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EOG Resources Reports Fourth Quarter and Excellent Full Year 2001 Results
- Replaces 201 Percent of Production
- Increases Reserves By 11 Percent
PRNewswire-FirstCall
HOUSTON

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FOR IMMEDIATE RELEASE: Tuesday, January 29, 2002

EOG Resources, Inc. (EOG) today reported fourth quarter 2001 net loss available to common of $27.6 million, or $0.24 per share. This compares to fourth quarter 2000 net income available to common of $158.7 million, or $1.33 per share. The results for the fourth quarter 2001 include $19.2 million ($12.3 million after tax, or $0.11 per share) of charges related to the Enron Corp. bankruptcy and $2.7 million ($1.7 million after tax, or $0.02 per share) of mark-to-market gains on commodity price transactions, of which $34.3 million ($22.0 million after tax, or $0.19 per share) was cash realized during the quarter.

For the full year 2001, EOG reported net income available to common of $387.6 million, or $3.30 per share. This compares to full year 2000 net income available to common of $385.9 million, or $3.24 per share.

"EOG remains committed to its long-term rate of return strategy," said Mark Papa, Chairman and Chief Executive Officer. "Throughout 2001, EOG made strategic decisions to position the company for commodity volatility in the natural gas industry. In the first half of 2001, EOG had minimal natural gas price swaps in place, thus benefiting from high commodity prices. EOG used the free cash flow generated in the first half of the year to buy back shares and pay down debt. During the same period, EOG increased North American natural gas production by 6.4 percent per share.

"In the second half of 2001, when rates of return deteriorated due to weak commodity prices and escalating service costs, EOG added natural gas price swaps and collars and decreased its level of drilling activity in North America. During the fourth quarter when commodity prices weakened further, EOG moderated natural gas production. In a year that included decreased drilling activity and production moderation, EOG still posted a 4.3 percent per share increase in North American natural gas production," Papa noted.

EOG continues to focus on outstanding shareholder returns and profitability. For the combined two-year period 2000 and 2001, it ranked in the top 20 performers in stock price appreciation in the S&P 500 Index. For each of the last five years, EOG's return on common shareholders' equity performance has outperformed the industry average. EOG's return on common shareholders' equity for 2001 was 28.4 percent.

  Other significant 2001 accomplishments:

   Capital Structure
   --  Repurchased 1.5 million shares of common stock, net of option
       exercises and other increases resulting in 115.1 million basic
       shares outstanding at December 31, 2001;
   --  Maintained debt to total capitalization ratio of 34 percent, one of
       the lowest in the industry at December 31, 2001; and
   --  Increased the common stock dividend by 14 percent from $0.14 to
       $0.16 per share during the first quarter 2001.

   Financial Transactions
   --  Entered into natural gas price swaps and collar transactions, and to
       a lesser extent crude oil price swaps as a response to market
       dynamics during the year;
   --  Realized $62.1 million in cash during the full year 2001 from these
       derivative transactions; and
   --  Locked in 2002 price swaps for an average of approximately
       120,000 million British thermal units per day (MMBtud) of natural
       gas at an average price of $3.18 per MMBtu, for a year-end 2001
       value of $19.5 million.

   Reserves
   --  Increased total company proved reserves by approximately 11 percent
       to 4,229 billion cubic feet equivalent;
   --  Replaced 201 percent of production from all sources at a finding
       cost of $1.36 per thousand cubic feet equivalent (Mcfe) compared to
       152 percent in 2000; and
   --  Retained the independent engineering firm of DeGolyer and
       MacNaughton to evaluate year-end 2001 reserves in oil and natural
       gas fields comprising approximately 71 percent of total reserves.
       For the fourteenth consecutive year, the DeGolyer and MacNaughton
       estimate of proved reserves for the properties reviewed is within
       five percent of the internal estimate prepared by EOG.  For the
       second straight year, the independent estimate of net equivalent
       reserves exceeded the internal EOG estimate.

"While we expect natural gas prices to lag during the first half of 2002, a rebound could begin as early as the second half of the year as the U.S. begins to pull out of this recession. Looking ahead, natural gas prices should be very healthy in 2003 and beyond," added Papa. "The ongoing acceleration of existing production decline rates in the U.S. will have an impact on prices. Our studies show the rate of decline from existing fields to be approximately 29 percent in 2002, up from 22 percent just three years ago in 1999. Production from new reserves will be needed to maintain total U.S. production, which has become increasingly difficult in the industry. With our North American natural gas focus, EOG is uniquely positioned to benefit from a higher price environment."

EOG's fourth quarter and full year 2001 conference call will be available via live audio webcast at 9:00 a.m. Central Time (10:00 a.m. Eastern Time) on Wednesday, January 30, 2002. To listen to this webcast, log on to http://www.eogresources.com/ . The webcast will be archived on EOG's website, http://www.eogresources.com/ , until February 13.

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            Twelve Months
                                    Ended December 31    Ended December 31
                                     2001      2000       2001       2000
  Net Operating Revenues            $237.4    $505.1    $1,654.9   $1,489.9
  Net Income (Loss) Available to
   Common                           $(27.6)   $158.7      $387.6     $385.9
  Net Income (Loss) Per Share
   Available to Common
    Basic                           $(0.24)    $1.36       $3.35      $3.30
    Diluted                         $(0.24)    $1.33       $3.30      $3.24
  Average Number of Shares
   Outstanding
    Basic                            115.1     116.7       115.8      116.9
    Diluted                          115.1     119.6       117.5      119.1


                          SUMMARY INCOME STATEMENT
                          (Unaudited; in thousands)

                                  Quarter                 Twelve Months
                             Ended December 31          Ended December 31
                             2001        2000          2001         2000
  Net Operating Revenues
   Natural Gas             $189,435    $415,533    $1,298,102   $1,155,804
   Crude Oil, Condensate
    and Natural Gas Liquids  44,440      86,885       258,101      325,726
   Mark-to-market
    Gains(Losses) on
    Commodity Contracts       2,717       2,623        97,750       (1,000)
   Gains on Sales of
    Reserves and Related
    Assets and Other, Net       822          80           934        9,365
      Total                 237,414     505,121     1,654,887    1,489,895
  Operating Expenses
   Lease and Well            45,984      39,649       175,446      140,915
   Exploration               17,048      26,149        67,467       67,196
   Dry Hole                  32,088       2,659        71,360       17,337
   Impairments               26,528      18,167        79,156       46,478
   Depreciation, Depletion
    and Amortization         97,617      95,600       392,399      359,265
   General and
    Administrative           22,354      17,565        79,963       66,932
   Taxes Other Than Income   14,242      31,572        95,333       94,909
   Charges Associated
    with Enron Bankruptcy    19,211         ---        19,211          ---
      Total                 275,072     231,361       980,335      793,032
  Operating Income (Loss)   (37,658)    273,760       674,552      696,863

  Other Income (Expense)        120      (3,115)        2,003       (2,300)

  Income (Loss) Before
   Interest Expense and
   Income Taxes             (37,538)    270,645       676,555      694,563

  Interest Expense, Net      10,955      16,107        45,110       61,006

  Income (Loss) Before
   Income Taxes             (48,493)    254,538       631,445      633,557

  Income Tax Provision
   (Benefit)                (23,696)     93,091       232,829      236,626

  Net Income (Loss)         (24,797)    161,447       398,616      396,931

  Preferred Stock Dividends   2,757       2,759        10,994       11,028

  Net Income (Loss)
   Available to Common     $(27,554)   $158,688      $387,622     $385,903


                             EOG RESOURCES, INC.
                             OPERATING HIGHLIGHTS
                                 (Unaudited)

                                           Quarter         Twelve Months
                                      Ended December 31  Ended December 31
                                       2001      2000      2001     2000
  Wellhead Volumes and Prices
  Natural Gas Volumes (MMcf/d)
    United States                       632       673       680      654
    Canada                              140       128       126      129
      North America                     772       801       806      783
    Trinidad                            120       126       115      125
      Total                             892       927       921      908

  Average Natural Gas Prices ($/Mcf)
    United States                     $2.39     $5.58     $4.26    $3.96
    Canada                             2.31      4.85      3.78     3.33
      North America Composite          2.37      5.47      4.19     3.86
    Trinidad                           1.22      1.17      1.22     1.17
      Total Composite                  2.22      4.88      3.81     3.49

  Crude Oil/Condensate Volumes (MBD)
    United States                      19.6      23.8      22.0     22.8
    Canada                              1.7       1.9       1.7      2.1
      North America                    21.3      25.7      23.7     24.9
    Trinidad                            2.2       2.5       2.1      2.6
      Total                            23.5      28.2      25.8     27.5

  Average Crude Oil/Condensate Prices
   ($/Bbl)
    United States                    $18.91    $30.44    $25.06   $29.68
    Canada                            16.40     30.21     22.70    27.76
      North America Composite         18.71     30.42     24.89    29.51
    Trinidad                          16.56     32.62     24.14    30.14
      Total Composite                 18.51     30.62     24.83    29.57

  Natural Gas Liquids Volumes (MBD)
    United States                       3.5       3.0       3.5      4.0
    Canada                              0.5       0.7       0.5      0.7
      Total                             4.0       3.7       4.0      4.7

  Average Natural Gas Liquids Prices
   ($/Bbl)
    United States                    $12.66    $23.24    $17.17   $20.45
    Canada                             8.81     20.31     15.05    16.75
      Total Composite                 12.14     22.68     16.89    19.87

  Natural Gas Equivalent Volumes
   (MMcfe/d)
    United States                       771       834       833      814
    Canada                              153       144       139      146
      North America                     924       978       972      960
    Trinidad                            132       141       128      141
      Total                           1,056     1,119     1,100    1,101

  Total Bcfe Deliveries                97.2     102.9     401.4    403.1


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

                                  Quarter                Twelve Months
                             Ended December 31         Ended December 31
                              2001       2000          2001         2000
  Net Income (Loss)
   Available to Common     $(27,554)   $158,688      $387,622     $385,903
  Items Not Requiring Cash
    Depreciation,
     Depletion, and
     Amortization            97,617      95,600       392,399      359,265
    Impairments              26,528      18,167        79,156       46,478
    Deferred Income Taxes    (5,370)     16,126       164,945       97,729
    Charges Related to
     Enron Bankruptcy        19,211         ---        19,211          ---
    Other, Net                1,046       3,211        10,842        7,127
  Exploration Expenses       17,048      26,149        67,467       67,196
  Dry Hole Expense           32,088       2,659        71,360       17,337
  Mark-to-market
   Commodity Contracts
    Total (Gains)Losses      (2,717)     (2,623)      (97,750)       1,000
    Realized Gains(Losses)   34,313      (1,008)       62,110       (1,438)
  Other, Net                    628      17,276         5,041       26,833
    Total Discretionary
     Cash Flow Available
     to Common             $192,838    $334,245    $1,162,403   $1,007,430


                             EOG RESOURCES, INC.
                           Summary Balance Sheets
                          (Unaudited; in thousands)

                                                       At December 31,
                                                   2001              2000
                     ASSETS

   Current Assets
     Cash and Cash Equivalents                    $2,512           $20,152
     Accounts Receivable                         194,624           342,579
     Inventories                                  18,871            16,623
     Assets from Price Risk Management Activities 19,161               438
     Other                                        37,253            15,073
           Total                                 272,421           394,865

   Oil and Gas Properties (Successful
    Efforts Method)                            6,065,603         5,122,728
       Less: Accumulated Depr., Depl.,
        and Amortization                      (3,009,693)       (2,597,721)
           Net Oil and Gas Properties          3,055,910         2,525,007

   Other Assets                                   85,713            81,381

   Total Assets                               $3,414,044        $3,001,253

       LIABILITIES AND SHAREHOLDERS' EQUITY

   Current Liabilities
      Accounts Payable                          $219,561          $246,468
      Accrued Taxes Payable                       40,219            78,838
      Dividends Payable                            5,045             4,525
      Other                                       46,022            40,285
            Total                                310,847           370,116

   Long-Term Debt                                855,969           859,000

   Other Liabilities                              53,522            51,133

   Deferred Income Taxes                         551,020           340,079

   Shareholders' Equity
      Preferred Stock                            147,582           147,164
      Common Stock                               201,247           201,247
      Retained Earnings                        1,668,708         1,301,067
      Common Stock Held in Treasury             (304,780)         (237,262)
      Other                                      (70,071)          (31,291)
                                               1,642,686         1,380,925
   Total Liabilities and Shareholders' Equity $3,414,044        $3,001,253


                             EOG RESOURCES, INC.
                          RESERVES SUPPLEMENTAL DATA

  2001 RESERVES RECONCILIATION SUMMARY
                                   United                     Other
  NATURAL GAS (Bcf)                States   Canada  Trinidad  Int'l  Total

  Beginning Reserves               1,821.4   545.7  1,013.5         3,380.6
  Revisions of previous estimates     15.0   (26.8)  (121.6)         (133.4)
  Purchases in place                  66.1   111.5      ---           177.6
  Extensions, discoveries and
   other additions                   358.3    59.7    295.2           713.2
  Sales in place                      (1.0)    ---      ---            (1.0)
  Production                        (252.5)  (46.0)   (42.0)         (340.5)

  Ending Reserves                  2,007.3   644.1  1,145.1    ---  3,796.5


  LIQUIDS (MMBbls) (A)

  Beginning Reserves                  52.0     5.8     15.6            73.4
  Revisions of previous estimates     (3.1)    1.3     (3.7)           (5.5)
  Purchases in place                   0.6     ---      ---             0.6
  Extensions, discoveries and
   other additions                    12.4     0.3      2.0            14.7
  Sales in place                      (0.2)    ---      ---            (0.2)
  Production                          (9.3)   (0.8)    (0.8)          (10.9)

  Ending Reserves                     52.4     6.6     13.1    ---     72.1


  NATURAL GAS EQUIVALENTS (Bcfe)

  Beginning Reserves               2,133.5   580.6  1,106.9         3,821.0
  Revisions of previous estimates     (3.7)  (19.1)  (143.7)         (166.5)
  Purchases in place                  69.7   111.7      ---           181.4
  Extensions, discoveries and
   other additions                   432.6    61.9    307.0           801.5
  Sales in place                      (2.2)   (0.2)     ---            (2.4)
  Production                        (308.2)  (51.0)   (46.5)         (405.7)

  Ending Reserves                  2,321.7   683.9  1,223.7    ---  4,229.3


  EXPLORATION AND DEVELOPMENT
   EXPENDITURES ($ Million)

  Acquisition cost of properties
     Unproved                        $69.3    $7.0     $---   $---    $76.3
     Proved                           95.6    72.7      ---    ---    168.3
  Exploration Costs                  163.6    16.6     13.7    8.7    202.6
  Development Costs                  512.2    92.4     61.0    ---    665.6

    Total                            840.7   188.7     74.7    8.7  1,112.8

  Proceeds from sales in place        (5.0)   (1.8)     ---    ---     (6.8)

  Net Expenditures                  $835.7  $186.9    $74.7   $8.7 $1,106.0

  (A) Includes crude oil, condensate and natural gas liquids.

Investors
Maire A. Baldwin
(713) 651-6EOG (651-6364)

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

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