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EOG Resources Reports Second Quarter 2005 Results and Increases 2005 Production Growth Target
* Achieves 20 Percent Organic Production Growth
* Increases Full Year 2005 Production Growth Target to 15.5 Percent
* Maintains 2006 Production Growth Target at 8 Percent
PRNewswire-FirstCall
HOUSTON

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FOR IMMEDIATE RELEASE: July 26, 2005

EOG Resources, Inc. today reported second quarter 2005 net income available to common of $247.6 million, or $1.02 per share. This compares to second quarter 2004 net income available to common of $142.2 million, or $0.60* per share.

The results for the second quarter 2005 included an adjustment to revenue of $19.3 million ($8.7 million after tax, or $0.04 per share) related to an amended gas sales agreement. Adjusting for this item, second quarter non-GAAP net income available to common was $238.9 million, or $0.98 per share. Last year's second quarter results included a tax benefit of $5.3 million ($0.02* per share) from the reduction in the corporate tax rate in Alberta, Canada and a $14.6 million ($9.4 million after tax, or $0.04* per share) loss on the mark-to-market of financial commodity price transactions. The net cash outflow from the settlement of financial commodity price transactions was $35.9 million ($23.2 million after tax, or $0.10* per share). Reflecting these items, second quarter 2004 adjusted non-GAAP net income available to common was $123.1 million, or $0.52* 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.)

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

  Operational Highlights

In the second quarter, total company production increased 20 percent versus the second quarter 2004 with significant increases in all four of EOG's producing areas: the U.S., Canada, Trinidad and the United Kingdom North Sea. Natural gas production rose 21 percent overall led by increases of 32 percent from Trinidad, 16 percent from Canada and 14 percent from the U.S.

U.S. gas production was higher than the prior year period as a result of successful drilling predominantly in the Barnett Shale, South Texas, East Texas/North Louisiana, Mid Continent and Rocky Mountain areas.

"Because production results exceeded our original expectations for the first half of the year, we are increasing EOG's 2005 full year production growth target from 13.5 to 15.5 percent. Essentially all of this is organic," said Mark G. Papa, Chairman and Chief Executive Officer. "Our 2004 to 2006 three year compounded production growth target now increases from 35 percent to 38 percent, while the 2006 target remains at eight percent. In North America, we are seeing contributions from both the Barnett and our extensive assets outside that play."

In the Barnett Shale, EOG has accumulated approximately 490,000 acres. During the second quarter, additional wells drilled to the west of Johnson County, in Hood and Jack Counties, continued to confirm the acreage is natural gas and not oil productive. EOG currently has nine rigs in the Barnett Shale Play, eight of which are operating in Johnson County and one in Hood County. The company's plan is to pursue a steady drilling program for at least the next six years.

In Trinidad and Tobago, EOG will supply 60 MMcfd, net of natural gas to the M5000 Methanol Plant, which is on schedule to begin full production during August. EOG also announced it signed the Block 4(a) production sharing contract at the beginning of July that adds 102,000 additional net acres to the company's position off the southeast coast of the country. EOG has a 90 percent working interest in the block and has secured a rig to commence drilling an exploration prospect in December that will target natural gas reserves at 8,400 feet.

In the United Kingdom North Sea, the Arthur 2 well commenced production in late July increasing total natural gas production from the discovery to 39 MMcfd, net.

Conference Call Scheduled for July 27, 2005

EOG's second quarter 2005 conference call will be available via live audio webcast at 9:30 a.m. Central Time (10:30 a.m. Eastern Time) Wednesday, July 27, 2005. To listen, log on to http://www.eogresources.com/ . The webcast will be archived on EOG's website through August 10, 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 Annual Report on 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                  Six Months
                               Ended June 30              Ended June 30
                              2005       2004           2005        2004
  Net Operating Revenues     $783.9     $519.0        $1,472.1     $983.3
  Net Income Available
   to Common                 $247.6     $142.2          $448.4     $240.3
  Net Income Per Share
   Available to Common
    Basic                     $1.04      $0.61 *         $1.89      $1.04 *
    Diluted                   $1.02      $0.60 *         $1.85      $1.02 *
  Average Number of
   Shares Outstanding
    Basic                     238.3      232.8 *         237.8      232.1 *
    Diluted                   243.4      237.4 *         242.8      236.5 *



                        SUMMARY INCOME STATEMENTS
                        (Unaudited; in thousands)

                                 Quarter                 Six Months
                              Ended June 30             Ended June 30
                             2005       2004           2005        2004
  Net Operating Revenues
    Wellhead Natural Gas   $625,564   $430,134      $1,168,670   $847,005
    Wellhead Crude Oil,
     Condensate and
     Natural Gas Liquids    157,307    102,401         301,843    192,859
    Losses on Mark-to-
     Market Commodity
     Derivative
     Contracts                  ---    (14,563)           (940)   (59,018)
    Other, Net                1,053      1,049           2,507      2,495
      Total                 783,924    519,021       1,472,080    983,341
  Operating Expenses
    Lease and Well,
     including
     Transportation          86,851     65,532         169,726    129,949
    Exploration Costs        27,994     19,596          62,810     45,592
    Dry Hole Costs           22,537     19,064          37,119     29,091
    Impairments              24,231     15,711          36,403     33,359
    Depreciation,
     Depletion and
     Amortization           159,896    116,224         312,912    230,021
    General and
     Administrative          30,113     26,370          58,800     51,285
    Taxes Other Than Income  37,613     29,788          79,526     65,872
      Total                 389,235    292,285         757,296    585,169
  Operating Income          394,689    226,736         714,784    398,172

  Other Income
   (Expense), Net             6,874      1,425          12,339     (1,304)

  Income Before Interest
   Expense and Income
   Taxes                    401,563    228,161         727,123    396,868

  Interest Expense, Net      14,687     15,416          28,644     32,099

  Income Before Income
   Taxes                    386,876    212,745         698,479    364,769

  Income Tax Provision      137,420     67,808         246,320    118,979

  Net Income                249,456    144,937         452,159    245,790

  Preferred Stock
   Dividends                  1,858      2,758           3,716      5,516

  Net Income Available
   to Common               $247,598   $142,179        $448,443   $240,274

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



                           EOG RESOURCES, INC.
                           OPERATING HIGHLIGHTS
                               (Unaudited)

                                        Quarter              Six Months
                                     Ended June 30         Ended June 30
                                   2005         2004      2005        2004
  Wellhead Volumes and Prices
  Natural Gas Volumes (MMcf/d)
    United States                    706          619       698         618
    Canada                           228          197       231         201
      United States & Canada         934          816       929         819
    Trinidad                         214          162       209         158
    United Kingdom                    34          ---        34         ---
      Total                        1,182          978     1,172         977

  Average Natural Gas Prices
   ($/Mcf)
    United States                  $6.64        $5.67     $6.31       $5.54
    Canada                          6.02         5.04      5.85        5.01
      United States & Canada
       Composite                    6.49         5.52      6.20        5.41
    Trinidad                        2.92 (A)     1.36      2.35 (B)    1.42
    United Kingdom                  5.54          ---      6.10         ---
      Composite                     5.82         4.83      5.51        4.77

  Crude Oil and Condensate
   Volumes (MBD)
    United States                   21.7         21.0      22.1        20.5
    Canada                           2.5          2.6       2.5         2.6
      United States & Canada        24.2         23.6      24.6        23.1
    Trinidad                         4.2          3.1       4.1         2.8
    United Kingdom                   0.1          ---       0.2         ---
      Total                         28.5         26.7      28.9        25.9

  Average Crude Oil and
   Condensate Prices ($/Bbl)
    United States                 $51.03       $37.39    $49.90      $36.11
    Canada                         46.58        35.59     45.68       33.63
      United States & Canada
       Composite                   50.58        37.19     49.47       35.83
    Trinidad                       53.05        37.69     49.22       35.52
    United Kingdom                 49.10          ---     43.93         ---
      Composite                    50.93        37.25     49.41       35.80

  Natural Gas Liquids Volumes
   (MBD)
    United States                    7.9          5.0       6.7         4.9
    Canada                           1.2          0.6       1.3         0.6
      Total                          9.1          5.6       8.0         5.5

  Average Natural Gas Liquids
   Prices ($/Bbl)
    United States                 $30.51       $23.78    $30.01      $24.24
    Canada                         30.52        20.35     28.80       20.25
      Composite                    30.51        23.40     29.81       23.80

  Natural Gas Equivalent
   Volumes (MMcfe/d)
    United States                    885          775       870         771
    Canada                           249          216       254         219
      United States & Canada       1,134          991     1,124         990
    Trinidad                         238          181       235         175
    United Kingdom                    35          ---        35         ---
      Total                        1,407        1,172     1,394       1,165

  Total Bcfe Deliveries            128.1        106.6     252.3       212.1

   (A)  Includes $0.99 per Mcf as a result of a revenue adjustment related
        to an amended Trinidad take-or-pay contract.
   (B)  Includes $0.51 per Mcf as a result of a revenue adjustment related
        to an amended Trinidad take-or-pay contract.



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

                                                June 30,        December 31,
                                                  2005              2004

                                     ASSETS
  Current Assets
    Cash and Cash Equivalents                    $282,701           $20,980
    Accounts Receivable, Net                      450,606           447,742
    Inventories                                    52,188            40,037
    Assets from Price Risk Management
     Activities                                       ---            10,747
    Deferred Income Taxes                          26,644            22,227
    Other                                          54,366            45,070
         Total                                    866,505           586,803

  Oil and Gas Properties (Successful
   Efforts Method)                             10,193,805         9,599,276
    Less:  Accumulated Depreciation,
     Depletion and Amortization                (4,738,768)       (4,497,673)
      Net Oil and Gas Properties                5,455,037         5,101,603
  Other Assets                                    106,115           110,517
  Total Assets                                 $6,427,657        $5,798,923

                   LIABILITIES AND SHAREHOLDERS' EQUITY
  Current Liabilities
    Accounts Payable                             $439,532          $424,581
    Accrued Taxes Payable                          65,059            51,116
    Dividends Payable                               9,831             7,394
    Deferred Income Taxes                          52,350           103,933
    Other                                          38,000            45,180
         Total                                    604,772           632,204


  Long-Term Debt                                1,117,097         1,077,622
  Other Liabilities                               248,137           241,319
  Deferred Income Taxes                         1,058,229           902,354

  Shareholders' Equity
    Preferred Stock, $0.01 Par,
     10,000,000 Shares Authorized:
     Series B, 100,000 Shares Issued,
     Cumulative, $100,000,000 Liquidation
     Preference                                    98,944            98,826
    Common Stock, $0.01 Par, 640,000,000
     Shares Authorized and
     249,460,000* Shares Issued                   202,495           201,247
    Additional Paid In Capital                     38,391            21,047
    Unearned Compensation                         (34,263)          (29,861)
    Accumulated Other Comprehensive
     Income                                       124,685           148,015
    Retained Earnings                           3,136,135         2,706,845
    Common Stock Held in Treasury,
     9,552,169 shares at June 30, 2005
     and 11,605,112* shares at
     December 31, 2004                           (166,965)         (200,695)
            Total Shareholders' Equity          3,399,422         2,945,424
  Total Liabilities and Shareholders'
   Equity                                      $6,427,657        $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)

                                                       Six Months
                                                      Ended June 30,
                                                  2005              2004
  Cash Flows from Operating Activities
  Reconciliation of Net Income to Net
   Cash Provided by Operating
   Activities:
    Net Income                                  $452,159          $245,790
    Items Not Requiring Cash
       Depreciation, Depletion and
        Amortization                             312,912           230,021
       Impairments                                36,403            33,359
       Deferred Income Taxes                     109,278            84,216
       Other, Net                                  5,333            11,277
    Dry Hole Costs                                37,119            29,091
    Mark-to-Market Commodity Derivative
     Contracts
       Total Losses                                  940            59,018
       Realized Gains (Losses)                     9,806           (38,211)
    Tax Benefits From Stock Options
     Exercised                                    18,309            13,792
    Other, Net                                    (5,323)           (1,273)
    Changes in Components of Working
     Capital and Other Liabilities
       Accounts Receivable                        (5,081)          (62,082)
       Inventories                               (12,185)           (8,368)
       Accounts Payable                           16,934            41,515
       Accrued Taxes Payable                       5,200             1,329
       Other Liabilities                          (5,324)              921
       Other, Net                                (10,917)          (10,339)
    Changes in Components of Working
     Capital Associated with
     Investing and Financing
     Activities                                   19,842            14,402
  Net Cash Provided by Operating
   Activities                                    985,405           644,458

  Investing Cash Flows
    Additions to Oil and Gas Properties         (762,347)         (563,631)
    Proceeds from Sales of Assets                 31,578             9,762
    Changes in Components of Working
     Capital Associated with
     Investing Activities                        (19,950)          (15,150)
    Other, Net                                   (16,111)          (12,920)
  Net Cash Used in Investing Activities         (766,830)         (581,939)

  Financing Cash Flows
    Net Commercial Paper and Line of
     Credit Borrowings (Repayments)               39,475           (98,050)
    Long-Term Debt Borrowings                        ---           150,000
    Long-Term Debt Repayments                        ---           (75,000)
    Dividends Paid                               (20,220)          (18,957)
    Proceeds from Stock Options
     Exercised                                    24,372            42,294
    Other, Net                                       108              (784)
  Net Cash Provided by (Used in)
   Financing Activities                           43,735              (497)

  Effect of Exchange Rate Changes on Cash           (589)            1,374

  Increase in Cash and Cash Equivalents          261,721            63,396
  Cash and Cash Equivalents at
   Beginning of Period                            20,980             4,443
  Cash and Cash Equivalents at End of
   Period                                       $282,701           $67,839



                           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 three-month and six-month periods ended June 30 reported net income available to common to reflect actual cash realized from oil and gas hedges by eliminating the unrealized mark-to-market gains or losses from these transactions, to eliminate the revenue related to an amended gas sales agreement recorded in the second quarter of 2005 and to eliminate a tax benefit related to the Alberta (Canada) corporate tax rate reduction recorded in the second quarter of 2004. 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 and make certain other adjustments. EOG management uses this information for comparative purposes within the industry.

                                     Quarter                Six Months
                                  Ended June 30,          Ended June 30,
                                 2005       2004         2005       2004

  Reported Net Income
   Available to Common         $247,598   $142,179     $448,443   $240,274

  Mark-to-Market (MTM)
   Commodity Derivative
   Contracts Impact
    Total Losses                    ---     14,563          940     59,018
    Realized Gains (Losses)         ---    (35,869)       9,806    (38,211)
       Subtotal                     ---    (21,306)      10,746     20,807

    After Tax MTM Impact            ---    (13,710)       6,915     13,389

  Less: Revenue related to an
   amended gas sales
   agreement, net of tax         (8,672)       ---       (8,672)       ---
  Less: Tax benefit related
   to the Alberta (Canada)
   corporate tax rate reduction     ---     (5,335)         ---     (5,335)


  Adjusted Non-GAAP Net
   Income Available to Common  $238,926   $123,134     $446,686   $248,328

  Adjusted Non-GAAP Net
   Income Per Share Available
   to Common
    Basic                         $1.00      $0.53 *      $1.88      $1.07 *
    Diluted                       $0.98      $0.52 *      $1.84      $1.05 *

  Average Number of Shares
   Outstanding
    Basic                       238,252    232,776 *    237,752    232,103 *
    Diluted                     243,414    237,417 *    242,771    236,455 *

   * 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 three-month and six-month periods ended June 30 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 changes in components of working capital, other liabilities and preferred stock dividends. EOG management uses this information for comparative purposes within the industry.

                                       Quarter               Six Months
                                    Ended June 30          Ended June 30
                                   2005        2004        2005       2004
  Net Cash Provided by
   Operating Activities          $503,566    $279,012    $985,405  $644,458

  Adjustments
    Exploration Costs              27,994      19,596      62,810    45,592
    Changes in Components of
     Working Capital and Other
     Liabilities
      Accounts Receivable          10,599      52,922       5,081    62,082
      Inventories                   3,484       6,519      12,185     8,368
      Accounts Payable            (43,286)    (27,936)    (16,934)  (41,515)
      Accrued Taxes Payable        36,606      20,765      (5,200)   (1,329)
      Other Liabilities             8,992      (1,292)      5,324      (921)
      Other, Net                    4,458      16,436      10,917    10,339
    Changes in Components of
     Working Capital Associated
      with Investing and
      Financing Activities          5,878      (4,826)    (19,842)  (14,402)
    Preferred Dividends            (1,858)     (2,758)     (3,716)   (5,516)

  Discretionary Cash Flow
   Available to Common           $556,433    $358,438  $1,036,030  $707,156

 

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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