Eagle Ford Rig Count Inches Up

March 19, 2016 Elizabeth Alford

The Eagle Ford Shale rig count increased by four, ending the week with 52 rigs running across our coverage area by midday Friday.

In recent Eagle Ford news, in the wake of the shale boom hundreds of roadways in South Texas are in disrepair and will likely cost communities hundreds of millions of dollars to fix.

A total of 476 oil and gas rigs were running across the United States this week, which is a drop of nine over last week. 89 were targeting natural gas (four less more than the previous week) and 387 were targeting oil in the U.S. (one more than the previous week). The remainder were drilling service wells (e.g. disposal wells, injection wells, etc.)217 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 increased in the Eagle Ford fell by on to five this week as natural gas prices improved slightly, trading at $1.93/mmbtu, a $.11 increase from the previous week.

The Eagle Ford saw an increase in running oil rigs up this week to 45 with WTI oil prices ending the week at $39.64, an increase of $1.05 over last week. A total of 45 rigs are drilling horizontal wells, zero are drilling directional wells, and seven are vertical rigs.

Karnes County continues to lead the region in development with 13 running rigs. See the full list below in the Eagle Ford Shale Drilling by County below.

Eagle Ford Shale Drilling by County

Eagle Ford Shale News

Clayton Williams Stops Eagle Ford Drilling

Earthstone Reports ‘Decent’ Q4

Eagle Ford County Roads a Mess

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.

Abraxas: No Activity in the Eagle Ford

March 18, 2016 Elizabeth Alford

Chesapeake Released 2015 Q1 — Abraxas Petroleum Earnings Report

Abraxas Petroleum Corp. announced they will focus the remainder of 2016 on their Bakken assets while scouting opportunities to sell Texas properties.

Abraxas recorded a net loss of roughly $127 million for the full year 2015. Moving forward in 2016, the company plans to focus on their Bakken assets and they anticipate six gross well completions in the third quarter. Abraxas' net CAPEX for the region will be between $24 - 34 million.

In a recent earnings call, Abraxas' executives did not give any new information on what is happening in the Eagle Ford, but they are preparing to divest 5,227 net acres in the Texas counties of Ward and Reeves along with an additional 12,100 net surface acres in Pecos County.

“Abraxas is going to build on our past record to become better in 2016 and beyond despite of 64% decrease in capital expenditures and a substantial proved undeveloped reserve right down due to prices in 2015. We still increased our proved reserves by 2% to 43.2 million barrels and we replaced production 136%. We also grew production grew year-over-year 4%.”

— Bob Watson, Abraxas' President and CEO

In January, the leadership team of Abraxas Petroleum voluntarily cut their fees in a drastic measure to stay afloat.

The twelve months ended December 31, 2015 resulted in:

Production of 2.2 MMBoe (5,975 Boepd)
Revenue of $76.9 million inclusive of realized hedge settlements
Adjusted EBITDA(a) of $43.7 million inclusive of Raven Drilling
Adjusted discretionary cash flow(a) of $40.2 million inclusive of Raven Drilling
Net loss of $127.1 million, or $1.21 per share
Adjusted net loss(a), excluding certain non-cash items and inclusive of Raven Drilling of $6.0 million, or $0.06 per share (a) See reconciliation of non-GAAP financial measures below

Clayton Williams Stops Eagle Ford Drilling

March 16, 2016 Elizabeth Alford

Executives of Clayton Williams Energy Inc. (CWEI) were happy to see 2015 come to an end.

Related: Baytex Reports Strong Q4

In October 2014 as the oil slump was just beginning, Clayton Williams executives announced they would pull back activity in 2015. And during an earnings call last week, they confirmed that was indeed how the year played out.

Throughout 2015, the company limited their drilling and completion activities to combat the downturn and expect to reduce capital spending further in 2016.

“We’re ready to close the chapter on 2015. It was a tough time, it reminds me a lot of 1980s and I was in – I lived through the 1980s, I worked at Clayton Williams then and we made it. We made it through that time. We’re going to make it through this time.”

— Mel G. Riggs - President & Director

Eagle Ford Operations

CWEI speculated that they expect their 70,000 net acres in the Eagle Ford to achieve high shareholder value. Average daily oil production for 2015 was 3,037 Bbls compared to 2,529Bbls for 2014. The company also saw a production increase in natural gas from 464 (Mcf) in 2014 to 516 (Mcf) in 2015. The company is shifting it's focus to the Delaware Basin and would not speculate on what its spending will be for the Eagle Ford for the rest of the year.

Other 2015 Results

Oil and Gas Production of 15.8 MBOE/d
Adjusted Net Loss1 (non-GAAP) of $70.4 million
EBITDAX2 (non-GAAP) of $112.1 million
Production costs in 2015 were $87.6 million versus $105.3 million in 2014
G&A was down 34% compared to the previous year

Earthstone Reports 'Decent' Q4

March 15, 2016 Elizabeth Alford

Earthstone Energy executives announce they are looking for more investment opportunities in the Eagle Ford Shale after cutting staff expenses by 12% in 2015.

Earthstone Energy released its Q4 and full year 2015 results showing a net loss of $116.5 million for the quarter and $116.7 million loss for the year. During an earnings call on Monday, the company's CEO called it a 'decent' quarter, despite the downturn.

Executives also announced an annual savings associated with general administrative costs to be about $1.3 million, mostly from expenses related to personnel.

“During 2015 (...) we cut virtually all of our long term contractors, some employees, rolled back salaries 10% and eliminated some benefits. We did what we had to do, however I am pleased to say that staff morale and determination to succeed is high.”

— Frank Lodzinski, President and CEO

Eagle Ford Operations

In the fourth quarter, Earthstone drilled four-well Eagle Ford Boggs Unit in Karnes County and report that there are 12 wells that were waiting on completion by year's end. Looking to 2016, the company anticipates completing these wells in the second half of 2016.

One well with a lateral length of approximately 7,200 feet will be completed with 32 stages
Three wells with lateral lengths of approximately 6,500 feet will be completed with 30 stages
Completion costs are expected to be less than $100,000 per stage

Other 2015 Highlights

Q4: Average daily production of 3,872 Boepd, a 40% increase compared to the fourth quarter of 2014(2);
Q4: Revenues of $8.3 million
Full 2015: Average daily production of 3,936 barrels of oil equivalent per day ("Boepd"), a 63% increase compared to the full year 2014
Full 2015:Revenues of $49.4 million

Eagle Ford County Roads a Mess

March 14, 2016 Elizabeth Alford

be safe. be smart. — Eagle Ford Roads a Mess

In small towns all across the Eagle Ford, decreased oil and gas activity has left a mess of the county roads system.

The South Texas roadway problems left in the wake of the shale boom will cost communities in the hundreds of millions of dollars for repairs.

Poor road conditions, increased traffic and heavy equipment brought on by the oil boom contribute to the unsafe conditions. Roads in the Eagle Ford Shale are under intense pressure from the huge volumes of truck traffic that are regularly running up and down South Texas highways – literally hundreds of trips per day in many cases. And, often, the counties have not been able to keep up with the problems caused by the increased volume.

The Texas Railroad Commission estimates that it will around $432 million to rebuild the roads in DeWitt County alone.

“If it leads to a rig site, its bound to be a broken road. We’ve been able to raise locally and appropriate more than $78 million to the road effort in the last four years, and 80 percent of that money is money that is being taxed to companies like (BHP Billiton). So they are paying a huge price to be here.”

— DeWitt County Judge Daryl Fowler