Water Rights and Use at the Forefront of Debate

As we hear more are more questions about water, we thought it was worth aggregating some of the data we have found. We recently published an Eagle Ford Water page as a reference for everyone in South Texas. You can find the page by hovering over "Geology" in the navigation and clicking "Water" in the drop down. We've added detailed information on Water Use Per Well, where we're beginning to see Water Recycling, and the TCEQ who regulates Water Rights in South Texas.

We'll be adding and editing the page as new information comes to light. You can also go straight there by clicking this link: http://eaglefordshale.com/water/

264 Rigs Working the Eagle Ford Shale Region - January 6, 2012

drilling rig
drilling rig 8

The Eagle Ford Shale drilling rig count fell 1 rig to 264 this past week. The rig count has remained virtually flat over the past few holiday weeks. Oil prices have moved back above $100/bbl and natural gas prices have remained about the same. The February natural gas contract is bouncing around $3/mmbtu (Henry Hub) and the natural gas rig count in our area began to show some weakness with a drop off of 7 rigs (86). The loss was almost completely absorbed by the addition of 6 rigs drilling for oil (178 total). Horizontal wells account for activity from 243 rigs drilling and we have 0 injection or service wells being drilled.

Webb (38) still leads the region, while Karnes (37), La Salle (32), DeWitt (26), Gonzales (25), McMullen (25), and Dimmit (22) still outpace other counties by more than 10 rigs. The only major move during the week was Gonzales County where 6 additional units went to work. EOG Resources (3) and Hunt Oil (2) operate 5 of the six new rigs.

News in the Eagle Ford was relatively slow until today when Hunt Oil and Marubeni announced a $1.3 billion Eagle Ford JV. Other news over the past week included

Come back weekly for updates on the South Texas drilling rig count.

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

Hunt Oil - Marubeni $1.3 Billion Eagle Ford Shale JV

Marubeni Corporation and Hunt Oil have reached a joint venture (JV) agreement whereby the Japanese company is acquiring 52,000 net acres for $1.3 billion. Hunt Oil is just the latest of many Eagle Ford Shale operators to sell a non-operated interest in their acreage. The $1.3 billion for 52,000 acres equates to a ~$25,000 per acre valuation undiscounted. The deal value will be split between an upfront payment and a carried interset in development of the play until the $1.3 billion is spent.

Hunt and Marubeni have combined interest in almost 150,000 acres and will jointly acquire additional acreage across the play. Hunt Oil operates wells or has operated a rig in Gonzales County, Karnes County, La Salle County, McMullen County, and Wilson County in our coverage area. We assume this deal covers much if not all of this area. Neither Hunt nor Marubeni disclosed the location of the JV's acreage.

Marubeni has positioned its energy and mineral resources business, including oil and gas exploration and development, as a strategically important business area, and has already been involved in projects in the Gulf of Mexico, the North Sea (U.K.), India, Qatar and the Niobrara Shale Oil (U.S.), which started its initial oil production in October, 2011. As the result of this Project, Marubeni’s total acreage for shale oil play is approximately 72,000 net acres, which makes Marubeni the largest acreage holder among Japanese firms.

Read the full press release at maurbeni.com

 

Goodrich Petroleum Plans Eagle Ford Growth in 2012

Goodrich Petroleum's Eagle Ford assets will be the beneficiary of $155 million in capital spend on 29 gross (19 net) wells in 2012. The company's assets are centered in Frio and La Salle counties.

Oil directed activity will be concentrated in the Eagle Ford Shale trend with $155 million allocated to 29 gross (19 net) wells (which assumes a combination of 6,000 to 9,000 foot laterals), and the Tuscaloosa Marine Shale trend, with $20 – $45 million allocated to 4 gross (2 net) to 6 gross (4 net) wells.

 

The Company estimates oil volumes to grow by 130 – 160% in 2012 versus 2011, which will drive very strong cash flow growth.  Natural gas volumes are expected to be flat to slightly down, while overall production on a Mcfe basis is expected to increase by 10 – 15% over 2011.  Oil volumes are estimated to grow to approximately 5,000 barrels per day as the Company exits 2012.

Read the entire press release at goodrichpetroleum.com

EagleFordShale.com Energy Newsletter Coverage - Bisnow

EagleFordShale.com was recently interviewed by Bisnow reporter Greg Miller for placement in the company's Energy Newsletter. The following article was included in the January 5, 2011 email:

WEBSITE SERVES THE NEW WILD WEST

Like a mining boomtown in the Old West, the Eagle Ford shale play in South Texas has seen an enormous population explosion. And now a Houston-based website has taken on the role of the saloon where people come together to exchange information. (The site has no sarsparilla or fighting over fixed card games, that we know of.)

We snapped EagleFordShale.com operations director R.T. Dukes this week at his office in the Rice Village area. R.T., a graduate of Texas A&M and a former consultant with Wood Mackenzie’s upstream energy group. He tells us the site’s focus is to keep people apprised of what's happening in the play. The site, which is getting 45,000 visitors each month, includesjob listings and a marketplace. R.T. says his company is expanding to serve more shale regions. Look for a Bakken site to launch later this quarter and a Marcellus site to follow in Q2.      

EagleFordShale.com was founded by Mississippi State petroleum engineer Kenny DuBose, shown here sporting his alma mater’s hat on a South Texas frack job in fall 2010. Kenny owns the site’s parent company, KED Interests. There are now about 265 rigs working in the Eagle Ford area. R.T. says a rule of thumb is to count about 50 active jobs for every rig and 150 indirect jobs. The town of Carrizo Springs alone has grown from 10,000 in 2010 to 20,000 today. The town sits in Dimmit County, which has 23 rigs, which means 1,150 active rig jobs alone. It has been estimated that the Eagle Ford has added approximately 12,000 jobs with thousands more on the way.      

The site also has listings for scarce lodging. Hotels, trailers, RVs, apartments, and rental properties are getting harder and harder to find. For a small fee, sellers can obtain an area of the site and manage it themselves. It also links to hotels, man camps, and extended-stay facilities. Though non-energy industries are working fast to respond, progress is still painfully slow. Developers are buying large acres of land but construction is well behind demand. (It's ok, we'll rough it, sleep under the stars, like our forefathers... as long as there's wireless.) On top of that, completed buildings have been sitting for weeks waiting for water and electricity to reach them.

Bisnow is a national media company that publishes 27 daily e-newsletters and produces 230 annual events in Atlanta, Austin, Baltimore, Boston, Charlotte, Chicago, Dallas-Fort Worth, Houston, Los Angeles, New Jersey, New York City, Philadelphia, San Antonio, San Francisco, Seattle, South Florida, Washington, DC, as well as publishing a once weekly National e-newsletter that reaches nearly every state in the US. 

The Energy Newsletter covers the globe and is sent out four times a week.