Seeking Alpha Article On EOG; Qatar Is World's Largest LNG Exporter -- October 21, 2015

EOG Data Points

The linked article at Seeking Alpha is for the operational data points regarding EOG. It is not for investment purposes.

EOG has historically and continues to grow its reserves and drilling inventory rapidly. In 2015 alone, EOG added 960 net drilling locations and 600 MMboe of potential reserves in the Bakken. Its net potential reserves in the Eagle Ford, which is either the first or second most economical play in the United States depending on how it is measured, are 3,200 MMBoe through net acreage of 561,000.

Core and non-core positions in the Bakken are 620 and 400 MMBoe respectively encompassing a total of 230,000 acres. The Delaware Basin position of 310,000 acres and approximately 1,350 MMboe is the other main drilling area. EOG also has smaller holdings in the DJ Basin, Powder River Basin, and Midland Basin Wolfcamp. Total remaining drilling locations add up to 11,000 and over 20 years of drilling capacity.

The firm is the largest oil producer and acreage holder in the Eagle Ford Shale. 92% of Q2 completions were on multi-well pad sites which improve economics considerably. 89% of the land is held by production providing significant flexibility. Most is positioned in the crude oil window portion of the formation and subsequently production is 78% liquids, 12% natural gas, and 10% NGLs.

Upstream firms must recognize substantial cost savings if they have any hope of maintaining production levels without eating a hole through their balance sheet. EOG's completed well costs in the Bakken have declined from $8.8 million in 2014 to $7.1 currently. Its near term target is even lower at $6.5 million. This 35% reduction in well costs helps mitigate a lot of oil's 50% decline. Average drilling time in the Bakken was 20.8 days in 2012 but averaged only 8.2 in Q2 2015 with the target closer to 5. While some costs will increase when oil recovers, many will not and it is easy to see how EOG could be positioned for seriously strong financial performance.

An important point is that EOG has continued drilling at a pace not far from earlier cycles. It is not, however, bringing all these wells online. It is slowly building an inventory of wells that will cost a fraction of a new well to bring online. In future periods, there is a high probability that per barrel costs will be much lower than average since prior periods absorbed a significant amount of the expenses. [We call them DUCs.]

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EIA's "Energy Cookie"

EIA "energy cookie":

Qatar is the largest exporter of liquefied natural gas (LNG) in the world. The country’s exports of LNG, crude oil, and petroleum products provide a significant portion of government revenues…Qatar is also at the forefront of gas-to-liquids (GTL) production, and the country is home to the world’s largest GTL facility ---EIA

It will be interesting to see if this changes by 2030.

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A Top-10 List Nice Not To Be On

Minnesota Made The List

Kiplinger: ten (10) least tax-friendly states for retirees. I went through the list once. I can almost recall it from memory [2014]:

• New York [#10, same in 2014]
• New Jersey #9, same in 2014]
• Nebraska [#8, same in 2014]
• California [#7, same in 2014]
• Montana (surprising)[ #6, same in 2014]
• Oregon (not surprising)[#5, same in 2014]
• Minnesota (not surprising) [#4, same in 2014]
• Rhode Island [#1 in 2014]
• Connecticut [#3 in 2014]
• Vermont (not surprised it's on the list; surprised it's #1) [#2 in 1014]

What happened to Massachusetts?