Who’s hot in Eagle Ford? Right now it’s Marathon Oil (US: MRO), which has earmarked $1.9 billion of it’s $5.2 billion in 2013 capital for this south Texas shale play.
For Eagle Ford, we’re talking about 7,500 in total acreage, five producing wells, two more wells being drilled, and the potential for 100 wells. Eagle Ford is probably the most active shale plays right now, and drilling results have been a bit better than Bakken.
After faring well in Bakken shale in North Dakota, and in Oklahoma, Marathon Oil is turning its attention to south Texas, where it hopes to reach production levels of 85,000 net barrels of oil equivalent per day in 2013.
Is it feasible? Yes. The past quarter of this year saw production from Eagle Ford almost double, so it’s on the right track. Right now, production is at about 40,000 bpd.
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And the Houston-based company is crediting its Eagle Ford operations with an 11% jump in profits for the third quarter of 2012.
Oil production was up 500,000 barrels per day from September 2011 to September 2012—largely because of the Eagle Ford shale play. As things stand, Eagle Ford—which borders Mexico--could soon out-produce west Texas’ Permian Basin.
Most of Eagle Ford’s oil is found in the area’s northernmost tip, while elsewhere the play offers condensate and dry gas. Last year alone, according to Texas authorities, Eagle Ford produced 914 million cubic feet of natural gas per day and 119,353 barrels of oil per day. For gas, those figures are slightly lower for 2012, but for oil, they have increased to nearly 300,000 bpd through August.
Right now, the top producer is EOG Resources (NYSE:EOG), which is pumping out around 110,000 barrels of oil equivalent per day and owns about 1.6 billion boe of reserves in Eagle Ford.
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But Marathon isn’t far behind. Though it’s only pumping about 40,000 bpd right now, that represents a doubling in one quarter alone, and they shouldn’t have too much trouble reaching their 2013 production target of 85,000 bpd.
We expect to see some buyouts in Eagle Ford, though. The majors aren’t likely to sit back and watch while EOG and Range Resources (NYSE:RRC) hold on to a sizable portion of Eagle Ford acreage.
It was Petrohawk Energy Corp. which got in there first, meeting will drilling success in 2008. But it was bought out last year for $15.1 billion by Houston-based BHP Billiton (BHP, BLT.LN).
By. Jen Alic of Oilprice.com