The Eagle Ford Shale region of south Texas has been hammered hard by Tropical Storm Harvey and the impact may not be fully known for weeks.
Harvey, now a tropical storm, is being touted as the most powerful storm ever to hit Texas. The torrential rainfall and power outages have affected tens of thousands of square miles across Texas, including a significant portion of the state's shale oil and gas production in the Eagle Ford Shale.
The Eagle Ford was in the direct path of the storm as it headed inland last week. Many shale producers operating in the Eagle Ford shut down operations ahead of the storm including ConocoPhillips, EOG Resources, XTO Energy, Chesapeake Energy Corp., BHP Billiton, Murphy Oil and Statoil.
Analysts suggest that the storm may have cut off as much as 15% of U.S. oil supplies and halted up to $800 million a day in energy industry revenue. Lost production is being estimated at between 400,000 and 500,000 barrels a day.
The full impact of Harvey on Texas shale production may not be known for a number of weeks. Even as producers bring wells back online, the energy infrastructure that is the backbone of the industry relies on assets such as ports, refineries and pipelines that sit in some of the hardest hit areas.
By midday Tuesday, a number of producers indicated they are looking to resume operations. ConocoPhillips has brought some wells back online and EOG Resources Inc. plans to resume drilling in the Eagle Ford when it is safe.
Producers are feeling the effects of Harvey as shares dipped for many this week, according to CNBC on Monday.
- EP Energy: - 7%
- Carrizo Oil and Gas: - 6.5%
- Wildhorse Resources: - 4%
- Sanchez Energy: - 4%
Refinery shutdowns will affect oil prices, though it's still too early to assess the full impact. Prices fell on Monday more than 2.5% Monday to $46.57 a barrel.