EOG Resources, Inc. Barclays 40th Annual Energy-Power Conference

Yeah, that's a great question. Exploration is near and dear to our heart. It's obviously a big part of the company. It's a core competency. Really, we like to tell people it's part of the actual company's DNA. So, one of the things that we've always done since the inception of the company is we've really honed that skill set. It's something we've tried to hold onto and as we have new generations come in, we try to pass down that information to them so we have future explorers to continue that skill set. The other thing is our decentralized structure really helps that out because we have seven domestic divisions. We have a division in the GCC now, we have one in Trinidad, and then we have an international division in Houston.

Each one of those are exploring in their area, so they can really put a lot of focus and intention on finding what the next resource is in that area. We've got a very structured way that we look at exploration. What we're trying to do is really look for four primary characteristics and at least check three of the boxes. The first one would be scale. It's got to have enough size. You want to have high rate of return. You want to have low or potential for low F&D, and then you also want shallow decline if possible. Those are really the things we look for. In order to really gauge those things, you have to have some data. So we go into areas, it's nice if there are obviously some penetration points.

Maybe there's some geologic data, older vertical data, maybe some older cores, older logs, seismic that we can work on. Maybe there's a little bit of vertical production that we can go ahead and we can extrapolate out to what might happen in a horizontal. We like to see, if possible, maybe there's a little bit of services in the area that we can utilize. Also infrastructure. If you have some infrastructure in the area, you can really keep your all-ins in the front of the actual play down, so it really makes the full cycle economics that much better. I think a couple great examples of what we've recently done, obviously people know about the Utica organically exploring and finding that and then making the Encino acquisition. But even if, we've found that it doesn't necessarily have to be a greenfield entry.

We've seen bypass pay step-out areas and extensions just with technology that you're able to explore for. A couple good examples of that would be the latest Austin Chalk sweet spot that we talked about there in the Eagle Ford. Just southeast of our Eagle Ford primary, we could use that geologic data and reservoir data to find that. Also, as we've talked about our entry into the GCC, we see a lot of opportunity in international unconventionals. Obviously our entry into Bahrain, which is an unconventional gas play, and then the UAE, which we're excited about, which is a pure oil play over there with 900,000 acres.

I think it is getting better, yes, absolutely. I would say the first thing is we see people think that there is inventory degradation and there is no more place to find domestically. We do not believe that. We still see a lot of opportunity for exploration and to be able to find very economic resource here in the U.S. Yes, as you look internationally, there has been very little unconventional international operations. Obviously some in Argentina, there has been some up in Canada, but there is unconventional rock all around the world. It is really just about having some of those boxes checked that I talked about as far as characteristics and hopefully having a little bit of data to get into them.

We have seen an evolution with a lot of the different governments out there, where they are becoming much more knowledgeable and understanding, not just how conventional operations and financials work, but also unconventional financials. We have been able to see, we can get in and we can actually partner with some of these entities and get a piece of the actual resource and be able to go in with our technology to exploit it, but then also partner with them to where they can learn off of us from our unconventional technology.

Yeah. I'd say, the easiest thing to point to is the actual success we've had out the gates over there. We knew there was going to potentially be some challenges, but we've been extremely happy with what's happened over there in the UAE. What that is it's a 900,000 acre, first of its kind unconventional concession there in the UAE. We've went in, we've started our exploration program. We have a three-year exploration phase on it. We've drilled our first handful of wells. What I'd say is operationally, we're very happy with what we're seeing there. We're able to apply some of the technologies out the gates, not all of them, but at least initially to be able to look at the reservoirs. We brought on our first two wells, and they were just 1 mile laterals.

Not necessarily optimal casing designs or optimal completions, but really just to test the formation. Those wells, they produced each 25,000 barrels of oil in the first 30 days. With a caveat to that, I'll say is, we had about a week or so that we were having to optimize facilities within that. It's the first time that you're stepping in and you're learning about it. There's still a lot of upside that you can bring to it. Both of the wells were flowing natural with no artificial lift. What we've seen is, we see great pressure profiles on them. The fluid mix is matching exactly what we thought. Everything's really encouraging. I think the exciting thing is we see so much upside with this. There's a lot of improvements that we can continue to make by applying that unconventional technology.