Carrizo Springs and Cotulla Eagle Ford Shale Activity Increasing
Though the peak of the initial Eagle Ford shale leasing frenzy is slowly winding down, the LaSalle county clerk’s office in the old Welhausen School building, where president Lyndon Johnson once taught, is still crowded with landmen searching property records for mineral rights ownership. Mineral rights in Texas are usually conveyed to a landowner unless a “Save and Except” clause is placed in the deed. Since some property deeds go back as far as the days of Spanish land grants to colonists, it can sometimes be a daunting task to locate heirs. There have been more than a few surprises so far as some of those heirs learn for the first time how much those mineral rights are now worth. The fact that the Eagle Ford shale is rich in oil and natural gas liquids at a time when oil prices are hovering around $100 a barrel is one reason this is the hottest oil and gas boom in the nation. Many Eagle Ford shale leases in LaSalle and Dimmit counties were made with terms giving up to 25% or more of production to landowners. It doesn’t take a mathematical genius to realize that some ranchers who have one or multiple Eagle Ford shale wells, some making over 1000 barrels a day, at $100 a barrel, are getting very rich in a short period of time. Lease payments have gone as high as $8,000 an acre in LaSalle county for “sweet spot” oil window acreage. Farther East, in Atascosa, Karnes, DeWitt and Gonzales counties, Marathon Oil recently paid Hilcorp Resources Holdings over $25,000 an acre for Eagle Ford acreage. It’s the kind of money that is unfathomable to some hard working residents of South Texas, but the checks are as real as the oil deep underground.
Sleepy South Texas Towns Waking Up To Wild and Crazy New Reality
Signs of new businesses can be seen all around Cotulla Texas, from the impoverished side of town across the tracks, where small RV parks are springing up on vacant lots, to along IH-35 where new oilfield companies are putting in yards. East of Cotulla, along SH-97 near Los Angeles are dozens of newly drilled Eagle Ford shale wells, some with pumpjacks, nodding to the Tejano music coming from Ruby’s Lounge. Orange surveyor’s flagging tape, tied to mesquite trees, can be seen almost everywhere you look, flying in the hot South Texas wind. The area of the Eagle Ford shale from near Carrizo Springs to east of Cotulla may eventually see over 15,000 wells drilled, according to analysts for Enterprise Products Partners, which is busy building phase I of a 500,000 barrel crude oil gathering terminal west of Cotulla along IH-35 near Gardendale. Enterprise Product Partners’ major pipeline project, which will bring crude from the western part of the Eagle Ford shale play to a terminal in Wilson county, is underway at a breakneck pace. See photo of pipeline construction east of Cotulla, Texas below.
A welding inspector prepares to inspect a newly welded segment of an Eagle Ford shale oil pipeline near Cotulla, Texas.
From Jan 1, 2011 to June, 21, 2011, there were over 350 wells permitted in LaSalle county, most of them in the Eagle Ford shale. Drilling activity will no doubt pick up even more, when major crude oil pipeline projects are completed in 2012 and early 2013. In Dimmit county, whose county seat is Carrizo Springs, there were 379 Texas Railroad Commission well permits issued since the first of the year.
Below. Eagle Ford shale wells east of Cotulla from the Texas Railroad Commission GIS map system. This spiderweb pattern of horizontal wells will eventually cover much of the county. The black lines originating from the pentagon shaped symbols indicate the path of the well bore or “lateral” underground. Squares represent one square mile, or a 640 acre tract.
Above: Unlike past oil and gas booms the highly repeatable nature of drilling in the Eagle Ford, where EOG Resources has yet to drill a dry hole out of over 100 completed thus far, means that the empty spaces such as the ones on the map above, will most likely one day be filled with thousands of horizontal wells.
Communities Struggling To Come To Grips With What The Oil Boom Means
Oil and gas drilling has long contributed to the local economies of LaSalle And Dimmit counties, and to the wealth of area ranchers such as the Briscoe family, yet never as much as the current Eagle Ford shale play is doing now. Now, slowly, some of the billions of dollars flowing into the region are beginning to trickle down to those who are not major landowners in the form of a multitude of business and job opportunities. Traffic, dust, higher home prices, and other negative aspects are unfortunately coming as well. Waking up one day and learning that the sixth largest oilfield thus far discovered in the United States is right underneath your feet can be hard to come to grips with, but residents of these small towns are beginning to understand that life will never be the same again, at least not for a long while. For those residents of towns such as Cotulla who are living on fixed incomes, and who don’t own any property with mineral rights, there is little silver lining in the new oil boom. Food prices in South Texas grocery stores are rising, as are rental rates for homes and apartments.
Recently I talked to the owner of a small restaurant in Carrizo Springs, situated just a couple of blocks from the Dimmit county courthouse. He stated that he had “seen a few oil booms here, but this one seems to be very different”. He remarked that his son who had just graduated from high school, was starting an oilfield business, hauling gravel to new well sites. As I thanked him and paid him for my food I noticed that the price of his barbacoa tacos had risen fifty cents since the last time I had stopped in.
Article by Nolan Hart.