Texas-Wide Rig Count Down Another 14

February 12, 2016 Elizabeth Alford

The Eagle Ford Shale rig count fell by three this week with 65 rigs running across our coverage area by midday Friday.

In recent Eagle Ford news, President Obama continues to push additional legislation that will push more oil and gas operators out of business. The latest move is a controversial oil tax embedded in his $4.1 trillion budget request he prosed this week.

A total of 541 oil and gas rigs were running across the United States this week, which is a drop of 48 over last week. 102 were targeting natural gas (2 less than the previous week) and 439 were targeting oil in the U.S. (28 less than the previous week). The remainder were drilling service wells (e.g. disposal wells, injection wells, etc.)248 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 are at five this week as natural gas prices declined, trading at $1.96/mmbtu, an $.08 decrease from the previous week.

The Eagle Ford oil rigs dropped to 60 with WTI oil prices ending the week at $29.58, a decrease of $1.74. A total of 60 rigs are drilling horizontal wells, zero are drilling directional wells, and five are vertical rigs.

Karnes County leads the region in development with 15 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

Oil Tax Would Crush Eagle Ford Companies

AWE Exits the Eagle Ford and Carrier Moves In

Cabot Oil Slashes 2016 Budget

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 Slashes 2016 Budget

February 11, 2016 Elizabeth Alford

Eagle Ford producer, Cabot Oil and Gas reduces their projected 2016 spending by nearly 50%.

Cabot announced last week it will cut its 2016 capital budget to $325 million as a result of the continued low pricing environment. This is a reduction 58 percent from the 2015 capital program of $774 million.

“We have reduced our 2016 capital program in response to the lower commodity price environment and its anticipated impact on our operating cash flow for the year,” said Dan O. Dinges, Chairman, President and Chief Executive Officer. “Our reduction in capital spending reflects our commitment to maintaining a strong balance sheet and highlights the capital efficiency of our asset base.”

92 percent of Cabot's 2016 budget will go to drilling, completion and facilities capital. The company's Eagle Ford Shale projects will garner about 30 percent of total spending. Other highlights include:

Total production growth for 2015 expected to be approximately 13 percent
40 new net wells in the Marcellus Shale for 2016
15 net wells in the Eagle Ford Shale for 2016
Reduce its rig count to one rig company-wide by mid-February 2016
47% reduction from its $615M preliminary budget for the year and 58% lower than its $774M capital program for 2015
Company lowers the top end of its production growth guidance range for the year to 2%-7% from 2%-10%

Cabot’s activity is focused on its 89,000 net acre position in the Eagle Ford Shale, principally located in Atascosa and Frio Counties, Texas.

Oil Tax Would Crush Eagle Ford Companies

February 9, 2016 Elizabeth Alford

alt="Eagle Ford at One Billion Barrels" — 10.25 Tax Per Barrel

President Obama continues to push additional legislation that will push more Eagle Ford operators out of business. The latest move is a controversial oil tax embedded in his $4.1 trillion budget request he sent to Congress today.

Related: Texas Challenges Methane Rules

The Obama Administration hopes to raise $319 billion over the next decade for 'clean' transportation and plans to fund these projects with a $10.25-per-barrel tax on crude.

This new tax is part of Obama's 21st Century Clean Transportation System, which is dubbed as "smart, strategic integrated investments to help reduce carbon pollution and strengthen the economy."

The President’s plan stresses the need for a sustainable funding solution that takes into account the integrated and varied nature of our transportation system. It will increase American investments in clean transportation infrastructure by roughly 50 percent while reforming the investments we already make to help reduce carbon pollution, cut oil consumption, and create new jobs. The new fee on oil will also encourage American innovation and leadership in clean technologies to help reshape our transportation landscape for the decades ahead.

The proposed tax is the latest in an onslaught of regulations aimed at the fossil fuel industry. The move brought immediate criticism from many analysts and industry leaders with oil mogul T. Boone Pickens tweeting its the "dumbest idea ever" and that the "$35 billion/year oil tax would bankrupt O&G industry."

“I can believe the White House is bad at math; I doubt they would conceive of a tax directly intended to undermine U.S. energy independence and gut a business”

— Steven Kopits of CNBC

After months of plummeting crude, the boom has become a bust for many and companies have struggled to survive. 18 companies that do business in the Eagle Ford filed bankruptcy and an estimated 60,000 jobs have been lost. Adding an additional tax that is roughly 30% of a barrel of crude will devastate many producers.

Key components of the plan include:

Reducing carbon pollution by creating incentives to reduce our reliance on oil and cut carbon pollution from our transportation sector including self-driving cars vehicles and other alternative vehicles
Strengthening the economy by supporting hundreds of thousands of jobs each year and increase the competitiveness of U.S. businesses and the productivity of our economy by making it faster, easier, and less expensive to move American-made products.
Expanding clean, reliable, and safe transportation options such as public transit and rail

AWE Exits the Eagle Ford and Carrier Moves In

February 8, 2016 Elizabeth Alford

Carrier Energy Partners II moves into the Eagle Ford by purchasing holdings from Australia-based AWE.

In 2010, AWE acquired a 10 percent stake in Sugarloaf Area of Mutual Interest inKarnes County, Texas. The company has worked with Marathon oil to develop their stake that comprises 24,000 acres in the Eagle Ford shale with proved plus probable reserves of 47.8 million barrels of oil equivalent.

The deal announced last week will cost Carrier Energy Partners II $190 million in cash and is expected to be complete by the end of March 2016.

“AWE has worked with the operator, Marathon Oil, over the past few years to optimally develop the asset and realise its potential. With Sugarloaf now entering a more mature phase of production and development, the time is right to divest this asset and focus on the next major project for AWE - the Waitsia gas project in Western Australia,” Clement said.

The transaction is expected to be completed by the end of March 2016. Highlights include:

AWE agrees to sell its 10% working interest in the Sugarloaf project to US-based Carrier Energy Partners II, LLC for USD 190 million (AUD 271 million) before tax
Additional USD 9 million (AUD 13 million) payment to AWE for past drilling costs
Sale proceeds will be used to repay all debt, resulting in an estimated net cash position of AUD 60 million at closing (March 2016)
Tax on the transaction is estimated at USD 35 million (AUD 50 million), payable in the June quarter
The current mark to market value of AWE’s unutilised oil price hedges relating to the Sugarloaf asset is USD 5.2 million (AUD 7.5 million)

Eagle Ford Rig Count Falls Below 70

February 5, 2016 Elizabeth Alford

The Eagle Ford Shale rig count fell by five this week with 68 rigs running across our coverage area by midday Friday.

In recent Eagle Ford news, the Texas Work Force Commission announced that new layoffs in the oil and gas industry will total over 539 jobs, adding to the strain of the current downturn.

Eagle Ford Oil & Gas Rigs

Natural gas rigs in the Eagle Ford are at five this week as natural gas prices declined, trading at $2.04/mmbtu, a $.36 decrease from the previous week.

The Eagle Ford oil rigs dropped to 63 with WTI oil prices ending the week at $31.32, a decrease of $4.67. A total of 64 rigs are drilling horizontal wells, zero are drilling directional wells, and four are vertical rigs.

Karnes County leads the region in development with 15 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

NuStar Reports Record Earnings

More Job Cuts for Texas

Murphy Oil to Spend $340 in Eagle Ford in 2016