Eagle Ford Boom Bad News for County Roads – KENS-TV – Video

Less than 1% of Right of Way Royalties Returned to Local County Governments for Road Maintenance

The Eagle Ford oil boom has been a boon on the Texas economy, injecting billions of dollars in revenue from oil & gas companies into the state’s budget. By contrast, local county governments have not seen parallel increases for their coffers, although money derived from local tax revenues and drilling fees, in some instances, have padded local county budgets.

Read more: Riches from the Eagle Ford Boom – Video

One of the most serious problems for local county governments is a direct result of the increased traffic on their roads. According to a recent KENS-TV story, it takes 1,200 18-wheelers  to set up a rig, and another 350 trucks during the life of the rig for maintenance. Karnes County and DeWitt County, which are both in the heart of the oil window of the play, have consistently had active rig counts between 20 – 30, since the beginning of the year, which has equated to a lot of traffic on roads not designed for such heavy loads.

In the past 3 ½ years, $28,000,000 has gone directly to the state through right of way royalties, but less than 1% has been returned for road maintenance. Karnes and DeWitt County have forked over $16-million during the same time frame, according to the report.

Local county officials are fed up with not receiving what they feel is more adequate funding from the state for road maintenance in their areas. Now, there is talk about a coalition of county governments being formed to demand more money from Austin.

Smiley Texas Makes Its Mark as the Eagle Ford Comes In

Sales tax revenues are up over 250% year over year

Smiley, TX, continues to top the charts in monthly increases in state sales tax revenues. The community of just 500 in Gonzales County saw its July tax revenues jump over 250% from the previous year.

Texas comptroller Susan Combs said sales tax revenue for the state in July was $2.05 billion, up 10.1 percent compared to July 2011.

“Business spending in the oil and natural gas industry and other sectors continues to be robust,” Combs said. “That spending, along with increases in consumer sectors such as retail trade, continues to boost sales tax collections. State sales tax revenue has now increased for 28 consecutive months.”
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Eagle Ford Consortium Highlights

Just a few thoughts from the Eagle Ford Consortium Conference last week:

  • Production is outpacing expectations – Almost double early predictions from UTSA
  • Housing remains a concern, but investors are beginning to consider major multi-family developments
  • Peak drilling in the Eagle Ford is expected at 2,500-3,000 wells per year
  • The success/economics of downspacing will ultimately decide how far we go below the range of 65-130 acre spacing currently
  • More than 70,000 direct Eagle Ford Shale jobs will be created by 2020
  • Permits issued over the past three years in the Eagle Ford have gone 2009 – 94; 2010 > 1,000; 2011 > 3,000
  • In the most active counties, sales tax revenue increases have been as high as 500%
  • Oil prices remain the major risk to development [Read more…]