Tickers in this Article: PVA, FST, CXPO, AXAS
The Eagle Ford Shale in Texas has become one of the fastest-growing areas for oil and gas development, with the exploration and production industry putting billions in capital into this onshore play. While many operators have been involved for several years, others have only recently established positions here or announced the first well.

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Growth
A recent study conducted by the Center for Community and Business Research at the University of Texas at San Antonio Institute for Economic Development estimates that 5,000 new wells will be drilled in the Eagle Ford Shale by 2020. Some believe that this estimate is too conservative.

Newbies
Penn Virginia (NYSE:PVA) entered the Eagle Ford Shale in 2010, and recently reported its first completion here. The well came in with an initial production rate of approximately 1,250 barrels of oil equivalent (BOE) per day, with 90% of the production composed of oil.

Penn Virginia also added to its holdings here, purchasing 4,100 net acres of leasehold for $14.5 million. The company has major plans for the Eagle Ford Shale in 2011, and has allocated $165 million, or 48% of its entire capital budget to this play. Penn Virginia will operate three rigs here in 2011 and drill 29 wells during the year.

Forest Oil (NYSE:FST) also reported its first non operated Eagle Ford Shale well, and just spud its first operated horizontal well here. The company plans to put $50 million in capital into this play in 2011, and may increase that allocation based on its progress during the year. Forest Oil has 106,000 net acres and plans to drill eight operated horizontal wells in 2011.

Some new entrants into the Eagle Ford Shale have decided to develop acreage in partnership with other operators. This is typically done to share the risk and cost of exploration and development of new areas.

Abraxas Petroleum Corporation (Nasdaq:AXAS) has 8,300 net acres and is involved in a joint venture with a private oil and gas company to develop its acreage in the Eagle Ford Shale. The company plans to drill four wells here in 2011, but will have all of its development costs covered by the drilling carry from its partner. Abraxas Petroleum's first well was reported with a good mix of production, including condensate and natural gas liquids. (This simple measure can help investors determine whether a stock is a good deal. See Value Investing Using The Enterprise Multiple.)

Crimson Exploration (Nasdaq:CXPO) and U.S. Energy just signed an agreement to jointly develop 4,675 gross acres in Zavala County, Texas. U.S. Energy will earn a 30% working interest in the acreage through an undisclosed payment of cash and a future drilling carry. The two companies plan to spud the first well here in the second quarter of 2011.

Crimson Exploration has other acreages outside the joint venture that is prospective for the Eagle Ford Shale, and reported that most of the leases are held by production through existing wells into other formations. This is an advantage, as the company can develop the acreage at a pace that it chooses.

The Bottom Line
The Eagle Ford Shale has been growing as fast as any onshore basin in North America, with dozens of operators drilling hundreds of wells over the last year. Despite this intense activity, the play has some new entrants that are at an early stage of development.

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