Texas Shale Activity

By Jamie Ferguson, VP of Global Business Development, Maxwell Drummond


The U.S. Energy Information Administration's (EIA) Annual Energy Outlook 2012 estimates that the United States possessed 2,214 trillion cubic feet (tcf) of technically recoverable natural gas resources. Natural gas from proven and unproven shale resources accounts for 542 tcf of this resource estimate. Texas has long been recognized as the key state for oil and gas exploration and production in the United States. Although much has been said about the Gulf of Mexico’s offshore resurgence post-Macondo, Texas’ onshore oil and natural gas exploration and production activity has also been on a strong upswing. The sector has seen substantial growth over the last decade thanks to the emergence of new technologies which have increased the amount of recoverable gas and improved the economics of the extraction of Shale Gas in the state. Not only have estimates of natural gas still in ground increased substantially, but “legacy” fields, once thought of as obsolete are coming alive as new methods of hydrocarbon recovery have come to fruition.

The Barnett Shale in the Dallas area and the Eagle Ford Shale basins are emerging as crucial components in the nation’s natural gas supply. Estimates from the U.S. EIA state that shale gas will eventually account for nearly half of the total U.S. supply by 2035, and this is a conservative estimate according to many analysts. Even though industry has been aware of the Barnett Shale since the early 20th century, the first wells were not drilled until 1993 and the number of permits granted remained relatively low until 2001 when activity skyrocketed. The level of activity peaked in the mid-2000s and although drilling is slower, production continues. Last year, almost 2 tcf of natural gas was produced. The Eagle Ford Shale, too, is a key driver of Texas’, producing more than traditional shale plays. Technological advances in fracking will also play into production in the Eagle Ford, as its high carbonate content is the ideal setting for cutting-edge technology to be utilized.

A study conducted by the Center for Community and Business Research at the University of Texas-San Antonio has found that the Eagle Ford alone has paid $3.1 billion in salaries and worker benefits, and Midland, TX’s 3.5% unemployment rate was the lowest seen in Texas in April of this year, demonstrating the profound economic effect the oil and gas industry has on areas surrounding these prolific Texas basins.

The supply of natural gas is not as dependent on foreign producers as is the supply of crude oil and the delivery system is less subject to interruption. Additionally, this sector of industry is forecast to provide more than 1.6 million jobs over the next 25 years providing valuable employment opportunities for skilled workers at every level.

About the author
Jamie Ferguson joined Maxwell Drummond’s Aberdeen team in 2006 and by July 2011 was promoted to Vice President of Global Business Development. Jamie has extensive experience managing executive level searches for clients spanning the oil and gas value chain and has deep industry networks developed from working on assignments in over 20 countries on 6 continents.

Maxwell Drummond International is a world leading retained search consultancy offering professional search services to clients in all sectors of the energy and natural resources industries.