Eagle Ford Rig Count Declines by One

April 17, 2015 Elizabeth Alford

Texas Job Growth Slows — Rig Counts Continue Decline

The Eagle Ford Shale rig count fell by one this week ending at 136 rigs running across our coverage by midday Thursday.

In recent Eagle Ford news, another round of layoffs hit the Texas energy industry early this week as manufacturers and service companies struggle with the global crude collapse.

The U.S. rig count fell another 34 to 954 rigs running as of today. A total of 217 rigs were targeting natural gas (a decrease of eight from the previous week) and 734 were targeting oil in the U.S. (26 less than the previous week). The remainder were drilling service wells (e.g. disposal wells, injection wells, etc.)412 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

By Midday Friday, natural gas rigs increased by one, totalling 17 rigs. Natural gas prices increased $.12 from the previous week landing at at $2.63/mmbtu by week’s end. .

The oil rig count fell to 136 rigs this week. WTI oil prices increased $4.10 from the previous week, trading at $55.74/bbl on Friday afternoon.. A total of 140 rigs are drilling horizontal wells, zero rigs are drilling directional wells, and vertical rigs increased to six. Karnes (19), DeWitt (19), and Webb (18) and LaSalle (16), have the highest rig counts this week. See the full list below in the Eagle Ford Shale Drilling by County below.

Eagle Ford Shale Drilling by County

Eagle Ford Shale News

1,400 Uncompleted Wells in the Eagle Ford

Researchers Gather Data in Texas Skies

Texas Economic Index Down

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.

Read more at bakerhughes.com

1,400 Uncompleted Wells in the Eagle Ford

April 16, 2015 Elizabeth Alford

EFS Rigs Decrease — 1400 Wells Not Completed

In a recent report, the IHS revealed that Eagle Ford producers have built a large inventory of over 1,400 wells that have been drilled but not completed.

Drilled but uncompleted wells (DUCs) offer an attractive economic alternative for producers who are looking for ways to cut costs in this crude pricing slowdown. A DUC can be converted to a producing well for 65% of the cost of new drilling, which will likely incentivize operators to work through these inventories as oil rices rebound.

BHP, Chesapeake, Anadarko, EOG Resources, ConocoPhillips and Pioneer Resources own nearly 40 Percent of the optimal DUC wells in the Eagle Ford. The report estimates that BHP, ConocoPhillips and Pioneer Resources have better potential in their delayed wells and the greatest available options of any operators in the play.

Raoul LeBlanc, senior director of research at IHS Energy, said the drilled but uncompleted wells have two advantages under current market conditions.

“First, the drilling costs of these wells were already incurred by operators prior to 2015, and the completion costs — which comprise the majority of well costs — can be negotiated at a cheaper rate since completion crews are now both available and available at cheaper rates. Second, if completion costs are fairly consistent in the play, then it stands to reason that wells with higher production will yield better returns on capital.”

Researchers Gather Data in Texas Skies

April 15, 2015 Elizabeth Alford

Scientists from the National Oceanic and Atmospheric Administration (NOAA) are flying over the Texas oil and gas fields to gather data to measure air pollution in the Eagle Ford.

The research in Texas is part of a larger project that includes over 15 research flights out of Colorado and Texas between March and May to measure air pollution from America’s biggest shale fields. The project tracks things like the excessive production of ozone and methane, a greenhouse gas far more potent than even carbon dioxide.

A nationwide study published in early April showed that methane emissions across the United States have dropped significantly in the past two decades and are much lower than current Environmental Protection Agency estimates. But the scientists from NOAA are focused on understanding the variability between the leaks from one field to another. Lead research, Joost de Gouw cites many factors that cause a variability, such as what is being pumped from the ground, the techniques, equipment and the amount of regulation in each state.

“Methane emissions are of particular interest. Natural gas, he said, is mostly methane. Although carbon dioxide is more abundant in the atmosphere, when compared molecule to molecule, methane is a more potent greenhouse gas.”

— Lead Researcher, Joost de Gouw

The research takes place high above the ground in “Miss Piggy”, an airplane that has been customized as a flying lab. Once airborne, teams in the air and on the ground measure readings upwind and downwind of oil and gas activity. The researchers are using aircraft equipped with chemical instruments, and say that once their data is collected, it will take more than a year to synthesize.

Layoffs Claim 343 More Texas Jobs

April 14, 2015 Elizabeth Alford

Another round of layoffs hit the Texas energy industry early this week as manufacturers and service companies struggle with the global crude collapse.

Related: Talisman Energy Cuts Jobs

The largest private well completion company in North America, FTS International, laid off 194 employees from its Bryan location last week.

“Although this closure affects a small percentage of our total workforce of approximately 4,000 employees, we do regret that current circumstances have resulted in this impact on our people.”

— FTS spokeswoman, Lynaia Lutes

he Texas Workforce Commissions also confirmed that Lufkin Industries removed 149 workers in February and March. The company designs, manufactures and services equipment for the oil field.

The Federal Reserve Bank of Dallas conducts a monthly survey of manufacturing executives and the responses confirm that low crude prices are causing a slowdown in the state’s factories. According to a recent survey of 112 Texas manufacturers, the production index fell in March and manufacturers were pessimistic about broader business conditions. A majority of executives reported a decrease in new orders, increased layoffs and falling prices for prices for finished goods.

“Our oil and gas customers have just stopped producing,” one executive from the fabricated metal manufacturing sector responded. “This is not an unusual event for our oil and gas customers, but what feels different about this time is no one knows when production will restart. Typically we have to ride out 60 to 90 days, and this one looks like six months or more.”

Texas Economic Index Down

April 13, 2015 Elizabeth Alford

Comerica Bank’s economic index showed a decrease in activity for the first three months of 2015. For January, the index was down to 106.3, a .9% decrease from December. Though this is the first three-month decline since June 2009, the index is still 34 points above the all-time low.

The report showed that five of the eight index components were down in January including exports, claims for unemployment insurance, housing starts, rig count and hotel occupancy. Other markets such payroll employment, house prices and sales tax continued to show positives numbers.

The Texas Workforce Commission reported that the state added 7,100 jobs in February, including 6900 oil and gas jobs. This was the smallest monthly job gain since October 2011. Read more here.

Low crude oil prices and a decline in drilling activity are at the center of this economic slowdown.

“Obviously, the more than 50-percent drop in oil prices from mid-year 2014 to present is a significant drag on the Texas economy,” Dye said in a statement. “We know the payroll job growth for the state has slowed through February and the weekly rig count numbers have declined into March, so we expect to see more evidence of a downshift in the Texas economy in the months ahead.”

— Robert A. Dye, Ph.D., Senior Vice President and Chief Economist at Comerica Bank