EOG Resources

EOG Resources led the push into the oil window of the Eagle Ford Shale oil play. The company began leasing in the oil window before many thought producing liquids from the formation would yield economic wells. The company has since amassed a position of almost 650,000 acres that stretches from Gonzales County down to La Salle and Webb counties. Drilling is concentrated in the oil window of the play where the company drills extended reach horizontal wells to recover commercial quantities of oil. The company estimates the play will contribute 1.6 Billion boe of potential reserves to the company over the lifetime of the asset.

EOG Resources, Inc. is a large independent (non-integrated) oil and natural gas company that operates in the Eagle Ford Shale. The company has proved reserves in the United States, Canada, offshore Trinidad and the United Kingdom’s North Sea.  EOG stock trades on the NYSE under the ticker EOG.

EOG’s strategy concentrates on growth through exploration with the drillbit. EOG is one of the most active drillers in both the United States and Canada, while building a reputation of delivering organic growth. Some of their largest production increases have come from EOG’s Central Texas, East Texas, North Louisiana, South Texas and Rocky Mountain operating areas.  Activity in the Eagle Ford Shale of South Texas has contributed significantly to the company’s reserves and the company will be developing the Eagle Ford for many years to come.

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EOG Eagle Ford Shale Quarterly Commentary

Press Release

November 6, 2012

The main takeaways from the company’s Eagle Ford updated were:

  • Monster Wells are improving – 16 wells came online with IPs between 2,500 and 4,800 b/d of oil
  • Continue to test multi-well pilots at denser spacing (65-90 acres)
  • Oil is being priced at LLS, which is trading at a premium to WTI
  • Average well costs are falling near $5.5 million
  • 20 rigs are expected to drill 320 net wells in 2012, with an average drilling time that has decreased to 13 days per well.

EOG continued to post outstanding well results in the Eagle Ford. In Gonzales County, the Baker-DeForest Unit #4H came on line at 4,598 barrels of oil per day (b/d) with 488 barrels per day (b/d) of natural gas liquids (NGLs) and 2.9 million cubic feet per day (mmcfd) of natural gas. The Baker-DeForest Unit #1H, #2H, #3H and #12H were turned to sales at initial rates ranging from 3,346 to 4,216 b/d with 457 to 537 b/d of NGLs and 2.7 to 3.2 mmcfd of natural gas. EOG has 100 percent working interest in these five Baker-DeForest wells.

Near the DeWitt County line in Gonzales County, a newer area for EOG, the Reilly Unit #1H had an initial oil production rate of 3,579 b/d with 483 b/d of NGLs and 2.9 mmcfd of natural gas. EOG has 70 percent working interest in this well. Also in the new area northeast of the Reilly, the Boysen Unit #1H and Baird Heirs Unit #4H were completed at 2,540 and 2,242 b/d with 268 and 181 b/d of NGLs and 1.6 and 1.1 mmcfd of natural gas, respectively. EOG has 100 percent working interest in both wells. EOG also has 100 percent working interest in the Henkhaus Unit #8H, which was completed offsetting the previously drilled Henkhaus Unit #10H and #11H. The #8H had an initial production rate of 4,012 b/d with 495 b/d of NGLs and 3.0 mmcfd of natural gas.

In the western region of its Eagle Ford acreage where EOG increased drilling activity in the second half of the year, the Lowe Pasture #9H and #10H were completed in McMullen County at initial production rates of 1,905 and 2,075 b/d with 112 and 115 b/d of NGLs and 0.673 and 0.688 mmcfd of natural gas, respectively. The Martindale L&C #1H and #2H in La Salle County began sales at 1,522 and 1,876 b/d with 220 and 208 b/d of NGLs and 1.3 and 1.2 mmcfd of natural gas, respectively.

August 3, 2012

In the South Texas Eagle Ford, EOG drilled its best well to date. The Boothe Unit #10H in Gonzales County began initial production at 4,820 barrels of oil per day (Bopd) while an offset well, the Boothe Unit #9H, had an initial production rate of 3,708 Bopd. The Boothe wells produced 972 and 527 barrels per day (Bpd) of natural gas liquids (NGLs) and 4.5 and 2.4 million cubic feet per day (MMcfd) of associated natural gas production, respectively.

“We continually focus on making better wells and with an initial flow rate in excess of 4,800 barrels of crude oil per day, EOG’s Boothe Unit #10H is clearly the top producing oil well in the entire Eagle Ford play to date,” Papa added.

Drilled from the same pad as the Boothe wells to minimize costs, the Dreyer Unit #19H and #20H were turned to sales at initial rates of 3,703 and 2,650 Bopd with 460 and 300 Bpd of NGLs and 2.1 and 1.4 MMcfd of natural gas, respectively. EOG has 100 percent working interest in these four wells.

Also in Gonzales County, the Henkhaus Unit #9H, #10H and #11H flowed at individual initial well rates of 4,184, 3,546, and 4,140 Bopd, with 633, 730 and 670 Bpd of NGLs and 2.9, 3.4 and 3.1 MMcfd of natural gas, respectively. The Guadalupe Unit #5H, #6H, #7H and #8H were turned to sales early in the second quarter at initial individual crude oil production rates ranging from 2,675 to 3,900 Bopd with 175 to 590 Bpd of NGLs and 800 thousand cubic feet per day (Mcfd) to 2.7 MMcfd of natural gas. EOG has 100 percent working interest in these seven wells.

In Karnes County, the Crews Unit #1H, #2H, #3H, #4H and #5H initially produced at individual well rates ranging from 2,645 to 2,986 Bopd with 193 to 390 Bpd of NGLs and 900 Mcfd to 1.8 MMcfd of natural gas. EOG has 100 percent working interest in these five wells.

EOG’s marketing options for its prolific Eagle Ford production expanded in July when Enterprise Products Partners L.P. (Enterprise) began first commercial operation of the first phase of a 24-inch crude oil pipeline linking the Eagle Ford with extensive Houston area refining markets. Enterprise also has commissioned a new natural gas processing plant, as well as rich natural gas pipelines to gather and transport production to its Mont Belvieu NGL complex.

May 9, 2012

In the Eagle Ford Shale, EOG is pursuing field development on spacing densities of 65 to 90 acres per well. Production rates confirm well results as good as or better than, previous development patterns. Additional testing is underway to determine the viability of further downspacing and higher recoveries.

In Gonzales County, the company drilled two new Henkhaus wells offsetting a series of six Henkhaus wells completed in late 2011. The Henkhaus Unit #5H well, drilled with a short lateral offsetting the previously drilled and producing Henkhaus Unit #4H, was turned to sales at 2,775 barrels of oil per day (Bopd) with 438 barrels per day (Bpd) of natural gas liquids (NGLs) and 2.3 million cubic feet per day (MMcfd) of natural gas. The Henkhaus Unit #4H, on-line since mid-December 2011, has produced over 130 thousand barrels of oil equivalent. The Henkhaus Unit #12H, drilled offsetting the Henkhaus Unit #5H, began flowing at an initial rate of 3,000 Bopd with 425 Bpd of NGLs and 2.2 MMcfd of natural gas. Drilled on 65-acre spacing between wells, the Lord A Unit #2H and A Unit #3H were completed at 2,448 and 2,562 Bopd with 440 and 400 Bpd of NGLs and 2.3 and 2.1 MMcfd of natural gas, respectively. EOG has 100 percent working interest in these wells. Also in Gonzales County, the Brothers #4H, #5H and #6H began initial production at 3,424, 2,260 and 2,334 Bopd with 370, 233 and 274 Bpd of NGLs and 1.9, 1.2 and 1.4 MMcfd of natural gas, respectively. After 30 days on-line, these wells, in which EOG has 90 percent working interest, were producing 2,046, 1,427 and 1,553 Bopd, respectively.

In Karnes County, the center of EOG’s 120-mile long Eagle Ford trend, the Alton Unit #2H, Unit #3H, Unit #4H, Unit #5H and Unit #6H were drilled on 85-acre spacing. The wells, in which EOG has 100 percent working interest, were completed to sales at initial individual production rates ranging from 1,940 to 3,158 Bopd with 206 to 329 Bpd of NGLs and 1.1 to 1.7 MMcfd of natural gas. The Alton Unit #6H had an average 30-day production rate of 1,770 Bopd. In McMullen County, the southwestern part of EOG’s acreage, the Thelma-Brite #4H and #6H were completed to sales at rates of 1,697 and 1,902 Bopd each with 96 Bpd of NGLs and 500 thousand cubic feet per day (Mcfd) of natural gas, respectively.

Our confidence level in the Eagle Ford is very high. Even after we implemented denser well spacing earlier this year, individual well performance remains remarkably strong. In fact, based on ongoing completion refinements, 30-day crude oil production rates from recent wells have increased,” Papa said.

February 17, 2012

Production at year-end was 66 thousand barrels of oil equivalent per day, net, 78 percent of which was crude oil.

Starting 2011 with a 12-rig drilling program that ramped up to 26 rigs in December, EOG drilled and completed 244 net wells during the year with a focus on optimizing completion techniques, in addition to reducing drilling days and overall well costs. Moving into development mode early in 2011, EOG began shifting its attention to increasing recovery of the oil-in-place in the field. To test the impact of well spacing on reserve recoveries, EOG drilled eight pilot programs that included 33 total wells. Based on production analysis from these pilots and reservoir modeling, EOG is now pursuing development drilling on 65 to 90-acre spacing, significantly tighter than the original density of 130 acres between wells.

After taking into account both the excellent results from the 375 wells it has drilled to date across its 120-mile acreage position and the results from the down-spaced drilling tests, EOG has increased its estimated potential reserves in the Eagle Ford from 900 million barrels of oil equivalent (MMboe) to 1,600 MMboe, net after royalty (NAR). The 700 MMBoe, NAR, or 78 percent increase represents an estimated 6 percent recovery factor. On its 572,000 net acres in the prolific oil window, EOG has identified approximately 3,200 remaining drilling locations and increased its average per well estimate to 450 thousand barrels of oil equivalent (MBoe), NAR.

EOG’s well results in the Eagle Ford continue to lead the industry. In Gonzales County, the Henkhaus Unit #1H, #2H, #3H, #4H, #6H and #7H wells were drilled on a pattern of 65-acre spacing. The six wells were completed to sales at individual initial production rates ranging from 2,424 to 3,733 barrels of oil per day (Bopd) with 442 to 679 barrels per day (Bpd) of natural gas liquids (NGLs) and 2.2 to 3.4 million cubic feet per day (MMcfd) of natural gas per well. The Mitchell Unit #3H, #4H, #5H, #6H, #7H and #8H wells, which were also drilled as down-spaced pilots, began initial production at 2,833 to 3,527 Bopd with 275 to 485 Bpd of NGLs and 1.4 to 2.4 MMcfd of natural gas per well. The Meyer #3H, #4H, #5H, #8H and #9H wells had individual peak oil rates ranging from 1,647 to 2,813 Bopd with 199 to 413 Bpd of NGLs and 1.0 to 2.1 MMcfd of natural gas. EOG has 100 percent working interest in these 17 Gonzales County wells.

November 1, 2011

EOG’s 2011 improved completion techniques and cost optimization practices continue to drive operational gains and enhanced well production results. Reflecting this combination, EOG has posted its best wells to date in the South Texas Eagle Ford. In Gonzales County, the northeastern-most part of EOG’s acreage, the Mitchell Unit #1H and #2H began initial production at peak rates of 2,821 and 3,090 barrels of crude oil per day (Bopd) with 2.8 and 2.9 million cubic feet per day (MMcfd) of rich natural gas, respectively. The Meyer Unit #1H, #2H and #6H started sales at peak crude oil rates of 2,372, 1,600 and 2,918 Bopd, respectively, and produced 1.8, 2.2 and 2.7 MMcfd of associated rich natural gas, respectively. The Kerner Carson Unit #1H, #2H, #4H, #6H, #8H and #10H wells were turned to sales at crude oil production rates ranging from 1,580 to 2,239 Bopd with 1.2 to 1.9 MMcfd of rich natural gas. EOG has 100 percent working interest in these Gonzales County wells.

South of Gonzales in Karnes County, the center of EOG’s acreage, the AFO Unit #1H, #2H and #3H began initial maximum production at 2,289, 1,700 and 1,548 Bopd, respectively, with rich natural gas production ranging from 1.2 to 1.6 MMcfd. EOG has 100 percent working interest in these wells. EOG has 50 percent working interest in the Deleon-Reinhard Unit #1H and Deleon-Wiatrek Unit #1H wells, which were completed at peak crude oil rates of 2,235 Bopd with 1.2 MMcfd and 2,161 Bopd with 1.7 MMcfd of rich natural gas, respectively.

In LaSalle County, EOG’s southwestern-most acreage, the Naylor Jones A #6H and A #7H began initial production at 1,582 and 1,342 Bopd with 1.5 and 1.6 MMcfd of rich natural gas, respectively. EOG has 100 percent working interest in these wells.

“As we apply what we’ve learned about the Eagle Ford across our extensive operations, EOG’s production results just get better and better,” Papa said. “We are also seeing early positive results from each of our seven downspacing pilot programs. Drilling wells more tightly spaced than our original 130-acre patterns provides even more development opportunities for EOG.”

August 4, 2011

“…Early in its transition to a liquids-focused company, EOG identified the rich oil potential of the South Texas Eagle Ford Shale and amassed a large acreage position in the sweet spot of the crude oil window.

‘We are finding that well results across our 535,000 net acre position in the Eagle Ford oil window are remarkably similar. The wealth of drilling, completion and production data at our fingertips is reflected in the steadily rising momentum of our operations and success in achieving more predictable results,’ Papa said.

As EOG further defines geologic sub-trends and refines completion techniques, the majority of its Eagle Ford wells are being completed to sales at initial production rates in excess of 1,000 barrels of crude oil per day (Bopd). Leveraging this consistency, EOG ramped up its drilling activity from 10 rigs at the beginning of 2011 to its current intensive program of 22 rigs.

In Gonzales County where EOG is actively drilling, the King Fehner Unit #2H, #4H, #5H and #6H wells began initial production at maximum rates ranging from 1,238 to 1,487 Bopd with 1.2 to 1.6 million cubic feet per day (MMcfd) of rich natural gas.

‘These are the first Eagle Ford wells that EOG has tested with a tighter spacing pattern. If downspacing proves economically viable, we have the potential to significantly increase our reserves in the Eagle Ford,’ Papa said.

EOG reported production rates from other successful wells in Gonzales County. The Merritt #4H had a peak initial production rate of 1,361 Bopd with 0.6 MMcfd of rich natural gas. The Steen Unit #1H, #2H, #4H and #6H came online with production rates ranging from 663 to 1,269 Bopd with 0.7 to 1.4 MMcfd of rich natural gas. In its far northeastern acreage where EOG announced success from a fault block earlier this year, the Hill Unit #1H and #3H were completed. They flowed to sales at peak rates of 1,461 and 1,734 Bopd with 1.0 and 1.3 MMcfd of rich natural gas, respectively.

In LaSalle County, the Naylor Jones A #2H, 99 #1H and 96 #1H provided additional confirmation of the consistent quality of EOG’s 120-mile acreage trend. The wells, located in the southwestern part of EOG’s block, had strong production rates ranging from 997 to 1,153 Bopd with 1.0 to 2.3 MMcfd of rich natural gas. In Karnes County, the heart of EOG’s extensive acreage, the Max Unit #1H had a peak initial production rate of 1,591 Bopd with 1.5 MMcfd of rich natural gas. Also in Karnes County, the Braune Unit #1H was turned to sales at an initial rate of 1,611 Bopd with 1.0 MMcfd of rich natural gas. EOG has 100 percent working interest in all 16 of these Eagle Ford wells.

‘With the 77 percent crude oil mix of our Eagle Ford acreage position, this large, highly rated resource play has become a significant contributor to fueling EOG’s transition to an oil company in a short period of time,’ Papa said. …”

May 5, 2011

“..Across its 120-mile South Texas Eagle Ford position in the crude oil window, EOG brought a number of highly productive wells to sales during the first quarter. In Karnes County, near the center of EOG’s acreage, the Beynon Unit #2H and #3H wells began initial sales at rates of 1,747 and 1,100 Bopd with 1.4 and 0.7 MMcfd of rich natural gas, respectively. Also in Karnes County, the Dullnig Unit #5H and Joseph #3H began production at 1,353 and 1,317 Bopd, respectively, with 1.2 MMcfd of rich natural gas for both wells. On the southwest part of EOG’s acreage in LaSalle County, the Naylor Jones Unit 95#1H and A#1H were completed to sales at 790 and 955 Bopd with 0.8 and 1.3 MMcfd of rich natural gas, respectively. On the northeast part of EOG’s acreage in Gonzales County, the HFS #3H and #5H began production at 1,345 and 1,620 Bopd with 0.8 and 1.3 MMcfd of rich natural gas, respectively.

Also in the Eagle Ford, EOG drilled its most northeastern well to date in a previously untested fault block in Gonzales County. The Hill Unit #2H was completed to sales at 1,233 Bopd with 685 Mcfd of rich natural gas. EOG has 100 percent working interest in these nine Eagle Ford wells.

‘Every single well we’ve drilled across our 120-mile Eagle Ford position that runs from southwest La Salle County to northeast Gonzales County is productive. That’s a success rate of 100 percent,’ Papa said. ‘With 520,000 net acres, EOG holds the largest position of any operator in the crude oil window of this resource play, which according to industry studies, represents one of the most significant oil discoveries in the lower 48 during the last 40 years’…”

Source: EOG Resources

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