Eagle Ford Rig Count Falls to 90

October 30, 2015 Elizabeth Alford

The Eagle Ford Shale rig count fell by four this week ending with 90 rigs running across our coverage area by midday Friday.

In recent Eagle Ford news, the U.S. Bureau of Labor Statistics released a report showing that Eagle Ford counties led the state in oil and gas related deaths for 2014.

A total of 775 oil and gas rigs were running across the United States this week. 197 were targeting natural gas (four more than the previous week) and 578were targeting oil in the U.S. (16 less than the previous week). The remainder were drilling service wells (e.g. disposal wells, injection wells, etc.)339 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 below.

Eagle Ford Oil & Gas Rigs

Natural gas rigs in the Eagle Ford remained at 12 this week as natural gas prices rose slightly, trading at $2.33/mmbtu, a $.04 increase from the previous week.

The oil rig count dropped to 78 with WTI oil prices ending the week at $46.35, a increase of $1.75. A total of 82 rigs are drilling horizontal wells, one are drilling directional wells, and seven are vertical rigs. Karnes County leads the region in development with 22 rigs 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

Cabot Oil & Gas Reducing Rigs in the Eagle Ford

China Grabs Texas Shale Fields

EXCO Suspends Eagle Ford Operations

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.

Cabot Oil & Gas Reducing Rigs in the Eagle Ford

October 29, 2015 Elizabeth Alford

Chesapeake Released 2015 Q1 — Cabot Oil & Gas Q3 2015

Cabot Oil & Gas' third quarter results failed to meet expectations, including a slowdown in its Eagle Ford operations.

Cabot Oil & Gas released its 2015 third quarter earnings last week, reporting revenue of $305.30M, way below the anticipated $354.36M. The company also reported production increases of 7% with a total of 27 new net wells.

For its Eagle Ford operations, Cabot experienced an 8% decline in liquid volumes, resulting from the reduced amount of activity in the play due to lower oil prices. Other Eagle Ford highlights include:

Experienced another 15% to 20% reduction in drilling costs over Q2
Completed seven wells in the Eagle Ford and placed six wells on production
Drilling Eagle Ford wells was 30% to 40% faster than our 2014 average
Currently operating one rig in the Eagle Ford

“We are currently operating one rig in the Eagle Ford, and we plan to drop that rig by the end of the second quarter of 2016 when the contract expires unless we see a significant uplift in oil prices during the first half of this next year. ”

— Dan O. Dinges, Chairman, President and CEO

Cabot’s activity in the Eagle Ford is focused on 89,000 net acres in Atascosa and Frio Counties, Texas.

EXCO Suspends Eagle Ford Operations

October 28, 2015 Elizabeth Alford

U.S. natural gas producer, EXCO Resources Inc, announced on Tuesday it has suspended oil exploration in the Eagle Ford shale of South Texas.

Related: Shale Industry Shake-Up

EXCO released its third quarter financial and operational results that showed several areas of growth for its Eagle Ford operations:

Production increased by 26% over Q3 2014
Average drill time of 11.2 days with average total measured depth of 15,900 feet
Improved cost structure with average drilling cost of approximately $5.5 million per well
Drilled 4 gross (2.8 net) operated horizontal wells

But theses gains are not enough to counter the low prices that have been too much for the struggling company.

“As a result of continued depressed oil prices, EXCO has suspended its development program in the South Texas region for the remainder of 2015. The Company’s acreage in the South Texas region is approximately 81% held-by-production, which allows EXCO flexibility in the timing of development of this region.”

— EXCO

EXCO is in the middle of a strategic restructuring led by turnaround expert and former TXU Corp Chief Executive John Wilder. Going forward, the company plans to implement a new strategy focusing on 1) liability management, 2) operational performance, 3) capital deployment, 4) risk management, 5) portfolio repositioning, and 6) performance management.

Company-wide Q3 Highlights

Drilled 9 gross (5.2 net) and turned-to-sales 9 gross (4.6 net) operated horizontal wells
Produced 340 Mmcfe per day
Production decreased 6%, from the Q2
Adjusted EBITDA was $62 million, 10% below adjusted EBITDA for the Q2
Progress with cost savings for gathering, transportation, lease operating and administrative costs

China Grabs Texas Shale Fields

October 27, 2015 Elizabeth Alford

Rosetta-Noble Merger — Chinese Buy Texas Shale Fields

Yantai Xinchao, a Chinese investment firm, has announced plans to buy Texas shale oil fields.

The $1.3 billion deal includes purchasing oil assets from Tall City Exploration and Plymouth Petroleum from oil fields located in Howard and Borden counties.

This is the second deal this year where Yantai Xinchao invested in Texas. In May, the company announced plans to pay about 2.2 billion yuan for another oilfield inCrosby, Texas, with proven reserves of about 25 million barrels

China's huge demand has Chinese oil and gas companies eyeing U.S. assets and analysts predict that we will see more of this activity as tough competition and tight government regulations back home put more pressure on Chinese energy industry. So far this year, the Chinese government has issued five import licenses to independent refineries to break the dominance of State-owned companies and create a more competitive and efficient energy sector.

“The Chinese are logical buyers for assets here (...) Some of the independents will be cash-strapped and so they’re potentially sellers. I think the Chinese NOCs are logical buyers.”

— John England, chief of Deloitte LLP’s U.S. Oil and Gas Practice

In 2010, state-owned Chinese energy giant CNOOC bought 600,000 acres of oil and gas fields the Eagle Ford. Tom Pauken, former chairman of the Texas Workforce Commission, expressed concern about long-term effects of such deals on the U.S. economy and possible threats to Texas and warned against allowing the Chinese access to new, hard-earned U.S. technology.

Eagle Ford Oil Field Deaths Lead State

October 26, 2015 Elizabeth Alford

Karnes County Well Explosion — Eagle Ford Explosion

Eagle Ford counties lead the state in oil and gas related deaths for 2014.

As the oil boom exploded over the last few years, so has the number of deaths, according to the U.S. Bureau of Labor Statistics. The agency reports that number of fatal work injury cases in oil and gas extraction industries were 27 percent higher in 2014, rising to 142 in 2014 from 112 in 2013.

Between 2010 and 2014, 615 U.S. oil field workers died with 270 (44%) of those being from Texas. And in 2014 alone, half of the country's oil field deaths were in Texas.

“The Houston Chronicle reports that most of Texas’ accidents last year occurred in the heart of the Eagle Ford Shale with eight occurring in La Salle County. One explosion explosion alone accounted for three of those deaths.”

The oil field is a dangerous place, where repetitious work and long hours create an environment ripe for mistakes. In South Texas, workers (all men) have been crushed, burned, electrocuted, scalded, run over and hit by equipment.

Fatal work injuries in the private mining, quarrying, and oil and gas extraction sector were 17 percent higher in 2014, rising to 181 from 155 in 2013

The number of deaths were directly proportional to the upswing in activity and with the downturn leaving thousands out of work, the trend may slow. More recent accident figures are not yet available to the public.