The Eagle Ford Shale Blog, Maps and News
Note: This was an earlier blog post from back in Febuary of 2010. Many of the predictions we made back then have since come to pass, however due to depressed natural gas prices much of the Eagle Ford Shale’s deep natural gas area remains yet to be drilled. Presently there is a damper on the oil boom because of lower crude prices, yet drilling continues in the Eagle Ford Shale. The most successful oil producers in the Eagle Ford Shale have adapted and become even more efficient at drilling and completing wells in the core area of the EFS play.
The Eagle Ford shale (often misspelled Eagleford,) is not the next big thing in oil and gas plays, it is the “right now” big thing. You may have never heard of the Eagle Ford if you live outside of South Texas or are not in the oil and gas business but it will be big news in business circles around the rest of the country in the coming months and years. First recognized as a major natural gas play it is now being seen as the sixth largest oilfield ever discovered in the United States and the largest discovery in over forty years. Our site, the original Eagle Ford Shale Blog, has been here since the play began in 2009, with the purpose of shedding light on this incredible oil and gas discovery.
What Is The Eagle Ford shale?
The Eagle Ford shale is not located in one place, (we were just having fun with Hondo’s sign,) although it is named for the small community of Eagle Ford, located near Dallas. There the shale outcrops, or appears on the surface as clay soil. Far to the south, running in an arc that roughly follows the outline of the Gulf Coast, starting from East Texas and going all all the way to near Eagle Pass, the rock formation is found deep below the surface. Shale is a sedimentary rock that is rich in organic material called kerogen. As this organic material decays. complex hydrocarbons, such as oil and gas are formed. The Eagle Ford shale is the source rock for other oil and gas bearing zones in South Texas, such as the Austin Chalk formation, which lies above it.
It was formed during the late Cretaceous geologic period, approximately 85 to 95 million years ago. It lies at a depth of between 2500 feet at the edge of the hill country to over 15,000 feet deep in southern LaSalle, McMullen, Live Oak, Bee, DeWitt and LaVaca counties. The area of oil and gas activity is over forty miles wide and four hundred miles long, spanning an area from near Mexico to East Texas. It is at the deeper or more mature end of the formation where pressures are higher and gas volumes greater. The shallower zones in the central and upper part of the play contain more liquids such as condensate and crude oil. The Eagle Ford formation is over 330 feet thick in some areas.
The Eagle Ford shale was not recognized as an economically viable oil and gas reservoir until recently.
Now, because of a technology called horizontal drilling, which allows for a hole to be drilled across shales like the Eagle Ford for up to a mile or more, and because of advances in hydraulic fracturing, which uses high pressure liquid to bust apart the rock strata, oil and gas can now be extracted easily.
EOG Resources has estimated over 900,000,000 or 900 MMboe (nine hundred million barrels equivalent), net after royalty, in the 550,000 acres they hold in the oil and condensate windows. (Update, March 12, 2012: EOG revised estimates of potential reserves upward to 1.6 billion barrels of oil (net after royalty, NAR) in the acreage they hold. As this is only a small part of the huge play, the Eagle Ford shale may indeed hold billions of barrels of recoverable oil and trillions of cubic feet of natural gas. At the Developing Unconventional Gas convention in San Antonio, Pioneer Natural Resources offered a presentation suggesting that the amount of oil and natural gas liquids in the Eagle Ford shale could be as much as 25 billion barrels and the amount of natural gas at 150 trillion cubic feet. That amount would equal more than known reserves in Alaska and in Federal offshore areas combined. Oil and gas companies are discovering that there are “stacked pay” opportunities in formations that lie above and below the Eagle Ford such as the Olmos sand, furthering the potential for oil and gas production from the area.
The Eagle Ford shale is not a typical shale, but closer to marlstone. It is high in carbonate content, making it very brittle and therefore able to be fractured easily with a frac job. Porosity and permeability are greater in the Eagle Ford than other shale plays. Core samples of the shale contain as much as 70% calcite with an average clay content of eleven percent.
An Oil and Natural Gas Producer
The Eagle Ford shale is producing impressive amounts of both oil and natural gas in wells all the way from Maverick county near the Mexican border to Dewitt county farther east. The current epicenter of activity in terms of horizontal drilling is along the Stuart City Reef and Sligo shelf trend from Maverick, McMullen, Dimmitt, Frio, LaSalle, Live Oak, Gonzales, DeWitt, Atascosa and a number, of other counties farther east. Farther north, in those areas where the Austin Chalk has been productive in the past, oil companies are finding oil in the Eagle Ford shale as well. The two formations are highly correlated, with the Eagle Ford shale being one of the major “source rocks” for oil that is found in the Austin Chalk formation. The maps on this website shows the Eagle Ford shale oil and gas producing areas.
The northern part of the Eagle Ford is the “oily” section, with lower pressure and high volumes of crude oil. The middle section of the play is the “condensate or wet gas window”. A “sweet spot” exists in the wet gas window where high concentrations of light oil or “volatile oil” are being produced. These wells have the advantage of gas “drive” pushing out liquids from the formation into the wellbore. There are horizontal wells in the “volatile oil window” with initial production rates well over 1500 barrels a day. (One must take into consideration that some of these large producing wells have laterals, or horizontal sections, of up to a mile long, so it is not possible to compare production from E.F. wells to typical vertical oil wells.) The deeper section farther south, plunging as deep as 15,000 feet, is a producer of large volumes of drier gas.
Most of the major players in the Eagle Ford shale are focusing on the oil window and wet gas window of the play. This is mostly due to the depressed price of natural gas and the high price of oil.
The Eagle Ford Shale Has Been Known About For Years
For years there has been oil and gas activity along the Stuart City trend, from the Mexico Border on through the prolific South Texas Syndicate field in LaSalle county, through the Dilworth field in McMullen county curving on back toward the coast and then trending northward, upwards towards East Texas . Numerous Edwards, Olmos, Wilcox and Austin Chalk formation wells exist in this area. In past years drillers of deeper wells into formations below the Eagle Ford formation noticed a lot of gas coming back, though the mudloggers and wireline well logs showed the zone where it was coming from, the Eagle Ford shale, to be 100% shale rock. Shale in earlier years was not seen as a potential reservoir of oil and gas.
Once Thought To Be Worthless
Since the 1970’s geologists have known that the Eagle Ford shale contained high volumes of oil and gas throughout a wide geographic area stretching from East Texas to Mexico.
It was not thought of as any kind of resource that could be productive since a well that was drilled in the Eagle Ford shale would quickly deplete down to nothing. There was not enough porosity or natural permeability to allow for much oil or natural gas from the couple hundred feet of exposed formation to seep out. A few years ago companies like Halliburton, Weatherford, Baker Hughes and Schlumberger began to perfect horizontal drilling assemblies, along with accurate down-hole direction sensors called MWD or “measure while drilling” instruments, to guide these drilling assemblies. Starting in the 1990’s in the Barnett shale near Ft. Worth these two technologies were applied and it was proven that shale could be a productive source of oil and natural gas.
Mud motors, which consist of a rotor and stator unit and a bit that are turned by the force of drilling fluid, are placed at the end of the drill string. The whole drill string, as hard as the steel drill pipe is, can actually turn ninety degrees to vertical and drill a horizontal oil or gas well. Without any rotary motion from above, the drill pipe can remain stationary as the mud motor all the way down at the bottom of the well turns by the force of the drilling fluid and thereby turns the drill bit, eating away at the Eagle Ford shale until several thousand feet of horizontal lateral is drilled. This long lateral (horizontal section of the well) is later hydraulically fractured using very high pressure fluids, by a company such as Halliburton or Schlumberger. Thousands of gallons of water are used in this process and in this notoriously dry part of the country that will be one of the challenges to development. Far above the Eagle Ford shale lies the freshwater Carrizo – Wilcox aquifer, which is currently being used for frac water, possibly depleting this valuable resource. (Recent studies conducted by Texas A&M University have concluded that enough water exists in the Carrizo Wilcox aquifer to develop the Eagle Ford Shale, and support agriculture and other water uses.)
Deeper But Cheaper
The break even point for making a profit from Eagle Ford shale gas is about $3.88 per Million BTU’s, compared to $5.19 in the Barnett shale. Part of the reason is that there are less impediments to drilling in sparsely populated South Texas. Also, the Eagle Ford shale is proving to hold far greater quantities of valuable liquids than the Barnett, Marcellus or Haynesville shales. Break even point for Eagle Ford shale oil is around $50 a barrel, compared to $75 for deep water Gulf of Mexico oil.
Oil and Natural Gas Liquids Now The Main Focus
Due to lower natural gas prices companies are now focusing more on the upper and central oil and liquids laden section of the Eagle Ford. Since the price of oil is high due to international demand, this part of the Eagle Ford shale play is where much of the new drilling activity will likely take place in the coming years.
Lease Area Growing Daily
Petrohawk Energy (A BHP Billiton company) has identified over 2,700 potential well locations on the more than 330,000 acres they have leased. . Pioneer Natural Resources has over 310,000 acres under lease and a host of other companies from EOG Resources to ConocoPhillips have similar amounts of acreage leased. EOG Resources, a major player in the Barnett shale, has leased up over a half million acres, mostly in the oil window. They have plans to drill between 2,000 and 3,000 wells. The significance of the Eagle Ford shale has not gone unnoticed by international companies. China’s state owned oil company, CNOOC, has partnered with Chesapeake Energy in the play. Australian companies are even getting in on the action with Antares Energy, BHP Billition, (acquired Petrohawk Energy), Texon Petroleum, all Aussie firms, active in the play. The number of wells eventually drilled in the new oil and gas discovery could be in the tens of thousands.
What Is In Store For South Texas
South Texas residents are finally seeing the kind of economic boom that many have always dreamed of. Oil and gas exploration companies have leased up hundreds of thousands of acres of land in South Texas, in an area over 400 miles long by 50 miles wide. Sleepy South Texas towns such as Tilden, Cotulla, Pleasanton, Three Rivers, Pawnee and others are in the midst of a major change, one which may be hard for some residents to comprehend or cope with. For those without mineral rights and who don’t want wells on their property or near their homes, the Eagle Ford shale may not be seen as much of a blessing. Issues such as the amount of water used for frac jobs, poisonous H2S gas (which is produced by some Eagle Ford shale wells), traffic, price inflation, housing shortages, road wear and tear and much more will have to be dealt with. Overall however, the potential economic benefits to Texas and the nation are too great to not develop this huge discovery.
What Will The Boom Look Like In South Texas?
In the Barnett shale play, near Dallas and Ft. Worth, the economy has seen massive growth, which the Fort Worth Chamber of Commerce once compared to having ten Boeing Aircraft plants plunked down on the prairie overnight. Jobs were created in record numbers and as royalty payments of billions of dollars poured into the hands of landowners, this money began to circulate through the economy. The two shale plays have a lot of similarities, however the economy and population density of South Texas differ greatly from that of North Texas.
How the flow of money that will occur over the next decade will affect the area remains to be seen. In much of the region owners of large ranches will be the the recipients of the oil and gas royalties. Undoubtedly they will spend some of the money on ranch improvements such as fences, ponds, barns, etc, as we are already seeing in many South Texas counties, and this will create a few local jobs, but much of the revenue from Eagle Ford shale wells will end up being spent elsewhere. This will benefit the Texas economy as a whole. Oil and gas service companies in existing hubs like Alice and Freer will hire more workers and a few companies will open satellite offices in smaller towns such as Tilden, and Cotulla, near the production. For county governments, tax coffers will swell and this will lead to new schools and road construction. The effects on the economy of South Texas and the rest of the state will nonetheless be dramatic. (Update: Only a year after a record budget deficit, Texas may see a budget surplus in 2013, thanks to tax revenue from the Eagle Ford Shale.) Texas Railroad Commissioner David Porter stated that “The Eagle Ford shale has the potential to be the single most significant economic development in our state’s history.”
Pioneer Natural Resources Company’s CEO Scott Sheffield was quoted as saying “when you have a 25 billion barrel play in south Texas, just the amount from severance taxes on oil and condensate and NGLs – the amount of ad valorem taxes that goes into hospitals and schools – that’s a tremendous boon to the economy of south Texas,”
Boom Times Coming. Why This Time It Is Different
If you live in this area of Texas you are already witnessing a boom such as you may have never imagined in your wildest dreams. Many small towns are starting to grow again, lots of farmers and ranchers who own land with mineral rights are becoming rich overnight, and there are good, high paying jobs being created. (Since 2008, an estimated 24,600 jobs were created in Texas by the Eagle Ford shale play.) This is not some kind of pipe dream, it is real and it is happening right now. All the evidence from well logs, seismic surveys and new well production figures point to one of the largest oil and gas finds in the past half century. The economic effects are already being seen. All you have to do to notice is look at all the cars of landmen parked at the courthouses and the flow of oilfield traffic up and down the roads. Anywhere from $200 to $8000 an acre for Eagle Ford shale leases is flowing into the hands of landowners and they are starting to spend it. Booms like these have their upside and their downside, such as much more traffic (and accidents) on the roads.
What makes this oil and gas boom dramatically different from others that the region has seen is the widespread nature of the Eagle Ford shale. While not every well drilled will be productive, with shale plays like this one, the odds are much better. Unlike the relatively small fields and pockets of oil and gas that exploration companies have chased over the years, this field is all over, underneath a very wide swath of country, all the way from Southeast Texas to Mexico. The full implications of this massive oil and gas field have not yet been reported by the mainstream media in Texas but it will be major news very soon.
How productive will the play be? Petrohawk Vice President Richard Stoneburner had this to say in a July, 2009 meeting about the Eagle Ford in their McMullen and LaSalle county leasehold area: “The gas-in-place numbers are “so exceptional,” because the shale is some 250 feet thick over a 50-by-25-mile swath and is 100% net pay.”
It should be noted that Stoneburner is talking only about their focus area, not the entire Eagle Ford shale play.
How Long Will Eagle Ford Shale Oil Wells Last?
How long will the boom last? Past oil and gas booms , such as the Austin Chalk play, which promised to make the region the next Saudi Arabia, were an eventual letdown as initially high production rates fell to only a few barrels per day. One oil company CEO recently stated that he estimates Eagle Ford shale wells to produce in the eight to ten year range. It is true that unlike those drilled in sandstone oil reservoirs, shale oil plays like this one tend to make most of the production in the first few years. EOG investor reports show Eagle Ford shale wells with production curves over 20 years, with much of the production coming in the first four years. What this play has going for it is that is spans such a wide area and companies are able to drill essentially “risk free”oil wells in a time when bankers are reluctant to lend any oil company money for exploratory drilling. With the vast amount of infill drilling that will occur as the play is exploited we may see several decades worth of production. Some companies are already experimenting with well spacing as low as 50 acres, which could double the amount of wells to be drilled in the play. Add to that the potential for future secondary recovery efforts and more laterals at different depths in the thickest part of the shale and the potential is enormous. Chances are, most of those who are reading this article will be dead and gone when the last Eagle Ford shale well is drilled.
Winds Of Change Blowing In South Texas.
It is the purpose of this site to get the word out. In a region where folks are not accustomed to change, one of the biggest economic transformations in American history is happening. State, county and city agencies will have to rapidly gear up for this transformation and plan wisely. On the societal level, there will be scores of newly rich landowners and this wealth will have both dramatically positive and negative consequences for some of the recipients. Traffic accidents, overcrowding in schools and other issues will create problems South Texas is unaccustomed to dealing with.
You read it here first. This is the most exciting thing to ever happen to the economy of South Texas and the state in general. The next few years will be a wild and crazy ride as the Eagle Ford shale is developed, so hang on with us and save our site in your favorites to stay informed all the news.
Below is a map of the latest Eagle Ford shale drilling activity from the Texas Railroad Commission.
(Click On Image To View At Full Size)
For more maps of the Eagle Ford shale See: More Maps
Thanks for stopping by the Eagle Ford Shale Blog. Bookmark this site for news updates on this exciting resource play.