Matador Resources' Capital Budget is Focused in the Eagle Ford Shale

Matador Resources will spend almost 85% of its capital budget developing properties and acquiring new properties in the Eagle Ford Shale in 2012. The company wil drill no Haynesville Shale operated wells in 2012 and will keep two rigs active in the Eagle ford throughout the next 12-months.

As set forth in its initial public offering prospectus dated February 1, 2012, Matador's 2012 capital budget is estimated to be approximately $313 million. The Company plans to direct approximately 94% or $295 million of its 2012 capital budget to opportunities prospective for oil and liquids opportunities, including the allocation of approximately 84% or $264 million specifically to the exploration, development and acquisition of additional interests in the Eagle Ford shale play in South Texas. Matador is running two rigs in South Texas currently and expects to run two rigs in that area throughout 2012. The Company plans to allocate the remaining 6% or approximately $18 million of its 2012 budget to natural gas related activities, primarily in the Haynesville shale in North Louisiana. The Company does not plan to drill any operated Haynesville wells in 2012.

While natural gas production will be in decline from the lack of activity in the Haynesville, the company expects volumes will be offset by higher value wet-gas in the Eagle Ford.

Matador anticipates that some of the decline in the Company's Haynesville dry gas production will be offset by natural gas production associated with its Eagle Ford drilling activities which should enjoy higher effective pricing as compared to the Haynesville dry gas production due to its natural gas liquids ("NGL") content.

Read the entire press release at matadorresources.com

TXDOT Task Force to Address Barnett & Eagle Ford Shale Roads

Texas Department of Transportation officials are convening a task force to address road damage associated with oil & gas activity in the South Texas Eagle Ford Shale and North Texas Barnett Shale regions.

Within 90 days, the task force will convene an executive-level meeting of local governments, law enforcement, transportation officials, Railroad Commission, energy industry leaders.

 

  • Continue research, data gathering and sharing.
  • Identify future energy developments.
  • Strategize use of new technology.
  • Discuss potential legislative issues.
  • Develop funding strategies.
  • Routinely monitor, evaluate and revise plans.

 

Eagle Ford Drilling Pushes to New Heights - 273 Rigs - March 9, 2012

drilling_rig_1_50x731.jpg
Drilling Rig

The Eagle Ford Shale drilling rig count jumped 4 rigs to 273 active in the region. That's a record for the area with four more rigs than the 269 rig record we set just one week ago. We are ten rigs above the 2011 exit rate and there are 10-15 more known rigs to be headed our direction over the coming months. If oil prices remain above $100, activity could possible stretch even higher.

Eagle Ford Oil & Gas Rigs

The natural gas rig count fell 2 to 72 this week. New lows in the natural gas rig count are coinciding with new highs in the oil rig count. Companies continue a shift in their operations from gassy portions of the play to areas that are supported by higher oil & condensate prices. Oil directed activity grew 6 rigs to drive us through the old record and to surpass 200 oil rigs working for the first time in the area.

Natural gas prices hit fresh 10-year lows this week on news that weather in the Northeast will continue to be mild. Gas traded below $2.30/mmbtu on Thursday. Oil held almost exactly the same - $106 per barrel (WTI) at the end of the week. The Eagle Ford is very attractive at $100+ oil prices and that's the main reason we haven't seen a drop in activity like many other areas of the country.

Horizontal wells account for activity from 254 rigs and we have no service wells being drilled. Karnes County leads development with 40 rigs. La Salle (38),Webb (31), Gonzales (28), DeWitt (27), McMullen (25), Dimmit (18), Live Oak (9), and Frio (9) make up the top Eagle Ford counties.

News from the week included:

If you're traveling to San Antonio soon, be sure to visit our Eagle Ford Hotels page. We've negotiated discounted rates with hotels that are welcoming the Oil & Gas Industry.

Come back weekly for updates each week or sign up for alerts.

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

Schlumberger Opens San Antonio Operations Center - Bexar County

Schlumberger opened the doors to its San Antonio facilities earlier in the week. The new operations center will serve the company's south division in New Mexico, South Texas, and West Texas. While servicing multiple areas, the main purpose for the new office is the Eagle Ford Shale. Oilfield service companies in the Eagle Ford  have moved to expand their presence in South Texas as they prepare for the multi-billion dollar, multi-decade development in the area. The almost $20 million facility will support 500+ Eagle Ford jobs that pay a range of $25,000-$85,000 per year. The new facility is located on the south side of San Antonio at the intersection of IH-35 and Loop 410.

Read more related to the opening at mysanantonio.com

Dow Chemical's Propylene Plant Gets Approval - Eagle Ford Feedstock

Dow Chemical's board has authorized the company to finalize the engineering plans and to begin purchasing equipment for a "world-scale" propylene plant near the company's Freeport Complex in Texas.  You can read more about why a new petrochemical plant makes sense in a recent article published here - Eagle Ford NGLs Adding to U.S. Supply Growth. The announcement is a big step in what is really becoming a petrochemicals renaissance in our country. It was just a few years ago that industry experts thought there would never be another pet-chem plant built in the U.S., but that was before the shale plays really burst onto the scene. The Eagle Ford, along with many others, have changed the cost of doing business in our country. That's a big win and this is why: 

Dow expects the new facility will:

  • Create 1,300 jobs at the height of construction
  • 40 contractors and 80 new Dow employees will be needed to maintain & operate the facilities

This is the perfect example of what domestic energy can do for the economy. This plant would have been undoubtedly built in a different region of the world before shales began adding low cost oil & gas supply. It's also why measuring the direct impact of a play like the Eagle Ford is difficult. Do you consider the jobs created by the Dow plant as Eagle Ford Jobs? I doubt many will, but I can guarantee this plant would have been far less likely without it.

“The availability of cost-advantaged feedstocks from U.S. shale gas developments represents a value-creating opportunity for our downstream businesses, and Dow is capitalizing on this,” said Brian Ames, vice president of Olefins, Aromatics and Alternatives. “Our Company was among the first in our industry to declare a comprehensive plan to take advantage of the increasing supplies of U.S. natural gas liquids, and we remain on track to implement that plan, which will create thousands of domestic jobs.”

Read the entire press release at dow.com