The Eagle Ford Shale drilling rig count hit 280 rigs over the past week. This marks the first week activity has reached 280 rigs since mid-May. The play was in the news several times this week as UTSA released an Eagle Ford Housing Study that outlined the needs for creative solutions in South Texas. Flexible design that allows for multiple uses and affordable options are important for the growing population.
Forest Oil made headlines by announcing the company would "Go it alone" in the Eagle Ford. The company has over 100,000 net acres in the play and had announced intentions of seeking a joint venture partner. A partner would have likely injected enough capital for Forest to develop most of its acreage position. Instead, the company has dropped plans of seeking a JV partner and will run two rigs, with a focus on developing 40,000 acres. The remaining acreage will either be sold or farmed out to another operator.
Eagle Ford Oil & Gas Rigs
The number of rigs directed at natural gas (Smithbits) remained steady at 71. Karnes and Webb counties are currently the only counties with over ten rigs targeting natural gas. Henry Hub futures were trading at $2.88 on Friday afternoon. Coal to gas switching is less favorable in summer months, but June and July have bucked the trend and natural gas demand has stayed seasonally high. Higher consumption will likely save the natural gas market from a train wreck as we head toward peak storage levels. Every day that passes at current levels of consumptions lowers price risks for operators.
WTI was trading at $87/bbl Friday afternoon, and is ending the week up almost 5% over last week. Thanks to Mr. Hammett who wrote in noting Eagle Ford prices are trading above WTI prices. He is exactly right. Eagle Ford crude trades at a variable premium to WTI that normally falls between WTI and Louisiana Light Sweet (LLS) prices. As of Friday, LLS was trading just over $100/bbl. The number of rigs targeting oil was unchanged this week at 207.
The number of horizontal rigs running in the region is still 263. One water well is being drilled in McMullen County. Karnes County holds its position as the leader of development with 42 rigs and La Salle is down to 36 rigs this week. McMullen (31), Dimmit (28), Webb (26), Gonzales (20), DeWitt (20), Atascosa (13), and Live Oak (12) make up the top Eagle Ford counties.
News items this week included:
- Port Aransas Housing Boom Supported by New Wealth in South Texas – Video
- Eagle Ford Shale Housing Solutions Need to Be Creative
- Forest Oil Plans to “Go It Alone” in the Eagle Ford – No JV Partner Identified
Thank you to Cal Chapman, P.E., who contributed an article addressing Electric Power Consumption in South Texas – Growing Due to Eagle Ford Development. The growing industry and population in South Texas means a greater strain on our power infrastructure.
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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.