Eagle Ford development is proceeding a bit slower than I would have hoped. Nonetheless, the numbers are impressive.
From the Houston Chronicle
Production in the Eagle Ford could reach 1 million barrels a day by 2016, said Trevor Sloan, director of energy research at ITG Investment Research in Calgary, Alberta.
"So the growth rate out of there would be pretty spectacular," he said.
But before production can reach that level, some problems have to be solved.
About 1,400 Eagle Ford wells are waiting to be completed or to be tied into pipelines, ITG research shows. There are also shortages of crews and water and too few pipelines.
Once the problems of getting the oil and natural gas to market are gone, production from the Eagle Ford could double, and "the Eagle Ford would be the second-largest producing area if you could bring all those to market," Sloan said.
I haven’t looked at the raw data in some time but based on my earlier guess-estimate 1 million barrels per day by 2016 would be a significant disappointment. There are some bottle neck issues but assuming they are resolved I would expect a much faster ramp-up in production.
When these numbers get put together typically they assume that crude-oil prices are always headed back down toward $60 – $70 a barrel and they do historical ramp-up rates, which don’t take into account the blisteringly low real interest rate environment that we are in.
Negative real interest rates mean that investment doesn’t have to pay for itself in real terms. This allows you to “buy” lots of adjustment costs. In short, throwing money at a project to get it online as fast as possible makes business sense.
18 comments
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Friday ~ May 18th, 2012 at 11:41 am
rjs
how much does 1 to 5 million gallons of water per well impact texas agriculture?
Saturday ~ May 19th, 2012 at 11:40 am
jj
Not at all , they just keep recycling it
Thursday ~ May 24th, 2012 at 12:06 am
A
Listened to a presentation in the EFshale from the gal in DeWitt county in charge of keeping records on drilling water a few weeks back. She said NOT ONE drop is being reused. Can’t go on forever.
More info on the true water cost of drilling. http://www.earthworksaction.org/earthblog/detail/water_fracking_sucks_more_than_you_think
Friday ~ May 18th, 2012 at 1:55 pm
scott f
I second rjs. Shortages of water are a wee bit different from missing pipelines. You can’/t build water.
With tensions over water issues high in many places – witness 20 years of Alabama, Georgia and Florida wrangling over Lake Lanier – the water shortage may be the thorniest of bottlenecks.
Saturday ~ May 19th, 2012 at 12:08 pm
Betty Anne
Too bad you can’t find water in the Atlantic or Gulf of Mexico that can be desalinize ???
Saturday ~ May 19th, 2012 at 2:02 pm
Paul
Would using desalinized water for fracking be economical? I thought that desalinization was expensive, but I am not sure how expensive it is relative to the other inputs in the fracking process.
Saturday ~ May 19th, 2012 at 11:23 am
Production in the Eagle Ford could hit 1M bbl/day by 2016, ITG Research says, but some problems must be solved: ~1,400 wells are waiting to be completed or tied into pipelines, and there are shortages of crews and water. But once the problems of… |
[…] in the Eagle Ford could hit 1M bbl/day by 2016, […]
Saturday ~ May 19th, 2012 at 10:46 pm
John A
The Permian Basin in west Texas is looking to be bigger than the Eagleford. Currently under 1 million barrels/day, could get up to 2 million barrels/day.
LINK
Monday ~ May 21st, 2012 at 4:25 pm
Bruce Hughes
For a detailed report on the economic impact projected from the Eagle Ford Shale, see http://bit.ly/EagleFordShale
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fragman izle
thanks…
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