2013 Impact of the Eagle Ford Shale field

The University of Texas San Antonio released their 2013 study of the impact of drilling in Eagle Ford. You can get the full report here.

I’ve read through the slide deck for the presentation on 3-28-13. Here a few cool things I think are highlights:

Check out the explosion in drilling permits:

•      94 – 2009
• 1,010 – 2010
• 2,826 – 2011
• 4,145 – 2012

Look at the average daily production of oil from Eagle Ford:

•        358 – 2008
•        844 – 2009
•   11,986 – 2010 – up 11,142
• 127,965 – 2011 – up 150,979 or 9.7 times
• 352,127 – 2012 – up 224,162, or 175%

Economic impact

The study looks at the total impact on a 14 county area and then an expanded basis of 20 counties. This allows an analysis on the area most affected and the immediately adjacent areas.

Here is the total estimated economic output for the 14 county and 20 County areas:

•            14 cy. – 20 cy.
• 2011 – $20B – $25B
• 2012 – $46B – $61B
• 2022 – $61B – $89B – this is the moderate scenario

Look at the impact on full-time jobs, again for the 14 and 20 county areas with a 2022 forecast based on the moderate scenario:

•         14 cy. –  20 cy.
• 2011 – 38k –  47k
• 2012 – 86k – 116k
• 2022 – 90k – 128k

Declining production costs

Slide 29 shows the cost of drilling a well. There has been a tremendous drop in the cost over the last two years.

I made a guess at the data points on the smoothed curve:

• $13.0M – 11/1/10
• $11.1M – 5/1/11 – down $1.9M
• $  9.8M – 11/1/11 – down 1.3M
• $  8.8M – 5/1/12 – down 1.0M
• $  8.2M – 11/1/11 – down .6M
• $  7.9M – 5/1/12 – down .3M

My guesses on the exact amount are probably off, but you can still see the picture. A drop of about $5M in the cost of each well in just two years.

Preparing workers for the field

Final thing I found very encouraging is a list of seven colleges that are expanding their programs to provide trained workers for all those new jobs in the Eagle Ford field.

The programs range from vocational (welders, truck drivers) through supporting areas (oil & gas accounting, land man, analysts, civic planning) to professional (mechanical, petroleum, & civil engineering degrees). Very cool.