Eagle Ford Shale Regional Rig Count at 271 – June 22, 2012

Murphy Oil Eagle Ford  Shale Map
Murphy Oil Eagle Ford Shale Map

The Eagle Ford Shale drilling rig count dropped to 271 this past week. That's down from 278 the past two weeks. Losing seven rigs is noticeable, but not significant. Watch the rig count for the next few months to get an idea of what becomes normal. Many analyst are beginning to predict lower activity across the U.S. Some expect declines of 20-25%. That won't likely happen in the Eagle Ford, but don't be surprised if activity does slow. Capital budgets simply weren't planned with $2/mcf gas and less than $80/bbl oil.

Murphy Oil is up for review this week. The company is relatively new to shale plays, but entered when commodity prices were low during the recession of 2008-2009. The company quickly assembled more than 200,000 acres across eight counties in the play. Murphy has 14 rigs active in North America and 10 of those are active in the Eagle Ford Shale. The company has three rigs in Karnes, three in McMullen, two in Atascosa, and two in Dimmit County.

Eagle Ford Oil & Gas Rigs

The natural gas directed rig count (Smithbits) rose by two to 74 this past week. Karnes and Webb counties are the only counties with more than ten rigs targeting natural gas. Henry Hub futures prices traded down during the week, but recovered by the end of Friday. Prices were trading at $2.62/mmbtu on Friday afternoon. Oil prices lost even more ground this week. WTI was trading just over $80/bbl Friday afternoon, but had dipped below $78/bbl at one point. During the past week, oil directed activity fell to 196 rigs. That's the first time we've fallen below 200 since the beginning of April.

248 horizontal rigs are running in the region down from 256 last week and one water well is being drilled in McMullen County. Karnes County still leads development with 40 rigs and La Salle is up to 37 rigs this week. McMullen (30), Dimmit (29), Webb (25), DeWitt (22), Gonzales (18), Live Oak (11) and Atascosa (10) make up the top Eagle Ford counties.

News items this week included:

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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