EOG to keep capital spending, production in line with 2023

Jan. 8, 2024

EOG Resources Inc., Houston, will this year keep its capital spending in line with 2023’s roughly $6 billion as it prioritizes returns over production volumes, president Lloyd “Billy” Helms Jr. said Jan. 4.

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EOG Wells Drilled in 2023

Speaking at the Goldman Sachs Energy, CleanTech & Utilities Conference, Helms said EOG’s production finished 2023 with oil production up about 3% to roughly 475,000 b/d and with total production up about 8% to about 980,000 boe/d. Those numbers, he added, are unlikely to grow much this year.

“We’re very comfortable with the activity levels. We don’t really see the need to increase activity based on what we see the macro looks like,” Helms told conference attendees. “We want to continue to run at a pace that we can improve the company.”

The EOG team’s fall forecast had the company finishing last year with 26 rigs, 17 of which are in the Delaware basin. This year, Helms said, most of the company’s growth efforts will be focused on Utica operations in Ohio, which span about 430,000 net acres. The company’s first project there comprises four wells that produced 2,150 boe/d in their first 30 days, 85% of which was liquid. EOG’s next step, he said, will be to tighten spacing from its initial 1,000 ft.

“We may run a little bit more activity there, bring on a few more wells as we delineate that play,” Helms said. “But in general, […] we’re very comfortable with the activity level we see.”

Helms framed his caution about growth with the view that US producers will not match 2023’s increase of about 900,000 b/d. In 2023, he said, many private producers ramped up output but rig counts are down substantially from a year ago and that’s showing up in the number of DUCs, he said.

“It’s hard to throw a number out there […] but I think it’s going to be considerably less, less than half of that number,” Helms said.

EOG’s plans echo one of the main findings of last month’s Dallas Fed Energy Survey, which showed that many oil and gas executives in Texas were trimming their 2024 spending plans as prices slipped and uncertainty rose last fall (OGJ Online, Dec. 20, 2023). The survey showed that about 30% of exploration and production firms plan to grow capital outlays this year versus 2023, down from 50% 3 months ago.

Shares of EOG (Ticker: EOG) were trading around $117 on Jan. 8, down nearly 3% from the previous week’s close. They’re essentially flat over the past 6 months, leaving the company’s market capitalization around $68 billion.