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How Long Will Eagle Ford Shale Wells Last?

The life span of Eagle Ford shale wells is proving to be much longer than those drilled in the Austin Chalk a number of years ago, but will they be long term producers of oil and gas? Eagle Ford shale well life expectancy could be as long as thirty years, according to a recent report from EOG Resources.   According to that report, 40%  of an Eagle Ford shale well's production will come in the first five years, followed by a long decline curve lasting perhaps as many as thirty years. Judging from the curve below (assuming a higher IP rate), after the first ten years or so,  Eagle Ford shale wells most likely become  "stripper wells" making less than ten barrels per day, unless some kind of secondary recovery method such as CO2 or dry gas injection is used, or the well is re-fracked, etc.  (Note that EOG Resources is already planning a dry gas injection pilot project in 2013 as an attempt to boost the ultimate recovery factor.)

  See graph below which is based on data from old wells. (Note that no information was provided as to where these vertical Eagle Ford shale wells were located and what completion methods were used.) Source EOG Resources:

decline curve eagle ford shale wells

Getting a true picture of how many years Eagle Ford shale wells will produce at this point is difficult. So far  it appears that as liquids production goes, those wells drilled in the "Goldilocks zone" or over - pressured, volatile oil window, which has reservoir drive, plus high carbonate content, will be the long term champs. We can look at Texas Railroad Commission production data from some of the first Eagle Ford shale wells drilled in the volatile oil window and get some idea of fall-off rates, but other factors come into play when looking at reported production figures. For example, many wells are put on a pumpjack when reservoir drive gas falls off, but the particular well you are investigating may not have been placed on a pumping unit yet, or is being choked back while the company waits on infrastructure, etc. Also,  R.R.C. production figures are  hard to interpret, since they are reported on the lease level. Unless there is just one well on that lease, it can be hard to determine how much  production is coming from the one well you're investigating.

One Eagle Ford shale decline rate chart can be found here: Eagle Ford Well Decline Curve  It shows EOG Resources wells (mostly in the oil window) peaking at around 350 BOE/D, and flattening out pretty fast after eight months to less than 100 BOE/D. The term BOE/D means "barrels of oil equivalent per day, not "barrels of oil per day" and also includes natural gas and natural gas liquids. The term BOE/D is often used in investor reports rather than BOPD (barrels of oil per day), especially by those companies who have more acreage in the dry gas zone of the Eagle Ford. As a unit, one BOE is roughly equal to 6,000 cubic feet of natural gas.

How Much Oil Will Be Left In The Ground?

It has been estimated by some petroleum geologists that more than 75% of all the world's oil is still left in the "mother rock" or source rocks, which happen to be shale. The rest of that oil migrated upward and was trapped in other porous rock formations where only a fraction has been recovered.  EOG Resources expects that the recovery factor for the Eagle Ford shale will be about 5%, compared to the Bakken Shale at 10%. Will oil and gas companies end up leaving in place 95% of the oil held in the Eagle Ford shale? The most likely answer is "no",  and many  companies are already anticipating using secondary recovery methods, such as CO2 injection, to  force more oil out of declining Eagle Ford shale wells. In the technology industry there is a theory known as "Moore's Law", which states that the memory capacity of computer chips will double every two years. In the oil and gas industry, it has been found that with every doubling of wells in a shale play, productivity increases by up to 23%.  New frac techniques, secondary recovery methods, longer laterals and closer well spacing will most likely be used to increase the amount of oil recovered from the Eagle Ford shale far beyond 5%.

Killing Some Of The Golden Geese?

(Some) oil and gas companies could be playing a delicate game in the Eagle Ford shale. It's one that's been played many times before in the industry and one which has ruined a lot of wells. It's called the "pull 'em hard and make it look good on paper to the investors" game. Right now it appears that some companies are trying to lure investors their way with high initial production or IP rates from wells that probably should be held back. It's been proven over and over that the harder you flow back a new shale well, the sooner it dies. High IP rates may be good for investor reports, but perhaps not that great for the landowner in the long run. If you flow a new shale well too hard by using too large of a choke at the well head, you can cause the proppant, (sand, resin beads, etc., which is pumped into the formation during a frac job to hold tiny fissures open)  to flow back to the surface along with oil and gas. With nothing to keep them open anymore, tiny fissures and cracks may then collapse, reducing the life of the well. As a landowner, you don't have any choice in the matter as to how hard an oil company flows a new well on your land, so, "too bad" if they let it "burn out" early to boost numbers reported to investors. So, when looking at the life expectancy of Eagle Ford shale wells, it will be interesting to see how some of the very high IP wells pan out over the long term.

Eagle Ford Shale Well Life Span Long But Low Volume After First Few Years

Despite the relatively fast decline rates of some wells, it looks like Eagle Ford shale wells will be producing oil and gas for a long period of time, just at very low volume. Currently there are at least a dozen major pipeline projects underway, crisscrossing South Texas to transport Eagle Ford shale oil and gas to  market. Oil and gas companies simply don't sign long term contracts and invest billions of dollars into such projects without a firm belief that an oilfield will be a long term producer. There is so much land to be drilled that even with sharp decline curves, there will be lots of oil flowing into these pipelines for years as the play is drilled out.

Well costs are coming down into the $5 million range, so payback for an oil company can come in just a few months, even with steep decline curves.  Landowners may continue to receive royalty checks from a single Eagle Ford shale well for decades, especially with secondary recovery methods coming into play in the future, but shouldn't plan on getting  the really huge checks after the first year(s).

 

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