email   rss   
Press Releases
EOG Resources Reports Second Quarter 2001 Results
- 6.1 percent increase in North American production
- Net income available to common of $133.4 million or $1.13 per share
- Continuing current share repurchase program
PRNewswire
HOUSTON

Click here for PDF version

FOR IMMEDIATE RELEASE: Monday, July 30, 2001

EOG Resources, Inc. (EOG) today reported a 6.1 percent increase in North American production for the second quarter of 2001 compared to the second quarter 2000. EOG also announced record second quarter net income available to common of $133.4 million or $1.13 per share. This compares to second quarter net income available to common of $74.7 million or $.63 per share a year ago.

During the second quarter, EOG continued a disciplined approach to its long-term strategy by focusing on the rate of return of its drilling program. Led by a 9.1 percent increase in total U.S. production, overall North American production increased 6.1 percent, in excess of the stated 4 percent annual goal. On a per share basis, North American production grew 7.2 percent.

EOG repurchased 837,000 net shares of common stock and paid down $218 million of debt during the first half of the year, strengthening its balance sheet and per share performance. At June 30, EOG's debt to total capitalization was 27.9 percent, within its stated target of 25 to 35 percent.

"EOG was totally unhedged on the natural gas side during 2000 and through March of 2001. We received the entire benefit of the high gas prices and channeled it directly to our earnings and financial structure," said Mark G. Papa, Chairman and Chief Executive Officer. "However, the very high prices of the first quarter were unsustainable and sowed the seeds for a loss in natural gas demand that we are dealing with today."

EOG's 2001 Third & Fourth Quarter Strategy

EOG responded to the marketplace changes in the second quarter by entering into natural gas price swaps and collars. As a result of the 2001 and 2002 transactions in place at June 30, a mark-to-market pretax gain of $35.3 million was recognized.

Currently, 200,000 MMBtud (million British thermal units per day) of notional volumes are hedged through November with a $4.40 per MMBtu floor price and a ceiling price that averages $6.15 per MMBtu. An additional 115,000 MMBtud of notional volumes are locked in from August through yearend at an average price of $3.38 per MMBtu. For 2002, 50,000 MMBtud of notional volumes are locked in at an average price of $3.56 per MMBtu. In addition, EOG entered into Canadian physical delivery contracts for approximately 46,000 MMBtud for August 2001 through December 2002 at an average price of US$3.53 per MMBtu less applicable basis (location) adjustments.

"During the first half we continued our multiyear track record of reducing the number of outstanding shares," said Papa. "Because of current market weakness, we anticipate purchasing additional shares during the third quarter. EOG has an outstanding 5.3 million share buyback authorization.

"We continue to be bullish regarding the long term price for natural gas and expect to continue to demonstrate a track record of strong capital investment rates of return with consistent organic production growth."

EOG's second quarter conference call will be available via live audio webcast at 9:00 a.m. Central Time (10:00 a.m. Eastern Time) on Tuesday, July 31, 2001. To listen to this webcast, log on to http://www.eogresources.com/ . The webcast will be archived on EOG's website for 14 days.

EOG Resources, Inc. is one of the largest independent (non-integrated) oil and gas companies in the United States and is the operator of substantial proved reserves in the U.S., Canada and offshore Trinidad. EOG Resources, Inc. is listed on the New York Stock Exchange and is traded under the ticker symbol "EOG".

This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are not guarantees of performance. Although EOG believes its expectations reflected in forward- looking statements are based on reasonable assumptions, no assurance can be given that these expectations will be achieved. Important factors that could cause actual results to differ materially from the expectations reflected in the forward-looking statements include, among others: the timing and extent of changes in commodity prices for crude oil, natural gas and related products and interest rates; the extent and effect of any hedging activities engaged in by EOG; the extent of EOG's success in discovering, developing, marketing and producing reserves and in acquiring oil and gas properties; the accuracy of reserve estimates, which by their nature involve the exercise of professional judgement and may therefore be imprecise; political developments around the world; and financial market conditions. In light of these risks, uncertainties and assumptions, the events anticipated by EOG's forward-looking statements might not occur. EOG undertakes no obligations to update or revise its forward-looking statements, whether as a result of new information, future events or otherwise.

                           EOG RESOURCES, INC.
                             FINANCIAL REPORT
                (Unaudited; in millions except per share)

                                          Quarter            Six Months
                                       Ended June 30        Ended June 30
                                       2001      2000       2001      2000

  Net Operating Revenues              $466.0    $322.7    $1,063.3   $582.6
  Net Income Available to Common      $133.4     $74.7      $346.0   $113.5
  Net Income Per Share Available to
   Common
    Basic                              $1.15     $0.64       $2.98    $0.97
    Diluted                            $1.13     $0.63       $2.92    $0.96
  Average Number of Shares
   Outstanding
    Basic                              115.9     116.7       116.1    117.2
    Diluted                            118.0     119.2       118.6    118.8


                         SUMMARY INCOME STATEMENT
                        (Unaudited; in thousands)

                                      Quarter               Six Months
                                   Ended June 30           Ended June 30
                                 2001        2000         2001       2000

  Net Operating Revenues
    Natural Gas                $357,536    $244,403     $879,013   $430,603
    Crude Oil, Condensate
     and Natural Gas Liquids     73,143      77,340      148,337    150,407
    Mark-to-market Gains on
     Commodity Contracts         36,849         ---       36,283        ---
    Gains on Sales of
     Reserves and Related
     Assets and Other, Net       (1,480)        984         (332)     1,613
      Total                     466,048     322,727    1,063,301    582,623
  Operating Expenses
    Lease and Well               43,248      32,223       85,822     65,962
    Exploration                  17,746      13,204       38,011     26,149
    Dry Hole                     12,971       3,290       28,655      9,051
    Impairments                  16,267      10,123       32,031     18,525
    Depreciation, Depletion
     and Amortization            97,470      87,951      191,431    172,088
    General and
     Administrative              18,735      16,027       36,684     32,314
    Taxes Other Than Income      25,372      20,674       62,404     39,089
      Total                     231,809     183,492      475,038    363,178
  Operating Income              234,239     139,235      588,263    219,445

  Other Income, Net               1,250         763          611        780

  Income Before Interest
   Expense and Income Taxes     235,489     139,998      588,874    220,225

  Interest Expense, Net          10,624      15,581       23,913     30,149

  Income Before Income Taxes    224,865     124,417      564,961    190,076

  Income Tax Provision           88,662      46,900      213,511     71,069

  Net Income                    136,203      77,517      351,450    119,007

  Preferred Stock Dividends      (2,757)     (2,860)      (5,478)    (5,514)

  Net Income Available to
   Common                      $133,446     $74,657     $345,972   $113,493


                           EOG RESOURCES, INC.
                           OPERATING HIGHLIGHTS
                               (Unaudited)

                                           Quarter           Six Months
                                        Ended June 30       Ended June 30
                                       2001       2000      2001     2000
  Wellhead Volumes and Prices
  Natural Gas Volumes (MMcf/d)
    United States                        703       633       704      644
    Canada                               123       131       120      132
      North America                      826       764       824      776
    Trinidad                             105       116       112      122
      Total                              931       880       936      898

  Average Natural Gas Prices ($/Mcf)
    United States                      $4.61     $3.44     $5.78    $2.98
    Canada                              4.14      2.89      5.33     2.53
      North America Composite           4.54      3.35      5.72     2.90
    Trinidad                            1.22      1.17      1.22     1.17
      Total Composite                   4.16      3.06      5.18     2.67

  Crude Oil/Condensate Volumes (MBD)
    United States                       23.5      22.8      23.2     21.7
    Canada                               1.7       2.3       1.8      2.3
      North America                     25.2      25.1      25.0     24.0
    Trinidad                             1.9       2.5       2.0      2.8
      Total                             27.1      27.6      27.0     26.8

  Average Crude Oil/Condensate
   Prices ($/Bbl)
    United States                     $26.82    $28.37    $27.44   $28.26
    Canada                             24.99     25.66     25.12    26.24
      North America Composite          26.69     28.12     27.28    28.07
    Trinidad                           28.73     28.54     28.79    28.17
      Total Composite                  26.84     28.16     27.40    28.08

  Natural Gas Liquids Volumes (MBD)
    United States                        3.8       4.3       3.4      4.3
    Canada                               0.5       0.8       0.5      0.8
      Total                              4.3       5.1       3.9      5.1

  Average Natural Gas Liquids
   Prices ($/Bbl)
    United States                     $17.60    $18.64    $20.41   $19.64
    Canada                             17.71     15.24     20.39    14.44
      Total Composite                  17.61     18.13     20.41    18.85

  Natural Gas Equivalent Volumes
   (MMcfe/d)
    United States                        867       795       864      801
    Canada                               136       150       133      150
      North America                    1,003       945       997      951
    Trinidad                             117       131       124      138
      Total                            1,120     1,076     1,121    1,089

  Total Bcfe Deliveries                101.9      97.9     203.0    198.1


                           EOG RESOURCES, INC.
                    SUPPLEMENTAL FINANCIAL INFORMATION
               DISCRETIONARY CASH FLOW AVAILABLE TO COMMON
                        (Unaudited; in thousands)

                                     Quarter                 Six Months
                                   Ended June 30           Ended June 30
                                  2001        2000        2001       2000
  Net Income Available to
   Common                       $133,446     $74,657    $345,972   $113,493
  Items Not Requiring Cash
    Depreciation, Depletion,
     and Amortization             97,470      87,951     191,431    172,088
    Impairments                   16,267      10,123      32,031     18,525
    Deferred Income Taxes         53,355      23,669      87,807     40,714
    Other, Net                     1,840       1,840       7,337      2,666
  Exploration Expenses            17,746      13,204      38,011     26,149
  Dry Hole Expense                12,971       3,290      28,655      9,051
  Losses on Sales of Reserves
   and Related Assets                812          79       1,128      1,650
  Other, Net                     (31,333)      8,147     (28,998)     6,257
    Total Discretionary Cash
     Flow Available to Common   $302,574    $222,960    $703,374   $390,593

For Further Information Contact:
Maire A. Baldwin
(713) 651-6EOG (651-6364)

 
Top of Page