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EOG Resources Reports First Quarter 2007 Results

HOUSTON, April 30 /PRNewswire-FirstCall/ -- EOG Resources, Inc. (NYSE: EOG)(EOG) today reported first quarter 2007 net income available to common of $216.8 million, or $0.88 per share. This compares to first quarter 2006 net income available to common of $424.8 million, or $1.73 per share.

The results for the first quarter 2007 included a previously disclosed $39.8 million ($25.6 million after tax, or $0.11 per share) loss on the mark- to-market of financial commodity price transactions. During the quarter, the net cash realized related to financial commodity contracts was $47.3 million ($30.4 million after tax, or $0.12 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 $272.8 million, or $1.11 per share. Last year's first quarter results included a $107.0 million ($68.8 million after tax, or $0.28 per share) gain on the mark-to-market of financial commodity price transactions. The net cash inflow from the settlement of financial commodity price transactions was $30.1 million ($19.3 million after tax, or $0.08 per share). Reflecting these items, first quarter 2006 adjusted non-GAAP net income available to common was $375.3 million, or $1.53 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

United States natural gas production increased 21 percent over the first quarter 2006 led by continued strong results and production increases from the Fort Worth Basin Barnett Shale. Other growth drivers during the first quarter were EOG's operations in East Texas, South Texas, the Rockies and Mid Continent.

"Based on our growing success in the Barnett Shale and our other activities in North America, we are on track to achieve our target of 10 percent total company production growth in 2007," said Mark G. Papa, Chairman and Chief Executive Officer. "We think it is a significant operational achievement for a company the size of EOG to grow U.S. production organically at double digit rates as we are doing."

In Johnson County, where EOG is furthest along in the development of its Barnett Shale assets, the Fowler Unit #1H, the best well that EOG has completed in the play to date, began production at a rate of 16 million cubic feet per day (MMcfd) of natural gas in March. EOG has a 100 percent working interest in the well, which is located in the eastern part of the county. Also in Johnson County, three Hardcastle Unit wells, the #8H, #9H and #10H, were drilled with 35 acre spacing between them. The wells, in which EOG has a 100 percent working interest, each began producing natural gas at rates varying from 5.8 to 6.7 MMcfd.

Outside of Johnson County in Erath, Hood, Jack and Parker Counties where EOG has increased its drilling activity, a number of wells were recently turned to sales. In Erath County, the Houston Ranch #16H, in which EOG has a 97 percent working interest, began producing natural gas in March at a rate of 1.7 MMcfd. Four Hood County wells, the Black Ranch #14H, the Branch Farms #1H and the Mabery A Unit #1H and B Unit #1H, were drilled during the first quarter and completed to sales in April at initial production rates that varied from 1.4 to 2.6 MMcfd. EOG has an approximate 80 percent working interest in these wells. In Parker County, EOG has a 100 percent working interest in the KTV Betzel Unit #3H, which began initial production in April at 2.0 MMcfd.

"Operating results from the Fort Worth Barnett Shale continue to meet or exceed every target we have set," said Papa. "As we maintain our focus on gaining operational expertise, our results continue to improve as well."

In South Texas, EOG completed two strong Lobo wells in Zapata County. The Barrocito #6, in which EOG has a 100 percent working interest, was drilled to 11,000 feet. The well, which began initial natural gas production at a rate of 14 MMcfd, sets up the potential for a significant number of offset drilling locations. Also in Zapata County, the Slator Ranch W-4, which was drilled in the Stirling Field, flowed at an initial production rate of 13.8 MMcfd of natural gas and 120 barrels of oil per day, gross. EOG has an 88 percent working interest in the well.

"In the past month, we have seen a strengthening in natural gas prices for the second half of the year that falls in-line with our internal expectations. Based on the current commodity environment, we plan to execute our $3.4 billion capital expenditure program in 2007," said Papa.

Capital Structure

Recognizing the company's strong financial position, Standard and Poor's Credit Rating Services upgraded EOG to A- after the end of the first quarter.

"2007 is shaping up to be an active drilling year with good organic production growth. Combined with our continued focus on returns and cost control, we expect to end the year as we began, with a very strong balance sheet," noted Papa.

Conference Call Scheduled for May 1, 2007

EOG's first quarter 2007 conference call will be available via live audio webcast at 8 a.m. Central Daylight Time (9 a.m. Eastern Daylight Time) Tuesday, May 1, 2007. To listen, log on to http://www.eogresources.com . The webcast will be archived on EOG's website through Tuesday, May 15, 2007.

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, 2006, 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
                                                         Ended March 31
                                                    2007               2006
    Net Operating Revenues                         $875.2            $1,084.5
    Net Income Available to Common                 $216.8              $424.8
    Net Income Per Share Available to Common
       Basic                                        $0.89               $1.76
       Diluted                                      $0.88               $1.73
    Average Number of Shares Outstanding
       Basic                                        242.8               241.1
       Diluted                                      246.7               245.9



                          SUMMARY INCOME STATEMENTS
                          (Unaudited; in thousands)

                                                            Quarter
                                                         Ended March 31
                                                    2007               2006
    Net Operating Revenues
       Wellhead Natural Gas                      $735,642            $789,061
       Wellhead Crude Oil, Condensate
        and Natural Gas Liquids                   174,864             184,718
      (Losses) Gains on Mark-to-Market
       Commodity Derivative Contracts             (39,801)            107,024
       Other, Net                                   4,508               3,733
         Total                                    875,213           1,084,536
    Operating Expenses
       Lease and Well                             104,325              87,484
       Transportation Costs                        37,748              28,096
       Exploration Costs                           26,384              39,392
       Dry Hole Costs                              16,810              10,726
       Impairments                                 24,042              22,773
       Depreciation, Depletion and
        Amortization                              244,342             177,652
       General and Administrative                  43,879              36,291
       Taxes Other Than Income                     40,648              53,694
         Total                                    538,178             456,108
    Operating Income                              337,035             628,428

    Other Income, Net                               5,924              14,556

    Income Before Interest Expense and
     Income Taxes                                 342,959             642,984

    Interest Expense, Net                           7,638              13,153

    Income Before Income Taxes                    335,321             629,831

    Income Tax Provision                          117,654             203,124

    Net Income                                    217,667             426,707

    Preferred Stock Dividends                         875               1,858

    Net Income Available to Common               $216,792            $424,849



                             EOG RESOURCES, INC.
                             OPERATING HIGHLIGHTS
                                 (Unaudited)

                                                            Quarter
                                                         Ended March 31
                                                     2007               2006
    Wellhead Volumes and Prices
    Natural Gas Volumes (MMcfd)
      United States                                   915                 758
      Canada                                          222                 229
        United States & Canada                      1,137                 987
      Trinidad                                        253                 283
      United Kingdom                                   30                  34
        Total                                       1,420               1,304

    Average Natural Gas Prices ($/Mcf)
      United States                                 $6.42               $7.77
      Canada                                         6.43                7.87
        United States & Canada Composite             6.42                7.79
      Trinidad                                       2.81                2.44
      United Kingdom                                 5.55               11.56
        Composite                                    5.76                6.72

    Crude Oil and Condensate Volumes (MBbld)
      United States                                  21.9                21.0
      Canada                                          2.5                 2.6
        United States & Canada                       24.4                23.6
      Trinidad                                        4.3                 5.4
      United Kingdom                                  0.1                 0.2
        Total                                        28.8                29.2

    Average Crude Oil and Condensate
     Prices ($/Bbl)
      United States                                $53.76              $60.42
      Canada                                        51.76               51.95
        United States & Canada Composite            53.55               59.48
      Trinidad                                      59.91               61.79
      United Kingdom                                52.87               57.86
        Composite                                   54.51               59.90

    Natural Gas Liquids Volumes (MBbld)
      United States                                   9.5                 7.3
      Canada                                          1.1                 0.7
        Total                                        10.6                 8.0

    Average Natural Gas Liquids Prices ($/Bbl)
      United States                                $37.07              $37.19
      Canada                                        36.37               42.77
        Composite                                   37.00               37.69

    Natural Gas Equivalent Volumes (MMcfed)
      United States                                 1,104                 927
      Canada                                          243                 249
        United States & Canada                      1,347               1,176
      Trinidad                                        279                 316
      United Kingdom                                   31                  35
        Total                                       1,657               1,527

    Total Bcfe                                      149.1               137.5



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

                                                  March 31,       December 31,
                                                    2007               2006

                                    ASSETS
    Current Assets
      Cash and Cash Equivalents                  $141,700            $218,255
      Accounts Receivable, Net                    734,231             754,134
      Inventories                                 122,461             113,591
      Assets from Price Risk Management
       Activities                                  41,330             130,612
      Income Taxes Receivable                      42,202              94,311
      Deferred Income Taxes                         9,767                 ---
      Other                                        36,415              39,177
           Total                                1,128,106           1,350,080

    Oil and Gas Properties (Successful
     Efforts Method)                           14,793,485          13,893,851
      Less:  Accumulated Depreciation,
       Depletion and Amortization              (6,212,647)         (5,949,804)
          Net Oil and Gas Properties            8,580,838           7,944,047
    Other Assets                                  117,910             108,033
    Total Assets                               $9,826,854          $9,402,160



                       LIABILITIES AND SHAREHOLDERS' EQUITY
    Current Liabilities
      Accounts Payable                           $924,644            $896,572
      Accrued Taxes Payable                        80,194             130,984
      Dividends Payable                            22,030              14,718
      Deferred Income Taxes                        21,071             144,615
      Other                                        50,607              68,123
           Total                                1,098,546           1,255,012


    Long-Term Debt                                820,042             733,442
    Other Liabilities                             315,102             300,907
    Deferred Income Taxes                       1,747,500           1,513,128

    Shareholders' Equity
      Preferred Stock, $0.01 Par,
       10,000,000 Shares Authorized:
       Series B, Cumulative, $1,000
       Liquidation Preference Per Share,
       53,260 Shares Outstanding at
       March 31, 2007 and December 31, 2006        52,919              52,887
      Common Stock, $0.01 Par, 640,000,000
       Shares Authorized and 249,460,000
       Shares Issued                              202,495             202,495
      Additional Paid In Capital                  140,642             129,986
      Accumulated Other Comprehensive
       Income                                     194,628             176,704
      Retained Earnings                         5,356,647           5,151,034
      Common Stock Held in Treasury,
       4,979,921 Shares at March 31, 2007
       and 5,724,959 Shares at
       December 31, 2006                         (101,667)           (113,435)
              Total Shareholders' Equity        5,845,664           5,599,671
    Total Liabilities and Shareholders'
     Equity                                    $9,826,854          $9,402,160



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


                                                            Quarter
                                                         Ended March 31
                                                    2007               2006
    Cash Flows from Operating Activities
    Reconciliation of Net Income to Net
     Cash Provided by Operating Activities:
      Net Income                                 $217,667            $426,707
      Items Not Requiring Cash
         Depreciation, Depletion and
          Amortization                            244,342             177,652
         Impairments                               24,042              22,773
         Stock-Based Compensation Expenses         14,211               9,003
         Deferred Income Taxes                     96,999             106,326
         Other, Net                                (1,695)             (4,444)
      Dry Hole Costs                               16,810              10,726
      Mark-to-Market Commodity Derivative
       Contracts
         Total Losses (Gains)                      39,801            (107,024)
         Realized Gains                            47,268              30,054
      Other, Net                                   10,219               4,299
      Changes in Components of Working
       Capital and Other Assets and
       Liabilities
         Accounts Receivable                       22,935             135,150
         Inventories                               (8,844)            (13,370)
         Accounts Payable                          23,431              (9,535)
         Accrued Taxes Payable                      1,967              29,298
         Other Assets                              (3,623)              7,385
         Other Liabilities                        (14,356)             (5,046)
      Changes in Components of Working
       Capital Associated with Investing
       and Financing Activities                   (32,694)            (33,187)
    Net Cash Provided by Operating
     Activities                                   698,480             786,767

    Investing Cash Flows
      Additions to Oil and Gas Properties        (867,936)           (589,048)
      Proceeds from Sales of Assets                 2,939               2,741
      Changes in Components of Working
       Capital Associated with Investing
       Activities                                  32,959              33,288
      Other, Net                                  (26,173)             (5,253)
    Net Cash Used in Investing Activities        (858,211)           (558,272)

    Financing Cash Flows
      Net Commercial Paper and Revolving
       Credit Facility Borrowings                 116,600                 ---
      Long-Term Debt Repayments                   (30,000)            (52,325)
      Dividends Paid                              (15,522)            (11,432)
      Excess Tax Benefits from Stock-Based
       Compensation Expenses                        7,409               7,177
      Proceeds from Stock Options
       Exercised and Employee Stock
       Purchase Plan                                5,276               6,129
      Other, Net                                     (265)               (101)
    Net Cash Provided by (Used in)
     Financing Activities                          83,498             (50,552)

    Effect of Exchange Rate Changes on Cash          (322)               (427)

    (Decrease) Increase in Cash and Cash
     Equivalents                                  (76,555)            177,516
    Cash and Cash Equivalents at Beginning
     of Period                                    218,255             643,811
    Cash and Cash Equivalents at End of
     Period                                      $141,700            $821,327



                             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 periods ended March 31 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.  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
                                                   2007                2006

    Reported Net Income Available to
     Common (GAAP)                               $216,792            $424,849

    Mark-to-Market (MTM) Commodity
     Derivative Contracts Impact
      Total Losses (Gains)                         39,801            (107,024)
      Realized Gains                               47,268              30,054
         Subtotal                                  87,069             (76,970)

      After Tax MTM Impact                         56,029             (49,530)

    Adjusted Net Income Available to
     Common (Non-GAAP)                           $272,821            $375,319

    Adjusted Net Income Per Share
     Available to Common (Non-GAAP)
      Basic                                         $1.12               $1.56
      Diluted                                       $1.11               $1.53

    Average Number of Shares Outstanding
      Basic                                       242,763             241,118
      Diluted                                     246,677             245,923



                             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 periods ended March 31 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 Exploration Costs
    (excluding Stock-Based Compensation Expenses), Changes in Components of
    Working Capital, Other Assets and Liabilities and Preferred Stock
    Dividends.  EOG management uses this information for comparative purposes
    within the industry.

                                                            Quarter
                                                         Ended March 31
                                                   2007                2006
    Net Cash Provided by Operating
     Activities (GAAP)                           $698,480            $786,767

    Adjustments
       Exploration Costs (excluding
        Stock-Based Compensation
        Expenses)                                  23,345              37,665
       Changes in Components of Working
        Capital and Other Assets and
        Liabilities
         Accounts Receivable                      (22,935)           (135,150)
         Inventories                                8,844              13,370
         Accounts Payable                         (23,431)              9,535
         Accrued Taxes Payable                     (1,967)            (29,298)
         Other Assets                               3,623              (7,385)
         Other Liabilities                         14,356               5,046
       Changes in Components of Working
        Capital Associated with Investing
        and Financing Activities                   32,694              33,187
       Preferred Stock Dividends                     (875)             (1,858)

    Discretionary Cash Flow Available to
     Common (Non-GAAP)                           $732,134            $711,879

SOURCE EOG Resources, Inc.

Contact: investors, Maire A. Baldwin, +1-713-651-6EOG, or +1-713-651-6364, or media and investors, Elizabeth M. Ivers, +1-713-651-7132, both of EOG Resources, Inc.