Way back in 2015, the Eagle Ford Shale in South Texas was big news, duking it out with the Permian and the offshore Gulf of Mexico for the #1 spot in crude oil production and with the then-preeminent Haynesville for top honors in natural gas output. But the mid-decade crash in oil and gas prices hit the Eagle Ford harder than any other U.S. production area — in fact, production there remains below its peak seven years ago. Lately, however, M&A activity in the shale play has been surging, suggesting that the Eagle Ford may finally be on the verge of a serious, sustained comeback. In today’s RBN blog, we discuss this renewed interest in South Texas and whether this time the play’s recovery is for real.
We picked “Come Back Song” for today’s title in part because Darius Rucker, who co-wrote the tune and made it a #1 hit on the country music charts in 2010, reminds us of the Eagle Ford Shale. Rucker started off his career with a bang — as lead singer of Hootie & the Blowfish, he and his soft-rock band’s debut album, Cracked Rear View, was the #1-selling LP of 1995 (and one of the best-selling albums of all time) and the next year, Hootie & the Blowfish won Grammys for Best New Artist and Best Pop Performance by a Duo or Group (for the single “Let Her Cry”). But after a period of commercial success, the band and Rucker himself faded from view. By 2008, though, Rucker had re-invented himself as a country music singer and become the first African-American soloist to chart a #1 country hit since Charley Pride in the early 1980s. In 2009, Rucker won the Country Music Association’s New Artist of the Year award, and he’s won a handful of Grammy and ACM awards since then.
The Eagle Ford Shale has had a similar trajectory: a quick rise to the top, followed by a long lull and now, at long last, the prospect of a return to the big time. As shown in the graphs in Figure 1 — and as chronicled in a number of our blogs — drilling activity and production in South Texas really took off in the early 2010s as producers “cracked the code” for using horizontal drilling and hydraulic fracturing in the play’s five production “windows”: dry gas, wet gas, condensate, volatile oil and black oil. By 2015, crude oil production in South Texas (about half of it light oil and half superlight condensate) had topped 1.7 MMb/d and gas production was north of 7 Bcf/d (right-most point of lines in Figure 1).
Join Backstage Pass to Read Full Article
