Declining oil prices and stringent regulations aren't the only threats to the Texas oil boom. Another problem is taking center stage.
Drillers in the Eagle Ford shale are facing the worst drought in more than a century, a major concern considering drilling a well in the region can require as much as 13 million gallons of water.
Exploring for solutions
At this point, explorers are keeping the problem in check. ExxonMobil
Rationing the water supply could put the brakes on oil production in the Eagle Ford shale. Companies heavily exposed to the area will likely suffer the most.
Counting on the Eagle Ford
The bottom line
The Eagle Ford drought will drag down stocks with high exposure to the region if the situation worsens. But this could create a great buying opportunity if panic begins to dominate the trade.
Keep an eye on the Eagle Ford stocks and patiently wait for a good entry point.