ConocoPhillips (NYSE:COP) delivered flat production growth in the third quarter when compared with last year's numbers. While asset dispositions fueled earnings, it had a negative impact on production. But the one number that stuck out to me is the remarkable rise in the company's Eagle Ford Shale production.
Production from the Eagle Ford Shale soared 66% when compared with last year's third quarter. Eagle Ford production now represents a quarter of the company's production in the lower 48 states. While production growth slowed to a 4% increase from the second quarter of this year, that can be partially attributed to the company's move to multi-well pad drilling, as well as the fact that Conoco is now growing off of a much larger base.
For the quarter, ConocoPhillips delivered Eagle Ford production of 126,000 barrels of oil equivalent per day, or BOE/d. By 2017 the company sees production in the Eagle Ford of close to 150,000 BOE/d as it has identified 1,900 drilling locations that can be tapped to fuel that growth. While the rate of production growth will slow from here, overall growth from the Eagle Ford is unlikely to end anytime soon.
The same thing can be said for Eagle Ford producing peers such as EOG Resources (NYSE:EOG) and Chesapeake Energy (NYSE:CHK). As the top producer in the play, EOG Resources sees its drilling inventory providing a dozen years' worth of growth. Further, it sees its position in the play leading to best-in-class oil production growth over the next few years. The company continues to get better at reducing its costs while increasing its productivity. That's why I'd expect to see EOG Resources have really good things to say about the Eagle Ford when it reports earnings on Nov. 7.
Likewise, I expect Chesapeake Energy's quarter to be fueled in part by its Eagle Ford Shale position when it reports the day before EOG Resources. Chesapeake Energy's Eagle Ford shale position has been growing by a 44% compound annual rate over the past few years. Over the past year, Chesapeake's Eagle Ford production has helped push overall oil production up by 25% over the prior year. Further, with 3,400 remaining drilling locations, Chesapeake Energy has plenty of growth ahead of it as it continues to develop its position in the Eagle Ford.
The Eagle Ford shale continues to deliver for producers. With years' worth of future drilling locations it will keep producers busy, which is why it's one of the key pillars in ConocoPhillips plan to grow its production over the next few years.