March 26 (Bloomberg) -- Producers will ramp up oil production in the Eagle Ford shale formation in South Texas by 47 percent this year, according to a report released today.
The Eagle Ford will produce 527,000 barrels of crude a day this year, up from 358,000 in 2012, the University of Texas at San Antonio’s Center for Community and Business Research reported. The center forecast output will reach 771,000 barrels a day in 2022.
Energy production accounted for 116,000 jobs in the 14 counties where drilling is active and six other surrounding counties, the center estimated. The economic impact, estimated at $61 billion in 2012, is expected to reach $89 billion and 127,000 jobs for the 20-county region in 2022.
“I think we’re sort of in unknown territory,” said Tom Tunstall, lead researcher on the study. “Previous oil and gas exploration has been conventional. Shale is different. Drilling folks will probably be in the area longer than conventional plays.”
Spending subject to sales tax in the 14 counties increased to $1.26 billion in the second quarter of 2012 from $752 million in the second quarter of 2009. Overall, oil and gas exploration and production added more than $1 billion in local government revenue and $1.2 billion in state government revenue in 2012, according to the study.
“One thing we suggest is that local officials use some of these new tax monies to put in amenities and create identities that extend beyond oil and gas so they have something sustainable to build on when this slows down,” Tunstall said.
Production of natural gas liquids, or condensates, in the Eagle Ford was 68,000 barrels a day last year and is expected to rise to 101,000 this year and 147,000 in 2022, according to the report.
Natural gas production was 1.57 billion cubic feet a day last year and is expected to rise to 1.63 billion this year. Natural gas output is projected to decline from 2014 through 2016 before rebounding and reaching 1.73 billion cubic feet a day in 2022.
The projections are based on current production and rig counts, and U.S. Energy Information Administration forecasts of oil and gas prices.
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