Eagle Ford Shale News

Texas Counties Dominate Job Growth

Houston Leads the List for Job Losses
Top Oil and Gas Economies

Top Oil and Gas Economies

Texas has both highs and lows for oil and gas economies for 2014.

 

Related:Low Oil Prices and the Texas Economy

Headlight Data released a report based on 2014 data from the Bureau of Labor Statistics that shares a peek into the labor market just before it headed into the oil price crash. Job creation in the Oil, Gas & Mining sector has been strong in the U.S. growing 31% over the past five years and adding 200,000 new jobs to the national economy. The sector currently employs 842,000 people in the US.

The report shows that, out of more than 1,100 counties across the U.S., Texas held top spots for both job creation and job losses. In 2014, there were 3,200 jobs created in Midland County, TX and 1,100 jobs lost in Harris County. Overall, Texas had five of the top 10 spots: Midland County, Bexar County, Frio County, Ector County, and Tarrant County.

The Eagle Ford’s Frio County came in at the fifth spot and boasts an impressive growth of 1,100 new  oil and gas jobs with a small population of 18,500 people.

The report speculates that the “largest oil, gas & mining job losses occurred across many parts of the US, for varying reasons. Large job losses in Harris County-TX (Houston), Collin County-TX (north Dallas), and Pinal County-AZ (Phoenix) are due to the loss of energy headquarters jobs, possibly to other parts of the metro. Elko County-NV’s job losses are in gold mining, and Charleston-WV’s job losses are in coal mining.”

Top 10 Counties: Most oil, gas and mining jobs created  in 2014:

  1. Midland County (Midland, Texas): 3,169
  2. Weld County (Greely, Colo.): 2,367
  3. Williams County (Williston, N.D.): 1,807
  4. Bexar County (San Antonio): 1,416
  5. Frio County (Pearsall): 1,067
  6. Ector County (Odessa): 1,064
  7. Tarrant County (Fort Worth): 908
  8. Denver County (Denver): 893
  9. Lea County (Hobbs, N.M.): 785

Bottom 10 Counties: Most oil, gas and mining jobs lost in 2014:

  1. Harris County (Houston): -1,115
  2. Elko County (Elko, Nev.): -744
  3. Collin County (McKinney, Texas): -584
  4. Boone County (Charleston, W.V.): -551
  5. Pinal County (Phoenix, Ariz.) -535
  6. St. Martin Parish (Lafayette, La.): -459
  7. Salt Lake County (Salt Lake City): -451
  8. Mingo County (Williamson, W.Va.): -444
  9. Contra Costa County (San Francisco): -439
  10. Hopkins County (Madisonville, Ky.): -376

Eagle Ford Loses More Rigs

Oil Production Rose Slightly
Eagle Ford Rigs

Eagle Ford Rigs

The Eagle Ford Shale rig count fell this week to 110 rigs running across our coverage area by midday Friday.

In recent Eagle Ford news, oil production in the region increased slightly during July. After production fell in May by 50,000 barrels per day, it increased a slighttly from June to July by 10,000 barrels a day. Average production throughout the region was 1.6 million b/d, about 17% higher than July 2014.

Read more: Eagle Ford Production up 1%

The U.S. rig count decreased by eight, ending with 877 rigs running by midday Friday.  A total of 202 rigs were targeting natural gas (nine less than the previous week) and 675 were targeting oil in the U.S. (one more than the previous week). The remainder were drilling service wells (e.g. disposal wells, injection wells, etc.)  383 of the rigs active in the U.S. were running in Texas.

Baker Hughes reports its own Eagle Ford Rig Count that covers the 14 core counties. The rig count published on EagleFordShale.com includes a 30 county area impacted by Eagle Ford development. A full list of the counties included can be found in the table near the bottom of this article.

Eagle Ford Oil & Gas Rigs

Natural gas rigs in the Eagle Ford decreased again to 15 this week as natural gas prices traded at $2.71/mmbtu, a $.03 increase from the previous week.

The oil rig count was at 95 as WTI oil prices rose to $44.99, an increase of $4.54. A total of 101 rigs are drilling horizontal wells, one is drilling directional wells, and eight are vertical rigs. Karnes County continues to lead development this week running 19 rigs, with DeWitt (18), following closely behind. See the full list below in the Eagle Ford Shale Drilling by County below.

Eagle Ford Shale Drilling by Count

County Previous Week Current Week County Previous Week Current Week
KARNES 21 19 COLORADO 1 1
DE WITT 17 18 GOLIAD 0 1
LA SALLE 11 11 GRIMES 1 1
MCMULLEN 11 11 LIVE OAK 2 1
WEBB 10 10 MADISON 1 1
DIMMIT 11 9 MAVERICK 0 1
GONZALES 4 5 WILSON 1 1
ATASCOSA 4 4 AUSTIN 0 0
BURLESON 4 4 FAYETTE 0 0
FRIO 3 3 LAVACA 2 0
ZAVALA 2 3 LEON 0 0
DUVAL 2 2 MILAM 0 0
LEE 2 2 ROBERTSON 0 0
BEE 2 1 WASHINGTON 0 0
BRAZOS 1 1 BASTROP 0 0

Eagle Ford Shale News

Will Re-Fracking Save the Eagle Ford?

Mexico Oil Swap Not Significant

NextEra Energy Moves into the Eagle Ford

What is the Rig Count?

The Eagle Ford Shale Rig Count is an index of the total number of oil & gas drilling rigs running across a 30 county area in South Texas. The South Texas rigs referred to in this article are for ALL drilling reported by Baker Hughes and not solely wells targeting the Eagle Ford formation. All land rigs and onshore rig data shown here are based upon industry estimates provided by the Baker Hughes Rig Count.

Read more at bakerhughes.com

Will Re-Fracking Save the Eagle Ford?

Producers Look to Controversial Technology
Eagle ford

Re-fracking in the Eagle Ford

As Eagle Ford oil and gas producers tighten their budgets and look to new innovations to stay afloat, some are considering re-fracking as a way to cut costs and continue the boom.

Related: Shale Oil: The Sky’s the Limit

The Eagle Ford and other shale formations in the U.S. have been the source of an historic oil boom since 2008, but have only harvested a fraction of the available oil, according to the Houston Chronicle.

Re-fracking is when producers work to get more oil out of depleted or under-performing wells by blasting the shale oil deposits with water, chemicals and sand for a second time. This is a very cost effective measure that can be up to two-thirds less than new drilling.

Halliburton’s, Priyesh Ranjan, told the Chronicle that “There’s so much low-hanging fruit. There’s an obvious push for everybody to think about how to achieve more with less.”

Refracking certainly has its critics. It is a risky practice and seen as a gamble because if drillers re-frack too closely to an adjacent well, it can damage the other wells.

Jonathan Garret of wood Mackenzie commented, “This technology is very much in its infancy and it’s not going to be something that’s going to change the game or move the needle at least in the near term.”

Even with the controversy, re-fracking might be the answer for producers to stay competitive. In a recent study of 66 companies, the IHS found that in the first quarter of 2015 they had to write down nearly $29 billion in the value of their assets, which exceeded the total for the full year of 2014. Read more about the Fierce Competition in the Eagle Ford

Read the cmplete article at houstonchronicle.com

NextEra Energy Moves into the Eagle Ford

Deal Includes Texas-Mexico Pipeline
Eagle Ford Deals

Eagle Ford Deals

NextEra Energy Partners LP will purchase NET Midstream to gain foothold in the Eagle Ford.

Related:  Oil & Gas Deals in the Eagle Ford

NextEra Energy Partners LP announced this month that they are moving forward with a deal to purchase NET Midstream, which will include seven natural gas pipelines in Texas.  The $2.1 billion deal will give the company future potential to ship 1billion cubic feet of shale gas a day. The largest asset in NextEra’s acquisition will be pipelines that deliver gas to Mexico under a 20-year contract with Pemex, the state-owned energy company.

Related:Eagle Ford Shale and Mexico: An Important Partnership

NextEra Chief Financial Officer Moray Dewhurst told Bloomberg that “Natural gas demand in Mexico has been growing substantially. At the same, time Mexico-based natural gas supply has been declining, which we believe increases Mexico’s need for U.S. gas.”

Through this deal, NextEra will move into the Eagle Ford by purchasing a pipeline that connects to U.S. and Mexican markets and the Monument Pipeline, along with four smaller lines that supply power plants and households.

Mexico has been anxious to increase its imports for natural gas and has been working lots of deals since the country’s energy reforms were passed last year. Mexico’s current demand for the commodity is currently outstripping its ability to provide the demand.

Read more at nexteraenergyresources.com

Mexico Oil Swap Not Significant

Analysts Downplay the Significance
Oil Exports

Oil Exports

Last week’s buzz surrounding the U.S. swapping oil with Mexico may end up being more hype than reality.

Read more: Swapping Oil with Mexico

The U.S Commerce Department opened the door last week for a limited amount of oil to be exported to Mexico when it approved an application from Pemex that would allow for the U.S. to exchange our light crude for Mexico’s heavy crude.

Many were hoping this signified a shift in opinion about the oil export ban that has been in effect since the 1970’s, but some analysts are now saying that the effort may be mostly symbolic.

Mark Broadbent, an analyst at Wood Mackenzie told FuelFix that there’s little evidence that regulators are prepared to offer a similar exception for crude exports to more far-flung countries. “In terms of the actual impact on the U.S. refining, it’s a small step.”

Despite the ban on oil exports since the 1970s, the U.S. still imports a large amount of heavy oil from Mexico and Canada. Between January and May 2015, it is estimated that U.S. refineries imported about 700,000 barrels per day of Mexican crude.

Mexico wants our lighter crude oil because it allow their refineries to shift their output toward valuable gasoline and away from less valuable fuel oil. Wood Mackenzie estimates that Mexico uses about 300,000 barrels per day of gasoline more than it produces.

Read more at fuelfix.com

Eagle Ford Production up 1%

Texas Still Ahead of the Pack
Eagle Ford Oil

Eagle Ford Oil

Eagle Ford oil production increased slightly during July, according to Bentek Energy

After peaking in April are the highest levels since 1971, analysts predicted that U.S. oil production would continue to decline through the early part of next year bringing supply and demand back into balance.

Related:EIA: U.S. Oil Production Has Peaked

Eagle Ford production fell in May by 50,000 barrels per day and then increased10,000 barrels a day, a slight 1% from June to July. Average production throughout the region was 1.6 million b/d, about 17% higher than July 2014.

Analyst Sami Yahya said, “Initial production (IP) rates have been improving, especially in the oily window of the Eagle Ford Basin. As well, producers in the Eagle Ford are currently drilling 2.5 wells per rig per month, which is higher than the national average of 1.5 wells. Drill times have been improved from an average of 15 days per well in 2014 to roughly 11 days per well in 2015.”

The Eagle Ford continues to lead other shale basins in efficiency gains and internal rates of return of around 18%. Bentek reports that the Bakken formation is just behind the Eagle Ford with drilling decreasing from about 15 days per well in late 2014 to about 13 days per well during the second quarter of this year.

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