EOG Acreage In The Eagle Ford Shale
In the past three years EOG Resources quietly snatched up some of the most prime acreage in the Eagle Ford shale. EOG Resources now holds over 535,000 net acres in the oil window, 26,000 net acres in the wet gas window, and 49,000 acres in the dry gas window for a total of 610,000 net acres. By cherry picking some of the best acreage in the volatile oil window, with shale thickness up to 250′ or more, EOG is now the leading oil producer in the Eagle Ford shale. In a recent investor presentation the company is optimistic about reducing the original planned well spacing of approximately 130 acres per well to fewer acres. This effectively could mean many more potential well locations. Rosetta Resources, a smaller player in the Eagle Ford, is experimenting with 50 acre per well spacing on the Gates Ranch in Webb County.
EOG’s expected EUR (estimated ultimate recovery) from wells in the western part of the play is approximately 430,000 barrels per well. In the eastern part of the play the approximate EUR of EOG Resources wells is estimated to be 460,000 barrels. ATROR or “after tax rate of return” for EOG’s Eagle Ford shale wells is approximately 95% to 140%.
EOG Resources expects to reduce well costs in 2012 by one million dollars per well by using self – sourced frac jobs. The EOG Resources Frac Sand & Resin Sand Enhancement Plant is under construction near Victoria, TX.
So far EOG has had a 100% successful completion history across more than 120 miles of the Eagle Ford shale. 96 net wells were drilled in 2010 and approximately 250 will be drilled in 2011. When a new 70,000 barrel per day rail unloading terminal in St. James Louisiana is completed in the first quarter of 2012, EOG Resources will begin selling Eagle Ford shale crude at something between higher LLS (Light Louisiana Sweet) crude prices, and West Texas Intermediate (WTI). In addition, an approximate $4 to $5 cost savings is achieved by shipping by rail vs. by truck.
Below is a synopsis of EOG’s acreage holding in the Eagle Ford shale. (Image is link to investor presentation).