American Oil and Gas Reporter - March 2023 - 53

SpecialReport: Eagle Ford Playmakers
That was not the case one year ago,
when the Eagle Ford's 657 DUCs ranked
third behind only the Anadarko Basin
and mighty Permian Basin. One year
later, only 478 DUCs remain across the
Eagle Ford, which is not only the lowest
DUC count in any play, but a full 75
DUCs behind the region with next lowest
count in inventory, the Bakken Shale. As
shown in Table 1, the Eagle Ford was the
only shale region to experience a net decline
in DUCs between December 2022
and January 2023.
That implies sustaining the trend of
the past several months toward incremental
production growth will require much
more reliance on newly drilled wells and
refracturing of existing wells across the
expansive Eagle Ford trend (Figure 1), a
bullish setup for the in-basin drilling and
well services sectors.
Inherent Optionality
With WTI prices persisting in the
$75-$80/bbl range while natural gas
prices struggle to gain momentum above
$3/Mcf as the winter heating season
winds down and the summer driving season
nears, it also sets up the likely intermediate-term
continuation of the current
oil-versus-gas drilling rig split of nearly
23-to-1. As the only major play with
fairly well-defined crude oil (shallower),
wet gas (intermediate depth), and dry
gas (deeper) windows linked to the thermal
maturity and depth of the shale, the
Eagle Ford gives operators the inherent
optionality to focus drilling investments
on the parts of the play that offer the
most compelling economics according
to prevailing market conditions.
The play's flexibility, coupled with
its ample pipeline takeaway capacity
and short-haul proximity to nearby Gulf
Coast refineries, petrochemical plants
and liquified natural gas export facilities,
also give it the ability to quickly respond
to improving price margins for any or
all of three hydrocarbon product streams
and efficiently deliver that production
to market.
Multiple recent acquisitions underscore
the Eagle Ford's favorability for both offering
production upside potential and
for getting supplies efficiently to market
centers. They also signal a growing cosmopolitan
flavor and international recognition
of the play's emerging role in satisfying
global calls for energy supplies,
while simultaneously underscoring the
importance of the smaller private operators
that have long played a defining role in
Eagle Ford activity.
The first acquisition was privately held
WildFire Energy's $1.4 billion purchase
of Chesapeake Energy's Brazos Valley
region Eagle Ford assets. That was followed
by INEOS Energy's $1.4 billion
buyout of Chesapeake's remaining Eagle
Ford assets, marking the U.K.-based
petrochemicals manufacturer's entry as
an operator into the U.S. onshore upstream
market. The third deal, valued at $2.5
billion, is an acquisition by Canada-based
Baytex Energy Corp. of Eagle Ford operator
Ranger Oil Corp. These three deals
follow on the heels of last year's blockbuster
move, which saw Marathon purchase
Ensign Natural Resources' Eagle
Ford assets for $3 billion.
Then in late February, Repsol, an international
operator headquartered in
Spain, announced that it had acquired
the Eagle Ford position of INPEX, a
Japanese exploration and production company.
The financial terms of that deal
were undisclosed, but the assets are conTABLE
1
Region
Anadarko
Appalachia
Bakken
Eagle Ford
Haynesville
Niobrara
Permian
TOTAL
Inventories of Drilled but Uncompleted Wells
December 2022
722
631
552
482
624
539
1,079
4,629
Source: U.S. Energy Information Administration
MARCH 2023 53
January 2023
726
633
553
478
637
561
1,083
4,671
Change
4
2
1
(-4)
13
22
4
42
centrated in the oiliest parts of the play.
Meanwhile, home-grown private players
such as Houston-based Crescent Pass
Energy LLC are adding production using
horizontal well refracturing programs in
core acreage positions, and capitalizing
on the robust opportunity the Eagle Ford
presents in further developing their portfolios
through focused drilling campaigns.
Unconventional Stronghold
According to Chris Jeske, senior asset
manager for Repsol, the company entered
the Eagle Ford nearly a decade ago after
acquiring longtime Canadian stalwart Talisman
Energy. That put Repsol in a 50/50
partnership with Statoil, with each operating
half of the investment. Statoil later
would transform into Equinor and exit
the venture in 2019. At that point, Repsol
purchased Equinor's share in the venture
and focused on the Eagle Ford properties
as a second asset base to complement its
Marcellus holdings and establish itself
as a significant player in horizontal resource
plays.
" Repsol identified the Eagle Ford as a
lucrative opportunity to secure an additional
stronghold in North American unconventionals
and a complement to its
global exploration and production portfolio, "
says Jeske.
After gaining total ownership and control
of its Eagle Ford assets, Repsol aggressively
instituted an organic plan to
increase production, he explains. The
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