EOG Resources Buys Ohio’s SOUL For $5.6 Billion In Massive Shale Sale…

EOG Resources just did what every cash-flush oil CEO dreams about in the shower but never has the stones to actually pull off: slam $5.6 billion on the table for a slab of Ohio so big you could land Air Force One on it sideways. If you thought the Utica Shale was flyover country, EOG just turned it into the hottest ZIP code in American oil…. Making every “capital discipline” preacher on Wall Street spit out their holy water. 

(Source: Giphy) 

In short, EOG is buying Encino Acquisition Partners, which owns 675,000 net acres in Ohio’s Utica Shale. That instantly balloons EOG’s total Utica position to 1.1 million acres. Transformative? You bet your tail it is. Their daily production out of Utica goes from a rounding error (40,000 barrels) to a “call OSHA” level 275,000 barrels. Bigly.

What’s more is that Encino is Ohio’s largest oil producer and third-biggest gas source, built by Encino Energy and the Canada Pension Plan Investment Board back in 2017 to do one thing: hoard American hydrocarbons until someone lost control of their checkbook. And now, that someone is EOG… a.k.a. A big oil company who usually grows by drilling more holes than a Bonnie Blue world record… not by buying out the next guy’s inventory. Case in point: Their last deal was nine years ago… so apparently scarcity makes the heart (and wallet) grow reckless. 

(Source: Wall Street Journal) 

As for the money split, here’s how the deal shakes out: $3.5 billion in new debt and $2.1 billion in straight cash homie. Meaning, financially, this is a BFD. EOG claims the deal boosts their net asset value and all those per-share metrics that analysts get hot and bothered about. The deal drops them into a new weight class: three “foundational pillars” now: Permian, Eagle Ford, and a juiced-up Utica. Not to mention over 12 billion barrels of oil equivalent in their “multi-basin portfolio”. 

But, but, but… here’s the messy part. Oil prices are swinging harder than a friggin’ Buccees parking lot. M&A in oil and gas has been dead in the water for months, thanks to the trade war pissing match… and the fact every exec is either waiting for a better deal or a worse market. However, EOG just broke the seal. And if natural gas demand takes off in 2025… think: data centers, LNG exports, every idiot who thinks AI runs on vibes instead of grid power… this acreage just became the golden ticket. Yacob (the CEO) is betting Ohio will go from “emerging” to “central” on the U.S. energy map. Big swing. Could flop, but also could be a license to print money. 

(Source: Giphy) 

Translation: EOG is betting the bottom is in and the next cycle is up, while everyone else is still locked in analysis paralysis. They didn’t wait for oil to hit $100, or for the Fed to cut rates, or for the Canada Pension Plan to get cold feet. They saw a strategic asset and pounced. With that said though, EOG shares are down -1.40% over the past five days… but the news was made over the weekend. So if you’re wondering what happens next: expect a stampede both in share price and M&A’s. 

Every PE fund, every Houston exec with a pulse, is dialing the same handful of landmen right now, asking what else is for sale in the Utica before prices go full bananas. This deal just told the entire sector: wake up and grab your wallet, because Ohio is officially open for business. Of course, do what you will with this information. I’m not saying we’ll see a massive full-send in EOG price action tomorrow… but I’m definitely not saying we won’t see a bigly drive down south either. So place your bets accordingly, and keep your head on a swivel, friends. Until next time… 

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Stocks.News does not hold positions in companies mentioned in the article.