EOG Completes Austin Chalk Leasing, Integrates Chalk with South Texas Development in Q2 2026

Status of Austin Chalk leasing and integration into South Texas development vs. Eagle Ford/legacy assets (EOG)

1) Leasing status in the Austin Chalk (how far along EOG is)

• EOG “identified and leased about 60,000 acres in the Austin Chalk,” describing the acreage as a “sweet spot.” ¹
• Management said they believe they have “leased up the majority of the sweet spot,” which is why they are able to discuss it now. ¹
• EOG acquired the acreage “primarily through organic leasing,” with “average cost” around $1,200 per acre (with only “maybe some small acquisitions”). ¹
• EOG has been actively de-risking the play: it has drilled “about 12” high-return wells that “confirm” strong economics, and it reported “payouts of less than 1 year” with “returns over 100% at $65 WTI.” ¹
• EOG further contextualized development inventory: within the identified “60,000 acre sweet spot,” it identified about 125 remaining 2-mile locations, adding about “1 additional full year of drilling inventory at current pace to our San Antonio division.” ¹

Bottom line on leasing: Based on management’s language (“leased up the majority”), leasing appears largely complete for the core sweet spot, with ongoing data collection to understand the play’s extent further. ¹²

2) How Chalk is being integrated into South Texas development plans (feathering into the Eagle Ford program)

• EOG framed Chalk integration as “feathering the Chalk into the development program” and aligning capital allocation with existing South Texas development priorities. ³
• On the capital allocation question directly, management indicated Chalk will be “equally within our core Eagle Ford development” because it is a “sweet spot.” ⁴
• EOG said Chalk development will be “pretty much in the mix” alongside:
  • “standard Eagle Ford,” and
  • “Austin Chalk proper” over “the next handful of years.” ⁴
• Operationally and technically, EOG emphasized cross-basin know-how: it used its “high-temperature, high-pressure operations from Dorado” and “learnings there to really push it forward” in Chalk. ⁴
• EOG also described Chalk’s economic and performance profile as meeting its hurdle rates—specifically, “less than 1-year payout at $65 WTI”—and described the play as a “combo play” (more down-dip and deeper, with “more associated gas”) while still having “total liquids yields” “very comparable” to Eagle Ford proper. ¹²

Bottom line on integration: Chalk is not being treated as a standalone program separated from the Eagle Ford engine; instead, EOG is integrating Chalk acreage into the same South Texas/Eagle Ford development framework (“in the mix”) over the “next handful of years,” with capital allocation treated as comparable to the core Eagle Ford sweet spot economics. ⁴

3) What this implies vs. the Eagle Ford and other legacy assets (Eagle Ford “foundation” comparison)

The transcripts indicate two main comparisons: (a) capital allocation parity with core Eagle Ford, and (b) how Chalk extends drilling inventory while legacy assets continue their own development.

A) Capital allocation: Chalk is treated as comparable to core Eagle Ford, not a “separate” capital bucket

• Management stated capital allocation for Chalk will be “equally within our core Eagle Ford development,” explicitly linking Chalk’s role to the Eagle Ford sweet spot economics. ⁴

B) Development/inventory: Chalk extends drilling horizon for the San Antonio division without displacing Eagle Ford work

• Chalk’s identified inventory (about 125 remaining 2-mile locations) contributes about “1 additional full year of drilling inventory” to the “San Antonio division.” ¹
• Management characterized the acreage as “southeast of our Eastern Eagle Ford acreage,” which supports the idea of geographical and operational adjacency that facilitates integration into existing development planning. ¹

C) Legacy assets still carry a structural development profile; Chalk is an extension/sweet spot overlay

• EOG’s response to the question about “structural elements there vs. what’s going on in the legacy foundation in the Eagle Ford” was essentially that Chalk will sit within the core Eagle Ford development mix due to its sweet spot character and comparable returns. ³⁴
• Separately, EOG quantified ongoing Eagle Ford performance improvements (showing the “foundation” remains active): it reduced Eagle Ford “direct well costs to less than $525 per foot” and reported continued operational efficiency gains (e.g., drilled feet per day and completed lateral feet per day increases). ⁵
• EOG also noted it continues “unlocked additional resource across the Eagle Ford oil trend” through “cost reductions” plus “organic leasing and strategic acquisitions,” indicating legacy Eagle Ford development is ongoing and likely remains the platform upon which Chalk is layered. ⁵

Bottom line vs. legacy assets: Chalk is being used as a play-extension/sweet-spot addition that adds near-term drilling inventory to the South Texas division while capital allocation is treated similarly to core Eagle Ford; meanwhile, Eagle Ford’s legacy “foundation” continues with its own operational/cost improvements. ⁴¹⁵

4) “Are you done leasing?”—what management’s wording suggests

• EOG’s language is consistent with being largely done for the main sweet spot, but not necessarily fully done for understanding boundaries:
  • They leased “about 60,000 acres” in the sweet spot and believe they have “leased up the majority” of it. ¹
  • They are “still trying to figure out the extent of it,” and they “continue to gather data and evaluate its extent.” ¹²
• So, the status is best described as: core sweet spot leasing is largely complete, while delineation/data work continues to determine whether additional areas beyond that majority warrant further leasing/integration. ¹²

Conclusion

• Leasing status in Austin Chalk: EOG has leased about 60,000 acres in a defined “sweet spot,” and believes it has leased up the majority of that sweet spot; additional work continues to evaluate play extent. ¹²
• Integration into South Texas plans: EOG plans to “feather” Chalk into the core Eagle Ford development mix, treating Chalk as comparable in capital allocation because it is a sweet spot with economics meeting hurdle rates (e.g., “less than 1-year payout at $65 WTI”). ³⁴¹²
• Versus Eagle Ford and legacy assets: Chalk is positioned as a complementary, adjacent inventory extension (adding about 1 full year of drilling inventory to the San Antonio division) rather than a separate strategic program, while Eagle Ford legacy operations remain the active development platform supported by ongoing efficiency and cost improvements. ⁴¹⁵