Eagleford shale play extends about 400 miles across South Texas in a 50-mile-wide band, from the Mexican border, below San Antanio and up into East Texas. Some of the world’s biggest oil companies – including Shell, BP, Statoil and CNOOC – recently have entered the Eagle Ford and are helping to put it on the global energy map with aggressive exploration drilling planned for coming years. In 2010 in the Eagle ford, about 1,018 drilling permits were issued through November, which means that this area is definitely the next big thing to look out for. Not only the drilling permits issued in number increased but also the number of rigs have increased in number.
EOG, in 2010 averaged seven rigs in the Eagle Ford and drilled 110 wells. This year, it expects to have 14 rigs and drill 256 wells. Chesapeake, the largest leaseholder with 625,000 acres, also expects to double the dozen rigs it has working in the area. Petrohawk Energy also expects to spend more than twice as much as it did in the region in 2010. And ConocoPhillips, another major leaseholder, just leaped from seven to 11 rigs in the region.
Why Eagle Ford ?
What makes this shale play different is that it produces oil, condensate, gas and finally drier gas as drilling proceeds down dip. The carbonate content (up to 70% calcite) of the shale makes it very brittle and easily fractured during stimulation treatments, resulting in impressive production figures of both oil and gas.
What are others thinking?
- EOG Resources, one of the major players in the Eagle Ford shale, is planning to drill about 250 wells in the area in 2011.
- Rosetta Resources has allocated 90% of its $360 million budget for its activities in this area.
- Due to lower natural gas prices companies are focusing more on the upper, oil laden section of the Eagle Ford. Since the price of oil is high due to international demand, the upper side of the shale is where much of the new drilling activity in 2011 will take place.
There has been a huge increase in the demand for this acreage , from about $100 to $200 per acre in 2007 to more than $10,000 per acre at present, which signifies that the companies are confident to reap huge profits from this area!
Following the footsteps......
- Like other companies, Anadarko is focusing more on its liquids-rich Eagle ford acreage where it has increased the average estimated ultimate recoveries of its existing wells to more than 450,000 barrels of oil equivalent per well in the liquids-rich Eagle Ford shale.
- The Company plans to double its drilling activity at these assets with more than 200 wells planned for 2011.
- With $5.6 to $6 billion as capex for 2011, about $3.19 billion seems to be allocated to US onshore.
- The Company estimates to spend $5 to $5.5 million per well which totals up to about $1.05 billion to drill 200 wells in the Eagleford.
How Long Will Eagle Ford Shale Oil Wells Last?
What makes Eagle ford shale play the most sort after thing these days is its wide expanse and the ability 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 more than a couple of decades worth of production.
