EOG Resources expects oil production 2021 crude output to be flat with the fourth-quarter 2020 level at 440 thousand barrels per day.
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EOG Resources, Inc. EOG recently clarified production growth strategy in the Evercore ISI Elite Energy conference. CEO William Thomas stressed on the company’s intention to boost output only when the market demand rises to the adequate level. It also highlighted its game plan for 2021. EOG stated that oil production growth will resume to 10% by 2022, which was not appreciated by investors as a volatile environment still persists in the global oil energy space.
EOG Resource Production 2021 expects crude oil demand to recover to pre-coronavirus levels by the end of the second half of this year. So, in 2022, crude demand will likely be in line with the pre-pandemic level. EOG Resources is not only looking for demand recovery to drive production growth, but also global inventory levels to reduce to five-year average or even below. Moreover, the company’s decision will depend on the Organization of the Petroleum Exporting Countries’ ability to restore production cuts without affecting the price level.
If the above-mentioned factors align, the company might boost production by 8-10%. However, if the requirements are not met, EOG Resources may not increase output at all or do so at a smaller rate. It expects 2021 crude output to be flat with the fourth-quarter 2020 level at 440 thousand barrels per day.
EOG Resource Production 2021 goals include generation of $2.4 billion in free cash flow at the $50 per barrel of crude oil mark. Moreover, it intends to boost shareholder value via hiking dividend by 10% and strengthening the balance sheet. The company intends to boost returns through developing “double premium” wells that can earn higher profits even at the $40 per barrel of oil level.
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Spudding is the process of beginning to drill a well in the oil and gas industry. … After the surface hole is completed, the main drill bit—which performs the task of drilling to the total depth—is inserted and this process can also be referred to as “spudding in.”
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Permian Basin is a shale basin about 250 miles wide and 300 miles long, spanning parts of west Texas and southeastern New Mexico. It includes the highly-prolific Delaware and Midland sub-basins.
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About EOG Resources
EOG Resource Production 2021 tested EOG like it has never been tested. At the start of the year, the coronavirus pandemic compounded what started as an oil price war, crushing oil demand in a market that was already oversupplied, and drove oil prices to levels the company had not seen in more than 20 years.
EOG generated $1.6 billion of free cash flow* which both paid the dividend and further shored up what was already an industry-leading balance sheet, all while WTI oil prices averaged less than $40 per barrel.
For the third year in a row, EOG increased the dividend at least 30%. The company also announced a new premium natural gas play in South Texas named Dorado. Dorado added 1,250 premium net drilling locations.
EOG more than replaced the inventory drilled throughout the year. The company’s premium inventory had grown to 11,500 net locations by year end, which is more than three and a half times the total since introducing the premium well standard in 2016.
