In a rare move to the buy-side, EOG Resources has secured a strategic 30,000-net-acre block in Atascosa County, Texas, plugging a critical gap in its South Texas leasehold. The $275 million deal, believed to involve Arrow S Energy Operating, adds 120 new 3-mile-lateral drilling locations to EOG’s oily Eagle Ford inventory.
📍 Strategic Fit: Filling the Core Acreage Hole
“This essentially was a hole in our acreage… the largest remaining block of largely undeveloped core Eagle Ford acreage out there,”
— Keith Trasko, SVP E&P, EOG
The acquired acreage sits between two major EOG blocks and is surrounded by top-tier operators: Marathon Oil, Murphy Oil, and Crescent Energy’s Javelin unit. The area was historically underdeveloped, but existing EOG infrastructure, seismic data, and well control on all sides made it a natural fit.
🔁 From Leasing to Acquiring
EOG has long favored leasing over acquisitions, but this deal stood out. The company cited deep geological knowledge, infrastructure synergies, and low indirect costs as compelling reasons to shift its usual approach.
“We’re very familiar with the geology of the area… We understand the area very well.”
— Trasko
🚀 Development Potential: Long Laterals, Modest PDP
The existing ASE South lease—producing 2,000–3,000 boe/d (85% oil)—is expected to be a launching pad for longer wells. EOG plans to extend 35 wells by one mile each, tapping into the underutilized core acreage for higher returns.
However, development won’t begin until late 2025, after facilities are upgraded to “EOG spec.” The proved developed producing (PDP) reserves were described as “modest,” leaving the value largely tied to future drilling.
📉 Deal Economics: Cheap for Core Eagle Ford
At $6,000 per undeveloped acre, analysts see the deal as attractively priced:
“The deal looks quite cheap… if we assume $42,500 per flowing boe for the production.”
— Leo Mariani, Roth Capital
JP Morgan’s Arun Jayaram noted that the acquired wells currently underperform EOG’s typical metrics, but with D&C optimization and longer laterals, that’s likely to change.
📊 Regional Context: Atascosa Activity Snapshot
| Company | Feb. 2025 Oil Production (bbl) |
|---|---|
| Marathon Oil | 641,000 |
| EOG Resources | 593,000 |
| ExxonMobil (XTO Energy) | 344,000 |
| Crescent Energy (Javelin) | 189,000 |
This move strengthens EOG’s competitive positioning in an already active county and sets up the company for continued long-lateral drilling in one of North America’s most prolific shale plays.
🦄 A Rare Opportunity
“The unicorn left in the play… with that big undeveloped position.”
— Charles Meade, Johnson Rice
Trasko confirmed that deals of this quality are rare, but EOG remains opportunistic. For now, the acquisition effectively gives EOG an extra year of Eagle Ford drilling inventory, enhancing both runway and optionality.
