Thursday, July 26, 2012

Move Over Bakken, Here Comes Eagle Ford Shale

The world's largest economics organization IHS Global Insight is reporting today that the Eagle Ford Shale area in South Texas will likely be an even more prolific oil-producing area than the booming oil-rich Bakken region of North Dakota:

"Strong drilling results, coupled with the large prospective area, and magnitude of the resource potential, combine to make the Eagle Ford Shale play in South Texas a contender for the best tight oil play in the U.S., according to a new report from IHS, the leading global source of information and analytics.

According to the IHS Herold Eagle Ford Regional Play Assessment, typical well performance as well as peak-month production of the Eagle Ford’s best wells exceeds wells drilled in the Bakken Shale, often considered the tight oil standard. The favorable outlook for the Eagle Ford is reflected in a highly competitive merger and acquisition (M&A) environment, with implied deal values averaging $14,000 per acre for Eagle Ford acreage in 2011 and top prices approaching $25,000 per acre.

“Our analysis at IHS indicates that Eagle Ford drilling results to date appear to be superior to those of the Bakken,” said Andrew Byrne, director of equity research at IHS and author of the study. “Although the well counts aren’t nearly as high at this point in development of the Eagle Ford, the peak of the well-distribution curve compares favorably with the Bakken.”

The most frequent well result of the Eagle Ford is around 300 barrels per day to 600 barrels-per-day for a peak month production average, compared with 150 barrels-per-day to 300 barrels-per-day for the Bakken, Byrne said. The best wells in the Bakken have an average peak-month production rate of 1,000 barrels-per-day or more, while the Eagle Ford central area’s top wells are even better on a barrels-of-oil-equivalent (BOE) -per-day basis."

MP: Peak what? 

5 Comments:

At 7/27/2012 12:10 AM, Blogger OBloodyHell said...

>>> Eagle Ford

LOL, well, at least it SOUNDS like it has a use for oil, being an auto dealership and all that... :-D

 
At 7/27/2012 5:49 AM, Blogger JJ Butler said...

The shale boom is remarkable, but it is not a panacea for world oil produciton rates. The treadmill is too fast Exxon Mobil (XOM) and ConocoPhilips (COP) who reported second quater production was lower by 5.6% and 6.5%, respectfully.

 
At 7/27/2012 5:56 AM, Blogger Benjamin said...

They say California will be much larger than Eagle Ford and Bakken combined.

 
At 7/27/2012 9:05 AM, Blogger Jon Murphy said...

In a more general industry overview:

US Crude Oil Production on a monthly, quarterly, and annual basis, are at 13 year highs. Annual Production is up 8.5% from the same time last year, quarterly production is up 10.5%, and monthly up 10.9%.

This industry is looking pretty good going through the second half of 2012.

 
At 7/27/2012 3:57 PM, Blogger VangelV said...

US Crude Oil Production on a monthly, quarterly, and annual basis, are at 13 year highs. Annual Production is up 8.5% from the same time last year, quarterly production is up 10.5%, and monthly up 10.9%.

This industry is looking pretty good going through the second half of 2012.


When you add refinery gains, NGLs, ethanol, biodiesel, etc., you may be right that the US is near a 13 year high even though it is very far from its 1970s peak and all the easy conventional fields are in decline. But I prefer to look at an apple to apple comparison and compare the type of oil that is being produced and the cost of producing it. The fact that the EIA is not providing a decent breakdown of the aggregate should worry investors because one type of crude is often very different from another and produces very different end products. Ethanol is not gasoline and a barrel of heavy sour is not the same as a barrel of light sweet.

 

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