Although EOG Resources (NYSE:EOG) recently announced a strategic shift away from natural gas, and towards oil and liquids development, the company will still continue to be a major player in several natural gas oriented shale basins, including the Haynesville and Bossier Shale.
IN PICTURES: 9 Ways To Use A Tax Refund

Haynesville/Bossier Shale
EOG Resources has a total of 160,000 net acres, in both Louisiana and Texas, which is prospective for the Haynesville and Bossier Shale. The company plans on utilizing 11 rigs to drill 72 gross wells in 2010.

EOG Resources divides its acreage into three areas of focus - a Texas "sweet spot" in San Augustine and Nacogdoches counties, a Louisiana "sweet spot" in De Soto Parish, and some other Texas acreage in the north of the play in Harrison and Panola counties.

Testing the Potential
The acreage in Louisiana was the location of one of the company's first test wells into the Bossier Shale. EOG Resources reported an initial production rate of 14.7 million cubic feet per day, and also drilled another successful Bossier Shale well on the Texas sweet spot acreage. The company reported that the Hassell number two was completed with an initial production rate of 21 million cubic feet per day.

Reserve Potential
EOG Resources has one TCF of proved reserves booked here as of the end of 2009. While it can be difficult to estimate the reserves at such an early stage of development, the company is using a 10 Tcf figure for 3P reserves. The assumptions embedded in this estimate are 128-acre spacing on wells, leading to 1,662 future drilling locations with estimated ultimate recovery (EUR) per-well in a range from 4.9-6.6 Bcfe.

EOG Resources was producing only 60 million cubic feet per day of natural gas at the end of 2009 from its acreage here, but all the planned activity will lead to a quick ramp up in activity. The company estimates that by the end of 2017, production will reach 840 million cubic feet per day of natural gas.

Other Players
Other companies with acreage in the Haynesville and Bossier Shale include:

  • EXCO Resources (NYSE:XCO)
    The company has 163,000 net acres and will drill 102 wells in 2010.

  • Forest Oil (NYSE:FST)
    The company has 27,900 net acres and plans to drill 15 wells in 2010.

  • Goodrich Petroleum (NYSE:GDP)
    The company has 89,500 net acres and plans to drill 38 gross wells in 2010.

The Bottom Line
EOG Resources still has a major resource base to develop in several prolific unconventional natural gas basins, including the Haynesville and Bossier Shale. The company's recent shift away from development here will hardly even be noticed in the long term. (For more background on this industry, refer to our Oil and Gas Industry Primer.)

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

Related Articles
  1. Options & Futures

    Analyzing The 5 Most Liquid Commodity Futures

    Crude oil leads the pack as the most liquid commodity futures market, followed by corn and natural gas.
  2. Term

    What are Non-GAAP Earnings?

    Non-GAAP earnings are a company’s earnings that are not reported according to Generally Accepted Accounting Principles.
  3. Mutual Funds & ETFs

    ETF Analysis: PowerShares FTSE RAFI US 1000

    Find out about the PowerShares FTSE RAFI U.S. 1000 ETF, and explore detailed analysis of the fund that invests in undervalued stocks.
  4. Options & Futures

    Use Options to Hedge Against Iron Ore Downslide

    Using iron ore options is a way to take advantage of a current downslide in iron ore prices, whether for producers or traders.
  5. Stock Analysis

    Fortinet: A Great Play on Cybersecurity

    Discover how a healthy product mix, large-business deal growth and the boom of the cybersecurity industry are all driving Fortinet profits.
  6. Stock Analysis

    2 Catalysts Driving Intrexon to All-Time Highs

    Examine some of the main reasons for Intrexon stock tripling in price between 2014 and 2015, and consider the company's future prospects.
  7. Stock Analysis

    Net Neutrality: Pros and Cons

    The fight over net neutrality has become an amazing spectacle. But at its core, it's yet another skirmish in cable television's war to remain relevant.
  8. Savings

    Do Natural Gas Prices Always Follow Oil Trends?

    Prices for oil and natural gas are highly correlated. But investors should be aware of different factors affecting the prices of these commodities.
  9. Charts & Patterns

    Understand How Square Works before the IPO

    Square is reported to have filed for an IPO. For interested investors wondering how the company makes money, Investopedia takes a look at its business.
  10. Technical Indicators

    4 Ways to Find a Penny Stock Worth Millions

    Thinking of trading in risky penny stocks? Use this checklist to find bargains, not scams.
  1. Equity

    The value of an asset less the value of all liabilities on that ...
  2. Profit Margin

    A category of ratios measuring profitability calculated as net ...
  3. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis ...
  4. Debt Ratio

    A financial ratio that measures the extent of a company’s or ...
  5. Price-Earnings Ratio - P/E Ratio

    The Price-to-Earnings Ratio or P/E ratio is a ratio for valuing ...
  6. Net Present Value - NPV

    The difference between the present values of cash inflows and ...
  1. How do dividends affect retained earnings?

    When a company issues a cash dividend to its shareholders, the retained earnings listed on the balance sheet are reduced ... Read Full Answer >>
  2. What is the formula for calculating compound annual growth rate (CAGR) in Excel?

    The compound annual growth rate, or CAGR for short, measures the return on an investment over a certain period of time. Below ... Read Full Answer >>
  3. What is the difference between called-up share capital and paid-up share capital?

    The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
  4. When does the fixed charge coverage ratio suggest that a company should stop borrowing ...

    Since the fixed charge coverage ratio indicates the number of times a company is capable of making its fixed charge payments ... Read Full Answer >>
  5. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  6. What is the difference between the return on total assets and an interest rate?

    Return on total assets (ROTA) represents one of the profitability metrics. It is calculated by taking a company's earnings ... Read Full Answer >>

You May Also Like

Trading Center

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!