Two wells carry EOG's case for exporting the shale playbook to Abu Dhabi

Analogue rock is what makes the entry cheap. If Abu Dhabi's shale behaves like South Texas's Eagle Ford, as Ezra Yacob told a Hart Energy conference in Houston that it does ^[4], then the completion design and the frac recipe are already written. The open question is narrow: does the rock cooperate. EOG has a couple of wells online to answer it ^[5]. "It's outperforming our expectations right now," Yacob said ^[6].

That is a thin evidence base for a story about capital moving continents, and the Fortune account does not include capital budget amounts, well costs or returns for any of the companies it names ^[25]. It does give direction. Exxon and Chevron, which cut exploration hard without ever leaving international development ^[10], are both raising the international share of their capital budgets for Middle East and Africa projects ^[11]. Continental Resources, the largest privately held domestic producer, is expanding in Argentina and dealmaking in Venezuela ^[14].

Domestically, the condition being described is about upside. Fortune calls the 20-year-old shale business maturing and not declining, with the thrill of the big discovery largely gone ^[9]. Bobby Tudor, who founded Tudor, Pickering, Holt & Co. and now runs Artemis Energy Partners ^[15], called the industry mature consolidation mode with only so much room left to grow ^[17]. Both are statements about growth and discovery. EOG is meanwhile still huge in Texas and leading a mini oil boom in Ohio ^[8].

The constraint is people. "The exploration muscle memory of the U.S. got hollowed out and it got hollowed out pretty badly during the shale revolution," Tudor said ^[19], adding that many workers in oil and gas "have never drilled a dry hole" ^[18]. An engineer who joined at the start of the shale era in 2005, as Yacob did when he left the USGS for EOG's geoscience team ^[1], has roughly twenty years of experience in a business that is itself twenty years old. All of it was spent on acreage somebody else had already found ^[24].

The export is technique and staff, paid for by host governments who want American shale expertise well by well ^[21]. Or the dollars move first at major scale, where the international budget share is already rising ^[11]. Or the migration goes west instead, since Tudor said "The pull toward the Americas, especially in light of this war, is actually quite dramatic" ^[20], from Alaska, where Bill Armstrong drilled the Pikka discovery ^[23], down to Argentina.

I would expect people and technique to travel before capital does, because the only disclosed international result at EOG is two wells and the scarce input in the account is wildcatting experience. The way to find out I have the order backwards is an EOG budget that puts a material share of spending in the UAE and Bahrain ^[7] before the third and fourth wells are drilled.