Eagle Ford Shale in the US – Oil and Gas Shale Market Analysis and Forecasts to 2020

11 Aug 2010 • by Natalie Aster

GlobalData’s new report “Eagle Ford Shale in the US – Oil and Gas Shale Market Analysis and Forecasts to 2020” analyzes the recent activities in the Eagle Ford Shale play in the US. The report details the drilling activity in the play by analyzing the permits issued in Eagle Ford shale by period, county and also by company. It provides the well and acreage costs in the shale play. The report provides major players in the shale play in terms of acreage and production. It also details the expected production from the shale play by 2020. The report details the major infrastructure developments and recent merger and acquisition activities in the play. It also provides the future plans of major companies involved in the Eagle Ford shale play.

Increased Drilling Activities and Encouraging Well Results Allow Eagle Ford to Emerge as a Major Potential Oil and Gas Producing Region in the US

The encouraging results from the wells drilled in Eagle Ford shale have significantly increased the drilling activities in the shale play. As per Texas Rail Road Commission (RRC), as on April 16, 2010, there were 231 permitted wells and 123 drilled wells in the play. The activity in the play is expected to continue to increase over the next few years. Major companies in the play together plan to drill approximately 230 wells in Eagle Ford shale in 2010.

The Shale play is expected to emerge as a major oil and gas producing field in the US over the next decade. EOG Resources, one of largest players in the Eagle Ford shale play has estimated that the Eagle Ford, as an oil discovery, will rank sixth in size among the all time giant oil fields in the US - just after the Bakken Shale. The overall production of Eagle Ford shale is expected to reach approximately 2,827.4 million cubic feet equivalent (Mmcfe) per day by 2020.

Oil and Condensate Production from the Eagle Ford Shale Makes It A Lucrative Investment Destination

The Eagle Ford Shale, in contrast to other major shale plays in the US like Barnett, Haynesville and Marcellus, which primarily produce natural gas and condensate, produces oil in addition to natural gas and condensate. The oil and condensate percentage in some regions have been quite high giving the companies a huge premium.

The Eagle Ford shale is expected to attract huge investments over the next decade with rapid increase in activities in the play. The major eight companies in the play plan to spend over $1billion in 2010.

Entry of Global Oil Majors Into Eagle Ford Indicates Its Huge Potential

Almost all the oil and gas major companies have substantial acreage in the Eagle Ford shale. Royal Dutch Shell, ConocoPhillips and ExxonMobil Corporation claim to have significant acreage in the play. Even BP Plc has recently entered into the shale play. These companies and other major North American independent producers are looking to further expand their acreages in the shale play. Chesapeake Energy, the leader in natural gas shale plays in the US has rapidly accumulated 400,000 net acres and become one of leading players in the play. The huge interest of the companies in the play further substantiates the potential of the play.

Eagle Ford Shale: Attracting Increasing Number of Joint Ventures

There have been an increasing number of joint ventures in the Eagle Ford Shale. BP Plc entered into a joint venture with a private player Lewis Energy. The deal will give BP Plc a 50% stake in Lewis’s 80,000 net acres in the play. Swift Energy entered into a joint venture with Petrohawk Energy to develop a portion of its acreage in the Eagle Ford Shale. The company entered into an agreement with Petrohawk to develop an approximate 26,000 acre portion of Eagle Ford. Recently Lucas Energy announced the closing of the first part of an Eagle Ford Shale joint venture with Hilcorp Energy.

In addition, some of the major players in the shale play are looking for partners for fast development their acreages. Pioneer Resources had already announced that it is seeking a joint venture partner to accelerate development of its significant acreage position in Eagle Ford shale. Recently Chesapeake Energy also announced that it will seek a partner for the development of its 400,000 acres in the play.