Eagleford Now Largest Play in the World

The Eagle Ford now ranks as the largest single oil and gas development in the world based on capital expenditures. That means more will be invested in the South Texas oil play than any other single oil and gas development in the world.

That’s the headline takeaway from a recent report released by Wood Mackenzie analyst Callan McMahon.

The report notes that BHP, ConocoPhillips and EOG Resources have a combined value of more than $30 billion in the Eagle Ford. That number likely doubles when you add other large players like Anadarko, Chesapeake, Lewis Energy, Marathon Oil, Murphy, Pioneer and Talisman. If natural gas prices recover to more than $5/mmbtu, it’s quite possible more than $100 billion in value has been created by operators across the Eagle Ford.

“Some of these numbers can be difficult to put into perspective, but $28 billion would put one at roughly the median country annual GDP,” McMahon notes.

In terms of costs, Wood Mackenzie notes the play will likely surpass the Kashagan project in Kazakhstan, which will have an estimated $116 billion invested in the coming years. At the current rate of spending in the Eagle Ford, the play will surpass the Kashagan project in as little as four years.

“With $28 billion in capex being spent in 2013 and development now in full swing, the excitement in the Eagle Ford Shale and value being extracted from the play continues to exceed expectations,” McMahon says.

Other highlights from the report include:

  • Growth from zero to more than 700,000 b/d of oil and natural gas liquids (NGLS) in three years
  • Eagle Ford is the top liquids producing shale in the world with Q3 volumes of 1 million boe/d (Bakken ranks #1 for oil production alone)
  • DeWitt, Gonzales and Karnes counties account for 50% of liquids production
  • 74% of estimated future activity will target liquids areas (this changes if natural gas prices go up)
  • Capacity constraints have eased
  • The Eagle Ford accounts for 38% and 20% of EOG’s and BHP’s upstream value, respectively
  • In 2013, the play will account for 27% of all upstream spend in the Lower 48