EOG Resources Inc expects its oilfield service costs to drop this year in two large shale areas, its chief executive said on Tuesday, bucking the industry trend as costs inch higher across the industry.
EOG expects its service costs to drop 9 percent this year in the Permian Basin, the largest U.S. oilfield, and 4 percent in the Eagle Ford shale, CEO Bill Thomas said at the Scotia Howard Weil energy conference in New Orleans.
“We’re really locked in and seeing prices move down,” he said. Unlike some peers, EOG procures its own sand, water and chemicals for fracking, helping to defray costs.
“We don’t need a lot from the service industry except people and equipment to pump,” Thomas said.
The forecast for a decrease in cost over 2017 levels comes as EOG’s peers grapple with rising prices from Halliburton Co and other oilfield service providers, who are eager to charge more as crude prices climb higher.
Houston-based EOG has already contracted for 60 percent of the services it will need this year, Thomas said.