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EOG Resources Announces Third Quarter 2008 Results
- Third Quarter United States Crude Oil and Condensate Production Increases By 65 Percent Year-Over-Year
- On Track to Achieve 15 Percent Total Company Production Increase in 2008
- Targets 2009 Total Company Organic Production Growth of 10 to 14 Percent
- Projects 43 Percent Increase in Total Company Crude Oil and Condensate Production in 2009
PRNewswire-FirstCall
HOUSTON

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FOR IMMEDIATE RELEASE: Monday, November 3, 2008

HOUSTON - EOG Resources, Inc. (EOG) today reported third quarter 2008 net income available to common stockholders of $1,556.3 million, or $6.20 per share. This compares to third quarter 2007 net income available to common stockholders of $202.4 million, or $0.82 per share.

The results for the third quarter 2008 included a previously disclosed $1,381.7 million ($889.2 million after tax, or $3.55 per share) gain on the mark-to-market of financial commodity transactions. During the quarter, the net cash outflow related to financial commodity contracts was $122.5 million ($78.8 million after tax, or $0.31 per share). Consistent with some analysts' practice of matching realizations to settlement months, adjusted non-GAAP net income available to common stockholders for the quarter was $588.3 million, or $2.34 per share. Adjusted non-GAAP net income available to common stockholders for the third quarter 2007 was $195.7 million, or $0.79 per share. (Please refer to the attached tables for the reconciliation of adjusted non-GAAP net income available to common stockholders to GAAP net income available to common stockholders.)

Operational Highlights

Excellent results from North American operations continue to position EOG to achieve its 2008 production goals set forth in February of this year. Despite plant downtime and hurricane interruptions, the company is on track to increase its 2008 total company production by 15 percent over 2007.

EOG's United States crude oil and condensate production increased 65 percent versus the third quarter 2007, led primarily by results from strong wells in the North Dakota Bakken. Condensate rich natural gas production from Johnson County and the western counties of the Fort Worth Basin Barnett Shale Play also contributed to the increased liquids production in the United States.

Currently, EOG is operating an eight rig program in the North Dakota Bakken with seven rigs running in the Parshall Field and one drilling step-out wells. Among the most prolific wells EOG drilled in the Bakken core area during the third quarter were the Austin #21-28H, #18-21H and #10-34H. The wells, in which EOG holds a 66, 100 and 70 percent working interest, respectively, posted corresponding peak gross production rates of 2,847, 3,029 and 3,477 barrels of oil per day.

In the Fort Worth Basin Barnett Shale Play, EOG continues to make improvements to individual well production rates and reserve recoveries. During the third quarter, EOG drilled and completed a pattern of four horizontal wells in northeastern Johnson County. The Little Buddy Units #3H, #5H, #6H and #7H began initial production in October at individual rates ranging from 6.5 to 10 million cubic feet per day (MMcfd) of natural gas, gross. EOG has an average 81 percent working interest in these wells. Also in Johnson County, the Raam Unit #4H, in which EOG has 100 percent working interest, began initial production at over 8.5 MMcfd.

In July, EOG brought its first two wells to sales in British Columbia's Horn River Basin natural gas play where the company holds approximately 150,000 net acres. Since then, EOG has drilled and completed three horizontal wells, which had initial production rates of 16, 12 and 9 MMcfd, respectively. EOG has a 100 percent working interest in the wells, which continue to produce at strong rates after being on-line for 30 to 60 days.

"EOG hit its volume targets again this quarter because of the inherent strength of our drilling inventory, not only in the North Dakota Bakken and Fort Worth Basin Barnett Shale, but across our North American operations," said Mark G. Papa, Chairman and CEO. "Our year-to-date results reflect EOG's technological expertise with regard to implementing drilling and well completion enhancements that give us an economic advantage in geologically challenging plays even during periods of low hydrocarbon prices. Our results in the Bakken and Barnett plays demonstrate the high quality completion results that EOG is achieving."

2009 Operational Plans and Targets

EOG is targeting 2009 total company production growth ranging from 10 to 14 percent, depending upon North American natural gas prices. Production growth in 2009 is expected to be driven by high reinvestment rate of return opportunities in the United States, particularly the Fort Worth Basin Barnett Shale and the North Dakota Bakken. Natural gas production from Canada, Trinidad and other international areas in 2009 is projected to remain relatively flat with 2008 production levels.

EOG is approaching its 2009 natural gas drilling and capital expenditure program with two alternate production growth targets, one more robust than the other.

"We believe that cold winter weather -- or lack of it -- will be the determining factor of North American natural gas prices in 2009. If Henry Hub prices average above $8.00, we will target 14 percent total company production growth. However, if prices average $7.00, we expect to reduce our North American natural gas drilling activity and achieve an overall 10 percent production increase. In either case, our focus is on the balance sheet and our commitment to low debt ratios. We anticipate that total company crude oil and condensate production will increase 43 percent in 2009 over 2008 driven primarily by the North Dakota Bakken with a lesser contribution from our Barnett oil and other plays," said Papa.

"Based on EOG's projected 2009 activity level and our strong prospect inventory, we have confidence that EOG can achieve double-digit organic production growth with attractive reinvestment rates of return. In these uncertain times, the consistency of our long-term strategy and focus on ROCE and the balance sheet is paying off. Although we have abundant opportunities, EOG's goal remains the same: to pursue a high rate of return drilling program with a low unit cost structure while maintaining flat year-end net debt year over year."

Capital Structure

At September 30, 2008, EOG's total debt outstanding was $1,897 million for a debt-to-total capitalization ratio of 18 percent. Taking into account cash on the balance sheet of $886 million, at the end of the third quarter EOG's net debt was $1,011 million and the net debt-to-total capitalization ratio was 10 percent, down from 14 percent at year-end 2007. (Please refer to the attached tables for the reconciliation of net debt (non-GAAP) to current and long-term debt (GAAP) and the reconciliation of net debt-to-total capitalization ratio (non-GAAP) to debt-to-total capitalization ratio (GAAP).)

"With the recent issuance of our long-term notes of $750 million, essentially all of EOG's debt is termed up and we have minimized our short-term credit needs. Combined with our investment grade 'A' credit ratings category and conservative financials, EOG's capital structure remains in excellent shape. Because maintaining a low net debt-to-total capitalization ratio is a key strategy for EOG, we will manage our capital expenditures accordingly," said Papa.

Conference Call Scheduled for November 4, 2008

EOG's third quarter 2008 results conference call will be available via live audio webcast at 8 a.m. Central Standard Time (9 a.m. Eastern Standard Time) on Tuesday, November 4, 2008. To listen, log on to http://www.eogresources.com/. The webcast will be archived on EOG's website through Tuesday, November 18, 2008.

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, Trinidad, the United Kingdom North Sea and China. 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, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. 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 or 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 the expectations reflected in its 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 EOG's 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,
     interest rates and financial market conditions;
  -- the extent and effect of any hedging activities engaged in by EOG;
  -- the timing and impact of liquefied natural gas imports;
  -- changes in demand or prices for ammonia or methanol;
  -- 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 ability to achieve production levels from existing and future oil
     and gas development projects due to operating hazards, drilling risks
     and the inherent uncertainties in predicting oil and gas reservoir
     performance;
  -- the availability and cost of drilling rigs, experienced drilling crews,
     tubular steel and other materials, equipment and services used in
     drilling and well completions;
  -- the availability, terms and timing of mineral licenses and leases and
     governmental and other permits and rights of way;
  -- access to surface locations for drilling and production facilities;
  -- the availability and capacity of gathering, processing and pipeline
     transportation facilities;
  -- 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 and the enactment of new
     government policies, legislation and regulations, including
     environmental regulations;
  -- acts of war and terrorism and responses to these acts; and
  -- weather, including weather-related delays in the installation of
     gathering and production facilities.


In light of these risks, uncertainties and assumptions, the events anticipated by EOG's forward-looking statements may not occur. EOG's 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 (SEC) 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, 2007, available from EOG at P.O. Box 4362, Houston, Texas 77210-4362 (Attn: Investor Relations). You can also obtain this report 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,
                                   2008       2007       2008        2007
  Net Operating Revenues         $3,219.5    $986.2    $5,353.0    $2,925.9
  Net Income Available to
   Common Stockholders           $1,556.3    $202.4    $1,975.0      $725.2
  Net Income Per Share
   Available to Common
   Stockholders
    Basic                           $6.30     $0.83       $8.02       $2.98
    Diluted                         $6.20     $0.82       $7.88       $2.93
  Average Number of Shares
   Outstanding
    Basic                           247.2     243.5       246.3       243.1
    Diluted                         250.9     247.4       250.8       247.3



                          SUMMARY INCOME STATEMENTS
                          (Unaudited; in thousands)

                                Quarter                  Nine Months
                           Ended September 30,        Ended September 30,
                            2008         2007         2008          2007
  Net Operating Revenues
    Natural Gas          $1,259,130    $679,992    $3,637,325    $2,196,290
    Crude Oil,
     Condensate and
     Natural Gas Liquids    574,402     258,273     1,494,043       651,833
    Gains on Mark-to-
     Market Commodity
     Derivative
     Contracts            1,381,733      43,591        69,067        47,893
    Other, Net                4,241       4,307       152,570        29,871
      Total               3,219,506     986,163     5,353,005     2,925,887
  Operating Expenses
    Lease and Well          151,342     120,091       422,679       347,604
    Transportation Costs     78,136      39,913       203,205       109,452
    Exploration Costs        37,943      38,840       145,397       106,440
    Dry Hole Costs           12,849      46,046        28,062        74,672
    Impairments              32,142      42,014       113,591        86,860
    Depreciation,
     Depletion and
     Amortization           346,247     279,189       958,740       783,311
    General and
     Administrative          70,893      48,101       185,459       139,163
    Taxes Other Than
     Income                  97,771      47,111       279,866       149,806
      Total                 827,323     661,305     2,336,999     1,797,308

  Operating Income        2,392,183     324,858     3,016,006     1,128,579

  Other Income, Net          13,864       6,311        28,756        22,236

  Income Before
   Interest Expense
   and Income Taxes       2,406,047     331,169     3,044,762     1,150,815

  Interest Expense, Net      12,095      12,571        33,315        31,027

  Income Before Income
   Taxes                  2,393,952     318,598     3,011,447     1,119,788

  Income Tax Provision      837,667     114,595     1,036,000       391,065

  Net Income              1,556,285     204,003     1,975,447       728,723

  Preferred Stock
   Dividends                      -       1,637           443         3,502

  Net Income Available
   to Common
   Stockholders          $1,556,285    $202,366    $1,975,004      $725,221



                           EOG RESOURCES, INC.
                          OPERATING HIGHLIGHTS
                               (Unaudited)

                                      Quarter            Nine Months
                                 Ended September 30,  Ended September 30,
                                   2008       2007      2008      2007
  Wellhead Volumes and Prices
  Natural Gas Volumes (MMcfd)(A)
    United States                  1,196       997      1,141      958
    Canada                           224       216        218      223
    Trinidad                         240       262        229      255
    Other International (D)           19        22         16       25
      Total                        1,679     1,497      1,604    1,461

  Average Natural Gas Prices
   ($/Mcf) (B)
    United States                  $8.99     $5.52      $9.15    $6.19
    Canada                          8.15      5.49       8.33     6.22
    Trinidad                        4.04      2.20       3.86     2.35
    Other International (D)         7.41      5.89       8.90     5.29
      Composite                     8.15      4.94       8.28     5.51

  Crude Oil and Condensate
   Volumes (MBbld) (A)
    United States                   41.8      25.3       35.9     23.6
    Canada                           3.0       2.4        2.7      2.4
    Trinidad                         3.4       4.2        3.4      4.2
    Other International (D)          0.1       0.1        0.1      0.1
      Total                         48.3      32.0       42.1     30.3

  Average Crude Oil and
   Condensate Prices ($/Bbl)(B)
    United States                $109.86    $70.86    $107.36   $62.52
    Canada                        109.71     69.99     104.57    60.54
    Trinidad                      111.39     67.03     103.80    67.22
    Other International (D)       112.77     66.96     104.66    61.57
      Composite                   109.96     70.27     106.89    63.01

  Natural Gas Liquids Volumes
   (MBbld) (A)
    United States                   13.2      10.8       14.7     10.3
    Canada                           1.1       0.9        1.0      1.0
      Total                         14.3      11.7       15.7     11.3

  Average Natural Gas Liquids
   Prices ($/Bbl) (B)
    United States                 $69.79    $47.94     $63.08   $43.73
    Canada                         64.01     46.71      62.45    41.52
      Composite                    69.33     47.84      63.04    43.52

  Natural Gas Equivalent
   Volumes (MMcfed) ©
    United States                  1,525     1,213      1,445    1,161
    Canada                           249       236        240      244
    Trinidad                         261       288        250      280
    Other International (D)           20        22         16       25
      Total                        2,055     1,759      1,951    1,710

  Total Bcfe ©                   189.1     161.9      534.5    466.8

  (A) Million cubic feet per day or thousand barrels per day, as applicable.
  (B) Dollars per thousand cubic feet or per barrel, as applicable.
  © Million cubic feet equivalent per day or billion cubic feet
      equivalent, as applicable; includes natural gas, crude oil, condensate
      and natural gas liquids.  Natural gas equivalents are determined using
      the ratio of 6.0 thousand cubic feet of natural gas to 1.0 barrel of
      crude oil, condensate or natural gas liquids.
  (D) Other International includes EOG's United Kingdom and China
      operations.



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

                                              September 30,     December 31,
                                                  2008              2007
                                ASSETS
  Current Assets
    Cash and Cash Equivalents                    $885,977         $54,231
    Accounts Receivable, Net                    1,048,385         835,670
    Inventories                                   146,571         102,322
    Assets from Price Risk Management
     Activities                                   317,994         100,912
    Income Taxes Receivable                         8,789         110,370
    Deferred Income Taxes                               -          33,533
    Other                                          68,801          55,001
         Total                                  2,476,517       1,292,039

  Property, Plant and Equipment
    Oil and Gas Properties (Successful
     Efforts Method)                           20,216,168      16,981,836
    Other Property, Plant and Equipment           901,209         581,402
                                               21,117,377      17,563,238
    Less:  Accumulated Depreciation,
     Depletion and Amortization                (7,985,007)     (7,133,984)
        Total Property, Plant and
         Equipment, Net                        13,132,370      10,429,254
  Long-Term Assets Held for Sale                        -         254,376
  Other Assets                                    223,843         113,238
  Total Assets                                $15,832,730     $12,088,907

                 LIABILITIES AND STOCKHOLDERS' EQUITY
  Current Liabilities
    Accounts Payable                           $1,340,822      $1,152,140
    Accrued Taxes Payable                         136,254         104,647
    Dividends Payable                              33,325          22,045
    Liabilities from Price Risk
     Management Activities                            118           3,404
    Deferred Income Taxes                         200,118         108,980
    Current Portion of Long-Term Debt              37,000               -
    Other                                          85,443          82,954
         Total                                  1,833,080       1,474,170

  Long-Term Debt                                1,860,000       1,185,000
  Other Liabilities                               512,006         368,336
  Deferred Income Taxes                         2,707,684       2,071,307

  Stockholders' Equity
    Preferred Stock, $0.01 Par, 10,000,000
     Shares Authorized: Series B, Cumulative,
     $1,000 Liquidation Preference per Share,
     5,000 Shares Outstanding at
     December 31, 2007                                  -           4,977
    Common Stock, $0.01 Par, 640,000,000
     Shares Authorized: 249,752,807 Shares
     Issued at September 30, 2008 and
     249,460,000 Shares Issued at
     December 31, 2007                            202,498         202,495
    Additional Paid In Capital                    369,128         221,102
    Accumulated Other Comprehensive Income        314,982         466,702
    Retained Earnings                           8,038,477       6,156,721
    Common Stock Held in Treasury, 168,395
     Shares at September 30, 2008 and
     2,935,313 Shares at December 31, 2007         (5,125)        (61,903)
            Total Stockholders' Equity          8,919,960       6,990,094
  Total Liabilities and Stockholders'
   Equity                                     $15,832,730     $12,088,907



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

                                                       Nine Months
                                                    Ended September 30,
                                                 2008                2007
  Cash Flows from Operating Activities
  Reconciliation of Net Income to Net
   Cash Provided by Operating Activities:
    Net Income                                $1,975,447           $728,723
    Items Not Requiring (Providing) Cash
      Depreciation, Depletion and
       Amortization                              958,740            783,311
      Impairments                                113,591             86,860
      Stock-Based Compensation Expenses           76,344             46,732
      Deferred Income Taxes                      790,699            328,005
      Other, Net                                (135,325)           (21,080)
    Dry Hole Costs                                28,062             74,672
    Mark-to-Market Commodity Derivative
     Contracts
      Total Gains                                (69,067)           (47,893)
      Realized (Losses) Gains                   (237,326)            99,188
    Other, Net                                    14,390             20,778
    Changes in Components of Working Capital
     and Other Assets and Liabilities
      Accounts Receivable                       (219,947)            78,283
      Inventories                                (45,354)             4,232
      Accounts Payable                           221,449             42,830
      Accrued Taxes Payable                      135,747            (22,834)
      Other Assets                               (18,756)            (7,780)
      Other Liabilities                           (3,397)             2,732
    Changes in Components of Working Capital
     Associated with Investing and Financing
     Activities                                   14,389            (44,314)
  Net Cash Provided by Operating Activities    3,599,686          2,152,445

  Investing Cash Flows
    Additions to Oil and Gas Properties       (3,532,343)        (2,472,902)
    Additions to Other Property, Plant
     and Equipment                              (320,699)          (204,000)
    Proceeds from Sales of Assets                369,669             43,972
    Changes in Components of Working Capital
     Associated with Investing Activities        (14,501)            44,325
    Other, Net                                    (1,316)            (3,966)
  Net Cash Used in Investing Activities       (3,499,190)        (2,592,571)

  Financing Cash Flows
    Long-Term Debt Borrowings                    750,000            610,000
    Long-Term Debt Repayments                    (38,000)           (60,000)
    Dividends Paid                               (81,453)           (61,253)
    Redemptions of Preferred Stock                (5,395)           (10,641)
    Excess Tax Benefits from Stock-Based
     Compensation                                 69,824             17,422
    Treasury Stock Purchased                     (11,266)            (6,497)
    Proceeds from Stock Options Exercised
     and Employee Stock Purchase Plan             67,414             32,747
    Debt Issuance Costs                           (6,704)            (4,752)
    Other, Net                                       112                (11)
  Net Cash Provided by Financing Activities      744,532            517,015

  Effect of Exchange Rate Changes on Cash        (13,282)             6,800

  Increase in Cash and Cash Equivalents          831,746             83,689
  Cash and Cash Equivalents at
   Beginning of Period                            54,231            218,255
  Cash and Cash Equivalents at End of
   Period                                       $885,977           $301,944



                             EOG RESOURCES, INC.
    QUANTITATIVE RECONCILIATION OF ADJUSTED NET INCOME AVAILABLE TO COMMON
                           STOCKHOLDERS (Non-GAAP)
            TO NET INCOME AVAILABLE TO COMMON STOCKHOLDERS (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 Stockholders (GAAP) to reflect actual net cash realized from financial commodity price transactions by eliminating the unrealized mark-to-market (gains) losses from these transactions and for the gain on the sale of Appalachian assets. 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,
                                2008        2007        2008        2007

  Reported Net Income
   Available to Common
   Stockholders (GAAP)        $1,556,285   $202,366   $1,975,004   $725,221

  Mark-to-Market (MTM)
   Commodity Derivative
   Contracts Impact
    Total Gains               (1,381,733)   (43,591)     (69,067)   (47,893)
    Realized (Losses) Gains     (122,467)    33,308     (237,326)    99,188
       Subtotal               (1,504,200)   (10,283)    (306,393)    51,295

    After Tax MTM Impact        (967,953)    (6,617)    (197,164)    33,008

  Less:  Gain on Sale of
   Appalachian Assets, Net
   of Tax                              -          -      (84,748)         -

  Adjusted Net Income
   Available to Common
   Stockholders (Non-GAAP)      $588,332   $195,749   $1,693,092   $758,229

  Net Income Per Share
   Available to Common
   Stockholders (GAAP)
    Basic                          $6.30      $0.83        $8.02      $2.98
    Diluted                        $6.20      $0.82        $7.88      $2.93

  Adjusted Net Income Per
   Share Available to Common
   Stockholders (Non-GAAP)
    Basic                          $2.38      $0.80        $6.87      $3.12
    Diluted                        $2.34      $0.79        $6.75      $3.07

  Average Number of Shares
   Outstanding
    Basic                        247,155    243,486      246,343    243,140
    Diluted                      250,930    247,425      250,765    247,275



                             EOG RESOURCES, INC.
  QUANTITATIVE RECONCILIATION OF DISCRETIONARY CASH FLOW AVAILABLE TO COMMON
                           STOCKHOLDERS (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 Stockholders (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 and Other Assets and Liabilities, Changes in Components of Working Capital Associated with Investing and Financing Activities and Preferred Stock Dividends. EOG management uses this information for comparative purposes within the industry.

                               Quarter                  Nine Months
                          Ended September 30,       Ended September 30,
                           2008         2007         2008          2007
  Net Cash Provided by
   Operating
   Activities (GAAP)     $1,537,065    $725,829    $3,599,686    $2,152,445

  Adjustments
   Exploration Costs
    (excluding Stock-
    Based Compensation
    Expenses)                32,818      35,268       131,909        96,842
   Changes in
    Components of
    Working Capital
    and Other Assets
    and Liabilities
     Accounts Receivable   (175,579)    (57,549)      219,947       (78,283)
     Inventories             36,178      (6,708)       45,354        (4,232)
     Accounts Payable        34,046     (28,179)     (221,449)      (42,830)
     Accrued Taxes
      Payable              (228,485)     49,025      (135,747)       22,834
     Other Assets           (42,867)      3,097        18,756         7,780
     Other Liabilities       (5,043)    (18,224)        3,397        (2,732)
   Changes in Components
    of Working Capital
    Associated with
    Investing and
    Financing Activities    (15,164)     23,843       (14,389)       44,314
   Preferred Stock
    Dividends                     -      (1,637)         (443)       (3,502)

  Discretionary Cash
   Flow Available to
   Common Stockholders
   (Non-GAAP)            $1,172,969    $724,765    $3,647,021    $2,192,636



                             EOG RESOURCES, INC.
        QUANTITATIVE RECONCILIATION OF NET DEBT (Non-GAAP) AND TOTAL
           CAPITALIZATION (Non-GAAP) AS USED IN THE CALCULATION OF
                  THE NET DEBT-TO-TOTAL CAPITALIZATION RATIO
     TO CURRENT AND LONG-TERM DEBT (GAAP) AND TOTAL CAPITALIZATION (GAAP)
              (Unaudited; in millions, except ratio information)

The following chart reconciles Current and Long-Term Debt (GAAP) to Net Debt (Non-GAAP) and Total Capitalization (GAAP) to Total Capitalization (Non-GAAP), as used in the Net Debt-to-Total Capitalization ratio calculation. 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 Net Debt-to-Total Capitalization ratio calculation. EOG management uses this information for comparative purposes within the industry.

                                                 09/30/2008       12/31/2007

     Total Stockholders' Equity (GAAP) - (a)       $8,920          $6,990

     Current and Long-Term Debt (GAAP) - (b)        1,897           1,185
     Less: Cash (GAAP)                               (886)            (54)
     Net Debt (Non-GAAP) - (c)                      1,011           1,131

     Total Capitalization (Non-GAAP) - (a) + (c)   $9,931          $8,121

     Total Capitalization (GAAP) - (a) + (b)      $10,817          $8,175

     Net Debt-to-Total Capitalization
      (Non-GAAP) - (c) / [(a) + (c)]                  10%             14%

     Debt-to-Total Capitalization
      (GAAP) - (b) / [(a) + (b)]                      18%             14%

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

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

 

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