How Much Oil Is There In The Eagle Ford Shale?

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Getting a true picture of how much oil is contained in the Eagle Ford shale at this point is difficult. One reason that no hard numbers are out there yet is because there are simply not enough wells and production figures. As more wells come online we should start to see the bean counters come up with some better numbers. For now, I’ve got some for you, based on projections from companies like EOG Resources, Pioneer Natural Resources and Petrohawk Energy and financial research firms such as FBR Capital.

Eagle Ford Shale Oil Potential Greater Than Bakken Shale

The Bakken shale in North Dakota, which thus far was considered the largest new oil discovery in the United States, at around 5 billion barrels of recoverable oil, may pale in comparison to the Eagle Ford shale.

EOG Resources  has estimated their own Eagle Ford shale holdings at 900 MMBoe*  (nine hundred million barrels of oil equivalent)  in the roughly 550,000 acres they hold in the oil and “wet gas” windows.  “This figure, stated in “barrels of oil equivalent”, consists of an estimated 690 million barrels of oil, 100 million barrels of natural gas liquids, and 661 Bcf of natural gas.  That’s “net after royalty” meaning you can add about 20-25% more to that figure for another 180 MMBoe  of recoverable hydrocarbons.  There, in just a fraction of the Eagle Ford shale you get over one billion barrels of oil equivalent, most of it liquids.  McMullen county alone is comprised of 712,320 acres. Much of that county lies in the oil and “wet gas” windows.

Petrohawk Energy has reported that in the 360,000 acres they hold, 225,000 are in the oil and  wet gas windows of the Eagle Ford shale, and have the potential to produce 340 million barrels.  That’s 1,511 barrels per acre of liquids for Petrohawk Energy and 1,782 barrels per acre (net after royalty) for EOG Resources.  Let’s just take a look at the map below and do a very rough estimate.

Map from EOG Resources

Take LaSalle county for example, (where the Hoff #4H is located above), which consists of 956,800 acres. Of that, roughly half is in the oil window, and the other in the wet gas window. EOG Resources recently drilled a series of delineation wells, as seen above, and has estimated that the potential of oil and gas production over a 120 mile swath of South Texas is fairly consistent.

Just for fun, if you take an area of roughly three LaSalle counties in the oil and condensate window of the Eagle Ford shale, or 2,870,400 acres, and multiply that number by the average barrels per acre that has been proposed by EOG and Petrohawk, or 1,646 barrels of recoverable crude (net after royalty), per acre, and multiply that by 2,870,400, you get 4,724,678,400 barrels of oil.   That’s about 4.7 billion barrels, or roughly as much oil as remains in Alaska.  Pioneer Natural Resources believes the Eagle Ford shale contains as much as 25 billion barrels of  recoverable crude and natural gas liquids. This is much higher than the amount estimated by the D.O.E. and others, which is around 3.35 billion barrels. FBR Capital, a financial research firm, reported in August of 2011 that “worst case” the Eagle Ford shale holds 7 billion barrels of oil. On the high side FBR estimates it holds as much as 20 billion barrels. These numbers could be revised upwards as new drilling and production methods are developed.

Now look at the chart below, showing remaining U.S. reserves.

Update: At the recent Developing Unconventional Gas (DUG) Eagle Ford conference in San Antonio, Pioneer Natural Resources offered a presentation that suggested that the Eagle Ford shale contained as much as 150 trillion cubic feet (Tcf) of natural gas and 25 billion barrels of recoverable liquids including crude oil and condensate.  Referring to the economic impact of the Eagle Ford shale on South Texas, Pioneer Natural Resources CEO Scott Sheffield added the following comment.   “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,”

Right now, according to these  estimates, there is more oil in the Eagle Ford shale as exists in all of Alaska. There’s more than in the federally controlled offshore areas, California and the Permian Basin. On the high side, there is possibly more oil in South Texas than in ALL of the conventional oilfields shown in the graph above!   FBR Capital estimates the Eagle Ford shale is the largest discovery of natural gas ever found in Texas, at around 200 trillion cubic feet, which would supply the United States needs for over ten years. Are you like me and are wondering why this huge discovery is not front page news across the nation?

* BOE or barrels of oil equivalent assumes that one 42 gallon barrel of oil is equivalent to 5,800 cubic feet of natural gas. The term BOE is used liberally by companies with acreage in areas of the Eagle Ford shale which contain more oil than natural gas. Most companies with liquids rich holdings will break their estimated reserves down into oil, NGL’s and gas for investor presentations.

Update: Just when you thought it couldn’t get any better in terms of new oil discoveries in the United States, along comes a potential 25 billion barrel discovery in Ohio. See Utica Shale

Article by author Nolan Hart, August 12, 2010