uploads///EOG Q Post Production

EOG Resources Increases Drilling and Completion Targets for Fiscal 2016

By

Nov. 9 2016, Updated 11:04 a.m. ET

EOG Resources’ 3Q16 production

For 3Q16, EOG Resources (EOG) reported total production of 555.2 Mboepd (thousand barrels of oil equivalent per day), which is higher than its 3Q16 production guidance range of 524.2–549.7 Mboepd.

Although EOG Resources beat its own production guidance, its 3Q16 production is ~3% lower than its 3Q15 production of 569.6 Mboepd. But sequentially, EOG Resources’ 3Q16 production is ~5% higher than in 2Q16.

Article continues below advertisement

Increased drilling and completion activity

Due to cost reductions and efficiency improvements, EOG has increased its targeted number of well completions for fiscal 2016 from 350 to 450 net wells. Many of the additional well completions are scheduled for late 2016. In addition, due to increased drilling productivity, EOG Resources expects to drill 290 net wells, which is 90 more than its original 2016 plans.

To accomplish this increase in activity, EOG increased its fiscal 2016 capital expenditure by ~$200 million to a range of $2.6 billion–$2.8 billion, excluding acquisitions.

Production guidance

Due to increased activity levels, EOG has increased its fiscal 2016 production guidance. For 2016, EOG now expects its full-year production to be in a range of 554.9–562.2 Mboepd, which is a midpoint rise of ~16 Mboepd (or ~3%) over its previous guidance of ~543 Mboe per day.

For 4Q16, EOG expects total production in a range of 562.7–591.8 Mboepd, which is midpoint rise of ~1% over its 4Q15 production.

Notably, S&P 500 (SPY) upstream peers ConocoPhillips (COP), Southwestern Energy (SWN), and Pioneer Natural Resources (PXD) have also increased their fiscal 2016 production guidance.

Advertisement

More From Market Realist