The Eagle Ford Shale drilling rig count is up to 279 units as of July 6, 2012. The play is showing resilience at $80 oil prices. Economics are robust at $80/bbl, but capital budgets at companies like Chesapeake will determine whether or not activity will stay at levels we've seen during the first half of 2012.
Eagle Ford road issues were in the news again this week. A study commissioned for DeWitt County was released this week and suggests total road maintenance costs could soar to over $400 million dollars over the next 20 years. That's up from approximately $70 million expected before oil & gas development began in earnest. The Eagle Ford Road Maintenance to Require Millions in New Funding article also includes great comments from DeWitt County Judge Daryl Fowler. Share your thoughts and comments there.
Eagle Ford Oil & Gas Rigs
The number of rigs directed at natural gas (Smithbits) fell again this past week to 71. Karnes and Webb counties are currently the only counties with over ten rigs targeting natural gas. Henry Hub were done slightly to $2.77 on Friday afternoon. That's after trading near $3, an important coal to gas switching threshold, during the week. Many utilities and power companies are burning as much natural gas as possible due to low prices. If prices were to increase above $3/mmbtu, it is expected many would begin burning coal again and we'd see less natural gas demand. WTI was trading at $84/bbl Friday afternoon, and is ending the week with almost no change from last week. Oil directed activity rose from 204 to 207 rigs this week.
The number of horizontal rigs running in the region is up to 263. That's four more than last week's count of 259. One water well is being drilled in McMullen County and one disposal well in Atascosa County. Karnes County continues to lead development with 42 rigs and La Salle is up to 37 rigs this week. McMullen (31), Dimmit (27), Webb (27), Gonzales (23), DeWitt (19), Atascosa (13), and Live Oak (12) make up the top Eagle Ford counties.
News items this week included:
- Recycling Waste Water is Big Business
- Trucking Accidents at Railroad Crossings – Don’t Be A Statistic – Stop, Look, Listen
- Eagle Ford Road Maintenance to Require Millions in New Funding
- Valero’s Three Rivers Refinery Gets a $100 Million Boost
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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.