EOG CEO sees supply chain constraints slowing Permian production growth
EOG Resources (NYSE:EOG) expects its activity in the Permian Basin will come in flat in 2023, as supplies and equipment remain expensive and as it focuses on shareholder returns, CEO Ezra Yacob said Friday.
Global oil supplies likely will tighten this year, while the demand outlook is "more difficult to see," the CEO told the Goldman Sachs Global Energy and Clean Technology Conference.
Even as natural gas prices plunged 18% the first week of January largely due to warmer than normal temperatures in the U.S. and Europe, Yacob said he was constructive on natural gas prices for 2023 and bullish on U.S. gas prices from 2025 and beyond as liquefied natural gas demand ramps up.
Yacob said the Eagle Ford shale in south Texas holds 20B cf of recoverable natural gas, where the company has been developing the vast Dorado natural gas play and has exposure to ~140M cf/day of gas demand as LNG.
EOG CEO Recent Comments
Re: EOG CEO Recent Comments
I forgot to mention in yesterday's webinar that none of the five gassers in our Sweet 16 have production in the Permian Basin. Lack of adequate takeaway pipeline capacity make it difficult to forecast West Texas natural gas prices.
AR, EQT and RRC are Marcellus/Utica gas producers in Appalachia where there is also some pipeline issues. They will all report some well freeze offs.
CRK is primarily a Haynesville dry gas company. CRK has direct access to the Henry Hub and to several LNG exporters.
SBOW is an Eagle Ford company. The South Texas Eagle Ford / Austin Chalk play has plenty of pipeline access and direct access to some large LNG exporters.
I expect the next two ngas storage reports to be well-below the 5-year average. I HOPE that by mid-January we see the weather in the eastern half of the U.S. get back to more normal winter temperatures.
AR, EQT and RRC are Marcellus/Utica gas producers in Appalachia where there is also some pipeline issues. They will all report some well freeze offs.
CRK is primarily a Haynesville dry gas company. CRK has direct access to the Henry Hub and to several LNG exporters.
SBOW is an Eagle Ford company. The South Texas Eagle Ford / Austin Chalk play has plenty of pipeline access and direct access to some large LNG exporters.
I expect the next two ngas storage reports to be well-below the 5-year average. I HOPE that by mid-January we see the weather in the eastern half of the U.S. get back to more normal winter temperatures.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: EOG CEO Recent Comments
A replay of the presentation is available at EOG website. Insightful on how a “Bentley” o & g company operates. All of their activity is based on being able to achieve a ROI of 60% at $2.50 gas and $40 oil. Culture is a long view with constant improvement. Stellar operation that is very shareholder friendly.