This Texas Oil Field Is a Big Winner

Anadarko Petroleum drilling rig in the Eagle Ford Shale. Photo credit: Anadarko Petroleum

We have a winner. Texas' Eagle Ford Shale beat North Dakota's Bakken Shale in the race to top one million barrels of oil production per day. This is according to new data from the EIA which estimates that the Eagle Ford Shale hit one million barrels per day in August, while the Bakken's production surged to 910,000 barrels per day.

Many energy producers have turned to the Eagle Ford to grow oil production over the past few years. The play has been a real savior to natural gas producer Chesapeake Energy (NYSE: CHK  ) . The nation's number two natural gas producer has used the play to increase its output of more profitable oil and natural gas liquids. Since 2011 Chesapeake Energy has grown this liquids-rich production in the Eagle Ford by 44% annually. Looking ahead, Chesapeake sees more than 3,400 future drilling locations meaning production growth out of this Texas oil field isn't about to slow down anytime soon.

Likewise, Anadarko Petroleum (NYSE: APC  ) has seen its Eagle Ford production surge over the past few years. Since 2009, its production has grown by more than 100% annually, though that is off of a very low base. Like Chesapeake Energy, Anadarko doesn't see its production growth tapering off. That's because the company sees more than 2,500 future wells sites, which it estimates will deliver an average of 600,000 barrels of oil equivalent production over the lifetime of each well.

One of the reasons that production out of the Eagle Ford has been surging is because producers are finding out how to get more oil out of each well. EOG Resources (NYSE: EOG  ) , which is the largest producer in the Eagle Ford, is a great example of a company that has steadily grown its initial well production rates. In 2009, an average EOG Resources' well would begin its life producing 483 barrels of oil per day. This year, however, EOG's average new well starts by producing 1,226 barrels of oil per day. EOG Resources has really focused on getting more oil out of each well, and one way it has done that is by increasing the lateral length. The following charts show how successful that endeavor has been for EOG Resources.

Source: EOG Resources Investor Presentation

Longer wells are just one part of the solution to increasing the Eagle Ford's oil output. ConocoPhillips (NYSE: COP  ) , for example, has been using science-based experimentation to optimize its recoveries in both the Eagle Ford and Bakken. It has been pursuing a multitude of promising technologies, which are starting to show up in its results. Since 2010 ConocoPhillips has increased the estimated ultimate recoveries of each newly drilled Eagle Ford shale well by 100%, while increasing Bakken recoveries by 50%.

Energy companies in both the Eagle Ford and Bakken shale plays are getting better at designing wells that will produce more oil. This rapid change in techniques has enabled the Eagle Ford Shale to win the race to daily oil production topping a million barrels of oil. That said, the race isn't over as the next stop is two million barrels of oil per day, which is the goal that the Bakken's top producer has set for the play.

How to profit from America's oil boom

The Eagle Ford and Bakken have helped fuel record oil and natural gas production that is revolutionizing the United States' energy position. These plays could be fueling your portfolio, if you choose the right stock. The Motley Fool would like to help, which is why we are offering a comprehensive look at three energy companies set to soar during this transformation in the energy industry. To find out which three companies are spreading their wings, check out the special free report, "3 Stocks for the American Energy Bonanza." Don't miss out on this timely opportunity; click here to access your report -- it's absolutely free. 

 


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2699549, ~/Articles/ArticleHandler.aspx, 10/22/2014 8:18:33 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 11 hours ago Sponsored by:
DOW 16,614.81 215.14 1.31%
S&P 500 1,941.28 37.27 1.96%
NASD 4,419.48 0.00 0.00%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/21/2014 4:01 PM
APC $92.09 Up +1.42 +1.57%
Anadarko Petroleum… CAPS Rating: *****
CHK $21.66 Up +1.02 +4.94%
Chesapeake Energy CAPS Rating: ****
COP $70.59 Up +1.76 +2.56%
ConocoPhillips CAPS Rating: *****
EOG $96.03 Up +3.27 +3.53%
EOG Resources, Inc… CAPS Rating: *****

Advertisement