Investors worried about what is to become of EOG Resources Inc. (NYSE: EOG) that day its Eagle Ford wells run dry—roughly 13 years from now—can relax.

In its earnings release Nov. 5, EOG said it had bumped up its Delaware Basin resource estimate by 1 billion barrels of oil equivalent (Bboe) through acquisitions and further delineation.

Its estimated total resource in the Delaware is now at a comfortable 2.35 Bboe, which the company said amounted to “decades of high-return drilling potential.”

“The Delaware Basin disclosure should assuage any investor anxiety over what's next for EOG after the Eagle Ford,” said Pearce Hammond, analyst with Simmons & Co. International.

The third quarter of 2015 saw EOG strike in what it called three “tactical acquisitions” that totaled 26,000 net Delaware acres for $368 million.

The acquisitions tacked on additional net production of 750 boe/d.

In the first quarter of 2015, William R. “Bill” Thomas, chairman and CEO, said EOG would be looking for bolt-on acquisitions. “We’re focused on opportunities where we see very sweet spot acreage,” he said at the time.

The company appears to have gone straight to the core, adding Wolfcamp acreage with 500 MMboe. In the Wolfcamp, EOG added 950 net drilling locations and increased its net resource potential estimate by more than 60% to 1.3 Bboe.

EOG also said that its Second Bone Spring Sand oil play has an initial net resource potential estimated at 500 MMboe with 1,250 net drilling locations in this high-quality crude oil play.

The acreage is in Loving County, Texas, and Lea County, N.M. Most of the acquisitions are adjacent to EOG's existing operating areas in the high-rate-of-return Delaware Basin oil window.

Thomas said the Delaware is now its second-largest play behind the Eagle Ford.

“We have now added 2200 locations,” he said.

Hammond said that after applying a $60,000 per boe/d assumption to production yields, EOG paid $12,400 per acre.

“While this is in line with recent industry transactions and not a bargain on the surface, it is important to note that EOG looked at numerous potential deals before settling on these transactions,” he said. “EOG believes the acquired acreage is in the core of the play.”

Flat, But Growing

In what might look at first glance like an anomaly, EOG said that it increased its net acreage position in all three areas of the Delaware Basin by 46,000 acres.

But that’s 20,000 more acres than its announced acquisitions.

“Why the 20,000 difference in the net acreage? Organic leasing and further delineation,” Hammond said.

EOG continues to gain inventory and resources, largely without making a large-scale purchase.

In part, the company said advancements in targeting and completion technology are enabling tighter well spacing and increased production per well.

Yet EOG set out to keep production relatively flat in 2015. In a Nov. 10 presentation at the Bank of America Merrill Lynch Global Energy Conference, Thomas said the company intentionally dialed back volumes.

“We didn’t grow production this year intentionally because we wanted to make sure we were focused on our returns,” Thomas said. “We have set ourselves up for a very strong start in 2016.”

Yet, the company has rapidly filled inventory slots.

Notwithstanding its recent acquisitions, EOG has typically grown through organic exploration rather than high-dollar purchases.

Annually, the company identifies locations about “twice as fast as we’ve been able to drill,” Thomas said.

In 2015, the company’s acquisitions and growth have opened up 5x the amount of inventory currently being drilled, Thomas said.

Hide And Seek

Thomas said EOG's Delaware Basin, Eagle Ford and Bakken positions continue to show grow in both size and quality through technology.

"Outstanding technical and operational advances enabled us to increase potential resource estimates for our Delaware Basin position by more than 70%," Thomas said. "We are also pleased that through our tactical acquisitions of new, high-quality Delaware Basin acreage, we added assets which meet our high rate of return hurdle.”

But EOG’s ability to keep the top slot among Texas oil producers has involved streamlining every process and squeezing every penny.

Thomas said EOG has made strides in high-density fracking, for instance.

In 2010, EOG was able to produce 540 events per 1,000-foot (ft) stage. In 2015, microseismic data shows a 1,000-ft stage creates 4,030 events.

One of its more notable wells in the Delaware had an IP rate of 4,465 boe/d, with 30-day production of 3,490 boe/d. The well used a 4,600-ft lateral.

And in the Eagle Ford, the company remains the largest acreage holder and oil producer. On average, it has operated 15 rigs and completed 300 net wells. EURs for Eagle Ford wells are 450 Mboe using 40-acre spacing.

“The productivity of wells continues to increase over time with the fracking technology,” Thomas said. But in the third quarter, lease operating expenses (LOE) were down about 17% year-over-year, he said.

Contact the author, Darren Barbee, at dbarbee@hartenergy.com.