EOG Waiting Out Oil Prices

EOG Releases 2015 Q1 Report
EOG Releases 2015 Q1 Report

EOG Resources will continue to hold off on Bakken well completions  until crude prices stabilize.

Pulling back, slowing down and waiting it out is the preferred strategy for oil producers looking for strategies during the current pricing crisis.

During an earnings call, EOG says that they are benefiting greatly from the pull-back in activity and progress is being made to lowering cost in each phase of their operations. The company announced a first quarter loss net loss of $169.7 million.

Related: EOG Reduces 2015 Capex 40 Percent

Bakken Activity

The slowdown in activity has allowed EOG to focus on three things in its Bakken operations

  1. Operational efficiencies and lowering well cost. Currently, a typical 10,000 foot lateral is now drilled in just over 10 days.
  2. Using new technical data from our integrated completion process to further adjust and tailor high density completion designs to specific formation properties.  These modifications are leading to improved results.
  3. Maintain a more stable production base with minimal downtime
William Thomas, chairman and CEO commented that “the company has no interest in accelerating oil production at the bottom of the commodity cycle. “We continue to adjust to the lower oil price environment by reducing well costs and operating expenses and by making significant well productivity improvements through technology advancements.

Other Bakken Highlights

  • Well costs are currently 14% less than the 2014 well cost.
  • 2015 well costs will be as much as 20% below 2014 levels with a target of $7.4 million.
  • Began production on eight wells in two 500 foot space patterns in the partial area.
  • Initial per well production rates from a five-well pattern averaged 1,235 barrels of oil per day and a three-well pattern averaged 1,345 barrels of oil per day.
  • Focused activity on its Parshall Core acreage in the North Dakota Bakken where 500-foot spacing results were very encouraging.  Operational improvements continue to generate efficiency gains and lower well costs.  Average well costs in the first quarter were down 14 percent from 2014 levels.
Billy Helms - EVP, Exploration & Production said that “For the Bakken, as we continue to experiment with our completion designs we’re seeing different areas of the field have different rock properties and we’re tailoring those completion designs to match those rock properties.

Read more at EOGresources.com