EOG Resources plans to ramp up its new oily Utica Shale and gassy Dorado plays in 2025 as it further delineates the Ohio play and feeds new LNG demand on the Texas Gulf Coast in South Texas.
In its 160,000-net-acre Dorado play in the gassy southern fairway of the Eagle Ford and Austin Chalk in Webb County, Texas, it expects 25 net completions with a part-time frac spread and one full-time rig in 2025.
The rate is up from 21 net completions in 2024 with the same iron and pressure-pumping count in the play along the Mexican border.
In its 460,000-net-acre Utica oil play in Ohio, it plans 30 net completions with one full-time frac spread and two rigs, up from 25 net completions, one rig and one part-time frac spread in 2024.
The plans are part of its $6.2 billion capex budget for 2025, EOG COO Jeff Leitzell said in a recent investor call.
Dorado trigger
The increased Dorado activity is while the 12-month natgas strip has grown from less than $3/Mcf this past fall to more than $4.50 currently.
In addition to fulfilling a gas-sales agreement with Cheniere Energy (LNG) at its Corpus Christi, Texas, LNG plant, the Dorado gas growth is toward meeting generally larger intra-U.S. demand, Leitzell said.
“With this current activity level, it really positions Dorado … to improve year-over-year and … drive down the cost, while we're taking advantage of where the proximity is, Leitzell said.
EOG isn’t working with any particular gas strip as the trigger for Dorado D&C.
“What we really look to do is not just invest necessarily at a particular price point, but we really look to invest to lower our costs through the cycles,” Leitzell said.
Eagle Ford has at least 10 more years
In its adjacent, oily 535,000 net Eagle Ford acres, it plans 120 net completions with one frac crew and four rigs, down from 160 completions, two crews and six rigs in 2024.
Keith Trasko, senior vice president, E&P, said the scale-back is because EOG leaned hard on the Eagle Ford asset in 2023 and 2024 while oilfield service inflation persisted in the Delaware Basin.
Also, the asset had been sharing a rig with the Dorado play, which had dropped activity when gas futures were plummeting to less than $2/Mcf last spring.
“So consequently, there were more completions in the Eagle Ford when we deferred completion activity in Dorado,” Trasko said.
But even at 15 years old, “the Eagle Ford is a core foundational asset for us” with “some of the highest returns in the play we've ever seen actually in the last several years,” he added.
He said that the prolific play even into 2025 “supports a line of sight to maintain production for a decade or more, really.”
In its 395,000-net-acre Delaware Basin play, meanwhile, EOG completed 385 net wells in 2024 in the Leonard, Bone Spring and Wolfcamp and plans 375 this year with four frac spreads and 16 rigs, unchanged from 2024.
Utica spacing
EOG tested Utica well-spacing in 2024.
Trasko said it’s unlikely it will pick one number and roll it out across the nearly half-million-net-acre leasehold.
“We pride ourselves in not being in a manufacturing mode ever in any of our plays, and so we don't really employ a set spacing or completion design throughout an entire field,” he said.
Generally, EOG is looking at landing laterals between 600 ft and 1,000 ft apart, “which is pretty standard for a North American unconventional oil play,” he said.
“But we've also said it depends on the area.”
EOG may space its wells more widely at the southern end of the Utica’s north-south volatile oil fairway.
“In the South, where we have thinner pay, but we also have better frac barriers … that could also mean that the frac reaches out further, so you might expect wider spacing in the south to work out better.”
As for commencing tests of the Utica’s adjacent black oil fairway, EOG wants 3D seismic first, Ezra Yacob, EOG chairman and CEO, said. “We’re still a little ways [out].”
Utica versus Eagle Ford
Yacob added that comparing Utica economics with EOG’s Eagle Ford asset is premature, since infrastructure and other efficiencies are long in place in the latter.
“We've really captured the economies of scale [in the Eagle Ford]. So that's one of the things that right off the bat is still lacking with the Utica,” Yacob said.
Toward reducing its Utica costs to less than $650 per completed foot includes in-basin sand, water-sourcing infrastructure “and then just having consistent frac and drilling operations …,” Yacob said.
But at just two years old, the Utica asset “is significantly farther down the path of having lower well costs and, quite frankly, a better understanding of the subsurface reservoir quality” than the Eagle Ford was at two years, he added.
The Powder
In the Powder River Basin, where EOG holds 365,000 net acres, it expects 30 net completions, also with one part-time frac crew and one full-time rig, unchanged from 2024 when it made 27 net completions.
Trasko said the 2025 plan for the Powder is focused more on the oilier Niobrara formation versus the oil-and-gas mixed Mowry Shale.
“We kind of have a little multi-basin portfolio in the Powder itself,” Trasko said.
“You have the Mowry—more of a combo play with good finding costs—and then Niobrara [with] a little more oil, which is a little bit higher return. And together they do kind of mix to make a nice holistic asset there.”