The Eastern Eagle Ford:
Is this the Bright Spot
for 2015?
by: Jennifer Larivey
Recently, Texas Oil & Gas Magazine attended The Eagle Ford
Production Conference in Houston, Texas. One of the discussions during this conference was about the brightest spot for
production and getting the most return on your investment. Phil
Martin, CEO of New Century Exploration presented on this subject. According to his presentation he made valid points on how
production and being profitable in 2015 is definitely harder than
the last couple of years, as we have seen significant changes in the
market. When one discusses the supply vs. demand issues, Mr.
Martin referred to the factors that are elevating supply are:
1.
US Shale Oil-being victims of our own success
2.
Libyan quadruples in the most recent months
3.
OPEC is slightly up
4.
Possible increased supply from Iraq and Iran
He also said that the demand is waning and the factors suppressing the demand are:
1.
Russia and Venezuela are depressed
2.
Europe is stagnant (problems with Russia and Greece)
3.
Japan is in recession
4.
China is slowing down
So where do we go from here? How does production companies
profit? According to Mr. Martin, one needs to be aware of these
factors:
Where Can We Profit?
Location:
•
Rock quality and continuity
•
Midstream and Downstream infrastructure
•
Marketability- price differential and take away capacity
Technology:
•
Robust well performance
•
Improving well prices
Execution:
•
Minimize costs
•
Scalability
The best trend to look at is the breakeven point. In October of
2014 USB Research gathered information showing that Eagle Ford’s
breakeven price per barrel was $40 compared to the Utica at approximately $115 per barrel. So the answer is obviously Eagle Ford.
Mr. Martin then pointed out that the Eastern Eagle Ford had:
•
Lower well costs
•
Shallower
•
Black Oil Window
•
Abundant Infrastructure
•
Sound Economics
Some of the History of the Eagle Ford includes:
•
2008-2010 Some of the first horizontals were not successful due to use of weak technology & poor results
•
2013 New Technology such as long horizontals and big
fracks are highly successful
•
2013- present Companies flock to the region and delineation begins
•
2015 Oil prices fall and activity slows down
MAJOR OPERATORS IN THE AREA:
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