South Texas producers are mowing down the Austin Chalk as high-quality Eagle Ford Shale inventory declines. (Source: Shutterstock.com)
Natural gas is having a moment and South Texas wants in on the fun.
Growing gas demand and rising commodity prices have analysts anticipating production growth from gassy U.S. basins, like the Haynesville and Appalachia. Associated Permian gas output is also accelerating.
But don’t count out South Texas.
Natural gas production from the Eagle Ford region is expected to grow from 6.8 Bcf/d in 2024 to 7 Bcf/d in 2026, according to the U.S. Energy Information Administration.
South Texas producers see expanding LNG export demand looming on the horizon and are building up gassy portfolios on the Gulf Coast.
The Eagle Ford basin is still synonymous with the Eagle Ford Shale bench, which boomed with horizontal development in the late 2000s.
But it’s the Austin Chalk bench, overlying the deeper Eagle Ford, that’s driving the basin’s growth today.
Since 2020, Austin Chalk natural gas production has nearly tripled to 1.8 Bcf/d, per EIA data. Austin Chalk oil production has grown by 26%, or 26,000 bbl/d.
Eagle Ford gas still makes up 73% (5.5 Bcf/d) of the region’s natural gas supply.
South Texas’ top Austin Chalk developers include EOG Resources, SM Energy, Magnolia Oil & Gas, Lewis Energy Group, Crescent Energy, Kimmeridge Texas Gas (KTG) and GeoSouthern Energy II.
Emerging Austin Chalk producers include Black Mountain Oil & Gas, Rosewood Resources, and Japanese firm Mitsui E&P USA, Texas Railroad Commission (RRC) data show.
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EOG’s Dorado gas
EOG Resources continues to test and delineate the Austin Chalk in its South Texas Eagle Ford program.
The company’s natural-gas focused Dorado play in Webb County, Texas, spans around 160,000 net acres, EOG said in investor filings. EOG completed 21 net Dorado gas wells last year and plans to complete 25 more in 2025.
RRC data show that a considerable amount of EOG’s Dorado gas comes from the Austin Chalk.
Of the roughly 475 MMcf/d (gross) EOG produced in Webb County in 2024, nearly 74%—350 MMcf/d—came from Austin Chalk wells.
Most of the remaining 125 MMcf/d came from the Eagle Ford Shale.
24-hour IPs for EOG’s recent Dorado Austin Chalk wells have ranged between 20 MMcf/d to 24 MMcf/d, per RRC figures.
EOG has global visions for its Austin Chalk gas. The company has signed gas sales contracts linked to Brent, JKM and Henry Hub prices to diversify revenue for its Dorado gas.
EOG has also started service on a 1-Bcf/d gas pipeline, Verde, which connects the Dorado field with the Agua Dulce gas trading hub.
Outside of Dorado, EOG has landed a handful of Austin Chalk laterals in the Karnes Trough, RRC data shows.
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SM’s Austin Chalk
SM Energy began full development of the Austin Chalk in 2021 on its 155,000-acre South Texas position.
Since then, SM has been among the most active Austin Chalk developers in the far western Eagle Ford, near the Texas-Mexico border.
SM produced 339 MMcf/d (gross) in Webb County in 2024. Austin Chalk output averaged 191 MMcf/d; Eagle Ford, 148 MMcf/d.
The company is landing Austin Chalk laterals in the oil and liquids-rich gas windows of the play.
Fifteen Austin Chalk gas wells are seeing average 30-day IPs of 2,352 boe/d (26% oil, 61% liquids).
Another six Austin Chalk oil wells are averaging 1,056 boe/d (49% oil, 75% liquids) per well.
SM has significant running room in the Austin Chalk, President and CEO Herb Vogel told Oil & Gas Investor in an interview this year.
“The Austin Chalk is where the returns are right now,” Vogel said.
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Lewis Energy Group
Private, San Antonio-based E&P Lewis Energy Group, founded by industry veteran Rod Lewis, is another top South Texas gas producer.
Lewis Energy began targeting the Olmos and Escondido tight gas formations before the Eagle Ford Shale took off in 2008. But Lewis started development of the Austin Chalk in 2019.
Lewis’ gross operated Eagle Ford gas production averaged 573 MMcf/d in 2024; Austin Chalk production averaged 90 MMcf/d.
Last year, French energy firm TotalEnergies acquired a 45% stake in Lewis’ dry gas assets in South Texas.
Magnolia’s Giddings
Magnolia Oil & Gas is all-in on the Giddings Field’s Austin Chalk play.
The Giddings Field accounted for 77% of Magnolia’s fourth-quarter 2024 production, the company said in February earnings.
Magnolia’s fourth-quarter net Giddings production averaged 71,800 boe/d, including 26,200 bbl/d of crude, 22,100 bbl/d of NGL and 140 MMcf/d of gas.
Between 75% and 80% of Magnolia’s 2025 budget will be deployed in Giddings.
But Magnolia is also making Austin Chalk wells in the oily Karnes Trough in the basin’s core.
Austin Chalk gas accounted for 93% of Magnolia’s gross operated volumes reported to the RRC last year.
And Austin Chalk oil and NGL production accounted for 80% of Magnolia’s reported liquids output in 2024, per RRC figures.
Magnolia made a $125 million acquisition from a private operator last year to add 27,000 net acres in the Giddings Field.
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