EOG cuts 2016 capex in half

EOG Resources Inc., Houston, reported planned capital expenditures for 2016 of $2.4-2.6 billion, a 45-50% year-over-year reduction.

For 2015, EOG took a net loss of $4.5 billion, compared with net income of $2.9 billion in 2014. During the fourth quarter, the firm posted a net loss of $284.3 million, compared with fourth-quarter 2014 net income of $444.6 million.

The firm’s US crude oil and condensate production remained flat, and overall company production decreased 4% compared with that of 2014. Total worldwide liquids production decreased 2%, and total worldwide natural gas production decreased 7% vs. the prior year’s total. 

EOG says it’s shifting its focus to premium drilling and completions in 2016. Driven by continued efficiencies, technical advancements and geoscience breakthroughs, the company has identified more than 3,200 premium drilling locations capable of delivering solid rates of return at low commodity prices. 

The firm in 2016 expects to complete 270 net wells—of which 150 will be in the Eagle Ford, 75 in the Delaware basin, and 35 in the Bakken and Rockies region—compared with 470 net wells total in 2015. Total company crude oil production is expected to decline 5% vs. that of 2015. 

"EOG has now identified more than 2 billion [boe] of estimated net resource potential and a decade of premium drilling inventory that can earn superior returns in a low commodity price environment," said William R. Thomas, EOG chairman and chief executive officer.  

Driven by declines in commodity prices, total company net proved reserves decreased 15% in 2015 to 2.12 billion boe, comprising 52% crude oil and condensate, 18% NGLs and 30% natural gas. Revisions due to price reduced net proved reserves by 574 million boe. Net proved reserve additions, excluding revisions due to price, replaced 192% of EOG's 2015 production. 

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