Analysts forecast increasing unconventional US production during 2015 with one of the prolific plays being the Eagle Ford shale in South Texas.
Cumulative Eagle Ford oil and condensate production reached more than 1 billion bbl during November 2014, energy consultant Wood Mackenzie Ltd. estimated, adding that more than 70% of that total was produced during the last 2 years.
Cody Rice, WoodMac analyst, in late 2014 said it was difficult to predict what dropping oil prices might mean for actual drilling budgets in the Eagle Ford during 2015.
"Lower prices mean lower investment although the Eagle Ford is highly economic," especially in the Karnes trough where the breakeven price can be $49/bbl, Rice said, adding that the breakeven price can be $85/bbl or more on the fringes of the Eagle Ford.
Rice noted that two different companies operating in the Eagle Ford core area can easily have different breakeven prices.
R.T. Dukes, WoodMac senior analyst, said that the Eagle Ford is "the best place to weather a low-price storm." Rig counts often take 3-6 months to respond to oil price swings, he noted.
"We're at a price-point low enough now that nobody is happy," Dukes said. "The trend is pointing down, and we're entering into a period of new budgets. January and February are the months to watch."
In December 2014, WoodMac forecast 2015 Eagle Ford production at 2.8 million boe/d. At that time, analysts expected capital expenditure of $30.8 billion for the Eagle Ford shale during 2015, which is nearly twice what WoodMac expects for the Bakken formation.
Analysts forecast industry will spend $16.7 billion during 2015 on the Bakken formation in North Dakota and Montana.
Meanwhile, the Eagle Ford accounted for 16% of US oil production in 2014. More than half of the Eagle Ford's production comes from 10% of its 20,000 sq miles, WoodMac said. The Eagle Ford play was the third-fastest to have produced 1 billion bbl, trailing Alaska's North Slope and Saudi Arabia's Ghawar field.
