Eagle Ford shale sees oil production soar
LONDON - The Eagle Ford shale play in Texas is benefiting from increasing production, as crude oil growth overtakes natural gas production, pushing up the shale’s profitability, claims a new report by GlobalData.
The new report says that several oil and gas majors have moved into the shale play, investing millions of dollars in an attempt to reap valuable fossil fuel rewards.
Eagle Ford production showed a three-fold increase in overall output during 2011 over 2010 levels, thanks to an increase in crude oil prices relative to natural gas prices. Texas has seen the Eagle Ford shale churn out four times as many liquids in 2011 as compared to 2010, with production growing from 10.8 MMboe to 57.5MMboe. Thus, the profitability associated with the crude oil prices is supporting this trend.
Exponential production growth in the Eagle Ford play has rewarded companies, such as Anadarko Petroleum , BHP Billiton, EOG Resources Inc, ConocoPhillips, and Rosetta Resources Inc., with high volumes of natural gas and high-quality liquids. According to the Railroad Commission of Texas, Briscoe Ranch field reported the highest gross Eagle Ford production during 2011, at around 26.2 MMboe.
The Eagle Ford shale has, therefore, witnessed a significant rise in drilling and exploration activities during 2011–2012, with many oil and gas companies continuously exploring the play in hopes of increasing their production base. There were 4,286 drilling permits issued in the play throughout 2011. By contrast, 1,620 drilling permits already had been distributed during the first four months of 2012. GlobalData anticipates that the Eagle Ford shale play will continue to see increased drilling activity during the coming years.
Tempted by such huge rewards, Chesapeake Energy Corporation was issued a record number of permits in the Eagle Ford during 2011, at around 724. The firm allocated around $2.25 billion to $2.40 billion of planned capital expenditure for drilling and exploration activities in the Eagle Ford play throughout this year. This level of investment promises more activity in the future, as major companies fight it out to win a piece of the Eagle Ford shale’s wealth
Total gross production from the Eagle Ford increased from 0.02 MMboe in 2006 to 105 MMboe in 2011 at a CAGR of 4.4%. It is expected to reach 207.3 MMboe in 2012, and stabilize at 1,386.3 MMboe in 2020.