Shale oil bellwether EOG Resources boosted this year’s fracking plans by 30 per cent, saying it expected big returns on new wells even as oil dipped back to $40 a barrel.
The plans are the boldest yet among US shale oil companies, many of which have raised their production forecasts in recent days after posting second-quarter results. The upward revisions highlight how the fittest shale companies, mainly those with the oiliest land, are surviving at a time when dozens of others are filing for creditor protection in the biggest wave of bankruptcies since the telecom meltdown in the early 2000s.
Houston-based EOG raised the number of wells it plans to bring online this year to 350 from 270, and lifted by 50 to 250 the number of wells it would drill, while keeping its budget stable around $2.5 billion.
Since the start of the worst price crash in a generation in mid-2014, when oil was still above $100 a barrel, many shale producers have cut costs and lifted well productivity by 50 per cent or more. Wall Street has also demanded they focus more on capital efficiency rather than just raising output.
"The benefits of EOG’s premium drilling strategy are beginning to show in our operating performance," CEO Bill Thomas said in a statement. "We are committed to focusing capital on our premium assets."
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