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Energy in the Eleventh District

Eagle Ford Shale

Advances in horizontal drilling technology have allowed companies to extract oil and natural gas from the Eagle Ford Shale for more than a decade, bringing jobs to many rural communities in South Texas. Using the tabs below, learn more about the growth in oil and natural gas production across the region and its effects on employment.

The Region
Highlights

According to the Energy Information Administration, the currently defined boundaries of the Eagle Ford Shale formation fall within a 23-county region.

During fourth quarter 2022, six counties produced 71.3 percent of Eagle Ford's oil: Karnes, De Witt, La Salle, Dimmit, Gonzales, and McMullen. Karnes, Dimmit, LaSalle and DeWitt counties also produce a large portion of the region's natural gas. Webb county is by far the region's largest producer of natural gas, with production averaging 2.7 billion cubic feet per day in fourth quarter 2022.[1]

Location of the eagle ford shale Oil production regions in eagle ford shale Gas production regions in eagle ford shale

Notes

  1. For more information on how these production numbers are calculated, see Energy Data Explantory Notes and Resources.
History

The Eagle Ford Shale forms an arc across 20,000 square miles in South Texas. It begins in Laredo near the Mexico border and extends 400 miles northeast between Austin and Houston. The formation is divided into three zones, commonly referred to as windows (Chart 1).

Oil, Natural Gas Liquids and Natural Gas Windows in Eagle Ford Shale

The northernmost window contains high concentrations of oil while the southernmost window contains high concentrations of natural gas. And the central window contains natural gas liquids, such as ethane, propane and butane, which are used to produce a variety of industrial products.[1] These windows have played an important part in the story of the Eagle Ford, as they allow drillers to target different areas depending upon which commodity is most valuable. While companies initially focused on the area's natural gas resources, the other windows have attracted the lion share of activity over the past decade, due to the relatively low price of natural gas in the United States (Chart 2).[2]

Prices for crude oil, natural gas liquids, and natural gas

Petrohawk Energy Corp. completed the Eagle Ford's first well in October 2008.[3] Activity was slow to pick up at first, due to the onset of the Great Recession and a sharp decline in natural gas prices. Starting in 2010, though, the area experienced a gold rush that lasted through 2014. The number of drilling permits (Chart 3) and completed wells (Chart 4) skyrocketed, and both oil and gas production followed suit. By the end of 2014 the area was producing 18 percent the country's oil and 8 percent of its natural gas (Chart 5).

Drilling permits issued in Eagle Ford

Eagle Ford rig count and wells placed online

Share of U.S. crude oil and natural gas produced in Eagle Ford

The gold rush ended even faster than it began, though. The boom had been supported by a period of relatively high oil prices but at the end of 2014 those prices declined precipitously. This led to a sharp cutback in drilling activity both inside and outside the Eagle Ford. As in other areas in the country, lower prices spurred E&P companies operating in the Eagle Ford to become more efficient in a variety of ways. This has included shifting drilling activity to the best acreage, finding ways to optimize well spacing and completions design, and reducing costs by increasing scale.

Companies also have made efforts to increase the horizontal lateral length of the wells being drilled (Chart 6). Those lengths have leveled off in recent years, though, to an average of about 7,500 feet. This has had impacts on the well-level economics relative to some other basins, which have seen more substantial changes in lateral length. For example, in the Permian Basin and the Bakken companies drill wells with lateral lengths of near 10,000 feet, on average. While production for new wells in the Eagle Ford saw improvement in the initial years, that improvement has also flatlined in recent years (Chart 7).

Eagle Ford average horizontal lateral length for new wells

Horizontal well crude oil decline curve in Eagle Ford

Since the price bust, neither drilling activity nor oil and gas production in the Eagle Ford have recovered back to their peak levels. However, the efficiency gains made by companies since the bust have allowed the economics of the Eagle Ford to remain favorable enough to sustain a reasonable level of activity, stabilizing oil production at over 1 mb/d (Chart 8).[4] In the first quarter 2023 Dallas Fed Energy Survey, operators reported they needed, on average, $56 per barrel to profitably drill a new well in the Eagle Ford, below the average WTI price during the survey period ($69 per barrel).

Crude oil and natural gas produced in Eagle Ford

Estimates from the Energy Information Administration for 2021 estimate the Eagle Ford still contains 30.0 trillion cubic feet in technically recoverable natural gas and 3.6 billion barrels in technically recoverable oil.[5] With the diversity of its resources and its close proximity to the coast, which reduces transportation cost versus other basins, the Eagle Ford is poised to continue producing for many years to come. However, significant growth is unlikely in the coming years in the current pricing environment, as the basin has matured and most of the “sweet” spots in the basin have already been drilled.

Notes

  1. For more information on natural gas liquids and their many uses, see What Are Natural Gas Liquids and How Are They Used?, Energy Information Administration, April 20, 2012.
  2. Oil Boom in Eagle Ford Shale Brings New Wealth to South Texas, Southwest Economy, Second Quarter 2012.
  3. The Discovery of the Eagle Ford Shale, Texas A&M University-Corpus Christi.
  4. Drilling Productivity Report, Energy Information Administration.
  5. U.S. Crude Oil and Natural Gas Proved Reserves, Energy Information Administration.
Oil Production
Highlights

Oil production growth in Eagle Ford began accelerating in 2010. Production in the region approximately doubled every year between 2010 and 2013. Since 2015, production has come down but remains significantly higher than in 2010. The share of U.S. oil produced in the Eagle Ford has also grown rapidly. In January 2010, the Eagle Ford produced just 1 percent of U.S. oil, but in December 2022, it accounted for 8.8 percent of the nation's oil production.[1]

The pace of production growth has varied across the counties in the Eagle Ford. Some counties have experienced especially dramatic growth. For instance, in first quarter 2010, La Salle county produced only 538 barrels per day, but by fourth quarter 2022, it yielded 107,000 barrels per day.[2]

Eagle Ford Oil Production
December 2022
  Barrels per day
(thousands)
Year/year change
(percent)
Eagle Ford counties 1,063.0 –2.3
Rest of Texas 4,131.8 4.8
SOURCE: Energy Information Administration.
Monthly Oil Production in Eagle Ford and Rest of Texas Share of U.S. Oil Produced in Eagle Ford
Top Oil-Producing Counties in Eagle Ford
Fourth Quarter 2022
  Barrels per day
(thousands)
Year/year change
(percent)
Karnes 284.7 –10.6
De Witt 117.0 –2.7
La Salle 107.0 –12.2
SOURCES: Energy Information Administration; WellDatabase;
calculations by Federal Reserve Bank of Dallas.
Annualized Percent Change in Oil Production Across Eagle Ford Counties Quarterly Oil Production in Eagle Ford, by County

Notes

  1. Overall production for the Eagle Ford comes directly from the Energy Information Administration's Drilling Productivity Report.
  2. Data from the Energy Information Administration's Drilling Productivity Report is combined with county-level production data from the Welldatabase.com to estimate county-level production. For more information on how these series are computed, see Energy Data Explanatory Notes and Resources.
Natural Gas Production
Highlights

Natural gas production in the Eagle Ford has increased an average of 11.7 percent per year since January 2010. As a result of these increases, the Eagle Ford now accounts for 5.9 percent of all U.S. natural gas production.[1]

As with oil production, the growth rate of natural gas production has varied substantially across counties in the Eagle Ford. Natural gas production has grown fastest in Wilson and Gonzales counties, which have recorded annual increases of approximately 42 percent and 34 percent, respectively, since first quarter 2010. Webb County remains the largest natural gas producer in the region.[2]

Eagle Ford Natural Gas Production
December 2022
  Cubic feet per day
(billions)
Year/year change
(percent)
Eagle Ford counties 7.1 10.7
Rest of Texas 24.8 3.5
SOURCE: Energy Information Administration.
Monthly Natural Gas Production in Eagle Ford and Rest of Texas Share of U.S. Natural Gas Produced in Eagle Ford
Top Natural Gas-Producing Counties in Eagle Ford
Fourth Quarter 2022
  Cubic feet per day
(billions)
Year/year change
(percent)
Webb 2.7 26.9
La Salle 0.9 –5.3
Karnes 0.9 2.2
SOURCES: Energy Information Administration; WellDatabase;
calculations by Federal Reserve Bank of Dallas.
Annualized Percent Change in Natural Gas Production Across Eagle Ford Counties Quarterly Natural Gas Production in Eagle Ford, by County

Notes

  1. Overall production for the Eagle Ford comes directly from the Energy Information Administration's Drilling Productivity Report.
  2. Data from the Energy Information Administration's Drilling Productivity Report is combined with county-level production data from the Railroad Commission of Texas to estimate county-level production. For more information on how these series are computed, see Energy Data Explanatory Notes and Resources.
Drilling Activity
Highlights

The rig count in the Eagle Ford increased steadily from mid-2009 to mid-2012. In June 2009, only 30 rigs operated in the Eagle Ford; by June 2012, the number of active rigs had soared to 312. The rig count leveled off in mid 2012, hovering between 280 and 310 rigs until December 2014, when the number of rigs began to decrease in response to falling oil prices.

Rig Count
December 2022
  Number of rigs Year/year change
(percent)
Eagle Ford counties 76 61.7
Rest of Texas 296 29.8
SOURCE: Baker Hughes.
Rig Count in Eagle Ford Shale
Labor Markets
Highlights

Employment growth in some Eagle Ford counties has approached 10 percent per year since the start of 2010. While wages in the rural counties of Eagle Ford remain lower than in the rest of Texas, their growth is robust. In most counties in the region, annualized wage growth has surpassed that in the rest of the state since the first quarter of 2010.

Employment
Fourth Quarter 2022
  Employment
(thousands)
Year/year change
(percent)
Texas
Eagle Ford counties 382.5 3.9
Rest of Texas 13,185.0 4.7
SOURCE: Bureau of Labor Statistics.
Annualized Percent Change in Employment Across Eagle Ford Counties Average Weekly Wages in Eagle Ford and Rest of Texas
Wages
Fourth Quarter 2022
  Average weekly wage (dollars) Year/year change
(percent)
Texas
Eagle Ford counties $993 0.8
Rest of Texas $1,383 –0.2
SOURCE: Bureau of Labor Statistics.
Annualized Percent Increase in Average Weekly Wages Across Eagle Ford Counties
Resources