Eagle Ford Shale drilling fell one rig to 273 over the past week. This is roughly the third week in a row the rig count has gone almost unchanged. That likely means operators are settled in and don't plan to make major changes before the end of the year. Third quarter earnings announcements are starting to roll in and results have been positive to date. I've heard a couple of operators who have 1-2 rigs active say they are planning for three or more in 2013. Capital budgets are being set as we speak, so we'll have a really good idea of what to expect come January.
Newfield is one operator who plans to pick up its pace of development in 2013. The company has drilled four extended lateral wells (7,500 ft) in Dimmit County and expects ultimate recoveries from each of the wells will surpass 500,000 barrels. The company also has plans to test a 10,000 ft lateral in the area. With additional efficiency gains through pad drilling, internal rates of returns on the company's wells will easily surpass 50%.
Eagle Ford Oil & Gas Rigs
The natural gas rig count held flat at 53 rigs running this past week. With gas holding relatively strong in the mid-$3 range, it's no surprise to see operators honing in on gassy areas.
The oil rig count was essentially flat, dropping one rig to settle at 219 running. Just one service well is currently being drilled and it is a water well in Bastrop County.
Henry Hub futures were down two dimes to end the week at ~$3.40 on Friday. Spot prices were trading in the same range.
WTI was down 7% to ~$86 this week. Generally, weak corporate earnings reports are taking a toll on commodities. Eagle Ford crude priced at $95.18/bbl on the 26th of October. Light crude and condensate in the area traded at $86.75 and $81.75, respectively.
There are 259 horizontal rigs running in the region. La Salle County still leads development with 39 rigs running. Karnes with 36 rigs, McMullen (30), Webb (25), Dimmit (23), Gonzales (20), DeWitt (17), Atascosa (11), Live Oak (11), and Frio (8) round out the top Eagle Ford counties.
News items this week included:
- DCP's Sand Hills Pipeline Begins Moving Eagle Ford NGLs
- Live Oak Railroad is Opening Near Three Rivers
- Eagle Ford Shale Stakeholder's Summit
- Lonestar Resources Deal with Amadeus Create Australian Public Company
Be sure to visit our South Texas Oilfield Job Listings to search openings and come back weekly for updates or sign up for alerts.
Eagle Ford 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.