EOG Resources' geographic focus is determined by where it can locate primary energy resources -- natural gas, natural gas liquids, and oil. In recent years that focus has been shale plays in the US. The independent oil and gas company is engaged in exploring for natural gas and crude oil and developing, producing, and marketing those resources. In 2013, EOG's total estimated net proved reserves was 2.1 billion barrels of oil equivalent, of which 901 million barrels was crude oil and condensate reserves, and 5 trillion cubic feet was natural gas reserves.
EOG is developing major shale plays in the US -- the Eagle Ford Shale and Barnett Shale in Texas and the Bakken Formation in North Dakota. EOG also has operations in Canada, offshore Trinidad, the UK North Sea and East Irish Sea, the China Sichuan Basin, and the Neuquén Basin of Argentina.
In 2013 the US accounted for some 92% of the company's proved reserves. EOG is the largest oil producer in the lucrative Eagle Ford Shale play in South Texas, producing 142,000 barrels of oil equivalent per day that year.
That year it also drilled and participated in 61 net wells in the Permian Basin to develop its liquids-rich Leonard and Wolfcamp plays. The company has 73,000 net acres in the Leonard Shale, and 134,000 net acres in the Wolfcamp Shale, all within the Permian's Delaware Basin. Additionally, EOG has 113,000 net acres in the Wolfcamp Shale within the Midland Basin.
Sales and Marketing
The company sell its North American wellhead crude oil and condensate production to local markets and (by pipeline, rail, and truck) to downstream markets, and its natural gas production to local markets or via pipeline to downstream markets.
EOG's major sales points include Cushing, Oklahoma, St. James, Louisiana, and other points along the Gulf Coast. In 2013, two purchasers each accounted for more than 10% of EOG's total wellhead crude oil and condensate, NGLs and natural gas revenues and gathering, processing and marketing revenues.
In 2013 and 2012, all natural gas from EOG's Trinidad operations was sold to the National Gas Company of Trinidad and Tobago and all natural gas from EOG's China operations was sold to PetroChina.
EOG’s revenues increased by 24% in 2013 due to higher sales of crude oil and condensate, NGLs, and natural gas, and higher gathering, processing and marketing revenues (including gathering fees associated with gathering third-party natural gas), and a gain on the disposal of assets.
After experiencing a major net income drop in 2012 due to an increase in operating expenses, in 2013 EOG’s net income jumped up by 285% due to higher revenues and operating income.
In 2013 the company’s operating cash inflow increased to $7.33 billion (from $5.24 billion in 2012) as the result of higher net income and a change in working capital due to higher inventories and account payables.
EOG's strategy is to focus on organic growth of its North American shale plays and making complementary acquisitions of properties in North America and internationally. The company puts an emphasis on developing advanced technology associated with maximizing production from shale plays (especially in the Eagle Ford and Permian Basin), including reservoir simulation models, improved drill bits, mud motors for horizontal drilling, and horizontal completion methods.
In 2014 EOG expanded its inventory of crude oil plays with successful drilling results in the Second Bone Spring Sand, which underlies its extensive Leonard Shale acreage position in Lea and Eddy counties, New Mexico.