Wood Mackenzie Ltd. calculates oil and gas companies will spend $28 billion in the South Texas Eagle Ford play during 2013.
Callan McMahon, WoodMac upstream analyst, said the anticipated Eagle Ford growth will concentrated on counties having crude oil and condensate exposure.
“The pace of growth in the Eagle Ford shale shows no sign of slowing down, and our analysis indicates that Gonzalez, DeWitt, and Karnes counties have established themselves as the sweet spots of the play, and now account for over 50% of daily liquids production,” said McMahon.
The Eagle Ford is the second largest US tight oil play and ranks fifth in terms of US shale gas production. The Bakken formation in North Dakota is the top US unconventional oil producer.
Eagle Ford liquids production, including natural gas liquids, has increased from 100,000 b/d in early 2011 to 700,000 b/d currently.
For this year’s third quarter, Eagle Ford liquids and gas production averaged more than 1 million boe/d.
WoodMac attributed increased well productivity to both technology and experience. Depressed natural gas prices have prompted companies to continue diverting capital to liquid plays.
Meanwhile, midstream and service companies have invested in the Eagle Ford to capitalize on production growth, McMahon said.
The biggest three Eagle Ford operators are EOG Resources Inc., BHP Billiton Ltd., and ConocoPhillips, McMahon said, adding all three have moved to large-scale development in the play.
WoodMac estimates the Eagle Ford holds 38% of the company’s upstream value.
“EOG was one of the first companies to shift its strategic focus to liquids, a decision that has been well rewarded in the Eagle Ford,” notes McMahon.
BHP Billiton's Eagle Ford shale assets represent 20% of the company's entire upstream assets worldwide, he said.
ConocoPhillips also targeted the Eagle Ford liquids-rich core area early, enabling a substantial acreage position to be built at a lower cost than current costs.
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