Sunset along Interstate 37, somewhere north of Corpus Christi, Texas: Twilight falls with just a couple of golden clouds left to remind the traveler of the show a few minutes earlier as the sun performed a picture-perfect day's end. The first points of light pop out of a darkening sky. The stars at night really are big and bright, here in the heart of Texas.
But wait—not all of those twinkling lights are out in the cosmos. Quite a few seem terrestrial. Some outline drilling rigs making hole into the night. Off to the right a lazy flare is poking above some processing equipment. No galaxy this: A bright field of lights ahead frame a brand-new rail yard built to handle frac sand.
We're out in the oil patch. Not just any field, we're driving through perhaps the brightest star right now in Texas' energy firmament—the Eagle Ford. It's hard to believe five years ago the only lights to be seen out here at night really were stars.
From zero in 2007, the Eagle Ford now ranks among North America's busiest tight oil plays, according to a recently released IHS report. In fact, the play's peak-month production and typical well performance exceed the Bakken Shale, says the IHS Herold Eagle Ford Regional Play Assessment. Credit consistently strong drilling results, alongside enormous resource potential. "The favorable outlook for the Eagle Ford is reflected in a highly competitive merger and acquisition environment, with implied deal values averaging $14,000 per acre for Eagle Ford acreage in 2011 and top prices approaching $25,000 per acre," says the report.
Rising Star: We're out in the oil patch. Not just any field, though, we're driving through perhaps the brightest star right now in Texas' energy firmament — the Eagle Ford.
"The Eagle Ford shale has proven to be one of the most important economic engines in the state," adds Thomas Tunstall, director of the University of Texas-San Antonio's Center for Community and Business Research, which recently released a report on the play's economic impact. That's quite a statement, given the size of Texas' economy.
Currently, the Eagle Ford produces around 600,000 barrels per day and some reports forecast that volume could more than double in five years. Texas Railroad Commission (TRC) data benchmark that rapid growth. The TRC issued just 34 drilling permits in 2008. That number grew nicely to 94 in 2009. The explosion hit in 2010 with more than 1,000 permits, then 2,800 in 2011 and another 2,000 in the first five months of this year.
Can you say boom? And when, not if, natural gas prices perk up, the Eagle Ford has plenty of gas-prone prospects, too.
Midstream Business this month takes a long gaze at this energy star. Associate Editor Michelle Thompson has put together a great cover story on its prospects while Editor-At-Large Skip Simmons contributes a thorough operational analysis.
Our Eagle Ford coverage coincides with Hart Energy's DUG Eagle Ford conference in San Antonio. We expect another large crowd for one of our most-popular events. This year's conference adds a midstream track that will interest our readers, alongside an upstream program. I hope you can join me there.
I can't think of a better place to start my new role as editor of Midstream Business. I've had the pleasure of watching the energy industry up close in a diverse career that has ranged from jug hustlers to convenience-store gas pumps, with stops beside pipelines, compressor stations, processing plants, rail yards, truck terminals and LNG liquefaction plants. One recent stop provided a chance to closely observe the Eagle Ford's dawn.
I've already had the opportunity to meet some of you, and I want to say thanks again for your ideas and suggestions on how to make Midstream Business more meaningful. I welcome your input. These are exciting times for midstream, let's continue our journey and watch for more bright stars up ahead.
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