Eagle Ford Rig Count at 274 | Oct 12, 2012

October 12, 2012 R.T. Dukes

Eagle Ford Shale drilling settled at 274 rigs running over the past week. Natural gas prices held above $3 for the second week in a row. That's a good sign for operators, but not enough of an increase to alter plans for 2013. We've mentioned the potential in the natural gas window of the Eagle Ford before. A sharp increase in prices could motivate even more drilling in the area, but it doesn't look like prices are going to rise fast enough to change capital budgets for 2013. Most companies are planning their capital budgets for next year right now and $3.30 isn't enough incentive for operators to make big changes in how capital dollars are spent. Expect even more companies to announce activity shifting to oily areas of plays like the Eagle Ford.

On a technical note, Schlumberger's Smith Bits released its second generation spear PDC bit. The bit is cased in steel and set an Eagle Ford Rate of Penetration Drilling Record of 79 feet per hour during testing. The bit allows operators to drill horizontal laterals in one pipe trip.

Eagle Ford Oil & Gas Rigs - New Oil Rig Count Record 217

The natural gas rig count in the area hit a new Eagle Ford era low this week with just 38 rigs running. The record low is 75% lower than the peak of 120+ gas rigs that were running in the area just a year ago.

As you might expect, the record low in gas rigs mean rigs moved to oil prospects and we hit a new record of 235 rigs in the region. It is worth reiterating again this week. Over 130 oil rigs have been added in the region since June of 2011.

Just one service well is currently being drilled and it is a water well in Bastrop County.

Henry Hub futures were up again week over week to $3.58 on Friday. Spot prices were almost unchanged at $3.28.

WTI was up almost two dollars on the week, trading at ~$92/bbl Friday. Eagle Ford crude priced at $100.93/bbl on the 11th of October. Light crude and condensate in the area traded at $88.50 and $87.50, respectively.

There are 259 horizontal rigs running in the region. La Salle County still leads development with 39 rigs running. Karnes with 37 rigs, McMullen (26), Dimmit (25), Webb (25), Gonzales (22), DeWitt (19), Atascosa (14), Frio (10), and Live Oak (10) round out the top Eagle Ford counties.

News items this week included:

Devorah Fox also contributed an article titled Tied Down Cargo and Load Securement.

Be sure to visit our South Texas Oilfield Job Listings to search openings and come back weekly for updates.

Eagle Ford 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.

Eagle Ford Shale Drilling by County

Smith Bits Spear PDC Bit Sets Eagle Ford ROP Record

October 11, 2012 R.T. Dukes

Smith Bits, a subsidiary of Schlumberger, released its next generation spear polycrystalline diamond compact (PDC) bit optimized for shale plays. Spear PDC bits have provided for more effective and quicker drilling in the lateral portions of horizontal wells. In the Eagle Ford, the first generation steel bodied PDC bit allowed operators to drill laterals in one pipe run. In the same application, the second generation bit set a new record for speed. The bit was able to drill a lateral run at a rate of 79 feet per hour compared to median performance of 65 feet per hour with the first generation bit.

The test was done in South Texas, but the bit will be used in other shale plays as well. At the rate of penetration achieved in the test well, a 6,000 ft lateral can be drilled in just over three days.

“With experience of more than 6,000 Spear bit runs to date, we incorporated specific design elements into the next-generation bit to deliver even more rate of penetration (ROP), further lowering drilling costs in unconventional wells.”
A range of application-specific features were incorporated into the next-generation Spear bit, including improved body geometry and hydraulic enhancements, engineered to minimize blade packing, improve cutter cleaning and increase ROP. Cutter layouts were fine-tuned with IDEAS* integrated drillbit design platform to deliver improved ROP while ensuring smooth directional control.

Eagle Ford Drilling at 280 Rigs - La Salle County Leads - Oct 5, 2012

October 5, 2012 R.T. Dukes

Eagle Ford Shale drilling jumped six rigs to 280 running in the region over the past week. If natural gas prices continue to rise throughout the winter, 2013 could prove to be another exciting year in the Eagle Ford. Over 80% of current activity is focused in oily portions of the play and most of the gas activity is in areas of high condensate and NGL yields. Higher natural gas prices will support activity in dry gas portions of the play that have been explored very little to date. While I'm not confident natural gas prices will get much better, I do believe we'll see more natural gas well records in the Eagle Ford fall if they do.

Penn Virginia had the biggest announcement of the week. The company acquired 4,100 net acres in what they call the "volatile oil" window in Gonzales and Lavaca counties for $10 million. You can read more in the article Penn Virginia Acquires Gonzales & Lavaca County Acreage for $10 million.

Eagle Ford Oil & Gas Rigs - New Oil Rig Count Record 217

Three natural gas rigs were added this week to reach a total of 46 running in the area.. That's a bounce off lows the past two weeks. The oil count blew through the previous record of 228 to reach 232 rigs targeting oil. Over 130 oil rigs have been added in the region since June of 2011.

One water well is being drilled in Bastrop County and one disposal well is being drilled in McMullen County.

Henry Hub futures were trading at ~$3.38 on Friday morning. A full week above $3 is welcomed by the industry. Spot prices began to catch up this week as well. Henry Hub spot prices were up a quarter, trading at $3.25.

WTI was trading at ~$90/bbl Friday. That's a level not seen since July. Eagle Ford crude priced at $100.68/bbl on the 4th of October. Light crude and condensate in the area traded at $88.25 and $87.25, respectively. Notice how Eagle Ford pricing is holding stronger than the rest of the country. Location near the Gulf Coast refinery complex and favorable oil characteristics provide a strategic advantage for the play.

There are 264 horizontal rigs running in the region. La Salle County took the lead in development with 41 rigs running. Karnes with 38 rigs, McMullen 29, Webb (26), Dimmit (24), Gonzales (23), DeWitt (20), Atascosa (15), and Frio (10) round out the top Eagle Ford counties.

News items this week included:

Be sure to visit our South Texas Oilfield Job Listings to search openings and come back weekly for updates or sign up for alerts.

Eagle Ford Rig Count by Operator

What is the Rig Count?

Eagle Ford Shale Drilling by County

Eagle Ford Regional Drilling at 274 Rigs - Sept 28, 2012

September 28, 2012 R.T. Dukes

Eagle Ford Shale drilling fell five units over the past week to settle at 274 running in the region and the oil rig count held near its record at 227 rigs active. During the week, Matador Resources released well production results from its Eagle Ford wells to date. The company's average well has a perforated well length of 5,090 ft, was completed with 18 frac stages, and produced 1,103 boe/d initially (859 b/d and 1.5 mmcfd). Read more in the article Well Results from Matador Resources Eagle Ford Operations.

Natural gas saw a significant jump as contracts rolled into October. Gas was trading at just over $3.30/mmbtu on Friday afternoon. That's more than a 10% increase from last week at this time.

Eagle Ford Oil & Gas Rigs - New Oil Rig Count Record 217

The number of natural gas rigs running fell to 43 this week. That's another new low for everyone keeping count. Rigs are moving to oily targets for the foreseeable future, but if natural gas prices continue a rise that could very well change. The oil count held near its record with 227 rigs working the region. Just one less than last week.

One water well is being drilled in Bastrop County, while Karnes, Leon, and McMullen counties all have disposal wells being drilled, respectively.

Henry Hub futures were trading at ~$3.30 on Friday afternoon. That's a $0.40 increase from last week. Spot prices rose considerably, but not quite as much trading at ~$3.00 to end the week.

WTI was trading at ~$92/bbl Friday afternoon. That's the lowest point in the past two months. With elections and international turmoil, I don't believe many people have conviction about the oil market. Eagle Ford crude priced at $101/bbl on the 27th of September. Light crude and condensate in the area traded at $88.50 and $87.50, respectively.

There are 252 horizontal rigs running in the region. The four counties leading development are Karnes with 39 rigs, La Salle with 37, Dimmit with 29, and McMullen with 28. Webb (26), Gonzales (22), DeWitt (18), Atascosa (15), and Frio (10) round out the top Eagle Ford counties.

News items this week included:

Be sure to visit our South Texas Oilfield Job Listings to search openings and come back weekly for updates or sign up for alerts.

Eagle Ford Rig Count by Operator

What is the Rig Count?

Eagle Ford Shale Drilling by County

Eagle Ford Oil Rig Count Record at 228 - 279 Rigs Running Sept 21, 2012

September 21, 2012 R.T. Dukes

Eagle Ford Shale drilling grew by six active rigs this past week to reach 279 units. The week was largely dominated by headlines regarding the South Texas Oilfield Expo in Corpus Christi. Several hundred vendors who supply and service the oilfield in the Eagle Ford were in attendance. You're welcome to read more in regard to our time there in our Notes from the Expo.

In a positive note for the gas window of the Eagle Ford, Escondido Resources announced a record natural gas well in Webb County. The Spohn Ranch 1H well came online at more than 16 mmcfd and produced 0.4 Bcf in its first month.

Eagle Ford Oil & Gas Rigs - New Oil Rig Count Record 217

The number of natural gas rigs running fell to 47 this week. That's a new low for everyone keeping count. It was mentioned last week and I'll say it again even though we had a record natural gas well reported. Most operators expect to have most lease held-by-production this year and we're seeing the result. Where possible, rigs are moving to oily targets. There are a record 228 oil rigs working the region. That surpasses the old record of 217 set just last week.

One water well is being drilled in Bastrop County, while Karnes, Leon, and McMullen counties all have disposal wells being drilled.

Henry Hub futures were trading at ~$2.89 on Friday afternoon. That's a six cent decline from last week. Spot prices fell almost twenty cents to $2.76 to end the week.

WTI was trading at ~$93/bbl Friday afternoon. After trading near $96/bbl for a month, we close last week at $99/bbl and we've now dropped to $93/bbl in one week. The market isn't quite sure where it is going next. Eagle Ford crude priced at just over $100/bbl. That's eight dollars less per barrel than it did this time last week. Light crude and condensate in the area traded at $88.25 and $87.25, respectively.

There are 258 horizontal rigs running in the region. The four counties leading development are Karnes with 41 rigs, La Salle with 34, Dimmit with 32, and McMullen with 31. Webb (24), DeWitt (20), Gonzales (20), Atascosa (15), Frio (11), and Live Oak (9) round out the top Eagle Ford counties.

News items this week included:

Be sure to visit our South Texas Oilfield Job Listings to search openings and come back weekly for updates or sign up for alerts.