unconventional oil & gas activity and its implications for texas real estate harold hunt, phd...
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Unconventional Oil & Gas Activity and Its Implications for Texas Real Estate
Harold Hunt, PhDReal Estate Center @ Texas A&M
College Station, [email protected]
My Focus at the REC
Addressing these two questions:
• How is “unconventional” drilling different from conventional drilling?
• How long will (drilling activity in) the Eagle Ford Play last?
What Countries Have the Most Shale Oil and Shale Gas Reserves?
Major and Minor Shale Plays
Active Drilling Rigs in Texas(As of April 4th, 2014)
Source: Baker Hughes
Rig Counts(Land Rigs Only as of April 4th, 2014)
Area Total Gas Oil• U.S. 1,814 316 1,498
• Texas 877 81 796
• Permian 438 3 435
• Eagle Ford 224 10 214
• Granite Wash 58 10 48
• Haynesville 45 44 1
• Barnett 25 14 11
Source: Baker Hughes
Characteristics of the Best Shale
1) High organic matter content
2) The right maturity window
3) Sufficient brittleness
4) Sufficient natural fractures
5) Good porosity
Definitions
• Porosity - the percentage of void space in a material.
• Permeability – The property of a porous material to permit a liquid or gas to pass through it.
Permeability of Shale
Source: SPE International
What Shale Rock Looks Like
The pct. of O&G being recovered from the shale is relatively small.
The Difference in Conventional and Unconventional Drilling
Source: U.S. Energy Information Administration
6,000 ft.
Source Rock
Equipment to Fracture a Well
Fracfocus.org Fluid Disclosure by Well
Source: Fracfocus.org
A Look at the Eagle Ford Shale
First Wells Drilled: 2008
Area: 20,000 sq. miles or 13 million acres
Most Active Eagle Ford Counties in Red(2012 Population Estimates)
Dimmit Co.Pop. 10,461
Source: U.S. Census and Real Estate Center
Webb Co.
Victoria Co.Pop. 17,702
Pop. 259,172
De Witt
Co.
Gonzales Co.
Karnes C
o.
McMullen Co.La Salle Co.
Pop. 7,109Pop. 726
Pop. 15,233
Pop. 20,045
Pop. 20,465
Frio Co.
Atascosa Co.
Pop. 46,446Pop. 89,269
Live Oak Co.
Bee Co.
Pop. 11,664
Pop. 32,527
Wilson Co.Pop. 44,370
Maverick Co.Pop. 55,365
PleasantonPearsall
Laredo
TildenCotulla George West
Cuero
Karnes City
Jim Wells Co.
Uvalde Co.
Zavala Co.Pop. 11,961
Crystal City
Pop. 26,752
Pop. 41,339
Goliad C
o.
Pop. 7,351
Goliad
Nueces Co.
Pop. 347,691Duval Co.
Pop. 11,754
San Diego
Eagle Ford Shale Thickness
Source: Geology.com
Eagle Ford Shale Depth
Source: Geology.com
Completed Wells in the Eagle Ford
Source: Texas Railroad Commission
263 Producing Oil Wells
394 Producing Gas Wells
As of Aug, 2011:
Completed Wells in the Eagle Ford
Source: Texas Railroad Commission
1,690 Producing Oil Wells
710 Producing Gas Wells
As of July, 2012:
An Increase of:
1,427 Producing Oil Wells
316 Producing Gas Wells
11 Months Later…
Completed Wells in the Eagle Ford
Source: Texas Railroad Commission
3,868 Producing Oil Wells
1,681 Producing Gas Wells
As of July, 2013:
An Increase of:
2,178 Producing Oil Wells
971 Producing Gas Wells
12 Months Later…
Completed Wells in the Eagle Ford
Source: Texas Railroad Commission
5,858 Producing Oil Wells
2,896 Producing Gas Wells
As of Apr., 2014:
An Increase of:
1,990 Producing Oil Wells
1,215 Producing Gas Wells
9 Months Later…
Technology Improvements
Several Technological Improvements Will Affect the Number of Wells Drilled
1) Drilling one well to “hold a field by production” giving way to “pad drilling” where multiple wells are drilled from one drillsite, saving time and money.
2) Drilling rigs that “walk” or move along rails will significantly reduce the downtime between drilling a well.
3) The well spacing continues to tighten, leading to more producing wells on a given amount of acreage.
4) Tapping other pay zones will also extend the life of fields.
1) Pad Drilling
Pad Drilling Example
Karnes Co. Drilling Pads
Gonzales Co. Drilling Pads