EOG Resources Inc. (EOG:US), the shale driller that helped discover the prolific Eagle Ford formation in South Texas, has identified the Rocky Mountains as the next great opportunity in North American oil.
The company, which is known for quietly building up positions in areas before their potential is widely recognized, said in a statement yesterday that its land in the DJ and Powder River basins in Colorado and Wyoming may hold the equivalent of 400 million barrels of oil. Shares rose 3.8 percent to $103.06 at 9:32 a.m. in New York.
EOG’s decision to identify the region as one of four central elements of its drilling portfolio is significant because the company has been among the most conservative in describing the potential of new developments. In an industry full of wildcatters talking up their own prospects, Houston-based EOG has been far more cautious in approaching new drilling prospects, said Fadel Gheit, an analyst at Oppenheimer & Co. in New York. So when they commit to an area, others follow.
“They are always, always, always leading the pack,” said Gheit, who rates the company a buy and doesn’t own shares. “They tend to sniff things out a lot sooner than competitors.”