EOG Resources Bolts-On 30,000 Acres in Eagle Ford for $275MM

EOG Resources has bolted on what it called the largest remaining undeveloped core acreage in the Eagle Ford Shale for $275 million, the company said in its first-quarter earnings report.

EOG also said it had made a shallow water offshore oil discovery in Trinidad with partner BP. 

The Eagle Ford acquisition— a rare deal for EOG—adds 30,000 net acres in the play that is contiguous with EOG’s current position and can connect to existing infrastructure. EOG holds 565,000 net acres in the Eagle Ford.

EOG said the area immediately competes for capital within its existing portfolio and that it plans activity there this year. TD Cowen analyst David Deckelbaum said the area adds production of 2,000 boe/d to 3,000 boe/d. EOG said the acreage enables extended lateral wells. Analysts estimated the area holds a potential 120 undeveloped 3-mile locations and 180 undeveloped 2-mile locations.

“We believe these Eagle Ford assets were acquired at an attractive valuation of less than $1.5 million per gross location,” Siebert Williams Shank & Co. Managing Director Gabriele Sorbara wrote in a May 2 report. He said the deal had closed in April.

“The acquisition allows EOG to extend laterals on ~35 wells on its legacy acreage into the acquired acreage by about one mile each,” Sorbara said. “The acquisition included ~2.0-3.0 Mboe/d of production (high oil mix, we estimate ~85%). EOG noted that this was the largest remaining undeveloped core Eagle Ford acreage available that competes with its existing assets, especially given its high NRI. Accordingly, EOG has already planned for activity on the acreage in its 2025 program.”

EOG also said it had found oil in the Beryl area offshore Trinidad, based on a successful exploration well in the TSP Deep Area.

Tim Rezvan, an analyst at KeyBanc Capital Markets, said the company provided few details apart from 125 ft of oil pay. No final investment decision has been reached yet.