HOUSTON, May 6, 2013 /PRNewswire/ --

• Delivers Outstanding Crude Oil Production Growth of 36 Percent Year-Over-Year in the U.S. and 33 Percent Total Company
• Surpasses Eagle Ford Production Targets
• Announces Successful North Dakota Three Forks Second Bench Test
• Reports Positive Results from Bakken Core 160-Acre Downspacing Program
• Records Success from Permian Delaware and Midland Basins
• Provides Five-Year Outlook

EOG Resources, Inc. (NYSE: EOG) today reported first quarter 2013 net income of $494.7 million, or $1.82 per share. This compares to first quarter 2012 net income of $324.0 million, or $1.20 per share.

Consistent with some analysts' practice of matching realizations to settlement months and making certain other adjustments in order to exclude one-time items, adjusted non-GAAP net income for the first quarter 2013 was $489.9 million, or $1.80 per share. Adjusted non-GAAP net income for the first quarter 2012 was $317.5 million, or $1.17 per share. The results for the first quarter 2013 included net gains on asset dispositions of $115.0 million, net of tax ($0.42 per share) and a previously disclosed non-cash net loss of $105.0 million ($67.2 million after tax, or $0.24 per share) on the mark-to-market of financial commodity contracts. During the quarter, the net cash inflow related to financial commodity contracts was $67.1 million ($43.0 million after tax, or $0.16 per share). (Please refer to the attached tables for the reconciliation of adjusted non-GAAP net income to GAAP net income.)

Earnings per share increased 52 percent, discretionary cash flow increased 28 percent and adjusted EBITDAX rose 25 percent during the first quarter 2013, compared to the first quarter 2012. (Please refer to the attached tables for the reconciliation of non-GAAP discretionary cash flow to net cash provided by operating activities (GAAP) and adjusted EBITDAX (non-GAAP) to income before interest expense and income taxes (GAAP).)

"During the first quarter, EOG met its goal of again delivering strong financial performance and highly competitive overall returns," said Mark G. Papa, Chairman and Chief Executive Officer.

Operational Highlights

EOG's total crude oil production increased 33 percent during the first quarter 2013 compared to the same prior year period. U.S. crude oil production increased 36 percent versus the first quarter 2012.

EOG's South Texas Eagle Ford crude oil operations surpassed expectations due to ongoing refinements in completion techniques. During the quarter, 27 wells were put to sales with initial production rates in excess of 2,500 barrels of crude oil per day (Bopd), including nine which exceeded peak production rates of 3,500 Bopd. EOG's southeastern New Mexico and West Texas operations in the Permian Basin also contributed to ongoing production growth. In addition, modifications in completion techniques and production enhancements combined to make EOG's rate-of-return results from the Bakken the highest in company history.

"Our first quarter results clearly demonstrate EOG's ability to consistently execute a highly efficient crude oil drilling program while simultaneously trimming costs and continually making better wells," Papa said. "To further fuel EOG's momentum, we are channeling as much capital as possible into our high rate-of-return oil plays this year."

In the South Texas Eagle Ford, the Guadalupe Unit #01H, #02H, #03H, #04H, #09H, #10H, #11H and #12H had initial rates ranging from 2,175 to 4,490 Bopd with 265 to 630 barrels per day (Bpd) of natural gas liquids (NGLs) and 1.5 to 3.6 million cubic feet per day (MMcfd) of natural gas in Gonzales County. Other excellent Gonzales County producers were the Lepori Unit #1H, #2H and #3H, which flowed at initial production rates of 3,490, 3,900 and 3,880 Bopd with 530, 585 and 590 Bpd of NGLs and 3.0, 3.4 and 3.4 MMcfd of natural gas, respectively. The Lefevre Unit #1H and #2H had initial crude oil production rates of 3,195 and 3,180 Bopd with 425 and 525 Bpd of NGLs and 2.4 and 3.0 MMcfd of natural gas, respectively. The Otto Unit #4H, #5H and #6H were completed to sales at 3,915, 3,125 and 3,485 Bopd with 570, 485 and 555 Bpd of NGLs and 3.3, 2.8 and 3.2 MMcfd of natural gas, respectively. EOG has 100 percent working interest in these 16 Gonzales County wells.

Southwest of its Gonzales County acreage in Karnes County, EOG reported additional notable well results. The Wolf Unit #1H and #2H, in which EOG has 100 percent working interest, began sales at 5,380 and 4,475 Bopd with 400 and 500 Bpd of NGLs and 2.3 and 2.9 MMcfd of natural gas, respectively. The Lazy Oak Unit #4H and #5H went to initial production at 2,025 and 2,680 Bopd with 170 and 240 Bpd of NGLs and 1.0 and 1.4 MMcfd of natural gas, respectively. EOG has 50 percent working interest in these wells. EOG has 100 percent working interest in the Korth Unit #1H and #2H, which were completed to sales in January at 3,980 and 3,580 Bopd with 415 and 450 Bpd of NGLs and 2.4 and 2.6 MMcfd of natural gas, respectively.

In February 2013, EOG increased the reserve potential on its Eagle Ford acreage by 600 million barrels of crude oil equivalent (Boe) to 2.2 billion Boe and identified a 12-year inventory of more than 4,900 remaining drilling locations. Currently, EOG is pursuing manufacturing-type development of its highest rate-of-return asset with 40-acre to 65-acre spacing between wells. Based on efficiency gains and well cost improvements, EOG plans to increase its drilling program in the Eagle Ford from 400 to 425 net wells this year. If crude oil prices remain at or above current levels, EOG will further augment its drilling program in 2014.

In the Permian Basin, EOG has advanced development of its three combo shale assets, which are comprised of crude oil, NGLs and natural gas. In the Delaware Basin where EOG is focusing on the Wolfcamp and Leonard shales, it is assessing multiple producing horizons and determining optimal spacing. In the Midland Basin Wolfcamp, EOG also continues to refine completion techniques, as well as evaluate the reserve potential and determine optimal spacing on its 133,000 net acres.

EOG has accumulated 114,000 net acres in its newest asset, the West Texas Delaware Basin Wolfcamp. Its third successful horizontal well in the play, the Apache State 57 #1101H, had an initial production rate of 815 Bopd with 600 Bpd of NGLs and 3.8 MMcfd of natural gas. EOG has 100 percent working interest in this Reeves County well located south of the New Mexico border. Based on individual well reserves of 700,000 Boe, net, and over 1,100 drilling locations, EOG's estimated net reserve potential in the Delaware Basin Wolfcamp is 800 million Boe. 

In the northeastern part of the Delaware Basin where EOG is targeting the Leonard shale, it completed several wells in Lea County, New Mexico. The Vaca 24 Fed Com #2H, #3H and #4H began production at 1,230, 1,410 and 1,205 Bopd with 140, 140 and 230 Bpd of NGLs and 780, 760 and 1,290 thousand cubic feet per day (Mcfd) of natural gas, respectively. EOG has 90 percent working interest in these wells. EOG has 100 percent working interest in the Vanguard 30 State Com #1H, which had an initial production rate of 1,540 Bopd with 165 Bpd of NGLs and 915 Mcfd of natural gas. The Excelsior 12 #1H, in which EOG has 48 percent working interest, was completed to sales in Loving County, Texas, adjacent to the New Mexico border, at 1,010 Bopd with 260 Bpd of NGLs and 1.4 MMcfd of natural gas.

East of the Delaware Basin in the Midland Basin Wolfcamp shale, EOG completed a number of wells in Irion County, Texas. The Munson #1005H, #1006H and #1007H began production at 965, 970 and 1,290 Bopd with 55, 60 and 100 Bpd of NGLs and 400, 430 and 730 Mcfd of natural gas, respectively. EOG has 85 percent working interest in these wells. The Faudree #10H, #11H and #12H were completed at 560, 670 and 810 Bopd with 50, 70 and 60 Bpd of NGLs and 365, 490 and 420 Mcfd of natural gas, respectively. EOG has 75 percent working interest in these wells. EOG has 80 percent working interest in the University 40D #0702H and #0701H, which began production at 660 and 705 Bopd with 75 and 95 Bpd of NGLs with 550 and 685 Mcfd of natural gas, respectively.

In North Dakota on its Antelope Extension acreage in McKenzie County, EOG previously reported success from both the Bakken formation and the first bench, the upper pay zone, of the Three Forks. During the first quarter, EOG achieved success from its first production test of the second bench of the Three Forks. The Riverview 03-3130H, in which EOG has 94 percent working interest, was completed to sales at 3,150 Bopd. EOG plans to continue testing the second bench in the same area this year. Also in McKenzie County, the West Clark 101-2425H was completed in the first bench of the Three Forks at an initial production rate of 2,205 Bopd. EOG has 100 percent working interest in the well.

In the Bakken Core Parshall Field, recent initial production rates and well results from EOG's 160-acre spacing between wells continues to be encouraging. The Wayzetta 136-2127H was completed at an initial production rate of 1,910 Bopd. Also in the Core, the Fertile 53-3024H began sales at 1,725 Bopd. EOG has 63 and 67 percent working interest in these wells, respectively. The Van Hook 20-0107H and 127-0107H were completed to sales at rates of 2,375 and 2,170 Bopd, respectively. EOG has 55 percent working interest in these wells. If crude oil prices remain in the current range, EOG plans to increase the level of its North Dakota drilling activity in 2014.

"Capturing key acreage in the Eagle Ford, Permian and Bakken/Three Forks has provided EOG with the opportunity to make good assets even better," Papa said. "We are particularly enthused about the Delaware Basin Wolfcamp and Leonard plays. With the addition of these assets, EOG's portfolio is grounded by three dynamic crude oil production growth drivers that should continue to generate best-in-class growth for many years."

Five-Year Outlook

Based on confidence in its current asset base and multi-year inventory of drilling locations, EOG is targeting sustained peer-group leading high growth rates of crude oil production for the 2013-2017 period, provided WTI prices remain at or above the mid-$80 level. With a solid inventory of combo plays, growth from NGLs also should be robust. North American natural gas is expected to show a moderate increase next year and beyond. Production in Trinidad and China during 2014 to 2017 should be flat. Overall, EOG expects to achieve a very positive total company production growth profile while maintaining a strong balance sheet.

"EOG's outstanding asset base allows us to define long-term production gains with confidence because these onshore domestic assets are largely underpinned by high rate-of-return crude oil growth," Papa said.

Hedging Activity

EOG has hedges in place for approximately 46 percent of its North American crude oil production for the remainder of 2013. For the period May 1 through June 30, 2013, EOG has crude oil financial price swap contracts in place for 101,000 Bpd at a weighted average price of $99.29 per barrel, excluding unexercised options. For the period July 1 through December 31, 2013, EOG has hedged 93,000 Bpd at a weighted average price of $98.44 per barrel, excluding unexercised options.

Based on its increased production weighting to crude oil and to better protect cash flows, EOG has implemented a hedge program for 2014. For the period January 1 through June 30, 2014, EOG has crude oil financial price swap contracts in place for 42,000 Bpd at a weighted average price of $95.86 per barrel, excluding unexercised options.

EOG also has hedged some natural gas volumes for 2013 and 2014. For the period June 1 through October 31, 2013, EOG has natural gas financial price swap contracts in place for 200,000 million British thermal units per day (MMBtud) at a weighted average price of $4.72 per million British thermal units (MMBtu), excluding unexercised options. For the period November 1 through December 31, 2013, EOG has hedged 150,000 MMBtud at a weighted average price of $4.79 per MMBtu, excluding unexercised options. For the full year 2014, EOG has natural gas financial price swap contracts in place for 170,000 MMBtud at a weighted average price of $4.54 per MMBtu, excluding unexercised options. (For a comprehensive summary of crude oil and natural gas derivative contracts, please refer to the attached tables.)           

Capital Structure

As of May 1, 2013, EOG had closed on approximately $500 million of asset sales, 90 percent of its stated goal. At March 31, 2013, EOG's total debt outstanding was $6,312 million for a debt-to-total capitalization ratio of 31 percent. Taking into account cash on the balance sheet of $1,108 million at the end of the first quarter, EOG's net debt was $5,204 million for a net debt-to-total capitalization ratio of 27 percent. (Please refer to the attached tables for the reconciliation of net debt (non-GAAP) to current and long-term debt (GAAP) and the reconciliation of net debt-to-total capitalization ratio (non-GAAP) to debt-to-total capitalization ratio (GAAP).)

Conference Call Scheduled for May 7, 2013

EOG's first quarter 2013 results conference call will be available via live audio webcast at 8 a.m. Central time (9 a.m. Eastern time) on Tuesday, May 7, 2013. To listen, log on to www.eogresources.com. The webcast will be archived on EOG's website through May 21, 2013.

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, statements regarding future commodity prices 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," "should" 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, generate income or cash flows or pay dividends 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, unknown or currently unforeseen 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 and condensate, natural gas liquids, 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, advanced completion technologies and hydraulic fracturing;
• 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 and capital expenditure requirements 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, and EOG's ability to retain mineral licenses and leases;
• 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, hydraulic fracturing and access to and use of water, laws and regulations imposing conditions and restrictions on drilling and completion operations and laws and regulations with respect to derivatives and hedging activities;
• 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, and to otherwise satisfy its capital expenditure requirements;
• 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 conditions and developments around the world (such as political instability and armed conflict), including in the areas in which EOG operates;
• the use of competing energy sources and the development of alternative energy sources;
• the extent to which EOG incurs uninsured losses and liabilities or losses and liabilities in excess of its insurance coverage;
• acts of war and terrorism and responses to these acts;
• physical, electronic and cyber security breaches; and
• the other factors described under Item 1A, "Risk Factors", on pages 16 through 23 of EOG's Annual Report on Form 10-K for the fiscal year ended December 31, 2012 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.

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 "potential" reserves and/or other 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, 2012, 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.  In addition, reconciliation and calculation schedules for non-GAAP financial measures can be found on the EOG website at www.eogresources.com.   

SOURCE EOG Resources, Inc.