NATCHEZ — Development in the Tuscaloosa Marine Shale is continuing to slow as oil prices continue declining.
Goodrich Petroleum announced last week its plans to spend between $90 and $110 million this year in the shale play, which is located in Amite, Wilkinson and southern Adams County and in Louisiana.
That plan is a reduction from earlier projections of $150 to $200 million for 2015.
This makes Goodrich — an independent oil and gas exploration company — the third major player in the shale to reduce plans or pull out entirely.
Comstock Resources has suspended drilling, while Halcon Resources — which has a one-year option on a 50-acre property in the Natchez-Adams County Port area — has announced it will not devote significant resources to the high-cost development while crude oil prices stay low.
“The price of oil means everything,” said Bernell McGehee, a TMS observer who runs the website tmshorizons.com. “As soon as the prices go up, they can say, ‘Let’s go to the Tuscaloosa Marine Shale and ramp it up.’
“There are over 75 wells that are here (in the shale), and as we are talking I can see a load of pipes heading through town for a site. There is a lot going on, but it is winding down and not ramping up.”
Concordia Parish Economic Development Director Heather Malone said the biggest concern in the short term locally is for oil supply and ancillary service businesses that have felt the positive impact from the shale’s development thus far.
“We want to know how that is going to impact them in the coming business year,” she said. “In Concordia Parish, a large part of our workforce is made up of oil and gas industry folks, whether working for a firm locally or a larger firm.”
While the slowdown in shale development means the area won’t be feeling the economic boost that had been anticipated right now, the groundwork won’t be wasted, Malone said.
“(The companies) know (the oil) is here and they have done the research to know that they are able to produce in that location,” she said. “Even if they are currently taking a break because of the prices — and you can’t blame them for that — they are going to be ready when the prices come back up. We are still going to benefit from that. It just may not be as soon as we hope.” ___
This article was written by Vershal Hogan from The Natchez Democrat, Miss. and was legally licensed through the NewsCred publisher network.