Eagle Ford Sand Grab Underway

September 19, 2014 Kirk Eggleston

At the onset of the Eagle Ford boom, the biggest priority was getting skin in the game. Now, rather than a land grab, the next big thing may be a sand grab.

Next month, the EIA predicts the Eagle Ford will reach oil production of $1.5-million bbls/d, but according to the Houston Chronicle, 95% of the oil and gas is left behind, despite the high production numbers. With those statistics, operators are motivated to find ways to recover these hydrocarbons. One method already being applied is the use of copious amounts of sand in well completions, in order to further stimulate the well during the fracking process.

The use of sand in well completions stands to greatly benefit companies that supply sand to operators. Sand miner US Silica Holdings Inc. said its demand could triple over the next five years, according to Reuters. Thousands of tons of sand are used to frack just one well.

Texas Oil Production Reaches Levels Not Seen Since the 70s

July 2, 2014 Kirk Eggleston

The "good ol' days" for the oil and gas industry are back in Texas! The Energy Information Administration (EIA) recently released data showing the state produced just over 3 million b/d of crude oil in April of 2014, reaching production levels not seen in the state since the 70s.

Many Texans remember well the oil bust of the early 80s, when the price of oil fell drastically, and what followed was a blight on the states' economy. A steady decline in oil production, which began in 1972, and fell sharply after the bust, signaled the state's oil boom days were likely over for good. But now Texas along with the rest of the U.S. is on track to become the top oil producer in the world by 2015, according to the International Energy Agency (IEA). The EIA said in the month of April, Texas and North Dakota, which encompasses the prolific Bakken Shale play, made up nearly half of U.S. oil production (48%).

The rise in Texas' oil production is thanks in large part to the tight oil and shale gas revolution in the Eagle Ford, and made possible by advancements in horizontal drilling and fracking technology. The Permian Basin in West Texas, a major oil producing area in the state for years, has also seen an increase in horizontal drilling since the end of 2013, and many of the areas untapped oil reserves are being accessed by the technology.

Texas Surpasses Iraq's Oil Production

The EIA's data is yet another indication of America's re-emerging prominence as a leader in world-wide oil production. In June of 2014, Iraq's production fell 400,000 b/d to 2.9 million, due to violence and civil unrest flaring up in the country, according to Bloomberg. That means Texas has likely surpassed Iraq's oil production, since Texas' production has increased on a month-to-month basis since 2011. Iraq was rated as the second largest OPEC producer in April at 3.2 million b/d.

Texas Injection Wells Garner Increased Scrutiny

May 30, 2014 Kirk Eggleston

Injection wells* in the state of Texas are garnering increased scrutiny. In the past year, these wells have been linked to earthquakes, and now the state's water districts are taking a closer look at the potential impacts of injection wells on groundwater.

The Gonzales County Underground Water Conservation District (GCUWCD) recently lost its fight with Marathon Oil Corporation over the company's plan to install an injection well in the Eagle Ford. In late May of 2014, at a Texas Railroad Commission (RRC) hearing, commissioners rejected the districts attempt to protest the permit, and gave Marathon the go-ahead to proceed with the injection well. The RRC's ruling was in response to an appeal by Marathon, after an agency hearing examiner's decision allowed the GCUWCD to protest the permit. The commissioners claimed the unanimous decision to dismiss the protest was based on the location of the well being outside the water district's area.

The GCUWCD remains concerned the injection well could potentially contaminate the underlying Carrizo-Wilcox aquifer. After the Railroad Commission made the decision to grant the permit, environmentalist groups sounded off.

“This was a terrible decision by the Railroad Commission. Disposal of fracking waste poses serious risks to water quality and water districts should absolutely be allowed to participate in the permitting process. The Railroad Commission has a terrible track record of watchdogging the oil and gas industry and holding them accountable. Groundwater districts should have the right to scrutinize proposals to dump waste near drinking water supplies and demand strong safety standards. The Railroad Commission has become a runaway train, running down citizens rights, public health and the environment.”

— Luke Metzger, with Environment Texas

At the hearing, a Marathon representative said the company was a committed "environmental steward", and stressed the importance of consistent and clear regulation of disposal wells. The Texas Railroad Commission has the explicit authority in the state of Texas to grant or deny drilling permits.

Tell us what you think about this decision. Did the RRC make the right move, or should the GCUWCD have been allowed to protest the permit?

Injection wells - generally a waste water disposal well, in which treated waste water is injected into the ground

Fracking Turns 65 - Eagle Ford Shale Drilling Boom Made Possible by the Technology

March 18, 2014 Kirk Eggleston

On Monday, The American Petroleum Institute celebrated the 65th birthday of hydraulic fracturing or fracking. The technology is widely used across the Eagle Ford Shale, and has contributed significantly to Texas's current oil boom, giving many folks connected to the oil and gas industry in the state reason to celebrate.

According to a University of Texas at San Antonio study, the development of the Eagle Ford Shale had an economic impact of $61 billion on the region in 2012. That's not a small figure, and estimates for future exploitation of the tight oil formation through fracking are only expected to go up.

At the beginning of March 2014, the Energy Information Administration (EIA) released data placing the Eagle Ford at the head of the pack for oil production in Texas per well compared to six other U.S. domestic shale plays. The EIA credits horizontal drilling and fracking for the play's strong oil production.

Industry players and those connected to the industry maintain that fracking is safe.

“At the 2014 NAPE Winter Business Conference, Former Secretary of the Interior, Ken Salazar, said, “I believe hydraulic fracking is safe… there is not a single case where fracking has caused an environmental problem for anyone.”

There is however strong opposition to fracking from some special interest groups, activists across the country and local residents living in areas impacted by the oil patch.

Since the drilling boom began in the Eagle Ford Shale, a steady up-tick in earthquakes in South Texas has been recorded. Scientists believe that could be linked to fracking and disposal and injection wells.

As the Eagle Ford continues to be developed, the practice of fracking will continue to impact the state of Texas and those connected to the industry in multiple ways - economically, politically and environmentally.

The first commercial fracking job was in Duncan, Oklahoma on March 17, 1949, according to API.

Matador Resources Oil Production Up 76% Company-Wide Due to Eagle Ford

March 14, 2014 Kirk Eggleston

Matador Resources had a 76% increase in oil production across its portfolio in 2013 from 3,317 b/d - 5,843 b/d. The increase was a direct result of the company's drilling operations in the Eagle Ford Shale. In 2013, Eagle Ford production also contributed ~14.9 mmcf/d, which was ~42% of the company's total natural gas production.

Matador continues to have solid results in the Eagle Ford. Look for the company to make some acreage deals in the play this year.

Matador's Eagle Ford budget for 2014 is $318 million.

Matador Eagle Ford Operations in 2013

During 2013, Matador completed and began producing oil and natural gas from 32 gross (27.6 net) Eagle Ford wells, including 25 gross (25.0 net) operated and 7 gross (2.6 net) non-operated wells. In the fourth-quarter, the Company completed and began producing oil and natural gas from 9 gross (9.0 net) operated and 3 gross (1.1 net) non-operated wells.

Drilling and completion costs went down in 2013, and are connected to refinements in the company's fracking treatments.

“Drilling times and overall well costs have continued to improve in the Eagle Ford, and several recent wells on our western acreage in La Salle County in South Texas have been drilled in as few as eight days from spud to total depth with total drilling and completion costs at or below $6 million. The latest generation of our fracture treatment design, whereby we are pumping more fluid and more proppant while using more perforation clusters and tighter fracture spacing, is also resulting in better well performance, as compared to offsetting wells treated with earlier generation fracture treatment designs. Overall, our operations group is continuing to deliver better wells for less money in the Eagle Ford.”

— Matador CEO, Jospeh Foran

Matador is also seeing positive results from downspacing. To date, the company has now drilled seven 40 to 50-acre spaced wells on its central acreage in Karnes County. Two of these wells flowed at approximately 1,100 to 1,200 boe/d (almost 90% oil), making them two of the best wells drilled by Matador in this area.

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Texas Surpasses Iraq's Oil Production

Matador Eagle Ford Operations in 2013