Eagle Ford Regional Rig Count 252 - Feb 1, 2013

February 1, 2013 R.T. Dukes

The Eagle Ford Shale drilling rig count fell 3 rigs to average 252 running this past week. That's right in line with the average number of rigs running in January and 17 below the average of 269 rigs that ran throughout 2012. Honestly, it has been surprising the rig count has held this strong. Many analyst were calling for a larger drop in the rig count, but smaller operators have stepped in to help support activity. Larger operators lowered their rig count throughout 2012 as drilling times decreased. Faster drilling means you can drill more with less, so rigs get dropped.

ConocoPhillips is the perfect example of a company utilizing fewer rigs, but not necessarily drilling any less. The company utilized a peak of 17 rigs early in 2012, but lowered its rig count in the face of operational improvements that increased drilling speed. The backlog of drilled yet not completed wells simply grew over the year. Completion crews and gathering pipelines simply weren’t able to keep up with the rigs. ConocoPhillips (COP) has 11 rigs running as of January 2013.

Conoco's production also hit new highs as the company crossed the 100,000 boe/d mark in the fourth quarter. That's 100,000 boe/d from almost nothing three years ago.

Eagle Ford Oil & Gas Rigs

[ic-r]The natural gas rig count increased by two to 40 running this week. Gas prices continued two weeks of declines to trade at ~ $3.30/mmbtu on Friday afternoon.

The oil rig count fell five rigs to 210 running in the area. WTI crude futures were trading close to $98 per barrel to end the week. Eagle Ford crude priced at $110.53/bbl on the 31st of January. Eagle Ford light crude and condensate in the area traded at $94 and $93, respectively.

There are 225 horizontal rigs running in the region. A disposal well is being drilled in Frio County and an injection well is being drilled in Karnes County.

La Salle County leads development with 32 rigs running. DeWitt (24), McMullen (24), Webb (24), Dimmit (23), Karnes (22), Gonzales (22), Live Oak (21), Atascosa (10), Leon (7), Lavaca (7), and Frio (6) round out the top counties in the region. The drop from 31 rigs to 22 in Karnes County was almost entirely attributable to Marathon and ConocoPhillips. The two companies combined to move eight rigs out of Karnes County last week.

South Texas Oil & Gas News:

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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

Eagle Ford Rig Count Holds Steady In January - Jan 25, 2013

January 25, 2013 R.T. Dukes

Production Growth — Growing Production Image

The Eagle Ford Shale drilling rig count increased by 3 rigs to top out at 255 running this past week.

The two most publicized events of the week were reports of UFO's in the Eagle Ford (Pictures included) and news that Oil Production Likely Surpassed 400,000 b/d.

Yes, multiple media outlets reported sightings of strange lights moving in the sky and a well location camera caught what MUFON has authenticated as a flying object. In the news of this world, November production numbers reported by the TX RRC have crude oil rising to more than 350,000 b/d. If revisions over the next two months hold consistent, that indicates more than 400,000 bbls were produced per day. Prior months have been revised up by an average of 50,000 b/d as operators who report late get data into the commission.

Eagle Ford Oil & Gas Rigs

[ic-r]The natural gas rig count was down to 38 rigs running this past week. That matched the Eagle Ford era low hit in October of 2012. Natural gas prices fell from highs last week to settle near $3.46/mmbtu on Friday afternoon.

The oil rig count climbed to 215 rigs working this past week. That's also a level that hasn't been matched since October of 2012. WTI crude futures were trading at $96 per barrel to end the week. Eagle Ford crude priced at $109.03/bbl on the 24th of January. Eagle Ford light crude and condensate in the area traded at $92.50 and $91.50, respectively.

South Texas Oil & Gas News:

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

Eagle Ford Drilling by Operator

Eagle Ford Shale Drilling by County

What is the Rig Count?

Eagle Ford Regional Drilling at 252 Rigs - January 18, 2013

January 18, 2013 R.T. Dukes

The Eagle Ford Shale drilling rig count increased by 3 rigs to top out at 252 running this past week.

In news, we touched on two developments regarding Eagle Ford completions over the past week. An Eagle Ford well was completed with a propane frack and a second well is planned to be completed with LNG powered frack pumps.

We sat down with a Ferus Oilfield Services rep, Jed Tallman, who provided details related to the Baker Hughes led LNG powered completion. Essentially, LNG is brought onsite in tanker trucks, regassed and injected through the air intake of the frack pumps. Diesel is still used and provides the spark for combustion, but substitution rates as high as 65% can be achieved. Add theeconomic savings of as much as $50,000 to the environmental benefits of cleaner burning natural gas and you get get a recipe for something you'll likely hear about again.

Eagle Ford Oil & Gas Rigs

[ic-r]The natural gas rig count fell two to 40 running this week. Gas prices, on the other hand, reversed weeks of declines to reach almost $3.60/mmbtu on Friday afternoon.

The oil rig count jumped five rigs to 209 running in the area. WTI crude futures were trading close to $95.50 per barrel to end the week. Eagle Ford crude priced at $108.53/bbl on the 17th of January. Eagle Ford light crude and condensate in the area traded at $92 and $91, respectively.

There are 233 horizontal rigs running in the region. A storage well is being drilled in Zavala County and disposal wells are being drilled in Frio County and Leon County.

La Salle & Karnes counties lead development with 32 and 30 rigs running, respectively. McMullen (27), Webb (25), Dimmit (24), DeWitt (22), Gonzales (22), Live Oak (13), Atascosa (9), Leon (8), Lavaca (7), Frio (6) and Fayette (5) round out the top counties in the region.

South Texas Oil & Gas News:

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?

Eagle Ford Shale Drilling by County

Eagle Ford Well Completed With LNG Powered Frack Pumps

January 15, 2013 R.T. Dukes

LNG powered frack pumps were used to complete an Eagle Ford well in late 2012. We sat down with Ferus' LNG rep Jed Tallman to learn more. This was the first time LNG has ever been used to fuel pumps fracking a well. Field gas has been used by Schlumberger in the Horn River Basin of Canada, but LNG has never been used before.

Ferus is an oilfield service company that supplies cryogenic liquids as part of its offering. The company worked with Baker Hughes to test natural gas conversion technology and yard tested 10 Cummins QSK50 powered pumps. After a successful test, the companies took the pumps into the field to complete an Eagle Ford well south of Pearsall.

Diesel fuel was used as the spark for combustion and LNG was regassed and brought in through the air intake.

Mr. Tallman stated, "This particular technology can achieve diesel substitution rates of 40-65%. An average of 50% substitution is expected.""

Only 6 LNG powered pumps were used on this particular job, but ten will be tested soon. A real determination of savings will be made when the LNG pumps are being fully utilized.

In simple economic terms, vaporized LNG is 20-40% cheaper than diesel fuel. Ifyou can substitute half that cost, you can save 10-20% on fuel costs alone. Build pumps fully powered by LNG and you might save 40%. Consider the average Eagle Ford well can consume as much as 25,000 gallons of diesel and the economics become attractive.

LNG Provides Environmental Benefits

There is also an environmental benefit to using LNG over diesel. Emissions for natural gas vs. diesel can drop as much as 30% for CO2, 75% drop for NOx, 90% drop in particulates, and a 99% drop is SOx emissions.

More LNG Powered Frack Jobs Are Coming

“Ferus is building one 50,000 gallon per day LNG plant in Western Canada and has plans for three more, each of which will have capacity for 87,000 to 100,000 gallons per day, consuming 8.5 mmbtu’s/day.”

Ferus is building one 50,000 gallon per day LNG plant in Western Canada and has plans for three more, each of which will have capacity for 87,000 to 100,000 gallons per day, consuming 8.5 mmbtu’s/day. Ferus is currently looking at areas of high demand and expects the Eagle Ford to top that list. The company committed to develop the plants a couple of years ago, so everything is in place to have a plant up and running in as little as 18 months.

This won't be the last time you hear about LNG being used in frack pumps. Apache will complete a well with 12 LNG powered frack pumps in January of 2013. The effort will be in partnership with Schlumberger and Halliburton. Apache expects fuel cost to fall from a little more than $120,000 to less than $75,000 when utilizing a duel fuel approach similar to that implemented by Baker Hughes and Ferus.

The real hope is to one day fuel the pumps with gas source directly from the field. If field gas were to replace diesel, the industry could save more than $1.5 billion per year. Sounds to me like Ferus should get to work on a new plant in South Texas.

Eagle Ford Regional Drilling at 249 Rigs Jan 11, 2013

January 11, 2013 R.T. Dukes

Eagle Ford Shale regional drilling fell to 249 rigs running this past week.

We know that capital spending will make the Eagle Ford the largest development in the world in 2013, but we spent time reviewing a few smaller companies' budgets.

Eagle Ford Oil & Gas Rigs

The natural gas rig count was 42 this week as gas prices fell further, but then bounced on Friday to end the week basically flat near $3.30/mmbtu.

The oil rig count was flat at 204 running in the area. WTI crude futures were trading close to $94 per barrel to end the week. Eagle Ford crude priced at $106.53/bbl on the 8th of January. Eagle Ford light crude and condensate in the area traded at $90 and $89, respectively.

There are 241 horizontal rigs running in the region. A storage well is being drilled in Zavala County and disposal wells are being drilled in Frio County and Leon County.

La Salle & Karnes counties lead development with 32 rigs running. McMullen (28),Dimmit (25), Webb (22), Gonzales (21), DeWitt (15), Live Oak (11), Atascosa (8), Fayette (8), Lavaca (8), Leon (8), Frio (6) and Zavala (6) round out the top counties in the region. [ic-c] South Texas Oil & Gas News:

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