Producer
EOG Resources
Major U.S. oil and gas producer (NYSE: EOG); one of the largest independent Permian Basin operators producing significant associated natural gas alongside crude oil. Permian Basin accounts for ~17% of U.S. natural gas production (up from 5.8% in 2011). Associated gas from Permian oil production is a critical and growing feedstock for Gulf Coast refinery SMR units — and also a major source of U.S. natural gas flaring when pipeline capacity is constrained.
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Permian Basin Crude Oil & Condensate
65%Associated Natural Gas
20%Eagle Ford & Other Shale
10%International
5%
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Origin2023
EOG Resources was originally Enron Oil & Gas Company -- the exploration and production subsidiary of Enron Corporation. When Enron began its restructuring after the 2001 fraud collapse, EOG had already been partially spun off in 1999 (renamed from Enron Oil & Gas, with Enron retaining a 53% stake that was distributed to creditors in Enron's bankruptcy). EOG emerged from the Enron collapse as one of the few genuinely valuable assets -- its production assets were real, unlike Enron's mark-to-market trading positions. Under CEO Mark Papa (2000-2013) and his successors, EOG became the US leader in horizontal shale drilling technology, consistently generating more oil per dollar of capital investment than its Permian Basin competitors. The company that inherited Enron's most solid physical assets became one of the most respected E&P companies in the world -- its low-cost production model and technology-driven efficiency are industry benchmarks. EOG is what remained when you stripped away Enron's financial engineering.
EOG Resources, Inc. ↗Did you know2022
EOG Resources' Permian Basin crude oil production comes with approximately 1.5-2 Mcf of associated natural gas per barrel of oil -- a byproduct that EOG sells into the Gulf Coast gas market. As the Permian Basin grew to represent 17% of US natural gas production (up from 5.8% in 2011), Permian operators like EOG became inadvertent major natural gas suppliers to Gulf Coast refinery steam methane reforming (SMR) units. When Permian pipeline capacity is constrained, EOG must either flare associated gas (carbon emission and waste), shut in oil production (revenue loss), or take lower prices for gas (margin compression). When Permian pipeline capacity is adequate, EOG's associated gas flows to Gulf Coast industrial users including the hydrogen producers that supply refineries. The same company decision -- where to drill Permian wells -- simultaneously affects crude oil supply, Gulf Coast natural gas prices, SMR hydrogen feedstock availability, and methane flaring emission levels. An independent Permian E&P company's drilling budget is embedded in the hydrogen supply chain for US refineries.
US Energy Information Administration ↗