Madrid-based Repsol SA will invest €$2.2 billion (US$2.38 billion) between 2024-2027 on its unconventional assets in the Marcellus and Eagle Ford as it focuses on increasing its core U.S. upstream business platform.

“On our positions in Eagle Ford and the Marcellus, we want to continue improving our operating model, reducing break evens and gaining scale,” Repsol CEO Josu Jon Imaz told analysts Feb. 22 during the company’s fourth quarter 2023 webcast.

Besides its North American presence, Repsol has assets in Brazil, Colombia, Trinidad and Tobago, Venezuela, the U.K. and Norway, and continues efforts to consolidate the U.S. as a key growth area. In that vein, Repsol aims to actively manage optionalities to upgrade and optimize its portfolio, Imaz said, while focusing on areas of competitive advantage and higher value.

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In 2023, the unconventional Marcellus and Eagle Ford plays accounted for around 82% of Repsol’s North American production of 218,000 boe/d—including conventional production—and 36% of Repsol’s total global production of 599,000 boe/d. Between 2021-2023, the Marcellus and Eagle Ford assets boasted a CAGR of around 37%, according to Repsol statements.

Over the next four years, Repsol will spend €$1 billion (US$1.083 billion) in the Marcellus and €$1.2 billion (US$1.3 billion) in the Eagle Ford. But near-term production gains will primarily come from the Marcellus, which will offset declines from the Eagle Ford, according to Imaz. He did not address why Eagle Ford production would be lower despite the allocation of more capital.

Looking ahead, Imaz expects combined production from the two plays to average 180,000 boe/d to 200,000 boe/d between 2024-2027 compared to 182,000 boe/d in 2023, 121,000 boe/d in 2022 and 99,000 boe/d in 2021.

Alaska and GOM production upside

Repsol also has promising activities in Alaska and the U.S. Gulf of Mexico (GoM) that will contribute to production gains over the near-term.

Repsol’s Alaska Pikka project offers the company an advantaged onshore position and low carbon intensity production (12 kgCO2/boe). The final investment decision (FID) for the project was taken in 2022 and commercial operations are expected to start in 2026. Peak production from the project, in which Repsol has a 49% interest, is estimated at 32,000 boe/d.

Repsol’s Leon and Castile projects in the GoM provides production flexibility and lower carbon intensity production (5 kgCO2/boe). FID for the project was taken in 2022 and commercial operations are expected to start in 2025. Peak production from the project, in which Repsol has 50% interest in Leon and 36% interest in Castile, is estimated at 20,000 boe/d. 

Repsol announced an FID at its Monument project in the GoM in 2023. Peak production from the project, in which Repsol has 20% interest, is estimated at just 3 boe/d.

The Shenzi North subsea tieback in the GoM is also expected to start initial production in 2024.

"Over the next four years we will stay the course on the strategy we presented in our previous plan to address the energy transition, and we will focus on all the types of energy that meet our customer’s needs,” Imaz said in a separate statement related to the company’s quarterly results.

“We are convinced that this approach, in which decarbonization is an attractive opportunity to create value, grow and be profitable, is the most appropriate one for us.”