EOG: Utica Oil Can ‘Compete with the Best Plays in America’

EOG Resources is taking its 3-mile-lateral tack in Ohio’s Utica oil play to a company-record 3.7-mile test, finding the rock’s output and costs “compete with the best plays in America,” EOG executives told investors May 3.

The seven laterals in its first multi-well pads, Timberwolf and Xavier, have produced more than 200,000 bbl of oil each since turned into sales—the former, in August; the latter, in October.

A third pad, the four-well White Rhino in Noble County, Ohio, is cleaning up currently, but it is “meeting our expectations during [their] first few weeks of production,” said Keith Trasko, EOG’s senior vice president of E&P. Well spacing is 1,000 ft.

The 3.7-miler is in its Sable pad, which is currently underway and is also in Noble County.

EOG’s 180-day results

On the three-well Xavier, first-180-day production averaged nearly 450,000 boe per well; from the older and four-well Timberwolf, more than 350,000 boe per well.

The Xavier wells were landed with 800-ft spacing; Timberwolf, 1,000-ft spacing.

The exact lateral length was not provided for each, however, EOG reported that it is consistently drilling three-mile laterals in the Utica.

Xavier’s first-six-month barrels of oil per lateral foot is 14.8. When including NGL and gas, boe per foot per well is 25.1, EOG reported.

The Xavier pad IP’ed an average of 3,250 boe/d from each of the three wells. Its first-30-day production was 55% oil and 75% total liquids, including NGL.

In Timberwolf, the first-six-month barrels of oil per lateral foot from each well is 11.3. When including NGL and gas, boe per foot per well is 20.3.

Timberwolf IP’ed an average of 2,150 boe/d from each of its four wells, 55% oil and 85% liquids.

Timberwolf and Xavier “are fantastic,” said Ezra Yacob, EOG chairman and CEO. “They're exceeding what we initially had in our type curves and they're more than confirming some of our early thoughts on spacing.”

Trasko said, “We see that these compete with the best plays in America—very comparable to the Permian on a production-per-foot basis, both in oil and equivalent.”

Yacob added that the Utica “will be competitive with the premier unconventional plays across North America.”

Utica geology, north to south

White Rhino is EOG’s first pad in the southern portion of its 140-mile north-south leasehold focus, totaling 435,000 net acres. In the southern part of the Utica, it also owns 135,000 net acres of minerals.

The southern fairway has a slightly higher liquids ratio than Timberwolf in the north and Xavier in the middle, Trasko said.

The Utica is thicker in the north and in the middle of the fairway, while “the southern area has better geomechanical properties,” Trasko said.

Yacob added, “It's a bit of a different geologic environment down [south]. It is also an area where we own the minerals, which is very exciting. You guys know the economic uplift that can have.”

“So overall, I would say that everything's right on pace.”

In addition to the three pads’ 11 wells, EOG also owns 18 legacy wells that came with its leasehold and drilled four stand-alone delineation wells.

EOG plans 20 net wells in the Utica this year throughout the leasehold, north to south.

It has one full-time rig in the play. In 2023, it had one rig drilling half-time.

The black-oil window

EOG’s drilling activity has focused on the volatile-oil window, which is flanked on the west by the black-oil window.

Before drilling it, though, “the first thing we need to do on the west is … acquire seismic data. We're in the process of doing that,” Yacob said.

“We need to see the degree of structural complexity before we start developing. But geologically, in general, we don't see significant changes in thickness or pay from east to west.”

The lower thermal maturity of the black-oil phase will mean less pressure, which typically “reduces the well productivity a little bit,” Yacob said.

“But it also reduces costs. So your economics are still really comparable to all the other portions of the play.”

EOG wants to increase infrastructure in Ohio’s Utica, including in-basin sand and water reuse assets, he added.

Full-field development

As for moving on to full development mode—or manufacturing mode—EOG isn’t rushing, Yacob said.

“I wouldn’t say we're looking for any major sign or any silver bullet that we're going to turn on a 15-rig program,” he said.

Understanding the resource in Ohio’s Utica oil window is “around where the Permian was in the 2012-2013 timeframe,” he added.

Since it’s frontier-ish in that sense, EOG’s approach is to consider upfront “the full cycle economics—and they're going to stay with you on the life of this asset.”

He added that the company wants to bring some of these capital-efficiency learnings from its other assets into the Utica.

“But we want to do it at a pace where we don't have the misses on spacing or higher well costs or things that have plagued some of the early learnings in other resource plays,” Yacob said.

Thicker north

Trasko said, “We like that, generally in the area, it's an easier operating environment compared to a lot of our other plays: [It’s] consistent geology [and] it's a little bit shallower depth.”

Trasko said the south’s higher quality geomechanics and rock properties have to do with frac barriers and keeping the frac energy more contained near the wellbore.

Thus, type curves will differ from north to south, Trasko said.

As for going full-field with laterals longer than three miles, “we’re in the very early innings,” said Jeff Leitzell, the company’s COO.

But, Leitzell added, “the Utica sets up almost perfectly.”

EOG is aiming to push lateral length “just because we can do one-runs in the laterals and stay on bottom longer and not have to trip out of the hole,” he said.

“We really have no problems operationally [with] completing the well.”

So “yes, we'll continue to push the limits there,” Leitzell said. Eventually, “we will be drilling longer and longer there in the Utica.”

Another upcoming pad, according to Utica state permit records, is the Shadow (seven wells) in Carroll County, Ohio.

Of EOG’s Ohio leasehold, more than 90% is HBP by legacy wells. The leasehold and minerals were reportedly bought in 2022 from Encino Energy and Artex Energy Group for some $500 million.