Posted on 05/17/2012 5:12:45 AM PDT by thackney
The development of the Eagle Ford shale continues to prompt dazzling assessments and predictions from experts, who said at an energy symposium Wednesday that in four years, the oil-rich formation could become the nation’s second-most productive shale play.
Production in the Eagle Ford could reach 1 million barrels a day by 2016, said Trevor Sloan, director of energy research at ITG Investment Research in Calgary, Alberta.
“So the growth rate out of there would be pretty spectacular,” he said.
But before production can reach that level, some problems have to be solved.
About 1,400 Eagle Ford wells are waiting to be completed or to be tied into pipelines, ITG research shows. There are also shortages of crews and water and too few pipelines.
Once the problems of getting the oil and natural gas to market are gone, production from the Eagle Ford could double, and “the Eagle Ford would be the second-largest producing area if you could bring all those to market,” Sloan said.
The Bakken shale in the western U.S. is No. 1.
His remarks were addressed to a crowd of more than 100 at the seventh annual Energy Symposium, sponsored by South Texas Money Management Ltd. The event focused on natural gas, oil and the effect of geopolitics on oil and gas development.
There are about 240 rigs now in the shale, a tenfold increase from January 2010, according to ITG research.
The Eagle Ford produced 30.5 million barrels of oil in 2011, up from 4.4 million barrels in 2010, Texas Railroad Commission figures show. Natural gas production rose to 243 billion cubic feet in 2011, compared with 108 billion cubic feet in 2010.
“It’s truly historic what’s happened,” said Jeanie Wyatt, CEO of South Texas Money Management.
By mid-2013, pipeline expansions will relieve most of the bottlenecks in the Eagle Ford, and more crews are being hired to complete wells. There’s still a shortage of water for fracturing, but some operators are treating brackish water, said Manuj Nikhanj, managing director and head of energy research at ITG.
The nation faces a glut of natural gas, so companies are moving into the oil-rich parts of the Eagle Ford, Nikhanj said. But the Eagle Ford is blessed because, in contrast to many other U.S. shale plays, it is richer in oil and oil-rich liquids.
“Natural gas is a victim of its own success,” Nikhanj said.
Natural gas closed at $2.618 per million British thermal units on Wednesday. Peter Zeihan, vice president of analysis at Strategic Forecasting, doesn’t expect the price of natural gas to exceed $6 per million British thermal units over the next decade.
Amy Myers Jaffe, fellow in energy studies at the Baker Institute at Rice University and an expert on the geopolitics of oil, titled her talk “Adios OPEC,” saying that the U.S. is headed toward an energy renaissance.
“The center of the energy world is moving back to the Americas,” she said, in part because she doesn’t foresee a big increase in production from the Middle East that many have expected.
With increasing oil production in this nation, the price of oil might come down somewhat, Jaffe said, but it isn’t likely to go below $70 a barrel. That’s because of jitters over the uprisings and unrest in the Arab world. In addition, hostilities between Israel and Iran aren’t going away.
Still, the price of oil continues to decline amid expectations that world markets will be flush with extra supplies this year.
Prices fell Wednesday as a report showed that U.S. crude supplies had climbed to the highest level in 22 years. Supplies grew last week by 2.1 million barrels, according to the Energy Information Administration. That’s a bigger increase than analysts expected, and more could be on the way.
Benchmark U.S. crude on Wednesday fell $1.17 to finish at a seven-month low of $92.81 per barrel in New York. Oil is down nearly 13 percent since the beginning of May.
Brent crude, which helps set the price of oil imported into the U.S., fell by $1.70 to finish at $109.75 per barrel in London.
Japan’s Kyodo news agency reported that the U.S. will ask other countries to release spare oil reserves when the Group of Eight meets this Friday. The report follows rumors earlier this year that Western nations were planning a coordinated release of spare supplies.
White House officials wouldn’t comment about the report.
“Shale has given us the upper hand,” Jaffe said, but it’s important to extract the oil and gas in an environmentally responsible way, or bans on hydraulic fracturing could result.
The Eagle Ford produced 30.5 million barrels of oil in 2011, up from 4.4 million barrels in 2010, Texas Railroad Commission figures show. Natural gas production rose to 243 billion cubic feet in 2011, compared with 108 billion cubic feet in 2010.
.......truly stunning! Is there any way to guess what kind of time frame a play like this will keep producing in a meaningful way?
Strategic Forecasting, doesn’t expect the price of natural gas to exceed $6 per million British thermal units over the next decade...the U.S. is headed toward an energy renaissance.
There you go. We have NG, we have NG pipelines, we have CNG vehicles and conversion kits.
Now all we need are lots and lots of CNG filling stations.
Japan’s Kyodo news agency reported that the U.S. will ask other countries to release spare oil reserves when the Group of Eight meets this Friday.***********
This jackleg in the WH doesn’t give a crap about energy security. Crude is down to about $93 and he wants international reserves released just to help his floundering campaign.
I hope the other countries tell him to go pi** up a rope.
They are still finding new areas the formation reaches with economically recoverable reserves.
Tight formations like the Bakken and Eagle Ford do drop off quickly for production rates per well. But the number of wells being drilled continues to grow offsetting the per well decline.
One of the problems facing Eagle Ford development right now is market. Since the nation is awash in natural gas, and storage is full, there is no demand for all the Eagle Ford gas. Even the liquids-rich portion of the Eagle Ford produces less than 100 BO/mmcfg, and you can’t produce the oil without producing the gas. No one wants to flare the gas, the formation is too tite to re-inject, so you must find a market for gas to sell oil.
This is a really good reason to push the LNG export projects. Once a stable/better market for gas is established, it becomes more feasible to drill wells at a faster rate.
Where did you get that number, it cannot be correct.
In 2011, the entire Eagle Ford formation produced 243 billion cubic feet of gas and 30,453,253 barrels of oil.
So the entire field, dry gas to liquid rich, averages 125 barrels of oil for each million cubic feet.
http://www.rrc.state.tx.us/eagleford/EagleFordOilProduction.pdf
http://www.rrc.state.tx.us/eagleford/EagleFordGWGProduction.pdf
Also note the natural gas liquid production is about 84 barrels NGL per mmscf on top of the oil.
http://www.rrc.state.tx.us/eagleford/EagleFordCondensateProduction.pdf
My reading shows that the EF is going to last quite long. Indications, early, show that the wells if choked back initially, will drop only 50% in the first five years then slowly decrease over the next 20 years.
My reading shows that the EF is going to last quite long. Indications, early, show that the wells if choked back initially, will drop only 50% in the first five years then slowly decrease over the next 20 years.
Is there even a 5 year old well in the Eagle Ford?
Eagle Ford GOR
Thanks for that link.
In that blog post:
See graph below which is based on data from old wells. (Note that no information was provided as to where these vertical Eagle Ford shale wells were located and what completion methods were used.)
If those “old” wells are from before 2008, they are not from the Eagle Ford.
Eagle Ford was first drilled by Petrohawk (now owned by BPH Billiton) in 2008.
http://www.rrc.state.tx.us/eagleford/index.php
In that same blog post:
One Eagle Ford shale decline rate chart can be found here: Eagle Ford Well Decline Curve It shows EOG Resources wells (mostly in the oil window) peaking at around 350 BOE/D, and flattening out pretty fast after eight months to less than 100 BOE/D.
This is a rather quick drop down in rate, less than a 1/3 after less than 1 year.
Thank you for providing better figures on the GOR’s. The problem of gas market remains. But twice the liquids production makes a big difference.
Click map to enlarge
U.S. Natural Gas Pipeline Network 
http://www.eia.gov/pub/oil_gas/natural_gas/analysis_publications/ngpipeline/index.html
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