Latest News About Eagle Ford Shale
Among the most accessed shale formations in the United States, the Eagle Ford Shale extends from the Mexican border 400 miles well into south central Texas. Originally drilled at LaSalle County in 2008, Eagle Ford has greatly benefitted from advances in hydraulic fracturing and horizontal drilling. Between 2010 and 2012, the number of drilling permits quadrupled to 4,000. Both oil and natural gas production increased exponentially over the last five years and there are now over 2,200 oil wells in its largest field, the Eagleville Eagle Ford, in Karnes County. In terms of natural gas, the Briscoe Ranch Eagle Ford field in Dimmitt County tops the rankings with over 900 wells.
EFS and Regional Development
Eagle Ford Shale (EFS) has brought good times to southern Texas. For a capital investment it may well be the largest oil and gas development anywhere in the world. In 2013 alone, it received 30 billion dollars from investors. Yet the effects on local and regional economies is twice that. Not only did EFS create 114,000 jobs for itself, it substantially generated economic growth throughout South Texas that translates into countless more. This brings more opportunity, infrastructure, education and cultural improvements. EFS has bought about economic abundance heretofore never experienced.
Not To Last?
If you hold mineral rights at the Eagle Ford play, you might want to stress this positive history when attempting to sell. The boom, sad to say, turned to bust in 2015-2016, with many bankrupt operators financially unable to cap their wells, leaving an expensive task for the state of Texas to cover. In celebrated Dimmitt County, 18 rigs have dropped to three. Prices having fallen to undesirable lows, not only have drillers had to lay off many employees but local businesses have failed as a result. Hotel revenues, alcohol sales and tax collections continue to plunge.
There are positive signs amidst the hardships. On the regulation front, a U.S. district judge recently ruled that the federal government lacked the legal authority to impose new rules on hydraulic fracturing. And although the number of exploration rigs had hit rock bottom, the Associated Press reports that the number of active rigs is now climbing, albeit slowly, with Texas gaining an additional 13 in one week. Perhaps the most encouraging news comes from south of the border: Mexico needs more electricity and Eagle Ford producers will soon benefit from a pipeline that will run from the U.S border at Texas to Tuxpan, Mexico. This pipeline project was awarded to TransCanada and several other partners.
What the Future Holds
The Federal Reserve Bank of Dallas holds that oil prices per barrel need to stay at $53 or above if companies are to at least break even. NASDAQ shows prices in June have not reached this threshold though they are inching closer—with a few fits and starts—since the early spring. As travel season ramps up, producers are hopeful of an uptick in demand and, in turn, energy prices. Once prices are again stable, much of the production in the Eagle Ford shale area is expected to continue.