Is the Eagle Ford shale the linchpin to a burgeoning U.S. economy?

A new report by the Boston Consulting Group (BCG) says that’s the case, and an Oct. 10 Hart Energy webinar about the Eagle Ford gives some serious credence to that sentiment.

The BCG report says that U.S. manufacturing costs, over the next few years, will be 15% lower than manufacturing costs in Germany; 8% lower than manufacturing costs in the United Kingdom; and 21% lower than manufacturing costs in Japan.

That would give the U.S. economy a huge leg up on its main global competitors, according to the BCG report, which adds that China would still have the lowest-cost manufacturing base among major global powers.

But that leaves a big question: How does all of that leverage come from a big slice of Texas geography that 20 years ago was only known to geologists, a handful of oil drillers and some forward-looking Wall Street analysts?

The Eagle Ford has come a long way since then, and is now a global hotspot for cheap, abundant shale oil and gas

Hart Energy will present its annual DUG Eagle Ford conference in San Antonio Oct. 14-16. The conference will feature presentations from some of the leading production companies in the Eagle Ford and a special appearance by former speaker of the House Newt Gingrich.

In the Hart Energy webinar, “An In Depth Look At the Eagle Ford Shale: Geology, Benchmarking, Best Practices and Reserves,” Drillinginfo, an Austin, Texas-based oil and gas intelligence gathering firm, takes a thorough look at the Maverick/Eagle Ford basin, and concludes that, yes, the area could be a huge difference-maker not just for the E&P companies drilling there, and for the investors who pour billions into those companies, but for the U.S. economy as well.

Drillinginfo analysts Lisa LaChance and Jason Simmons, who co-moderated the webinar, said there has been a dramatic hike in production in Maverick Basin/Eagle Ford area since 2009.

According to Drillinginfo figures, in early 2009 the area had approximately 23,000 actively producing wells. Three years later, that figure jumped to 25,300 in Eagle Ford, according to the firm. In the webcast, LaChance says the play currently has more than 44,000 wells.

What’s especially unique about the Maverick/Eagle Ford Area is the huge uptick in overall productivity per well, which Drillinginfo pegs at a whopping 600% increase over the past three years, according to Ramona Hovey, managing director of Drillinginfo’s DI Analytics outfit. Officially, per-well productivity levels in the area skyrocketed from an average of 2.06 bopd/well to 18.6 bopd/well. That puts Maverick/Eagle Ford light years ahead of formerly comparable oil and gas basins like the Williston Basin in the Bakken, and the Arkoma in Oklahoma and Arkansas.

Drillinginfo says that rock quality has been the main driver of productivity in the Eagle Ford.

Some other takeaways from the webinar include:

  • Positioning – The Eagle Ford shale is the source rock for oil and gas in the Austin Chalk. It is overlain by the Austin Chalk and is above the Buda and Edwards Limestone.
  • Potential for recovery – The Eagle Ford is divided into lower transgressive and upper regressive layers. Transgressive shales have optimum oil-prone potential; regressive shales are gas prone.
  • Leasing – Two years after its peak, royalty trending is down while lease-term factors are increasing. But leasing on a county-to-county basis shows only two primary growth areas – in Goliad and in Burleson counties – up 309% and 220%, respectively, since 2011.
  • Permitters – The top leasing permitters in Eagle Ford are Chesapeake, EOG and Anadarko, with 792, 441 and 354 permits, respectively.
  • Production – Eagle Ford Production hit 797,000 Boe/d in May, 2012, from about 2,910 wells.

Those are all good reasons why oil industry analysts are increasingly reporting that it’s the Eagle Ford, and not the Bakken shale in North Dakota, that is the biggest producer of shale oil in the U.S. right now.

A July 2012 study from energy consultant HIS says that a “typical” well in the Eagle Ford basin averages 300-to-600 barrels-per-day, compared with 150-to-300 barrels-per-day for a similar Bakken well. “Our analysis indicates that Eagle Ford drilling results to date appear to be superior to those of the Bakken,” explains Andrew Byrne, director of equity research at IHS and the author of the study.

With more than 20,000 square miles of terrain and about 3 billion recoverable barrels of oil and gas up to 14,000 feet below the ground, the Eagle Ford is, right now, the major domestic energy play.

As Drillinginfo says, the region offers low oil extraction costs, shallower drilling depths, and is ideally located near refineries and pipelines.

If the first decade of the new century was all about the Bakken, the second one could easily be all about the Eagle Ford.