NEW YORK (TheStreet) -- Plunging crude prices are not only hitting energy producers, but also high-cost oil- and gas-producing regions such as the Tuscaloosa Marine Shale, or TMS, in the southeastern U.S.

During the last few years, TMS, which is located beneath parts of Mississippi and Louisiana and which could hold about 7 billion barrels of oil reserves, has risen as the last major untapped shale oil-producing region of the U.S. When West Texas Intermediate crude prices were above $100 a barrel, which was less than five months ago, oil and gas producers were touting TMS as a region that could drive production growth.

For instance, Canada's Encana (ECA) - Get Report , which owns 200,000 net acres at TMS, called it one of its "growth assets." Similarly, Halcon Resources (HK) , the largest TMS leaseholder with around 315,000 net acres, earmarked the property as one of its core assets. During an interview with TheStreet in August, Halcon spokesman Scott Zuehlke said that TMS will start making meaningful contributions to the company's production in the second half of 2015.

For Halcon, that is not going to happen, according to the most recent report from Daniel Katzenberg, an analyst at Robert W. Baird who does not own the stock. Last month, Halcon said that it will pull its rigs out from TMS in 2015, which is in stark contrast to its previous plan to double the number of rigs. The move came on the back of nearly 39% drop in WTI crude prices during the last three months to less than $60 a barrel, the lowest level in more than five years. The company will play the role of a spectator at TMS until oil prices rise.

Similarly, earlier this month, Goodrich Petroleum (GDP) - Get Report , a small oil producer with a market capitalization of less than $250 million and with 306,000 net acres at TMS, slashed its 2015 capital-spending plan for TMS by 37%.

On the other hand, in an email to TheStreet, Encana spokesman Doug McIntyre said that there is "significant upside potential" at TMS. Historically, however, Encana hasn't made any big investments at TMS. In 2015, TMS, as well as two other regions, will get a total of less than 13% of Encana's annual capital budget.

The capital-spending cuts by Halcon and Goodrich, two of the largest players of TMS in terms of acreage, are spurred by the region's position as one of the most expensive places to drill for oil and gas in the U.S. According to various estimates, including from Tudor Pickering Holt and Bloomberg, TMS wells require WTI prices of about $80 a barrel to break even.

By comparison, North Dakota's Bakken shale formation and Colorado's Niobrara Shale would break even at between $65 and $75 a barrel. Some parts of Permian Basin in West Texas and Eagle Ford Shale in South Texas, on the other hand, are one of the most economical regions in the U.S. and are profitable even with oil at less than $60 a barrel.

TMS, unlike Bakken, Niobrara, Eagle Ford and the Permian Basin, is a relatively new play. Although the aforementioned companies have been working to improve their understanding about the region's geology and to develop new drilling technologies to reduce well costs, TMS is still in the early stages of development, which is the biggest reason behind its high costs.

In other words, even if oil prices recover to $70 a barrel in 2015, as predicted by some analysts, TMS producers will continue to lose money.

For Halcon and Encana, the lower crude prices have effectively eliminated TMS's potential as a driver for future production growth. The two companies, however, had little exposure to TMS, in terms of production, to begin with. Both of them were generating a majority of their output from other parts of the U.S. and from Canada.

Goodrich, on the other hand, has greater exposure to TMS and could be a casualty of deteriorating prospects of this play. According to its previous quarterly results, the company gets about 20% of its total production and 45% of its oil production from TMS.

Halcon and Goodrich didn't immediately respond to messages from TheStreet requesting comment.

Follow @Sarfaraz_A_Khan

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

TheStreet Ratings team rates ENCANA CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate ENCANA CORP (ECA) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and a generally disappointing performance in the stock itself."

You can view the full analysis from the report here: ECA Ratings Report

At the time of publication, the author held no positions in any of the stocks mentioned.