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As I reported previously, crude oil production in Texas has roughly doubled in just the last three years, from 1.08 million barrels of output per day in September 2009 to 2.05 million barrels per day in September of this year (see chart above). The oceans of hydrocarbons trapped in the shale rock below the Eagle Ford Shale area of Texas, now being released with hydraulic fracturing, are the main reason for the explosive growth in crude oil production in the Lone Star State. Here are some interesting facts about the Eagle Ford Shale, courtesy of an article today at the Fuel Fix blog:
1. “The Eagle Ford Shale was deposited millions of years ago in the Cretaceous Period when much of Texas was a shallow sea. It’s 50 miles wide and extends about 400 miles across the state, from the border to East Texas. The Eagle Ford Shale reaches across 25 Texas counties. But more than 60 percent — 141 of the play’s 227 drilling rigs — are operating in five counties: La Salle, Karnes, McMullen, Gonzales and DeWitt.”
2. “Eagle Ford wells cost $7 million to $10 million but they pay back within half a year. “The Eagle Ford has become the most profitable field in the world,” said J. Michael Yeager is CEO of BHP Billiton Petroleum, the Houston-based oil and gas arm of the Australian mining giant that bought Petrohawk Energy Corp. last year for $15.1 billion.”
3. “Becca Followill of U.S. Capital Advisors LLC said companies operating in the Eagle Ford Shale have seen initial rates of return higher than 50 percent, with some wells as high as 70 percent. “There’s always sweet spots in the oil and gas industry,” Followill said.”
4. “Part of the Eagle Ford’s profitability has been practical in nature, including relatively quick access to coastal refineries. Moving oil by rail from the Bakken field in North Dakota can add $10 to $12 to the production cost per barrel.”
5. “EOG Resources holds the largest acreage position in the Eagle Ford, including more than 570,000 acres in the oil window, according to Hart Energy, and has said this year in calls with analysts that it completed 28 “monster wells” in a six-month period, which it defines as having initial production rates from 2,500 and 4,800 barrels of oil per day (bpd), plus gas and natural gas liquids. In Gonzales County, one of its wells tested at 4,598 barrels of oil per day (bpd).”
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