Worldwide oil and gas company Murphy Oil (NYSE:MUR) is counting on the Eagle Ford Shale in South Texas to help grow the company's production to 300,000 barrels of oil equivalent (BOE) per day by 2015. (For background reading on investing in this sector, check out the Oil And Gas Industry Primer.)

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Murphy Oil expects to average 200,000 BOE per day of production in 2011 and has set a goal of increasing that production by 50% within five years. The company expects nearly half that production growth to come from the development of the Eagle Ford Shale in Texas.

Eagle Ford Shale
Murphy Oil has 220,000 net acres under lease in Texas that is prospective for the Eagle Ford Shale. The company hopes to boost production from almost nothing in 2010 to 45,000 BOE per day in 2015.

Murphy Oil is currently operating four rigs in the Eagle Ford Shale and will reach seven by the end of 2011. The company has drilled a total of 24 wells, 15 of which are already producing, while nine await completion services.

Murphy Oil has four project areas in Dimmitt, Karnes, McMullen, La Salle and Atascosa counties, and is currently developing a project in Karnes County. The company has 19,200 gross acres under lease here and estimates that this area will be producing 4,500 BOE per day by the end of 2011.

The company also has 240 drilling locations at this project, assuming 80 acre spacing, with an estimated ultimate recovery of 580,000 BOE per well. The company estimates that it has 65 million barrels of oil resource potential at the Karnes project, along with 65 Bcf of natural gas potential.

Murphy Oil's other three projects include Tilden in Atascosa County, Catarina in Dimmit County and Nueces in McMullen and La Salle Counties. The Tilden Project comprises approximately 79,000 gross acres with nearly 1,000 locations to exploit. Murphy Oil expects to sanction this project in August 2011.

Murphy Oil's Competitors
One operator at an early stage of the development of the Eagle Ford Shale is Penn Virginia (NYSE:PVA), which just increased its position to 12,700 net acres. The company plans to drill 29 wells in 2011. Crimson Exploration (Nasdaq:CXPO) has 6,700 net acres under lease that is prospective for the Eagle Ford Shale. The company estimates that it has 172 drilling locations on its acreage, with most of the opportunities in the oil window of the play.

Talisman Energy (NYSE:TLM) has 78,000 net acres and is aggressively ramping up its development here. The company will move from four to 10 rigs and add 25 net wells to sales in the Eagle Ford Shale during 2011.

The Bottom Line
The successful development of the Eagle Ford Shale is a key component of Murphy Oil's plan to grow production to 300,000 BOE per day by 2015.

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