EOG Eyes Flat Permian Activity, Tighter Global Oil Supply in 2023

(Reuters) — U.S. shale producer EOG Resources Inc. on Friday said it anticipates its activity in the Permian Basin to be flat this year, as supplies and equipment remain expensive and as it focuses on shareholder returns.

Global oil supply will likely tighten this year, Chief Executive Ezra Jacob said at a Goldman Sachs conference in Miami, Florida, but he cautioned the demand outlook is currently more "difficult to see."

Oil prices started the year off with the biggest two-day fall in three decades amid growing concerns of a global recession, while natural gas prices slid 18% the first week of January as warmer-than-usual temperatures in the United States and Europe cut demand.

Jacob said he was constructive on natural gas prices for 2023 and bullish on U.S. gas prices from 2025 and beyond as LNG demand ramps up. EOG has been developing the vast Dorado natural gas play in south Texas, and currently has exposure to some 140 million cubic feet per day (MMcf/d) of gas demand as LNG.

When Cheniere Energy kicks off Stage 3 of its Corpus Christi LNG plant in 2025 in Texas, EOG will have exposure to 720 MMcf/d of natural gas, 420 MMcf/d of which is linked to international pricing.

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