Eagle Ford Shale Still in Recovery After Hurricane

Hurricane impacts Eagle Ford

The oil and gas industry throughout Texas and the Eagle Ford is still recovering from the devastation of the record-breaking Hurricane Harvey. 

The Eagle Ford Shale: Hammered by Harvey

Two weeks after the storm slammed into the Lone Star State, much of the petrochemical and refining capacity is up and running. But activity in the Eagle Ford is still not 100%. 

The destruction has left some significant gaps in the Eagle Ford Shale supply chain, causing delays and frustrations for some operators. Even as many companies are resuming operations, they are faced with hard-to-travel roads and a reduced workforce. 

Texas’ energy infrastructure is recovering quickly from the devastating impacts of Hurricane Harvey. The industry and state and federal governments have worked expeditiously to ensure that citizens’ energy needs are met, primarily at the gas pump. Several Texas refineries have restarted although a few remain closed as assessments are completed. Pipeline infrastructure including the Magellan, Explorer and Colonial pipelines are all operational again.
— Texas Railroad Commissioner Ryan Sitton

During the storm, shut-in wells caused production to trickle, with some estimating that the storm affected 25 percent of the nation's crude oil refining capacity. Eagle Ford and other Texas operators cut production by 800,000-900,000 barrels per day during the week of the storm. The disruption even caused Baker Hughes to suspend its weekly rig count last week saying there was too little data coming in. 

Eagle Ford Increases Rig Count by One

Harvey's Effect on Gasoline Prices

Consumers felt an immediate impact at the gas pump, as prices spiked in the days following Hurricane Harvey's landfall. The Automobile Association of America said the average cost across Texas is up more than 50 cents a gallon to $2.53. The Energy Department announced this week that six refineries in the Gulf Coast region are still shut down. Five refineries have begun to come back online and another six are operating with reduced rates of gasoline production.

Effects on Eagle Ford Producers

In preparation for the storm, many operators in the Eagle Ford and across Texas were forced to slow or stop production. Some had wells in the path of the storm, while others were impacted when the stress on the infrastructure wouldn't allow them to get their product to market. 

Here is the latest update on the impact to Eagle Ford Operators:

  • ConocoPhillips announced this week that their Eagle Ford production was running at over 90 percent of our pre-storm production rate of 130 thousand barrels of oil equivalent per day. They expect to return to pre-storm levels in the next week or two. As of Thursday, Sept. 7
  • Carrizo Oil and Gas sustained no damage to its Eagle Ford assets. In preparation for the storm, the Company suspended its drilling and completions operations in the play, but crews were able to return to the field last week.
  • EOG saw third-quarter volumes cut by about 15,000 bpd
  • Pioneer Natural Resources stopped completing oil wells in the Eagle Ford Shale before the storm and saw a loss in output of 1,000 bpd to 2,000 bpd
  • Apache Corporation experienced some minor direct impacts from the storm in its Gulf of Mexico and Lower 48 regions, including production shut-ins between 1,000 and 2,000 barrels of oil equivalent per day. Apache's operations in the Eagle Ford play in Burleson and Brazos counties experienced a brief, yet negligible, interruption.
  • Silverbow Resources said their operations were largely unaffected by the storm, the company is experiencing delays due to equipment and crew availability
  • BHP Billiton Ltd. shut down drilling and completion activities at its Eagle Ford shale operations
  • Chesapeake Energy Corp suspended drilling and completion of new wells in the Eagle Ford
  • XTO Energy unit shut in some oil wells in the Eagle Ford 
  • Marathon Oil Corp. released non-essential personnel and suspended operations where appropriate
  • Noble Energy Inc. halted well completions 
  • Statoil ASA evacuated staff
  • Baytex Energy Corp. suspended drilling and completion operations and evacuated its Houston office
  • Sundance Energy Australia shut in about 75% of its Eagle Ford production; and
  • Lonestar Resources evacuated Eagle Ford Shale personnel before the storm hit. The “vast majority of its wells” in Dimmit and LaSalle counties, Texas, continued to produce or have resumed operations.