Conoco Phillips Eagle Ford Shale Investment

In a recent conference call to investors Conoco Phillips CEO Jim Mulva announced that the company will be investing more capital in proven plays such as the Eagle Ford shale, where they hold a position of approximately 240,000 acres. Seen below is a slide from a recent presentation showing capital expenditures on exploration. Conoco Phillips plans to spend 80% of their 2010 budget on exploration and production.  The pie chart below is for lower 48 state and Canada exploration.  You can see that the majority of Conoco’s budget is slated for Eagle Ford shale exploration. The company plans to bring 900,000 barrels of production online in 2011, part of that will be coming from the Eagle Ford shale holdings.  All one has to do is look at what a large chunk of Conoco Phillip’s exploration budget is going to the Eagle Ford shale and compare it with the tiny sliver of production to see that big gains in overall Eagle Ford shale production are coming.  Next year’s production pie chart should look a whole lot different with respect to the Eagle Ford shale.

images  from http://www.conocophillips.com

In the lower part of the slide below you see Conoco Phillip’s 240,000 acres in the Eagle Ford shale. It is the “significant shale position” that was acquired at “low cost”.

Conoco is only one of the majors that are entrenched in the Eagle Ford shale oil window. EOG, BP, Exxon Mobil, Shell Oil and others are planning major drilling programs in the fall on into 2011 and beyond. Things are heating up, and as this chart showing Conoco Phillips Eagle Ford shale investment indicates, the majors are betting big on South Texas shale oil and gas.