EOG increases capex plan by $1.4 billion, leans on basin diversity

The leaders of EOG Resources Inc., Houston, are ramping up spending plans this year aiming to put up 9% total production growth from their multi-basin portfolio.

EOG’s 2023 capital spending is expected to be $5.8-6.2 billion—versus $4.6 billion last year and about $3.8 billion in 2021—with a goal of 630 net completions across the United States and in Trinidad. The company’s average rig count for the year is expected to tick up by about two rigs and one frac fleet as it targets total production of 986,000 boe/d.

Of the $6 billion, $4.4 billion has been allocated to premium areas, with the company’s holdings in the Eagle Ford set to grow most significantly. EOG executives plan to develop about 21,000 net new acres there and add two rigs as part of a plan to complete 155 wells this year, up from 103 in 2022. On a smaller scale, EOG’s Power River and Dorado basin plays are forecast to complete a combined 70 wells versus 49 last year.

By contrast, the company will essentially hold steady in the Delaware basin, its largest operation by far. After completing a net 358 wells in the basin last year, EOG is targeting 365 for 2023.

“We didn't really feel that we wanted to ramp up activity anymore in the Delaware basin, but instead leverage on our multi-basin portfolio to increase activity in areas where equipment and crews are more available,” president and chief operating officer Billy Helms told analysts on a Feb. 24 conference call discussing EOG’s fourth-quarter results and outlook.

Helms, chairman and chief executive officer Ezra Yacob, and the team also will move this year to build out infrastructure for EOG’s work in the Utica basin in eastern Ohio, where it controls about 405,000 acres and plans to develop 15 wells this year after completing four in 2022.

In addition to being more geographically distributed, EOG’s 2023 capex also will be more heavily weighted toward the earlier part of year, with $1.6 billion slated to be spent in this year's first quarter.

EOG produced a fourth-quarter profit of nearly $2.3 billion on revenues of $6.7 billion, increases from $2 billion and $6 billion, respectively, in the last 3 months of 2021. Total volumes during the quarter rose 5% year over year to a little more than 909,000 boe/d.

Shares of EOG (Ticker: EOG) fell more than 4% Feb. 24 to about $114 on the earnings report and spending outlook. They have lost nearly 10% of their value over the past 6 months, lowering the company’s market capitalization to about $67 billion.