CBS Evening News Cites EagleFordShale.com

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CBS and the nation are beginning to see the impact of the Eagle Ford job boom. CBS Evening News cited EagleFordShale.com in a story on the oil patch. You can watch the story- Here.

The forecast is bright for South Texas and a big thanks goes to the oil & gas boom. A National Petroleum Council report released on September 15, 2011, estimates shale oil plays like the Eagle Ford might add as much as 3 million barrels per day of domestic oil supply. That's enough to get the news press going. If we can get closer to meeting our own energy needs, that will mean energy security and more jobs.

The 400 mile stretch in south Texas is a job factory and estimates go as high as 66,000 to 68,000 new jobs by the year 2020. That's direct jobs. When you consider the new hotels and other industries that benefit, that number increase by several fold.

In the U.S., there are a total of 177,100 workers drilling for oil and gas and that is up 21% since the beginning of the recession.  Throw in the landowners that are receiving generous paychecks and we have new millionaires born each day.

A new pipeline in Hobson is gushing money for the small towns that dot a 400-mile stretch that geologists call the Eagle Ford Shale.

"I'm gonna hire as many people as I can possibly afford to hire," David Brodsky told CBS News reporter Bigad Shaban.

Brodsky used to own a coin laundrymat. Now, he's on his way to becoming a millionare.

"I was just sitting in my living room one day," Brodsky says, "and somebody knocked on my door and decided they wanted to lease my property for oil."

Brodsky used the money to buy three RV parks - which are now packed with oil workers. So he's expanding. He's building up to 600 rooms, which are all already rented.

Energy companies are rushing to the area to tap deposits that could produce up to 12 billion barrels of oil, and enough natural gas to power every American household for at least five years.

By 2020, that number is expected to increase to 66,000.

Read the full news article at cbsnews.com

R.T. 

Drought = Fires in Texas

Texas Fire Map

The Texas drought is wreaking havoc on the state. South Texas is blanketed with smoke and fires near Bastrop have taken lives and hundreds of homes. Wildfires have spread throughout Texas and destroyed millions of acres. If you live in affected areas, please use any and all precautions. Weather reports indicate we'll get a reprieve from the wind over the next few days. Firefighters should have a better chance of controlling the fires if that proves correct.

To our knowledge, the fires have not directly impacted any oil & gas operators, but that can change if we don't get rain sooner or later. We don't have any areas of the state that are immune to the risk of fires.

This map will give you an idea of just how bad it is:

Texas Drought Map

We'll keep the families impacted by the fires in our prayers.

Eagle Ford Oil & Gas Completion Technology - HAL - SLB - GFS.TO

GasFrac Photo

Eagle Ford completion technology is evolving as it needs to if operators want to remain competitive. Operators have lots of theories, but the proof is in the pudding. Drilling and completing wells is the only real way to test new technologies.  That technology is needed as we experience rising service costs, along with natural gas prices of $4 per mcf and oil prices that look to be below $90 for the foreseeable future. $90 a barrel isn't bad, but it isn't $100.

Petrohawk was the first to announce a major change in completion technology by using Schlumberger's Hi-way Frac system. SLB refers to it as "HiWay Flow Channel Fracturing". Fancy name and all, nobody really cares unless it delivers. For Petrohawk, it looks to have done just that. Petrohawk had utilized hiway fracs in 12 wells that had a production history of 90 days or more as of June. Those 12 wells had produced 32% more at a pressure 42% higher than other wells with a choke (18/64ths). More production at a higher pressure is about as good as it gets. The higher pressure indicates better overall communication, which is great in tight shale rocks. We'll hear more about hiway fracs as operators test it in other parts of the Eagle Ford and in other plays. Read more on Schlumberger's HiWay Flow Channel Fracturing at www.slb.com [ic-c] The other service companies are not slouches, and are working the technology game too. Halliburton is pushing for speed and has lowered completion times by as much as two days with its "Delta Stim" completion service. Multiply two days per well over 100s of wells per year and you begin saving alot of money. Across 182 wells per year, that's an extra well on production for a full year! Days and hours count in the oil & gas game. If you're offering, I'd be just fine with an extra year of production from an Eagle Ford well.

A GasFrac completion in Maverick County is being tested for Jedela Operating. The results will be interesting to watch as GasFrac's technology is more commonly used in Canada where the company was founded. The idea is interesting. If you can sell your flowback fluids or gas, you might only be out the costs of getting it there. If you're in a drought and have to spend top dollar for water, it gets even more compelling. If better production rates and quicker completions prove true, you'll likely end up with a winning combination. Read more at GasFrac.com.

R.T. 

Energy, Jobs and America

My Heart is with the Independents - it's the little guys who are making it happen. Creating jobs that is.  According to the IPAA, there are nearly 18,000 independent oil and gas producers in America.  A surprising figure to most is that on average, they employ 11 employees, but their work product, ie, the generating of oil and gas drilling prospects, generate multiple jobs for everyone else down the food chain - and there are lots of them.  Landmen, geophysical workers, truck drivers, pipe manufacturers, drilling contractors, roughnecks, pipeline companies, oil and gas marketers, traders, refining personell, and more. Their Output - here's a startling stat for you.  Independents drill 95% of the wells in the U.S. and produce 85% of the nat gas and 54% of the crude oil in this country.  That amounts to 4% of the entire U.S. gross domestic product, supporting almost 4 million American jobs.  Moreover these are great paying jobs for the most part.

The Upshot - we're a long way from the notion of "energy independence" in this country.  A very long way.  In the meantime, let's be realistic (and thankful) to an industry and it's people who are making our lives more enjoyable through supplying the energy we need to make our lives go round.[ic-c]

Common Eagle Ford Questions - KNES Television Channel 5 Interview

From time to time, we do interviews with major media outlets... I thought I'd share the latest. KNES 5 in San Antonio did a segment on the Eagle Ford Shale on the 6pm newscast of August 25, 2011. R.T. Dukes and Kenny DuBose of EagleFordShale.com provided the background data for the story by answering a few common questions regarding the Eagle Ford's development. Here's the Q&A below for everyone's benefit.

Is there a reserves estimate for the Eagle Ford?

This is a tricky question and there's not doubt that as an oil & gas play develops, estimates for production and reserves change as quickly as a well is drilled. New information is being gathered constantly in the form of seismic data, drilling data, well production, production history, and the list goes on. If you consider that there was virtually ZERO production from the Eagle Ford formation just a few short years ago, the current estimates will most definitely dwarf the previous.

The USGS has not completed a study on Eagle Ford reserves and they likely won't at any time in the future. We'll have to go off industry estimates and we've heard numbers as high as 20+ billion barrels of liquids (oil, condensate, and NGLs) and 150 Tcf of gas. That's a lot of hydrocarbons!

Will the Eagle Ford be or is it biggest oil field in Texas?

"Biggest" is a tricky word and that question can be asked in terms of reserves, production rate, number of wells, or geographic extent. Also, the Eagle Ford is not technically a "field", but a producing geologic formation. Formations can cover a huge geographic extent and only have good reservoir or source rock properties in certain areas. A play like the Eagle Ford will cover multiple fields.

In terms of production, the Eagle Ford is estimated to produce more than 160,000 barrels of oil and condensate per day as of the end of July. That means the play is already contributing 3% of total U.S. oil production, which was 5.6 mmbopd in May of 2011. Conservative estimates peg Eagle Ford production at 2-3 times that by 2015.

Is the Eagle Ford the largest field in the U.S.?

The last major oil field discovered in the U.S. was Alaska's Prudhoe Bay in 1969 and reserves are estimated at 12-13 billion barrels. If you're counting, that's 42 years ago.

We can consider the Eagle Ford a discovery, but as mentioned above it is more than one field. The Eagle Ford will likely run a tight race with the Bakken Shale. The Bakken (2001 "play opening well") was a few years ahead of the Eagle Ford (2008 "discovery well"). If you consider the potential for gas production, the Eagle Ford is likely much larger, but if you simply consider liquids production it will be a close race. Bakken estimates range from 5-20+ billion barrels and we've seen very similar numbers describing the Eagle Ford.

In South Texas, EOG estimates it has almost 1 billion barrels of reserves across its 600,000 acre position. In short, it's big.

How long will drilling activity last?

That's a loaded question since no one has proved to know what the oil price is going to be tomorrow, but the Eagle Ford has pretty attractive economics and that won't change dramatically, without another "shale gas" sized revolution. We expect the Eagle Ford and the like will be developed for decades to come. When you take into account technological advances, which have historically shown to further extend the lives of known reserves, it could extend further.

How many wells are currently producing?

There are more than 500 producing well reported by the Texas RRC. That includes 200+ oil wells and more than 250 gas wells.

R.T.