Bone Spring Play In The Delaware Basin Could Be Huge For EOG -- April 3, 2015

EOG's Bone Spring play could hold massive amounts of upside potential for EOG -- Seeking Alpha.

Summary:

• EOG Resources is ramping up the development of the Second Bone Spring play this year.
• Additional drilling activity could give EOG a much better idea of its resource potential in the area.
• Even when realizing only $55 per barrel of oil, EOG's Second Bone Spring wells still generate a 35% BTROR. 

EOG Resources' development of the Second Bone Spring play in the Delaware Basin is going along nicely, which is why management plans to ramp up drilling activity in the area this year.

Last year, EOG Resources completed three net wells in the Second Bone Spring. Management hopes to bring that up to 37 net wells this year.

The Delaware Basin is one of the three basins that make up the Permian Basin, and is often considered one of the most prolific portions of the play. Even in this low price environment, EOG Resources still expects to generate a 35% before-tax return on its wells in the Second Bone Spring formation.

Initial oil production rates [24-hour] out of EOG Resources' wells range from 1,270 bo/d - 1,825 bo/d, very solid numbers. So far, management has located 90,000 net acres in the prolific Northern Delaware Basin capable of targeting the Second Bone Spring.

Currently, EOG Resources doesn't know what the resource potential of the area is, but it could be huge.

At the link, note all the pay zones in the Delaware Basin. 

I track the Delaware Basin over at the sidebar on the right.

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