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Press Releases
EOG Resources Reports First Quarter 2005 Results
- Achieves 19.3 Percent Production Increase
- Extends Barnett Shale Play Boundaries
- Increases Momentum in New South Texas Play
- Announces Successful North Sea Well
PRNewswire-FirstCall
HOUSTON

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FOR IMMEDIATE RELEASE: April 26, 2005

EOG Resources, Inc. (EOG) today reported first quarter 2005 net income available to common of $200.8 million, or $0.83 per share. This compares to first quarter 2004 net income available to common of $98.1 million, or $0.42* per share.

The results for first quarter 2005 included a previously disclosed $0.9 million ($0.6 million after tax, or less than $0.01 per share) loss on the mark-to-market of financial commodity price transactions. During the quarter, the net cash inflow from the settlement of financial commodity price transactions was $9.8 million ($6.4 million after tax, or $0.03 per share). Consistent with some analysts' practice of matching realizations to settlement months, adjusted non-GAAP net income available to common for the quarter was $207.8 million, or $0.86 per share. EOG's first quarter 2004 results included a $44.5 million ($28.6 million after tax, or $0.12* per share) loss on the mark-to-market of financial commodity price transactions and the net cash outflow from the settlement of financial commodity price transactions was $2.3 million ($1.5 million after tax, or $0.01* per share). Reflecting these items, first quarter 2004 adjusted non-GAAP net income available to common was $125.2 million, or $0.53* per share. (Please refer to the table below for the reconciliation of adjusted non-GAAP net income available to common to net income available to common.)

   * First quarter 2004 per share amounts are restated for the two-for-one
     stock split effective March 1, 2005.

"EOG's outstanding performance during the first quarter 2005 reflects strong operating results generated from organic production growth combined with robust commodity prices," said Mark G. Papa, Chairman and Chief Executive Officer.

Operational Highlights

Total company daily production increased 19.3 percent during the first quarter versus the same quarter last year. With a continued focus on growth through the drillbit, natural gas production from the United States and Canada increased 12.4 percent.

"Based on first quarter drilling results and production increases from our three operating areas: North America, Trinidad and the North Sea, we can confidently reaffirm our previously stated 13.5 percent production growth target," said Papa. "As the year progresses, we may reevaluate this goal with the possibility of increasing our full year target."

In the Texas Barnett Shale, EOG announced positive results from the Bishop Well in Erath County and the Richards Ranch Well in Jack County. These wells represent the company's initial drilling efforts outside of Johnson County.

"The successful gas tests in counties west and northwest of Johnson County reinforce our optimism that this extended Barnett Shale acreage is natural gas, rather than oil, productive. These test results indicate that a substantial majority, if not all, of our 460,000-acre position lies within the gas window. The next phase is to establish widespread commercial production in these extended areas. We expect to increase our drilling activity in the overall Barnett Shale from four to seven rigs by mid-year," said Papa.

In South Texas, EOG reported success from several different areas. In the Wilcox Play, the Aviator #2 Well in which EOG has a 100 percent working interest recently came on-line at 12 million cubic feet per day (MMcfd). In another Wilcox area, the Buck Hamilton #11 Well was recently completed and is producing 16 MMcfd, gross. EOG has a 50 percent working interest in the well. In a new area that has not yet been disclosed, EOG has been quietly accumulating a 35,000-acre position where it continues to test the viability of a new seismic concept. The most recent well in which EOG has a 100 percent working interest, came on-line at a rate of approximately 20 MMcfd and 500 barrels of oil per day. Currently operating one rig in this new play, EOG plans to add a second later in the year.

EOG also reported a significant discovery in the East Texas Branton Field and a successful well in the North Louisiana Vernon Field. Also in North Louisiana, EOG drilled a successful extension well in the previously announced Driscoll Mountain discovery in which it has a 50 percent working interest. The Davis 21 #1 extends the play limits, providing EOG with an inventory of drilling locations for an active two-rig program for several years.

In the United Kingdom North Sea, the Arthur 2 Well, drilled during the first quarter 2005, proved a new fault block extension of the 2003 Arthur 1 natural gas discovery. EOG has a 30 percent working interest in the Arthur 2, which tested 58 MMcfd, gross. Initial natural gas production is expected to come on-line during the third quarter of 2005.

Conference Call Scheduled for April 27, 2005

EOG's first quarter 2005 conference call will be available via live audio webcast at 9:00 a.m. Central Time (10:00 a.m. Eastern Time) Wednesday, April 27, 2005. To listen, log on to http://www.eogresources.com/ . The webcast will be archived on EOG's website through May 11, 2005.

EOG Resources, Inc. is one of the largest independent (non-integrated) oil and natural gas companies in the United States with proved reserves in the United States, Canada, offshore Trinidad and the United Kingdom North Sea. 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. All statements other than statements of historical facts, including, among others, statements regarding EOG's future financial position, business strategy, budgets, reserve information, projected levels of production, projected costs and plans and objectives of management for future operations, are forward-looking statements. EOG typically uses words such as "expect," "anticipate," "estimate," "strategy," "intend," "plan," "target" and "believe" or the negative of those terms or other variations of them or by comparable terminology to identify its forward-looking statements. In particular, statements, express or implied, concerning future operating results, the ability to replace or increase reserves or to increase production, or the ability to generate income or cash flows are forward- looking statements. 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 and changes in demand or prices for ammonia or methanol; 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; the availability and cost of drilling rigs, experienced drilling crews and tubular steel; the availability, terms and timing of governmental and other permits and rights of way; the availability of pipeline transportation capacity; the extent to which EOG can replicate on its other Barnett Shale acreage outside of Johnson and Parker Counties, Texas, the results of its most recent Barnett Shale wells; whether EOG is successful in its efforts to more densely develop its acreage in the Barnett Shale and other production areas; political developments around the world; acts of war and terrorism and responses to these acts; 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, 2004, 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 or from the SEC's website at http://www.sec.gov/ . In addition, reconciliation and calculation schedules for Non-GAAP Financial Measures referred to in this presentation can be found on the EOG Resources website at http://www.eogresources.com/ .

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

                                                        Quarter
                                                     Ended March 31
                                                  2005            2004

  Net Operating Revenues                         $688.2           $464.3
  Net Income Available to Common                 $200.8            $98.1
  Net Income Per Share Available to Common
      Basic                                       $0.85            $0.42 *
      Diluted                                     $0.83            $0.42 *
  Average Number of Shares Outstanding
      Basic                                       237.3            231.3 *
      Diluted                                     242.1            235.2 *

   * Restated for 2-for-1 stock split effective March 1, 2005.



                        SUMMARY INCOME STATEMENTS
                        (Unaudited; in thousands)

                                                          Quarter
                                                       Ended March 31
                                                   2005              2004
  Net Operating Revenues
      Natural Gas                                $543,591          $417,389
      Crude Oil, Condensate and Natural
       Gas Liquids                                144,536            90,458
      Losses on Mark-to-Market Commodity
       Derivative Contracts                          (940)          (44,455)
      Other, Net                                      969               928
        Total                                     688,156           464,320
  Operating Expenses
      Lease and Well, including
       Transportation                              82,875            64,417
      Exploration Costs                            34,816            25,996
      Dry Hole Costs                               14,582            10,027
      Impairments                                  12,172            17,648
      Depreciation, Depletion and
       Amortization                               153,016           113,797
      General and Administrative                   28,687            24,915
      Taxes Other Than Income                      41,913            36,084
        Total                                     368,061           292,884
  Operating Income                                320,095           171,436

  Other Income (Expense), Net                       5,465            (2,729)

  Income Before Interest Expense and
   Income Taxes                                   325,560           168,707

  Interest Expense, Net                            13,957            16,683

  Income Before Income Taxes                      311,603           152,024

  Income Tax Provision                            108,900            51,171

  Net Income                                      202,703           100,853

  Preferred Stock Dividends                         1,858             2,758

  Net Income Available to Common                 $200,845           $98,095



                           EOG RESOURCES, INC.
                           OPERATING HIGHLIGHTS
                               (Unaudited)

                                                          Quarter
                                                       Ended March 31
                                                   2005               2004
  Wellhead Volumes and Prices
  Natural Gas Volumes (MMcf/d)
    United States                                    689                618
    Canada                                           234                203
      United States & Canada                         923                821
    Trinidad                                         205                154
    United Kingdom                                    35                ---
      Total                                        1,163                975

  Average Natural Gas Prices ($/Mcf)
    United States                                  $5.97              $5.40
    Canada                                          5.69               4.98
      United States & Canada Composite              5.90               5.30
    Trinidad                                        1.74               1.49
    United Kingdom                                  6.65                ---
      Composite                                     5.19               4.70

  Crude Oil and Condensate Volumes
   (MBD)
    United States                                   22.5               20.0
    Canada                                           2.5                2.6
      United States & Canada                        25.0               22.6
    Trinidad                                         4.1                2.6
    United Kingdom                                   0.2                ---
      Total                                         29.3               25.2

  Average Crude Oil and Condensate
   Prices ($/Bbl)
    United States                                 $48.79             $34.76
    Canada                                         44.79              31.72
      United States & Canada Composite             48.39              34.41
    Trinidad                                       45.38              32.91
    United Kingdom                                 39.74                ---
      Composite                                    47.91              34.25

  Natural Gas Liquids Volumes (MBD)
    United States                                    5.5                4.8
    Canada                                           1.5                0.6
      Total                                          7.0                5.4

  Average Natural Gas Liquids Prices
   ($/Bbl)
    United States                                 $29.28             $24.71
    Canada                                         27.47              20.14
      Composite                                    28.89              24.21

  Natural Gas Equivalent Volumes
   (MMcfe/d)
    United States                                    857                767
    Canada                                           258                222
      United States & Canada                       1,115                989
    Trinidad                                         230                169
    United Kingdom                                    36                ---
      Total                                        1,381              1,158

  Total Bcfe Deliveries                            124.3              105.4



                           EOG RESOURCES, INC.
                          SUMMARY BALANCE SHEETS
               (Unaudited; in thousands, except share data)

                                               March 31,        December 31,
                                                  2005              2004

                                 ASSETS
  Current Assets
    Cash and Cash Equivalents                    $173,385           $20,980
    Accounts Receivable, Net                      441,157           447,742
    Inventories                                    48,741            40,037
    Assets from Price Risk Management
     Activities                                       ---            10,747
    Deferred Income Taxes                          25,788            22,227
    Other                                          42,995            45,070
         Total                                    732,066           586,803

  Oil and Gas Properties (Successful
   Efforts Method)                              9,934,032         9,599,276
    Less:  Accumulated Depreciation,
     Depletion and Amortization                (4,646,824)       (4,497,673)
      Net Oil and Gas Properties                5,287,208         5,101,603
  Other Assets                                     97,754           110,517

  Total Assets                                 $6,117,028        $5,798,923



                  LIABILITIES AND SHAREHOLDERS' EQUITY

  Current Liabilities
    Accounts Payable                             $400,802          $424,581
    Accrued Taxes Payable                          90,911            51,116
    Dividends Payable                               9,811             7,394
    Deferred Income Taxes                          20,293           103,933
    Other                                          40,970            45,180
         Total                                    562,787           632,204

  Long-Term Debt                                1,119,797         1,077,622
  Other Liabilities                               251,997           241,319
  Deferred Income Taxes                         1,028,805           902,354

  Shareholders' Equity
    Preferred Stock, $0.01 Par,
     10,000,000 Shares Authorized:
       Series B, 100,000 Shares Issued,
       Cumulative, $100,000 Liquidation
       Preference                                  98,885            98,826
    Common Stock, $0.01 Par, 320,000,000
     Shares Authorized and
     249,460,000* Shares Issued                   202,495           201,247
    Additional Paid In Capital                     31,480            21,047
    Unearned Compensation                         (37,116)          (29,861)
    Accumulated Other Comprehensive
     Income                                       140,741           148,015
    Retained Earnings                           2,898,126         2,706,845
    Common Stock Held in Treasury,
     10,364,740 shares at March 31, 2005 and
     11,605,112* shares at December 31, 2004     (180,969)         (200,695)
            Total Shareholders' Equity          3,153,642         2,945,424

  Total Liabilities and Shareholders'
   Equity                                      $6,117,028        $5,798,923

  * Restated for 2-for-1 stock split effective March 1, 2005.



                           EOG RESOURCES, INC.
                     SUMMARY STATEMENTS OF CASH FLOWS
                        (Unaudited; in thousands)

                                                       Three Months
                                                      Ended March 31,
                                                  2005               2004
  Cash Flows from Operating Activities
  Reconciliation of Net Income to Net
   Cash Provided by Operating
   Activities:
    Net Income                                  $202,703           $100,853
    Items Not Requiring Cash
       Depreciation, Depletion and
        Amortization                             153,016            113,797
       Impairments                                12,172             17,648
       Deferred Income Taxes                      44,928             32,016
       Other, Net                                  1,257              7,432
    Dry Hole Costs                                14,582             10,027
    Mark-to-Market Commodity
     Derivative Contracts
       Total Losses                                  940             44,455
       Realized Gains (Losses)                     9,806             (2,342)
    Tax Benefits From Stock Options
     Exercised                                     9,348              2,419
    Other, Net                                    (2,112)              (825)
    Changes in Components of Working
     Capital and Other Liabilities
       Accounts Receivable                         5,518             (9,160)
       Inventories                                (8,701)            (1,849)
       Accounts Payable                          (26,352)            13,579
       Accrued Taxes Payable                      41,807             22,094
       Other Liabilities                           3,666               (371)
       Other, Net                                 (6,459)             6,097
    Changes in Components of Working
     Capital Associated with
     Investing and Financing
     Activities                                   25,720              9,576
  Net Cash Provided by Operating
   Activities                                    481,839            365,446

  Investing Cash Flows
    Additions to Oil and Gas
     Properties                                 (363,760)          (240,543)
    Proceeds from Sales of Assets                 19,752              5,954
    Changes in Components of Working
     Capital Associated with
     Investing Activities                        (25,671)           (11,162)
    Other, Net                                    (7,394)            (7,646)
  Net Cash Used in Investing
   Activities                                   (377,073)          (253,397)

  Financing Cash Flows
    Net Commercial Paper and Line of
     Credit Borrowings (Repayments)               42,175            (98,050)
    Long-Term Debt Borrowings                        ---            150,000
    Long-Term Debt Repayments                        ---            (75,000)
    Dividends Paid                                (8,880)            (8,461)
    Proceeds from Stock Options
     Exercised                                    14,264              8,775
    Other, Net                                       (49)               264
  Net Cash Provided by (Used in)
   Financing Activities                           47,510            (22,472)

  Effect of Exchange Rate Changes on Cash            129              1,697

  Increase in Cash and Cash
   Equivalents                                   152,405             91,274
  Cash and Cash Equivalents at
   Beginning of Period                            20,980              4,443
  Cash and Cash Equivalents at End of
   Period                                       $173,385            $95,717



                           EOG RESOURCES, INC.

  QUANTITATIVE RECONCILIATION OF ADJUSTED NET INCOME AVAILABLE TO COMMON
           (Non-GAAP) TO NET INCOME AVAILABLE TO COMMON (GAAP)
           (Unaudited; in thousands, except per share amounts)

The following chart adjusts reported first quarter ended March 31 net income available to common to reflect actual cash realized from previously disclosed oil and gas hedges and to eliminate the mark-to-market gain or loss from these previously disclosed oil and gas hedges. EOG believes this presentation may be useful to investors who follow the practice of some industry analysts who adjust reported company earnings to match realizations to production settlement months. EOG management uses this information for comparative purposes within the industry.

                                                       Quarter
                                                    Ended March 31
                                                2005             2004

  Reported Net Income Available to
   Common                                      $200,845          $98,095

  Mark-to-Market (MTM) Commodity
   Derivative Contracts Impact
    Total Losses                                    940           44,455
    Realized Gains (Losses)                       9,806           (2,342)
       Subtotal                                  10,746           42,113

    After Tax MTM Impact                          6,915           27,100

  Adjusted Non-GAAP Net Income
   Available to Common                         $207,760         $125,195

  Adjusted Non-GAAP Net Income Per
   Share Available to Common
    Basic                                         $0.88            $0.54 *
    Diluted                                       $0.86            $0.53 *

  Average Number of Shares Outstanding
    Basic                                       237,293          231,289 *
    Diluted                                     242,114          235,242 *

  * Restated for 2-for-1 stock split effective March 1, 2005.



                           EOG RESOURCES, INC.

Quantitative Reconciliation of Discretionary Cash Flow Available to Common
      (Non-GAAP) to Net Cash Provided by Operating Activities (GAAP)
                        (Unaudited; in thousands)

The following chart reconciles first quarter ended March 31 net cash provided by operating activities to discretionary cash flow available to common. EOG believes this presentation may be useful to investors who follow the practice of some industry analysts who adjust net cash provided by operating activities for exploration costs, changes in components of working capital, other liabilities and preferred stock dividends. EOG management uses this information for comparative purposes within the industry.

                                                         Quarter
                                                      Ended March 31
                                                  2005               2004
  Net Cash Provided by Operating
   Activities                                   $481,839           $365,446

  Adjustments
     Exploration Costs                            34,816             25,996
     Changes in Components of Working
      Capital and Other Liabilities
       Accounts Receivable                        (5,518)             9,160
       Inventories                                 8,701              1,849
       Accounts Payable                           26,352            (13,579)
       Accrued Taxes Payable                     (41,807)           (22,094)
       Other Liabilities                          (3,666)               371
       Other, Net                                  6,459             (6,097)
     Changes in Components of Working
      Capital Associated with
      Investing and Financing Activities         (25,720)            (9,576)
     Preferred Dividends                          (1,858)            (2,758)

  Discretionary Cash Flow Available to
   Common                                       $479,598           $348,718

 

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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