EOG May Be The Apple Of Unconventional Production -- Part 1 -- Filloon -- May 28, 2017

Part 2 at this post. 

Summary

• IBD has stated EOG may be the Apple of oil and we test this theory in what may be the its best acreage
• Delaware Basin core well results have outpaced the rest of the country, and EOG's most recent results point to much better results for competitors in the future
• We took a sample of 135 horizontal locations in the same general area where EOG has produced huge initial production to provide an idea of average economics
• Results continue to outpace the rest of the country and point to lower breakeven prices going forward

Is EOG Resources the Apple of oil? IBD seems to think so and with good reason. Oil recovery has become a science with the advancement of shale. This is the reason for the large discrepancy in initial production rates by operator. Conventional vertical production did require proficiency. This proficiency may have been more about geology than technology. US operators continue to pester OPEC with better economics.

Although decreased costs are touted, improved recoveries will drive the industry.

EOG is even using Apple technology, including the iSteer smartphone app. It is using precision targeting as well. EOG has real time data streaming from every asset. It applies proprietary algorithms with in-house software. It also uses over 65 in-house desktop and mobile software applications. EOG also applies data science to optimize completion design to specific geology. These are just a few of the ways that EOG continues to outperform. More importantly, we would expect other operators to match this performance in the future.

The Delaware Basin may be better than Midland. We have continued to be bullish this play as production per foot has consistently outperformed. This has been seen with a lower inventory of wells turned to sales. The bullish narrative gets better when we look at EOG results. Focusing on northern Loving County, Texas and southern Lea County, New Mexico provides a visual to why there is so much activity in the area. From March of 2016, 135 horizontal locations have been completed. 74 of those wells are owned by EOG.

Much, much more at the link.