Page 16 - NorthAmOil Week 32

NorthAmOil PERFORMANCE NorthAmOil

EOG joins ranks of shale producers

to report second-quarter loss

US HOUSTON-BASED EOG Resources has joined company reported a 23% year-on-year decline
the growing ranks of shale producers to report a in overall production in the second quarter of
loss for the second quarter of 2020. The company 2020, with volumes falling to 623,400 barrels
– one of the US’ largest shale players – swung to a of oil equivalent per day (boepd). Oil was hit
net loss of $909mn, from a net profit of $848mn particularly hard, with output falling 27% y/y to
in the second quarter of 2019. The result was also 331,100 barrels per day (bpd), while natural gas
a sequential decline on the first quarter of 2020, liquids (NGLs) production was down 23% and
for which EOG posted net income of $10mn. gas volumes dropped by 15%.
On an adjusted basis, the second-quarter net EOG said oil volumes associated with the
loss amounted to $131.2mn, or $0.23 per share – shut-in of its existing wells peaked at around
a wider loss than analysts had been expecting. It 107,000 bpd in May, while for the second quar-
is yet another example of the hammering that oil ter shut-in volumes averaged 73,000 bpd. The
producers took in the second quarter, following a company began to return shut-in volumes to the
collapse in both crude prices and demand. EOG market in June, and said it expected nearly all of
noted, however, that it had managed to partially its shut-in wells to resume production before the
offset the hit to its earnings through a reduction end of the third quarter.
in operating costs. EOG also deferred initial production from
Like other shale drillers, EOG rapidly scaled most of its new wells until late June, with 10 net
back both activity and capital expenditures after new wells contributing less than 1,000 bpd of
crude prices crashed in March. As a result, the output to second-quarter volumes.™

PROJECTS & COMPANIES

Cameron LNG enters full commercial

operations with Train 3 start-up

LOUISIANA SEMPRA Energy announced on August 10 that were developing Phase 2 of Cameron LNG,
its Cameron LNG export terminal in Hackberry, which would add 9.97mn tpy of capacity to the
Louisiana had entered full commercial service facility through the construction of two more
with the start-up of the third liquefaction train. trains.
The company said in a statement that this was In January, Sempra asked the US Federal
the beginning of full run-rate earnings under Energy Regulatory Commission (FERC) for
Cameron LNG’s tolling agreements. an extension to build Trains 4 and 5, having
The plant, which has a total capacity of initially been given a deadline of May 2020 for
14.95mn tonnes per year (tpy), has exported bringing them into service. The delay to Phase 2
nearly 100 cargoes of LNG since its first train was partly attributed to a change in the circum-
entered service in August 2019, amounting to stances of one of Sempra’s joint venture partners.
more than 6mn tonnes of the super-chilled fuel. Having previously been targeting mid-2021
The second train began commercial service in for a final investment decision (FID) on Phase
February this year. 2, Sempra cautioned this week that “there can be
The terminal cost $10bn to construct, and no assurance” that Phase 2 of Cameron or any of
operations are anticipated to generate nearly the other LNG projects it is developing will be
$12bn of after-debt service cash flows for Sem- completed. This was attributed to the “number
pra during the project’s 20-year contract period. of risks and uncertainties” these LNG ventures
Sempra indirectly owns 50.2% of Cameron are currently subject to.
LNG. The other partners in the project are The company did say, however, that Cam-
affiliates of Total, Mitsui & Co. and Japan LNG eron LNG’s owners had signed memoranda
Investment – which is jointly owned by Mitsub- of understanding (MoUs) for 100% of the
ishi and Nippon Yusen Kabushiki Kaisha. In its offtake capacity from Phase 2 with no change
statement, Sempra also said that the partners in equity ownership.™

P16 www. NEWSBASE .com Week 32 13•August•2020