Unfortunately, the impact of dropping oil prices are catching up to Eagle Ford crude producers as reports are documenting a slight dip in production within the South Texas region.
Figures used by the San Antonio Business Journal attributed to Baker Hughes Rig count claim that in a one week period, active rigs in the Eagle Ford decreased from 204 rigs to 200 this week. In comparison, there were 228 active rigs in the Eagle Ford Shale Play at the beginning of 2014.
Throughout the state, active rigs decreased by 12 to 840. However, this is still higher than the 832 active rigs in the first week of January 2014. In the same week, the nation’s rig count fell to 1,811, a 29 rig depletion. Seven days prior to the most up-to-date count, rigs took another big hit by dropping 35. Still, the current operating rig amount topples over the 1,751 active rigs one year ago.
Reuters market analyst John Kemp is one among many that foresees the United States cutting oil production by the end of 2015. “Unless prices recover, U.S. oil production will start falling before the end of 2015 as new drilling is insufficient to replace declining output from wells completed in 2013 and 2014,” Kemp wrote in his latest editorial. “Future production depends on the rate of decline from existing wells (known as the decline curve) and the average age of old oil wells as well as the number of new ones drilled and their productivity.”
Nonetheless, every prediction is based on speculation around what global oil prices will be in 2015. Various economic and geopolitical activity could move around the price. In addition, if the U.S. is to begin exporting petroleum at a high frequency in 2015, oil price worries for companies could be alleviated with the new market avenues offered to them.