Eagle Ford's Oil Production: Predicting Negative Growth Ahead

[shaleprofile + 243]

This article contains still images from the interactive dashboards available in the original blog post. To follow the instructions in this article, please use the interactive dashboards. Furthermore, they allow you to uncover other insights as well.

Visit the blog to explore the full interactive dashboard

This interactive presentation contains the latest oil & gas production data from all 28,920 horizontal wells in the Eagle Ford region, that have started producing from 2008 onward, through April 2023.

Total production

Tight oil production in the Eagle Ford came in at about 1.1 million b/d in April 2023 (after upcoming revisions, horizontal wells only). April data is only currently available for 90% of the wells, which explains the apparent drop you’re seeing for April in the chart above. Natural gas production for that month was about 6.6 Bcf/d.

In the first 3 months of this year, almost 10% more horizontal wells came online compared with the same period last year (379 vs 347).

Drilling Activity

However, since the steep fall in hydrocarbon pricing in the 2nd half of last year, drilling activity is falling again and as of last week, 58 rigs were drilling horizontal wells. This was down from 74 rigs less than a year ago (source: Baker Hughes), which constitutes the biggest percentage decline among the 3 major US shale basins:

The horizontal rig count in the Eagle Ford (left hand side) and WTI (black curve, right hand axis)

Well performance

Next to declining drilling activity, another negative factor impacting production in the basin is falling well productivity as noted in earlier posts:

Well performance and completion details in the major shale basins, as measured by the cumulative oil recovered in the first 12 months, per 10k ft of lateral length. Horizontal oil wells since 2011 only.

 

In the top chart you can find that on a normalized basis (by lateral foot instead of by well) the Eagle Ford has seen the steepest decline in well productivity in recent years, and average well performance is now almost back where it was 10 years ago, despite a strong increase in proppant loadings (bottom chart) during that period.

Horizontal oil wells completed in recent years in the central part of the basin are now trending towards an EUR of around 300 thousand barrels of oil:

Well performance (rate vs. cum) in the Central Eagle Ford subbasin. Horizontal oil wells completed since 2017 only.

 

Permit activity

The following overview displays which operators have been most active in getting permits for new horizontal wells approved in the Eagle Ford so far this year:

 

Ranking of operators by approved well permits year to date.

EOG, the top producer in this basin, which operates about 170 thousand barrels of oil per day, is in the lead with 112 approved permits for new horizontal wells this year through June 30th.

 

Grit Oil & Gas, a newcomer to the basin, is the surprising number 2, with 91 approved permits. As you can find in the “Top operators” tab of the interactive presentation at the start of this post, it has greatly ramped up drilling and completion in the past year, and is now the 9th largest producer.

Finally

Production and completion data is subject to revisions, especially for the last few months.

Sources

For this presentation, I used data gathered from the following sources:

• Texas RRC. Production data is provided on lease level. Individual well production data is estimated from a range of data sources, including regular well tests, and pending lease reports.
• FracFocus.org

 

Visit our blog to read the full post and use the interactive dashboards to gain more insight: https://novilabs.com/blog/eagle-ford-update-through-april-2023/

[Boat + 1,324]

Let’s mention demand and rig counts are down compared to before Covid. No reason for drama but the days of oil growth are gone. Incredibly large market left for decades though.