EOG Resources (EOG) expanded its South Texas infrastructure base in the first half of 2024, spending about $134 million on a gathering system, according to the company’s second-quarter Securities and Exchange Commission filing.

The filing did not give a specific location of the gathering network.

In July, analytics firm RBN Energy noted that EOG, following the company’s usual strategy of identifying and developing unknown or overlooked plays, had been focusing on the Dorado play in South Texas since 2020.

EOG recently completed the 41-mile first phase of its 1 Bcf/d Verde Pipeline to transport natural gas from the Dorado play to the Agua Dulce hub near Corpus Christi, Texas. Phase 2 is slated for completion by the end of 2024 and will give the company access to three pipeline intercepts at the hub.

During EOG’s second-quarter conference call on Aug. 2, executives mentioned the continual development of transport out of the Dorado would increase the margins, even if natural gas prices remain low.

“While our current cash costs in Dorado are approximately [$1 per cubic foot], we expect a combination of Verde Phase 2 and the premium markets accessed at Agua Dulce will further expand our margins, positioning Dorado as one of the most competitive, lowest-cost and highest-return natural gas plates in North America,” said Ezra Yacob, EOG board chairman and CEO.  

EOG has agreements to connect the Verde line with WhiteWater Midstream’s ADCC Pipeline along with other lines that will give Dorado natural gas access to markets along the Gulf Coast and Mexico.

In the SEC filing, EOG also said that during the six months ended June 30, the company recognized net gains on asset dispositions of $46 million and received proceeds of $19 million, “primarily due to lease exchanges and dispositions in the Delaware Basin and the Eagle Ford, as well as the sale of certain other assets.”

Onshore