HPC Market Watch
With approximately 85% of its production in natural gas, EOG has responded to the depletion of conventional sources of this commodity by shifting its focus to unconventional deposits such as the Barnett Shale near Fort Worth, Texas. The difficult process of extracting gas from unconventional resources has only become economically feasible in recent years, and EOG has become highly efficient in these operations. In the Barnett Shale, it has reduced costs by cutting the time it takes to drill a well in half, and it plans to apply lessons learned at this unconventional field to other shale-based resources in the next two years.
The Barnett Shale has become one of North America's "hot spots" for natural gas and EOG owns about 610,000 acres of this area. In general, EOG avoids pricey acquisitions and relies on its ability to develop existing operations in order to keep costs low. Although EOG’s competitors have generated more impressive production growth, EOG maintains one of the industry’s lowest-cost asset bases. The firm has also outlined plans to build its own gathering, processing, and transportation infrastructure for its resources in Texas and North Dakota, which will create vertical efficiencies and maximize margins in the long term.(Read more at Wikinvest )