Where Is EOG Headed?

This is a "cut and paste" from one of my earlier postings. It's that important (the PN link was sent to me by a reader: a huge "thank you.")

A reader sent me this story. It supplements an earlier EOG story: very important. 

In the latter link, Papa says there are only four plays worth discussing (the rest are all "insignificant"): the Bakken, the Eagle Ford, the Permian, and the Barnett.

In this newest link, Papa has revised his opinion: there are only TWO plays that are important: the Bakken and the Eagle Ford. 

This is an incredible story -- everyone needs to read.

EOG Resource’s top executive Mark Papa raised a few eyebrows Sept. 4 when he told attendees of Barclays energy conference that only two horizontal liquids plays in the U.S. matter — the Eagle Ford and the Bakken.  

The rest are “insignificant” in terms of future U.S. production, Papa says, including those his company is invested in, such as the Wolfcamp, Permian and Barnett plays. 

In fact, in 2013, it is “likely” the Houston-based company will be “stealing some capital from the Permian and … Barnett combos” for company operations in the Eagle Ford and Bakken, Papa said. 

This story, by the way, is at odds of so much that has been published about the Permian lately (one example). It appears Papa, like Wayne and Steve, is skating to where the puck will be. Again.

Now some comments.

I wonder if he's forgetting about the Utica?

When I posted the earlier story about Papa stating only four plays were discussing, a reader noted that was in EOG's best interests. Well, of course.

However, in his most recent remarks, he is even dissing a couple of EOG plays. Interesting.

Another data point: Mr Papa retires retires in mid-2013.  For some CEOs there is not a lot of difference between fading away and retiring. Something tells me that Mr Papa is not going to fade away. I look for him/EOG to make a move in the Bakken. It's possible the move will be in the Eagle Ford, but two other data points to consider:

a) EOG has been relatively "status quo" in the Bakken for the past two years; predictable and not particularly exiting for a blogger or an investor; and,
b) the QEP/Helis deal raised the bar both in estimated value of Bakken assets and in urgency to acquire such acreage

Remember: updates of "all" Bakken players can be found at the 2Q12 earnings page.  EOG must be doing something right: in 2Q12, EOG beat consensus estimates by 18 cents.

As long as I'm rambling, two more data points:

a) it's hard for me to believe that Chesapeake won't sell its North Dakota acreage;
b) although Congress may sort it out later, there's no guarantee: don't forget the "fiscal cliff" which will impact the wealthy significantly

Disclaimer: this is not an investment site; do not make any investment decisions based on what you read at this blog. This is certainly not a recommendation to trade in EOG. It's just idle rambling by someone who gets a kick out of the Bakken.