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EOG Resources Reports Third Quarter 2011 Results
- Achieves 11 Percent Total Company Organic Production Growth for First Nine Months of 2011 Versus Prior Year Period
- Reports 54 Percent Total Company Crude Oil and Condensate Volume Growth Third Quarter Year-Over-Year and 51 Percent Growth for First Nine Months Year-Over-Year
- Announces 49 Percent Total Liquids Volume Increase in Third Quarter and 47 Percent Growth for First Nine Months Year-Over-Year
- Records Continued Positive Results from Tighter Eagle Ford Well Spacing
- Realizes Ongoing Success in Permian Basin Wolfcamp
- Delivers Consistent Results from North Dakota Bakken and Fort Worth Barnett Combo
- Verifies 2011 Asset Disposition Program Still On Track
PR Newswire
HOUSTON

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FOR IMMEDIATE RELEASE: November 1, 2011

HOUSTON, Nov. 1, 2011 /PRNewswire/ -- EOG Resources, Inc. (NYSE: EOG) (EOG) today reported third quarter 2011 net income of $540.9 million, or $2.01 per diluted share. This compares to a third quarter 2010 net loss of $70.9 million, or $0.28 per diluted share.

Consistent with some analysts’ practice of matching cash flow realizations to settlement months, and making certain other adjustments in order to exclude non-recurring items, adjusted non-GAAP net income for the third quarter 2011 was $223.2 million, or $0.83 per share. Adjusted non-GAAP net income for the third quarter 2010 was $46.6 million, or $0.18 per share. The results for the third quarter 2011 included net gains on asset dispositions of $132.9 million, net of tax ($0.49 per share), a $10.6 million, net of tax ($0.04 per share) impairment of certain non-core North American assets and a previously disclosed non-cash net gain of $357.7 million ($229.0 million after tax, or $0.85 per share) on the mark-to-market of financial commodity contracts. During the quarter, the net cash inflow related to financial commodity contracts was $52.5 million ($33.6 million after tax, or $0.12 per share). (Please refer to the attached tables for the reconciliation of adjusted non-GAAP net income to GAAP net income (loss).)

Operational Highlights

Driven by a 64 percent rise in United States crude oil and condensate production during the third quarter 2011, EOG delivered 54 percent total company crude oil and condensate production growth versus the third quarter 2010. For the first nine months of 2011, year-over-year crude oil and condensate production increased 51 percent. The South Texas Eagle Ford led the surge in crude oil production growth, followed by the Fort Worth Barnett Shale Combo.

Total company liquids production increased 49 percent in the third quarter 2011 over the same period in the prior year and 47 percent year-over-year for the first nine months of 2011.

EOG achieved 11 percent total company organic production growth for the first nine months of 2011 versus 2010. For the full year 2011, total company crude oil and condensate production is projected to increase by 51 percent, while total company liquids production is forecast to rise 47 percent compared to 2010.

“These extraordinary double-digit liquids growth rates, driven primarily by high value organic crude oil production, confirm that EOG’s transition to a crude oil and liquids-focused company is complete,” said Mark G. Papa, Chairman and Chief Executive Officer. “After assembling a best-in-class U.S. onshore liquids-rich portfolio, we are now harvesting these existing assets by maximizing their resource potential. Meanwhile, we continue to pursue new opportunities.”

Crude Oil and Liquids Activity

Across its dominant acreage position in the South Texas Eagle Ford crude oil window, EOG’s 2011 improved completion techniques and cost optimization practices continue to drive operational gains and enhanced well production results. Reflecting this combination, EOG has posted its best wells to date in the South Texas Eagle Ford. In Gonzales County, the northeastern-most part of EOG’s acreage, the Mitchell Unit #1H and #2H began initial production at peak rates of 2,821 and 3,090 barrels of crude oil per day (Bopd) with 2.8 and 2.9 million cubic feet per day (MMcfd) of rich natural gas, respectively. The Meyer Unit #1H, #2H and #6H started sales at peak crude oil rates of 2,372, 1,600 and 2,918 Bopd, respectively, and produced 1.8, 2.2 and 2.7 MMcfd of associated rich natural gas, respectively. The Kerner Carson Unit #1H, #2H, #4H, #6H, #8H and #10H wells were turned to sales at crude oil production rates ranging from 1,580 to 2,239 Bopd with 1.2 to 1.9 MMcfd of rich natural gas. EOG has 100 percent working interest in these Gonzales County wells.

South of Gonzales in Karnes County, the center of EOG’s acreage, the AFO Unit #1H, #2H and #3H began initial maximum production at 2,289, 1,700 and 1,548 Bopd, respectively, with rich natural gas production ranging from 1.2 to 1.6 MMcfd. EOG has 100 percent working interest in these wells. EOG has 50 percent working interest in the Deleon-Reinhard Unit #1H and Deleon-Wiatrek Unit #1H wells, which were completed at peak crude oil rates of 2,235 Bopd with 1.2 MMcfd and 2,161 Bopd with 1.7 MMcfd of rich natural gas, respectively.

In LaSalle County, EOG’s southwestern-most acreage, the Naylor Jones A #6H and A #7H began initial production at 1,582 and 1,342 Bopd with 1.5 and 1.6 MMcfd of rich natural gas, respectively. EOG has 100 percent working interest in these wells.

“As we apply what we’ve learned about the Eagle Ford across our extensive operations, EOG’s production results just get better and better,” Papa said. “We are also seeing early positive results from each of our seven downspacing pilot programs. Drilling wells more tightly spaced than our original 130-acre patterns provides even more development opportunities for EOG.”

Across its other crude oil and liquids-rich shale plays, EOG also recorded strong, consistent performance. In the Rocky Mountains, EOG has maintained a steady level of drilling activity in the Colorado Niobrara Shale and Wyoming Powder River Basin plays. Drilling results from the Mid-Continent Marmaton and Permian Basin Leonard also continued to be positive.

In the Permian Basin Wolfcamp in Texas, EOG has been operating a two-rig program and plans to ramp up drilling activity early in 2012. Recent efforts have focused on completion techniques that increase reserves per well and improve cost efficiencies. In Irion and Crockett Counties, the University 40 #1306H, 40 #1308H and 40 #1504H were completed to sales with initial maximum production rates of 1,426, 1,293 and 1,338 Bopd with 0.9, 1.0 and 1.2 MMcfd of rich natural gas, respectively. EOG has 94 percent, 88 percent and 89 percent working interest in these wells, respectively. In Irion County, EOG has 88 percent working interest in the Mayer #5002H, which was turned to sales at 686 Bopd with 1.3 MMcfd of rich natural gas.

Operational improvements are evidenced by individual well results in EOG’s North Texas Fort Worth Barnett Shale Combo. The play was a significant contributor to EOG’s crude oil and liquids growth both during the third quarter and in the first nine months of 2011 versus the same period in 2010. In Montague County, the Ketchum Unit #1H and #2H were brought to sales at 496 and 638 Bopd with increasing rich natural gas rates of 354 and 455 thousand cubic feet per day, respectively. Also in Montague County, the Farrell Unit A #1H, A #2H, B #3H and B #4H began initial production at crude oil rates ranging from 335 to 475 Bopd with 1.0 to 1.4 MMcfd of rich natural gas. EOG has 100 percent working interest in these wells.

In North Dakota, EOG again reported consistent results from its drilling program. A number of wells were completed across the Bakken with strong initial production rates. In Mountrail County, the Liberty 18-14H LR, drilled with a 12,675-foot lateral, began initial production at 1,215 Bopd. EOG has 96 percent working interest in the well. In Dunn County, EOG has 84 percent working interest in the Horse Camp 2-11H and 101-11H. Completed in the Bakken and Three Forks formations, respectively, the wells began flowing to sales at initial maximum production rates of 1,323 and 1,833 Bopd, respectively. Also in the Three Forks, EOG has a 55 percent working interest in the Mandaree 102-05H, which was completed to sales at a maximum peak rate of 1,189 Bopd.

EOG has resumed normal operations in both North Dakota and Waskada, Manitoba following spring flooding that temporarily impacted drilling activity. In a new area of EOG’s horizontal Waskada crude oil play, three recent wells were completed with initial production rates ranging from 300 to 400 Bopd, rates consistent with its 2010 drilling program results.

“EOG continues to deliver consistent long-term production growth at high rates of return from our liquids-rich portfolio. We have the potential to see this growth trend continue for many years to come,” Papa said.

Natural Gas Activity

Consistent with EOG’s overall strategy and emphasis on crude oil and liquids-rich production growth, North America natural gas production decreased 9 percent in the third quarter 2011 compared to the same prior year period. This reflects reduced drilling activity in a weak natural gas price environment, as well as previously announced natural gas asset sales.

Capital Structure

During the first nine months of 2011, total cash proceeds from asset sales were $1.3 billion. EOG anticipates full-year property sales of approximately $1.6 billion.

At September 30, 2011, EOG’s total debt outstanding was $5.2 billion for a debt-to-total capitalization ratio of 29 percent. Taking into account $1.4 billion of cash on the balance sheet at the end of the third quarter, EOG’s net debt was $3.8 billion for a net debt-to-total capitalization ratio of 24 percent. 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).)

“Our successful pursuit of high value crude oil and natural gas liquids growth is producing strong results for EOG. Most importantly, the majority of our liquids growth is oil as opposed to lower valued NGLs,” Papa said. “EOG’s strategy is consistent with the game plan we articulated four years ago.”

Conference Call Scheduled for November 2, 2011

EOG’s third quarter 2011 results conference call will be available via live audio webcast at 8 a.m. Central time (9 a.m. Eastern time) on Wednesday, November 2, 2011. To listen, log on to www.eogresources.com. The webcast will be archived on EOG’s website through November 16, 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

 

Nine Months Ended

 
     

September 30,

 

September 30,

 
     

2011

 

2010

 

2011

 

2010

 
                             

Net Operating Revenues                                                                        

$

2,885.7

 

$

1,582.1

 

$

7,353.1

 

$

4,310.7

 

Net Income (Loss)

$

540.9

 

$

(70.9)

 

$

970.4

 

$

107.0

 

Net Income (Loss) Per Share

                       

        Basic

$

2.03

 

$

(0.28)

 

$

3.71

 

$

0.43

 

        Diluted

$

2.01

 

$

(0.28)

 

$

3.66

 

$

0.42

 

Average Number of Shares Outstanding

                       

        Basic

 

266.1

   

251.0

   

261.7

   

250.7

 

        Diluted

 

269.3

   

251.0

   

265.2

   

254.4

 
                             
                             

SUMMARY INCOME STATEMENTS

 

(Unaudited; in thousands, except per share data)

 
                     
                     
     

Three Months Ended

 

Nine Months Ended

 
     

September 30,

 

September 30,

 
     

2011

 

2010

 

2011

 

2010

 

Net Operating Revenues

                       

         Crude Oil and Condensate

$

953,154

 

$

506,368

 

$

2,649,034

 

$

1,368,338

 

         Natural Gas Liquids

 

206,572

   

107,482

   

539,104

   

314,750

 

         Natural Gas

 

576,803

   

602,242

   

1,760,715

   

1,832,578

 

         Gains on Mark-to-Market Commodity Derivative Contracts

 

357,664

   

60,998

   

480,539

   

105,816

 

         Gathering, Processing and Marketing

 

578,022

   

233,971

   

1,461,303

   

601,790

 

         Gains on Asset Dispositions, Net

 

207,468

   

64,809

   

442,981

   

72,441

 

         Other, Net

 

6,061

   

6,205

   

19,424

   

15,023

 

              Total

 

2,885,744

   

1,582,075

   

7,353,100

   

4,310,736

 

Operating Expenses

                       

         Lease and Well

 

248,926

   

180,921

   

680,710

   

507,647

 

         Transportation Costs

 

108,678

   

103,262

   

308,276

   

286,318

 

         Gathering and Processing Costs

 

18,532

   

18,472

   

55,444

   

47,353

 

         Exploration Costs

 

48,469

   

47,307

   

140,616

   

148,635

 

         Dry Hole Costs

 

22,604

   

2,700

   

47,231

   

45,095

 

         Impairments

 

83,431

   

352,908

   

531,413

   

502,865

 

         Marketing Costs

 

572,604

   

231,758

   

1,427,450

   

591,735

 

         Depreciation, Depletion and Amortization

 

651,684

   

500,888

   

1,822,854

   

1,398,137

 

         General and Administrative

 

82,260

   

81,310

   

219,703

   

206,470

 

         Taxes Other Than Income

 

98,526

   

74,244

   

308,669

   

227,773

 

              Total

 

1,935,714

   

1,593,770

   

5,542,366

   

3,962,028

 
                             

Operating Income (Loss)

 

950,030

   

(11,695)

   

1,810,734

   

348,708

 
                             

Other Income, Net

 

1,377

   

5,772

   

11,205

   

7,910

 
                             

Income (Loss) Before Interest Expense and Income Taxes

 

951,407

   

(5,923)

   

1,821,939

   

356,618

 
                             

Interest Expense, Net

 

52,186

   

32,890

   

153,772

   

88,215

 
                             

Income (Loss) Before Income Taxes

 

899,221

   

(38,813)

   

1,668,167

   

268,403

 
                             

Income Tax Provision

 

358,343

   

32,093

   

697,742

   

161,422

 
                             

Net Income (Loss)

$

540,878

 

$

(70,906)

 

$

970,425

 

$

106,981

 
                             

Dividends Declared per Common Share

$

0.160

 

$

0.155

 

$

0.480

 

$

0.465

 
                           

 

EOG RESOURCES, INC.

 

OPERATING HIGHLIGHTS

 

(Unaudited)

 
                             
       

Three Months Ended

 

Nine Months Ended

 
       

September 30,

 

September 30,

 
       

2011

 

2010

 

2011

 

2010

 

Wellhead Volumes and Prices

                       

Crude Oil and Condensate Volumes (MBbld) (A)

                       

    United States

 

108.9

   

66.6

   

94.3

   

59.5

 

    Canada

 

6.8

   

5.9

   

8.0

   

6.1

 

    Trinidad

 

3.1

   

4.8

   

3.6

   

4.7

 

    Other International (B)

 

0.1

   

0.1

   

0.1

   

0.1

 

         Total

 

118.9

   

77.4

   

106.0

   

70.4

 
                               

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

                       

    United States

$

87.22

 

$

71.54

 

$

91.40

 

$

72.58

 

    Canada

 

90.54

   

69.12

   

92.76

   

71.32

 

    Trinidad

 

89.70

   

65.06

   

91.56

   

66.91

 

         Composite

 

87.49

   

70.96

   

91.52

   

72.09

 
                               

Natural Gas Liquids Volumes (MBbld) (A)

                       

    United States

 

43.2

   

31.1

   

38.7

   

27.4

 

    Canada

 

0.8

   

0.8

   

0.8

   

0.9

 

         Total

 

44.0

   

31.9

   

39.5

   

28.3

 
                               

Average Natural Gas Liquids Prices ($/Bbl) ©

                       

    United States

$

50.90

 

$

36.56

 

$

49.85

 

$

40.68

 

    Canada

 

57.69

   

40.34

   

54.36

   

42.90

 

         Composite

 

51.02

   

36.66

   

49.93

   

40.75

 
                               

Natural Gas Volumes (MMcfd) (A)

                       

    United States

 

1,122

   

1,175

   

1,123

   

1,096

 

    Canada

 

123

   

200

   

135

   

205

 

    Trinidad

 

330

   

333

   

354

   

342

 

    Other International (B)

 

12

   

14

   

13

   

15

 

         Total

 

1,587

   

1,722

   

1,625

   

1,658

 
                               

Average Natural Gas Prices ($/Mcf) ©

                       

    United States

$

4.06

 

$

4.21

 

$

4.13

 

$

4.50

 

    Canada

 

3.81

   

3.42

   

3.88

   

4.09

 

    Trinidad

 

3.59

   

2.53

   

3.42

   

2.54

 

    Other International (B)

 

5.54

   

5.41

   

5.60

   

4.64

 

         Composite

 

3.95

   

3.80

   

3.97

   

4.05

 
                               

Crude Oil Equivalent Volumes (MBoed) (D)

                       

    United States

 

339.4

   

293.5

   

320.3

   

269.6

 

    Canada

 

27.9

   

40.0

   

31.2

   

41.1

 

    Trinidad

 

58.0

   

60.3

   

62.7

   

61.7

 

    Other International (B)

 

2.0

   

2.5

   

2.2

   

2.6

 

         Total

 

427.3

   

396.3

   

416.4

   

375.0

 
                               

Total MMBoe (D)

 

39.3

   

36.5

   

113.7

   

102.4

 
                               
                             

 

(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)

 
     
               
   

September 30,

 

December 31,

 
   

2011

 

2010

 
               

ASSETS

 

Current Assets                                                                                                      

           

     Cash and Cash Equivalents

$

1,386,728

 

$

788,853

 

     Accounts Receivable, Net

 

1,249,649

   

1,113,279

 

     Inventories

 

580,355

   

415,792

 

     Assets from Price Risk Management Activities

 

364,991

   

48,153

 

     Income Taxes Receivable

 

28,013

   

54,916

 

     Deferred Income Taxes

 

-

   

9,260

 

     Other

 

125,626

   

97,193

 

            Total

 

3,735,362

   

2,527,446

 
               

Property, Plant and Equipment

           

     Oil and Gas Properties (Successful Efforts Method)

 

32,196,279

   

29,263,809

 

     Other Property, Plant and Equipment

 

1,993,824

   

1,733,073

 

            Total Property, Plant and Equipment

 

34,190,103

   

30,996,882

 

     Less:  Accumulated Depreciation, Depletion and Amortization

 

(13,453,905)

   

(12,315,982)

 

            Total Property, Plant and Equipment, Net

 

20,736,198

   

18,680,900

 

Other Assets

 

323,118

   

415,887

 

Total Assets

$

24,794,678

 

$

21,624,233

 
               

LIABILITIES AND STOCKHOLDERS' EQUITY

 

Current Liabilities

           

     Accounts Payable

$

1,926,455

 

$

1,664,944

 

     Accrued Taxes Payable

 

157,297

   

82,168

 

     Dividends Payable

 

43,015

   

38,962

 

     Liabilities from Price Risk Management Activities

 

-

   

28,339

 

     Deferred Income Taxes

 

139,646

   

41,703

 

     Current Portion of Long-Term Debt

 

220,000

   

220,000

 

     Other

 

179,910

   

143,983

 

            Total

 

2,666,323

   

2,220,099

 
               
               

Long-Term Debt

 

5,007,746

   

5,003,341

 

Other Liabilities

 

768,518

   

667,455

 

Deferred Income Taxes

 

3,858,243

   

3,501,706

 

Commitments and Contingencies

           
               

Stockholders' Equity

           

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

           

       269,124,759 Shares Issued at September 30, 2011 and

           

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

 

202,691

   

202,542

 

     Additional Paid In Capital

 

2,230,600

   

729,992

 

     Accumulated Other Comprehensive Income

 

372,448

   

440,071

 

     Retained Earnings

 

9,711,207

   

8,870,179

 

     Common Stock Held in Treasury, 281,595 Shares at September 30, 2011

           

       and 146,186 Shares at December 31, 2010

 

(23,098)

   

(11,152)

 

           Total Stockholders' Equity

 

12,493,848

   

10,231,632

 

Total Liabilities and Stockholders’ Equity

$

24,794,678

 

$

21,624,233

 
             

 
 

EOG RESOURCES, INC.

 
 

SUMMARY STATEMENTS OF CASH FLOWS

 
 

(Unaudited; in thousands)

 
                 
     

Nine Months Ended

 
     

September 30,

 
     

2011

 

2010

 

Cash Flows from Operating Activities

           

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

           

     Net Income

$

970,425

 

$

106,981

 

     Items Not Requiring (Providing) Cash

           

            Depreciation, Depletion and Amortization

 

1,822,854

   

1,398,137

 

            Impairments

 

531,413

   

502,865

 

            Stock-Based Compensation Expenses

 

95,057

   

81,700

 

            Deferred Income Taxes

 

499,279

   

53,067

 

            Gains on Asset Dispositions, Net

 

(442,981)

   

(72,441)

 

            Other, Net

 

2,270

   

(2,317)

 

     Dry Hole Costs

 

47,231

   

45,095

 

     Mark-to-Market Commodity Derivative Contracts

           

            Total Gains

 

(480,539)

   

(105,816)

 

            Realized Gains

 

83,765

   

25,180

 

     Other, Net

 

21,052

   

13,354

 

     Changes in Components of Working Capital and Other Assets and Liabilities

           

            Accounts Receivable

 

(128,965)

   

(124,813)

 

            Inventories

 

(167,611)

   

(134,181)

 

            Accounts Payable

 

245,385

   

527,418

 

            Accrued Taxes Payable

 

101,239

   

(40,104)

 

            Other Assets

 

(28,600)

   

(16,051)

 

            Other Liabilities

 

37,022

   

44,348

 

     Changes in Components of Working Capital Associated with Investing and

           

          Financing Activities

 

133,227

   

(216,695)

 

Net Cash Provided by Operating Activities

 

3,341,523

   

2,085,727

 
                 

Investing Cash Flows

           

     Additions to Oil and Gas Properties

 

(4,665,535)

   

(3,740,883)

 

     Additions to Other Property, Plant and Equipment

 

(502,112)

   

(223,072)

 

     Proceeds from Sales of Assets

 

1,294,627

   

126,371

 

     Changes in Components of Working Capital Associated with Investing

           

          Activities

 

(133,512)

   

216,546

 

     Other, Net

 

-

   

(4,206)

 

Net Cash Used in Investing Activities

 

(4,006,532)

   

(3,625,244)

 
                 

Financing Cash Flows

           

     Common Stock Sold

 

1,388,270

   

-

 

     Net Commercial Paper Borrowings

 

-

   

33,700

 

     Long-term Debt Borrowings

 

-

   

991,395

 

     Long-term Debt Repayments

 

-

   

(37,000)

 

     Dividends Paid

 

(124,133)

   

(114,277)

 

     Treasury Stock Purchased

 

(21,357)

   

(10,298)

 

     Proceeds from Stock Options Exercised and Employee Stock Purchase Plan

 

26,887

   

24,527

 

     Debt Issuance Costs

 

-

   

(6,469)

 

     Other, Net

 

285

   

149

 

Net Cash Provided by Financing Activities

 

1,269,952

   

881,727

 
                 

Effect of Exchange Rate Changes on Cash

 

(7,068)

   

(129)

 
                 

Increase (Decrease) in Cash and Cash Equivalents

 

597,875

   

(657,919)

 

Cash and Cash Equivalents at Beginning of Period

 

788,853

   

685,751

 

Cash and Cash Equivalents at End of Period

$

1,386,728

 

$

27,832

 
               

 

EOG RESOURCES, INC.

 

QUANTITATIVE RECONCILIATION OF ADJUSTED NET INCOME (NON-GAAP)

 

TO NET INCOME (LOSS) (GAAP)

 

(Unaudited; in thousands, except per share data)

 
                           
                           

The following chart adjusts three-month and nine-month periods ended September 30, 2011 and 2010 reported Net Income (Loss) (GAAP) to reflect actual net cash

realized from financial commodity price transactions by eliminating the unrealized mark-to-market gains from these transactions, to add back impairment charges

related to certain of EOG's non-core North American assets in the first nine months of 2011 and third quarter of 2010, to eliminate the net gains on asset dispositions

primarily in North America in the first nine months of 2011 and 2010, and to eliminate the change in the estimated fair value of a contingent consideration liability in     

2010 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

 

Nine Months Ended

 
   

September 30,

 

September 30,

 
   

2011

 

2010

 

2011

 

2010

 
                           

Reported Net Income (Loss) (GAAP)

$

540,878

 

$

(70,906)

 

$

970,425

 

$

106,981

 
                           

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

                       

       Total Gains

 

(357,664)

   

(60,998)

   

(480,539)

   

(105,816)

 

       Realized Gains (Losses)

 

52,480

   

(13,647)

   

83,765

   

25,180

 

          Subtotal

 

(305,184)

   

(74,645)

   

(396,774)

   

(80,636)

 
                           

       After-Tax MTM Impact

 

(195,394)

   

(47,791)

   

(254,035)

   

(51,627)

 
                           

Add:  Impairments of Certain Non-Core North American Assets, Net of Tax

 

10,654

   

208,331

   

267,114

   

208,331

 

Less: Net Gains on Asset Dispositions, Net of Tax

 

(132,895)

   

(41,494)

   

(284,005)

   

(46,381)

 

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

 

-

   

(1,587)

   

-

   

(12,941)

 
                           

Adjusted Net Income (Non-GAAP)

$

223,243

 

$

46,553

 

$

699,499

 

$

204,363

 
                           

Net Income (Loss) Per Share (GAAP)

                       

       Basic

$

2.03

 

$

(0.28)

 

$

3.71

 

$

0.43

 

       Diluted

$

2.01

 

$

(0.28)

 

$

3.66

 

$

0.42

 
                           

Adjusted Net Income Per Share (Non-GAAP)

                       

       Basic

$

0.84

 

$

0.19

 

$

2.67

 

$

0.82

 

       Diluted

$

0.83

 

$

0.18

 

$

2.64

 

$

0.80

 
                           

Average Number of Shares (GAAP)

                       

       Basic

 

266,053

   

251,015

   

261,664

   

250,719

 

       Diluted

 

269,292

   

251,015

   

265,245

   

254,444

 
                           

Average Number of Shares (Non-GAAP)

                       

       Basic

 

266,053

   

251,015

   

261,664

   

250,719

 

       Diluted

 

269,292

   

254,572

   

265,245

   

254,444

 
                         

 

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 the three-month and nine-month periods ended September 30, 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

 

Nine Months Ended

 
     

September 30,

 

September 30,

 
     

2011

 

2010

 

2011

 

2010

 
                             

Net Cash Provided by Operating Activities (GAAP)                                                     

$

1,272,283

 

$

784,387

 

$

3,341,523

 

$

2,085,727

 
                             

Adjustments

                       

        Exploration Costs (excluding Stock-Based Compensation Expenses)

 

40,624

   

40,095

   

121,166

   

130,598

 

        Changes in Components of Working Capital and Other Assets and Liabilities

                       

             Accounts Receivable

 

(36,335)

   

85,538

   

128,965

   

124,813

 

             Inventories

 

40,549

   

66,818

   

167,611

   

134,181

 

             Accounts Payable

 

(56,135)

   

(272,540)

   

(245,385)

   

(527,418)

 

             Accrued Taxes Payable

 

(6,928)

   

34,093

   

(101,239)

   

40,104

 

             Other Assets

 

23,804

   

(8,448)

   

28,600

   

16,051

 

             Other Liabilities

 

(49,039)

   

(55,278)

   

(37,022)

   

(44,348)

 

        Changes in Components of Working Capital Associated

                       

             with Investing and Financing Activities

 

(56,587)

   

80,722

   

(133,227)

   

216,695

 
                             

Discretionary Cash Flow (Non-GAAP)

$

1,172,236

 

$

755,387

 

$

3,270,992

 

$

2,176,403

 
                           

 

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.

 
       

 
   

September 30,

 
   

2011

 
         
 

Total Stockholders' Equity - (a)

$

                12,494

 
         
 

Current and Long-Term Debt - (b)

 

                  5,227

 
 

Less: Cash

 

                (1,387)

 
 

Net Debt (Non-GAAP) - (c)

 

                  3,840

 
         
 

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

$

                17,721

 
         
 

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

$

                16,334

 
         
 

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

 

29%

 
         
 

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

 

24%

 
       

 

EOG RESOURCES, INC.

 

 FOURTH QUARTER AND FULL YEAR 2011 FORECAST AND BENCHMARK COMMODITY PRICING

 
                       

    (a)  Fourth Quarter and Full Year 2011 Forecast

 

The forecast items for the fourth 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.  EOG undertakes no

obligation, other than as required by applicable law, to update or revise this forecast, whether as a result of new

information, subsequent events, anticipated or unanticipated circumstances or otherwise.  This forecast, which should be

read in conjunction with the accompanying press release and EOG’s related Current Report on Form 8-K filing, replaces

and supersedes any previously issued guidance or forecast.

 

    (b) Benchmark Commodity Pricing

 

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.

 

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.

 
                     

 
       

ESTIMATED RANGES

 
       

(Unaudited)

 
       

4Q 2011

 

Full Year 2011

 

Daily Production

               

     Crude Oil and Condensate Volumes (MBbld)

               

            United States

119.0

-

126.0

 

98.5

-

104.8

 

            Canada

6.3

-

9.5

 

7.2

-

9.0

 

            Trinidad

2.2

-

2.6

 

3.1

-

3.6

 

                  Total

127.5

-

138.1

 

108.8

-

117.4

 
                       

     Natural Gas Liquids Volumes (MBbld)

               

            United States

41.4

-

47.2

 

37.0

-

43.5

 

            Canada

0.6

-

0.8

 

0.7

-

1.0

 

                  Total

42.0

-

48.0

 

37.7

-

44.5

 
                       

     Natural Gas Volumes (MMcfd)

               

            United States

1,070

-

1,116

 

1,105

-

1,127

 

            Canada

106

-

116

 

126

-

132

 

            Trinidad

310

-

346

 

338

-

357

 

            Other International

8

-

14

 

12

-

14

 

                  Total

1,494

-

1,592

 

1,581

-

1,630

 
                       

     Crude Oil Equivalent Volumes (MBoed)

               

            United States

338.7

-

359.2

 

319.7

-

336.1

 

            Canada

24.6

-

29.6

 

28.9

-

32.0

 

            Trinidad

53.9

-

60.3

 

59.4

-

63.1

 

            Other International

1.3

-

2.3

 

2.0

-

2.3

 

                  Total

418.5

-

451.4

 

410.0

-

433.6

 
                       

Operating Costs

               

      Unit Costs ($/Boe)

               

            Lease and Well

$      6.60

-

$      6.96

 

$        6.14

-

$       6.24

 

            Transportation Costs

$      2.82

-

$      3.06

 

$        2.74

-

$       2.77

 

            Depreciation, Depletion and Amortization

$    16.92

-

$    17.52

 

$      16.20

-

$     16.50

 
                       

Expenses ($MM)

               

      Exploration, Dry Hole and Impairment

$    187.0

-

$    217.0

 

$      535.0

-

$     575.0

 

      General and Administrative

$      85.0

-

$      90.0

 

$      304.5

-

$     309.5

 

      Gathering and Processing

$      20.0

-

$      25.0

 

$        75.5

-

$       80.5

 

      Capitalized Interest

$      12.5

-

$      16.5

 

$        56.8

-

$       60.8

 

      Net Interest

$      45.0

-

$      55.0

 

$      199.0

-

$     209.0

 
                       

Taxes Other Than Income (% of Revenue)

5.5%

-

6.5%

 

6.1%

-

6.3%

 
                       

Income Taxes

               

      Effective Rate

40%

-

50%

 

40%

-

45%

 

      Current Taxes ($MM)

$         60

-

$         75

 

$         260

-

$        280

 
                       

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

               

      Exploration and Development, Excluding Facilities

       

$      5,750

-

$     5,850

 

      Exploration and Development Facilities

       

$         450

-

$        500

 

      Gathering, Processing and Other

       

$         600

-

$        650

 
                       

Pricing - (Refer to Benchmark Commodity Pricing in text)

               

      Crude Oil and Condensate ($/Bbl)

               

             Differentials

               

                    United States - below WTI

$      2.75

-

$      3.50

 

$        4.00

-

$       5.00

 

                    Canada - below WTI

$      5.00

-

$      5.50

 

$        3.25

-

$       3.75

 

                    Trinidad - below WTI

$      2.50

-

$      3.00

 

$        2.50

-

$       3.20

 
                       

      Natural Gas ($/Mcf)

               

             Differentials

               

                    United States - below NYMEX Henry Hub

$      0.08

-

$      0.16

 

$        0.07

-

$       0.11

 

                    Canada - below NYMEX Henry Hub

$      0.48

-

$      0.58

 

$        0.35

-

$       0.43

 
                       

             Realizations

               

                    Trinidad

$      2.50

-

$      3.25

 

$        3.20

-

$       3.39

 

                    Other International

$      5.55

-

$      6.55

 

$        5.58

-

$       5.78

 
                     

 

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.

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