The Eagle Ford Shale drilling rig count fell three this past week to settle at 276. The biggest risk to development is unfolding in the commodity market. Oil and gas prices both fell this past week. Even with good financial returns at lower prices, cash flow used to fund capital budgets is hit almost immediately when prices fall. If today's prices hold, we'll see companies cut back across the U.S. in coming months.
ConocoPhillips Eagle Ford Shale position is up for review this week. Conoco has over 200,000 core acres where the company is targeting the Eagle Ford. The company grew production to more than 50,000 boe/d at the end of 2011 and plans to reach more than 100,000 boe/d by the end of 2012. The company has 6 rigs drilling in DeWitt County, 5 in Live Oak, 4 in Karnes, and 1 in Gonzales County.
Eagle Ford Oil & Gas Rigs
The natural gas directed rig count (Smithbits) fell five rigs to 70 running. Karnes, McMullen, and Webb counties all have more than ten rigs targeting natural gas. Henry Hub futures prices lost almost a dime after poor economic data was reported on Friday. Natural gas was trading at $2.32/mmbtu on Friday afternoon. With a glut of production in the Lower 48, poor economic indicators will pour fuel on the proverbial fire. Oil prices fell almost 10% over the past week. WTI is trading at just over $83/bbl. During the past week, oil directed activity rose to 205 rigs. Levels of more than 200 rigs drilling for oil will not be sustained if oil prices continue the recent plunge from $100/bbl.
254 horizontal rigs are running in the region, with 1 disposal well being drilled in Atascosa County. Karnes County leads development with 38 rigs and La Salle has 37 rigs. Dimmit (31), McMullen (28), Gonzales (24), DeWitt (23), Webb (23), Atascosa (11), and Live Oak (11) make up the top Eagle Ford counties.
News items this week included:
- Credit Ratings are on the Rise in South Texas
- Chesapeake's Eagle Ford VPP Could Mean $1 Billion
- Copano Provided an Eagle Ford Midstream Update
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Drilling Rig Count by Operator
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
