EOG to rail Bakken crude to Cushing
EOG Resources Inc., Houston, is implementing a plan to use rail car unit trains to ship crude produced from the Bakken formation in North Dakota to the Cushing, Okla., terminal.
By OGJ editors
HOUSTON, May 6 -- EOG Resources Inc., Houston, is implementing a plan to use rail car unit trains to ship crude produced from the Bakken formation in North Dakota to the Cushing, Okla., terminal.
EOG Resources has finalized a strategic transportation arrangement with Burlington Northern Santa Fe railway and expects to have the rail facility operational by February 2010, said Mark Papa, chairman and chief executive officer.
The deal will afford sharply better long-term oil netbacks than it is receiving by shipping its oil by pipeline through the hub at Clearbrook, Minn., Papa said.
The company, which restricted its Bakken oil production for the first 6 months of 2009 due to marketing issues, expects to resume full production in Parshall field in North Dakota by July.
In the Williston basin, EOG Resources is running eight rigs compared with 10 in 2008, and the company has deferred almost all well completions until summer 2009 when fracs can be performed more economically and road conditions improve.
With natural gas prices languishing, EOG Resources's $3.1 billion capital budget for 2009 is directed toward liquids investments, Papa said.
The company raised its 2009 overall oil and gas production growth target to 5½% from 3%, driven by a 22% increase in liquids output. Most of the increase is to come from its Bakken and Fort Worth basin Barnett shale plays.