EOG Resources is making a major move into the northeast U.S. shale market by agreeing to buy Encino Acquisition Partners for $5.6 billion, including debt. This deal will make EOG a leading player in the Utica shale, giving it 1.1 million net acres and combined production of 275,000 barrels of oil equivalent per day (boe/d).
Encino Energy, owned by the Canada Pension Plan Investment Board, holds 675,000 core acres in the Utica region. Most of these acres are connected and rich in liquids—exactly what EOG wants. CEO Ezra Yacob called the Utica “a third foundational play,” joining EOG’s strong positions in the Delaware Basin and Eagle Ford.
To finance the deal, EOG will take on $3.5 billion in new debt and use $2.1 billion in cash. Despite adding debt, the company plans to raise its dividend by 5%. EOG expects strong cash flow growth after the acquisition, forecasting a 9% increase in free cash flow and a 10% rise in EBITDA for 2025.
The acquisition adds 235,000 acres with 65% liquids production to EOG’s portfolio. It also secures firm gas transportation to premium markets and boosts EOG’s working interest by over 20% in its top acreage.
EOG expects more than $150 million in cost savings during the first year. These savings will come from lower capital spending, operational efficiencies, and cheaper financing.
This deal stands out as U.S. energy mergers and acquisitions slow down in 2025, following a $192 billion boom last year. EOG, known for careful financial management, is taking an aggressive approach.
The acquisition still needs approval under the Hart-Scott-Rodino Act and other closing steps. The deal is expected to close in the second half of 2025. EOG has not updated its guidance but plans to provide more details after the transaction closes.
If successful, this deal will not only expand EOG’s presence in the Utica shale but could also shape the region’s future.
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