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According to Baker Hughes, for the week of June 8, there are 256 rigs at work (one classified as thermal) in the Texas Eagle Ford play. Of these, 67% or 173 are drilling for oil. This is up 59% YOY and more amazingly is up from a mere 19 rigs less than two years ago in August 2010. The oil drilling boom is on. On the flip side, the gas rig count dropped 8 for the week and stands at 82, after peaking at 95 in October 2011.
The leading acreage holder in the Eagle Ford play is EOG Resources with 647,000 net acres (572,000 of which are in the oil window). According to EOG, the company has captured the biggest U.S. crude oil discovery net to one company in the past ~40 years! Through drilling, EOG has increased its estimated potential net reserves to an impressive 1.6 Billion boe (1.1 billion bbls oil, 256 million bbls condensate and 1.2 Tcf gas). However, only 344 MMboe (or ~22%) is booked as proved reserves as of December 31, 2011. While development is still in the early innings, EOG has ramped production up to 77,000 boepd (90% liquids) as of March 2012. Future plans include continuing work on tighter spacing in order to improve recovery factors.
ConocoPhillips provides perhaps the most eloquent description of the Texas Eagle Ford Play - proclaiming it to be the "Best Play." Beating out EOG's numbers slightly, COP claims 1.8 Billion boe of resources on 228,000 net acres. COP's economics are impressive with a WTI breakeven price of just $37/bbl. No worries about a slowdown here. In 2012, COP expects to drill over 180 wells with 16 rigs, spending $2.3 billion and expecting a 50% return. Finding costs are a low $14 per boe and average cash margins are running $48 per boe (numbers based on WTI price of $106/bbl and HH $2.60/Mcf). COP's activities are expected to quickly build production beyond the 100,000 boepd benchmark -- averaging over 110,000 boepd next year.
More on Eagle Ford including Big Picture, Infrastructure and Water.
Want more data on current activity in the Eagle Ford play? See below. Chesapeake Energy has put the Eagle Ford on the "Keep List" for future growth. Netherland, Sewell and Associates provides some excellent detail on the growth of the play and the stratigraphy, Kinder Morgan just put a 300,000 b/d crude and condensate pipe in service and GreenHunter Energy educates us on the critical water market in the area.
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