Next New Shale Oil Hotspot? EOG: Utica Oil Can ‘Compete with the Best Plays in America’

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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.

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

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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.”

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

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.”

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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.

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This is pretty cool. Personally I’ve got only about a couple weeks worth of experience messing with the Utica region, and at that time, it was all about the gas. But there is a shite ton of existing wells already drilled and producing at least some hydrocarbons up there, so similar to Permian, lots of old leases being held by production, which means the operators up there don’t have to rush into a frenzy to try to hurry up and develop the horizontal oil play, as long as there’s no depth severances for those held leases.

Getting new infrastructure built up there to handle shale-like operations and production will probably be one of, if not the biggest, challenge. Lots of capital will need to be deployed, and those companies will need to have confidence in a legit return on investment. Would also be curious how the average spend per barrel up there compares to Permian, DJ, Powder and Uinita Basins.

Any baws here have some real experience working in the Utica area?