The economist speaking at the 2013 Executive Economic Outlook breakfast was simply conveying there is significant opportunity in South Texas. Most real estate developers are being cautious and not making commitments unless they can project a one-year payout. If the play has a lifespan of decades, more permanent developments are needed. South Texas will need every thing from grocery stores to home developments, gas stations and Wal-Marts.
The Eagle Ford is still relatively young, so everyone is wondering if the play will go bust. The answer to that question lies in the future oil price. As long as oil prices hold steady at a level of more than $70, South Texans don’t have much to worry about. The Eagle Ford returns more to operators than almost all plays in the country. Even if oil prices drop, it will still have the same relative position as the investment of choice in North America.
An old industry addage is “The easiest place to find hydrocarbons is where you’ve already found them”. That will likely prove true in South Texas. We’re actually seeing it play out today. Operators have new development plans in several other oil & gas plays including the Austin Chalk, Buda, Escondido, Olmos, and Pearsall Shale formations.
I wouldn’t say never, but I’d place the probability of a bust in South Texas lower than anywhere else in the country.http://www.eaglefordshale.com/
The Eagle Ford Shale is a geological formation directly beneath the Austin Chalk Shale. It is considered to be the “source rock”, or the original source of hydrocarbons that are contained in the Austin Chalk above it. The formation was also penetrated many times as operators targeted the Edwards Limestone formation along the Edwards Reef Trend.The Eagle Ford Shale is found at depths between 4,000 and 12,000 feet. The shale is up to 250 feet thick in some places, generally without natural fracturing present. To date, the most prolific area for production occurs at the convergence of the Stuart City Reef trend and the Sligo Reef Trend.
Karnes County neighbors DeWitt County and produces gas from the Edwards Reef Trend in South Texas. The region is not new to the oil & gas industry, but the Eagle Ford drilling boom brought development levels not seen before. The county is prospective for shale oil, shale gas, and the gas – condensate or liquids-rich window of the Eagle Ford Shale formation.
Karnes County forms part of a prolific area of the Eagle Ford where wells produce greater amounts of condensate, oil, and wet gas. The dry gas window of the Eagle Ford also passes through the county along the Southeastern border and into Bee and Goliad counties.
Karnes County drilling is focused in the central portion of the county that is prospective for wet gas and condensate and the northwest third of the the county that is prospective for oil . The best shale oil wells have come online producing more than 1,000 bbls/d.The county is approximately 50 miles southeast of San Antonio, TX. Karnes City serves as the county seat. Notable communities include Cestohowa, Ecleto, Falls City, Gillett, Helena, Hobson, Kenedy, Panna Maria, Runge, and Wintergreen.
Burlington (ConocoPhillips), EOG Resources, Murphy Oil, and Plains Exploration all have significant acreage positions in Karnes County.