The Texas oil industry for several decades seemed headed into territory best described by the old saying “all hat and no cattle.”
But the state appears awash again in oil and gas, with drilling in fields across the state, including one West Texas shale formation that could dwarf both the Eagle Ford Shale in South Texas and North Dakota’s famous Bakken Shale.
Texas recently had 839 drilling rigs operating — nearly half of all rigs in the U.S. and 22.7 percent of rigs worldwide, according to the Feb. 15 Baker Hughes Rig Count.
And most of those rigs were working in five regions of the state: the Permian Basin in West Texas, the Eagle Ford Shale in South Texas, the Granite Wash in the Panhandle, the Barnett Shale in North Texas and the Haynesville Shale in East Texas.
“You’d be hard pressed to find anybody who saw this coming,” said economist Karr Ingham, noting that there are more drilling rigs in the Permian Basin than during the 1980s boom. “That’s a stunning turn of events right there.”
West Texas has a multitude of overlapping oil fields, but the Cline Shale has created a stir. The formation runs about 140 miles north to south and about 70 miles wide through Howard, Glasscock, Reagan and Sterling Counties.
Early estimates for the Cline, based on Devon Energy’s exploration in the area, put the estimated recoverable reserves at 30 billion barrels of oil.
By comparison, the U.S. Geological Survey estimates the Eagle Ford holds up to 7 billion to 10 billion in recoverable reserves, while the Bakken Shale could hold as much as 4.3 billion barrels of recoverable oil.
Benjamin Shattuck, an analyst with Wood Mackenzie in Houston, said just 80 to 100 wells have been drilled in the Cline, and data is sketchy so far. He expects the industry in six months will have twice as much information on Cline Shale as it does now.
“Operators are doing their best to keep the result confidential,” he said. “The big thing in the Cline is that results so far have been good.”
Peggy Williams, editorial director with Hart Energy, said the Permian Basin, with more than 400 drilling rigs operating, is the most complex field in the state, with both horizontal and vertical drilling in multiple geologic horizons. The formations are so thick that they’re using vertical hydraulic fracturing, the process of using water, sand and chemicals pumped at high pressure to break open dense rock.

“It’s a very prolific conventional basin that produces in many, many zones,” Williams said. “If you’re in an area that’s produced a lot of oil, it’s a good place to look for more oil. In the Permian you have a world-class petroleum basin. There’s just oil all over the place.”
Hart Energy estimates the Permian Basin could produce 1.65 million barrels of oil equivalent per day by 2020, just from unconventional drilling that uses hydraulic fracturing.
The company estimates South Texas’ Eagle Ford Shale could produce 2.4 million barrels of oil equivalent per day by 2020.
“It’s enormous, enormous,” said Williams. “That’s more than some OPEC countries produce.”
In the Fort Worth area, the Barnett Shale is the grandfather of unconventional drilling — the place where operators first used both horizontal drilling and hydraulic fracturing.
Although drilling has declined, with most of the recent business activity coming in the form of asset sales, Chris Robertson, an analyst with Wood Mackenzie, said it’s still the third most productive U.S. gas field behind the Marcellus in Pennsylvania and the Haynesville in Louisiana.
“The Barnett is very well understood,” he said. “It’s a good source of cash flow that’s predictable.”
And natural gas prices have started to rise a bit from historic lows, driving a slight uptick in drilling in the Barnett. “Rigs have started to return to these dry gas plays,” Robertson said. “It’s nothing to write home about, but they are returning.”
In East Texas, there were 21 drilling rigs targeting the Haynesville/Bossier Shale as of Feb. 15.
The formation is more productive and lucrative in Louisiana, but it primarily produces natural gas, so operators are largely drilling because they must if they want to hold onto their mineral leases.
But there’s one area of the field, the Cotton Valley formation in Rusk, Panola and Harrison counties, where companies have been able to produce a higher proportion of the more profitable crude oil and natural gas liquids.
“In the Haynesville right now our view is that operators can make money in the top-tier core areas,” Robertson said. “On average there’s no economic reason to be drilling other than to hold acreage or to explore the liquids prone areas in the Cotton Valley.”
In the Panhandle, 47 drilling rigs were recently targeting the Granite Wash, a tight sandstone that extends into Oklahoma. “There’s quite a lot going on there, too, even though it’s primarily natural gas,” said Ingham.
Most of the state’s drilling is focused on finding crude oil because dry natural gas is selling near historic lows. But the heat content of the Granite Wash gas is so great that it sells at a premium of 30 percent to 50 percent over standard prices.
“You can sell it for more, so the natural gas and the liquids are a big deal up here,” Ingham said.
jhiller@express-news.net
Twitter: @Jennifer_Hiller
Photo: Eric Gay / Associated Press
A steady stream of trucks pass through the small town of Kenedy, Texas, Wednesday, May 9, 2012. A UTSA report says South Texas's Eagle Ford Shale supported nearly 48,000 jobs last year while creating overnight boom towns cashing in on a $25 billion economic windfall. The energy rush that started in 2008 mushroomed into nearly 1,700 wells last year. (AP Photo/Eric Gay)
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A steady stream of trucks pass through the small town of Kenedy, Texas, Wednesday, May 9, 2012. A UTSA report says South Texas's Eagle Ford Shale supported nearly 48,000 jobs last year while creating overnight
... more
Photo: Eric Gay / Associated Press
A drilling rig is seen near Kenedy, Texas, Wednesday, May 9, 2012. A UTSA report says South Texas's Eagle Ford Shale oil and gas bonanza supported nearly 48,000 jobs last year while creating overnight boom towns cashing in on a $25 billion economic windfall. The energy rush that started in 2008 mushroomed into nearly 1,700 wells last year.(AP Photo/Eric Gay)
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A drilling rig is seen near Kenedy, Texas, Wednesday, May 9, 2012. A UTSA report says South Texas's Eagle Ford Shale oil and gas bonanza supported nearly 48,000 jobs last year while creating overnight boom
... more
Photo: Eric Gay / Associated Press
A drilling rig is seen near Kenedy, Texas, Wednesday, May 9, 2012. A UTSA report says South Texas's Eagle Ford Shale oil and gas bonanza supported nearly 48,000 jobs last year while creating overnight boom towns cashing in on a $25 billion economic windfall. The energy rush that started in 2008 mushroomed into nearly 1,700 wells last year.(AP Photo/Eric Gay)
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A drilling rig is seen near Kenedy, Texas, Wednesday, May 9, 2012. A UTSA report says South Texas's Eagle Ford Shale oil and gas bonanza supported nearly 48,000 jobs last year while creating overnight boom
... more
Photo: Eric Gay / Associated Press
A drilling rig is seen near Kenedy, Texas, Wednesday, May 9, 2012. A UTSA report says South Texas's Eagle Ford Shale oil and gas bonanza supported nearly 48,000 jobs last year while creating overnight boom towns cashing in on a $25 billion economic windfall. The energy rush that started in 2008 mushroomed into nearly 1,700 wells last year.(AP Photo/Eric Gay)
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A drilling rig is seen near Kenedy, Texas, Wednesday, May 9, 2012. A UTSA report says South Texas's Eagle Ford Shale oil and gas bonanza supported nearly 48,000 jobs last year while creating overnight boom
... more
Photo: Eric Gay / Associated Press
A drilling rig is seen near Kenedy, Texas, Wednesday, May 9, 2012. A UTSA report says South Texas's Eagle Ford Shale oil and gas bonanza supported nearly 48,000 jobs last year while creating overnight boom towns cashing in on a $25 billion economic windfall. The energy rush that started in 2008 mushroomed into nearly 1,700 wells last year.(AP Photo/Eric Gay)
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A drilling rig is seen near Kenedy, Texas, Wednesday, May 9, 2012. A UTSA report says South Texas's Eagle Ford Shale oil and gas bonanza supported nearly 48,000 jobs last year while creating overnight boom
... more
Photo: Eric Gay / Associated Press
A "no vacancy" sign is seen in the window of a motel, May 9, 2012, in Kennedy, Texas. A UTSA report says South Texas's Eagle Ford Shale oil and gas bonanza supported nearly 48,000 jobs last year while creating overnight boom towns cashing in on a $25 billion economic windfall. The energy rush that started in 2008 mushroomed into nearly 1,700 wells last year. (AP Photo/Eric Gay)
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A "no vacancy" sign is seen in the window of a motel, May 9, 2012, in Kennedy, Texas. A UTSA report says South Texas's Eagle Ford Shale oil and gas bonanza supported nearly 48,000 jobs last year while creating
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Photo: Eric Gay / Associated Press
An oil truck passes a "now hiring" sign, Wednesday, May 9, 2012, in Kenedy, Texas. A UTSA report says South Texas's Eagle Ford Shale supported nearly 48,000 jobs last year while creating overnight boom towns cashing in on a $25 billion economic windfall. The energy rush that started in 2008 mushroomed into nearly 1,700 wells last year. (AP Photo/Eric Gay)
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An oil truck passes a "now hiring" sign, Wednesday, May 9, 2012, in Kenedy, Texas. A UTSA report says South Texas's Eagle Ford Shale supported nearly 48,000 jobs last year while creating overnight boom towns
... more
Photo: Eric Gay / Associated Press
Because housing is in high demand, travel trailers are up for rent in Kenedy, Texas, Wednesday, May 9, 2012. A UTSA report says South Texas's Eagle Ford Shale oil and gas bonanza supported nearly 48,000 jobs last year while creating overnight boom towns cashing in on a $25 billion economic windfall. The energy rush that started in 2008 mushroomed into nearly 1,700 wells last year.(AP Photo/Eric Gay)
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Because housing is in high demand, travel trailers are up for rent in Kenedy, Texas, Wednesday, May 9, 2012. A UTSA report says South Texas's Eagle Ford Shale oil and gas bonanza supported nearly 48,000 jobs
... more
Photo: Eric Gay / Associated Press
Oil workers in the Eagle Ford region are seen at a site near Karnes City, Texas, Wednesday, May 9, 2012. A UTSA report says South Texas's Eagle Ford Shale supported nearly 48,000 jobs last year while creating overnight boom towns cashing in on a $25 billion economic windfall. The energy rush that started in 2008 mushroomed into nearly 1,700 wells last year. (AP Photo/Eric Gay)
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Oil workers in the Eagle Ford region are seen at a site near Karnes City, Texas, Wednesday, May 9, 2012. A UTSA report says South Texas's Eagle Ford Shale supported nearly 48,000 jobs last year while creating
... more
Photo: Eric Gay / Associated Press
Oil workers in the Eagle Ford region are seen at a site near Karnes City, Texas, Wednesday, May 9, 2012. A UTSA report says South Texas's Eagle Ford Shale supported nearly 48,000 jobs last year while creating overnight boom towns cashing in on a $25 billion economic windfall. The energy rush that started in 2008 mushroomed into nearly 1,700 wells last year. (AP Photo/Eric Gay)
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Oil workers in the Eagle Ford region are seen at a site near Karnes City, Texas, Wednesday, May 9, 2012. A UTSA report says South Texas's Eagle Ford Shale supported nearly 48,000 jobs last year while creating
... more
Photo: Eric Gay / Associated Press
Eugene Martinez, left, Max Gasner, and Joseph Placencia go through a truck inspection exercise for drivers at Frac Tech, now called FTI International near Pleasanton on April 6 2012. The demand is high for truck drivers in the Eagle Ford shale industry. Billy Calzada / San Antonio Express-News
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Eugene Martinez, left, Max Gasner, and Joseph Placencia go through a truck inspection exercise for drivers at Frac Tech, now called FTI International near Pleasanton on April 6 2012. The demand is high for
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Photo: BILLY CALZADA / San Antonio Express-News
Eugene Martinez inspects a truck during training for drivers at Frac Tech, now called FTI International, on Friday, April 6, 2012. Billy Calzada / San Antonio Express-News
Eugene Martinez inspects a truck during training for drivers at Frac Tech, now called FTI International, on Friday, April 6, 2012. Billy Calzada / San Antonio Express-News
Photo: BILLY CALZADA / San Antonio Express-News
Floor hands David Vannapha, left, Mario Ramos, center, and Jose Garza make a pipe connection on the drill string on the Orion Perseus drilling rig near Encinal in Webb County, Texas, U.S., on Monday, March 26, 2012. The Perseus is drilling for oil and gas in the Eagle Ford Shale, a sedimentary rock formation underlying an area of South and East Texas. Photographer: Eddie Seal/Bloomberg *** Local Caption *** David Vannapha; Mario Ramos; Jose Garza
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Floor hands David Vannapha, left, Mario Ramos, center, and Jose Garza make a pipe connection on the drill string on the Orion Perseus drilling rig near Encinal in Webb County, Texas, U.S., on Monday, March 26,
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Photo: Eddie Seal / Eddie Seal
Floor hands Jose Garza, left, and Jose Salinas set slips to hold drilling pipe in the mouse hole on the Orion Perseus drilling rig near Encinal in Webb County, Texas, U.S., on Monday, March 26, 2012. The Perseus is drilling for oil and gas in the Eagle Ford Shale, a sedimentary rock formation underlying an area of South and East Texas. Photographer: Eddie Seal/Bloomberg *** Local Caption *** Jose Garza; Jose Salinas
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Floor hands Jose Garza, left, and Jose Salinas set slips to hold drilling pipe in the mouse hole on the Orion Perseus drilling rig near Encinal in Webb County, Texas, U.S., on Monday, March 26, 2012. The
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Photo: Eddie Seal / Eddie Seal
Floor hand Alejandro Cabanas holds a line from the floor on Orion Drilling Co.'s Perseus drilling rig near Encinal in Webb County, Texas, U.S., on Monday, March 26, 2012. The Perseus is drilling for oil and gas in the Eagle Ford Shale, a sedimentary rock formation underlying an area of South and East Texas. Photographer: Eddie Seal/Bloomberg *** Local Caption *** Alejandro Cabanas
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Floor hand Alejandro Cabanas holds a line from the floor on Orion Drilling Co.'s Perseus drilling rig near Encinal in Webb County, Texas, U.S., on Monday, March 26, 2012. The Perseus is drilling for oil and
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Photo: Eddie Seal / Eddie Seal
A drilling rig is seen near Kenedy, Texas, Wednesday, May 9, 2012. A UTSA report says South Texas's Eagle Ford Shale oil and gas bonanza supported nearly 48,000 jobs last year while creating overnight boom towns cashing in on a $25 billion economic windfall. The energy rush that started in 2008 mushroomed into nearly 1,700 wells last year.(AP Photo/Eric Gay)
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A drilling rig is seen near Kenedy, Texas, Wednesday, May 9, 2012. A UTSA report says South Texas's Eagle Ford Shale oil and gas bonanza supported nearly 48,000 jobs last year while creating overnight boom
... more
Photo: Eric Gay / Associated Press
Commercial and industrial properties are being developed along the Interstate 37 corridor near Pleasanton, Texas as the Eagle Ford shale oil and gas exploration plays out. This area near 3006 and Interstate 37 is unusual in that it has a feeder road (right) running parallel to the interstate (left) for vehicles to operate on from the new businesses. (Wednesday May 9, 2012) John Davenport/San Antonio Express-News
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Commercial and industrial properties are being developed along the Interstate 37 corridor near Pleasanton, Texas as the Eagle Ford shale oil and gas exploration plays out. This area near 3006 and Interstate 37
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Photo: JOHN DAVENPORT / SAN ANTONIO EXPRESS-NEWS
Garrett Ruple stands next to some commercial property recently sold on Interstate 37 near Pleasanton, Texas. Ruple and his family of Ruple Properties is developing and selling properties to companies taking part in the Eagle Ford shale oil boom. (Wednesday May 9, 2012) John Davenport/San Antonio Express-News
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Garrett Ruple stands next to some commercial property recently sold on Interstate 37 near Pleasanton, Texas. Ruple and his family of Ruple Properties is developing and selling properties to companies taking
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Photo: JOHN DAVENPORT / SAN ANTONIO EXPRESS-NEWS
West Texas shale could dwarf Eagle Ford