EOG Resources has entered into a definitive agreement to acquire Encino Acquisition Partners (EAP) for $5.6 billion, including net debt, in a transaction that significantly strengthens EOG’s position in the Utica Shale. The sellers are Canada Pension Plan Investment Board (CPP Investments) and Encino Energy.
The acquisition will be funded through a combination of $3.5 billion in new debt and $2.1 billion in existing cash, allowing EOG to preserve its shareholder equity. The deal is expected to close later this year, subject to customary approvals.
A Strategic Expansion in the Utica
The transaction adds 675,000 net core acres from Encino to EOG’s existing Utica footprint, creating a combined position of 1.1 million net acres and more than 2 billion barrels of oil equivalent (Boe) in undeveloped resources. Post-acquisition, EOG becomes one of the largest producers in the Utica, with pro forma daily production of 275,000 Boe.
“This acquisition creates a third foundational play for EOG alongside the Delaware Basin and Eagle Ford, enhancing the quality, scale, and resilience of our multi-basin portfolio,” said Ezra Y. Yacob, Chairman and CEO of EOG.
Financial and Strategic Benefits
The transaction is immediately accretive across key financial metrics:
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+10% to 2025 EBITDA (annualized basis)
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+9% to cash flow from operations and free cash flow
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Accretive to net asset value (NAV) and all per-share measures
It also enhances asset quality:
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Adds 235,000 net acres in liquids-rich “volatile oil window” (65% liquids)
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Adds 330,000 net acres in the natural gas window with premium pricing access
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Increases EOG’s working interest in high-performing acreage by over 20%
Operational efficiencies are expected to drive $150+ million in synergies in the first year, through reduced capital, operating, and financing costs.
Dividend Increase & Balance Sheet Integrity
In conjunction with the acquisition, EOG’s Board has declared a 5% increase to its regular quarterly dividend, now set at $1.02 per share, payable October 31, 2025. The new annualized rate is $4.08 per share.
EOG reaffirmed its commitment to capital discipline, noting the acquisition will not materially affect its long-term debt-to-EBITDA target of <1x at $45 WTI.
“This is a textbook example of how we apply our balance sheet strength to pursue counter-cyclical opportunities that deliver superior returns without shareholder dilution,” Yacob added.
Why the Utica? Condensate, Contiguity, and Competitive Returns
The volatile oil window of eastern Ohio — covering counties like Carroll, Guernsey, Harrison, and Noble — has seen a sharp rise in condensate production. Volumes have nearly tripled since July 2022, reaching 136 Mb/d by March 2025, driven largely by EAP and a few other producers.
EOG’s own wells in the Utica have reported IP30 rates of 1,425 to 3,250 boe/d, with condensate/oil making up as much as 70% of total volumes. These well results are on par with top-tier Permian wells, lending credibility to EOG’s bet on the play’s future competitiveness.
The condensate produced is used in refineries, petrochemical plants, or as diluent, and requires stabilization before transport — usually handled at facilities operated by MPLX (Cadiz), Williams (Scio), or Ergon Inc. (Marietta). Without a dedicated gathering network, the product is typically trucked from well pads to rail, marine, or pipeline terminals.
Ownership and Exit Strategy
EAP was established in 2017 by Encino Energy and CPP Investments (formerly Canada Pension Plan Investment Board) to acquire high-quality assets in mature U.S. basins. CPP’s head of sustainable energies, Bill Rogers, noted the success of the investment and the strong returns it generated. CPP manages net assets of $26.4 billion (CA$36.3B) globally in the sustainable energy space.
Market speculation had long surrounded Encino’s eventual exit strategy. EOG was among the few operators with the scale, balance sheet strength, and operational flexibility to execute such a transaction without shareholder dilution.
