The Eagle Ford Shale, where oil and natural gas development began in earnest less than three years ago, is making a big economic footprint in the 24-county South Texas area where it lies, according to researchers at the University of Texas at San Antonio (UTSA).
The Center for Community and Business Research at UTSA's Institute for Economic Development said the oil and gas play accounts for 6% of the gross regional product in the Eagle Ford area and generated nearly $3 billion in revenue last year.
"The Eagle Ford Shale may be one of the largest onshore natural gas and oil discoveries in the past half century," said Dominique Halaby, the center's director. "In 2010 alone this newest of the Texas shale plays generated close to $2.9 billion in revenue, supported approximately 12,600 full-time jobs in the area and provided nearly $47.6 million in local government revenue."
Economic benefits of the Eagle Ford are projected to grow over the next 10 years. By 2020 the center forecasts that close to 5,000 new wells will be drilled in the play, which it considers a conservative estimate as some speculate that as many as 1,000 wells per year could be drilled. The Eagle Ford produces natural gas, condensate, oil and natural gas liquids.
"Under moderate assumptions, by 2020 (in 2010 dollars), the Eagle Ford Shale is expected to account for close to $11.6 billion in gross state product, $21.6 billion in total economic output (or revenues) impact, and support close to 67,971 full-time jobs in the area," the study said. "This will add close to $1.2 billion in state revenues and more than $450.6 million in local government revenues.
"Analysts, investors and industry experts agree that due to a high reservoir quality, the Eagle Ford Shale will likely become a premiere oil and gas play in 2011. High-yield condensate and oil production together with a favorable business climate are very attractive to individual operators, and they are likely to play a key role in spurring economic development and contributing to the economic prosperity of the region."
The study was commissioned by America's Natural Gas Alliance and is available at www.ccbr.iedtexas.org.
Currently the top five leaseholders in the Eagle Ford are EOG Resources (595,000 net acres), Apache Energy (450,000 net acres), Chesapeake Energy (445,000 net acres), Petrohawk (347,600 net acres) and Newfield Exploration (335,000 net acres).
EOG, which is shifting from a natural gas-weighted producer to one more weighted to natural gas liquids and oil, drilled its first successful horizontal Eagle Ford well outside the crude oil window in 4Q2010 (see Shale Daily, Feb. 22).