email   rss   
Press Releases
EOG Resources Reports First Quarter 2011 Results
PR Newswire
HOUSTON

Click here for PDF version

FOR IMMEDIATE RELEASE: May 5, 2011

  • Reports 14 Percent Year-Over-Year Total Company Production Growth
  • Delivers 47 Percent Total Company Crude Oil, Condensate and Natural Gas Liquids Production Growth Over First Quarter 2010
  • Increases United States Crude Oil Volumes by 50 Percent Year-Over-Year
  • Drills Successful New Eagle Ford Fault Block Well Reaffirming Consistent Results from 120-Mile Acreage Stake
  • Raises Confidence Level in Niobrara Crude Oil Play
  • Announces New Powder River Basin Play
  • Completes Second High-Rate Bradford County Marcellus Natural Gas Well
  • On Track to Sell Approximately $1 Billion of Assets in 2011

HOUSTON, May 5, 2011 /PRNewswire/ -- EOG Resources, Inc. (NYSE: EOG) (EOG) today reported first quarter 2011 net income of $134.0 million, or $0.52 per share. This compares to first quarter 2010 net income of $118.0 million, or $0.46 per share.

Consistent with some analysts' practice of matching cash flow realizations to settlement months, and making certain other adjustments in order to exclude one-time items, adjusted non-GAAP net income for the quarter was $177.0 million, or $0.68 per share. Adjusted non-GAAP net income for the first quarter 2010 was $117.8 million, or $0.46 per share. The results for the first quarter 2011 included a $30.3 million, net of tax ($0.12 per share) impairment of certain non-core United States natural gas assets, gains on property dispositions, net of tax, of $45.9 million ($0.18 per share) and a previously disclosed non-cash net loss of $66.7 million ($42.7 million after tax, or $0.16 per share) on the mark-to-market of financial commodity contracts. During the quarter, the net cash inflow related to financial commodity contracts was $24.9 million ($15.9 million after tax, or $0.06 per share). (Please refer to the attached tables for the reconciliation of adjusted non-GAAP net income to GAAP net income.)

"EOG's strategic shift to a product mix more heavily weighted to crude oil and natural gas liquids is paying off," said Mark G. Papa, Chairman and Chief Executive Officer. "During the first quarter, EOG benefited from producing greater liquids volumes and rising crude oil prices."

Operational Highlights

Total company production increased 14 percent as compared to the first quarter 2010. EOG delivered 47 percent total company crude oil, condensate and natural gas liquids production growth compared to the first quarter 2010. The growth was driven by a 50 percent rise in United States crude oil production and a 49 percent increase in total United States crude oil, condensate and natural gas liquids production.

Crude Oil and Liquids Activity

Crude oil and condensate production growth was led by the North Dakota Bakken and the South Texas Eagle Ford, two remarkably consistent horizontal oil plays, in which EOG continues to be the largest crude oil producer.

EOG's first quarter drilling and completion operations were largely unaffected by weather conditions in North Dakota where a number of Bakken wells were brought to sales. Drilled with a 12,000-foot lateral, the Liberty LR 19-23H had a peak initial production rate of 1,282 barrels of oil per day (Bopd) with 793 thousand cubic feet per day (Mcfd) of rich natural gas, gross. This well's offset, the Liberty LR 14-23H, had a peak initial gross production rate of 1,124 Bopd with 580 Mcfd of rich natural gas. EOG has 88 and 86 percent working interest in the wells, respectively. The Liberty 10-36H and Ross 27-2728H, in which EOG has 94 and 70 percent working interest, respectively, had gross initial production rates of 1,716 and 1,038 Bopd, respectively. The Bear Den 4-20H, drilled in McKenzie County, southwest of EOG's Parshall Field, began sales in March at an initial peak rate of 2,116 Bopd with 2.5 million cubic feet per day (MMcfd) of rich natural gas, gross. EOG has 90 percent working interest in the well.

Across its 120-mile South Texas Eagle Ford position in the crude oil window, EOG brought a number of highly productive wells to sales during the first quarter. In Karnes County, near the center of EOG's acreage, the Beynon Unit #2H and #3H wells began initial sales at rates of 1,747 and 1,100 Bopd with 1.4 and 0.7 MMcfd of rich natural gas, respectively. Also in Karnes County, the Dullnig Unit #5H and Joseph #3H began production at 1,353 and 1,317 Bopd, respectively, with 1.2 MMcfd of rich natural gas for both wells. On the southwest part of EOG's acreage in LaSalle County, the Naylor Jones Unit 95#1H and A#1H were completed to sales at 790 and 955 Bopd with 0.8 and 1.3 MMcfd of rich natural gas, respectively. On the northeast part of EOG's acreage in Gonzales County, the HFS #3H and #5H began production at 1,345 and 1,620 Bopd with 0.8 and 1.3 MMcfd of rich natural gas, respectively.

Also in the Eagle Ford, EOG drilled its most northeastern well to date in a previously untested fault block in Gonzales County. The Hill Unit #2H was completed to sales at 1,233 Bopd with 685 Mcfd of rich natural gas. EOG has 100 percent working interest in these nine Eagle Ford wells.

"Every single well we've drilled across our 120-mile Eagle Ford position that runs from southwest La Salle County to northeast Gonzales County is productive. That's a success rate of 100 percent," Papa said. "With 520,000 net acres, EOG holds the largest position of any operator in the crude oil window of this resource play, which according to industry studies, represents one of the most significant oil discoveries in the lower 48 during the last 40 years."

Following the application of improved completion techniques in the Niobrara formation in the Denver-Julesburg Basin in northeast Colorado, new production data shows strong, consistent results.

"With an increased number of producing wells, EOG has gained a better understanding of the formation's geology. Our confidence level in the Niobrara has moved from cautious to optimistic," Papa said.

Three recent Niobrara wells support this view. The Fox Creek 3-35H drilled in January began production at 553 Bopd. Four miles to the southeast, the Jersey 12-25H well began sales at 404 Bopd with 300 Mcfd. The Bessie 9-11H was completed to sales at 432 Bopd. EOG has 100 percent working interest in these wells. To date, EOG has concentrated its activity on its 80,000 net acre Hereford Ranch Field in Weld County, Colorado, with a three-rig program. EOG plans to test its remaining 140,000 net acres in the Niobrara later this year.

In the Wyoming Powder River Basin, EOG announced drilling results from a new horizontal sandstone play. Currently operating a one-rig program, EOG has drilled and completed eight wells to date with a 100 percent success rate. EOG has 75 percent working interest in the Crossbow 7-06H well, with a 30-day average production rate of 275 Bopd with 100 barrels per day of natural gas liquids and 2 MMcfd of natural gas. EOG has 138,000 net acres in the Powder River Basin where it plans to test multiple intervals over the course of 2011 and 2012.

Despite the impact of freezing weather, EOG posted favorable drilling results from the Fort Worth Barnett Shale Combo, where it is operating an 11-rig program. During the first quarter, EOG further increased its position in the core area to 185,000 net acres which encompasses southwest Cooke and southern Montague Counties. The Stephenson Unit #3H and #4H in Cooke County had initial gross production rates of 498 and 631 Bopd with 1,534 and 688 Mcfd of rich natural gas, respectively. EOG has 96 percent working interest in these wells. Also in Cooke County, the Priddy A Unit #6 slant and Priddy #4H horizontal began production at 1,162 and 830 Bopd with 626 and 501 Mcfd of rich natural gas, respectively. In western Montague County, the Rosa Unit #2H and Shockley Unit #1H were completed to sales at 468 and 416 Bopd with 779 and 272 Mcfd of rich natural gas, respectively. EOG has 100 percent working interest in these wells.

In the West Texas Permian Basin Wolfcamp Shale, EOG has drilled and completed six horizontal wells to date proving up 44,000 of its 120,000 total net acre position. EOG reported strong production results from a number of horizontal wells. The University 40-1402H and 38-0701H in Crockett County had initial 30-day averages of 390 and 230 Bopd with 600 and 440 Mcfd of natural gas, respectively. EOG has 96 and 75 percent working interest in the wells, respectively. In Irion County, the University 43-1001H and Munson 2701H, in which EOG has 75 and 85 percent working interest, posted average 30-day production rates of 440 and 330 Bopd with 400 and 700 Mcfd of natural gas, respectively. Also in the Permian Basin, EOG continued to achieve drilling success in its Leonard Play during the first quarter.

"We are excited about the production results from our first horizontal Wolfcamp wells," Papa said. "EOG will be drilling on our remaining 76,000 net acres over the course of the year."

EOG's first quarter crude oil production in Canada increased 47 percent over the same period last year with further development of the Manitoba Waskada Field, where it drilled 47 wells.

"These positive results across the board are a direct reflection of our shift in portfolio mix to a greater focus on crude oil and liquids that began more than four years ago," Papa said. "We are now in execution mode on a number of these large-scale plays, developing them with efficient programs and applying technology to maximize these resources."

EOG's total company full-year 2011 crude oil and condensate production growth forecast of approximately 55 percent remains unchanged despite significant second quarter weather-related operational issues in the North Dakota Bakken and Manitoba Waskada areas.

Natural Gas Activity

In the United States, natural gas production increased 9 percent over the same prior year period. EOG posted strong operational results from its Marcellus and Haynesville/Bossier Shale core natural gas horizontal resource plays, where it is employing drilling capital this year. In Bradford County, Pennsylvania, EOG completed the Guinan 2H. Using new completion technology, the well flowed at an initial rate of 9 MMcfd. This is the second consecutive high-rate well that EOG has brought to sales from this 100 percent working interest 50,000 net acre block.

Capital Structure

During the first quarter, total cash proceeds from sales of acreage, producing natural gas properties and midstream assets were approximately $260 million. An additional $387 million of cash proceeds from asset dispositions was received subsequent to the first quarter. On March 7, 2011, EOG received $1.39 billion of net proceeds from a public offering of its common stock. At March 31, 2011, EOG's total debt outstanding was $5,225 million for a debt-to-total capitalization ratio of 31 percent. Taking into account cash on the balance sheet of $1,668 million at the end of the quarter, EOG's net debt was $3,557 million for a net debt-to-total capitalization ratio of 23 percent. Based on current commodity prices, proceeds from the March common stock offering and the expected sale during 2011 of approximately $1.0 billion of assets, EOG has the potential to be cash flow neutral for the year. EOG is targeting a net debt-to-total capitalization ratio of 30 percent or less at both year-end 2011 and 2012. (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).)

To secure a portion of cash flows to fund its active capital expenditure program during 2011 and 2012, EOG has in place financial price swap commodity contracts for both crude oil and natural gas. For the period May 1 through December 31, 2011, EOG has 29,241 barrels per day (Bbld) of crude oil financial price swap contracts in place at a weighted average price of $96.67 per barrel. For the full-year 2012, EOG has 9,000 Bbld of crude oil financial price swap contracts in place at a weighted average price of $107.12 per barrel. For the period June 1 through December 31, 2011, EOG has 650,000 million British thermal units per day (MMbtud) of natural gas financial price swap contracts in place at a weighted average price of $4.90 per million British thermal units (MMbtu), excluding unexercised swaptions. For the full-year 2012, EOG has 525,000 MMbtud of natural gas financial price swap contracts in place at a weighted average price of $5.44 per MMbtu, excluding unexercised swaptions.

"EOG's first quarter results demonstrate that our consistent game plan is working," Papa said. "Without entering into dilutive joint ventures, we continue to grow our North American liquids production at high reinvestment rates of return, while making the necessary investments to retain our key natural gas horizontal resource acreage and maintaining low net debt levels."

Conference Call Scheduled for May 6, 2011

EOG's first quarter 2011 results conference call will be available via live audio webcast at 8 a.m. Central time (9 a.m. Eastern time) on Friday, May 6, 2011. To listen, log on to www.eogresources.com. The webcast will be archived on EOG's website through May 20, 2011.

EOG Resources, Inc. is one of the largest independent (non-integrated) crude 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 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, returns, budgets, reserves, 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 any of these expectations will be achieved (in full or at all) 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, and demand for, crude oil, natural gas and related commodities;
  • the extent to which EOG is successful in its efforts to acquire or discover additional reserves;
  • 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, and to produce reserves and achieve anticipated production levels from, its existing and future crude oil and natural gas exploration and development projects, given the risks and uncertainties inherent in drilling, completing and operating crude oil and natural gas wells and the potential for interruptions of development and production, whether involuntary or intentional as a result of market or other conditions;
  • the extent to which EOG is successful in its efforts to market its crude oil, natural gas and related commodity production;
  • 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;
  • the impact of, and changes in, government policies, laws and regulations, including tax laws and regulations, environmental laws and regulations relating to air emissions, waste disposal and hydraulic fracturing and laws and regulations imposing conditions and restrictions on drilling and completion operations;
  • EOG's ability to effectively integrate acquired crude oil and natural gas 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;
  • the extent to which EOG's third-party-operated crude oil and natural gas properties are operated successfully and economically;
  • 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;
  • the accuracy of reserve estimates, which by their nature involve the exercise of professional judgment and may therefore be imprecise;
  • weather, including its impact on crude oil and natural gas demand, and weather-related delays in drilling and in the installation and operation of production, gathering, processing, compression and transportation 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 extent and effect of any hedging activities engaged in by EOG;
  • 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;
  • political developments around the world, including in the areas in which EOG operates;
  • the timing and impact of liquefied natural gas imports;
  • the use of competing energy sources and the development of alternative energy sources;
  • 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 14 through 20 of EOG's Annual Report on Form 10-K for the fiscal year ended December 31, 2010 and any updates to those factors set forth in EOG's subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K.
 

In light of these risks, uncertainties and assumptions, the events anticipated by EOG's forward-looking statements may not occur, and, if any of such events do, we may not have anticipated the timing of their occurrence or the extent of their impact on our actual results.  Accordingly, 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, other than as required by applicable law, to update or revise its forward-looking statements, whether as a result of new information, subsequent events, anticipated or unanticipated circumstances or otherwise.

Effective January 1, 2010, the United States Securities and Exchange Commission (SEC) permits oil and gas companies, in their filings with the SEC, to disclose not only "proved" reserves (i.e., quantities of oil and gas that are estimated to be recoverable with a high degree of confidence), but also "probable" reserves (i.e., quantities of oil and gas that are as likely as not to be recovered) as well as "possible" reserves (i.e., additional quantities of oil and gas that might be recovered, but with a lower probability than probable reserves). As noted above, statements of reserves are only estimates and may not correspond to the ultimate quantities of oil and gas recovered. Any reserve estimates provided in this press release that are not specifically designated as being estimates of proved reserves may include estimated reserves not necessarily calculated in accordance with, or contemplated by, the SEC's latest reserve reporting guidelines. Investors are urged to consider closely the disclosure in EOG's Annual Report on Form 10-K for the fiscal year ended December 31, 2010, 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.  

For Further Information Contact:

 Investors

 
 

Maire A. Baldwin

 
 

(713) 651-6EOG (651-6364)

 
 

Elizabeth M. Ivers

 
 

(713) 651-7132

 
     
 

Media

 
 

K Leonard

 
 

(713) 571-3870

 
   

 

EOG RESOURCES, INC.

 

FINANCIAL REPORT

 

(Unaudited; in millions, except per share data)

 
           
     

Three Months Ended

 
     

March 31,

 
     

2011

 

2010

 
                 

Net Operating Revenues                                                                                        

$

1,897.1

 

$

1,370.7

 

Net Income

$

134.0

 

$

118.0

 

Net Income Per Share

           

         Basic

$

0.52

 

$

0.47

 

         Diluted

$

0.52

 

$

0.46

 

Average Number of Shares Outstanding

           

         Basic

 

255.2

   

250.4

 

         Diluted

 

258.8

   

253.9

 
                 
                 

SUMMARY INCOME STATEMENTS

 

(Unaudited; in thousands, except per share data)

 
           
           
     

Three Months Ended

 
     

March 31,

 
     

2011

 

2010

 

Net Operating Revenues

           

         Crude Oil and Condensate

$

757,362

 

$

406,163

 

         Natural Gas Liquids

 

148,727

   

103,026

 

         Natural Gas

 

583,919

   

676,982

 

         (Losses) Gains on Mark-to-Market Commodity Derivative Contracts

 

(66,746)

   

7,803

 

         Gathering, Processing and Marketing

 

395,583

   

171,943

 

         Gains (Losses) on Property Dispositions, Net

 

71,742

   

(676)

 

         Other, Net

 

6,519

   

5,452

 

               Total

 

1,897,106

   

1,370,693

 

Operating Expenses

           

         Lease and Well

 

215,089

   

165,992

 

         Transportation Costs

 

97,633

   

88,711

 

         Gathering and Processing Costs

 

19,196

   

15,661

 

         Exploration Costs

 

50,909

   

51,197

 

         Dry Hole Costs

 

22,951

   

23,077

 

         Impairments

 

89,328

   

69,595

 

         Marketing Costs

 

385,409

   

168,764

 

         Depreciation, Depletion and Amortization

 

568,226

   

431,906

 

         General and Administrative

 

70,037

   

60,423

 

         Taxes Other Than Income

 

105,877

   

75,465

 

               Total

 

1,624,655

   

1,150,791

 
                 

Operating Income

 

272,451

   

219,902

 
                 

Other Income, Net

 

3,604

   

2,683

 
                 

Income Before Interest Expense and Income Taxes

 

276,055

   

222,585

 
                 

Interest Expense, Net

 

50,333

   

25,428

 
                 

Income Before Income Taxes

 

225,722

   

197,157

 
                 

Income Tax Provision

 

91,749

   

79,142

 
                 

Net Income

$

133,973

 

$

118,015

 
                 

Dividends Declared per Common Share

$

0.160

 

$

0.155

 
               

 

EOG RESOURCES, INC.

 

OPERATING HIGHLIGHTS

 

(Unaudited)

 
                 
     

Three Months Ended

 
     

March 31,

 
     

2011

 

2010

 

Wellhead Volumes and Prices                                                     

           

Crude Oil and Condensate Volumes (MBbld) (A)

           

     United States

 

81.4

   

54.1

 

     Canada

 

8.5

   

5.8

 

     Trinidad

 

4.4

   

3.8

 

     Other International (B)

 

0.1

   

0.1

 

          Total

 

94.4

   

63.8

 
                 

Average Crude Oil and Condensate Prices ($/Bbl) ©

           

     United States

$

88.00

 

$

73.29

 

     Canada

 

84.24

   

73.27

 

     Trinidad

 

86.84

   

66.45

 

     Other International (B)

 

85.57

   

71.37

 

          Composite

 

87.61

   

72.87

 
                 

Natural Gas Liquids Volumes (MBbld) (A)

           

     United States

 

34.5

   

23.7

 

     Canada

 

0.9

   

0.9

 

          Total

 

35.4

   

24.6

 
                 

Average Natural Gas Liquids Prices ($/Bbl) ©

           

     United States

$

46.63

 

$

46.64

 

     Canada

 

47.11

   

45.78

 

          Composite

 

46.65

   

46.61

 
                 

Natural Gas Volumes (MMcfd) (A)

           

     United States

 

1,134

   

1,043

 

     Canada

 

143

   

211

 

     Trinidad

 

385

   

351

 

     Other International (B)

 

14

   

16

 

          Total

 

1,676

   

1,621

 
                 

Average Natural Gas Prices ($/Mcf) ©

           

     United States

$

4.10

 

$

5.24

 

     Canada

 

3.67

   

5.22

 

     Trinidad

 

3.20

   

2.51

 

     Other International (B)

 

5.63

   

4.28

 

          Composite

 

3.87

   

4.64

 
                 

Crude Oil Equivalent Volumes (MBoed) (D)

           

     United States

 

304.9

   

251.6

 

     Canada

 

33.2

   

41.8

 

     Trinidad

 

68.6

   

62.3

 

     Other International (B)

 

2.4

   

2.8

 

          Total

 

409.1

   

358.5

 
                 

Total MMBoe (D)

 

36.8

   

32.3

 
                 
               

 

(A)  

Thousand barrels per day or million cubic feet per day, as applicable.  

 

(B)  

Other International includes EOG's United Kingdom and China operations.  

 

©  

Dollars per barrel or per thousand cubic feet, as applicable. Excludes the impact of

financial commodity derivative instruments.  

 

(D)  

Thousand barrels of oil equivalent per day or million barrels of oil equivalent, as applicable;

includes crude oil and condensate, natural gas liquids and natural gas.  Crude oil

equivalents are determined using the ratio of 1.0 barrel of crude oil and condensate or

natural gas liquids to 6.0 thousand cubic feet of natural gas.  MMBoe is calculated by

multiplying the MBoed amount by the number of days in the period and then dividing that

amount by one thousand.  

 
   

 

EOG RESOURCES, INC.

 

SUMMARY BALANCE SHEETS

 

(Unaudited; in thousands, except share data)

 
     
   

March 31,

 

December 31,

 
   

2011

 

2010

 
               

ASSETS

 

Current Assets                                                                                                 

           

      Cash and Cash Equivalents

$

1,668,285

 

$

788,853

 

      Accounts Receivable, Net

 

1,228,549

   

1,113,279

 

      Inventories

 

481,826

   

415,792

 

      Assets from Price Risk Management Activities

 

45,498

   

48,153

 

      Income Taxes Receivable

 

30,546

   

54,916

 

      Deferred Income Taxes

 

28,072

   

9,260

 

      Other

 

114,827

   

97,193

 

             Total

 

3,597,603

   

2,527,446

 
               

Property, Plant and Equipment

           

      Oil and Gas Properties (Successful Efforts Method)

 

30,526,397

   

29,263,809

 

      Other Property, Plant and Equipment

 

1,863,061

   

1,733,073

 

             Total Property, Plant and Equipment

 

32,389,458

   

30,996,882

 

      Less:  Accumulated Depreciation, Depletion and Amortization

 

(12,748,006)

   

(12,315,982)

 

             Total Property, Plant and Equipment, Net

 

19,641,452

   

18,680,900

 

Other Assets

 

306,467

   

415,887

 

Total Assets

$

23,545,522

 

$

21,624,233

 
               

LIABILITIES AND STOCKHOLDERS' EQUITY

 

Current Liabilities

           

      Accounts Payable

$

1,838,959

 

$

1,664,944

 

      Accrued Taxes Payable

 

136,897

   

82,168

 

      Dividends Payable

 

40,247

   

38,962

 

      Liabilities from Price Risk Management Activities

 

105,231

   

28,339

 

      Deferred Income Taxes

 

7,944

   

41,703

 

      Current Portion of Long-Term Debt

 

220,000

   

220,000

 

      Other

 

150,913

   

143,983

 

             Total

 

2,500,191

   

2,220,099

 
               
               

Long-Term Debt

 

5,004,725

   

5,003,341

 

Other Liabilities

 

680,754

   

667,455

 

Deferred Income Taxes

 

3,571,473

   

3,501,706

 

Commitments and Contingencies

           
               

Stockholders' Equity

           

      Common Stock, $0.01 Par, 640,000,000 Shares Authorized and

           

         268,540,507 Shares Issued at March 31, 2011 and

           

         254,223,521 Shares Issued at December 31, 2010

 

202,685

   

202,542

 

      Additional Paid In Capital

 

2,148,476

   

729,992

 

      Accumulated Other Comprehensive Income

 

485,464

   

440,071

 

      Retained Earnings

 

8,963,475

   

8,870,179

 

      Common Stock Held in Treasury, 121,135 Shares at March 31, 2011

           

         and 146,186 Shares at December 31, 2010

 

(11,721)

   

(11,152)

 

             Total Stockholders' Equity

 

11,788,379

   

10,231,632

 

Total Liabilities and Stockholders' Equity

$

23,545,522

 

$

21,624,233

 
             

 

EOG RESOURCES, INC.

 

SUMMARY STATEMENTS OF CASH FLOWS

 

(Unaudited; in thousands)

 
                 
     

Three Months Ended

 
     

March 31,

 
     

2011

 

2010

 

Cash Flows from Operating Activities                                                                                      

           

Reconciliation of Net Income to Net Cash Provided by Operating Activities:

           

      Net Income

$

133,973

 

$

118,015

 

      Items Not Requiring (Providing) Cash

           

             Depreciation, Depletion and Amortization

 

568,226

   

431,906

 

             Impairments

 

89,328

   

69,595

 

             Stock-Based Compensation Expenses

 

27,430

   

22,494

 

             Deferred Income Taxes

 

31,290

   

36,695

 

             (Gains) Losses on Property Dispositions, Net

 

(71,742)

   

676

 

             Other, Net

 

2,523

   

(953)

 

      Dry Hole Costs

 

22,951

   

23,077

 

      Mark-to-Market Commodity Derivative Contracts

           

             Total Losses (Gains)

 

66,746

   

(7,803)

 

             Realized Gains

 

24,937

   

22,960

 

      Other, Net

 

6,219

   

2,505

 

      Changes in Components of Working Capital and Other Assets and Liabilities

           

             Accounts Receivable

 

(113,855)

   

(95,770)

 

             Inventories

 

(67,733)

   

(53,312)

 

             Accounts Payable

 

165,497

   

147,632

 

             Accrued Taxes Payable

 

79,748

   

(3,790)

 

             Other Assets

 

(18,656)

   

(13,494)

 

             Other Liabilities

 

8,621

   

(5,554)

 

      Changes in Components of Working Capital Associated with Investing and

           

           Financing Activities

 

1,985

   

(74,592)

 

Net Cash Provided by Operating Activities

 

957,488

   

620,287

 
                 

Investing Cash Flows

           

      Additions to Oil and Gas Properties

 

(1,527,854)

   

(1,063,390)

 

      Additions to Other Property, Plant and Equipment

 

(159,794)

   

(61,483)

 

      Proceeds from Sales of Assets

 

260,107

   

3,766

 

      Changes in Components of Working Capital Associated with Investing

           

           Activities

 

(206)

   

74,322

 

      Other, Net

 

-

   

7,107

 

Net Cash Used in Investing Activities

 

(1,427,747)

   

(1,039,678)

 
                 

Financing Cash Flows

           

      Common Stock Sold

 

1,388,211

   

-

 

      Dividends Paid

 

(39,003)

   

(36,289)

 

      Treasury Stock Purchased

 

(14,981)

   

(5,347)

 

      Proceeds from Stock Options Exercised

 

17,363

   

5,277

 

      Other, Net

 

(1,779)

   

270

 

Net Cash Provided by (Used In) Financing Activities

 

1,349,811

   

(36,089)

 
                 

Effect of Exchange Rate Changes on Cash

 

(120)

   

(187)

 
                 

Increase (Decrease) in Cash and Cash Equivalents

 

879,432

   

(455,667)

 

Cash and Cash Equivalents at Beginning of Period

 

788,853

   

685,751

 

Cash and Cash Equivalents at End of Period

$

1,668,285

 

$

230,084

 
               

 

EOG RESOURCES, INC.

 

QUANTITATIVE RECONCILIATION OF ADJUSTED NET INCOME (NON-GAAP)

 

TO NET INCOME (GAAP)

 

(Unaudited; in thousands, except per share data)

 
   

The following chart adjusts three-month periods ended March 31, 2011 and 2010 reported Net Income (GAAP) to reflect

actual net cash realized from financial commodity price transactions by eliminating the unrealized mark-to-market losses

(gains) from these transactions, to add back impairment charges related to certain of EOG's United States (U.S.) natural

gas assets in the first quarter of 2011, to eliminate the gains on natural gas property dispositions primarily in the U.S. in

the first quarter of 2011, and to eliminate the change in the first quarter of 2010 in the estimated fair value of a contingent

consideration liability related to EOG's previously disclosed acquisition of Haynesville and Bossier Shale unproved

acreage. 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

 
   

March 31,

 
   

2011

 

2010

 
               

Reported Net Income (GAAP)                                                                                     

$

133,973

 

$

118,015

 
               

Mark-to-Market (MTM) Commodity Derivative Contracts Impact

           

        Total Losses (Gains)

 

66,746

   

(7,803)

 

        Realized Gains

 

24,937

   

22,960

 

           Subtotal

 

91,683

   

15,157

 
               

        After-Tax MTM Impact

 

58,640

   

9,704

 
               

Add: Impairment of Certain U.S. Natural Gas Assets, Net of Tax

 

30,283

   

-

 

Less: Gains on Property Dispositions, Net of Tax

 

(45,886)

   

-

 

Less: Change in Fair Value of Contingent Consideration Liability, Net of Tax

 

-

   

(9,933)

 

Adjusted Net Income (Non-GAAP)

$

177,010

 

$

117,786

 
               

Net Income Per Share (GAAP)

           

        Basic

$

0.52

 

$

0.47

 

        Diluted

$

0.52

 

$

0.46

 
               

Adjusted Net Income Per Share (Non-GAAP)

           

        Basic

$

0.69

 

$

0.47

 

        Diluted

$

0.68

 

$

0.46

 
               

Average Number of Shares

           

        Basic

 

255,200

   

250,370

 

        Diluted

 

258,819

   

253,869

 
             

 

EOG RESOURCES, INC.

 

QUANTITATIVE RECONCILIATION OF DISCRETIONARY CASH FLOW (NON-GAAP)

 

TO NET CASH PROVIDED BY OPERATING ACTIVITIES (GAAP)

 

(Unaudited; in thousands)

 
   

The following chart reconciles three-month periods ended March 31, 2011 and 2010 Net Cash Provided by Operating Activities

(GAAP) to Discretionary Cash Flow (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, and Changes in

Components of Working Capital Associated with Investing and Financing Activities. EOG management uses this information for

comparative purposes within the industry.

 
 

 
 

Three Months Ended

 
     

March 31,

 
     

2011

 

2010

 
                 

Net Cash Provided by Operating Activities (GAAP)                                                                     

$

957,488

 

$

620,287

 
                 

Adjustments

           

        Exploration Costs (excluding Stock-Based Compensation Expenses)

 

44,767

   

45,683

 

        Changes in Components of Working Capital and Other Assets and Liabilities

           

             Accounts Receivable

 

113,855

   

95,770

 

             Inventories

 

67,733

   

53,312

 

             Accounts Payable

 

(165,497)

   

(147,632)

 

             Accrued Taxes Payable

 

(79,748)

   

3,790

 

             Other Assets

 

18,656

   

13,494

 

             Other Liabilities

 

(8,621)

   

5,554

 

        Changes in Components of Working Capital Associated

           

             with Investing and Financing Activities

 

(1,985)

   

74,592

 
                 

Discretionary Cash Flow (Non-GAAP)

$

946,648

 

$

764,850

 
               

 

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 (NON-GAAP)

 

TO CURRENT AND LONG-TERM DEBT (GAAP) AND TOTAL CAPITALIZATION (GAAP)

 

(Unaudited; in millions, except ratio data)

 
         

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 and Total

Capitalization (Non-GAAP) in their Net Debt-to-Total Capitalization ratio calculation.  EOG

management uses this information for comparative purposes within the industry.

 
       

 
   

March 31,

 
   

2011

 
         
 

Total Stockholders' Equity - (a)

$

               11,788

 
         
 

Current and Long-Term Debt - (b)

 

                 5,225

 
 

Less: Cash

 

               (1,668)

 
 

Net Debt (Non-GAAP) - (c)

 

                 3,557

 
         
 

Total Capitalization (GAAP) - (a) + (b)

$

               17,013

 
         
 

Total Capitalization (Non-GAAP) - (a) + (c)

$

               15,345

 
         
 

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

 

31%

 
         
 

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

 

23%

 
       

 

EOG RESOURCES, INC.

 

SECOND QUARTER AND FULL YEAR 2011 FORECAST AND BENCHMARK COMMODITY PRICING

 
                         

(a) Second Quarter and Full Year 2011 Forecast

 

The forecast items for the second quarter and full year 2011 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)

 
         

2Q 2011

 

Full Year 2011

 

Daily Production                                                                                  

               

       Crude Oil and Condensate Volumes (MBbld)

               

              United States

85.2

-

93.2

 

94.2

-

114.2

 

              Canada

7.6

-

8.6

 

7.0

-

9.5

 

              Trinidad

3.4

-

4.0

 

2.5

-

4.1

 

                     Total

96.2

-

105.8

 

103.7

-

127.8

 
                         

       Natural Gas Liquids Volumes (MBbld)

               

              United States

35.0

-

39.0

 

34.8

-

44.8

 

              Canada

0.4

-

0.8

 

0.7

-

0.9

 

                     Total

35.4

-

39.8

 

35.5

-

45.7

 
                         

       Natural Gas Volumes (MMcfd)

               

              United States

1,080

-

1,112

 

1,116

-

1,154

 

              Canada

113

-

137

 

106

-

140

 

              Trinidad

316

-

348

 

316

-

340

 

              Other International

10

-

14

 

12

-

16

 

                     Total

1,519

-

1,611

 

1,550

-

1,650

 
                         

       Crude Oil Equivalent Volumes (MBoed)

               

              United States

300.2

-

317.5

 

315.0

-

351.3

 

              Canada

26.8

-

32.2

 

25.4

-

33.7

 

              Trinidad

56.1

-

62.0

 

55.2

-

60.8

 

              Other International

1.7

-

2.3

 

2.0

-

2.7

 

                     Total

384.8

-

414.0

 

397.6

-

448.5

 
                         

Operating Costs

               

       Unit Costs ($/Boe)

               

              Lease and Well

$   5.55

-

$   6.27

 

$   5.56

-

$   6.04

 

              Transportation Costs

$   3.00

-

$   3.36

 

$   2.88

-

$   3.24

 

              Depreciation, Depletion and Amortization

$ 15.54

-

$ 16.62

 

$ 15.50

-

$ 16.52

 
                         

Expenses ($MM)

               

       Exploration, Dry Hole and Impairment

$ 135.0

-

$ 165.0

 

$ 515.0

-

$ 560.0

 

       General and Administrative

$   73.0

-

$   80.0

 

$ 313.0

-

$ 333.0

 

       Gathering and Processing

$   16.5

-

$   20.5

 

$   68.0

-

$   85.0

 

       Capitalized Interest

$   13.0

-

$   17.0

 

$   51.0

-

$   70.0

 

       Net Interest

$   48.1

-

$   53.1

 

$ 190.0

-

$ 210.0

 
                         

Taxes Other Than Income (% of Revenue)

5.9%

-

7.1%

 

6.0%

-

7.0%

 
                         

Income Taxes

                 

       Effective Rate

35%

-

50%

 

35%

-

45%

 

       Current Taxes ($MM)

$      90

-

$    105

 

$    310

-

$    330

 
                         

Capital Expenditures ($MM) - FY 2011 (Excluding Acquisitions)

               

       Exploration and Development, Excluding Facilities

       

$ 5,350

-

$ 5,450

 

       Exploration and Development Facilities

       

$    550

-

$    600

 

       Gathering, Processing and Other

       

$    500

-

$    550

 
                         

Pricing - (Refer to Benchmark Commodity Pricing in text)

               

       Crude Oil and Condensate ($/Bbl)

               

              Differentials

               

                     United States - below WTI

$   6.00

-

$   8.50

 

$   5.45

-

$   7.45

 

                     Canada - below WTI

$   7.00

-

$   8.00

 

$   7.50

-

$   8.50

 

                     Trinidad - below WTI

$   8.15

-

$ 12.15

 

$   8.00

-

$ 12.75

 
                         

       Natural Gas ($/Mcf)

               

              Differentials

               

                     United States - below NYMEX Henry Hub

$   0.06

-

$   0.14

 

$   0.03

-

$   0.15

 

                     Canada - below NYMEX Henry Hub

$   0.41

-

$   0.56

 

$   0.44

-

$   0.55

 
                         

              Realizations

               

                     Trinidad

$   2.75

-

$   3.25

 

$   2.55

-

$   3.15

 

                     Other International

$   5.48

-

$   6.20

 

$   5.50

-

$   6.20

 
   
                       

 

Definitions

               

       $/Bbl

U.S. Dollars per barrel

 

       $/Boe

U.S. Dollars per barrel of oil equivalent

 

       $/Mcf

U.S. Dollars per thousand cubic feet

 

       $MM

U.S. Dollars in millions

 

       MBbld

Thousand barrels per day

 

       Mboed

Thousand barrels of oil equivalent per day

 

       MMcfd

Million cubic feet per day

 

       NYMEX

New York Mercantile Exchange

 

       WTI

West Texas Intermediate

 
                 

 

SOURCE EOG Resources, Inc.

Top of Page