The Eagle Ford Shale drilling rig count fell one rig to 270 this week. 270 rigs happens to be the average number of rigs the region had working in the first half of 2012. As we enter the second half of the year, watch to see if activity slows or if operators continue to increase activity levels. Don't forget - fewer rigs does not necessarily equate to fewer wells. Operators are getting much more efficient. Wells that once took 30 days to drill are now taking half that time.
The map highlighted this week is the Texas RRC's latest Eagle Ford Well map. Since the latest update in mid-May, operators have brought more than eight wells per day online to bring the total number of Eagle Ford producing wells to 2,400. The Railroad Commission has also issued more than 360 permits since that time. Expectations are that the number of producing wells will exceed 3,000 by the end of August or early September.
Eagle Ford Oil & Gas Rigs
The number of natural gas rigs (Smithbits) fell to 60 this week, down three from last week's count. The only counties with over ten rigs targeting natural gas are Karnes and Webb.
Henry Hub futures were trading at ~$3.00 on Friday afternoon. Two weeks over $3 is a milestone in 2012. It has been a tough year for natural gas producers and demand looks to be holding at this price level. Coal prices become more important as natural as prices rise. There is a certain amount of power that can be served by coal or natural gas depending on what provides a better return for electric companies.
Oil prices changed several dollars over the last week, but are ending the week at almost the same prices as last week. WTI was trading at ~$90/bbl Friday afternoon and LLS crude prices are just above $107/bbl. If oil prices remain higher than $90/bbl throughout the remainder of the year, operators will be inclined to increase their development drilling efforts. My expectation is that operators that have the flexibility with their balance sheets will increase the number of wells planned for the year.
There are 248 horizontal rigs running in the region. There is one water well being drilled in McMullen County and a disposal well in Leon County. The three counties leading development are Karnes with 37 rigs, and La Salle and McMullen each with 31. Dimmit (30), Webb (26), Gonzales (18), DeWitt (17), Atascosa (12), and Live Oak (12) round out the top Eagle Ford counties for this week.
News items this week included:
- Eagle Ford Oil Prices Trade at a Premium to WTI - Condensate Weaker
- New Eagle Ford Shale Well Map from the RRC
- Eagle Ford Oil Boom - Natural Gas Slump - EagleFordShale.com Quoted
- Cabot Oil & Gas 400 ft (55-acre) Spacing Test Yields Best Well To Date
- Aurora Oil & Gas Testing 350ft Eagle Ford Well Spacing
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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.
Drilling Rigs by County
