Inside, confidential and off the record
On Eagle Ford formation
Finally, yesterday we noted the huge new findings of nat-gas her in the US in the Marcellus shale and other areas, and quite honestly we forgot to note what’s going on in the Eagle Ford formation in south Texas [Ed. Note: The name Eagle Ford is derived from the town near Dallas where the first
outcroppings of the shale formation that extends all the way south and west to the border with Mexico. Eagle Ford, Texas, by the way, is the home town of “Bonny” of Bonny and Clyde fame.]. One of our oldest subscribers from the days of Lovett, Mitchell, Webb and Garrison (a warm shout out to all
of the alumni of that great firm lost in the mists of brokering time and one take-over after another!) wrote to tell us of what is going on down there. We thought it worthy of note here this morning.
Our friend, Marshall Graham, wrote to say that
having grown up in south Texas it is just unbelievable what is going on in the Eagle ford there right now. Long time businesses are moving to their homes and renting out two generation store fronts and so forth. Many of the drillers just buy trailers for their personnel to live in while on site instead of hoping to get a place to stay. One of my favorite motels was bought by one of the large e&p companies so that their folks would have a place to stay. Most of the wells are being drilled by two 12 hour shifts with 5 days on 2 days off. And it has gone to total specialization—one for drilling, one for water based mud one for oil based, one for cementing, one for perforating, one for hauling pipe, one for burying pipe, different ones for casing and for drill pipe, etc. The industry is really to be admired. You’d be amazed what they are going through to keep from polluting ground water and aquifers. Forget rocket science, these guys are in business science. They are drilling wells 14,000 feet long with a vertical 5000 foot section, taking 2 days to make the turn to horizontal and completing over a 1,000 foot section/day. Awesome. You want something done? Nothing like the profit motive.
The world of drilling and therefore the world of energy has changed violently in the course of the past decade, and most notably in the course of the past five years. We can drill, and we are drilling, in places and in manners we’ve never drilled before. As a result, we are finding oil in new places… and perhaps more importantly, in old… and the world’s reserves continue to grow despite the constant usage and supposed depletion of those reserves. Ah, technology!! It’s a beautiful thing.
-Dennis Gartman/ The Gartman Letter / 03/30/ 2011
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ISSUES.... Inside, confidential and off the record
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