El Dorado in Focus

Dissecting the Economics Behind South Texas’s Dry Gas Frontier

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Introduction

In November 2020, EOG Resources announced a major dry gas discovery in Webb County, Texas — the “El Dorado” play — targeting both the Eagle Ford and Austin Chalk formations. Marketed as one of the lowest-cost natural gas plays in North America, El Dorado was presented as a 21 Tcf resource base with breakevens below $1.25 per Mcf. The discovery breathed new life into a region historically overshadowed by oil-rich development and positioned EOG, and later others like Crescent Energy and Kimmeridge, to anchor large-scale, high-rate gas programs in South Texas.

The El Dorado play straddles legacy leasehold in Webb County, with development primarily focused on dry gas zones in the Lower Eagle Ford and Austin Chalk. EOG operates the majority of the acreage and has supported the buildout of midstream infrastructure to take gas to Gulf Coast markets. Yet despite the headline IPs and scale of resource, the economics are far more fragile than the marketing suggests — and in today’s gas price environment, more challenging.

Target wells are in the Dry Gas Window within EOG’s “El Dorado” play outline.

In this paper, we use real-world cost and production data sourced from the AFE Leaks database to evaluate how the El Dorado play has actually performed. This includes:

• Benchmarking well-level capital expenditures and completion designs

• Evaluating production trends and type curve evolution over time

• Applying actual gas marketing deductions and differential structures to evaluate realized break-evens

AFE Leaks focuses on providing detailed AFE/actual development costs across the Lower 48, with capex data across 96,000+ wells.

Our aim is to cut through the promotional framing and ground the El Dorado story in real economics. We evaluate how EOG’s high-profile dry gas program has progressed, what others like Crescent and Kimmeridge are doing to replicate it, and where prices need to be to support the story.