EOG Resources Inc., headquartered in Houston, has announced its intention to allocate $4.3 billion towards drilling and completing 600 wells in its premium domestic areas in 2024, which include the Eagle Ford and Permian basins in Texas.
This investment is part of EOG’s planned capital expenditures of $6 billion to $6.4 billion for 2024, to achieve a 3% increase in oil volume and a 7% increase in total volume. Despite being approximately $100 million lower than the previous year, the company aims to maintain growth through operational and capital efficiencies in its key areas such as the Permian Basin, Eagle Ford Shale, Ohio, Colorado, Wyoming, and North Dakota.
During the earnings call for the fourth quarter of 2023, EOG COO Jeff Leitzell highlighted the positive impact of improved efficiencies and longer laterals. As a result, the company witnessed a reduction in the number of drilling rigs by four, frac fleets by two, and net wells by 40 compared to the previous year. This achievement allowed EOG to grow its volumes year over year while minimizing direct capital expenditure. These improvements in performance and operational efficiency have been instrumental in EOG’s success across its operating area.
“These improved efficiencies and longer laterals have resulted in a decrease in the number of drilling rigs by four, frac fleets by two, and our net wells by 40 compared to last year,” EOG COO Jeff Leitzell said. “The ability to grow our volumes year over year for less direct capex is a testament to the improved well performance and operational efficiency gains we are realizing across our operating area.”
Looking ahead to 2024, EOG has set a production target ranging from 1.012 million to 1.087 million barrels of oil equivalent per day. This reflects the company’s commitment to continued growth and optimization in the coming year.
In 2023, EOG experienced a 3% growth in oil volumes and an 8% increase in total production year over year, achieving a significant milestone of 1 million barrels of oil equivalent per day in the fourth quarter.
For the entire year of 2024, EOG aims to achieve a production range of 1.012 million to 1.087 million boepd.
In addition to the $4.3 billion investment, EOG is allocating $400 million towards strategic infrastructure projects in the Delaware Basin section of the Permian and the Dorado play in the Eagle Ford Shale region.
According to Leitzell, “Our strategy involves increased investment and long-term strategic infrastructure in the Delaware Basin and Dorado, which are anticipated to lower operating costs and enhance margins throughout the lifespan of these assets.” The Delaware Basin stands as EOG’s most active operational region, the company noted.
While other producers have been focusing on shale consolidation through mergers and acquisitions in recent times, EOG has primarily increased its production through its existing assets. The company emphasized that enhancing its organic exploration remains its key priority to deliver value to its shareholders.
“We’re focused on creating shareholder value through the cycles, and the consistent way that we’ve been able to generate that value is through organic exploration, a focus on low-cost operations, and a commitment to capital discipline,” CEO Ezra Yacob said. “We have a high level of confidence in our existing portfolio, and it’s aimed at improving the financial performance of the company.”
