EOG Resources is one of the largest producers in the Bakken Shale. The company made what still stands as the most prolific discover in the play when it explored the Parshall Field in Mountrail County, ND, in 2006. The company has since expanded development to other areas of the basin.
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EOG Quarterly Bakken Results
During the first quarter, the company did not report on specific Bakken assets, but announced a net loss of $471.8 million.
EOG implemented its previously announced strategy to focus capital in areas which generate premium rates of return. This move significantly improved average well performance and contributed to EOG's strong production in the first quarter 2016. U.S. crude oil volumes exceeded the high end of the company's forecast in the first quarter 2016.
In addition, EOG continued to reduce costs across its operations. During the first quarter of 2016, lease and well expenses decreased 29 percent and transportation costs decreased 12 percent compared to the same prior year period, both on a per-unit basis. Total general and administrative expenses decreased 7 percent compared to the first quarter 2015, excluding expenses related to a voluntary retirement program.
EOG continues to advance its high-potential Rockies oil plays. In 2015, EOG added 600 million barrels of oil equivalent (MMBoe) to its Bakken net resource potential estimate, bringing EOG's total net resource potential estimate to approximately 1.0 BnBoe. EOG has decades of drilling inventory in this world-class oil basin.
During 2015, EOG continued to delineate its Powder River Basin and DJ Basin oil plays. In the fourth quarter 2015, EOG completed several wells in the Powder River Basin Turner oil play. The Blade 202-2116H and the Flatbow 602-1621H had 30-day initial production rates of 1,300 Bopd, 120 Bpd of NGLs and 1.4 MMcfd of natural gas, and 1,280 Bopd, 145 Bpd of NGLs and 1.7 MMcfd of natural gas, respectively.
In 2016, EOG plans to complete approximately 35 net wells in these plays, compared to 48 net wells in 2015.
EOG's activity in North Dakota remains focused on the Bakken Core and Antelope Extension areas. The company continued to improve its drilling and completion techniques including the expanded use of high density completions. In addition, recently installed water gathering facilities have significantly reduced operating expenses. During the third quarter 2015, the company completed the Parshall #88-3029H, #23-3029H and #26-3029H in a three-well pattern with average initial production rates per well of 1,830 Bopd and 1.0 MMcfd of rich natural gas. Average lateral lengths for the wells were 5,925 feet.
barrels of oil equivalent (MMBoe) to 1.0 billion barrels of oil equivalent (BnBoe) and grew total net drillable locations from 580 to 1,540. Successful down-spacing and advances in completion technology have generated excellent well results and led to the expanded resource potential. As a result, EOG has decades of high-return drilling potential ready to be developed.
"Our team's outstanding technical and operational advances have enabled us to more than double prior estimates for our position in the Bakken and Three Forks," said Thomas. "EOG's Bakken and Three Forks assets along with the company's Eagle Ford and Delaware Basin positions continue to grow in both size and quality. With these premier assets, EOG is uniquely positioned for high-return growth in a low oil price environment."
In the second quarter 2015, the company continued to make well productivity gains. EOG completed an industry record Bakken well using enhanced high-density completion techniques. The Riverview 102-32H came on line producing 3,395 barrels of oil per day (Bopd) and 6.0 million cubic feet per day (MMcfd) of rich natural gas.
In the first quarter 2015, EOG 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.
First quarter 2015 results included a five-well pattern in the Parshall area (Parshall 39-1608H, 58-1608H, 59-1608H, 147-1608H and 151-1608H), which averaged initial production rates per well of 1,235 Bopd, 110 Bpd of NGLs and 0.5 MMcfd of natural gas. Additionally, EOG completed a three-well pattern (Parshall 42-2117H, 43-2117H and 67-2117H), which had initial production rates per well that averaged 1,345 Bopd, 110 Bpd of NGLs and 0.5 MMcfd of natural gas.
In the DJ and Powder River Basins, EOG is focused on target selection and operational efficiencies. Both of these proven plays continue to generate strong results as evidenced by recent completions. In the DJ Basin, two first quarter Codell wells, the Jubilee 580-1720H and the Jubilee 582-0805H, had initial flow rates of 1,005 and 1,125 Bopd, 80 and 145 Bpd of NGLs and 0.3 and 0.5 MMcfd of natural gas, respectively. In the Powder River Basin, the Flatbow 13-13H was completed in the Turner with initial production of 860 Bopd, 70 Bpd of NGLs and 0.8 MMcfd of natural gas.
In 2014, EOG's drilling activity in North Dakota was directed to two key areas, the Bakken Core and the Antelope Extension. The focus this past year has been to drive down drilling costs and further advance completions to improve well performance and allow for additional downspacing. In the fourth quarter, EOG completed a six-well pattern in the Bakken Core area spaced at 700 feet between wells which delivered a combined initial production rate of 9,450 Bopd and 5 MMcfd of rich natural gas. Initial results from these completion and downspacing pilots are very encouraging, and additional pilots and testing in 2015 are designed to uncover the best long-term development plan for this crude oil growth play.
Also in 2014, EOG stepped out from the Bakken to test the Three Forks formation, particularly in the Antelope Extension, with some notable well results. Due to the low-price crude oil environment, additional development of this high-potential target will be put on hold.
Capital allocated to the Bakken will decrease significantly in 2015. EOG expects to complete about 25 net wells compared to 59 in 2014.