Eagle Ford Shale - Texas' Single Largest Economic Development

We're just a few years into development, but the Eagle Ford Shale is looking the part of the single largest economic boom in the history of the state of Texas. UTSA estimates total revenue from the Eagle Ford in 2011 was almost $14 billion and that revenue could grow to almost $50 billion by 2020. In addition to revenue, almost 30,000 jobs related to the play were created in 2011 alone.

Reserve estimates also paint a rosy picture. If there are 20 billion barrels of liquids to be recovered in the Eagle Ford, revenue from oil, condensate, and NGL sales will reach somewhere in the neigborhood of $1-2 TRILLION over the life of the play (at $100/bbl oil and current NGL prices). Add the 100+ tcf of gas that could be recovered and revenue from hydrocarbon sales could easily reach 2 trillion dollars. Our country's deficit is the only other topic where I use the word trillion.

For reference, the caller.com provided a few interesting statistics.

The Eagle Ford will have a larger impact than the entire Corpus Christi Metro Area in 2012.

  • GDP for the area was $15 billion in 2011, compared to estimates of $14 billion in Eagle Ford revenue during that same time

Eagle Ford jobs are coming by the thousands.

  • There area 184,000 jobs (total) in the Corpus Christi Metro Area and on its current path the Eagle Ford might created over 75,000 jobs in 2020 alone

Magnum Hunter Triples Production Year Over Year - Q1 2012 Update

Magnum Hunter Resources tripled production year over year in the first quarter and the Eagle Ford is helping drive the company's strong growth.  In the first three months of the year, the company drilled four operated wells that all came on line at more than 1,325 boe/d, with the best well testing 2,250 boe/d. All production rates were reported from one day tests.  All four wells were fracture completed with 21-25 stages in 6,100 to 6,700 ft horizontal laterals.  With the new wells most of the company's acreage in Gonzales and Lavaca counties is now held by production.

In the company's non-operated position, Hunt Oil completed four additional wells that came on line with initial production rates between 167-920 boe/d.

 

Eagle Ford Shale Well Map - 3,700 Permits - 1,500 Producing - March 2012

Eagle Ford Shale Well Map
Eagle Ford Shale Well Map

As of March 15, 2012, the Texas Railroad Commission reported almost 3,700 permits had been submitted, with 954 oil wells and 578 gas wells on schedule. That's up from ~1,900 permits, with 194 oil wells and 249 gas wells on schedule in June of 2011. That means the industry brought on almost 1,100 wells in 9 months. Add in the many gathering delays in 2011 and that number could have been even higher. In 2012, don't be surprised if as many as 2,500 wells are brought to production.

Also, note the difference in the proportion of oil vs. gas wells. In June of 2011, 56% of producing wells were considered "gas" wells, but in March of 2012 that number had fallen to just 38%. That's a direct reflection of the commodity markets. Natural gas is at multi-decade lows, while oil has held strong above $100 per barrel.

Do you think 2,500 Eagle Ford wells will be drilled this year? Use the comments below to share your thoughts.

Enterprise Plant in Yoakum Coming Online May 1

The first phase of Enterprise Products' Eagle Ford midstream plant in Yoakum is coming online in the next few weeks and will have initial capacity to process 300 mmcfd.  The 100 acre plant has seen as many as 500 workers on site during various stages of construction The plant will strip out 6-9 gallons of NGLs for every mcf of gas that is processed. The plant is feed by a 36-inch pipeline and will have ultimate capacity to processes as much as 900 mmcfd when all stages of construction are complete in 2013.

Eagle Ford Rig Count At 274 With New Oil Drilling Record - April 13, 2012

Drilling Rig
Drilling Rig 7

The Eagle Ford Shale drilling rig count jumped back to 274 working this past week.  For the second week in a row, it looks like Webb County led the way in terms of change. The county added back six rigs in the last week.  Last week looks to be just a blip in the rig count statistics. One of two things likely accounted for the drop last week.  The rigs were either in some stage between wells and not counted, or there was a mistake in the census last week. We did confirm Lewis Petroleum's rig count statistics from last week were just a blip on the radar.  The company contacted us to say that they still have 11 rigs working and have additional rigs ordered. That means the actual rig count is 277 rigs (3 higher than this weeks reported number).

Eagle Ford Oil & Gas Rigs

The natural gas directed rig count grew 4 rigs up to 71 running this week. The bounce was largely attributable to Webb County where 5 rigs were back in the rig count statistics. DeWitt with 17 and Webb with 19 lead the natural gas focused counties. Oil directed activity jumped to 202 rigs and set a new record in the Eagle Ford.

Natural gas prices look to be on a path to $1/mmbtu. Future prices for Henry Hub were trading at $1.97 as of Friday morning. That's a new low, again, for those keeping track. Oil prices remained flat right around $103 per barrel (WTI).

258 horizontal rigs are running and we have 1 storage well being drilled in La Salle County. Karnes County leads development with 43 rigs. La Salle (40), Webb (29), McMullen (27), DeWitt (26), Dimmit (25), Gonzales (23), Live Oak (11), and Atascosa (10), make up the top Eagle Ford counties.

News highlights this week included:

If you are headed to San Antonio/South Texas, visit our Eagle Ford Hotels page. We've negotiated discounted rates with hotels that are welcoming the Oil & Gas Industry.

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Drilling Rig Count by Operator

What is the Rig Count?

The Eagle Ford Shale Rig Count is an index of the total number of oil & gas drilling rigs running across a 30 county area in South Texas. The South Texas rigs referred to in this article are for ALL drilling reported by SmithBits and not solely wells targeting the Eagle Ford formation. All land rigs and onshore rig data shown here are based upon industry estimates provided by the Baker Hughes Rig Count and/or Smith Service Co's (Schlumberger) Smith Rig Count.

Drilling Rigs by County