Tuesday, February 11, 2014

Eagle Ford Shale: How Gassy is it?

As the Eagle Ford quickly developed over the last three years,  producers have migrated north to tap the wet gas and oil windows of the play.  The Texas RRC map reflects this shift in its most recent update, as green dots (oil completions) steadily increase and red dots (gas completions) diminish.  But investor pressure to show liquid-focused activity may be resulting in a less oily outcome than meets the eye.  

Here are the core counties of the Eagle Ford, and their % gas output over the last three years.  The notable trends are in the three counties of McMullen, La Salle, and De Witt, where gas % has steadily declined to between 30% - 40% gas.  Gonzales has actually increased its gas %, and Webb has remained nearly all gas (about 90%).  Webb produces a tremendous amount of gas, something to consider as we look into the future potential of the Mexican Eagle Ford.

The quest for a more oily mix has indeed yielded more oil, but still a tremendous amount of gas, considering that there are more than 200 rigs working very quickly and productively in this basin.  Karnes county is by far the biggest oil producer among the active counties, and it currently hovers at 27% gas.  

Weigh these production results against the reported rig counts.  Grey lines are the horizontal rig counts.  Gas rig counts have been low since early 2013, while oil rigs have held up at a very high level for over two years.