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The Nation's Best Shale Play

Written By Brianna Panzica

Posted July 27, 2012

North Dakota’s Bakken might be the most established and most famous shale play in the United States, but it’s not the most prolific.

Texas’ Eagle Ford is catching up.

Results of a study by IHS Inc. (NYSE: IHS) have shown that Eagle Ford shale production from individual wells beats out the Bakken.

Eagle Ford stretches across Texas, substantially through the counties of Gonzalez, western Lavaca, DeWitt, Karnes, Bee, Live Oak, Atascosa, Dimmit, and eastern McMullen.

It has fewer wells than the Bakken, and development began more recently.

But the few wells that are in operation have shown greater promise.

According to the report, the typical Eagle Ford well produces between 300 and 600 barrels of oil equivalent per day. Bakken wells, on the other hand, only produce between 150 and 300 bpd.

And Eagle Ford’s most prolific wells produce much more than the Bakken peak of 1,000 barrels per day.

IHS’s director of equity research, Andrew Byrne headed the study. He wrote in the report:

“The central area of the play has outperformed other areas and has been the focus of most of the drilling to date. The western area is the next best, with the eastern area having the least activity and performance lagging the other two areas.”

Some of the best performing wells in the Eagle Ford are owned by EOG Resources (NYSE: EOG), Penn Virginia (NYSE: PVA), and the Hillcorp Resources/Marathon Oil (NYSE: MRO) combination.

Also highly involved in the area are Clayton Williams Energy (NASDAQ: CWEI), Swift Energy (NYSE: SFY), Matador Resources (NYSE: MTDR), SM Energy (NYSE: SM), and Forest Oil (NYSE: FST).

Most production came from the liquids-rich gas wells.

The report also notes a high level of mergers and acquisitions in the area. The average price for these was $14,000 last year.

Values on these deals continue to rise as companies begin to realize the potential of the play. This report, showing it in comparison to the highly favorable Bakken, will certainly heighten the interest.

But despite the Eagle Ford’s higher production per individual well, its overall production has not yet matched that of the Bakken.

Eagle Ford averaged 226,000 barrels per day in the first four months of 2012, while the Bakken doubled this with 570,000 bpd in May.

Some companies have predicted that Bakken production will rise to 1 million bpd in 2015.

But Eagle Ford is catching up. And it will continue to do so as more wells are drilled.

That’s all for now,


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