EOG Resources says enhanced oil recovery critical to Texas shale production

EOG says it has a $15-$20/b cost advantage over the rest of industry, which needs “sustained $60-$65 oil price

EOG

William R. “Bill” Thomas, Chairman and Chief Executive Officer

EOG Resources says it has confirmed success of its internally-developed enhanced oil recover process in the Eagle Ford and Permian shale basins following more than three years of testing in four successful pilot projects with 15 producing wells.

These four pilot projects, located across the field, demonstrated consistent reservoir responses from a group of mature producing wells.

The pilots generated significant increases in crude oil production with relatively low capital cost.

One additional EOR pilot project that encompasses 32 producing wells is planned for 2016.

“Today’s introduction of EOG’s enhanced oil recovery potential for the Eagle Ford shale is another technical breakthrough to further enhance the value of EOG’s Eagle Ford assets,” said CEO Bill Thomas.

“It will get more efficient as we move forward, and lower-cost.”

EOG anticipates many benefits from the application of this new technology, including high incremental net present value and rates of return on investment, low finding and operating costs, reduced severance tax rates, lower production decline rates and increased reservoir recoveries.

“Our proprietary EOR capabilities and first-mover advantages uniquely position the company to create substantial incremental shareholder value through this long-life project,” said Thomas

EOG’s Eagle Ford shale acreage position possesses unique geologic properties ideally suited for the company’s proprietary EOR techniques.  These methods require very strong geologic containment that may not exist in most horizontal oil plays.

Houston-based EOG, considered one of the most efficient U.S. drillers, has a $15-$20 per barrel cost advantage over the rest of the industry, which needs a “sustained $60-$65 oil price and 12 months of lead time” to deliver modest growth, Thomas told reporters earlier this month on a call to discuss first quarter results.

Thomas said the company was focusing on “premium drilling,” which he defined as wells that can generate a return of at least 30 percent after taxes at $40 oil.

With files from Reuters.

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