Thursday, November 4, 2010

EOG to Cut Back 2011-12 Haynesville Spending

EOG released its third quarter earnings yesterday.  EOG was an early adopter of the "shift to liquids" strategy and is of the belief that 67% of its production in 2011 will be oil and natural gas liquids. The company now proclaims itself a "North American Oil Company."  Good for them.

But EOG still has around 160,000 net acres in the Haynesville Shale.  Trying to put a happy face on this, the company touts that 67% of its acreage is in the sweet spot of the play, a higher percentage - it claims - than any other major leaseholders in the play.

The big news from EOG is that the company will pull back on its capital spending for 2011 and 2012.  There were no hard numbers, but the strategy will be to drill the sweet spot acreage and little else.  The company claims to have little remaining acreage that is not held by production (HBP).

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