EOG Resources sells $637 million in assets

By OGJ editors
HOUSTON, May 6
-- EOG Resources Inc. has sold $637 million worth of assets in its goal of divesting $1 billion worth of assets this year, EOG Chief Executive Officer Mark Papa said May 6, adding most of the assets sold were mature gas-producing properties in South Texas and New Mexico.

“Our shift from a natural gas to a liquids company is essentially complete,” Papa said during a conference call on the company’s first-quarter earnings. “At current prices, we expect approximately 70% of our North American revenue to emanate from crude oil, condensate, and natural gas liquids.”

He also discussed how EOG is working to move some Eagle Ford crude oil production by rail instead of trucking it. EOG expects to move 20,000 b/d by rail by yearend, Papa said, adding this could be a temporary solution until a pipeline, now under construction, is finished.

EOG put together the Eagle Ford rail arrangements in 30 days as a short-term solution to bridge a transportation gap that has hampered Eagle Ford shale producers, Papa said.

Enterprise Products Partners LP is building a 140-mile, 24-in. oil pipeline that will move Eagle Ford crude oil to a Houston-area oil terminal. EPP expects the line to enter service during second-quarter 2012.

“Ultimately, the pipeline cost is going to be very pleasant relative to trucking or rail,” Papa said of anticipated future transportation costs.

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