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EOG Resources Reports Third Quarter 2006 Results
* 10.9 Percent Increase in Overall Organic Year-Over-Year Production
* 17 Percent Increase in United States Natural Gas and Natural Gas Liquids Production
* Continued Drilling Success in Fort Worth Basin Barnett Shale
PRNewswire-FirstCall
HOUSTON

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FOR IMMEDIATE RELEASE: Monday, October 30, 2006

EOG Resources, Inc. (EOG) today reported third quarter 2006 net income available to common of $297.3 million, or $1.21 per share. This compares to third quarter 2005 net income available to common of $341.9 million, or $1.40 per share.

The results for the third quarter 2006 included a previously disclosed $104.7 million ($67.4 million after tax, or $0.28 per share) gain on the mark- to-market of financial commodity price transactions. During the quarter, the net cash realized related to financial commodity contracts was $73.0 million ($47.0 million after tax, or $0.19 per share). Reflecting these items, third quarter 2006 adjusted non-GAAP net income available to common was $276.9 million, or $1.12 per share. (Please refer to the attached tables for the reconciliation of adjusted non-GAAP net income available to common to net income available to common.)

Operational Highlights

Continuing its focus on organic growth, EOG reported a 10.9 percent increase in total production during the third quarter 2006 over the third quarter 2005.

"Third quarter operational results reinforce EOG's established track record of delivering consistent, high rates of organic production growth, while maintaining a very low level of net debt and generating high rates of return on equity and capital employed," said Mark G. Papa, Chairman and Chief Executive Officer.

In the United States, natural gas and natural gas liquids production rose 17 percent as compared to the same quarter a year ago. Domestic production increases were driven by continued exploitation success in the Fort Worth Basin Barnett Shale Play and outstanding results from the Rocky Mountain and South Texas operating areas.

In Johnson County, EOG is implementing development drilling in the Barnett Shale Play with reduced well spacing from the original plan of 1,000 feet. Strong results have been reported from both eastern and western Johnson County on wells drilled in these downspaced patterns. In eastern Johnson County, the Casstevens #1H began flowing to sales at an initial rate of over seven million cubic feet per day (MMcfd) of natural gas in September and is producing at a current rate of 4.5 MMcfd. In western Johnson County, the Hardcastle #3H came on-line in August at a rate of eight MMcfd and is now producing over four MMcfd of natural gas. EOG has an 84 percent and 100 percent working interest, respectively, in these wells. In the Fort Worth Basin outside of Johnson County, EOG continues to make operational progress and remains focused on improving well results and reducing well costs.

"EOG's natural gas production from the Fort Worth Basin Barnett Shale averaged 174 MMcfd in September, far in excess of our original year-end 2006 target of 155 MMcfd," said Papa. "During the third quarter, we completed several new 'monster wells' in both eastern and western Johnson County."

In the Rocky Mountain operating area, EOG's successful development drilling program in its Uinta Basin Chapita Wells Unit in northeastern Utah contributed to a 19 percent increase in natural gas production as compared to the same period last year.

In South Texas, EOG holds an 87.5 percent working interest in the Slator Ranch W2, which was drilled to 9,300 feet in the Lobo Formation, tested at a gross rate of 17 MMcfd of natural gas and is currently producing over nine MMcfd.

Mid-Continent operations reported a 9.5 percent sequential increase in natural gas production from the second quarter 2006. In Kansas, EOG has a 100 percent working interest in the GPCU 25#1, a natural gas well that has been flowing to sales at 15 MMcfd since August.

EOG's Trinidad natural gas sales considerably surpassed contract quantities during the first half of the year and slightly exceeded contract amounts during the third quarter. Fourth quarter gas sales in Trinidad are anticipated to be limited to contract levels. Therefore, EOG has revised its total company 2006 production growth forecast to 9 percent.

"EOG's two-year production per share growth for 2005 and 2006 on a debt- adjusted basis is one of the highest in our peer group and we expect very strong production growth in 2007. We have the assets to continue this momentum going forward," noted Papa.

Capital Structure

In the third quarter, EOG reduced long-term debt outstanding to $830 million at September 30, 2006 from $893 million at June 30, 2006. At quarter end, cash on the balance sheet was $596 million for non-GAAP net debt of $234 million. (Please refer to the attached tables for the reconciliation of non- GAAP net debt to current and long-term debt.) The company's debt-to-total capitalization ratio was 13 percent at September 30, 2006, down from 19 percent at December 31, 2005.

Conference Call Scheduled for October 31, 2006

An updated investor presentation and reconciliation schedules will be posted to the EOG website prior to the conference call.

EOG's third quarter 2006 conference call will be available via live audio webcast at 9 a.m. Central Standard Time (10 a.m. Eastern Standard Time) Tuesday, October 31, 2006. To listen, log on to http://www.eogresources.com/ . The webcast will be archived on EOG's website through Tuesday, November 14, 2006.

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, materials and equipment used in well completions, and tubular steel; the availability, terms and timing of governmental and other permits and rights of way; the availability of pipeline transportation capacity; the availability of compression uplift capacity; the extent to which EOG can economically develop its Barnett Shale acreage outside of Johnson County, Texas; 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; weather; and financial market conditions. In light of these risks, uncertainties and assumptions, the events anticipated by EOG's forward-looking statements might not occur. Forward-looking statements speak only as of the date made and EOG undertakes no obligation 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, 2005, 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/ .

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

                                       Quarter             Nine Months
                                  Ended September 30    Ended September 30
                                    2006      2005       2006        2005
  Net Operating Revenues           $968.2    $934.4    $2,971.9    $2,406.5
  Net Income Available to Common   $297.3    $341.9    $1,051.7      $790.3
  Net Income Per Share Available
   to Common
    Basic                           $1.23     $1.43       $4.35       $3.32
    Diluted                         $1.21     $1.40       $4.28       $3.25
  Average Number of Shares
   Outstanding
    Basic                           241.9     239.3       241.5       238.3
    Diluted                         246.1     244.9       246.0       243.5



                        SUMMARY INCOME STATEMENTS
                        (Unaudited; in thousands)

                                 Quarter                 Nine Months
                            Ended September 30        Ended September 30
                             2006        2005         2006          2005
  Net Operating Revenues
    Wellhead Natural Gas   $661,920    $751,239    $2,093,950    $1,919,909
    Wellhead Crude Oil,
     Condensate and
     Natural Gas Liquids    200,724     181,741       570,478       483,584
    Gains (Losses) on
     Mark-to-Market
     Commodity
     Derivative
     Contracts              104,696         ---       302,742          (940)
    Other, Net                  908       1,465         4,702         3,972
      Total                 968,248     934,445     2,971,872     2,406,525
  Operating Expenses
    Lease and Well           93,693      71,035       268,464       203,361
    Transportation Costs     26,632      20,975        80,641        58,375
    Exploration Costs        35,174      32,023       109,879        94,833
    Dry Hole Costs           16,356      19,130        41,750        56,249
    Impairments              22,106      18,292        67,559        54,695
    Depreciation,
     Depletion and
     Amortization           216,071     164,372       586,651       477,284
    General and
     Administrative          42,362      30,079       117,260        88,879
    Taxes Other Than
     Income                  54,066      56,383       154,618       135,909
      Total                 506,460     412,289     1,426,822     1,169,585

  Operating Income          461,788     522,156     1,545,050     1,236,940

  Other Income, Net          14,310      10,159        50,710        22,498

  Income Before Interest
   Expense and Income
   Taxes                    476,098     532,315     1,595,760     1,259,438

  Interest Expense, Net      10,102      13,877        35,639        42,521

  Income Before Income
   Taxes                    465,996     518,438     1,560,121     1,216,917

  Income Tax Provision      166,860     174,677       502,861       420,997

  Net Income                299,136     343,761     1,057,260       795,920

  Preferred Stock
   Dividends                  1,858       1,857         5,574         5,573

  Net Income Available
   to Common               $297,278    $341,904    $1,051,686      $790,347



                           EOG RESOURCES, INC.
                           OPERATING HIGHLIGHTS
                               (Unaudited)

                                      Quarter              Nine Months
                                 Ended September 30     Ended September 30
                                   2006      2005         2006     2005
  Wellhead Volumes and Prices
  Natural Gas Volumes (MMcfd)
     United States                   837       724          791      707
     Canada                          224       226          226      229
       United States & Canada      1,061       950        1,017      936
     Trinidad                        255       213          267      210
     United Kingdom                   28        44           29       38
       Total                       1,344     1,207        1,313    1,184

  Average Natural Gas Prices
   ($/Mcf)
     United States                 $6.21     $8.19        $6.74    $6.96
     Canada                         5.65      7.12         6.60     6.28
       United States & Canada
        Composite                   6.09      7.94         6.71     6.79
     Trinidad                       2.21      1.86         2.28     2.18 (B)
     United Kingdom                 6.09      5.14         8.27     5.72
       Composite                    5.35      6.77         5.84     5.94

  Crude Oil and Condensate
   Volumes (MBbld)
     United States                  20.6      21.2         20.4     21.8
     Canada                          2.6       2.3          2.5      2.4
       United States & Canada       23.2      23.5         22.9     24.2
     Trinidad                        4.4       4.2          4.9      4.2
     United Kingdom                  0.1       0.3          0.1      0.2
       Total                        27.7      28.0         27.9     28.6

  Average Crude Oil and
   Condensate Prices ($/Bbl)
     United States                $67.35    $61.63       $65.00   $53.75
     Canada                        63.87     57.08        59.42    49.26
       United States & Canada
        Composite                  66.96     61.19        64.35    53.30
     Trinidad                      74.26     61.93        66.50    53.56
     United Kingdom                59.09     53.80        60.49    48.75
       Composite                   67.68     61.22        64.68    53.30

  Natural Gas Liquids Volumes
   (MBbld)
     United States                   8.8       6.0          8.4      6.5
     Canada                          0.7       0.3 (A)      0.7      1.0
       Total                         9.5       6.3          9.1      7.5

  Average Natural Gas Liquids
   Prices ($/Bbl)
     United States                $44.33    $39.80       $41.10   $33.07
     Canada                        52.21     69.43 (A)    47.15    33.10
       Composite                   44.89     41.25        41.55    33.08

  Natural Gas Equivalent
   Volumes (MMcfed)
     United States                 1,015       887          964      876
     Canada                          243       242          245      250
       United States & Canada      1,258     1,129        1,209    1,126
     Trinidad                        281       238          296      236
     United Kingdom                   29        46           30       39
       Total                       1,568     1,413        1,535    1,401

  Total Bcfe                       144.2     130.0        419.1    382.3

  (A)  Includes 0.08 MBbld adjustment in the third quarter of 2005.
       Excluding the adjustment, the average natural gas liquid price was
       $44.50.
  (B)  Includes $0.34 per Mcf as a result of a revenue adjustment in the
       second quarter of 2005 related to an amended Trinidad take-or-pay
       contract.



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

                                             September 30,      December 31,
                                                  2006              2005

                                  ASSETS
  Current Assets
    Cash and Cash Equivalents                    $595,931          $643,811
    Accounts Receivable, Net                      656,523           762,207
    Inventories                                   117,385            63,215
    Assets from Price Risk Management
     Activities                                   125,893            11,415
    Deferred Income Taxes                             ---            24,376
    Other                                          87,269            58,214
        Total                                   1,583,001         1,563,238

  Oil and Gas Properties (Successful
   Efforts Method)                             13,188,912        11,173,389
    Less:  Accumulated Depreciation,
     Depletion and Amortization                (5,734,736)       (5,086,210)
      Net Oil and Gas Properties                7,454,176         6,087,179
  Other Assets                                    127,839           102,903
  Total Assets                                 $9,165,016        $7,753,320

                   LIABILITIES AND SHAREHOLDERS' EQUITY
  Current Liabilities
    Accounts Payable                             $794,588          $679,548
    Accrued Taxes Payable                         143,896           140,902
    Dividends Payable                              14,844             9,912
    Deferred Income Taxes                         122,147           164,659
    Current Portion of Long-Term Debt             124,075           126,075
    Other                                          59,418            50,945
        Total                                   1,258,968         1,172,041


  Long-Term Debt                                  705,442           858,992
  Other Liabilities                               310,063           283,407
  Deferred Income Taxes                         1,416,310         1,122,588

  Shareholders' Equity
    Preferred Stock, $0.01 Par,
     10,000,000 Shares Authorized:
     Series B, 100,000 Shares Issued,
     Cumulative, $100,000,000 Liquidation
     Preference                                    99,240            99,062
    Common Stock, $0.01 Par, 640,000,000
     Shares Authorized and
     249,460,000 Shares Issued                    202,495           202,495
    Additional Paid In Capital                    121,298            84,705
    Unearned Compensation                             ---           (36,246)
    Accumulated Other Comprehensive
     Income                                       241,640           177,137
    Retained Earnings                           4,928,453         3,920,483
    Common Stock Held in Treasury,
     6,008,852 Shares at September 30, 2006
     and 7,385,862 Shares at December 31, 2005   (118,893)         (131,344)
            Total Shareholders' Equity          5,474,233         4,316,292
  Total Liabilities and Shareholders' Equity   $9,165,016        $7,753,320



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

                                                       Nine Months
                                                   Ended September 30
                                                 2006               2005
  Cash Flows from Operating Activities
  Reconciliation of Net Income to Net
   Cash Provided by Operating Activities:
    Net Income                                $1,057,260          $795,920
    Items Not Requiring Cash
        Depreciation, Depletion and
         Amortization                            586,651           477,284
        Impairments                               67,559            54,695
        Stock-Based Compensation Expenses         38,407             8,825
        Deferred Income Taxes                    258,465           172,015
        Other, Net                                (9,738)             (103)
    Dry Hole Costs                                41,750            56,249
    Mark-to-Market Commodity Derivative
     Contracts
        Total (Gains) Losses                    (302,742)              940
        Realized Gains                           166,892             9,807
    Tax Benefits From Stock Options Exercised        ---            40,347
    Other, Net                                     8,316           (10,558)
    Changes in Components of Working
     Capital and Other Liabilities
        Accounts Receivable                      110,517          (171,428)
        Inventories                              (54,021)          (14,736)
        Accounts Payable                         104,592            79,239
        Accrued Taxes Payable                    (49,083)            8,018
        Other Liabilities                          2,626            (1,164)
        Other, Net                                18,093               804
    Changes in Components of Working
     Capital Associated with Investing
     and Financing Activities                    (65,996)           (1,942)
  Net Cash Provided by Operating Activities    1,979,548         1,504,212

  Investing Cash Flows
    Additions to Oil and Gas Properties       (1,953,209)       (1,223,715)
    Proceeds from Sales of Assets                 15,655            56,990
    Changes in Components of Working
     Capital Associated with
     Investing Activities                         66,054             2,572
    Other, Net                                   (20,474)          (13,986)
  Net Cash Used in Investing Activities       (1,891,974)       (1,178,139)

  Financing Cash Flows
    Net Commercial Paper and Line of
     Credit Borrowings                               ---            40,150
    Long-Term Debt Borrowings                     37,000               ---
    Long-Term Debt Repayments                   (192,550)          (75,000)
    Dividends Paid                               (44,015)          (31,575)
    Excess Tax Benefits from Stock-
     Based Compensation Expenses                  27,139               ---
    Proceeds from Stock Options
     Exercised and Employee Stock
     Purchase Plan                                29,284            56,437
    Other, Net                                      (448)           (1,462)
  Net Cash Used in Financing Activities         (143,590)          (11,450)

  Effect of Exchange Rate Changes on Cash          8,136             5,458

  (Decrease) Increase in Cash and Cash
   Equivalents                                   (47,880)          320,081
  Cash and Cash Equivalents at
   Beginning of Period                           643,811            20,980
  Cash and Cash Equivalents at End of
   Period                                       $595,931          $341,061



                           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 data)

The following chart adjusts three-month and nine-month periods ended September 30 reported Net Income Available to Common (GAAP) to reflect actual cash realized from oil and gas hedges by eliminating the unrealized mark-to- market gains or losses from these transactions, to add the one-time tax expense related to Texas (US) franchise tax law revision in the second quarter of 2006, to eliminate tax benefits related to the Alberta (Canada) provincial tax rate reduction and Canadian federal tax rate reduction in the second quarter of 2006 and to eliminate the upward revenue adjustment for an amended Trinidad gas sales agreement recorded in the second quarter of 2005. 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 to exclude one-time items. EOG management uses this information for comparative purposes within the industry.

                                      Quarter              Nine Months
                                Ended September 30     Ended September 30
                                  2006       2005        2006        2005

  Reported Net Income
   Available to Common (GAAP)   $297,278   $341,904   $1,051,686   $790,347

  Mark-to-Market (MTM)
   Commodity Derivative
   Contracts Impact
    Total (Gains) Losses        (104,696)       ---     (302,742)       940
    Realized Gains                72,978        ---      166,892      9,807
      Subtotal                   (31,718)       ---     (135,850)    10,747

    After Tax MTM Impact         (20,411)       ---      (87,419)     6,916

  Add: Tax Expense Related to
   Texas (US) Franchise Tax
   Law Revision                      ---        ---        5,221        ---
  Less: Tax Benefit Related to
   Alberta (Canada) Provincial
   Tax Rate Reduction                ---        ---      (13,449)       ---
  Less: Tax Benefit Related to
   Canadian Federal Tax Rate
   Reduction                         ---        ---      (18,593)       ---
  Less: Revenue Adjustment for
   an Amended Trinidad Gas
   Sales Agreement, Net of Tax       ---        ---          ---     (8,672)


  Adjusted Net Income
   Available to Common (Non-
   GAAP)                        $276,867   $341,904     $937,446   $788,591

  Adjusted Net Income Per
   Share Available to Common
   (Non-GAAP)
    Basic                          $1.14      $1.43        $3.88      $3.31
    Diluted                        $1.12      $1.40        $3.81      $3.24

  Average Number of Shares
   Outstanding
    Basic                        241,911    239,344      241,550    238,291
    Diluted                      246,136    244,900      245,990    243,530



                           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 nine-month periods ended September 30 Net Cash Provided by Operating Activities (GAAP) to Discretionary Cash Flow Available to Common (Non-GAAP). 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               Nine Months
                               Ended September 30      Ended September 30
                                 2006        2005       2006        2005
  Net Cash Provided by
   Operating Activities
   (GAAP)                      $603,116    $518,807  $1,979,548  $1,504,212

  Adjustments
    Exploration Costs            35,174      32,023     109,879      94,833
    Changes in Components of
     Working Capital and
     Other Liabilities
      Accounts Receivable        58,833     166,347    (110,517)    171,428
      Inventories                18,955       2,551      54,021      14,736
      Accounts Payable         (109,817)    (62,305)   (104,592)    (79,239)
      Accrued Taxes Payable      37,613      (2,818)     49,083      (8,018)
      Other Liabilities          (3,563)     (4,161)     (2,626)      1,164
      Other, Net                (14,419)    (11,721)    (18,093)       (804)
    Changes in Components of
     Working Capital Associated
     with Investing and
     Financing Activities        56,288      21,784      65,996       1,942
    Preferred Dividends          (1,858)     (1,857)     (5,574)     (5,573)

  Discretionary Cash Flow
   Available to Common
   (Non-GAAP)                  $680,322    $658,650  $2,017,125  $1,694,681



                           EOG RESOURCES, INC.
            QUANTITATIVE RECONCILIATION OF NET DEBT (NON-GAAP)
                   TO CURRENT AND LONG-TERM DEBT (GAAP)
                         (Unaudited; in millions)

The following chart reconciles Current and Long-Term Debt (GAAP) to Net Debt (Non-GAAP). A portion of the cash is associated with international subsidiaries; tax considerations may impact debt paydown. EOG believes this presentation may be useful to investors who follow the practice of some industry analysts who utilize Net Debt in their calculation. EOG management uses this information for comparative purposes within the industry.

                                                   September 30,
                                                       2006

     Current and Long-Term Debt (GAAP)                 $830
     Less: Cash                                        (596)
     Net Debt (Non-GAAP)                               $234

 

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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