Eagle Ford Oil Boom - Natural Gas Slump - EagleFordShale.com Quoted

Eagle Ford oil potential has kept drillers interested and even shifting capital to the play over the past year. Both oil and gas prices are up over the past few weeks, but comparatively $92/bbl is much better than $3/mcf. Read the entire article that details rig activity and production growth at chron.com

R.T. Dukes, a director at the website EagleFordShale.com, which posts news about the shale, said oil companies' budgets "are being pressured by natural gas prices, but drilling activity hasn't really slowed down in the Eagle Ford." However, if the price of oil should drop again and gas prices remain low, "you'll probably see some sort of slowdown in the second half of the year."

Yet Dukes remains bullish on the Eagle Ford.

"It's a first-class play in the United States," he said. "That usually doesn't change over short periods of time. On a relative basis, it's still better than most plays in the U.S.," he said.

Should natural gas prices go much higher, "you'll see additional capital come to the Eagle Ford," he said.

How Long Before New Neighborhoods are Built in South Texas?

The Eagle Ford housing market has driven investment in hotels, man-camps, RV parks, and to some extent apartments. The one thing missing is permanent homes. An article addressing the topic was published yesterday in the Chronicle.

Read more at chron.com

Builders are largely risk averse and will take their time in moving into the more rural parts of South Texas. The boom and bust nature of the oil business combined with the long development times of neighborhoods has many apprehensive.

"If it's going to take seven or eight years, you're reluctant because you don't know what's going to happen with the play," he said. "Not until people feel like there's going to be economy stability will there be home building."

I'll say this. Money talks. As the 50,000 workers in the region begin building savings and preparing to buy homes, you can bet the builders will step in.