Eagle Ford production likely to double, consultancy predicts

bizjournals.com ^ | Jun 5, 2014, 11:02am CDT | Sanford Nowlin

[ckilmer]

Jun 5, 2014, 11:02am CDT

Eagle Ford production likely to double, consultancy predicts

 

Enlarge Photo

Eddie Seal

Orion Drilling Co.'s Perseus rig prepares to drill for hydrocarbons in the Eagle Ford Shale. Output from the South Texas formation is likely to reach 2 million barrels per day, according to a new Wood Mackenzie analysis. Photo: Eddie Seal/Bloomberg

 

Sanford Nowlin

Crude oil and condensate output from South Texas’ Eagle Ford Shale is expected to double to 2 million barrels per day by 2020, according to energy consulting firm Wood Mackenzie.

That means output from the oil-and-gas formation south of San Antonio would widen its lead over North Dakota’s thriving Bakken formation, which once boasted higher production levels. The Eagle Ford beat the Bakken to the 1 million barrel per day milestone in October, according to U.S. Energy Information Administration data.

“These figures are unparalleled in terms of liquids production growth across the Lower 48, with Eagle Ford expected to produce 16 percent more crude and condensate than the Bakken and Three Forks during the same year combined,” Wood Mackenzie wrote in an update on its website.

The company’s analysis also breaks down expected production across the 24-county Eagle Ford into nine distinct regions. The Karnes Trough, Edwards Condensate and Hawkville Condensate sub-plays — all located at the core of the formation and nearer to San Antonio than the U.S.-Mexico border — are likely to account for 70 percent of 2020 production.

EOG Resources (NYSE: EOG) is currently the most valuable Eagle Ford operator, with its “massive position” in the play valued at $22 billion, according to Wood Mackenzie. ConocoPhillips and BHP Billiton are the second and third largest net producers.

The expected South Texas production increases don’t just mean economic growth in South Texas but also in San Antonio, which has seen its number of oil-and-gas related jobs more than double since 2009, according to new state and federal employment data.

What's more, the federal government recently projected that net oil imports to the United States could plummet to zero by 2037 because of surging production in the Eagle Ford and Bakken

[ckilmer]

Here’s the predictions on Eagle Ford which also show something roughly like 100,000 barrel @ day increases for 2016-2020—depending on how much of the production increases are front loaded onto 2014-15.

[ckilmer]

so reasonable estimates for oil production growth per day for out years 2016-2020 look something like

bakken 100,000 barrels @ day annual increase
eagle ford 100,000 barrels @ day annual increase
gulf of Mexico 100,000 barrels @ day annual increase
permian basin ?75,000 barrels @ day annual increase
everywhere else 75,000 barrels @ day annual increase

That make for a total wild hair estimate of about 450,000 barrel @ day annual increase for out years 2016-2020.

That’s slower than 1 million barrels @ day increases but still not too shabby.

The permian basin there is the wildest hair because that number could easily break upward significantly

I would like to see any additions or correction to those estimates.

[Cowboy Bob]

Every time I hear “Eagle Ford,” I think it’s a story about a car dealership.