Last week we covered the incredible growth and potential of the Bakken, where production is just over 600 MB/d headed toward 1,300 Mb/d in 2016 based on Bentek forecasts. In ‘With a Bakken well, they drilled more’ we looked at other producing zones in the Williston basin that have potential far beyond the Bakken proper. We were immediately inundated with demands for equal time from that other super-high-growth tight oil play – the Eagle Ford. “Hey”, say the Eaglefordians – “We are now the most active horizontal oil play, blowing past the Willison Basin late last year. Don’t you think we deserve just as much airtime?” Yes, they do. This week the total Eagle Ford rig count came in at 274 with 202 targeting oil. According to www.eaglefordshale.com, both numbers are records.
The numbers are definitely off the scale. From only 50 Mb/d as recently as April 2010, Eagle Ford production is now over 500 Mb/d (yes, 10X in two years) and according to Bentek headed to 1,500 Mb/d in 2016, or a couple of hundred thousand barrels per day over the Bakken. Not only will it be a horse race for bragging rights, it will be heads up competition for oil field services on the input side and downstream markets on the output side. Although it may change in the future, today there are no other basins playing at the world-class scale of the Eagle Ford and Bakken.
Here are the quick cliff notes about the Eagle Ford. It is south of San Antonio, north of Corpus Christi, 50-75 miles wide and running 400 miles or so west-to-east. That’s 20,000-25,000 square miles, depending on what counties you count. The play as we know it today was discovered by Petrohawk in 2008. Since then the growth has been astronomical. The EIA map below shows the most distinctive feature of the play – three relatively defined commodity windows: oil to the north, NGLs and condensates in the middle and dry gas to the south.
With gas prices where they are, nothing is happening in the dry window. But the NGL and crude windows are hotbeds of activity.
Here’s an update of some Eagle Ford high points based primarily on three sources: (a) presentations at the Morgan Stanley MLP Conference last month where I was a speaker, (b) the Bentek Southeast/Gulf Crude Oil Production Monitor report, and (c) a few excerpts from an RBC research piece titled Eagleford Shale Update that was issued earlier this month.
- According to Bentek, new well starts in the Eagle Ford are up 104% compared to last year.
- In fact, Eagle Ford drilling is moving faster than completion services (pressure pumping, etc.) can keep up. The number of non-completed wells may be more than 1,600 wells today.
- As bad as the situation has been so far this year, it does seem to be getting better as frac crews are moving into the Eagle Ford from other plays where activity has been falling off
- That would be plays like the Haynsville, the Fayetteville and some parts of the Barnett where there is nothing going on but dry gas. With gas prices at the sub $2.00 level, any operator that can take a rig from a dry gas play to a wet gas play is doing so, and fortunately for the Eagle Ford it is just down the road.