Eagle Ford Shale: Poor Little County Rich with 19 Trillion CF of Natural Gas

La Salle, one of the poorest counties in the U.S. with a population around 6,000 according to the 2000 census, holds a treasure trove of 19 trillion (that is not a typo) cubic feet of natural gas in Eagle Ford shale in South Texas. Petrohawk, a firm that does horizontal shale drilling in Eagle Ford, has 20 wells and found its first major Eagle Ford well in 2008. According to SmartMoney, Petrohawk plans to add 50 to 60 more in 2010. This is good news for oilfield-services companies.

Underlying the Austin Chalk and Edwards formation, Eagle Ford shale is 11,000 to 12,000 feet below the surface that makes it easier and cheaper to drill for an amount that is half of what companies pay for in other shale wells. Companies in Eagle Ford can break even with low gas prices at $3.8 per million British thermal units while it takes other shale areas $5 per million to do the same.

Petrohawk says its costs are about 20 percent lower than the industry average. Furthermore, the company has seen profit in spite of rock-bottom gas prices due to making the right land acquisitions. The company says it will sell over $1 billion of its noncore assets to pay debt and to get the needed cash flow.

Petrohawk works with natural gas and oil properties in Arkansas, North Louisiana, inland waters of Louisiana, East Texas and South Texas. The company has a joint venture with Swift Energy Company to develop a portion of Swift Energy's Eagle Ford shale.

Also drilling in Eagle Ford shale on the eastern side in McMullen County is Murphy Oil, which has abandoned two wells in Malaysia after receiving good results in its first Eagle Ford shale well.