Monday, August 16, 2010

Lea County, NM; Eddy County, NM: Avalon Shale Update

By Andrea:

EOG Resources Inc. (EOG) recently researched Avalon Shale potential across their 120,000 net acres in the Red Hill areas of Lea and Eddy counties, New Mexico. They believe that the recovery potential is 65 million bbl of oil equivalent. They based their estimate on 7 horizontal and 4 vertical wells that they have already drilled. They stated that the typical horizontal recovery potential is estimated at 400,000 net boe for $6.5 million per well, or a 40% direct after-tax reinvestment rate of return. EOG has been testing Avalon shale play for more than 1 year and they have production history of more than 300 days from one well.

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