Eagle Ford Prospects, South Texas

For over 70 years, drillers in South Texas have known of the Eagle Ford Shale. However, until the advent of the recent horizontal drilling and fracturing advancements, the Eagle Ford Shale was known primarily as a key source rock for the Austin Chalk and other shallower formations above it in South Texas. Following the successes in the Barnett and Bakken Shales (as well as the Haynesville Shale in East Texas and Louisiana and the Marcellus Shale in Pennsylvania and New York), significant leasing activity has occurred in South Texas during the past four years and a number of successful Eagle Ford wells have been drilled for gas and for oil. Early in 2011 there were over 1,300 new wells permitted for future drilling and over 300 completed oil and gas wells producing.

The Eagle Ford shale (often spelled Eagleford) is now being seen as possibly the sixth largest oilfield ever discovered in the United States and the largest discovery in Texas in over forty years. It is located in non-urban areas, so the cost of leasing and development is a lot less. Unlike the relatively small fields and pockets of oil and gas that exploration companies have chased over the years, this field is extensive, underneath a very wide swath of country, all the way from Southeast Texas to Mexico. In connection with a potential lease acquisition and drilling prospect evaluation we accumulated a significant amount of horizontal drilling, fracturing and production data in the western area of the oil window portion of the trend. We are using that data and the contacts we made during the evaluation to source and evaluate new prospect opportunities.