Josh Young
Hedge fund manager, energy, value, special situations

An Eagle Ford Oil Company Trading For Less Than 1/3 Of Its Proved Reserve Value

Eagle Ford focused companies such as EOG (NYSE:EOG), Marathon (NYSE:MRO), Sanchez (NYSE:SN) and Matador (NYSE:MTDR) have achieved excellent well results and tighter spacing. The following slide from EOG's presentation shows improving results and reduced days to drill, indicating improving economics:

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And the following slide shows the affect of downspacing:

(click to enlarge)

This trend allows more highly economic wells to be drilled on their acreage, increasing the value of their assets. Not surprisingly, their stocks have traded up and they trade at a premium to their booked proved reserve values.

(click to enlarge)

However, one Eagle Ford focused company trades at less than one third of its recently updated...

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