EOG Reports Strong 1Q08 Numbers; Reiterates Ability To Achieve 15% 2008 Growth Target
1Q08 Numbers:
- EPS of $1.89 vs $1.65 expected
- CFPS of $4.23 vs $3.93 expected
- as expected, their mix is become more liquids leveraged; gas in the quarter as a percent of total production declined to 83% from 86% one year ago.
They Reaffirmed 15% organic growth guidance for 2008 volumes while maintaining their original capital budget.
Operations Update - just a few quick highlights
Atoka Formation Horizontal Gas Play
- 60,000 acres acquired to date in the Texas Panhandle,
- 17 horizontal wells drilled so far (recent initial production in the 6 to 7 MMcfgpd range),
- 2.0 Bcfe expected per well for $3.4 mm apiece provides for some attractive, sub $2/Mcfe development costs.
Bakken Play Update:
- No increase in reserves (still think 80 million barrels (0.5 Tcfe) recoverable with a 10% recovery factor)
- or acreage (320,000 net acres)
- Hopefully we get a little color on the 2,000 to 3,000 bopd initial production wells they have been drilling in the Parshall portion of the play .. they did say the average IP from the last 10 completions has run up to 1,700 bopd.
- They are currently evaluating results from the first downspaced 320 acre well here. Up until now, they have developed the play on 640 acre (1 section or 1 sq mile) spacing. Downspacing could double the number of potential locations here and up the recoverable reserves. They see 9 mm barrels of oil in place per section so if the downspacing results in the recovery factor you can see the high degree of leverage it would have on their reserves here.
British Columbia Shale Play Update:
- no increase to acreage position (140,000 net acres)
- or reserve thoughts (still at a whopping 6 Tcfe of potential) … ,
- two recent horizontal tests with "half laterals" (think shorter than normal) IP'd at 3.5 and 4.2 MMcfepd,
Barnett Shale Play
- No change to their thoughts on oil reserves underlying their acreage on the north side of the traditionally gas Barnett Shale
- They've added 0.5 Tcfe to their estimate of recoverable gas reserves due to what they described as a technological breakthrough in completion technology.