Shale operations in Texas have grown exponentially since new natural gas and oil drilling methods have made extraction possible. Two of the largest shale plays in Texas are the Eagle Ford Shale and the Barnett Shale. While each yields somewhat the same product there are also a number of differences that impact how, when, and where operations can be set up.
Eagle Ford Shale
Named for the town of Eagle Ford, TX, Eagle Ford Shale is the largest oil and gas development in the world when it comes to capital investment. Soon after Petrohawk Energy drilled the first Eagle Ford wells in 2008, the area was producing over 4,000 barrels of oil per day within its first few months of operation. By 2012, Eagle Ford Shale had generated over $60 billion in economic impact for the area, while roughly $30 billion will be spent in development this year alone. With 116,000 full-time employees and over $1 billion in tax revenue in the past year, the Eagle Ford Shale operation is on track to produce an estimated $89 billion in local economic impact by 2022.
So what makes the Eagle Ford so profitable? As a “tri-phase play”, the Eagle Ford generates revenue through both dry gas and light and thick oil. In a World Oil article from 2012, Former Petrohawk Energy President and current President of BHP Billiton Petroleum’s North American Shale Production Division, Richard Stoneburner, explained: “You have very brittle rock, geopressure, thickness, net-to-gross ratio of 95 to 100% – everything you want from a rock standpoint. Then, you throw in the liquid component and the marketability, and it just doesn’t get any better than that.”
What’s more, the Eagle Ford’s location in South Texas – away from sprawling urban development – simplifies several aspects of the operation, from the drilling of new wells to parcel acquisition. Many of the oil and gas industry’s top companies now feature heavily in the area’s continued development, including:
- EOG Resources, Inc.
- BHP Billiton Petroleum
- ConocoPhillips
- Marathon Oil Corporation
- Chesapeake Energy Corporation
- Swift Energy
Meanwhile, a number of oilfield, surveying, drilling, construction, fabrication and transportation companies have flocked to the play to capitalize on the continued Eagle Ford Shale boom.
Barnett Shale
Not far from Dallas, TX lies the Barnett Shale formation, a 5000 mile-wide hydrocarbon-producing play considered by many to be the country’s largest onshore natural gas field. Though the location’s huge natural gas formation was first discovered in the 1950s, it took thirty years for the play to become “commercially viable.” While the Barnett Shale production peaked last year at 2 trillion cubic feet of gas, experts estimates a whopping 44 trillion cubic feet of gas are still available to be recovered over the next two decades.
Due to its proximity to an urban area, land acquisition and permitting in the Barnett Shale play can be more difficult and more expensive than in the Eagle Ford, but for the area’s individuals, the government, school districts, and businesses, the play provides economic support in the form of fees, bonus payments, and royalties. The tax base expands and new services are created in the area.
Major players in the Barnett Shale include:
- EOG Resources
- XTO Energy
- Chesapeake Energy
- Devon Energy
- Enervest
Both Eagle Ford and Barnett will produce for years to come and each area has its own challenges and strengths. Eagle Ford produces more oil which is currently a highly priced commodity, encouraging further development. The Barnett offers a positive economic impact in the Dallas/Fort Worth area. Although natural gas prices are much lower the possibility of exporting liquid natural gas exists.
