Eagle Ford Shale Regional Rig Count at 271 on August 10, 2012

August 10, 2012 R.T. Dukes

The Eagle Ford Shale drilling rig count grew to 271 this past week. News this week built on what we heard last week when several operators discussed drilling efficiencies and dropping rigs in response. Chesapeake highlighted its success in lowering well costs by 15% through drilling time improvements and other oilfield service costs. The company also plans to drop from almost 33 rigs running in the first half of the year to 25 at year-end and 22 for 2013. The company is also working off a backlog of 220 wells that have been drilled, but have not been brought to production.

Read our coverage of Chesapeake's quarterly release in the article Chesapeake Will Run 22 Eagle Ford Rigs in 2013.

Eagle Ford Oil & Gas Rigs

The number of natural gas rigs (Smithbits) stands at 59 this week, up one from last week. For the eighth week running, the only counties with over ten rigs targeting natural gas are Karnes and Webb. There are 210 oil rigs working, which ties the record set in April 27th.

Henry Hub futures were trading at ~$2.78 on Friday afternoon. That's a drop of almost 10% over the past three weeks. Notably, spot prices (physical prices today) are off, but still closer to $3 at $2.96 per mmbtu.

WTI was trading at ~$93/bbl Friday afternoon and LLS crude prices are just above $110/bbl. As I've mentioned several times before, if prices continue to rise we'll likely see additional drilling capital committed to the area.

There are 247 horizontal rigs running in the region. The three counties leading development are Karnes with 36 rigs, McMullen with 32 and La Salle with 31. Dimmit (29), Webb (20), DeWitt (19), Gonzales (17), Atascosa (12), Live Oak (11), and Frio (10) round out the top Eagle Ford counties.

News items this week included:

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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

Eagle Ford Shale Regional Rig Count at 268 - August 3, 2012

August 5, 2012 R.T. Dukes

Marathon Ealge Ford Spud to Spud Drilling Days

The Eagle Ford Shale drilling rig count fell two rigs to 268 this week. Operators are drilling wells faster than before and simply don't as many rigs to drill the same number of wells. Without a significant commodity price increase, the rig count will likely decline through the remainder of the year. If oil prices were to go well above $100 or if natural gas prices rose to $4, operators would likely increase the pace of development.

This week alone, we had three different operators highlight how fast they are drilling wells. EOG Resources and Marathon are both lowering their rig counts because they have dropped their drilling time significantly. Anadarko also announced a record drill time of just 6.8 days in the second quarter. As you can see in the chart above, Marathon has almost halved its spud to spud drilling time in the last ten months. I'm no math whiz, but that means they can drill the same number of wells with half the number of rigs they needed ten months ago. Wow.

You can read more second quarter highlights from each of these operators here:

Eagle Ford Oil & Gas Rigs

The number of natural gas rigs (Smithbits) fell to 58 this week, down two from last week. The only counties with over ten rigs targeting natural gas are still Karnes and Webb. For those keeping up with gas rigs, the region experienced a peak of 125 in October of 2011 and has been on a steady decline to the recent low. There are 209 oil rigs working, which is one shy of the record set in April.

Henry Hub futures were trading at ~$2.90 on Friday afternoon. That's a slight drop after trading above $3 over the past two weeks. Notably, spot prices (physical prices today) are $3.15. The severe heat as helped support prices at three dollars, but the heat will need to continue if we're going to lower the current natural gas storage surplus.

WTI was trading at ~$91/bbl Friday afternoon and LLS crude prices are just above $110/bbl. If we see prices rise throughout the remainder of the year, we'll likely see operators commit additional capital to the area.

There are 242 horizontal rigs running in the region. The three counties leading development are Karnes with 37 rigs, McMullen with 34 and both Dimmit and La Salle with 31 each. Webb (22), DeWitt (16), Gonzales (15), Atascosa (12), and Live Oak (11) round out the top Eagle Ford counties.

News items this week included:

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Drilling Rig Count by Operator

What is the Rig Count?

Drilling Rigs by County

Anadarko Eagle Ford Drilling Time Falls to 6.8 Days for Record

August 1, 2012 R.T. Dukes

Anadarko set an Eagle Ford record with a spud to rig release time of just 6.8 days for its best well in the second quarter of 2012. On average, the company spent just 10.5 days from spud to rig release for each well. That is down from almost 18 days when the company started drilling Eagle Ford wells in 2009.

Anadarko also set a record with a weekly net production rate of 32,300 boe/d in the quarter. Gross processed production is approaching 100,000 boe/d.

Anadarko is utilizing 9 conventional rigs and 1 spudder rig in the play. Eagle Ford drilling for the second quarter included spudding 70 wells, completing 50 wells, and reaching first production on 44 wells.

Eagle Ford Shale Regional Rig Count at 270 - July 27, 2012

July 27, 2012 Kenny DuBose

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:

Come back weekly for updates or sign up for alerts.

Drilling Rig Count by Operator

What is the Rig Count?

Drilling Rigs by County

New Eagle Ford Well Map from the TX RRC - July 2012

July 27, 2012 R.T. Dukes

The Texas RRC updated its Eagle Ford Shale well map with the most recent reported data through July 3, 2012.

Since May 14 when the RRC last updated the data points on its map, the commission has issued 367 permits. That's more than 7 permits per day over a period of 50 days.

A total of 2,400 wells had been reported producing as of July 3. That's 314 more oil wells and 107 more gas wells than we had as of May 14. If you're counting, that's a pace of more than 8 wells coming online per day.

Data from the RRC is always a little delayed, so we're likely on pace to surpass 3,000 producing wells by the end of August or early September.