EOG expects to drill in Argentina's Neuquen basin within weeks

EOG Resources Inc. expects to begin drilling at the Vaca Muerta oil shale in Argentina's Neuquen basin within weeks, EOG Chief Executive Officer Mark Papa said Nov. 30 during an investors presentation at Jefferies 2011 Global Energy Conference in Houston.

“We will start to drill the first well in a matter of weeks,” Papa said. “The shale looks pretty good to us.”

Although EOG has yet to drill a well, Papa said he is optimistic the Argentina shale play might prove to be as important to EOG as the Eagle Ford shale play in South Texas, which Papa calls EOG’s top asset.

EOG has 100,000 net acres in the Vaca Muerta. Papa said it’s too early yet for EOG to discuss any resource estimates about the play.

Repsol YPF SA has announced it identified the existence of a recoverable 927 million boe, 80% oil, in Late Jurassic-Early Cretaceous Vaca Muerta shale on about 3.5% of its 12,000 sq km holdings in the Neuquen basin in Argentina (OGJ Online, Nov. 8, 2011).

In the Eagle Ford shale, EOG has 535,000 net acres in what Papa calls the premier oil window. EOG also has 26,000 net acres in a wet gas window and 49,000 acres in a dry gas window in the Eagle Ford.

Papa said Eagle Ford well quality is improving with the initial production rate of some recent wells approaching 3,000 b/d of oil plus NGLs and gas. EOG is testing seven downspaced pilot patterns in the Eagle Ford.

Well costs are decreasing in the play for EOG, which expects to save more money after closing on a previously announced acquisition that will provide EOG with self-sourced sand for hydraulic fracturing.

“It will be mid 2012 before we get all take-away issues figured out,” Papa said of possible capacity constraints in the Eagle Ford.

EOG continues to exploit its expertise in horizontal shale technology in the US and Canada, Papa said.

“We’re looking for new horizontal oil plays in North America, and we don’t believe they’ve all been found yet,” he said.

Contact Paula Dittrick at paulad@ogjonline.com.

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