Texas Drilling Still Sluggish

July 7, 2015 Elizabeth Alford

The Texas Railroad Commission (RRC) released its monthly oil and gas statistics last week showing a continued slowdown for drilling across Texas. The Eagle Ford remained a bright spot for permits and production amidst sluggish numbers state-wide.

Drilling Permits

In May, the RRC issued a total of 917 original drilling permits, a huge decline from the 2,389 that were issued during this time period in 2014.

The May total included 778 permits to drill new oil and gas wells and of that, 143 went to the San Antonio area, which is in the heart of the Eagle Ford. 222 permits were issued for oil, 55 for gas and 583 for oil and gas.

Oil & Gas Completions

The total year-to-date well completions for 2015 are 9,832 down from 13,729 recorded during the same period in 2014.

May 2015: 1,299 oil, 201 gas, 72 injection and nine other

March 2014: 2,057 oil, 323 gas, 78 injection and 12 other

Production

Production remains high with preliminary figures for April 2015 at 69,595,733 barrels, up from 61,303,820 barrels reported during April 2014. The Eagle Ford continues to outproduce other Texas areas in oil production with Karnes, La Salle and DeWitt counties maintaining the lead. Following are top oil and gas producing counties in April, 2015 according to the RCC.

COUNTY – CRUDE OIL (BBLS)

KARNES – 6,503,269
LA SALLE – 4,481,444
DEWITT – 4,290,323
MCMULLEN – 3,143,357
ANDREWS – 2,969,079
UPTON – 2,919,211
MARTIN – 2,875,795
GONZALES – 2,874,191
MIDLAND – 2,719,874
REEVES – 2,223,136

Eagle Ford Hotels: Down But Not Out

July 6, 2015 Elizabeth Alford

The temporary housing market for oilfield workers in the Eagle Ford is hanging on despite slower demand.

Relates: Will Bakken Man Camps Disappear?

At the peak of the shale boom, Eagle Ford hotels, lodges and man camps could barely keep up with demand, as workers flooded the region for work and needed a place to stay. According to the Texas Comptroller of Public Accounts, temporary housing in the Eagle Ford increased more than 270 percent to 7,860 rooms since 2008.

At the height of the boom, many of these housing providers were able to set their prices and sometimes, even turn away customers. But today, its a different story. Producers have scaled back operations as they wait out the current pricing environment, which means fewer workers in the field that need housing. Supply has outstripped demand and rooms that once rented for $300 a night, may now only cost $75.

Things are hardly bleak, however. New numbers by the Comptroller's Office, show lodging providers in the Eagle Ford took in $63 million in revenue in the first quarter of the year, down 11 percent from the previous quarter, but a $5.1 million increase over 2014.

One company, InVision Housing Solutions LLC, is optimistic about the future and is working to raise $5 million in capital to build new oilfield worker housing at the Double C Resort just outside Carrizo Springs, Texas.

Michael Spencer, head of InVision, told San Antonio Business Journal that research shows that Carrizo Springs and surrounding Dimmit County remain the No. 1 drilling site in the Eagle Ford Shale. "

“(Operators) drilled 4,000 to 5,000 wells around here,” Spencer said. “They have to keep taking care of them.”

Eagle Ford Rigs Increase to 120

July 3, 2015 Elizabeth Alford

Eagle Ford Rig Count — Eagle Ford Rigs Increase

The Eagle Ford Shale rig count rose by three, ending the week at 120 rigs running across our coverage area by midday Thursday.

In recent Eagle Ford news, the Texas Railroad Commission issued new policies to protect Eagle Ford pipeline inspectors from drug smugglers and illegal immigrants.

The U.S. rig count increased slightly, ending with 862 rigs running by midday Friday. A total of 219 rigs were targeting natural gas (nine less than the previous week) and 640 were targeting oil in the U.S. (12 more than the previous week). The remainder were drilling service wells (e.g. disposal wells, injection wells, etc.)363 of the rigs active in the U.S. were running in Texas.

Baker Hughes reports its own Eagle Ford Rig Count that covers the 14 core counties. The rig count published on EagleFordShale.com includes a 30 county area impacted by Eagle Ford development. A full list of the counties included can be found in the table near the bottom of this article.

Eagle Ford Oil & Gas Rigs

Natural gas rigs in the Eagle Ford remained flat at 26 this week and natural gas prices traded at $2.81/mmbtu, an decrease of $.05 from the previous week.

The oil rig count increased by three to 94 as WTI oil prices dropped to $56.72, a decrease of $2.91. A total of 110 rigs are drilling horizontal wells, one rig are drilling directional wells, and nine are vertical rigs. Karnes leads development this week running 21 rigs, with LaSalle (20), DeWitt (16) and Webb (16) follow closely. See the full list below in the Eagle Ford Shale Drilling by County below.

Eagle Ford Shale Drilling by County

Eagle Ford Shale News

Texas Housing Market Strong

Eagle Ford Counties Win Royalties

Texas Attorney General Challenges EPA

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 Baker Hughes 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.

Texas Housing Market Strong

July 2, 2015 Elizabeth Alford

Housing markets in Texas remain strong remain strong despite an economic slump in the nation's energy capital, but some worry about the high prices for a few Eagle Ford residents.

The decline in oil prices over the last year has caused a slowdown in employment growth and some job cuts, but homes sales remain strong. In May 2015, there were 28,088 sales of existing single-family homes, 1.66% percent more than in May 2014.

Lawrence Yun, the chief economist for the National Association of Realtors, said that home price increases in Texas are running at about twice national rates.

While increased home prices are a great thing for property owners, for many at the bottom of the wage pool, this represents a constant struggle to make ends meet.

“We need to tone down the price growth, because prices are rising too fast,” Yun said. “House prices nationally are now reaching back to 2006 levels,” before the recession.”

Residents in some Eagle Ford counties are among the most vulnerable. UTSA just announced they will be conducting a study of the impact of oil-and-gas exploration on the affordability and adequacy of housing in Dimmit, La Salle and Zavala counties. The study, funded by the U.S. Department of Housing and Urban Development, will also address how federal, county and local policies affect the availability of rental housing, affordable housing and housing options for vulnerable populations.

Texas continues to lead the nation in consumer confidence. The Texas region's consumer confidence index was 130.5 in May 2015, up 7.5 percent from April 2015 and compared to the national index of 95.4.

Texas Attorney General Challenges EPA

July 1, 2015 Elizabeth Alford

Chesapeake Before Texas High Court — Texas Attorney General Challenges EPA

Texas Attorney General Ken Paxton has filed a lawsuit to challenge the new federal regulations under the Clean Water Act.

In a news release Monday, Paxton accuses the Obama Administration of illegally attempting to expand the jurisdiction and regulatory power of the Environmental Protection Agency (EPA) in such a way as to threatens private property ownership.

The EPA’s final rule was published Monday and is very broad. it leaves much open to interpretation including whether ditches, dry creek beds, gullies and isolated ponds formed after a big rain could be considered a “water of the United States.”

“The EPA’s new water rule is not about clean water – it’s about power,” Attorney General Paxton said. “This sweeping new rule is a blatant overstep of federal authority and could have a devastating effect on virtually any property owner, from farmers to ranchers to small businesses. Texans shouldn’t need permission from the federal government to use their own land, and the EPA’s attempt to erode private property rights must be put to a stop.”

Paxton is also sceptical of the EPA’s Clean Power Plan (“Carbon Rule”) and warned that it would have an impact on the livelihoods and quality of life of Texans and would result in higher electricity costs and less reliability for Texans, all while doing little to nothing to affect the environment. Attorney General Paxton last month announced Texas intends to challenge the Carbon Rule when it is finalized by the EPA later this summer.