Eagle Ford Natural Gas up 349%

Eagle Ford Natural Gas May 2015 | click to enlarge
Eagle Ford Natural Gas May 2015 | click to enlarge

The Energy Information Administration reported last week that Eagle Ford Shale gas production increased by 349% in the past eight years, even as rig counts plummeted.

Related: Eagle Ford Shale Midstream Sold

In May 2007, the region was producing 1.63 Bcf per day with less than 100 rigs, and one year ago 260 drilling rigs were producing around 6.2 Bcf per day. In May 2015, the region produced a record 7.33 Bcf per day while running about 120 rigs.

At the start of 2014, the Eagle Ford was producing less gas than either the Barnett or the Haynesville. However, as of June 2015, Wood Mackenzie estimates that the Eagle Ford is producing approximately 5.2 bcfd of gas, which is 34% more than the Barnett and 15% more than the Haynesville.

For the first time in many months, Webb County has taken over Texas top gas production spot for the month of March, producing 55,645,145 MCF compared to Tarrant County’s 53,003,565 MCF.

Eagle Ford is quickly gaining ranks as a major natural gas producer with companies such as Anadarko, Chesapeake, Swift and Rosetta growing production as they successfully reduced cycle times and maximize scale in the play.

EIA: Eagle Ford Oil Field Largest in the U.S.

EIA Namess top 100 Oil & Gas Fields
EIA Namess top 100 Oil & Gas Fields

The Eagle Ford tops the list of the 100 largest oil fields in the country, with Eagleville overtaking Alaska’s Prudhoe Bay for the number one spot.

The Energy Information Administration (EIA) made it official, reporting that the shale oil boom has contributed significantly to the U.S. oil and gas reserves as production numbers skyrocketed between 2008-2013.

Related: EIA: Texas is Largest Producer of Shale Natural Gas

A new report released in late March and based on the latest data from 2013, shows the top 100 oil fields accounted for 20.6 billion barrels of crude oil and lease condensate proved reserves, which was 56% of the U.S. total.  The top 100 gas fields provided 68% of U.S gas reserves in 2013 with 239.7 trillion cubic feet of total natural gas proved reserves.

At the top of the list are two fields from the Eagle Ford Shale Play in Texas, Eagleville and Briscoe Ranch. Eagleville spans 14 counties in South Texas and is the country’s largest oil field, which produced 238,050 million barrels in 2013. These fields also made the top 20 list for natural gas with Eagleville coming in at 12 and and Briscoe Ranch at #13. Just a few short years before, these Eagle Ford fields did not even appear in the top 100.

EIA defines a field as an area consisting of a single reservoir or multiple reservoirs grouped on, or related to, the same individual geological structural feature or stratigraphic condition. There may be two or more reservoirs in a field that are separated vertically or laterally by geologic features. However, this definition is not used by all states; consequently, areas classified as individual fields by some states may be combined in EIA’s study.

Read full report at eia.gov

Eagle Ford Production Expected to Decline

Eagle Ford Production to Dip in April
Eagle Ford Production to Dip in April

2014 was a record breaking year as shale oil production across the United States surged, but a new report suggests that trend may be shifting.

U.S. gains increased at least 100,000 barrels per day for 10 of the last 16 months. The Eagle Ford saw the same surges, as production increased from approximately 1,2 million barrels daily in 2014 and to over 1.7 million last month.

Related: Six Eagle Ford Counties Rank as Top U.S. Oil Producing Areas

Even the weekly loses of oil rigs since October hasn’t stopped production from soaring into numbers that have contributed significantly to a worldwide surplus. But this record streak may be coming to an end.

The U.S. Energy Information Administration (EIA) released a report on Monday that predicts oil production in the Eagle Ford Shale will dip in April, and possibly usher in a new trend of slower production. EIA analysts say that the Eagle Ford will produce 1.72 million barrels daily of crude oil and other liquids in April, down from an average of 1.73 million barrels daily this month.

Across the country, production from the six largest shale plays will hit 5.6 million barrels per day in April, which will be the smallest increase since February 2011.

This anticipated decline hasn't changed the fact that reserves are still very high. EIA reports that stockpiles grew by 4.5 million barrels last week brining the U.S. reserves to 449 million barrels of oil in storage.  It has been at least 80 years since the level has been this high.

Read more at eia.org

EIA Updates Eagle Ford Maps

The U.S. Energy Information Administration (EIA) has released new maps that include updated information for Eagle Ford derived from producing wells from January 2000- June 2014 based on The maps are categorized in the following geological parameters.

Initial GOR

This map shows the detailed production in relation to the natural gas to oil ratio (GOR) of the play.

Oil to gas ration map for Eagle Ford 2015

Play Footprint

This map shows the four boundaries of the Eagle Ford Play

  1. North - This boundary is determined by the temperatures at which oil is generated from rock and stops at 3650 feet in Frio County and counties east, and in Maverick and Zavala counties from 650 to 2900 feet.
  2. South - This boundary follows the Sligo Reef Margin.
  3. Northeast - This boundary where the lower Eagle Ford thins and grades into more silica-rich units of the Pepper Shale of the East Texas Basin
  4. West - This boundary is marked by the border with Mexico
EFS boundaries map: 2015

Elevation Contours

This structure map characterizes the depth of the play and represents the minimum drilling depth to reach the top of the Eagle Ford formation.

The Eagle Ford formation is divided into upper and lower units, and the top of the lower unit is considered the best proxy for the source rock; however, due to a lack of density and distribution of the depth to the top of the lower Eagle Ford formation, this map represents an approximation of the elevation of the top of the upper Eagle Ford unit.
Eagle Ford elevation map 2015

Thickness Contours

This map provide a rough estimate of the thickness of the play, which is used to estimate resource volumes, such as oil- or gas-in-place estimates, in combination with other information such as porosity, pressure, and geologic history.

Eagle Ford thickness map

What Lower Oil Prices Mean for Texas and Eagle Ford

With oil now below $70 per barrel, oil industry workers in Texas should anticipate a decline in exploration and drilling in certain areas and hence a slowdown in employment. Oil exploration and production accounts for about 10% of the Texas economy. At lower sustained oil prices, some operators will scale back their drilling programs in development areas across the state, which will in effect reduce spending in the oil sector, and have an impact on industries connected to the oil patch (i.e. steel and transportation).

Currently, the vast majority of Eagle Ford operators do not appear to be changing course next quarter, but last month, at least one Eagle Ford player, Clayton Williams, indicated it's considering scaling back its drilling program in 2015 due to the "pullback" in oil prices.

Read more: Clayton Williams May Reduce Eagle Ford Drilling Program - 2015

The good news is there are many areas in the Eagle Ford Shale where drilling and exploration are profitable well below the current benchmark price (West Texas Intermediate or WTI) of ~$67.00 per barrel.

Analysts predict the Karnes Trough, one of the best areas of the play, would be profitable, even if oil prices fell into the $40s range. In certain other liquids-rich areas of the play, breakeven oil prices are between $50 – $60 per barrel.

Read more: Worried About Oil Prices? What to Expect in the Eagle Ford

But there is a large variance in the well qualities across the Eagle Ford, with breakeven prices in several places above the current price of WTI.

Why the Price of Oil is Falling

Since June of this year, oil prices have been falling for a variety of reasons. The shale oil boom, for instance, has increased the supply of oil worldwide, while demand has gone down in China, the world’s second largest oil consumer. But the main reason oil prices are dropping can be traced back to OPEC, which announced last week it would not cut its oil production to shore up oil prices.