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Bakken Update: EOG Resources’ Completion Technology Is A Game Changer

Mar 6, 2013, 16:57 by: Michael Filloon: EOG, includes: KOG, NFX, OAS, SLCA, STO, WLL Disclosure: I am long SLCA. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. (More…)

EOG Resources (EOG) is changing the way it is working the Bakken. The Eagle Ford is its flagship, followed by the Bakken. The Permian was replaced as its number 2 play after NGL prices pulled back. This wasn’t the only reason, as EOG was the first to rail Bakken Light to Louisiana. Its ability to get LLS pricing has changed the dynamics of Bakken price realizations. In the most recent quarter, EOG had a realized crude price of $10.52. This has worked so well, EOG only utilizes a very small percentage of production in pipeline capacity. Other Bakken operators have begun railing crude. The rails will be a big part of Bakken crude transport for many years and it all started with EOG.

Over the past year, EOG has implemented a new completion design. It was first used in the Eagle Ford and Permian, and now it has found its way to North Dakota. In the Eagle Ford, EOG has used this and has a large number of short laterals with 24-Hour IP rates north of 3000 Bo/d. Its best completion, the Burrow Unit #2 produced 6331 Bo/d. In order to increase crude production it has not focused on long fracs but those that increase the surface area around the well bore. Essentially, EOG wants better fracs near as opposed to farther away as it allows the crude to flow in a radius around the well bore.

EOG has two areas of focus in North Dakota. The first is its core Parshall Field. The resource mix is 92% oil, 6% NGLs, and 2% gas. The second is its Antelope Prospect of northeast McKenzie County. This area produces 78% oil, 11% NGLs and 11% natural gas. The Antelope produces higher EURs, but the increased gas content makes these areas less economic. It plans to drill 46 wells in these areas, down spacing to 160 acres. EOG’s new completion design has improved production by 30% to 70%. In a recent article, I went over EOG’s newer Bakken completions and how it has been modifying well design for better recoveries. It differs greatly from the Bakken average of a 9000 foot 30 stage laterals using 60000 barrels of water and 3 million pounds of proppant. I have listed a few of EOG’s wells that have this completion design below.

EOG’s New Bakken Well Design Well Field Choke Lateral Stages H2O Proppant
22780 Parshall 32/64 8916 38 99316 9438324
20766 Round Prairie 36/64 8882 37 103333 9668031
21239 Parshall 30/64 7873 42 106887 9023010

The above well design is not cheap. The amounts of water and proppant are some of the largest in the United States. Below are other significant wells by EOG.

Other Significant EOG wells Well Field Choke Lateral Stages H2O Proppant
20542 Ross 22/64 9019 38 61136 5799564
19381 Clearwater 34/64 9560 39 74258 6186537
22199 Clarks Creek 20/64 9073 39 85375 5764801
21689 Spotted Horn 24/64 4401 19 54266 4639136
20578 Spotted Horn 16/64 4117 19 49220 4586886

The production of these wells is important to gauge how effective the well design is. I have broken down each well into initial production rates.

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