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EOG Resources, Inc. Announces Canadian Acquisition
PRNewswire-FirstCall
HOUSTON

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FOR IMMEDIATE RELEASE: August 20, 2003

EOG Resources, Inc. (EOG) today announced that its Canadian subsidiary has entered into an agreement to acquire natural gas properties in the Wintering Hills, Drumheller East and Twining areas of southeast Alberta from a subsidiary of Husky Energy Inc. for approximately US $320 million in an asset purchase. The properties, which Husky is acquiring through the purchase of Marathon Canada Limited shares in a separate transaction, are essentially adjacent to existing EOG operations or are properties in which EOG already has a working interest. The transaction value, reserves and working interest in the properties are subject to adjustment if preferential rights on the properties are exercised. The transaction is expected to close October 1, 2003.

"Consistent with EOG's 'growth-through-the-drillbit' philosophy, this acquisition is a natural fit because it allows us to continue expanding our Canadian program by adding a significant number of shallow gas drilling locations. The acquisition gives us at least 600 infill drilling locations and 380 recompletions," said Mark G. Papa, Chairman and Chief Executive Officer.

EOG will operate the properties, consisting of approximately 34 million cubic feet equivalent per day (MMcfed) of current production and approximately 275 billion cubic feet equivalent (Bcfe) of proved reserves, both net to EOG of royalty and other working interests. Additionally, this acquisition will allow EOG access to at least 100 net Bcfe of probable reserves.

EOG's shallow gas play in southeast Alberta and southwest Saskatchewan is a core component of its Canadian operations. During 2002, EOG drilled approximately 1,000 wells in this trend. Over the last six years, EOG's natural gas production from the trend has increased from 30 to 100 MMcfed. Since 1997, EOG has built a substantial acreage position by expanding its presence in the shallow gas area with ten acquisitions in the trend. The company's total Canadian proved reserves have increased at a 15 percent compounded annual rate since EOG's initial public offering in 1989. Production has increased at a 13 percent compounded annual rate during this same time period.

Based on EOG's 2002 year-end Canadian proved reserves of 821 Bcfe and second quarter 2003 production of 170 MMcfed, this acquisition increases EOG's Canadian proved reserves by 33 percent and production by 20 percent.

The purchase price is expected to be funded from internally available cash and short-term commercial paper. At June 30, 2003, EOG's debt-to-total capitalization ratio was 33.8 percent with a cash position of US $151 million. Based on current commodity prices and the completion of this acquisition, the ratio is expected to be in the same range at year-end 2003. EOG expects to hedge the natural gas production from the transaction through 2004.

"EOG can complete the acquisition of these strategic shallow gas properties while maintaining our strong financial position," said Papa. "We expect this transaction will be financially accretive on both an earnings and cash flow basis."

Conference Call Scheduled for August 21, 2003

Additional information regarding the transaction can be found on EOG's website, www.eogresources.com .

EOG will host a conference call to discuss the transaction on Thursday, August 21, 2003 at 8:30 a.m. Central Time (9:30 a.m. Eastern Time). To listen to this webcast, log on to www.eogresources.com . The webcast will be archived on EOG's website through September 5, 2003.

EOG Resources, Inc. is one of the largest independent (non-integrated) oil and natural 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, foreign currency exchange rates and interest rates; the timing and impact of liquefied natural gas imports; 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 judgment and may therefore be imprecise; political developments around the world, including terrorist activities and responses to terrorist activities; acts of war; 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.

The United States Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. As noted above, statements of proved reserves are only estimates and may be imprecise. Any reserve estimates provided in this press release that are not specifically designated as being estimates of proved reserves may include not only proved reserves, but also other categories of reserves that the SEC's guidelines strictly prohibit EOG from including in filings with the SEC. Investors are urged to consider closely the disclosure in EOG's Form 10-K for fiscal year ended December 31, 2002, available from EOG at P.O. Box 4362, Houston, Texas 77210-4362 (Attn: Investor Relations). You can also obtain this form from the SEC by calling 1-800-SEC-0330.

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

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

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