Increasing efficiency was a key theme in US upstream independents’ first-quarter results. Companies such as EOG Resources, Occidental Petroleum (Oxy) and Apache focused on cutting costs to make shale drilling economical-even if crude prices stay lower for longer. EOG introduced an internally developed enhanced oil recovery technology that will increase the rate of return on investment, lower exploration and operating costs, reduce production declines and boost reservoir recoveries. It will allow the company “to return to triple-digit direct rates of return with oil as low as $60/bl”, chief executive Bill Thomas says. The company has started to use the technology at its key Eagle Ford acreage in Texas. EOG’s shift last year to “premium drilling” means that it uses improved technology to drill in acreage that offers the best returns-locations that generate a direct rate of return of at least 30pc after taxes with a price of $40/bl. As a result, EOG’s operating costs in the first quarter fell by 24pc to $1.9bn from a year earlier.
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