East RGV News

Oil exploration companies in the Eagle Ford Shale have made major cutbacks and layoffs on the way with the price of oil dropping and new drilling being lessened. 

Twenty-six counties will be seeing layoffs with crude oil dropping to $20 a barrel — the lowest it's been since 2004. 

One producer working in the Eagle Ford Shale, Murphy Oil Corp., has already announced cuts, the San Antonio Express News reported. The company has reduced its operating budget by 35%, making it $950 million. 

And Marathon Oil Corp. is also cutting back $500 million. The company said its reductions are "optimizing development programs in the Eagle Ford and the Bakken Shale play, which covers North Dakota, northeastern Montana, southern Saskatchewan and southwestern Manitoba," Express News reported. 

Many oil companies are making cutbacks because they can't afford to profitably drill. Paige Meyer, an energy analyst at CFRA Research, said one way these companies are making cutbacks if by laying off employees. 

Meyer told the Express News the oil market has never seen these conditions at the same time. 

“We have never seen this before — to have a demand shock and a supply shock at the same time. It’s unprecedented," she told the Express News. "A lot of companies are in trouble."

Companies that haven't laid off employees yet have workers that know it will be coming. 

"If prices stay this low, a lot of workers will lose their jobs," one employee told the Express News. He asked not to be named because his company has a policy against talking to the media.

But how quickly employers will lay off employees is unknown, DeWitt County Judge Daryl Fowler told the Express News. It could happen in a couple of weeks or over the course of a couple months.

Dennis Elam, an associate professor of accounting at Texas A&M University in San Antonio, said more companies are likely to go bankrupt and layoff many employees. 

“Unless there is a quick rebound in oil prices, some companies won’t make it,” Elam told Express News.