A Tale of Two Cities | Russell T. Rudy Energy LLC
“It was the best of times, it was the worst of times.” So begins the famous novel by Charles Dickens describing London and Paris respectively at the close of the 18’th century. According to a recent article in “World Oil”, the same could be said about Karnes City and Smiley, Texas. Both of these small Texas towns are located along the Eagle Ford shale play in the southern part of the state and are only 38 miles apart. However, this is where the similarities end.
The crude oil price collapse has forced operators to retreat to the “core of the core” of shale plays from North Dakota to Texas. With falling prices, only wells that offer the highest potential production rates make economic sense. Fortunately for Karnes City, the underlying “Karnes Trough” of the Eagle Ford shale is the sweet spot of the structure. Consequently, rigs are running, oil is flowing, and hands are spending money in town. Essentially little has changed since last year.
Conversely Smiley, which is on the fringe of the Eagle Ford, is going through hard times. There are no rigs, little traffic, and no noise. There is still a little residual affect from the good times. Rental properties are mostly filled, and the new elementary school is packed with the young kids of recently arrived families. However, if crude prices remain at their current depressed levels, this afterglow of previous prosperity will fade as well.
To read the article in its entirety, please go to http://www.worldoil.com/news/2015/5/15/two-texas-oil-towns-38-miles-apart-one-still-booms-one-s-dead .
