The Most Profitable Oil Field In The World Is Right Here In America

eagle ford tour

Photo: pmoore4321 via Youtube

We recently told you how people now think America could become the next Saudi Arabia of oil production.One of big reason is North Dakota’s Bakken formation, which we showed you around earlier this year.

But another huge factor is the Eagle Ford formation in Texas, which many believe has become the most profitable oil play in the world:

  • In August, research firm IHS said drilling results there appeared “to be superior to those of the Bakken” — 300 to 600 barrels-per-day for a peak month production average, compared with 150 to 300 barrels-per-day in North Dakota.
  • BHP Billiton CEO Michael Yeager says Eagle Ford wells cost $7 million to $10 million, but  pay back within half a year (h/t Michael Giberson). “50 per cent of every well is oil, and we get $100 a barrel for that oil,” he said.
  • The Eagle Ford’s proximity to the Gulf also gives it a huge advantage. According to Becca Followill of U.S. Capital Advisors LLC, moving oil by rail from the Bakken field in North Dakota can add $10 to $12 to the production cost per barrel.

We wanted to take a look at what the country’s southwestern oil bonanza looks like.  

Where exactly is the Eagle Ford? It covers a huge swath of southwest Texas

Google Earth has some incredible views of the play. We've outlined its extent here. Even without this, you can see how it traces the white swatch below San Antonio

You can pretty much throw a dart within the swatch we outlined and hit a site. Here's Karnes County, Texas, just a few miles southeast of San Antonio, is one of the Eagle Ford's hotspots. You can see the heavy concentration of oil facilities here

And here are some of the sites up close: the rig...

The injection site

An operating well

Bloomberg recently visited a site in Encinal, Texas owned by Orion. Here's what it looks like from above...

And eye level...

You literally cannot take a road out of Encinal without running into some type of oil facility

So everyone's finally got the message that the Eagle Ford is the place to be. Here's total well starts through this spring

Here's what that looks like in real-time — it really gets going after 2006

EOG Resources holds the most acreage in the play. It's stock growth over the last two years reflects this privileged position

But other companies are trying to muscle their way through. EP Energy, the exploration and production spinoff of El Paso, is now all-in at the Eagle Ford

Why? It's providing the highest returns

The company's well costs have plummeted, even as they've had to dig deeper to get the the oil

So what does life in the Eagle Ford actually look like? For better or worse, it's fairly Spartan

When you're racing to tap resources, more family-oriented housing is not a huge priority

At the same time, you don't need to worry about keeping up with your neighbours

You can just hang out with them later

The rush has created echo booms for local economies in the play...

Like this cafe in Dilley, Texas

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