On July 1, without fanfare, EOG Resources (NYSE: EOG) made its planned switch at the CEO position.

Longtime leader Mark Papa slid into the seat of executive chairman of the board and William R. Thomas took the helm as chief executive. The move had been planned since at least September 2011, when Papa announced he would continue his day-to-day role as CEO and gradually turn over responsibilities to Thomas. Papa served as EOG’s chairman of the board and CEO for more than 13 years. Papa’s tenure at the company began in 1981, when he joined Belco Petroleum Corp., a predecessor of EOG.

Papa hasn’t gone anywhere, EOG says. He’s still the board chair, the principal executive officer and an employee. Thomas takes over the reins of one of the largest U.S. independents.

“I am very comfortable transitioning my leadership role to Bill and our very experienced, long-tenured and exceptionally talented team,” Papa said.

EOG’s future appears to be on sure footing as it produces more and its completions incorporate a “secret sauce” that has shown up in improved IP rates and well metrics, said David Tameron, Wells Fargo senior analyst.

Tameron said in May the company was firing on all cylinders while building “an engine that keeps growing.”

Hsulin Peng, senior analyst covering E&Ps for Baird Equity Research, said in an earnings preview that investors across the board are likely expecting another solid quarter from the company, including continued strong results out of the Eagle Ford and the Delaware Basin’s Leonard shale and Wolfcamp.

Second-quarter results could be interesting, Peng said. “As per other operators EOG has been testing massive wells (three-mile laterals, 7 million to 9 million pounds of sand proppant, 60 stages) in its (Bakken) Parshall Field with very solid results to date. Also in the Bakken, we could see more second bench well results and an update on downspacing efforts in the Parshall and South Antelope areas.”

EOG plans to complete 53 net wells in the Bakken. Its drilling in Parshall Field has produced at least 2.7 million barrels of oil from January to May, according to North Dakota Industrial Commission data.

EOG Parshall field oil production

2013

Oil production

January

550,270

February

468,395

March

561,417

April

581,425

May

562,444

Total

2,723,951

Source: North Dakota Industrial Commission

Peng’s target price for EOG is $163.

“We value EOG’s proved reserves to be worth $91 per share less net debt of $21 per share, for a total of $71 per share,” Peng said.

The upside from EOG’s reserves potential in the Eagle Ford, Bakken and Three Forks, Barnett Combo, Marcellus, Niobrara, Leonard shale and Wolfcamp is worth an estimated $114 per share based on Baird’s valuation methodology.

The company’s concentrated efforts in the Eagle Ford have paid off. In just four months of drilling, EOG has reached 40% of the play’s 2012 production of 42.8 million barrels of oil. Put another way, its additional 4.9 million barrels of oil in 2013 is akin to adding an extra month of production to the first quarter of 2012.

EOG Eagle Ford Oil Production, 2012 vs. 2013

 

Barrels of Oil 2012

Barrels of Oil 2013

Increase

January

2,945,382

3,931,890

986,508

February

2,807,444

3,853,256

1,045,812

March

3,231,537

4,951,525

1,719,988

April

3,376,903

4,555,577

1,178,674

Totals

12,361,266

17,292,248

+4,930,982

Source: Texas Railroad Commission 

Based on Texas Railroad Commission data, EOG produced 17.3 million barrels of oil from January through April, or 144,102 barrels per day. That’s more than a quarter of the Eagle Ford’s 536,117 barrels per day of production, according to the commission.

In February, EOG increased its Eagle Ford reserve potential to 2.2 billion barrels of oil equivalent (BOE) and identified a 12-year inventory of more than 4,900 remaining drilling locations.

The company was singled out July 15 by Bob Brackett, senior analyst for Bernstein Research, as one of a few North American E&Ps that will benefit from slowing growth in U.S. oil production.

“We particularly like EOG as the way to play to the heart of the shale theme (Eagle Ford and Bakken),” Brackett said.

EOG’s second-quarter earnings call is set for Aug. 7.