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Texas Eagle Ford Shale Play is Best Oil and Gas Play in the US!

A new report by IHS Inc., a global information and analysis company, states that Eagle Ford in South Texas is a contender for the best tight oil play in the US. This is based on strong drilling results, a large prospective area and the magnitude of the resource potential.

At the moment the number one position is held by the Bakken formation, located in North Dakota, Montana, and Saskatchewan. Bakken has been number one because it opened up development of unconventional resources using high-tech drilling methods and hydraulic fracturing. Andrew Byrne, the director of equity research at IHS and the author of this study, said “The results from the Bakken were so strong that it set the standard by which all others will be measured. It was the one play that incited the industry into pursuing these opportunities.” But now that title is shifting to Eagle Ford.

The study looked at 27 tight oil plays and assessed the emerging and mature tight oil plays in North America which have the largest impact on investment patterns and North American oil and gas supplies. The study is intended to help clients estimate the resource potential and recoverable hydrocarbons of each play. It’s also meant to help clients understand performance metrics and future supply potential and establish metrics to compare the performance and value of each play. The study enables clients to determine play strategies, determine potential partners and merger and acquisition strategies, and also to develop analogs for global tight oil potential.

This examination found that both on typical well performance and peak performance, Eagle Ford’s best wells exceeded the wells drilled in Bakken. This performance has also impacted the competitive merger and acquisition environment, with Eagle Ford’s implied deal values averaging $14,000 per acre in 2011 and top prices reaching $25,000 per acre. And implied deal values have been increasing. Several billion dollar transactions for undeveloped acreage have been announced during the past 18 months.

Mr. Byrne said, “Our analysis at IHS indicates that Eagle Ford drilling results to date appear to be superior to those of the Bakken.” He went on to say that while Eagle Ford doesn’t have as many wells as Bakken at the moment, the peak of the well-distribution curve compares favorably to Bakken. To illustrate this, the most frequent Eagle Ford well result is 300-6,000 barrels per day for a peak month average, compared to 150-300 barrels per day at Bakken. Eagle Ford’s best wells also beat Bakken’s best and most productive wells.

In terms of within the Eagle Ford itself, Mr. Byrne said that the central area of the play has outperformed all others. This area includes the counties of Gonzalez, western Lavaca, DeWitt, Karnes, Bee, Live Oak, Atascosa, Dimmit, and eastern Mullen. The western area of Eagle Ford is next best, and the eastern area has the least activity and its performance is lagging behind the other two areas. Additionally, Eagle Ford is divided into three distinct windows: the oil window, the liquids-rich gas window, and the dry-gas window. The highest production rates are from the liquids-rich gas window.

This fantastic growth at Eagle Ford has already proven to be great news for the Texas economy. And now it is becoming the most dynamic energy industry area in the nation, which can only bring more good news to our state!

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