From Investors Business Daily
EOG Resources (EOG) has been injecting cheap natural gas into some of its existing wells as the shale producer looks to extract more oil at low costs amid the prolonged slump in crude markets.
The top oil producer in Texas said in its first-quarter conference call Friday that it had successful trials of its natgas process in 15 mature horizontal wells in the Eagle Ford in south Texas. EOG plans to add another pilot project later this year that includes 32 producing wells.
Management expects the method to increase recoveries from oil reservoirs and reduce the rate of decline in production, while keeping operating costs low. But the company cautioned that the new method may not work in other shale plays with different geologic properties.
EOG shares closed down less than 0.1% in the stock market today, as crude futures fell.
The company has been working on the new process for three years but management wouldn’t go into detail about how exactly it works.
James Williams, an economist at WTRG, said that the enhanced recovery process is likely similar to a water or CO2 flood, where liquid or gas is pumped in a well, mixes with oil to add pressure, and pushes oil toward wells at the other end of a field to be pumped out.
“What they are effectively doing is using natgas to push more oil out to the surface, which is more valuable than the gas,” he said.
