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EOG Resources Reports Third Quarter Results
- Net Income Available to Common of $69.2 Million or $0.59 Per Share
- Continued Focus to Generate High Return on Equity
PRNewswire
HOUSTON

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FOR IMMEDIATE RELEASE: Tuesday, October 23, 2001

EOG Resources, Inc. (EOG) today reported third quarter 2001 net income available to common of $69.2 million or $0.59 per share. This compares to net income available to common of $113.7 million or $0.95 per share in the same quarter last year. Third quarter natural gas production in North America increased by approximately four percent versus the same quarter a year ago. This increase in production was more than offset by the significant decline in realized average natural gas and crude oil and condensate commodity prices as compared to the third quarter 2000.

"For the first nine months of 2001, EOG's daily North American production increased approximately four percent, in line with our original goal. However, because of weakening natural gas prices, EOG began moderating natural gas and associated condensate production in September. We are continuing this moderation strategy during October and will evaluate November based on natural gas prices," said Mark G. Papa, Chairman and Chief Executive Officer.

"EOG continues to monitor its drilling activity based on current market conditions. As a result of increased service costs, we have reduced the number of rigs we are running in North America from 50 to approximately 35. These actions are consistent with our long term goal of maintaining one of the highest return on equity ratios in the independent exploration and production sector."

EOG continues to strengthen financially. At September 30, 2001, EOG's debt to total capitalization ratio was 29 percent, one of the lowest in the independent exploration and production industry. This compares to a ratio of 55 percent in August 1999 immediately following EOG's separation from Enron Corp.

EOG continued to reduce its common shares outstanding with the repurchase of approximately 470,000 net shares during the quarter at an average share price of $29.12. For the nine months ended September 30, 2001, EOG repurchased approximately 1.3 million net shares, or 1.1 percent of total shares outstanding at an average price of $39.63. EOG is targeting a further reduction in the range of 500,000 to 1 million net shares by year-end 2001.

In response to market dynamics, EOG entered into natural gas price swaps and collar transactions, and to a lesser extent crude oil price swaps. During the third quarter 2001, a mark-to-market pretax gain of $58.8 million was recognized as a result of these 2001 and 2002 transactions. Of this amount, $27.3 million was cash realized during the quarter. An average of approximately 276,000 MMBtud (million British thermal units per day) of natural gas is locked in for the fourth quarter 2001 at an average price of $3.94 per MMBtu. For 2002, price swaps for 100,000 MMBtud of natural gas have locked in an average price of $3.46 per MMBtu.

"Looking ahead, we expect natural gas prices might remain sluggish for up to six months, at which point we think declining domestic volumes and increasing industrial demand will result in a price resurgence to $3.25 to $3.50, and we are formulating our business plans in this range," added Papa. "We expect to continue to be a sector leader in both organic North American production growth and overall investment return."

EOG's third quarter conference call will be available via live audio webcast at 9:00 a.m. Central Time (10:00 a.m. Eastern Time) on Wednesday, October 24, 2001. To listen to this webcast, log on to http://www.eogresources.com/ . The webcast will be archived on EOG's website until November 7.

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, including terrorist activities and responses to terrorist activities; 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            Nine Months
                                     Ended September 30  Ended September 30
                                       2001      2000        2001     2000

  Net Operating Revenues              $354.2    $402.2    $1,417.5   $984.8
  Net Income Available to Common       $69.2    $113.7      $415.2   $227.2
  Net Income Per Share Available to
   Common
    Basic                              $0.60     $0.98       $3.58    $1.94
    Diluted                            $0.59     $0.95       $3.51    $1.91
  Average Number of Shares Outstanding
    Basic                              115.7     116.6       116.0    117.0
    Diluted                            117.1     119.3       118.2    118.9


                         SUMMARY INCOME STATEMENT
                        (Unaudited; in thousands)

                                  Quarter                Nine Months
                              Ended September 30      Ended September 30
                               2001        2000         2001        2000

  Net Operating Revenues
    Natural Gas              $229,653    $309,668    $1,108,667   $740,271
    Crude Oil, Condensate
     and Natural Gas Liquids   65,324      88,434       213,661    238,841
    Mark-to-market Gains
     (Losses) on Commodity
     Contracts                 58,750      (3,623)       95,033     (3,623)
    Gains on Sales of
     Reserves and Related
     Assets and Other, Net        445       7,672           112      9,285
      Total                   354,172     402,151     1,417,473    984,774
  Operating Expenses
    Lease and Well             43,640      35,304       129,462    101,266
    Exploration                12,408      14,898        50,419     41,047
    Dry Hole                   10,617       5,627        39,272     14,678
    Impairments                20,597       9,786        52,628     28,311
    Depreciation, Depletion
     and Amortization         103,351      91,577       294,782    263,665
    General and Administrative 20,925      17,053        57,609     49,367
    Taxes Other Than Income    18,687      24,248        81,091     63,337
      Total                   230,225     198,493       705,263    561,671
  Operating Income            123,947     203,658       712,210    423,103

  Other Income, Net             1,272          35         1,883        815

  Income Before Interest
   Expense and Income Taxes   125,219     203,693       714,093    423,918

  Interest Expense, Net        10,242      14,750        34,155     44,899

  Income Before Income Taxes  114,977     188,943       679,938    379,019

  Income Tax Provision         43,014      72,466       256,525    143,535

  Net Income                   71,963     116,477       423,413    235,484

  Preferred Stock Dividends     2,759       2,755         8,237      8,269

  Net Income Available to
   Common                     $69,204    $113,722      $415,176   $227,215


                           EOG RESOURCES, INC.
                           OPERATING HIGHLIGHTS
                               (Unaudited)

                                          Quarter           Nine Months
                                     Ended September 30  Ended September 30
                                        2001      2000      2001     2000
  Wellhead Volumes and Prices
  Natural Gas Volumes (MMcf/d)
    United States                        681       652       696      647
    Canada                               124       125       121      130
      North America                      805       777       817      777
    Trinidad                             116       132       114      124
      Total                              921       909       931      901

  Average Natural Gas Prices ($/Mcf)
    United States                      $2.91     $4.22     $4.83    $3.40
    Canada                              2.48      3.44      4.35     2.83
      North America Composite           2.84      4.09      4.76     3.30
    Trinidad                            1.21      1.17      1.21     1.17
      Total Composite                   2.64      3.67      4.33     3.01

  Crude Oil/Condensate Volumes (MBD)
    United States                       21.9      23.8      22.8     22.5
    Canada                               1.8       2.1       1.7      2.2
      North America                     23.7      25.9      24.5     24.7
    Trinidad                             1.9       2.5       2.0      2.6
      Total                             25.6      28.4      26.5     27.3

  Average Crude Oil/Condensate
   Prices ($/Bbl)
    United States                     $25.60    $31.48    $26.84   $29.41
    Canada                             23.97     28.83     24.73    27.07
      North America Composite          25.48     31.27     26.69    29.20
    Trinidad                           23.12     31.87     26.94    29.36
      Total Composite                  25.30     31.32     26.71    29.21

  Natural Gas Liquids Volumes (MBD)
    United States                        3.6       4.2       3.5      4.3
    Canada                               0.6       0.7       0.5      0.7
      Total                              4.2       4.9       4.0      5.0

  Average Natural Gas Liquids
   Prices ($/Bbl)
    United States                     $15.46    $20.12    $18.69   $19.80
    Canada                             12.10     18.16     17.23    15.61
      Total Composite                  14.99     19.84     18.50    19.18

  Natural Gas Equivalent Volumes
   (MMcfe/d)
    United States                        834       820       854      807
    Canada                               138       142       135      148
      North America                      972       962       989      955
    Trinidad                             128       147       125      140
      Total                            1,100     1,109     1,114    1,095

  Total Bcfe Deliveries                101.2     102.0     304.2    300.2


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

                                      Quarter               Nine Months
                                 Ended September 30     Ended September 30
                                   2001        2000        2001       2000

  Net Income Available to Common $69,204    $113,722    $415,176   $227,215
  Items Not Requiring Cash
    Depreciation, Depletion,
     and Amortization            103,351      91,577     294,782    263,665
    Impairments                   20,597       9,786      52,628     28,311
    Deferred Income Taxes         82,508      40,889     170,315     81,603
    Other, Net                     2,459       1,250       9,796      3,916
  Exploration Expenses            12,408      14,898      50,419     41,047
  Dry Hole Expense                10,617       5,627      39,272     14,678
  Mark-to-market Commodity
   Contracts
    Total (Gains) Losses         (58,750)      3,623     (95,033)     3,623
    Realized Gains (Losses)       27,320        (430)     27,798       (430)
  Other, Net                      (3,522)      1,650       4,413      9,557
    Total Discretionary Cash
     Flow Available to Common   $266,192    $282,592    $969,566   $673,185

 

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

Media and Investors
Elizabeth M. Ivers
(713) 651-7132

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