Eagle Ford production is booming. Over the past four years production has climbed to almost 1.5 MMb/d from virtually nothing. Even as the WTI price flirts with $90/Bbl, it’s still a great time to be an Eagle Ford producer. But how long can this party last?
Any energy analyst worth their salt has played with ‘acreage math’ at some point in time. One section of land is 640 acres, if a producer is drilling 5000′ wells every 160 acres, that’s four wells a section, etc. Although we know that producers are actively testing downspacing pilots in the basin, it’s still a good exercise to run this acreage math at a grander scale using current spacing and well productivity assumptions to see if long-term production forecasts truly pass the smell test.
BTU Analytics pulled well data for all horizontal wells drilled in the county groupings that make up our Western and Eastern Eagle Ford production areas. We then mapped those wells by oil initial production (IP) rates, and used those IP rates to draw distinctions within counties between areas that are likely to be developed, and areas that are better used as goat pasture.
Based on the acreage likely to be developed, we calculated a number of potential drilling locations. Deducting wells already drilled from that number, we’re left with a number of ‘inventory’ locations yet to be drilled. Divide that number of inventory locations by the number of wells drilled over the last twelve months, and we get a number of years of drilling.
So what’s the takeaway? We’ve got a solid 10 years of drilling in all of the top ten counties outside of one. Since inventory isn’t an immediate concern in the Eagle Ford, we can refocus our anxiety towards another fear. Like domestic oil prices, perhaps?
For more data and information on production trends, forecasts, economics and inventory, keep an eye out for BTU Analytics’ forthcoming Upstream Outlook.