EOG is white hot!

by Matthew Downes

Since January 20th, EOG Resources (EOG: $90.24) stock is up 50%.  We’re gonna look a bit deeper into this E&Ps activity levels and provide some additional analysis.

In the chart below we analyze their frac jobs from 2015 to current.  Since January of 2015 EOG has performed close to 700 frac jobs. It has the appearance of a roller coaster ride, but further analysis will show you that this is a company who squeezed every dollar and leveraged their technology for every single frac job. Patience and target well selection were key factors in 2015.

Month by Month:

Over the same period EOG primarily worked with 4 pressure pumpers (in order):
1. Pumpco, a division of Superior Energy Services (SPN: $16.76)
2. Halliburton (HAL: $43.91)
3. Universal, a division of Patterson-UTI, Energy Inc. (PTEN: $19.77)
4. Baker Hughes Inc. (BHI: $47.71)

One more chart we thought was interesting to follow was their activity by county and state.

The majority of their activity takes place in Gonzales and La Salle counties in Texas.  This chart reflects activity in New Mexico, Texas, North Dakota and Wyoming.

The oil patch has seen a rash of bankruptcies over the last 24 months as the result of a downward pricing cycle. While you’d think this would be a company motto for all operators, EOG is targeting premium drilling properties with an after-tax rate rate of return of 30% which is outstanding. In a recent Forbes article they polled 18 analysts with 44% of them recommending a strong buy.

Frequently referred to as the Apple of all oil and gas, do you think EOG can continue to improve while the Oil markets fully recover?

Bruce Kamich of The Street “EOG Breaks Out of an Impressive Base Pattern
Dividend Channel on Forbes “EOG Cross Above Average Analyst Target
Erwin Cifuentes of OilPrice.com “EOG Resources Boosts Fracking Plan by 30 Percent

The data presented above has a margin of error of 5-8% as a result of E&P and/or service company errors or incorrect data filings. Neither the information, nor any opinion contained in this site constitutes a solicitation or offer by Primary Vision or its affiliates to buy or sell any securities, futures, options or other financial instruments or provide any investment advice or service.