Eagle Ford Shale Regional Rig Count at 270 – July 27, 2012

Eagle Ford Shale Well Map - July 2012

Eagle Ford Shale Well Map | Click to Enlarge

The Eagle Ford Shale drilling rig count fell one rig to 270 this week. 270 rigs happens to be the average number of rigs the region had working in the first half of 2012. As we enter the second half of the year, watch to see if activity slows or if operators continue to increase activity levels. Don’t forget – fewer rigs does not necessarily equate to fewer wells. Operators are getting much more efficient. Wells that once took 30 days to drill are now taking half that time.

The map highlighted this week is the Texas RRC’s latest Eagle Ford Well map. Since the latest update in mid-May, operators have brought more than eight wells per day online to bring the total number of Eagle Ford producing wells to 2,400. The Railroad Commission has also issued more than 360 permits since that time. Expectations are that the number of producing wells will exceed 3,000 by the end of August or early September.

Eagle Ford Oil & Gas Rigs

The number of natural gas rigs (Smithbits) fell to 60 this week, down three from last week’s count. The only counties with over ten rigs targeting natural gas are Karnes and Webb.

Henry Hub futures were trading at ~$3.00 on Friday afternoon. Two weeks over $3 is a milestone in 2012. It has been a tough year for natural gas producers and demand looks to be holding at this price level. Coal prices become more important as natural as prices rise. There is a certain amount of power that can be served by coal or natural gas depending on what provides a better return for electric companies.

Oil prices changed several dollars over the last week, but are ending the week at almost the same prices as last week. WTI was trading at ~$90/bbl Friday afternoon and LLS crude prices are just above $107/bbl. If oil prices remain higher than $90/bbl throughout the remainder of the year, operators will be inclined to increase their development drilling efforts. My expectation is that operators that have the flexibility with their balance sheets will increase the number of wells planned for the year.

There are 248 horizontal rigs running in the region. There is one water well being drilled in McMullen County and a disposal well in Leon County. The three counties leading development are Karnes with 37 rigs, and La Salle and McMullen each with 31. Dimmit (30), Webb (26), Gonzales (18), DeWitt (17), Atascosa (12), and Live Oak (12) round out the top Eagle Ford counties for this week.

News items this week included:

Come back weekly for updates or sign up for alerts – Email Subscribe Link]

Drilling Rig Count by Operator

Operator Name Prior Week Current Week
Chesapeake 30 30
EOG Resources 24 22
Marathon Oil (Hilcorp) 20 22
Petrohawk (BHP) 25 22
Pioneer Natural 12 12
ConocoPhillips 11 11
Anadarko 9 9
Murphy Oil 10 9
Talisman Energy (Statoil) 9 9
Lewis Petroleum 8 8
Plains Exploration 8 8
Shell 7 7
SM Energy 7 7
Rosetta Energy 3 5
Carrizo Oil & Gas 3 4
Hunt Oil 5 4
Swift Energy 5 4
Blackbrush O&G 3 3
Cabot Oil & Gas 3 3
Dan Hughes 3 3
El Paso Energy 3 3
All Others 63 65
Total 271 270

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 SmithBits 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 and/or Smith Service Co’s (Schlumberger) Smith Rig Count.

Drilling Rigs by County

Texas County Prior Week Current Week Texas County Prior Week Current Week
KARNES 40 37 BRAZOS 3 3
LA SALLE 33 31 GRIMES 3 3
MCMULLEN 33 31 LEON 2 3
DIMMIT 29 30 ROBERTSON 2 3
WEBB 25 26 BURLESON 3 2
GONZALES 17 18 MAVERICK 1 2
DEWITT 17 17 Washington 2 2
ATASCOSA 12 12 AUSTIN 1 1
LIVE OAK 12 12 BEE 1 1
MADISON 7 9 COLORADO 1 1
FRIO 8 8 DUVAL 1 1
LAVACA 4 5 BASTROP 0 0
FAYETTE 5 4 GOLIAD 0 0
WILSON 5 4 LEE 1 0
ZAVALA 3 4 MILAM 0 0
The following two tabs change content below.
Kenneth E. DuBose

Kenneth E. DuBose

Kenneth DuBose is the past President of Cheyenne Minerals Inc., an independent oil and gas operator. He began his energy industry career with ARCO Oil & Gas. Mr. DuBose then directed development of natural gas storage projects with Tejas Power Corp. He was a founding member of U.S. Minerals, (acquired by Torch Energy in 1999) a provider of internet based education for America’s mineral owners. Mr. DuBose holds a BS in Petroleum Engineering from Mississippi State University. He has served on various industry steering committees, non-profit boards, and is an active member of the Society of Petroleum Engineers, the National Association of Royalty Owners, the American Association of Professional Landmen, as well as being a Registered Investment Advisor. He writes on topics of oil and gas investing, wealth management and personal finance, having appeared in the Wall Street Journal, Kiplinger’s, Kiplinger’s Personal Finance, Houston Business Journal, Financial Advisor and various radio and TV outlets.

Comments

  1. John Billings says:

    No one seems to be asking the obvious question. Where are you getting this information from? Rigcount by operator, Is it from Baker Hughes or Rigdata?

    • R.T. Dukes RT Dukes says:

      Mr. Billings,

      Please read the “What is the rig count” paragraph below the rig count by operator table. I believe that will answer your question.

      Regards,

  2. Guy Harrell says:

    It would be helfield if you can posts where and who the rigs are working for. Thanks for a good paper. Guy

    • R.T. Dukes RT Dukes says:

      Mr. Harrell,

      Every so often, I take a snapshot of the Baker Hughes map. I’ll include one in the weekly post in the next few weeks.

Add a Comment

MENU