Thursday, July 26, 2012

A Nice Early Comparison Between Eagle Ford and The Bakken

Link here to Oil and Gas Journal.

This is my favorite line, validating what I've been blogging for quite some time (that part in bold):
The IHS Herold Eagle Ford Regional Play Assessment said typical well performance as well as peak-month production of the Eagle Ford’s best wells exceeds wells drilled in the Bakken formation, often considered the tight oil standard.
Note the price they are paying for acre in the Eagle Ford:
The Eagle Ford’s favorable outlook is reflected in a competitive merger and acquisition environment, with implied deal values averaging $14,000/acre for Eagle Ford acreage in 2011 and top prices approaching $25,000/acre, IHS said.
It's my understanding that the Eagle Ford play is much thicker than the Bakken. How this all plays out has to do with the economics of each well. Period. Dot.


  1. Overall, it seems clear, that as long as Bakken crude has a problem with infrastructure (delivery of its crude refineries), then the advantage goes to Eagle Ford. But on Rusty Brazil's last report (link posted elsewhere on your blog), he pointed out the discount that Eagle Ford crude has to accept because of a higher than desired amount of condensate (for all of 2011 total production of 36.6 MMBbl of which 21MMBl was condensate from Eagle Ford). So far I have't seen comparable statistics for the Bakken. Please comment if you know where to find them, or if you have already posted them somewhere else on this blog.
    Thanks in advance

    1. To answer your question:

      I was surprised to learn that about the Eagle Ford (percent of condensate). It seems I have seen ND statistics on condensates but don't recall specifics. I will keep an eye out for those statistics.

      Now a lot of rambling:

      The Eagle Ford is a much larger area than the Bakken (at least as far I know) based on maps. In addition, it seems that some areas are more "oily" than others, and others with more natural gas (wet and dry). It seems the Eagle Ford is early enough in its development that "we" really don't know how it will play out.

      What amazes me is that the Williston Basin is not a new phenomenon. It has been developed since 1951. So, when folks say the infrastructure can't keep up, that's not a trivial comment. Despite all that has been built, all the pipe laid since 1951 (60 years), there is still much more to do. I find that incredible. I think folks often forget that the Williston Basin has been producing oil since 1951. Same with Texas, but south of San Antonio (where the Eagle Ford is) seems to be a relatively new area that will require even more infrastructure (and geologic study).

      Along that line, it still surprises me that they are doing seismic studies in North Dakota. I though we saw the end of seismography years ago, and that the Williston Basin was pretty well mapped.

      On another note, if I'm giving the impression that I see a race developing between the Eagle Ford and Bakken, I probably need to clarify. I'm excited about developments in both areas; I am also excited about new activity in the Mississippi Lime and the OXY locations in California. Growing up in the Williston area, I am fascinated by the oil and gas industry. So, I don't see it as a race, but it will be impossible to avoid comparisons.

      Long term, based on surface area, and thickness, I assume the Eagle Ford will dwarf the Bakken. But this recent talk about a natural gas boom in North Dakota and revised estimates for oil in North Dakota is very, very surprising.

  2. Plus the Bakken is just one formation in the Williston Basin. Currently I believe there are at least twelve oil baring formations in the basin. To compare one with the other is like predicting the weather years ahead. It can't be done so it is foolishness in the end.

    I fail to see the need to do a comparative. We do know that both basins are incredibly successful and I wish both great success and with their success the country energy future looks bright and getting brighter every day. USA USA!

    1. Greetings. I was going to add a comment regarding the number of existing and potential payzones in the Williston Basin, but figured I had rambled enough.

      So, I know comparisons will be made between the Bakken and other formations going forward, but CRC is correct: way too many variables. And in the end it doesn't matter, does it, really?

    2. As a Bakken mineral rights owner, I am concerned (just a little - I am resigned to the fact that if I don't live long enough to see an oil well on our acres in the Bakken, I have hope that future technology will someday help benefit my descendants). Today, certain oil companies are concerned enough that some are cutting back on the Bakken, if they are fortunate enough to also have acres to drill in Eagle Ford.

      Perhaps a naive question on my part; but is it a realty that there is a limit to the number of E & P companies that can switch to Eagle Ford, which would leave plenty of E&P companies in the Bakken to continue developement at a good pace, even if the profit potential isn't as great - but still good enough??

    3. Not a naive question by any means. I was taken to task some weeks ago for suggesting that companies could easily go to the Eagle Ford if the Bakken got too expensive.

      In fact, many of the Bakken-centric companies have NO acreage in the Eagle Ford and at $14,000 to $25,000/acre, it will be no easy decision to go there, even if possible.

      I am absolutely convinced any company that wants to sell its acreage in the Bakken will find eager buyers, and probably at a premium.

      Also, new oil companies are formed periodically, and there are limited liability corporations that are "fronts" for established, larger oil companies.

      Every time we start to hear about slowing down in the Bakken, something new is posted that suggests the boom will continue. Most recently: ONEOK to build another 100 million cubic feet per day natural gas facility near Watford City.

      Bottom line: you have nothing to worry about. Your descendants will thank you.

  3. Eagle Ford would seem to be a logical candidate to take up some of the slack from idled gas rigs being stacked in the yards. A shale well whether gas or oil is basically the same in terms of men and equipment.