The new oil boom in South Texas is creating hundreds, if not thousands of new jobs. Among the hottest jobs in the Eagle Ford shale are truck driving positions. Despite this fact, trucking companies are finding it hard to recruit enough qualified drivers, for a number of reasons. At a recent meeting at Coastal Bend College in Beeville, several trucking firms voiced their concerns about the problems related to recruiting enough qualified applicants for Eagle Ford shale truck driving jobs.

Why Are Eagle Ford Shale Truck Driving Jobs So Hard To Fill?

Among the concerns that most of the trucking company owners had was the fact that one in four  applicants does not pass a mandatory  drug screening test. Another was that many applicants do not pass a basic background check. The applicant may not necessarily have a criminal record, but if they have too many driving violations they can’t be hired. Another issue that employers are facing is that  even if the applicants  have a valid CDL, they may lack the basic reading and math skills required to read company manuals, fill out load forms, calculate barrels of oil hauled, etc.

They also stated that there are more than likely many good candidates out there for truck driving jobs in the Eagle Ford shale, but that the majority of people who apply do so in person, and are not likely to apply online. If more job seekers were aware of how to fill out an online application, or were aware of the number of trucking jobs in South Texas and what they paid, perhaps a more diverse group of people might apply.  One trucking firm owner stated that they will “basically hire anyone with a CDL or commercial driver’s license who can pass a background check and drug screening”.

One would think that in these tough economic times the need to feed one’s family would be greater than the need to take recreational drugs, yet this does not seem to be the case in South Texas.

What Does It Take To Get A CDL In Texas?

1. You must pply in person at a Texas Driver License office.
2. You must present documents that verify your Identity. The requirements vary based on whether you are a U.S. citizen of lawful immigrant
3. Show proof of Social Security Number.
4. Meet the non-resident driver’s license requirements if you are not a Texas resident.
5. Have proof of Texas vehicle registration and liability insurance on all vehicles you own. (Or your employer must.)
6. Complete the application form.
7. You must be photographed, fingerprinted, and sign the application.
8. Pass the required vision exam. If you wear glasses, you must bring them to the appointment.
9. Pass the required written test for class of CDL you are applying for, including which endorsements your employer requires,  Pass A & B rules test (written), and the driving skill tests in the type of vehicle you will be driving.
10. Complete the HAZMAT or  Hazardous Material Endorsement Procedures.
11. Pay the required state fee.
12. You must provide a commercial motor vehicle for the driving exam, and present current liability insurance, Texas vehicle registration, and inspection for the vehicle. Note that if you are not licensed to operate the vehicle, you cannot drive it to the examination site. For more info you can view the state’s site here: Texas DPS

If you are in need of a job and would consider a move to South Texas to work in an Eagle Ford shale truck driving job, companies are literally begging you to apply.  Check sites such as Texasoilfieldjob.com and Coastal Bend Workforce Solutions for links to trucking company websites where you can fill out a job application. If you have a clean background record, (usually meaning fewer than 3 moving violations and no felonies), and can pass a drug test, chances are there is a truck driving job in the Eagle Ford shale waiting for you.  There is currently a need for frac sand truck drivers, vacuum truck drivers, gravel haulers, oil truck drivers and pipe and heavy equipment haulers.

Downsides?  Many frac sand hauling firms are looking for owner / operators, who have their own tractor, or trailer combo. These firms are offering sign on bonuses as high as $5,000. For those without their own rig, it may be a bit harder to find a frac sand hauling job. Those without rigs might consider vacuum truck jobs, or oil hauling jobs.

One of the biggest concerns that many South Texas residents have about the Eagle Ford shale oil and gas boom is the long term effect on water aquifers such as the Carrizo Wilcox. These water “sands” are not so much in danger from hydraulic fracturing, as some environmentalists would lead you to believe, but rather may suffer from depletion due to the amount of water used to frac new wells. How much that depletion amount ends up being is something that has bothered me for a while now.  Chesapeake Energy reports that a typical Eagle Ford shale well requires approximately 6 million gallons of water to drill and complete. With potential spacings as small as 80 acres to the well, and tens of thousands of wells to be drilled across the play, some fear a substantial drop in Carrizo Wilcox aquifer  levels. Another wild card that could come into play is that once all these new water wells are drilled, and oil and gas drilling is mostly over with, will ranchers sell their water rights and allow the wells to be connected up to pipelines, sending Carrizo Wilcox water to cities such as San Antonio?

All Doom And Gloom Or Just A Need To Proceed With Caution?

I’m beginning to come around and accept the fact that the Eagle Ford shale can be developed responsibly, with a minimal amount of impact on the Carrizo Wilcox. I’d still like to see more studies done, but here’s how it looks so far.   If you take six million gallons, which is about how much water that is used to frac a well, multiplied by 8 wells to the square mile,  you arrive at a one – time water use of about 48 million gallons, or 147 acre feet.   (An acre foot, or 325,851 gallons equals the amount of water which will fill a one acre area, one foot deep). Using a little “roughneck math”, on the 640 acre lease (one square mile), on which 8 wells would be drilled and fracked, there would be somewhere around 208,544,640 gallons of water available in a couple feet of the Carrizo aquifer, which is indeed quite thick. See Carrizo Wilcox thickness map below:

(The amount of water held in a vertical section of any aquifer depends on the porosity and uniformity of the formation).   Only 147 acre feet of water would be used for oil and gas drilling on the whole 640 acre section, that’s assuming it will all come from the Carrizo Wilcox, which is not going to be the case. Surface water, from large “tanks” or stock ponds will also be used as frac water, once a normal rainfall pattern returns to South Texas.

Darrel Brownlow, a geologist and former member of the Evergreen Water District, offered a presentation to McMullen County residents recently. Brownlow estimated that there will be between 20,000 and 25,000 wells drilled in the Eagle Ford shale in next 20 years, resulting in water usage of up to 300,000-365,000 ac/ft. That breaks down into 15,000 ac/ft per year or roughly 1,250 ac/ft per the 12 counties that pull water from the Carrizo Aquifer. (That’s assuming it all comes from groundwater sources and not surface sources such as ponds and that no water is recycled.)

A slide in Brownlow’s presentation noted that the 1,250 ac/ft per county includes the drilling and subsequent fracking of “roughly 80 to 100 wells per year per county.”
Brownlow stated that 1,250 ac/ft of water is about the same amount of water that it would take to farm  625 acres of corn.

I love to see detailed information such what Mr. Brownlow presented but would also like to see more studies  to confirm these numbers. For example, I’m skeptical about the amount of wells drilled per county that he offers, I think it will end up being a lot more than that. There have been over 200 permits issued for LaSalle county alone from Jan to Sept 2011.  For more reading, you can find the Carrizo – Wilcox Aquifer report here:  TCEQ Report

Is Recycling Frac Water The Answer?

Recycling frac water in the Eagle Ford shale is one way to reduce the impact on the Carrizo aquifer. There are a number of companies specializing in cleaning up used frac water, removing all chemicals, etc., from it so it can be used again for any number of purposes. This is a great technology and has been used with success in the Barnett and Marcellus shales. Companies are already setting up facilities in some areas of the Eagle Ford shale to clean used frac water. One reason that recycling frac water may not catch on as much in the Eagle Ford shale as it has in other shale plays, is due to the fact that there is favorable geology in much of the region for disposal wells to be used. Disposal wells are utilized to inject used frac and other produced water deep underground into non-productive zones far below  fresh water aquifers. The cost to treat frac water and return it to municipal water or agricultural water standards runs somewhere between $1.50 to $2.00 a barrel. (Correct me if I’m wrong and your company has developed a cheaper method).  In the end, any contaminants removed from it still must be disposed of, in disposal wells, etc.  If an oil company can frac a well with pond water or from the Carrizo aquifer for a few cents per barrel, then inject it into a disposal well for around 50 cents a barrel (add in trucking costs of about $1.00 a barrel), then the economics are simply not that favorable for treating and reusing frac water in those areas of South Texas where disposal wells can be drilled. (On a related note, it has been reported that cities such as Carrizo Springs are selling treated sewage plant water to oil companies for fifty cents a barrel).

In Texas, haulage and disposal costs average $1.47 per barrel. In the more populated East, the costs range from $1.68 to $2.10 per barrel. Source: U.S. Dept of Energy. 5/31/11

Even if treatment costs were on par with disposal costs, and used frac water was treated at a facility somewhere in the area, it still has to be trucked there, stored and then somehow transported to the next well for reuse, however far away that might be.  Six million gallons equals about 142,857 barrels, or about 1,098 vacuum truck loads just to frac one well.  I may be wrong on this one, but  the consensus I’ve been getting from  drilling consultants that I’ve spoken to is that it’s not yet economical in much of the Eagle Ford shale area to treat and reuse frac water. (At least not in those areas where the geology exists to drill disposal wells and obtain well water from the Carrizo aquifer.) This is  a subject I’m very interested in, so feel free to e-mail me if you have more insight on the economics of disposal vs. treatment in the Eagle Ford play.

It’s Not Eagle Ford Shale Drilling That Will Deplete The Carrizo

Here’s what I believe is going to be  the greater threat to the Carrizo Wilcox aquifer  in the Eagle Ford shale play area. It’s not the amount of water that is going to be used by oil and gas companies to frac wells but rather  how all of the newly drilled water wells will be used by landowners after oil drilling is over with. Landowners often end up keeping and using water wells that oil companies drill on their land. In many areas of South Texas, where the Carrizo Wilcox aquifer lies at a depth of several thousand feet, only wealthy ranchers could previously afford to  drill Carrizo wells (which could cost as much as $50,000 or more each). The game changer now is that even small landowners with a few hundred acres could possibly end up with a “free” Carrizo water well worth thousands of dollars, courtesy of the oil company. Let’s just imagine that  one new Carrizo Wilcox water well is drilled for every 2 or 3 square miles of the Eagle Ford shale play. Will the rancher or farmer then decide to put in some kind of crop, and put a high volume pump on the well and use that water for years thereafter, or will they decide to sell their water rights to a municipality such as San Antonio who offers them a deal they can’t refuse? It’s going to be interesting to see how the future “water wars” play out.

Article by Nolan Hart

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

One of the most common questions that  landowners who have signed Eagle Ford shale oil leases ask is  “when will they drill an oil well on my land?’

In the oil business, decisions are most often made with two things in mind, maximizing profit and minimizing risk. One of the biggest risks for oil companies in the Eagle Ford shale play at the moment is having leases expire, with no oil and gas production to hold them, then having to face a much more competitive market to re-lease that acreage. Once a well is drilled, the lease is “held by production”, but with so much acreage to drill up, oil companies simply won’t be able to get to all of it before leases expire or come up for renewal. Many Eagle Ford shale oil leases contain an option for the oil company to extend them when the primary term expires. For example, the contract may enable the oil company to pay the same amount per acre to hold the lease for another two years. On large ranches, it may cost an oil company too much to renew leases, so they will make every possible effort to drill a well and “hold by production” the acreage. This is especially true in areas where the price per acre of Eagle Ford shale leases has been driven into the thousands.  If you have several hundred or several thousand acres in one of these areas, and you signed a lease with a primary term of three years,  there is a good chance that you’ll see a rig move in before it expires so the company doesn’t have to pay any more to hold the land.

Oil Companies Must Clear Up All Title Issues First

Before drilling begins, oil and gas exploration companies must clear up all title issues related to the properties involved. If a number of  parcels of land are involved in the proposed unit, it may take several months to track down all of the information required to establish genuine ownership of the minerals / surface. Tracts of land must not have issues such as disputed ownership or back taxes. In the case of property that has  a quitclaim deed, (the lowest quality deed), the company may need to get affidavits from neighboring landowners to help validate the claim of ownership. This is necessary to avoid large lawsuits once royalty payments, surface damage, etc.,  becomes an issue.

There are other factors at play in the Eagle Ford shale right now that may be affecting drilling in your area.  These factors include the ability of the Texas Railroad Commission to issue permits, the availability of drilling rigs, frac water, sand, road material, oil and gas pipelines and trucks, etc. “Takeaway capacity” or the ability to get oil and gas from new wells to market, will be an issue well into 2012, until new pipeline networks are finished. Also,  permitting for new wells has seen delays due to a staffing shortage at the RRC, which is down to 625 full time employees from 704 in ’09. Update: The Texas RRC has noted that as of Sept, 2011 drilling permit processing time is, according to them, “1 business day for expedited permits and 3 business days for standard permits.”

Putting On A Show For Wall Street

Some landowners, such as those with EOG Resources leases in McMullen and LaSalle counties, have been perplexed to see drilling rigs show up, then move on down the road a few months later.

According to one oil company executive that I spoke to, one of  the motives in relocating assets is to drill enough “super wells”  and get them online as soon as possible to impress Wall Street investors. This is most likely the reason that companies such as EOG Resources have shifted rigs away from the western Eagle Ford play toward counties to the east. According to the Schlumberger rig count, EOG Resources had, as of July, 28, 2011,  9 rigs drilling in Gonzales county,  6 in Karnes county, and 2 in Wilson county, (the eastern side of the play). At that time there were only two rigs drilling for EOG Resources in LaSalle County and none in McMullen or Dimmit counties. EOG Resources holds thousands of acres in those counties, with proven reserves. However, in order to focus on “big producers”, they have moved almost all of their rig fleet to the east, where they are bringing in wells producing more barrels of oil than those in the western province. In Gonzales county, EOG has wells such as the Hansen – Kullin #3H, which is producing 1,538 barrels a day, with shorter laterals than those in the west. While there have been some big wells drilled in LaSalle, Dimmit, McMullen and other counties to the west, those in the eastern side of the play are on the priority list. The aim is to boost production numbers and keep the investor’s money flowing in. For landowners wanting to see an Eagle Ford shale well on their property, patience is a virtue. Rumors are in the air of “massive drilling programs”, by the main players in the Eagle Ford shale, once a network of new pipelines is completed in 2012.

Update: 09/19/2011.  Judging from the two dozen or more new drilling permits recently approved for EOG Resources in LaSalle and McMullen counties, a shift of rigs back to the west side of the play will occur in the coming months in order to “hold by production” some of the larger leases, which are about to come up for renewal.

By Eaglefordshaleblog.com editor Nolan Hart, 07/28/2011

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,” “We must develop this shale responsibly, finding the proper way to develop these resources while ensuring environmental protection.”

(Note: Since 2009 the Eaglefordshaleblog.com has been trying spread the word about the importance of Eagle Ford shale discovery for the Texas economy, now we see it echoed by the director of the Texas Railroad Commission. If the Texas Railroad Commission thinks it’s the biggest oil and gas boom to ever come to Texas, you can bet your boots that it most certainly is!)

The members of the new Texas Railroad Commission Eagle Ford shale task force include the following persons.

• Leodoro Martinez – Middle Rio Grande Development Council, Executive Director, Cotulla
• Kirk Spilman – Marathon Oil, Asset Manager Eagle Ford, San Antonio
• The Honorable Jaime Canales – Webb County Commissioner, Precinct 4, Laredo
• Teresa Carrillo – Sierra Club, Executive Committee Member – Lone Star Chapter, Treasurer – Coastal Bend Sierra, Corpus Christi
• James E. Craddock – Rosetta Resources, Senior Vice President, Drilling and Production Operations, Houston
• Erasmo Yarrito – Texas Commission on Environmental Quality, Rio Grande Valley Water Master, Harlingen
• Steve Ellis – EOG Resources, Senior Division Counsel, Corpus Christi
• The Honorable Daryl Fowler – Dewitt County Judge, Cuero
• Brian Frederick – DCP Midstream, Southern Unit Vice President for the East Division, Houston
• Anna Galo – Vice President, ANB Cattle Company, Laredo
• The Honorable Jim Huff – Live Oak County Judge, George West
• Stephen Ingram – Halliburton, Technology Manager, Houston Business Development & Onshore South Texas, Houston
• Mike Mahoney – Evergreen Underground Water Conservation District, General Manager, Pleasanton
• James Max Moudy – MWH Global, Inc., Senior Client Service Manager, Houston
• Trey Scott – Trinity Minerals Management, LTD, Founder, San Antonio
• Mary Beth Simmons – Shell Exploration and Production Company, Senior Staff Reservoir Engineer, Houston
• Terry Retzloff – TR Measurement Witnessing, LLC, Founder, Campbellton
• Greg Brazaitis – Energy Transfer, Vice President, Government Affairs, Houston
• Glynis Strause – Coastal Bend College, Dean of Institutional Advancement, Beeville
• Susan Spratlen – Pioneer Natural Resources, Senior Director, Corporate Communications & Public Affairs, Dallas
• Chris Winland – Good Company Associates; University of Texas at San Antonio, Interim Director, San Antonio Clean Energy Incubator, Austin/San Antonio
• Paul Woodard – J&M Premier Services, President, Palestine

Director Porter plans for the task force to hold monthly meetings to discuss Eagle Ford shale development issues. The first meeting occurred in San Antonio on July, 27, 2011.

The Texas Railroad Commission is the agency in the state in charge of regulating oil and gas activities. The Eagle Ford shale, one of the largest discoveries of oil and natural gas in over 40 years, will continue to be a big part of the agency’s work load in the coming years. The RRC is still understaffed, at 625 employees, 79 fewer than it had in 2009 and this has lead to some processing delays. The agency has requested additional funding, but in light of the state’s budget crisis it is unlikely to get it.  The agency could be overwhelmed in the coming years if it is not able to gear up for the Eagle Ford shale.  Bentek Energy, LLC recently reported that oil production from the Eagle Ford shale has doubled over the amount reported  last year. Bentek also predicts that oil output from the Eagle Ford will soar to five times the present amount over the next five years, with natural gas liquids and natural gas production increasing by 150%.

Most residents of the middle part of South Texas have  noticed the big increase in oilfield highway traffic that has resulted from  Eagle Ford shale drilling and production. Unfortunately for drivers, the situation isn’t going to improve anytime soon.  In an area where farmers and ranchers have grown accustomed to stopping in the middle of country roads to visit with neighbors, there are now scores of oil and gravel trucks plying those same roads to watch out for. Sheriff’ department officials in Wilson and Karnes counties report that many overweight vehicles are using county roads to avoid DPS troopers enforcing weight limits on state highways. Each day the number of complaints about oilfield truck traffic grows and some residents of South Texas are not happy about changes brought to the region by this large oil discovery.

Why Is There So Much Traffic On South Texas Roads?

At the present time, almost all Eagle Ford shale oil and condensate production is being moved to market by trucks. With some wells making over 1,000 barrels a day, and the capacity of a crude transport truck at around 200 barrels, that can amount to a lot of loads per day from a field.  Equipment and gravel hauling trucks, roughnecks and service company vehicles going to and from new wells are also adding to the huge increase in South Texas road traffic.

New Eagle Ford Shale Pipeline Projects Underway

EOG Resources, one of the biggest players in the Eagle Ford shale, has partnered with Enterprise Products Partners in a 140 mile pipeline project that will deliver oil and condensate to Houston refineries, as well as connect with larger pipelines to send it to storage facilities in Cushing, Oklahoma. Enterprise announced on May, 4, 2011 that they would begin construction of another 80 mile pipeline, originating in Wilson County and ending near Gardendale in LaSalle county as part of a partnership with Chesapeake Energy.  Kinder Morgan, another major pipeline company, has partnered with oil and gas producers Chesapeake Energy and SM Energy to build over 111 miles of pipeline in South Texas that will transport natural gas and liquids. A number of shorter liquids – gathering pipelines are currently being constructed across the play, but not fast enough to handle all the new wells coming online. Regarding the Eagle Ford shale crude bottleneck that is developing in South Texas, EOG Resources chairman Mark Papa commented to the effect that all Eagle Ford liquids production is currently being moved by trucks and due to a shortage of trucks to transport oil from the play, it will be, in his words “a tight situation throughout this year”.  According to Mr. Papa, EOG Resources  has a plan to deal with the situation. Unfortunately for South Texas drivers in McMullen, LaSalle, Atascosa, Bee, Karnes, DeWitt and other counties, any  solution probably means more truck traffic on the road.

Cities and Counties Struggling To Cope With Eagle Ford Shale Oilfield Traffic

The city of Pleasanton, TX is even considering an ordinance banning 18 wheelers from city streets. This has the owners of  non-oilfield related trucking companies worried that such ordinances will make it more difficult for them to do business.  Here on Eaglefordshaleblog.com, we have been trying to raise awareness of the changes that  are coming to South Texas for over two years now, but city and county leaders seem to have just woken up to the reality of this major oil boom and how it will impact roads, bridges and other infrastructure.

If you drive in South Texas, just be aware that the already heavy oilfield traffic on highways and county roads will become much worse before it gets better. Increased traffic in South Texas as a result of the Eagle Ford shale discovery will most likely be with us another decade, or longer. All of this oilfield traffic is taking its toll on roads that were not designed to handle so much extra tonnage.  Hopefully TXDOT can keep South Texas roads in good shape, but this will be a big challenge for the agency as the state faces a budget shortfall of $27 billion dollars.

Be Aware Of Extra Highway Traffic In South Texas Resulting From Eagle Ford Shale Drilling

For your own sake, as well as that of other drivers, please look both ways before pulling out, take a little extra time, and watch out for oilfield trucks.  Realize that there is a new traffic reality in those counties where Eagle Ford shale wells are located and that old driving habits don’t apply any more.

Article by Nolan Hart.

Interstate 37 cuts across the middle of the  red hot Eagle Ford shale oil and gas play south of San Antonio. Among the new oil and gas related businesses that are setting up shop along
IH-37 are Companies such as Frac Tech, which has constructed a new facility near the Coughran Road exit off IH 37 south of Pleasanton.
From the company website:

“The Pleasanton district is the base of operations for two frac crews currently working well sites in the Eagle Ford. With the high demand in the area, the number of crews is expected to expand to four with the next few months.

The increasing number of stages in horizontal wells and the need for reliable pumping equipment in shale plays across the country has fueled Frac Tech’s recent expansion. Frac Tech operates one of the youngest fleets in the pressure pumping industry, giving it a clear advantage in these extreme environments.

Hydraulic fracturing is a key part of developing Eagle Ford shale wells and companies that provide the pumping equipment and frac sand needed are moving into the area to get in on the hottest horizontal oil play in the United States.

All along IH 37, from near Pleasanton to south of Three Rivers, you can see signs of new oilfield related businesses. From frac tank rental companies to those providing frac sand and even new RV parks, there are many signs that IH-37 may be the new Eagle Ford Shale business corridor. Property with highway frontage along the interstate is quickly rising in value as more and more oil and gas businesses move into South Texas to get in on the opportunities provided by the huge Eagle Ford shale oil boom.  All of the new oilfield businesses will mean a big boost for the economies of small towns along IH-37 such as Three Rivers and Pleasanton. In a time when the rest of the nation is suffering from lack of jobs, companies in the Eagle Ford shale play are hiring and actively recruiting new employees with ads on area radio and TV stations.

“The bottom line here is that our confidence in individual well results and the total 900 million barrels of oil equivalent net after royalty reserve estimate, have increased since our April analyst conference. Because this is such a huge net oil accumulation, and I believe investors have undervalued this asset,”

Mr. Papa discussed how the Eagle Ford shale play is divided into the “East” and “West” areas, with Eagle Ford shale wells in the East such as the Harper #1H producing an initial production amount of 1,070 barrels a day, and the  Cusack – Clampit wells, at rates ranging from 860 to 1,800 barrels of oil per day, with 1 to 1.8 million cubic feet a day of rich gas each. In the Eastern Eagle Ford shale, the play is divided into two zones at different depths and the rock is thicker.   In the West, Eagle Ford shale wells such as the Haynes 1-H north of the town of  Tilden, in McMullen county, are producing in the 970 to 629 barrel per day range. There in the Western Eagle Ford shale oil window, the rock is a bit thinner but laterals are being drilled up to 6000 feet to increase production.

Also notable in the EOG conference call was a revelation about the mechanics of ultimate oil extraction from the formation.  Some geologists had at first doubted the ultimate recovery of Eagle Ford shale wells. Because the Eagle Ford shale is a “borderline carbonate reservoir” and not a traditional shale, there is a good amount of flow through the matrix of the rock itself.  The reservoir is proving to have much of the same qualities as a carbonate reservoir for ultimate recovery of oil.

In layman’s terms, a carbonate oil and gas reservoir is typically a much more porous and easily drained type of rock than shale when it comes to oil and gas. Carbonate rock such as limestone may have channels formed by acidic liquids, natural fracturing, etc, which allow oil and gas to flow through the rock to the wellhead.  See image below:

Many of the world’s largest oilfields such as some in the Middle East are carbonate reservoirs, drilled with vertical well technology. Shale on the other hand is a harder and mostly nonporous rock which requires much hydraulic fracturing before anything will come out of it. What exists in the Eagle Ford shale, is something in between. The fact that wells can now be drilled sideways using horizontal drilling and then hydraulically fractured, has made possible a  new frontier  when it comes to taking advantage of borderline rock such as exists in the Eagle Ford shale.

On a more technical level, Papa discussed the “bubble point pressure” of the Eagle Ford shale. “There is an extraordinarily high differential between the initial reservoir pressure and the pressure at which solution gas breaks out of the oil, technically called the bubble point pressure. Across our acreage, the original reservoir pressure averages 7,200 psi and the bubble point pressure averages 2,500 psi. This unusually high spread provides for a larger-than-normal fluid expansion recovery factor. That’s why we’re so confident with our 0.9 billion barrel reserve estimate.”

So far the company has had 100% success across an 120 mile window stretching from near Cotulla, TX to Gonzales county. Wells are being fracked in packages, as opposed to fracking just one well, and there have been some delays in getting the required amount of equipment to move forward  at the desired pace.  This has slightly reduced the amount of oil the company has expected to bring online in 2011 but is seen as an issue that will be overcome but not until mid 2011.

How many Eagle Ford shale wells will be drilled? With a proposed Eagle Ford shale well spacing of somewhere around 80 acres, (more in the west), there are going to be a lot of wells drilled in EOG’s Eagle Ford shale acreage. It may take a lot fewer to produce the .9 billion barrels as was first estimated according to Papa. They had initially given a figure of 2,800 wells to achieve .9 billion barrels of Eagle Ford shale oil production in their leasehold area.

Below, a photo of the Haynes 1-H, an Eagle Ford shale well drilled by EOG Resources in McMullen County.

Above, a photo of an EOG Resources Eagle Ford shale well, the Haynes 1-H, in McMullen County Texas, north of Tilden.

Second map of Eagle Ford shale depths.

Shows the depth of the Eagle Ford shale in southern Gonzales county at over 13,000′.  Both maps are from Petrohawk Energy.  In southern LaSalle county, in the dry gas window of the Eagle Ford shale, depths reach up to 15,000′.

The map below shows the thickness of the Eagle Ford shale in several key counties.

The following map of Eagle Ford shale depths is from the South Texas Geological Society and is an active link to their website.

For more maps including thickness of the Eagle Ford shale see: Eagle Ford Shale maps.

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 EagleFordShaleBlog.com author Nolan Hart, August 12, 2010