The North American unconventional oil and gas boom has been underway for several years now and each of the plays is evolving differently. Some, like the Bakken tight oil play, are showing the early signs of maturity while the Eagle Ford Shale continues to boom and interest is building in lesser-known emerging plays like the Tuscaloosa Marine Shale. IHS Herold analysts Daniel Pratt, Andrew Byrne and Sven del Pozzo offered up their perspectives on how things are unfolding during a presentation at the IHS Forum in Houston on September 19.

Bakken maturing

IHS analyst Daniel Pratt said fewer rigs are active in the Bakken tight oil play than there were a year-ago, well performance is tapering off and costs are coming down -- all signs that the play is maturing. Pratt said companies are seeing a material reduction in the cost of drilling and completing wells thanks to the use of pad drilling, tighter downspacing and lower well service costs as drilling activity levels off. The cost of drilling and completing a Bakken horizontal well now ranges from $8.0 million to $8.5 million.

Pratt said operators can be expected to continue drilling in the play for years to come, as it remains economic even at oil prices of $80 per barrel. He added that the declining well performance being seen now could be reversed by initiatives being led by a handful of independent operators. EOG Resources, for instance, is testing the use of longer horizontal laterals and more, stronger hydraulic fracturing stages; while Whiting Petroleum is experimenting with new completion designs to improve the flow rates of its wells.

Eagle Ford Shale is going strong

The Eagle Ford Shale in southern Texas is still going strong. Baker Hughes data shows more than 230 rigs are active there, accounting for around 13 percent of the roughly 1,770 rigs working in the U.S. IHS analyst Andrew Byrne told the forum that many Eagle Ford wells are reporting monthly production rates greater than 1,000 boe/d and even higher rates are being reported in the play's core oil areas in Karnes, DeWitt and Gonzalez counties.

Byrne said international buyers are more interested making investments in the Eagle Ford than in the Bakken and that is being reflected in the higher cost of land in the play. "The Bakken looks relatively cheap compared to the Eagle Ford," Byrne said. Notable players in the Eagle Ford include EOG Resources, GeoSouthern, Plains Exploration & Production, Marathon and ConocoPhillips/Burlington.

Emerging potential in the Utica Shale

Momentum is building in the Utica Shale in Ohio. Byrne said drilling activity is focused in the play's wet gas window due to its high content of more lucrative liquids and horizontal wells are yielding the highest initial production rates. Encouraging economic returns are also being seen in the play's dry gas window, although weak U.S. gas prices are discouraging drilling activity.

The play's oil window is another story. Even though the highest initial production rates are being reported in the oil window, the wells are unable to sustain the high production rates. Byrne said the drop from the initial production rate to the peak monthly production rate is about 60 percent for Utica oil wells, compared to an average of around 30 percent seen elsewhere.

Tuscaloosa Marine Shale shows promise

The Tuscaloosa Marine Shale extends across portions of southern Louisiana and Mississippi and is geologically similar to the Eagle Ford Shale. The play has not been proven commercial, but Byrne said it appears poised for growth because several companies hold substantial acreage positions, the needed infrastructure is in place, well performance has improved and drilling activity is increasing.

Momentum for the play has been building in recent months after a handful of wells yielded initial production rates greater than 1,000 boe/d thanks to the application of longer laterals and more, stronger hydraulic fracturing stages by operators Goodrich Petroleum and Encana. Early enthusiasm for the play had been tempered after the first few wells yielded disappointing results.

Byrne said even with the recent good news, the play is still a risky investment and more wells and production data are needed to assess its viability. Tuscaloosa Marine Shale wells are also expensive, with Goodrich and Encana estimating their longer lateral wells cost between $13 million to $15 million to drill and complete.

Focus shifting from acquiring land to developing holdings

Going forward, Pratt expects the focus in unconventional plays will shift away from the land acquisition phase and focus more on development activity. "We have seen four or five years of record merger and acquisition transactions in terms of dollars so a lot of companies have a lot of inventory on their plate". He added that some players in the unconventional space have already begun to step back and rationalize their portfolios, determining what plays are core to their businesses and what plays aren't.

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This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.