Eagle Ford Shale Forecast From FBR
How big is the Eagle Ford shale play going to be? One challenge that is facing government officials, South Texas residents, and investors is coming to grips with where the Eagle Ford shale play is heading. As we have repeatedly mentioned here on The Eagle Ford Shale Blog, starting in 2009, this discovery is the biggest thing to happen to South Texas, and indeed the entire state in recorded history. It’s bigger than Spindletop, the Permian Basin and every other oilfield found thus far in the state of Texas. The Eagle Ford shale is possibly bigger than any other oil discovery found in the United States so far. Those sentiments are being confirmed by a number of new research reports on the Eagle Ford shale. The University of Texas At San Antonio’s Center For Economic Development released a report earlier this year which indicated that the economic impact of the Eagle Ford shale will be approximately $21 billion dollars by 2020. New studies just released are blowing UTSA’s numbers out of the water. In terms of the ultimate economic impact of the Eagle Ford shale, the latest report by FBR Capital Markets & Co., a leading financial research firm, estimates that on the low side, it will be over $90 billion dollars, and as much as $200 billion dollars or more on the high side.
The FBR Capital Eagle Ford shale report noted that the upper side estimates were dependent on things such as improvements in drilling and recovery technologies, which enable more oil and gas to be extracted. As a general rule, every doubling of wells in a shale play has resulted in a 15-23% increase in productivity.
How Much Oil Is In The Eagle Ford Shale?
In an earlier post on this site, “How Much Oil Is In The Eagle Ford Shale”, we did some rough calculations, based on EOG Resources, Pioneer Natural Resources and Petrohawk Energy’s early estimates. Using projected EUR’s (Estimated Ultimate Recovery) numbers from those reports we estimated that the Eagle Ford shale holds about 5 billion barrels of recoverable oil. New estimates, such as the one by FBR Capital, indicate the Eagle Ford shale holds at least 7 billion barrels of oil on the low side and 20 billion barrels on the high side.
In contrast, the large East Texas oilfield that began with the famous Spindletop gusher near Beaumont, has produced about 5.2 billion barrels from over 30,300 past and present wells. (source: Wikipedia) The East Texas field was previously considered the largest oilfield ever discovered in the lower 48 states. Prudhoe Bay, the largest U.S. oilfield, was estimated to have originally held 25 billion barrels. Current estimates from the U.S. Department of Energy are that there are less than 5 billion barrels of oil remaining in all of Alaska.
South Texas Changing Forever
Folks, I can’t say it enough. The small towns that you once knew in South Texas, or for that matter, larger cities such as San Antonio or Corpus Christi, are about to be totally transformed as a result of the Eagle Ford shale. If you want to imagine what many cities and towns in South Texas will look in the coming months and years, drive to Midland or Odessa and notice all of the oilfield businesses, equipment yards, rigs, pumpjacks, etc. out there. No longer will you be driving past miles and miles of unbroken brush covered ranch land in counties such as Dimmit, McMullen, LaSalle, Live Oak, Gonzales, Atascosa and others. The landscape of a 50 mile wide by 400 mile long swath of Texas will be filled with new well locations, pumpjacks, compressor stations, and oilfield workers busy keeping it all running. Thirty years down the line, you’ll see more of the same.
You may not like all of those changes, such as increased traffic, higher food prices, and having a huge West Texas - style oilfield all around you, but many positive things will also result from it. For one thing, South Texas schools and hospitals are about to see big improvements as the tax base grows. Over a quarter of a million new jobs could be created by the Eagle Ford shale.
Small towns and cities in South Texas are already seeing a flurry of business activity as companies scramble for a position in the new oilfield. Halliburton is reportedly searching for a location to build a “supersite” south of San Antonio. Also, Schlumberger, Weatherford and Baker Hughes are all considering major industrial and office complexes in southern Bexar County. Corpus Christi and Three Rivers refineries are already switching from imported oil to local crude. Refineries in the Houston area are preparing to do the same, once large new pipelines are completed by late 2012. It’s that big. Not to seem overly dramatic, but the Eagle Ford shale is about to change life forever for residents of South Texas. It’s going to be a wild ride, so hang on to your hat pardner!
Article By Nolan Hart, 09/03/2011