HOUSTON, Nov. 5 /PRNewswire-FirstCall/ -- EOG Resources, Inc. (NYSE: EOG) (EOG) today reported its third quarter 2009 operating and financial results. For the third quarter, EOG reported net income available to common stockholders of $4.2 million, or $0.02 per share. This compares to third quarter 2008 net income available to common stockholders of $1,556.3 million, or $6.20 per share.
The results for the third quarter 2009 included a previously disclosed $20.9 million ($13.4 million after tax, or $0.05 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 $331.2 million ($213.1 million after tax, or $0.84 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 $203.9 million, or $0.81 per share. Adjusted non-GAAP net income available to common stockholders for the third quarter 2008 was $588.3 million, or $2.34 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.)
Full Year 2009 and 2010 Production Growth Forecasts
Based on the performance of its North American liquids plays, EOG has increased its 2009 total company production growth target from 5.5 to 6 percent. For 2010, EOG has set a total company organic production growth target of 13 percent that includes total liquids production growth of 50 percent.
Operational Highlights and Targets
With recent well results from the North Dakota Bakken Core and Lite areas and the Fort Worth Barnett Shale Combo Play showing the impact of substantially more effective completions, EOG is increasing its total company liquids production growth estimate from 25 to 27 percent for 2009. Carrying this momentum into 2010, EOG plans to ramp up operations in these areas and, therefore, is raising its full year 2010 crude oil, condensate and natural gas liquids production growth target from 20 to 50 percent.
In addition, EOG announced a tactical acquisition of core Barnett Shale Combo assets in Montague and Cooke Counties, Texas with the addition of 7,800 net acres during the third quarter.
Two recent horizontal Combo wells, the Christian A #1H and B #1H, in which EOG has 100 percent working interest, were drilled in Cooke County. They began initial production at 1,000 and 600 barrels of oil per day (Bopd) with 2.5 and 2.0 million cubic feet per day (MMcfd) of natural gas, respectively. Reflecting the implementation of EOG's improved completion techniques, recent horizontal wells in eastern Montague and western Cooke Counties indicate estimated per well reserves of over 280,000 barrels of oil equivalent (Boe), net, an 80 percent improvement over EOG's early 2008 per well reserve estimates for the play. In the core area of the Combo where pay intervals are thickest, EOG has been developing its acreage by drilling vertical wells. EOG has 100 percent working interest in the Fitzgerald #1 and Stephenson #1, which reported initial production rates of 1,100 and 450 Bopd with 2.1 and 0.7 MMcfd, respectively. EOG expects to recover over 220,000 Boe, net from vertical wells drilled in this core area.
EOG also reported positive well results from crude oil drilling activity in the North Dakota Bakken Core and Lite areas where it is operating a five-rig program. In the Bakken Core, EOG has 100 and 92 percent working interest, respectively, in the Fertile #9-8H and Fertile #13-18H. The wells commenced production at rates of 1,000 and 1,100 Bopd, respectively. In the Bakken Lite, EOG completed the Sidonia #2-5H and Ross #5-08H at initial rates of 626 and 750 Bopd, respectively. EOG has 78 and 100 percent working interest, respectively, in the wells. In addition, EOG drilled and tested its first wells in the Three Forks Formation to determine the extent of prospectivity across its acreage position. Initial results from the first two wells indicate encouraging pressure and flow rates in a portion of its acreage. By operating a 14-rig drilling program in North Dakota in 2010, EOG plans to focus on the Bakken Core and Lite, as well as further drilling and testing of the Three Forks Formation.
"EOG is successfully transferring its technical expertise in drilling horizontal natural gas wells to unconventional oil and liquids rich reservoirs," said Mark G. Papa, Chairman and CEO. "Although it is late in the year, EOG is on track to target a higher liquids growth rate for 2009 because of the quality of wells that we are making in the Barnett Combo and Bakken Core and Lite. On the strength of the results from our unconventional liquids plays, we have the confidence to raise EOG's 2010 total company crude oil, condensate and natural gas liquids production growth target from 20 percent to 50 percent."
As one of the first operators to test the extension of the Haynesville Play further southwest into Nacogdoches and Shelby Counties, Texas, EOG reported initial production rates from three wells that equal the better wells drilled to date in the Louisiana core area. In Nacogdoches County, the Hill #1, Pop Pop Gas Unit #1 and Hassell Gas Unit #1, which were drilled early in the third quarter, began initial production at rates in excess of 15 MMcfd of natural gas. EOG has 42 percent working interest in the wells. Based on this confirmation and the results of the Gammage #1 exploration well drilled in Nacogdoches County, EOG has increased its acreage position in the play. Including the recent acquisition of approximately 37,000 net acres in Nacogdoches County, EOG now has 153,000 total net acres in the Haynesville Play, after adjusting for the expected exercise of third party preferential purchase rights.
In the Horn River Basin of British Columbia, EOG's summer program concentrated on the completion of seven natural gas wells drilled the previous winter. The wells had initial production rates ranging from 16 to 23 MMcfd. In addition, EOG reached agreement with the British Columbia government on royalty incentives for a significant portion of the company's acreage.
"This has been an especially dynamic quarter for EOG with considerable strides made on both the liquids and gas sides of our business," said Papa. "Although EOG rarely makes an acquisition, we added tactical parcels to two of our core plays - the Barnett Combo and Haynesville. I'm particularly pleased that our focus on horizontal unconventional oil is already yielding meaningful results."
Conference Call Scheduled for November 6, 2009
EOG's third quarter 2009 results conference call will be available via live audio webcast at 8 a.m. Central Standard Time (9 a.m. Eastern Standard Time) on Friday, November 6, 2009. To listen, log on to www.eogresources.com. The webcast will be archived on EOG's website through Friday, November 20, 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 and China. EOG Resources, Inc. is listed on the New York Stock Exchange and is traded under the ticker symbol "EOG."
This press release (including the accompanying forecast and benchmark commodity pricing information) 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 19 of EOG's Annual Report on Form 10-K for the fiscal year ended December 31, 2008 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, 2008, 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) Three Months Ended Nine Months Ended September 30, September 30, ------------- ------------- 2009 2008 2009 2008 ---- ---- ---- ---- Net Operating Revenues $1,006.8 $3,263.9 $3,026.1 $5,493.4 ======== ======== ======== ======== Net Income Available to Common Stockholders $4.2 $1,556.3 $146.2 $1,975.0 ==== ======== ====== ======== Net Income Per Share Available to Common Stockholders Basic $0.02 $6.30 $0.59 $8.02 ===== ===== ===== ===== Diluted $0.02 $6.20 $0.58 $7.88 ===== ===== ===== ===== Average Number of Shares Outstanding Basic 249.5 247.2 248.6 246.3 ===== ===== ===== ===== Diluted 252.4 250.9 251.3 250.8 ===== ===== ===== ===== SUMMARY INCOME STATEMENTS ------------------------- (Unaudited; in thousands, except per share data) Three Months Ended Nine Months Ended September 30, September 30, ---------------- --------------- 2009 2008 2009 2008 ---- ---- ---- ---- Net Operating Revenues Natural Gas $450,304 $1,259,130 $1,477,926 $3,637,325 Crude Oil, Condensate and Natural Gas Liquids 398,806 574,402 886,268 1,494,043 Gains on Mark-to- Market Commodity Derivative Contracts 20,877 1,381,733 405,830 69,067 Gathering, Processing and Marketing 134,553 51,145 249,679 150,907 Other, Net 2,309 (2,524) 6,394 142,074 ----- ------ ----- ------- Total 1,006,849 3,263,886 3,026,097 5,493,416 --------- --------- --------- --------- Operating Expenses Lease and Well 142,183 142,238 422,288 396,294 Transportation Costs 70,971 78,136 205,844 203,205 Gathering and Processing Costs 13,318 9,104 44,552 26,385 Exploration Costs 44,910 37,943 128,840 145,397 Dry Hole Costs 3,016 12,849 39,653 28,062 Impairments 69,404 32,142 181,921 113,591 Marketing Costs 131,816 44,380 237,819 140,411 Depreciation, Depletion and Amortization 385,330 346,247 1,150,251 958,740 General and Administrative 62,775 70,893 179,481 185,459 Taxes Other Than Income 47,823 97,771 118,715 279,866 ------ ------ ------- ------- Total 971,546 871,703 2,709,364 2,477,410 ------- ------- --------- --------- Operating Income 35,303 2,392,183 316,733 3,016,006 Other Income (Expense), Net (339) 13,864 2,637 28,756 ---- ------ ----- ------ Income Before Interest Expense and Income Taxes 34,964 2,406,047 319,370 3,044,762 Interest Expense, Net 30,407 12,095 73,594 33,315 ------ ------ ------ ------ Income Before Income Taxes 4,557 2,393,952 245,776 3,011,447 Income Tax Provision 361 837,667 99,576 1,036,000 --- ------- ------ --------- Net Income 4,196 1,556,285 146,200 1,975,447 Preferred Stock Dividends - - - 443 --- --- --- --- Net Income Available to Common Stockholders $4,196 $1,556,285 $146,200 $1,975,004 ====== ========== ======== ========== Dividends Declared per Common Share $0.145 $0.135 $0.435 $0.375 ====== ====== ====== ====== EOG RESOURCES, INC. OPERATING HIGHLIGHTS -------------------- (Unaudited) Three Months Nine Months Ended Ended September 30, September 30, ------------- ------------- 2009 2008 2009 2008 ---- ---- ---- ---- Wellhead Volumes and Prices --------------------------- Natural Gas Volumes (MMcfd) (A) United States 1,128 1,196 1,153 1,141 Canada 219 224 224 218 Trinidad 268 240 266 229 Other International (B) 13 19 15 16 -- -- -- -- Total 1,628 1,679 1,658 1,604 ===== ===== ===== ===== Average Natural Gas Prices ($/Mcf) (C) United States $3.27 $8.99 $3.57 $9.15 Canada 3.15 8.15 3.67 8.33 Trinidad 1.77 4.04 1.54 3.86 Other International (B) 3.53 7.41 4.45 8.90 Composite 3.01 8.15 3.27 8.28 Crude Oil and Condensate Volumes (MBbld) (A) United States 51.7 41.8 46.5 35.9 Canada 4.7 3.0 3.6 2.7 Trinidad 3.0 3.4 3.0 3.4 Other International (B) 0.1 0.1 0.1 0.1 --- --- --- --- Total 59.5 48.3 53.2 42.1 ==== ==== ==== ==== Average Crude Oil and Condensate Prices ($/Bbl)(C) United States $60.79 $109.86 $49.54 $107.36 Canada 61.43 109.71 51.91 104.57 Trinidad 57.07 111.39 46.13 103.80 Other International (B) 57.93 112.77 50.11 104.66 Composite 60.65 109.96 49.51 106.89 Natural Gas Liquids Volumes (MBbld) (A) United States 23.1 13.2 22.2 14.7 Canada 1.0 1.1 1.1 1.0 --- --- --- --- Total 24.1 14.3 23.3 15.7 ==== ==== ==== ==== Average Natural Gas Liquids Prices ($/Bbl) (C) United States $31.15 $69.79 $26.42 $63.08 Canada 30.96 64.01 27.29 62.45 Composite 31.14 69.33 26.46 63.04 Natural Gas Equivalent Volumes (MMcfed) (D) United States 1,577 1,525 1,566 1,445 Canada 253 249 252 240 Trinidad 286 261 284 250 Other International (B) 13 20 15 16 -- -- -- -- Total 2,129 2,055 2,117 1,951 ===== ===== ===== ===== Total Bcfe (D) 195.9 189.1 578.1 534.5 (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 and 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 and condensate or natural gas liquids. EOG RESOURCES, INC. SUMMARY BALANCE SHEETS ---------------------- (Unaudited; in thousands, except share data) September 30, December 31, 2009 2008 ------------- ------------ ASSETS Current Assets Cash and Cash Equivalents $608,511 $331,311 Accounts Receivable, Net 604,260 722,695 Inventories 240,230 187,970 Assets from Price Risk Management Activities 290,536 779,483 Income Taxes Receivable 27,134 27,053 Other 61,018 59,939 ------ ------ Total 1,831,689 2,108,451 Property, Plant and Equipment Oil and Gas Properties (Successful Efforts Method) 23,515,362 20,803,629 Other Property, Plant and Equipment 1,261,505 1,057,888 --------- --------- Total Property, Plant and Equipment 24,776,867 21,861,517 Less: Accumulated Depreciation, Depletion and Amortization (9,524,312) (8,204,215) ---------- ---------- Total Property, Plant and Equipment, Net 15,252,555 13,657,302 Other Assets 137,049 185,473 ------- ------- Total Assets $17,221,293 $15,951,226 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts Payable $783,764 $1,122,209 Accrued Taxes Payable 86,334 86,265 Dividends Payable 36,255 33,461 Liabilities from Price Risk Management Activities 16,370 4,429 Deferred Income Taxes 114,304 368,231 Current Portion of Long-Term Debt 37,000 37,000 Other 127,124 113,321 ------- ------- Total 1,201,151 1,764,916 Long-Term Debt 2,760,000 1,860,000 Other Liabilities 609,150 498,291 Deferred Income Taxes 3,133,252 2,813,522 Commitments and Contingencies Stockholders' Equity Common Stock, $0.01 Par, 640,000,000 Shares Authorized: 252,421,628 Shares Issued at September 30, 2009 and 249,758,577 Shares Issued at December 31, 2008 202,524 202,498 Additional Paid In Capital 528,544 323,805 Accumulated Other Comprehensive Income 291,627 27,787 Retained Earnings 8,502,940 8,466,143 Common Stock Held in Treasury, 128,898 Shares at September 30, 2009 and 126,911 Shares at December 31, 2008 (7,895) (5,736) ------ ------ Total Stockholders' Equity 9,517,740 9,014,497 --------- --------- Total Liabilities and Stockholders' Equity $17,221,293 $15,951,226 =========== =========== EOG RESOURCES, INC. SUMMARY STATEMENTS OF CASH FLOWS -------------------------------- (Unaudited; in thousands) Nine Months Ended September 30, ---------------- 2009 2008 ---- ---- Cash Flows from Operating Activities Reconciliation of Net Income to Net Cash Provided by Operating Activities: Net Income $146,200 $1,975,447 Items Not Requiring (Providing) Cash Depreciation, Depletion and Amortization 1,150,251 958,740 Impairments 181,921 113,591 Stock-Based Compensation Expenses 74,532 76,344 Deferred Income Taxes 39,793 790,699 Other, Net 2,738 (135,325) Dry Hole Costs 39,653 28,062 Mark-to-Market Commodity Derivative Contracts Total Gains (405,830) (69,067) Realized Gains (Losses) 986,980 (237,326) Other, Net 9,385 14,390 Changes in Components of Working Capital and Other Assets and Liabilities Accounts Receivable 119,099 (219,947) Inventories (23,592) (45,354) Accounts Payable (361,698) 221,449 Accrued Taxes Payable (17,955) 135,747 Other Assets (4,255) (18,756) Other Liabilities 9,357 (3,397) Changes in Components of Working Capital Associated with Investing and Financing Activities 147,097 14,389 ------- ------ Net Cash Provided by Operating Activities 2,093,676 3,599,686 Investing Cash Flows Additions to Oil and Gas Properties (2,267,884) (3,532,343) Additions to Other Property, Plant and Equipment (240,614) (320,699) Proceeds from Sales of Assets 2,515 369,669 Changes in Components of Working Capital Associated with Investing Activities (146,783) (14,501) Other, Net 1,405 (1,316) ----- ------ Net Cash Used in Investing Activities (2,651,361) (3,499,190) Financing Cash Flows Long-Term Debt Borrowings 900,000 750,000 Long-Term Debt Repayments - (38,000) Dividends Paid (105,989) (81,453) Redemption of Preferred Stock - (5,395) Excess Tax Benefits from Stock-Based Compensation 34,052 69,824 Treasury Stock Purchased (9,888) (11,266) Proceeds from Stock Options Exercised and Employee Stock Purchase Plan 13,691 67,414 Debt Issuance Costs (8,887) (6,704) Other, Net (314) 112 ---- --- Net Cash Provided by Financing Activities 822,665 744,532 Effect of Exchange Rate Changes on Cash 12,220 (13,282) ------ ------- Increase in Cash and Cash Equivalents 277,200 831,746 Cash and Cash Equivalents at Beginning of Period 331,311 54,231 ------- ------ Cash and Cash Equivalents at End of Period $608,511 $885,977 ======== ======== 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, 2009 and 2008 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 to eliminate the gain on the sale of EOG's Appalachian assets in the first quarter of 2008. 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. Three Months Ended Nine Months Ended September 30, September 30, --------------- ---------------- 2009 2008 2009 2008 ---- ---- ---- ---- Reported Net Income Available to Common Stockholders (GAAP) $4,196 $1,556,285 $146,200 $1,975,004 Mark-to-Market (MTM) Commodity Derivative Contracts Impact Total Gains (20,877) (1,381,733) (405,830) (69,067) Realized Gains (Losses) 331,240 (122,467) 986,980 (237,326) ------- -------- ------- -------- Subtotal 310,363 (1,504,200) 581,150 (306,393) ------- ---------- ------- -------- After Tax MTM Impact 199,719 (967,953) 373,970 (197,164) ------- -------- ------- -------- Less: Gain on Sale of Appalachian Assets, Net of Tax - - - (84,748) --- --- --- ------- Adjusted Net Income Available to Common Stockholders (Non-GAAP) $203,915 $588,332 $520,170 $1,693,092 ======== ======== ======== ========== Net Income Per Share Available to Common Stockholders (GAAP) Basic $0.02 $6.30 $0.59 $8.02 ===== ===== ===== ===== Diluted $0.02 $6.20 $0.58 $7.88 ===== ===== ===== ===== Adjusted Net Income Per Share Available to Common Stockholders (Non- GAAP) Basic $0.82 $2.38 $2.09 $6.87 ===== ===== ===== ===== Diluted $0.81 $2.34 $2.07 $6.75 ===== ===== ===== ===== Average Number of Shares Basic 249,535 247,155 248,647 246,343 ======= ======= ======= ======= Diluted 252,422 250,930 251,288 250,765 ======= ======= ======= ======= 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, 2009 and 2008 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. Three Months Nine Months Ended September 30, Ended September 30, ------------------- ------------------- 2009 2008 2009 2008 ---- ---- ---- ---- Net Cash Provided by Operating Activities (GAAP) $816,458 $1,537,065 $2,093,676 $3,599,686 Adjustments Exploration Costs (excluding Stock-Based Compensation Expenses) 39,814 32,818 113,644 131,909 Changes in Components of Working Capital and Other Assets and Liabilities Accounts Receivable 29,922 (175,579) (119,099) 219,947 Inventories 1,441 36,178 23,592 45,354 Accounts Payable (53,125) 34,046 361,698 (221,449) Accrued Taxes Payable 212 (228,485) 17,955 (135,747) Other Assets (3,232) (42,867) 4,255 18,756 Other Liabilities (34,199) (5,043) (9,357) 3,397 Changes in Components of Working Capital Associated with Investing and Financing Activities 22,086 (15,164) (147,097) (14,389) Preferred Stock Dividends - - - (443) --- --- --- ---- Discretionary Cash Flow Available to Common Stockholders (Non-GAAP) $819,377 $1,172,969 $2,339,267 $3,647,021 ======== ========== ========== ========== EOG RESOURCES, INC. FOURTH QUARTER AND FULL YEAR 2009 FORECAST AND BENCHMARK -------------------------------------------------------- COMMODITY PRICING ----------------- (a) Fourth Quarter and Full Year 2009 Forecast The forecast items for the fourth quarter and full year 2009 set forth below for EOG Resources, Inc. (EOG) are based on current available information and expectations as of the date of the accompanying press release. This forecast replaces and supersedes any previously issued guidance or forecast. (b) Benchmark Commodity Pricing EOG bases United States and Canada natural gas price differentials upon the natural gas price at Henry Hub, Louisiana using the simple average of the NYMEX settlement prices for the last three trading days of the applicable month. EOG bases United States, Canada and Trinidad crude oil and condensate price differentials upon the West Texas Intermediate crude oil price at Cushing, Oklahoma using the simple average of the NYMEX settlement prices for each trading day within the applicable calendar month. ESTIMATED RANGES ---------------- (Unaudited) Full Year 4Q 2009 2009 ------- --------- Daily Production Natural Gas (MMcfd) United States 1,075 - 1,115 1,132 - 1,145 Canada 210 - 230 221 - 226 Trinidad 240 - 260 260 - 264 Other International 10 - 15 13 - 15 Total 1,535 - 1,620 1,626 - 1,650 Crude Oil and Condensate (MBbld) United States 49.0 - 52.0 47.0 - 48.0 Canada 4.8 - 6.8 4.0 - 4.4 Trinidad 2.8 - 3.2 2.9 - 3.1 Total 56.6 - 62.0 53.9 - 55.5 Natural Gas Liquids (MBbld) United States 21.0 - 26.0 22.0 - 23.2 Canada 0.7 - 1.0 0.9 - 1.1 Total 21.7 - 27.0 22.9 - 24.3 Natural Gas Equivalent Volumes (MMcfed) United States 1,495 - 1,583 1,546 - 1,572 Canada 243 - 277 250 - 259 Trinidad 257 - 279 278 - 283 Other International 10 - 15 13 - 15 Total 2,005 - 2,154 2,087 - 2,129 ESTIMATED RANGES ---------------- (Unaudited) Operating Costs 4Q 2009 Full Year 2009 ------- -------------- Unit Costs ($/Mcfe) Lease and Well $0.73 - $0.77 $0.73 - $0.76 Transportation Costs $0.33 - $0.37 $0.35 - $0.37 Depreciation, Depletion and Amortization $2.01 - $2.06 $1.99 - $2.03 Expenses ($MM) Exploration, Dry Hole and Impairment $150.0 - $170.0 $500.0 - $520.0 General and Administrative $60.0 $64.0 $238.5 $244.5 Gathering and Processing $16.0 - $20.0 $61.0 - $67.0 Capitalized Interest $13.0 - $15.0 $50.5 - $54.0 Net Interest $28.0 - $32.0 $98.0 - $110.0 Taxes Other Than Income (% of Revenue) 5.5% - 7.0% 5.1% - 5.6% Income Taxes Effective Rate 30% - 40% 35% - 45% Current Taxes ($MM) $10 - $20 $65 - $85 Capital Expenditures ($MM) - FY 2009 Exploration and Development, excluding Acquisitions Approximately $3,100 Gathering, Processing and Other Approximately $300 Acquisitions Approximately $320 Pricing - (Refer to Benchmark Commodity Pricing in text) Natural Gas ($/Mcf) Differentials (include the effect of physical contracts) United States - below NYMEX Henry Hub $0.15 - $0.35 $0.33 - $0.38 Canada - below NYMEX Henry Hub $0.20 - $0.40 $0.25 - $0.35 Realizations Trinidad $1.50 - $2.50 $1.50 - $1.75 Other International $3.75 - $5.25 $4.20 - $4.60 Crude Oil and Condensate ($/Bbl) Differentials United States - below WTI $9.50 - $13.00 $8.00 - $9.00 Canada - below WTI $6.00 - $10.00 $4.40 - $5.00 Trinidad - below WTI $8.75 - $12.75 $10.50 - $11.50 Definitions ----------- $/Bbl U.S. Dollars per barrel $/Mcf U.S. Dollars per thousand cubic feet $/Mcfe U.S. Dollars per thousand cubic feet equivalent $MM U.S. Dollars in millions MBbld Thousand barrels per day MMcfd Million cubic feet per day MMcfed Million cubic feet equivalent per day NYMEX New York Mercantile Exchange WTI West Texas Intermediate
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.