South Texas’ Eagle Ford Oil Field: Operational Update
News Article by Welsco Drilling
In today’s gloomy oil-price news cycle, it’s sometimes easy to overlook the fact that if not for the advent of hydraulic fracturing coupled with horizontal drilling – the Unconventional Revolution – the world would be a much different place. Things in the oil (and stock) market are certainly not super positive today, but without the unconventionals we would likely be looking at well over $100 barrel oil and in a massive bidding war with China and India to secure supply; the Middle East would likely be accumulating and centralizing more wealth and power rather than fracturing apart into sectarian in-fighting; and the ongoing shift from coal to cleaner-burning natural gas would not be as promising.
Of course, that is speculation, and today’s reality is that operators foreign and domestic “will produce existing wells at rates that aren’t sustainable to preserve cash flow or compete for market share, because the cost to drill and bring online is already sunk.”
Two of the largest success-drivers in the Unconventional Revolution, at least in terms of oilfields, were the previously untappable resources of North Dakota’s Bakken and The Eagle Ford of Texas. The last years’ decline in oil prices has hit the remote Bakken oilfields particularly hard, especially when you count the additional costs of getting that Bakken Crude to market. Bloomberg recently reported on the near-zero dollar value of Sour Bakken Crude.
But how are things faring in the Eagle Ford?
First let’s look at the New Production Capacity that is a result of last month’s drilling activity. New Production Capacity is a Drillinginfo metric that correlates active rigs and permits, compares new wells with nearest-neighbor production, and creates a projection of the production capacity of each new well drilled.
The Eagle Ford maintains third place among major plays, behind the almighty Permian Basin and the gas-rich Appalachian. A year ago we would have expected the Bakken, Permian and Eagle Ford to be neck-and-neck for primacy. Still the play maintains a strong position in new activity.
Two common methods for operators to increase output per well are 1: to seek the “honey spots” where maximum resources are available, and 2: to increase their engineering efficiencies. To explore the first method, let’s look at rig movement within the Eagle Ford.
Clearly the operators are concentrating their activity in the higher grade sections along the lower mid-line of the play area.
What sort of impact is that having? Average 24 hour oil test results over the middle 2 quarters of 2015 are showing a definitive trend.
Just how much of this trend is simply hitting the higher grade areas with an open choke vs. increased engineering efficiency, and what sort of impact the aggressive initial production will have on estimated ultimate recovery (EUR) remains to be seen, and we will keep a close watch on 6-month cumulative production from this activity.