The Eagle Ford Shale is a hydrocarbon producing formation of significant importance due to its capability of producing both gas and more oil than traditional shale plays. Located in the Western Gulf Basin in South Texas and extending from Webb County (Laredo) in the southwest to Walker County (Huntsville) in the northeast, the play contains a much higher carbonate percentage, upwards to 70% in the southwest, and becomes shallower and the shale content increases toward the northeast. The high percentage of carbonate makes it more brittle and "frackable."
The shale play trends across Texas from the Mexican border up into East Texas, roughly 50 miles wide and 400 miles long with an average thickness of 250 feet. It is Cretaceous in age, resting between the Austin Chalk and the Buda Lime, at a depth of approximately 4,000 to 12,000 feet. It is the source rock for the Austin Chalk and the giant East Texas Field.
In general, the northern portion of the formation yields oil, the southern part dry gas, and the middle portion mainly wet gas/condensate (see map).
Drilling activity increases
In the last year, operators have drilled 4,092 new wells in the Eagle Ford Shale, according to a new quarterly count of US wells from Baker Hughes.
In the second quarter of this year, there were 1,050 new Eagle Ford wells, which means each rig working in the region drilled 4.56 wells.
While the Eagle Ford was averaging 4.56 wells per rig, the US average was 5.2 land wells for each rig.
SM Energy marketing properties
SM Energy Co. has engaged an advisor to market all of its properties in the Anadarko Basin, including the company's Granite Wash interests, the company said July 10. Proceeds from the sale, which could reach $500 million according to estimates by Jefferies LLC analysts, are expected to fund "strategic projects" in the company's portfolio.
"We believe SM is prepared to reinvest Anadarko Basin proceeds into acceleration of the Eagle Ford and new ventures," say the analysts. "We expect an increase in production and capex guidance in the August update which should be favorably received."
Due to the high oil and liquids content of the assets, sale proceeds should command numbers at the high end of historical comps and are likely to bring in enough to bridge a $234 million funding gap this year, as well as fund acceleration of the company's Eagle Ford program should they choose to complete more wells, a likely scenario, noted the analysts.
During the first quarter of 2013, SM Energy operated five drilling rigs on its operated Eagle Ford shale acreage and made 28 flowing completions. In the non-operated portion of the company's Eagle Ford shale program, the operator ran nine drilling rigs during the first quarter of 2013.
ZaZa Energy selling
In July, ZaZa Energy LLC, a wholly owned subsidiary of ZaZa Energy Corp., entered into a new purchase and sale agreement with an independent third party to sell about 10,300 net acres of its properties in Fayette, Gonzalez, and Lavaca counties, Texas, which ZaZa refers to as its Moulton properties in the Eagle Ford shale play. The total cash purchase price for the acreage is $28.8 million. As part of the agreement, ZaZa has received a down payment of $1.4 million. The closing of the sale is expected to occur on or before July 31.
Sanchez Energy buying
Sanchez Energy Corp., an independent oil resource company targeting the onshore US Gulf Coast with a current focus on the Eagle Ford shale play, has agreed to acquire approximately 10,800 net acres in Fayette, Gonzales, and Lavaca counties in Texas in its Marquis area, with 250 boe/d of estimated net production for approximately $29 million. The transaction was expected to close by the end of July.
PetroEdge now operating in Eagle Ford
PetroEdge Energy III has acquired an acreage position in Brazos and Burleson counties in Texas, and will initially be focused on drilling and developing the lower Eagle Ford (Maness), an oil-prone shale play. The company will continue to acquire and lease additional land in the area while preparing to drill the first horizontal well on this acreage.
