EOG Resources (NYSE: EOG) has sold assets for $625 million, including about $167 million since fourth-quarter 2016 began.
In a November conference call, EOG said it had sold 80 million cubic feet per day (MMcf/d) of natural gas, 3,400 barrels of oil per day (bbl/ds) and 4,290 bbl/d of NGLs.
Since January, the company sold assets in the Midland and Denver-Julesburg (D-J) basins and the Haynesville shale. In the first nine months of 2016, the company sold $458 million in assets, three times the amount sold during the same time in 2015.
In August, EOG said it had divested 45 MMcf/d of natural gas and liquids-rich properties. The additional 35 MMcf/d—for a total of 80 MMcf/d on the year—may have been sold to Covey Park Energy LLC.
Covey Park said Nov. 2 that it had purchased 90,000 net acres in the Haynesville/Bossier shale area of East Texas. The company did not disclose the seller. EOG was one of two companies with interests in the acquired area and Covey Park reported gaining 35 MMcf/d of net production.
RELATED: Covey Park Gains Momentum With Haynesville Deal
EOG’s net debt is $7 billion and it has $1.1 billion in cash. The company is coming off a rare purchase with the acquisition of Yates Petroleum Corp. for $2.5 billion.
In October, EOG acquired holdings from Yates and other companies in the Permian, Powder River and Northwest Shelf play for $2.4 billion in stock, $16 million in cash and the assumption of $100 million in debt.
The deal created a 424,000-net acre Delaware position for EOG and, overall, expanded the company’s Permian holdings to 574,000 net acres.
Kevin Smith, an analyst for Raymond James, said Yates transaction and further delineation of its Delaware holdings has launched the company’s resource potential. EOG now estimates 6 billion barrels of oil equivalent (Bboe), a 155% increase from 2.35 Bboe.
EOG raised its capex guidance range by $200 million to $2.7 billion at the midpoint. Increased spending will add 90 more wells drilled than the 200 EOG previously guided as well as 180 more wells completed, up for 270.
David Tameron, senior analyst at Wells Fargo Securities, said EOG’s initial assessment of the Yates acreage was based on mile laterals.
“Since the announcement they’ve gone back and reassessed and now see laterals averaging closer to 7,000 feet, [Wolfcamp oil] which is the main driver of the uplift we saw this quarter,” Tameron said. “The Yates acreage allowed them to block up their existing position and [management] is confident in its ability to drill longer laterals across the entire portfolio.”
EOG’s rig count:
- Permian, five;
- Eagle Ford, six; and
- Rockies, four.
Tameron said one of EOG’s Rockies’ rigs was acquired on Yates’ Powder River acreage and will soon be let go.
Darren Barbee can be reached at dbarbee@hartenergy.com.
Recommended Reading
The One Where EOG’s Stock Tanked
2024-02-23 - A rare earnings miss pushed the wildcatter’s stock down as much as 6%, while larger and smaller peers’ share prices were mostly unchanged. One analyst asked if EOG is like Narcissus.
EOG Resources Wildcatting Veteran Billy Helms to Retire
2024-04-02 - Joining an EOG Resources predecessor in 1981, Helms is among the pre-1986-oil-bust generation who later found success in shale.
Kimmeridge Fast Forwards on SilverBow with Takeover Bid
2024-03-13 - Investment firm Kimmeridge Energy Management, which first asked for additional SilverBow Resources board seats, has followed up with a buyout offer. A deal would make a nearly 1 Bcfe/d Eagle Ford pureplay.
E&P Earnings Season Proves Up Stronger Efficiencies, Profits
2024-04-04 - The 2024 outlook for E&Ps largely surprises to the upside with conservative budgets and steady volumes.
Uinta Basin: 50% More Oil for Twice the Proppant
2024-03-06 - The higher-intensity completions are costing an average of 35% fewer dollars spent per barrel of oil equivalent of output, Crescent Energy told investors and analysts on March 5.