HOUSTON, Feb. 4 /PRNewswire-FirstCall/ -- EOG Resources, Inc. (NYSE: EOG) (EOG) today reported fourth quarter 2008 net income available to common stockholders of $461.5 million, or $1.84 per share. This compares to fourth quarter 2007 net income available to common stockholders of $358.0 million, or $1.44 per share. For the full year 2008, EOG reported net income available to common stockholders of $2,436.5 million, or $9.72 per share as compared to $1,083.3 million, or $4.37 per share, for the full year 2007.
The results for the fourth quarter 2008 included a previously disclosed $528.8 million ($340.3 million after tax, or $1.36 per share) net gain on the mark-to-market of financial commodity transactions. During the quarter, the net cash inflow related to financial commodity contracts was $100.7 million ($64.8 million after tax, or $0.26 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 $186.0 million, or $0.74 per share. Adjusted non-GAAP net income available to common stockholders for the fourth quarter 2007 was $319.4 million, or $1.29 per share. On a similar basis, eliminating the items detailed in the attached table, adjusted non-GAAP net income available to common stockholders for the full year 2008 was $1,879.1 million, or $7.50 per share, and for the full year 2007 was $1,074.2 million, or $4.34 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
Meeting the full year production growth target set in February 2008, EOG posted strong operational results by increasing total company production 15 percent over 2007, all organic. Crude oil production increased by 46 percent, driven primarily by continued drilling success from the North Dakota Bakken Play.
Stepping outside its established footprint in the natural gas area of the Fort Worth Basin Barnett Shale, EOG also reported strong test results from the Barnett Crude Oil Play (retitled the Barnett Combo Play). EOG has a dominant acreage position in the Barnett Combo, an oil play with a liquids rich natural gas stream. During the second half of 2008, drilling efforts were focused on defining acreage limits and testing wells with various completion methodologies. A total of 22 horizontal wells were completed during the second half of the year with average daily initial production rates of 300 barrels of crude oil, 130 barrels of natural gas liquids and 940 thousand cubic feet of associated natural gas. EOG recently commissioned its natural gas processing plant for this area, which will allow the company to move into development mode. EOG plans to drill 60 Barnett Combo wells in 2009.
During the past year EOG drilled five successful exploratory oil wells in the North Dakota Bakken outside its core area, the Parshall Field. By applying the same horizontal drilling and enhanced completion technology to this extension called the North Dakota Bakken Lite, EOG increased the potential for crude oil reserves on its acreage and added several years to its drilling inventory. EOG's total position in both the North Dakota Bakken Core and Bakken Lite was approximately 400,000 net acres at year-end 2008.
Testing the Haynesville Shale in North Louisiana, EOG drilled two horizontal wells on its acreage during 2008. The Martin Timber #2H tested at a rate of 17.4 million cubic feet per day (MMcfd), gross with 4,700 psi flowing tubing pressure. The Bedsole 27#1H tested at a rate of 17.5 MMcfd, gross with 7,400 psi flowing tubing pressure. EOG has 100 and 57 percent working interest in the wells, respectively. Due to pipeline limitations, the wells are currently producing at a combined restricted rate of 17 MMcfd until additional infrastructure is in place. EOG has estimated net reserve potential of 3 to 4 trillion cubic feet of natural gas on its 116,000 net acres and expects to drill 14 Haynesville wells in 2009.
"EOG had an outstanding year in 2008. We delivered conclusive results on the targets we laid out early last year and made significant progress in developing new plays such as the Horn River, Haynesville and Marcellus," said Mark G. Papa, Chairman and CEO. "With our consistent philosophy and focus on returns, we again reported very strong return on capital employed - 26 percent for the year."
For the 10-year period ended 2008, EOG reported return on capital employed (ROCE) of 20 percent. On a non-GAAP net income basis, EOG reported ROCE of 20 percent for 2008. (Please refer to the attached tables for the calculation of ROCE and the related reconciliations of after-tax interest expense (non-GAAP), adjusted net income (non-GAAP) and net debt (non-GAAP), as used in the calculations of ROCE, to interest expense (GAAP), net income (GAAP) and current and long-term debt (GAAP).)
Reserves
At December 31, 2008, total company reserves were approximately 8.7 trillion cubic feet equivalent, an increase of 944 billion cubic feet equivalent (Bcfe), or 12 percent higher than year-end 2007. In 2008:
-- Total reserve replacement from all sources - the ratio of net reserve additions from drilling, acquisitions, total revisions and dispositions to total production - was 228 percent at a total reserve replacement cost of $2.60 per thousand cubic feet equivalent (Mcfe). -- In the United States, EOG added 1,703 Bcfe of reserves from drilling and acquisitions, net of total revisions, with capital expenditures of $4,295 million, excluding gathering systems, processing plant and other expenditures. Total reserve replacement from all sources was 270 percent at a reserve replacement cost of $2.52 per Mcfe. -- Excluding the impact of price related revisions of 75 Bcfe due to lower natural gas and crude oil prices, total reserve replacement was 238 percent at a reserve replacement cost of $2.50 per Mcfe. Price related revisions were based on year-end 2008 benchmark Henry Hub natural gas pricing of $5.71 per million British thermal unit and year-end benchmark West Texas Intermediate crude oil pricing of $44.60 per barrel as posted on the New York Mercantile Exchange, as compared to year-end 2007 pricing of $6.80 and $95.98, respectively. (Please see attached tables for supporting data for the reconciliation of non-GAAP drilling capital expenditures to GAAP total costs incurred in exploration and development activities and for the calculation of reserve replacement percentages and reserve replacement costs.)
For the 21st consecutive year, internal reserve estimates were within 5 percent of those prepared by the independent reserve engineering firm of DeGolyer and MacNaughton (D&M). For 2008, D&M prepared a complete independent engineering analysis of properties containing 79 percent of EOG's proved reserves on a Bcfe basis.
"We are pleased with our 2008 results. We did not have any significant property impairments or any meaningful price related reserve revisions. This speaks to the efficacy of EOG's long-term conservative strategy of growing production organically while focusing on returns," said Papa.
Capital Structure
At December 31, 2008, EOG's total debt outstanding was $1,897 million for a debt-to-total capitalization ratio of 17 percent. Taking into account cash on the balance sheet of $331 million, at the end of the year EOG's net debt was $1,566 million and the net debt-to-total capitalization ratio was 15 percent. (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).)
2009 Operational Plans and Targets
In response to the current weakness in commodity prices, EOG has structured this year's operational plan with the goal of keeping its year-end 2009 net debt relatively flat with that of year-end 2008. While remaining flexible, EOG's production growth targets and the capital expenditure program will be a function of cash flow generation and reinvestment rates of return. Based on the current futures market for natural gas and crude oil, EOG plans to execute a total capital program of approximately $3.1 billion in 2009, of which $2.85 billion will be allocated to exploration and development activities, to generate approximately 3 percent total company organic production growth. The production increases will be driven by United States crude oil and natural gas liquids production.
In the North Dakota Bakken, EOG is temporarily reducing roughly half of its crude oil and associated natural gas production. This moderation is in response to current low crude oil prices coupled with high transportation costs related to trucking and correspondingly wide commodity price differentials due to location. Resumption of full production in this area will depend upon the strengthening of hydrocarbon prices and the development of crude oil transportation alternatives.
"With natural gas and crude oil prices thus far in 2009 reflecting a worldwide decline in demand, EOG's long-term strategy of profitability and maintaining a strong balance sheet gives us the flexibility to successfully weather diverse economic cycles. Although we plan to keep capital expenditures in line with cash flow during 2009, we will balance that with an active horizontal exploration program to set us up for an expected rebound in commodity prices in 2010," said Papa.
Dividend Increase
Following two increases during 2008, EOG's Board of Directors has again increased the cash dividend on the common stock. Effective with the dividend payable on April 30, 2009 to holders of record as of April 16, 2009, the quarterly dividend on the common stock will be $0.145 per share, an increase of 7 percent over the previous indicated annual rate. The indicated annual rate of $0.58 per share is the tenth increase in 10 years.
Conference Call Scheduled for February 5, 2009
EOG's fourth quarter and full year 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 Thursday, February 5, 2009. To listen, log on to www.eogresources.com. The webcast will be archived on EOG's website through Thursday, February 19, 2009.
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 and projections regarding EOG's future financial position, operations, performance, business strategy, budgets, reserve information, levels of production and costs and statements regarding the plans and objectives of EOG's management for future operations, are forward-looking statements. EOG typically uses words such as "expect," "anticipate," "estimate," "project," "strategy," "intend," "plan," "target," "goal," "may," "will" 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 EOG's future operating results and returns or EOG's ability to replace or increase reserves, increase production or 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 reasonable and are based on reasonable assumptions, no assurance can be given that these assumptions are accurate or that these expectations will be achieved or will prove to have been correct. Moreover, EOG's forward-looking statements may be affected by known and unknown risks, events or circumstances that may be outside EOG's control. Important factors that could cause EOG's 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 prices for natural gas, crude oil and related commodities; -- changes in demand for natural gas, crude oil and related commodities, including ammonia and methanol; -- the extent to which EOG is successful in its efforts to discover, develop, market and produce reserves and to acquire natural gas and crude oil properties; -- the extent to which EOG can optimize reserve recovery and economically develop its plays utilizing horizontal and vertical drilling and advanced completion technologies; -- the extent to which EOG is successful in its efforts to economically develop its acreage in the Barnett Shale, the Bakken Formation, its Horn River Basin and Haynesville plays and its other exploration and development areas; -- EOG's ability to achieve anticipated production levels from existing and future natural gas and crude oil development projects, given the risks and uncertainties inherent in drilling, completing and operating natural gas and crude oil wells and the potential for interruptions of production, whether involuntary or intentional as a result of market or other conditions; -- the availability, proximity and capacity of, and costs associated with, gathering, processing, compression and transportation facilities; -- the availability, cost, terms and timing of issuance or execution of, and competition for, mineral licenses and leases and governmental and other permits and rights of way; -- competition in the oil and gas exploration and production industry for employees and other personnel, equipment, materials and services and, related thereto, the availability and cost of employees and other personnel, equipment, materials and services; -- EOG's ability to obtain access to surface locations for drilling and production facilities; -- the extent to which EOG's third party-operated natural gas and crude oil properties are operated successfully and economically; -- EOG's ability to effectively integrate acquired natural gas and crude oil properties into its operations, fully identify existing and potential problems with respect to such properties and accurately estimate reserves, production and costs with respect to such properties; -- weather, including its impact on natural gas and crude oil demand, and weather-related delays in drilling and in the installation and operation of gathering and production facilities; -- the ability of EOG's customers and other contractual counterparties to satisfy their obligations to EOG and, related thereto, to access the credit and capital markets to obtain financing needed to satisfy their obligations to EOG; -- EOG's ability to access the commercial paper market and other credit and capital markets to obtain financing on terms it deems acceptable, if at all; -- the accuracy of reserve estimates, which by their nature involve the exercise of professional judgment and may therefore be imprecise; -- the timing and extent of changes in foreign currency exchange rates, interest rates, inflation rates, global and domestic financial market conditions and global and domestic general economic conditions; -- the extent and effect of any hedging activities engaged in by EOG; -- the timing and impact of liquefied natural gas imports; -- the use of competing energy sources and the development of alternative energy sources; -- political developments around the world, including in the areas in which EOG operates; -- changes in government policies, legislation and regulations, including environmental regulations; -- the extent to which EOG incurs uninsured losses and liabilities; -- acts of war and terrorism and responses to these acts; and -- the other factors described under Item 1A, "Risk Factors", on pages 13 through 16 of EOG's Annual Report on Form 10-K for the fiscal year ended December 31, 2007 and any updates to those factors set forth in EOG's subsequent Quarterly Reports on Form 10-Q.
In light of these risks, uncertainties and assumptions, the events anticipated by EOG's forward-looking statements may not occur, and you should not place any undue reliance on any of EOG's forward-looking statements. 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) currently 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 the 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 www.sec.gov.
EOG RESOURCES, INC. FINANCIAL REPORT ---------------- (Unaudited; in millions, except per share data) Quarter Twelve Months Ended December 31, Ended December 31, ------------------ ------------------ 2008 2007 2008 2007 ---- ---- ---- ---- Net Operating Revenues $1,633.7 $1,286.0 $7,127.1 $4,239.3 ======== ======== ======== ======== Net Income Available to Common Stockholders $461.5 $358.0 $2,436.5 $1,083.3 ====== ====== ======== ======== Net Income Per Share Available to Common Stockholders Basic $1.86 $1.46 $9.88 $4.45 ===== ===== ===== ===== Diluted $1.84 $1.44 $9.72 $4.37 ===== ===== ===== ===== Average Number of Shares Outstanding Basic 247.7 244.4 246.7 243.5 ===== ===== ===== ===== Diluted 250.2 248.5 250.5 247.6 ===== ===== ===== ===== SUMMARY INCOME STATEMENTS ------------------------- (Unaudited; in thousands) Quarter Twelve Months Ended December 31, Ended December 31, ------------------ ------------------ 2008 2007 2008 2007 ---- ---- ---- ---- Net Operating Revenues Natural Gas $814,733 $836,515 $4,452,058 $3,032,805 Crude Oil, Condensate and Natural Gas Liquids 275,883 335,690 1,769,926 987,523 Gains on Mark-to- Market Commodity Derivative Contracts 528,844 45,215 597,911 93,108 Gathering, Processing and Marketing 13,628 42,462 164,535 73,539 Other, Net 639 26,102 142,713 52,328 --- ------ ------- ------ Total 1,633,727 1,285,984 7,127,143 4,239,303 --------- --------- --------- --------- Operating Expenses Lease and Well 162,891 123,856 559,185 452,044 Transportation Costs 70,885 42,784 274,090 152,236 Gathering and Processing Costs 14,165 8,359 40,550 27,775 Exploration Costs 48,489 44,005 193,886 150,445 Dry Hole Costs 27,105 40,710 55,167 115,382 Impairments 79,268 60,657 192,859 147,517 Marketing Costs 12,431 39,248 152,842 66,680 Depreciation, Depletion and Amortization 368,135 282,234 1,326,875 1,065,545 General and Administrative 58,249 66,047 243,708 205,210 Taxes Other Than Income 40,930 58,267 320,796 208,073 ------ ------ ------- ------- Total 882,548 766,167 3,359,958 2,590,907 ------- ------- --------- --------- Operating Income 751,179 519,817 3,767,185 1,648,396 Other Income, Net 2,257 7,014 31,012 29,250 ----- ----- ------ ------ Income Before Interest Expense and Income Taxes 753,436 526,831 3,798,197 1,677,646 Interest Expense, Net 18,343 15,751 51,658 46,778 ------ ------ ------ ------ Income Before Income Taxes 735,093 511,080 3,746,539 1,630,868 Income Tax Provision 273,621 149,885 1,309,620 540,950 ------- ------- --------- ------- Net Income 461,472 361,195 2,436,919 1,089,918 Preferred Stock Dividends - 3,161 443 6,663 --- ----- --- ----- Net Income Available to Common Stockholders $461,472 $358,034 $2,436,476 $1,083,255 ======== ======== ========== ========== EOG RESOURCES, INC. OPERATING HIGHLIGHTS -------------------- (Unaudited) Quarter Twelve Months Ended Ended December 31, December 31, ------------- ------------- 2008 2007 2008 2007 ---- ---- ---- ---- Wellhead Volumes and Prices --------------------------- Natural Gas Volumes (MMcfd) (A) United States 1,231 1,010 1,162 971 Canada 231 225 222 224 Trinidad 184 241 218 252 Other International (B) 18 20 17 23 -- -- -- -- Total 1,664 1,496 1,619 1,470 Average Natural Gas Prices ($/Mcf) (C) United States $5.65 $6.48 $8.22 $6.27 Canada 5.71 6.36 7.64 6.25 Trinidad 2.53 3.84 3.58 2.71 Other International (B) 6.23 9.45 8.18 6.19 Composite 5.32 6.08 7.51 5.65 Crude Oil and Condensate Volumes (MBbld) (A) United States 50.4 27.6 39.5 24.6 Canada 2.7 2.3 2.7 2.4 Trinidad 2.5 3.8 3.2 4.1 Other International (B) 0.1 0.1 0.1 0.1 --- --- --- --- Total 55.7 33.8 45.5 31.2 Average Crude Oil and Condensate Prices ($/Bbl) (C) United States $46.03 $84.83 $87.68 $68.85 Canada 45.60 79.98 89.70 65.27 Trinidad 47.67 78.37 92.90 69.84 Other International (B) 84.33 86.70 99.30 66.84 Composite 46.12 83.77 88.18 68.69 Natural Gas Liquids Volumes (MBbld) (A) United States 15.9 13.7 15.0 11.1 Canada 0.9 1.1 1.0 1.1 --- --- --- --- Total 16.8 14.8 16.0 12.2 Average Natural Gas Liquids Prices ($/Bbl) (C) United States $26.45 $56.27 $53.33 $47.63 Canada 30.08 53.18 54.77 44.54 Composite 26.65 56.04 53.42 47.36 Natural Gas Equivalent Volumes (MMcfed) (D) United States 1,629 1,257 1,490 1,184 Canada 253 246 244 245 Trinidad 199 264 237 276 Other International (B) 18 20 17 24 -- -- -- -- Total 2,099 1,787 1,988 1,729 Total Bcfe (D) 193.1 164.4 727.6 631.3 (A) Million cubic feet per day or thousand barrels per day, as applicable. (B) Other International includes EOG's United Kingdom operations and, effective July 1, 2008, EOG's China operations. (C) Dollars per thousand cubic feet or per barrel, as applicable. (D) 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. EOG RESOURCES, INC. SUMMARY BALANCE SHEETS ---------------------- (Unaudited; in thousands, except share data) December 31, December 31, 2008 2007 ---- ---- ASSETS Current Assets Cash and Cash Equivalents $331,311 $54,231 Accounts Receivable, Net 722,695 835,670 Inventories 187,970 102,322 Assets from Price Risk Management Activities 779,483 100,912 Income Taxes Receivable 27,053 110,370 Deferred Income Taxes - 33,533 Other 59,939 55,001 ------ ------ Total 2,108,451 1,292,039 Property, Plant and Equipment Oil and Gas Properties (Successful Efforts Method) 20,803,629 16,981,836 Other Property, Plant and Equipment 1,057,888 581,402 --------- ------- Total Property, Plant and Equipment 21,861,517 17,563,238 Less: Accumulated Depreciation, Depletion and Amortization (8,204,215) (7,133,984) ---------- ---------- Total Property, Plant and Equipment, Net 13,657,302 10,429,254 Long-Term Assets Held for Sale - 254,376 Other Assets 185,473 113,238 ------- ------- Total Assets $15,951,226 $12,088,907 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts Payable $1,122,209 $1,152,140 Accrued Taxes Payable 86,265 104,647 Dividends Payable 33,461 22,045 Liabilities from Price Risk Management Activities 4,429 3,404 Deferred Income Taxes 368,231 108,980 Current Portion of Long-Term Debt 37,000 - Other 113,321 82,954 ------- ------ Total 1,764,916 1,474,170 Long-Term Debt 1,860,000 1,185,000 Other Liabilities 498,291 368,336 Deferred Income Taxes 2,813,522 2,071,307 Stockholders' Equity Preferred Stock, $0.01 Par, Zero Shares and 10,000,000 Shares Authorized at December 31, 2008 and 2007, respectively: Series B, Cumulative, $1,000 Liquidation Preference per Share, Zero Shares and 5,000 Shares Outstanding at December 31, 2008 and 2007, respectively - 4,977 Common Stock, $0.01 Par, 640,000,000 Shares Authorized: 249,758,577 Shares and 249,460,000 Shares Issued at December 31, 2008 and 2007, respectively 202,498 202,495 Additional Paid In Capital 323,805 221,102 Accumulated Other Comprehensive Income 27,787 466,702 Retained Earnings 8,466,143 6,156,721 Common Stock Held in Treasury, 126,911 Shares and 2,935,313 Shares at December 31, 2008 and 2007, respectively (5,736) (61,903) ------ ------- Total Stockholders' Equity 9,014,497 6,990,094 --------- --------- Total Liabilities and Stockholders' Equity $15,951,226 $12,088,907 =========== =========== EOG RESOURCES, INC. SUMMARY STATEMENTS OF CASH FLOWS -------------------------------- (Unaudited; in thousands) Twelve Months Ended December 31, ------------------ 2008 2007 ---- ---- Cash Flows from Operating Activities Reconciliation of Net Income to Net Cash Provided by Operating Activities: Net Income $2,436,919 $1,089,918 Items Not Requiring (Providing) Cash Depreciation, Depletion and Amortization 1,326,875 1,065,545 Impairments 192,859 147,517 Stock-Based Compensation Expenses 97,493 67,253 Deferred Income Taxes 1,133,630 426,827 Other, Net (138,392) (44,138) Dry Hole Costs 55,167 115,382 Mark-to-Market Commodity Derivative Contracts Total Gains (597,911) (93,108) Realized (Losses) Gains (136,625) 127,969 Other, Net 13,229 24,268 Changes in Components of Working Capital and Other Assets and Liabilities Accounts Receivable 95,165 (85,024) Inventories (92,049) 9,638 Accounts Payable 30,253 228,354 Accrued Taxes Payable 66,021 (40,002) Other Assets (10,715) (8,416) Other Liabilities 9,061 12,614 Changes in Components of Working Capital Associated with Investing and Financing Activities 152,269 (143,594) ------- -------- Net Cash Provided by Operating Activities 4,633,249 2,901,003 Investing Cash Flows Additions to Oil and Gas Properties (4,718,860) (3,401,986) Additions to Other Property, Plant and Equipment (476,611) (277,076) Proceeds from Sales of Assets 383,559 83,295 Changes in Components of Working Capital Associated with Investing Activities (152,374) 143,668 Other, Net (2,232) (3,675) ------ ------ Net Cash Used in Investing Activities (4,966,518) (3,455,774) Financing Cash Flows Long-Term Debt Borrowings 750,000 610,000 Long-Term Debt Repayments (38,000) (158,442) Dividends Paid (115,204) (84,020) Redemptions of Preferred Stock (5,395) (51,197) Excess Tax Benefits from Stock-Based Compensation 6,446 27,339 Treasury Stock Purchased (17,834) (7,638) Proceeds from Stock Options Exercised and Employee Stock Purchase Plan 72,572 55,320 Debt Issuance Costs (7,585) (5,206) Other, Net 105 (71) --- --- Net Cash Provided by Financing Activities 645,105 386,085 Effect of Exchange Rate Changes on Cash (34,756) 4,662 ------- ----- Increase (Decrease) in Cash and Cash Equivalents 277,080 (164,024) Cash and Cash Equivalents at Beginning of Period 54,231 218,255 ------ ------- Cash and Cash Equivalents at End of Period $331,311 $54,231 ======== ======= 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 twelve-month periods ended December 31, 2008 and 2007, 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 from these transactions and to eliminate the gain on the sale of Appalachian assets in the first quarter of 2008, to add the premium and fees for preferred stock redemptions in the third and fourth quarter of 2007, and to eliminate the effect of the income tax rate reductions enacted by the Canadian federal government in the second and fourth quarters of 2007. 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 Twelve Months Ended December 31, Ended December 31, ------------------ ------------------ 2008 2007 2008 2007 ---- ---- ---- ---- Reported Net Income Available to Common Stockholders (GAAP) $461,472 $358,034 $2,436,476 $1,083,255 Mark-to-Market (MTM) Commodity Derivative Contracts Impact Total Gains (528,844) (45,215) (597,911) (93,108) Realized Gains (Losses) 100,701 28,782 (136,625) 127,969 ------- ------ -------- ------- Subtotal (428,143) (16,433) (734,536) 34,861 -------- ------- -------- ------ After Tax MTM Impact (275,510) (10,575) (472,674) 22,433 -------- ------- -------- ------ Add: Premium and Fees for Preferred Stock Redemptions - 2,296 - 2,937 Less: Gain on Sale of Appalachian Assets, Net of Tax - - (84,748) - Less: Tax Benefit Related to Canadian Federal Tax Rate Reduction - (30,338) - (34,419) --- ------- --- ------- Adjusted Net Income Available to Common Stockholders (Non-GAAP) $185,962 $319,417 $1,879,054 $1,074,206 ======== ======== ========== ========== Net Income Per Share Available to Common Stockholders (GAAP) Basic $1.86 $1.46 $9.88 $4.45 ===== ===== ===== ===== Diluted $1.84 $1.44 $9.72 $4.37 ===== ===== ===== ===== Adjusted Net Income Per Share Available to Common Stockholders (Non-GAAP) Basic $0.75 $1.31 $7.62 $4.41 ===== ===== ===== ===== Diluted $0.74 $1.29 $7.50 $4.34 ===== ===== ===== ===== Average Number of Shares Outstanding Basic 247,672 244,440 246,662 243,469 ======= ======= ======= ======= Diluted 250,162 248,537 250,542 247,637 ======= ======= ======= ======= 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 twelve-month periods ended December 31, 2008 and 2007, 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 Twelve Months Ended December 31, Ended December 31, ------------------ ------------------ 2008 2007 2008 2007 ---- ---- ---- ---- Net Cash Provided by Operating Activities (GAAP) $1,033,563 $748,558 $4,633,249 $2,901,003 Adjustments Exploration Costs (excluding Stock-Based Compensation Expenses) 43,448 40,275 175,357 137,117 Changes in Components of Working Capital and Other Assets and Liabilities Accounts Receivable (315,112) 163,307 (95,165) 85,024 Inventories 46,695 (5,406) 92,049 (9,638) Accounts Payable 191,196 (185,524) (30,253) 228,354) Accrued Taxes Payable 69,726 17,168 (66,021) 40,002 Other Assets (8,041) 636 10,715 8,416 Other Liabilities (12,458) (9,882) (9,061) (12,614) Changes in Components of Working Capital Associated with Investing and Financing Activities (137,880) 99,280 (152,269) 143,594 Preferred Stock Dividends - (3,161) (443) (6,663) --- ------ ---- ------ Discretionary Cash Flow Available to Common Stockholders (Non-GAAP) $911,137 $865,251 $4,558,158 $3,057,887 ======== ======== ========== ========== EOG RESOURCES, INC. QUANTITATIVE RECONCILIATION OF AFTER-TAX INTEREST EXPENSE (Non-GAAP) AND ------------------------------------------------------------------------ NET DEBT (Non-GAAP) AS USED IN THE CALCULATION OF RETURN ON CAPITAL ------------------------------------------------------------------- EMPLOYED (ROCE) TO INTEREST EXPENSE (GAAP) AND CURRENT AND --------------------------------------------------------- LONG-TERM DEBT (GAAP), RESPECTIVELY ----------------------------------- (Unaudited; in millions, except ratio data) The following chart reconciles Interest Expense (GAAP) and Current and Long-Term Debt (GAAP) to After-Tax Interest Expense (Non-GAAP) and Net Debt (Non-GAAP), respectively, as used in the Return on Capital Employed (ROCE) calculation. EOG believes this presentation may be useful to investors who follow the practice of some industry analysts who utilize After-Tax Interest Expense and Net Debt in their ROCE calculation. EOG management uses this information for comparative purposes within the industry. 1998 1999 2000 2001 ---- ---- ---- ---- Interest Expense $61.8 $61.0 $45.1 Tax Benefit Imputed (based on 35%) (21.6) (21.4) (15.8) ----- ----- ----- After-Tax Interest Expense (Non-GAAP) - (a) $40.2 $39.6 $29.3 ===== ===== ===== Net Income - (b) $569.1 $396.9 $398.6 Total Stockholders' Equity - (c) $1,280.3 $1,129.6 $1,380.9 $1,642.7 Current and Long-Term Debt 1,142.8 990.3 859.0 856.0 Less: Cash (6.3) (24.8) (20.2) (2.5) ---- ----- ----- ---- Net Debt (Non-GAAP) - (d) 1,136.5 965.5 838.8 853.5 ------- ----- ----- ----- Total Capitalization (Non-GAAP) - (c) + (d) $2,416.8 $2,095.1 $2,219.7 $2,496.2 ======== ======== ======== ======== Average Total Capitalization (Non-GAAP)* - (e) $2,256.0 $2,157.4 $2,358.0 ======== ======== ======== Return on Capital Employed (ROCE) - [(a) + (b)] / (e) 27.0% 20.2% 18.1% ==== ==== ==== Average ROCE 1999 - 2008 2002 2003 2004 2005 ---- ---- ---- ---- Interest Expense $59.7 $58.7 $63.1 $62.5 Tax Benefit Imputed (based on 35%) (20.9) (20.5) (22.1) (21.9) ----- ----- ----- ----- After-Tax Interest Expense (Non-GAAP) - (a) $38.8 $38.2 $41.0 $40.6 ===== ===== ===== ===== Net Income - (b) $87.2 $430.1 $624.9 $1,259.6 Total Stockholders' Equity - (c) $1,672.4 $2,223.4 $2,945.4 $4,316.3 Current and Long-Term Debt 1,145.1 1,108.9 1,077.6 985.1 Less: Cash (9.8) (4.4) (21.0) (643.8) ---- ---- ----- ------ Net Debt (Non-GAAP) - (d) 1,135.3 1,104.5 1,056.6 341.3 ------- ------- ------- ----- Total Capitalization (Non-GAAP) - (c) + (d) $2,807.7 $3,327.9 $4,002.0 $4,657.6 ======== ======== ======== ======== Average Total Capitalization (Non-GAAP)* - (e) $2,652.0 $3,067.8 $3,665.0 $4,329.8 ======== ======== ======== ======== Return on Capital Employed (ROCE) - [(a) + (b)] / (e) 4.8% 15.3% 18.2% 30.0% === ==== ==== ==== Average ROCE 1999 - 2008 2006 2007 2008 ---- ---- ---- Interest Expense $43.2 $46.8 $51.7 Tax Benefit Imputed (based on 35%) (15.1) (16.4) (18.1) ----- ----- ----- After-Tax Interest Expense (Non-GAAP) - (a) $28.1 $30.4 $33.6 ===== ===== ===== Net Income - (b) $1,299.9 $1,089.9 $2,436.9 Total Stockholders' Equity - (c) $5,599.7 $6,990.1 $9,014.5 Current and Long-Term Debt 733.4 1,185.0 1,897.0 Less: Cash (218.3) (54.2) (331.3) ------ ----- ------ Net Debt (Non-GAAP) - (d) 515.1 1,130.8 1,565.7 ----- ------- ------- Total Capitalization (Non-GAAP) - (c) + (d) $6,114.8 $8,120.9 $10,580.2 ======== ======== ========= Average Total Capitalization (Non-GAAP)* - (e) $5,386.2 $7,117.9 $9,350.6 ======== ======== ======== Return on Capital Employed (ROCE) - [(a) + (b)] / (e) 24.7% 15.7% 26.4% ==== ==== ==== Average ROCE 1999 - 2008 20.0% ==== *Average of "Total Capitalization (Non-GAAP)" for the current and immediately preceding year EOG RESOURCES, INC. QUANTITATIVE RECONCILIATION OF AFTER-TAX INTEREST EXPENSE --------------------------------------------------------- (Non-GAAP), NET DEBT (Non-GAAP) AND ADJUSTED NET INCOME (Non-GAAP) ------------------------------------------------------------------ AS USED IN THE CALCULATIONS OF RETURN ON CAPITAL EMPLOYED (ROCE) ---------------------------------------------------------------- TO INTEREST EXPENSE (GAAP), CURRENT AND LONG-TERM DEBT (GAAP) AND ----------------------------------------------------------------- NET INCOME (GAAP), RESPECTIVELY -------------------------------- (Unaudited; in millions, except ratio data) The following chart reconciles Interest Expense (GAAP), Current and Long-Term Debt (GAAP) and Net Income (GAAP) to After-Tax Interest Expense (Non-GAAP), Net Debt (Non-GAAP) and Adjusted Net Income (Non-GAAP), respectively, as used in the Return on Capital Employed (ROCE) calculations. EOG believes this presentation may be useful to investors who follow the practice of some industry analysts who utilize After-Tax Interest Expense, Net Debt and Adjusted Net Income in their ROCE calculations. EOG management uses this information for comparative purposes within the industry. 2007 2008 ---- ---- Interest Expense $51.7 Tax Benefit Imputed (based on 35%) (18.1) ----- After-Tax Interest Expense (Non-GAAP) - (a) $33.6 ===== Reported Net Income - (b) $2,436.9 After-Tax Mark-to-Market Impact (472.7) After-Tax Gain on Sale of Appalachian Assets (84.7) ----- Adjusted Net Income (Non-GAAP) (c) $1,879.5 ======== Total Stockholders' Equity - (d) $6,990.1 $9,014.5 Current and Long-Term Debt $1,185.0 $1,897.0 Less: Cash (54.2) (331.3) ----- ------ Net Debt (Non-GAAP) - (e) $1,130.8 $1,565.7 ======== ======== Total Capitalization (Non-GAAP) - (d) + (e) $8,120.9 $10,580.2 ======== ========= Average Total Capitalization (Non-GAAP)* - (f) $9,350.6 ======== Return on Capital Employed (ROCE) - GAAP Net Income [(a) + (b)] / (f) 26.4% ==== Return on Capital Employed (ROCE) - Non-GAAP Adjusted Net Income [(a) + (c)] / (f) 20.5% ==== * Average of "Total Capitalization (Non-GAAP)" for the current and immediately preceding year EOG RESOURCES, INC. RESERVES SUPPLEMENTAL DATA -------------------------- (Unaudited) 2008 NET PROVED RESERVES RECONCILIATION SUMMARY United North NATURAL GAS (Bcf) States Canada America Trinidad ------ ------ ------- -------- Beginning Reserves 4,220.1 1,219.8 5,439.9 1,216.3 Revisions (110.3) 22.9 (87.4) 62.2 Purchases in place 31.0 15.0 46.0 - Extensions, discoveries and other additions 1,384.4 60.6 1,445.0 - Sales in place (200.2) - (200.2) - Production (436.0) (81.1) (517.1) (80.4) ------ ----- ------ ----- Ending Reserves 4,889.0 1,237.2 6,126.2 1,198.1 ======= ======= ======= ======= LIQUIDS (MMBbls) (a) Beginning Reserves 160.0 10.4 170.4 8.9 Revisions (1.6) 0.9 (0.7) 0.4 Purchases in place - - - 0.2 Extensions, discoveries and other additions 67.9 0.9 68.8 - Sales in place (0.5) - (0.5) - Production (20.0) (1.4) (21.4) (1.2) ----- ---- ----- ---- Ending Reserves 205.8 10.8 216.6 8.3 ===== ==== ===== === NATURAL GAS EQUIVALENTS (Bcfe) Beginning Reserves 5,180.2 1,282.0 6,462.2 1,269.7 Revisions (119.9) 28.1 (91.8) 64.7 Purchases in place 31.1 15.0 46.1 1.1 Extensions, discoveries and other additions 1,791.6 66.1 1,857.7 - Sales in place (203.2) - (203.2) - Production (555.8) (89.2) (645.0) (87.4) ------ ----- ------ ----- Ending Reserves 6,124.0 1,302.0 7,426.0 1,248.1 ======= ======= ======= ======= Net Proved Developed Reserves (Bcfe) At December 31, 2007 3,861.5 1,140.3 5,001.8 960.0 At December 31, 2008 4,502.3 1,166.2 5,668.5 929.6 (a) Includes crude oil, condensate and natural gas liquids. 2008 EXPLORATION AND DEVELOPMENT EXPENDITURES ($ in millions) Acquisition Cost of Unproved Properties $376.0 $141.1 $517.1 $0.3 Exploration Costs 550.7 95.6 646.3 6.7 Development Costs 3,298.5 243.1 3,541.6 70.7 ------- ----- ------- ---- Total Drilling 4,225.2 479.8 4,705.0 77.7 Acquisition Cost of Proved Properties 69.6 14.1 83.7 14.8 ---- ---- ---- ---- Total Exploration & Development Expenditures 4,294.8 493.9 4,788.7 92.5 Gathering, Processing and Other 474.6 1.2 475.8 0.3 Asset Retirement Costs 107.1 38.4 145.5 28.7 ----- ---- ----- ---- Total Expenditures 4,876.5 533.5 5,410.0 121.5 Proceeds from Sales in Place (419.1) (3.8) (422.9) - ------ ---- ------ - Net Expenditures $4,457.4 $529.7 $4,987.1 $121.5 ======== ====== ======== ====== RESERVE REPLACEMENT COSTS ($ / Mcfe) * Total Drilling, Before Revisions $2.36 $7.26 $2.53 $- All-in Total, Net of Revisions $2.52 $4.52 $2.64 $1.41 RESERVE REPLACEMENT * Drilling Only 322% 74% 288% 0% All-in Total, Net of Revisions & Dispositions 270% 122% 249% 75% * See attached reconciliation schedule for calculation methodology Other Total NATURAL GAS (Bcf) Int'l Int'l Total ----- ----- ----- Beginning Reserves 12.9 1,229.2 6,669.1 Revisions (4.2) 58.0 (29.4) Purchases in place 12.2 12.2 58.2 Extensions, discoveries and other additions - - 1,445.0 Sales in place - - (200.2) Production (6.0) (86.4) (603.5) ---- ----- ------ Ending Reserves 14.9 1,213.0 7,339.2 ==== ======= ======= LIQUIDS (MMBbls) (a) Beginning Reserves - 8.9 179.3 Revisions - 0.4 (0.3) Purchases in place 0.1 0.3 0.3 Extensions, discoveries and other additions - - 68.8 Sales in place - - (0.5) Production - (1.2) (22.6) - ---- ----- Ending Reserves 0.1 8.4 225.0 === === ===== NATURAL GAS EQUIVALENTS (Bcfe) Beginning Reserves 13.2 1,282.9 7,745.1 Revisions (4.3) 60.4 (31.4) Purchases in place 12.5 13.6 59.7 Extensions, discoveries and other additions - - 1,857.7 Sales in place - - (203.2) Production (6.1) (93.5) (738.5) ---- ----- ------ Ending Reserves 15.3 1,263.4 8,689.4 ==== ======= ======= Net Proved Developed Reserves (Bcfe) At December 31, 2007 13.2 973.2 5,975.0 At December 31, 2008 15.3 944.9 6,613.4 (a) Includes crude oil, condensate and natural gas liquids. 2008 EXPLORATION AND DEVELOPMENT EXPENDITURES ($ in million) Acquisition Cost of Unproved Properties $3.4 $3.7 $520.8 Exploration Costs 16.7 23.4 669.7 Development Costs - 70.7 3,612.3 - ---- ------- Total Drilling 20.1 97.8 4,802.8 Acquisition Cost of Proved Properties 10.3 25.1 108.8 ---- ---- ----- Total Exploration & Development Expenditures 30.4 122.9 4,911.6 Gathering, Processing and Other 0.4 0.7 476.5 Asset Retirement Costs 7.2 35.9 181.4 --- ---- ----- Total Expenditures 38.0 159.5 5,569.5 Proceeds from Sales in Place - - (422.9) - - ------ Net Expenditures $38.0 $159.5 $5,146.6 ===== ====== ======== RESERVE REPLACEMENT COSTS ($ / Mcfe) * Total Drilling, Before Revisions $- $- $2.59 All-in Total, Net of Revisions $- $1.66 $2.60 RESERVE REPLACEMENT * Drilling Only - 0% 252% All-in Total, Net of Revisions & Dispositions - 79% 228% * See attached reconciliation schedule for calculation methodology EOG RESOURCES, INC. QUANTITATIVE RECONCILIATION OF TOTAL EXPLORATION AND DEVELOPMENT ----------------------------------------------------------------- EXPENDITURES FOR DRILLING ONLY (Non-GAAP) AND TOTAL EXPLORATION --------------------------------------------------------------- AND DEVELOPMENT EXPENDITURES (Non-GAAP) AS USED IN THE CALCULATION ------------------------------------------------------------------ OF RESERVE REPLACEMENT COSTS ($ / MCFE) TO TOTAL COSTS INCURRED IN ------------------------------------------------------------------- EXPLORATION AND DEVELOPMENT ACTIVITIES (GAAP) ---------------------------------------------- (Unaudited; in millions, except ratio information) The following chart reconciles Total Costs Incurred in Exploration and Development Activities (GAAP) to Total Exploration and Development Expenditures for Drilling Only (Non-GAAP) and Total Exploration and Development Expenditures (Non-GAAP), as used in the calculation of Reserve Replacement Costs per Mcfe. There are numerous ways that industry participants present Reserve Replacement Costs, including "Drilling Only" and "All-In", which reflect total exploration and development expenditures divided by total net reserve additions from extensions and discoveries only, or from all sources. Combined with Reserve Replacement, these statistics provide management and investors with an indication of the results of the current year capital investment program. Reserve Replacement Cost statistics are widely recognized and reported by industry participants and are used by EOG management and other third parties for comparative purposes within the industry. Please note that the actual cost of adding reserves will vary from the reported statistics due to timing differences in reserve bookings and capital expenditures. Accordingly, some analysts use three or five year averages of reported statistics, while others prefer to estimate future costs. EOG has not included future capital costs to develop proved undeveloped reserves in Total Exploration & Development Expenditures United North States Canada America Trinidad ------ ------ ------- -------- Total Costs Incurred in Exploration and Development Activities (GAAP) $4,401.9 $532.3 $4,934.2 $121.2 Less: Asset Retirement Costs (107.1) (38.4) (145.5) (28.7) Less: Acquisition Cost of Proved Properties (69.6) (14.1) (83.7) (14.8) ----- ----- ----- ----- Total Exploration & Development Expenditures for Drilling Only (Non-GAAP) (a) $4,225.2 $479.8 $4,705.0 $77.7 ======== ====== ======== ===== Total Costs Incurred in Exploration and Development Activities (GAAP) $4,401.9 $532.3 $4,934.2 $121.2 Less: Asset Retirement Costs (107.1) (38.4) (145.5) (28.7) ------ ----- ------ ----- Total Exploration & Development Expenditures (Non-GAAP) (b) $4,294.8 $493.9 $4,788.7 $92.5 ======== ====== ======== ===== Net Reserve Additions From All Sources - Natural Gas Equivalents (Bcfe) Revisions due to price (c) (154.9) (19.7) (174.6) 99.6 Revisions other than price 35.0 47.8 82.8 (34.9) Purchases in place 31.1 15.0 46.1 1.1 Extensions, discoveries and other additions (d) 1,791.6 66.1 1,857.7 - ------- ---- ------- --- Total Reserve Additions (e) 1,702.8 109.2 1,812.0 65.8 Sales in place (203.2) - (203.2) - ------ --- ------ --- Net Reserve Additions From All Sources (f) 1,499.6 109.2 1,608.8 65.8 ======= ===== ======= ==== Production (g) 555.8 89.2 645.0 87.4 RESERVE REPLACEMENT COSTS ($ / Mcfe) Total Drilling, Before Revisions (a / d) $2.36 $7.26 $2.53 $- All-in Total, Net of Revisions (b / e) $2.52 $4.52 $2.64 $1.41 All-in Total, Excluding Revisions Due to Price (b / (e - c)) $2.31 $3.83 $2.41 $(2.74) RESERVE REPLACEMENT Drilling Only (d / g) 322% 74% 288% - All-in Total, Net of Revisions & Dispositions (f / g) 270% 122% 249% 75% All-in Total, Excluding Revisions Due to Price ((f - c) / g) 298% 145% 276% -39% Other Total Int'l Int'l Total ----- ----- ----- Total Costs Incurred in Exploration and Development Activities (GAAP) $37.6 $158.8 $5,093.0 Less: Asset Retirement Costs (7.2) (35.9) (181.4) Less: Acquisition Cost of Proved Properties (10.3) (25.1) (108.8) ----- ----- ------ Total Exploration & Development Expenditures for Drilling Only (Non-GAAP) (a) $20.1 $97.8 $4,802.8 ===== ===== ======== Total Costs Incurred in Exploration and Development Activities (GAAP) $37.6 $158.8 $5,093.0 Less: Asset Retirement Costs (7.2) (35.9) (181.4) ---- ----- ------ Total Exploration & Development Expenditures (Non-GAAP) (b) $30.4 $122.9 $4,911.6 ===== ====== ======== Net Reserve Additions From All Sources - Natural Gas Equivalents (Bcfe) Revisions due to price (c) - 99.6 (75.0) Revisions other than price (4.3) (39.2) 43.6 Purchases in place 12.5 13.6 59.7 Extensions, discoveries and other additions (d) - - 1,857.7 --- --- ------- Total Reserve Additions (e) 8.2 74.0 1,886.0 Sales in place - - (203.2) --- --- ------ Net Reserve Additions From All Sources (f) 8.2 74.0 1,682.8 === ==== ======= Production (g) 6.1 93.5 738.5 RESERVE REPLACEMENT COSTS ($ / Mcfe) Total Drilling, Before Revisions (a / d) $- $- $2.59 All-in Total, Net of Revisions (b / e) $- $1.66 $2.60 All-in Total, Excluding Revisions Due to Price (b / (e - c)) $3.71 $(4.80) $2.50 RESERVE REPLACEMENT Drilling Only (d / g) - - 252% All-in Total, Net of Revisions & Dispositions (f / g) - 79% 228% All-in Total, Excluding Revisions Due to Price ((f - c) / g) 134% -27% 238% 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. 12/31/2008 12/31/2007 ---------- ---------- Total Stockholders' Equity (GAAP) - (a) $9,014 $6,990 Current and Long-Term Debt (GAAP) - (b) 1,897 1,185 Less: Cash (GAAP) (331) (54) ---- --- Net Debt (Non-GAAP) - (c) 1,566 1,131 ----- ----- Total Capitalization (Non-GAAP) - (a) + (c) $10,580 $8,121 ======= ====== Total Capitalization (GAAP) - (a) + (b) $10,911 $8,175 ======= ====== Net Debt-to-Total Capitalization (Non-GAAP) - (c) / [(a) + (c)] 15% 14% == == Debt-to-Total Capitalization (GAAP) - (b) / [(a) + (b)] 17% 14% == ==
SOURCE EOG Resources, Inc.
Contact: investors, Maire A. Baldwin, +1-713-651-6EOG (651-6364), or media and investors, Elizabeth M. Ivers, +1-713-651-7132, both of EOG Resources, Inc.