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Natural Gas Makes a Comeback in the Eagle Ford Shale

by Will Brackett

Natural gas has been something of a stepchild in the 400-mile Eagle Ford Shale oil field, but it’s having a moment.

With Mexico’s natural gas production on the decline — even as Mexican demand for natural gas is surging — Texas companies operating in the southernmost part of the Eagle Ford near Laredo are drilling natural gas wells so they can sell the product across the border.

Since 2010, Webb County’s gas production has soared from around 100 million cubic feet per day of natural gas to around 2 billion cubic feet per day today. Eight drilling rigs are working in Webb County, up from about three this time last year.

 Brandon Seale, president of Howard Energy Mexico, said it doesn’t make sense for Mexico to rush to drill its own shale gas, even though it has its vast reserves.

Seale spoke Wednesday at the second annual Mexico Gas Summit at the St. Anthony Hotel in San Antonio, on the first of a two-day conference delving into the details of Mexico’s energy reform.

“A big issue is the declining production in Mexico,” Seale said. “Realistically, it’s probably going to keep happening, and why not?”

He said the South Texas market is among the most prolific, liquid and cheapest gas markets in the world.

“There’s no reason that Mexico should be chasing natural gas with a drill bit when they can buy it at the border for a lot cheaper,” he said.

Bill Deupree, CEO of Escondido Resources, said it’s not hugely profitable, but it makes economic sense to drill for gas in the southern part of the Eagle Ford. Webb County has long been a big natural gas producer, mostly from formations like the Olmos and Escondido sandstones. The deeper Eagle Ford is a more recent target.

“I think you’re going to see a lot of things coming into Mexico from this part of the trend,” Deupree said. “We’ve been quietly drilling in the Eagle Ford.”

The first Eagle Ford wells in 2008 and 2009 were gas wells. Companies later abandoned gas en masse, and started chasing the more profitable crude oil and other liquids. In much of the Eagle Ford, natural gas has been burned off as an unwanted byproduct.

Read more of the story from the San Antonio Express-News here


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