Texas Oil Production Reaches Levels Not Seen Since the 70s

July 2, 2014 Kirk Eggleston

The "good ol' days" for the oil and gas industry are back in Texas! The Energy Information Administration (EIA) recently released data showing the state produced just over 3 million b/d of crude oil in April of 2014, reaching production levels not seen in the state since the 70s.

Many Texans remember well the oil bust of the early 80s, when the price of oil fell drastically, and what followed was a blight on the states' economy. A steady decline in oil production, which began in 1972, and fell sharply after the bust, signaled the state's oil boom days were likely over for good. But now Texas along with the rest of the U.S. is on track to become the top oil producer in the world by 2015, according to the International Energy Agency (IEA). The EIA said in the month of April, Texas and North Dakota, which encompasses the prolific Bakken Shale play, made up nearly half of U.S. oil production (48%).

The rise in Texas' oil production is thanks in large part to the tight oil and shale gas revolution in the Eagle Ford, and made possible by advancements in horizontal drilling and fracking technology. The Permian Basin in West Texas, a major oil producing area in the state for years, has also seen an increase in horizontal drilling since the end of 2013, and many of the areas untapped oil reserves are being accessed by the technology.

Texas Surpasses Iraq's Oil Production

The EIA's data is yet another indication of America's re-emerging prominence as a leader in world-wide oil production. In June of 2014, Iraq's production fell 400,000 b/d to 2.9 million, due to violence and civil unrest flaring up in the country, according to Bloomberg. That means Texas has likely surpassed Iraq's oil production, since Texas' production has increased on a month-to-month basis since 2011. Iraq was rated as the second largest OPEC producer in April at 3.2 million b/d.

Why Horizontal Drilling is Important to Texas Oil Production

June 19, 2014 Kirk Eggleston

The tight oil and shale gas revolution has been made possible largely by horizontal drilling and fracking technology. Although the controversial process of fracking tends to dominate the headlines, advancements made in horizontal drilling have allowed operators to precisely access more of the shale rock layer than was thought possible even a decade ago.

As of this writing, 237 rigs in the Eagle Ford are drilling horizontal wells, which accounts for 88% of all rig activity in the play. Without a doubt, horizontal drilling dominates the Eagle Ford play, not to mention the next most significant shale play, the Bakken Shale, where horizontal drilling also reigns supreme. On our sister site, BakkenShale.com, horizontal drilling in our coverage area accounts for nearly 90% of all active rigs.

Horizontal Drilling Ramps Up in the Permian Basin

Although the Eagle Ford is by far the top producer in the state of Texas, it is not the top dog for horizontal drilling. Rather, its the Permian Basin that currently wears that crown. For years, much of the oil produced in the state came from West Texas, and although the spotlight has recently shifted to the Eagle Ford, the Permian appears to be ramping up for a revolution of its own.

According to the U.S. Energy Information Administration, since the end of 2013, the number of horizontal rigs in the Permian Basin have increased dramatically. From December 27, 2013, to the week ending on May 9, 2014, the number of horizontal, oil-directed rigs in the Permian Basin rose by 63 rigs, which accounts for 50% of the total increase in the United States.

“A change in the horizontal, oil-directed rig count of the scale seen in the Permian indicates a significant rise in activity in its tight oil plays relative to recent developments in other major production area.”

— EIA

At the beginning of 2013, both the Eagle Ford Shale and the Bakken Shale, exceeded the Permian Basin in the number of oil-directed horizontal drilling rigs. By the end of 2013, the Permian Basin's 215 rigs surpassed both the Eagle Ford and Bakken, which at that time had 173 and 164 rigs, respectively. During the first quarter of 2014, the increase in oil-directed horizontal rigs in the Permian Basin was more than four times the combined increase in the Eagle Ford and Williston Basin.

Escondido Resources Horizontal Eagle Ford Drilling Results - 2011

February 21, 2012 R.T. Dukes

Escondido Resources II announced well results from the company's 2011 drilling program in South Texas. Escondido drilled 17 wells in 2011 with an average IP rate of 7 mmcfd. That is not just Eagle Ford wells. The company has drilled a total of 29 wells since 2009, with 18 in the Escondido formation, 7 targeting the Olmos, and 5 targeting the Eagle Ford Shale. All 17 wells in 2011 were horizontal. The company primarily operates in Northern Webb County targeting the Escondido and Olmos formations, but also operates acreage in La Salle and McMullen counties. The company owns the deeper Eagle Ford rights on over half its 60,000 net acres in the area.

The jewel of the Eagle Ford wells came online at 10 mmcfd of wet gas in late 2011 and another well that had good log shows is set to be completed in March.

Read the full press release at escondido-resources.com

Horizontal Drilling and Hydraulic Fracturing Brought the Eagle Ford

September 26, 2011 Kenny DuBose

Anadarko's drilling manager Mark Sunland was interviewed by MyWestTexas. He talks about new technologies opening up what was traditionally thought to be a source rock. The combination of horizontal drilling and hydraulic fracturing have made the play economic and opened vast domestic resources. Future improvements, such as rotary steerable technology, will only improve the efficiency of shale drilling onshore.

"The technology involved in (horizontal drilling) is not really anything new to us," Sundland stated, adding hydraulic fracturing is not new either, having been around since the late 1940s. "It's applying technology that we use for a different style play and applying it to a new geological setting."

Historically, producers considered shale formations to be sources of oil and gas, but not to be access points because shale is not sufficiently porous nor permeable to release its hydrocarbons efficiently.
Whereas the older vertical drills could access only a small slice of a formation, horizontal drilling can cut through miles of the same layer of rock. Anadarko's record for horizontal hole length is 8,340 feet, with the average Eagle Ford hole coming in at 6,000 horizontal feet. This greater formation exposure was then combined with hydraulic fracturing, which created the artificial permeability needed to allow the oil to flow to the pump.
"This is the beauty of two well-understood technologies being applied in a different way. It has completely changed the paradigm for petroleum engineers," Sundland said.
Rotary steering technology (RST) on the other hand, is "much more high-tech," he said, not relying on bent housing, instead using computer controls to direct the bit. The drawback for RST, and the reason it had been mostly used offshore, is that it is much more costly.
This type of technology has opened not only the Eagle Ford shale - whose reserves Sundland compared to major offshore fields -- but in the Permian Basin and elsewhere as well, driving production rates in Texas to an upward curve for the first time in 40 years.