Eagle Ford: "Hundreds of Billions Worth of Oil and Gas"
New seismic technologies allowed prospectors to find liquid hydrocarbons in shales, even though the plays are deep and narrow – 12,000 feet down and usually only a few hundred feet thick. To efficiently drill these finds requires so-called "horizontal drilling," where rigs first must bore down to the oilfield and then veer sideways through it. The combination of these new technologies is releasing huge amounts of liquid hydrocarbons in the Eagle Ford.Eagle Ford, a new shale oil discovery in South Texas, looks as if it may prove to be quite exceptional. Besides being a rich field of shale gas, Eagle Ford is one of the rare shale gas fields to also contain significant liquid hydrocarbon.
Consider just one company's recent results. On April 7, EOG Resources announced drilling results from 16 test wells drilled across a 120-mile trend. Yes, that's right – a 120-mile trend. Based on the initial results and a core analysis, EOG believes it will produce 900 million barrels of crude from these wells over the next decade.
Mark Papa, EOG's CEO, says of the discovery: "We believe the South Texas Eagle Ford horizontal crude oil play will prove to one of the most significant United States oil discoveries in the past 40 years." _DailyWealth
You need to understand one critical thing about the Eagle Ford play in South Texas: It holds liquid hydrocarbons, not just gas. And there's a lot of liquid in it, not just a little.
So-called "condensate" is the holy grail of the natural gas business. It refers to the amount of liquid (think butane) that's mixed in with the gas that's trapped in "tight" shales.
Shale gas plays have been the driving force in the onshore oil and gas business for the last decade. You might even have heard of some of the big fields by now: Barnett, Fayetteville, Haynesville, and Marcellus.
Shale plays are big, rich resources... but they normally hold only a little condensate. Eagle Ford is proving to be a notable exception – it is rich in condensate. More information about the size of the field and the volumes of condensate and gas is coming out almost every day now, and the numbers get better and better. A year ago, only a dozen drilling rigs were working across the entire play, which stretches across more than 30 counties. Today, more than 50 rigs are drilling well after well.
Judging by the pace of the drilling and the production rates of each new well, these 50 drilling rigs should allow production to grow to nearly 40,000 barrels of oil per day within the next 24 months. That's roughly $1 billion worth of oil per year at current prices.
Keep in mind... this is just from the handful of rigs working Eagle Ford in 2009. Those estimates don't include the value of the gas that will also be produced. And those estimates don't take into account the hundreds of additional rigs that will be put to work. Oil production is going to ramp up quickly.
I expect Eagle Ford to yield more than $2 billion in oil and gas by 2013 and to increase steadily for at least 20 years. These numbers mean Eagle Ford will probably produce hundreds of billions worth of oil and gas over the next 30-40 years. _DailyWealth
It is growing increasingly clear that the Obama administration is not serious about the development of domestic hydrocarbon resources. This lack of seriousness on the part of the nation's government puts the US at a serious disadvantage -- and makes America increasingly vulnerable to foreign oil producers, often state supporters of terrorism.