EOG Resources Inc.’s budding Ohio Utica shale operation is—barring an ugly surprise in the coming months—in line to get more capital in 2025, one of the company’s top executives told an investor gathering Sept. 3.
Speaking to the Barclays CEO Energy-Power Conference, chief operating officer Jeff Leitzell said Houston-based EOG is “seeing outstanding results both through delineation and with our spacing tests in all three areas” of its Utica holdings, which tally 445,000 net acres in the east of the Buckeye State. The company’s early work has focused on about 225,000 net acres that are producing volatile oil.
“Everything so far has basically met type curve or exceeded type curve,” Leitzell said. “On that 225,000 acres, we’re just about there […] Everything kind of came in the way we want without any misses.”
If development work continues to progress as it has, Leitzell added, EOG’s Utica teams will get more funding in 2025 to add to this year’s 20 net wells, a figure more than triple 2023’s total. And while he didn’t specify dollar details relative to EOG’s total 2024 capex budget of $6.2 billion, it appears likely that Ohio spending will soon be a material part of the company’s outlays.
“It absolutely has the opportunity to be a foundational play” on a level with EOG’s core Delaware basin and Eagle Ford assets, Leitzell said. “And it’s on the pathway to be there.”
Leitzell’s bullish comments echo those of EOG leaders on the company’s second-quarter earnings call roughly a month ago. (OGJ Online, Aug. 2, 2024) At the time, chief executive officer Ezra Yacob and others praised the consistent production from the company’s delineation work in the Utica and noted its potential to be cost-competitive with parts of the Permian basin.
At the Barclays gathering, Leitzell also placed EOG’s Utica work inside its broader strategy, specifically its focus on incrementally amassing acreage to develop rather than following other exploration and production companies into the market for big M&A. Typically, he said, once the EOG team looks at whether the acreage is operated or not, the various contracts that come with a potential target, and the depletion rates at fields in question, it sees more potential value in an organic growth model.
“The goal is for it not just to be financially accretive but also accretive on a portfolio level,” Leitzell said. “So when we look at it all, we compare it to our exploration opportunities and we just see a lot more value right now in our exploration opportunities.”
Shares of EOG (Ticker: EOG) closed Sept. 4 trading at $122.78. They are up about 5% over the past 6 months and the company’s market capitalization now stands at nearly $70 billion.
