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CORRECTED UPDATE: Players in Tuscaloosa shale tread water, wait for market to return

By JACK WEATHERLY 

The Tuscaloosa Marine Shale formation has languished since the cratering of oil prices in mid-2014.

The “play” in southwest Mississippi and southeast Louisiana is not alone in its struggle to stay alive.

Operators there and elsewhere in the United States have pulled back since the price of oil dropped from about $100 a barrel to less than $50 in a six-month period ending in December 2014.

Benchmark West Texas light, sweet crude dropped below $30 in February 2016 and settled at $44.83 on Tuesday on the New York Mercantile Exchange.

The domestic industry was largely “victimized” by its own success through the revolutionary technology of hydraulic fracturing, or fracking, which in the past decade took the United States from dependence on foreign oil. Likewise, production of natural gas through the same technology has pushed that fuel to historic lows.

Yet a website that services the Tuscaloosa shale recently raised the question in a headline, “Possible Return of the TMS?”

“There are vague local signs of life here in the heartland of the Tuscaloosa Marine Shale,” wrote Bernel McGehee, who co-owns and operates the website. “I won’t go into what I’m seeing, because much of it could just be wishful thinking.”

“The price level needed for a return [of] the TMS may be much lower than we once thought,” McGehee wrote in July. “Late 2016 or early 2017 may not be out of the question.”

Meantime, the players in the TMS show few if any signs of a return to their former level of activity in the formation in which exploration began in earnest about five years ago.

Websites of four of the five companies tell the tale.

Goodrich Petroleum Corp. of Houston filed for Chapter 11 bankruptcy protection in April and is not hiring.

Comstock Resources of Frisco, Texas has suspended drilling there. An earlier version of this article erroneously said that Comstock filed for Chapter 11 protection under the U.S. Bankruptcy code and was delisted by the New York Stock Exchange. Both statements were not correct. Likewise, it does have job openings. The earlier version said that it does not.

Halcon Energy Resources of Houston reported a second-quarter loss of $382.4 million. It filed for Chapter 11 on July 28 and was delisted by the New York Stock Exchange on Aug. 15. It is completing two wells in the play drilled in 2015.

Sanchez Energy Corp. of Houston, which operates in the TMS and the Eagle Ford formation in south Texas, lost $186.9 million in the second quarter. It lists no job openings.

Canada-based Encana Corp. operates in a number of North American plays. Its website did not address specific activity in the Tuscaloosa formation.

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