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EOG Resources Announces First Quarter 2017 Results and Converts 1.4 BnBoe Net Resource Potential to Premium

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HOUSTON, May 8, 2017 /PRNewswire/ --

  • Exceeds High-End of Oil Production Forecast
  • Increases Premium Net Resource Potential by 27 Percent to 6.5 BnBoe
  • Reduces Completed Well Costs by 6 Percent in Major Plays Compared to 2016
  • Completes Four Record-Setting Permian Basin Horizontal Oil Wells

EOG Resources, Inc. (NYSE: EOG) (EOG) today reported first quarter 2017 net income of $28.5 million, or $0.05 per share. This compares to a first quarter 2016 net loss of $471.8 million, or $0.86 per share. 

Adjusted non-GAAP net income for the first quarter 2017 was $89.4 million, or $0.15 per share, compared to an adjusted non-GAAP net loss of $455.4 million, or $0.83 per share, for the same prior year period.  Adjusted non-GAAP net income (loss) is calculated by matching hedge realizations to settlement months and making certain other adjustments in order to exclude one-time items.  (Please refer to the attached tables for the reconciliation of non-GAAP measures to GAAP measures.)

Higher commodity prices, increased production volumes, well productivity improvements and overall per-unit cost reductions resulted in increases to adjusted non-GAAP net income, discretionary cash flow and EBITDAX during the first quarter 2017 compared to the first quarter 2016.  (Please refer to the attached tables for the reconciliation of non-GAAP measures to GAAP measures.)

Operational Highlights

EOG set a company record for crude oil volumes in the first quarter 2017 by producing 315,700 barrels of oil per day (Bopd), an 18 percent increase compared to the first quarter 2016.  This strong production growth reflects the company's premium drilling strategy and technical advances in its prolific plays across multiple basins.  EOG defines premium inventory as prospective well locations that will earn a minimum 30 percent direct after-tax rate of return at $40 crude oil and $2.50 natural gas prices.

EOG continues to reduce total well costs in each of its major plays.  First quarter 2017 average completed well costs were 6 percent lower than full year 2016 averages in the Eagle Ford, Delaware Basin and Bakken using normalized lateral lengths.  For all three plays, the overall cost reductions were achieved in spite of service and equipment price inflation in certain areas, which were more than offset by continued advances in drilling and completion tools and techniques, benefits from extended lateral lengths, and new contracts at lower prices.

During the first quarter 2017, lease and well expenses on a per-unit basis increased 4 percent compared to the same prior year period primarily because of last year's disposition of natural gas producing assets with lower per-unit operating costs, the Yates acquisition properties with higher per-unit operating costs, and higher production expenses in the United Kingdom.  Per-unit transportation costs decreased 8 percent and depreciation, depletion and amortization expenses decreased 14 percent on a per-unit basis year-over-year.  Total general and administrative expenses decreased 3 percent compared to the first quarter 2016 primarily due to expenses related to a voluntary retirement program in 2016.

"EOG continues to lead the industry in well productivity, with record-setting well performance driving company record crude oil volumes," said William R. "Bill" Thomas, Chairman and Chief Executive Officer.  "During the first quarter 2017, we increased our premium inventory by 1,200 net well locations and 1.4 BnBoe of premium net resource potential, which is approximately 2.5 times the number of wells we expect to complete during all of 2017.  EOG remains committed to creating significant shareholder value through low-cost, high-return growth and organic resource expansion."

Delaware Basin

In the first quarter 2017, EOG continued to increase development activity and expand resource potential in the Delaware Basin.  EOG increased its Delaware Basin premium net locations by 700 to 4,150 locations. 

EOG completed 33 wells in the Delaware Basin Wolfcamp in the first quarter 2017 with an average treated lateral length of 5,600 feet per well and average 30-day initial production rates per well of 2,855 barrels of oil equivalent per day (Boed), or 1,850 Bopd, 450 barrels per day (Bpd) of natural gas liquids (NGLs) and 3.3 million cubic feet per day (MMcfd) of natural gas. 

Of special note is a four-well pattern in Lea County, N.M., the Whirling Wind 14 Fed Com #701H and the Whirling Wind 11 Fed Com #702H - #704H which were completed with an average treated lateral length of 7,100 feet per well and average 30-day initial production rates per well of 5,060 Boed, or 3,510 Bopd, 700 Bpd of NGLs and 5.1 MMcfd of natural gas.  Each well exceeded the prior all-time industry record for 30-day initial production from Permian Basin horizontal oil wells. 

"EOG's Whirling Wind wells shattered industry records in the Permian Basin," said Thomas.  "Our advanced technology and proprietary techniques are leading to break-through well performance across our diverse portfolio of premium plays."

In the Delaware Basin Bone Spring, EOG completed three wells in the first quarter 2017 with an average treated lateral length of 8,800 feet per well and average 30-day initial production rates per well of 3,255 Boed, or 2,525 Bopd, 335 Bpd of NGLs and 2.4 MMcfd of natural gas. 

In the Delaware Basin Leonard, EOG completed three wells in the first quarter 2017 with an average treated lateral length of 3,800 feet per well and average 30-day initial production rates per well of 840 Boed, or 505 Bopd, 150 Bpd of NGLs and 1.1 MMcfd of natural gas.  These first quarter 2017 completions were drilled prior to 2016. 

South Texas Eagle Ford

EOG's South Texas Eagle Ford continued to be the most active area in the company in the first quarter 2017.  In addition to significant development activity, EOG expanded its Eagle Ford premium net locations by 500 to more than 2,400 locations.  Part of the increase in premium locations was enabled by a shift to longer lateral drilling units.  Seven wells that began production in the first quarter 2017 had lateral lengths in excess of 10,000 feet.

In the first quarter 2017, EOG completed 65 wells in the Eagle Ford with an average treated lateral length of 6,500 feet per well and average 30-day initial production rates per well of 1,390 Boed, or 1,130 Bopd, 130 Bpd of NGLs and 0.8 MMcfd of natural gas.

South Texas Austin Chalk

In the first quarter 2017, testing continued in the South Texas Austin Chalk.  EOG completed five wells in Karnes County with an average treated lateral length of 5,700 feet per well and average 30-day initial production rates per well of 2,605 Boed, or 1,895 Bopd, 360 Bpd of NGLs and 2.1 MMcfd of natural gas.

Rockies and the Bakken

During the first quarter, EOG continued to develop its premium Powder River Basin position and reduce its inventory of drilled uncompleted wells in the Bakken.    

In the Powder River Basin, EOG completed five wells in the first quarter 2017 with an average treated lateral length of 4,900 feet per well and average 30-day initial production rates per well of 1,160 Boed, or 950 Bopd, 75 Bpd of NGLs and 0.8 MMcfd of natural gas. 

In the North Dakota Bakken, EOG completed 27 wells in the first quarter 2017 with an average treated lateral length of 8,500 feet per well and average 30-day initial production rates per well of 715 Boed, or 640 Bopd, 40 Bpd of NGLs and 0.2 MMcfd of natural gas.  The first quarter 2017 completions in the Bakken included 24 wells that were drilled prior to 2016.  Three wells completed in the first quarter 2017 were the first wells completed in the Bakken Lite area with EOG's high-density fracs.  These three wells had an average treated lateral length of 7,700 feet per well and average 30-day initial production rates per well of 955 Boed, or 795 Bopd, 85 Bpd of NGLs and 0.5 MMcfd of natural gas. 

Hedging Activity

For the period June 1 through November 30, 2017, EOG has natural gas financial price swap contracts in place for 30,000 million British thermal units (MMBtu) per day at a weighted average price of $3.10 per MMBtu.  For the period March 1 through November 30, 2018, EOG has natural gas financial price swap contracts in place for 35,000 MMBtu per day at a weighted average price of $3.00 per MMBtu.

For the period June 1 through November 30, 2017, EOG has sold natural gas call option contracts for 213,750 MMBtu per day at an average strike price of $3.44 per MMBtu.  For the period March 1 through November 30, 2018, EOG has sold natural gas call option contracts for 120,000 MMBtu per day at an average strike price of $3.38 per MMBtu.

For the period June 1 through November 30, 2017, EOG has purchased natural gas put option contracts for 171,000 MMBtu per day at an average strike price of $2.92 per MMBtu.  For the period March 1 through November 30, 2018, EOG has purchased natural gas put option contracts for 96,000 MMBtu per day at an average strike price of $2.94 per MMBtu.   

For the period June 1 through November 30, 2017, EOG has natural gas collar contracts for 80,000 MMBtu per day at an average ceiling price of $3.69 per MMBtu and an average floor price of $3.20 per MMBtu.     

EOG did not have a net crude oil hedge position as of March 31, 2017. 

A comprehensive summary of crude oil and natural gas derivative contracts is provided in the attached tables.  

Capital Structure and Asset Sales

At March 31, 2017, EOG's total debt outstanding was $7.0 billion for a debt-to-total capitalization ratio of 33 percent. Considering cash on the balance sheet at the end of the first quarter, EOG's net debt was $5.4 billion for a net debt-to-total capitalization ratio of 28 percent.  For a reconciliation of non-GAAP measures to GAAP measures, please refer to the attached tables.

Proceeds from asset sales year-to-date 2017 totaled $118 million.  This includes proceeds from two transactions that closed in the second quarter 2017.

Conference Call May 9, 2017

EOG's first quarter 2017 results conference call will be available via live audio webcast at 9 a.m. Central time (10 a.m. Eastern time) on Tuesday, May 9, 2017.  To listen, log on to the Investors Overview page on the EOG website at http://investors.eogresources.com/overview.  The webcast will be archived on EOG's website through May 23, 2017.

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, 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, costs and asset sales, 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, reduce or otherwise control operating and capital costs, 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, extent and duration of changes in prices for, supplies of, 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 is successful in its efforts to economically develop its acreage in, produce reserves and achieve anticipated production levels from, and maximize reserve recovery from, its existing and future crude oil and natural gas exploration and development projects;
  • the extent to which EOG is successful in its efforts to market its crude oil and condensate, natural gas liquids, natural gas and related commodity production;
  • the availability, proximity and capacity of, and costs associated with, appropriate gathering, processing, compression, transportation and refining 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, health and safety laws and regulations relating to air emissions, disposal of produced water, drilling fluids and other wastes, hydraulic fracturing and access to and use of water; laws and regulations imposing conditions or restrictions on drilling and completion operations and on the transportation of crude oil and natural gas; laws and regulations with respect to derivatives and hedging activities; and laws and regulations with respect to the import and export of crude oil, natural gas and related commodities;
  • 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 the acquisition of licenses, leases and properties, employees and other personnel, facilities, equipment, materials and services;
  • the availability and cost of employees and other personnel, facilities, equipment, materials (such as water) 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 (by EOG or third parties) of production, gathering, processing, refining, 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 to which EOG is successful in its completion of planned asset dispositions;
  • 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 13 through 22 of EOG's Annual Report on Form 10-K for the fiscal year ended December 31, 2016, 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 duration and 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).  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, 2016, 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.

For Further Information Contact:

Investors

 

Cedric W. Burgher

 

(713) 571-4658

 

David J. Streit

 

(713) 571-4902

 

W. John Wagner

 

(713) 571-4404

   
 

Media and Investors

 

Kimberly M. Ehmer

 

(713) 571-4676

 

EOG RESOURCES, INC.

Financial Report

(Unaudited; in millions, except per share data)

           
 

Three Months Ended

 

March 31,

 

2017

 

2016

           

Net Operating Revenues

$

2,610.6

 

$

1,354.3

Net Income (Loss)

$

28.5

 

$

(471.8)

Net Income (Loss) Per Share 

         

        Basic

$

0.05

 

$

(0.86)

        Diluted

$

0.05

 

$

(0.86)

Average Number of Common Shares

         

        Basic

 

573.9

   

546.7

        Diluted

 

578.6

   

546.7

           
           

Summary Income Statements

(Unaudited; in thousands, except per share data)

           
 

Three Months Ended

 

March 31,

 

2017

 

2016

Net Operating Revenues

     

        Crude Oil and Condensate

$

1,430,061

 

$

753,711

        Natural Gas Liquids

 

153,444

   

75,319

        Natural Gas

 

230,602

   

165,503

        Gains on Mark-to-Market Commodity

         

           Derivative Contracts

 

62,020

   

5,435

        Gathering, Processing and Marketing

 

726,537

   

333,953

        Gains (Losses) on Asset Dispositions, Net

 

(16,758)

   

9,147

        Other, Net

 

24,659

   

11,281

               Total

 

2,610,565

   

1,354,349

Operating Expenses

         

        Lease and Well

 

255,777

   

240,865

        Transportation Costs

 

178,714

   

190,454

        Gathering and Processing Costs

 

38,144

   

28,524

        Exploration Costs

 

56,894

   

29,829

        Dry Hole Costs

 

-

   

246

        Impairments 

 

193,187

   

71,617

        Marketing Costs

 

736,536

   

340,854

        Depreciation, Depletion and Amortization

 

816,036

   

928,891

        General and Administrative

 

97,238

   

100,531

        Taxes Other Than Income

 

130,293

   

60,679

               Total

 

2,502,819

   

1,992,490

           

Operating Income (Loss)

 

107,746

   

(638,141)

           

Other Income (Expense), Net

 

3,151

   

(4,437)

           

Income (Loss) Before Interest Expense and Income Taxes

110,897

   

(642,578)

           

Interest Expense, Net

 

71,515

   

68,390

           

Income (Loss) Before Income Taxes

 

39,382

   

(710,968)

           

Income Tax Provision (Benefit)

 

10,865

   

(239,192)

           

Net Income (Loss)

$

28,517

 

$

(471,776)

           

Dividends Declared per Common Share

$

0.1675

 

$

0.1675

 
 

EOG RESOURCES, INC.

Operating Highlights

(Unaudited)

           
 

Three Months Ended

 

March 31,

 

2017

 

2016

Wellhead Volumes and Prices

 

Crude Oil and Condensate Volumes (MBbld) (A)

 

      United States

 

312.5

   

265.8

      Trinidad

 

0.8

   

0.7

      Other International (B)

 

2.4

   

1.4

            Total

 

315.7

   

267.9

           

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

         

      United States

$

50.38

 

$

30.87

      Trinidad

 

41.56

   

22.78

      Other International (B)

 

47.77

   

32.33

            Composite

 

50.34

   

30.85

           

Natural Gas Liquids Volumes (MBbld) (A)

         

      United States

 

78.8

   

79.4

      Other International (B)

 

-

   

-

            Total

 

78.8

   

79.4

           

Average Natural Gas Liquids Prices ($/Bbl) (C)

         

      United States

$

21.63

 

$

10.41

      Other International (B)

 

-

   

-

            Composite

 

21.63

   

10.41

           

Natural Gas Volumes (MMcfd) (A)

         

      United States

 

728

   

829

      Trinidad

 

308

   

361

      Other International (B)

 

22

   

25

            Total

 

1,058

   

1,215

           

Average Natural Gas Prices ($/Mcf) (C)

         

      United States

$

2.32

 

$

1.27

      Trinidad

 

2.57

   

1.88

      Other International (B)

 

3.76

   

3.63

            Composite

 

2.42

   

1.50

           

Crude Oil Equivalent Volumes (MBoed) (D)

         

      United States 

 

512.6

   

483.6

      Trinidad

 

52.2

   

60.8

      Other International (B)

 

5.9

   

5.5

            Total

 

570.7

   

549.9

           

Total MMBoe (D)

 

51.4

   

50.0

 

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

(B) Other International includes EOG's United Kingdom, China, Canada and Argentina operations.  The Argentina operations were sold in the third quarter of 2016.

(C) 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 equivalent volumes are determined using a 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,

 

2017

 

2016

ASSETS

Current Assets

         

     Cash and Cash Equivalents

$

1,546,566

 

$

1,599,895

     Accounts Receivable, Net

 

1,187,112

   

1,216,320

     Inventories

 

314,194

   

350,017

     Assets from Price Risk Management Activities

 

1,142

   

-

     Income Taxes Receivable

 

80,503

   

12,305

     Other

 

264,559

   

206,679

            Total

 

3,394,076

   

3,385,216

           

Property, Plant and Equipment

         

     Oil and Gas Properties (Successful Efforts Method)

 

50,195,608

   

49,592,091

     Other Property, Plant and Equipment

 

3,977,721

   

4,008,564

            Total Property, Plant and Equipment

 

54,173,329

   

53,600,655

     Less:  Accumulated Depreciation, Depletion and Amortization

 

(28,566,869)

   

(27,893,577)

            Total Property, Plant and Equipment, Net

 

25,606,460

   

25,707,078

Deferred Income Taxes

 

16,232

   

16,140

Other Assets

 

195,206

   

190,767

Total Assets

$

29,211,974

 

$

29,299,201

           

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities

         

     Accounts Payable

$

1,556,875

 

$

1,511,826

     Accrued Taxes Payable

 

143,710

   

118,411

     Dividends Payable

 

96,155

   

96,120

     Liabilities from Price Risk Management Activities

 

7,636

   

61,817

     Current Portion of Long-Term Debt

 

6,579

   

6,579

     Other

 

221,052

   

232,538

            Total

 

2,032,007

   

2,027,291

           
           

Long-Term Debt

 

6,980,008

   

6,979,779

Other Liabilities

 

1,248,102

   

1,282,142

Deferred Income Taxes

 

5,023,626

   

5,028,408

Commitments and Contingencies

         
           

Stockholders' Equity

         

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

         

          577,636,588Shares Issued at March 31, 2017 and 576,950,272

         

          Shares Issued at December 31, 2016

 

205,776

   

205,770

     Additional Paid in Capital

 

5,447,291

   

5,420,385

     Accumulated Other Comprehensive Loss

 

(18,664)

   

(19,010)

     Retained Earnings

 

8,329,951

   

8,398,118

     Common Stock Held in Treasury, 378,442 Shares at March 31, 2017

         

          and 250,155 Shares at December 31, 2016

 

(36,123)

   

(23,682)

            Total Stockholders' Equity

 

13,928,231

   

13,981,581

Total Liabilities and Stockholders' Equity

$

29,211,974

 

$

29,299,201

 
 

EOG RESOURCES, INC.

Summary Statements of Cash Flows

(Unaudited; in thousands)

           
 

Three Months Ended

 

March 31,

 

2017

 

2016

Cash Flows from Operating Activities

         

Reconciliation of Net Income (Loss) to Net Cash Provided by Operating Activities:

         

     Net Income (Loss)

$

28,517

 

$

(471,776)

     Items Not Requiring (Providing) Cash

         

            Depreciation, Depletion and Amortization

 

816,036

   

928,891

            Impairments 

 

193,187

   

71,617

            Stock-Based Compensation Expenses

 

30,460

   

32,380

            Deferred Income Taxes

 

694

   

(196,696)

           (Gains) Losses on Asset Dispositions, Net

 

16,758

   

(9,147)

            Other, Net

 

(3,052)

   

5,442

     Dry Hole Costs

 

-

   

246

     Mark-to-Market Commodity Derivative Contracts

         

            Total Gains

 

(62,020)

   

(5,435)

            Net Cash Received from Settlements of Commodity Derivative Contracts 

 

1,912

   

17,687

     Other, Net

 

(428)

   

1,407

     Changes in Components of Working Capital and Other Assets and Liabilities

         

            Accounts Receivable

 

28,688

   

132,398

            Inventories

 

24,736

   

57,578

            Accounts Payable

 

20,426

   

(289,627)

            Accrued Taxes Payable

 

(38,613)

   

2,460

            Other Assets

 

(44,677)

   

3,946

            Other Liabilities

 

(51,251)

   

7,992

     Changes in Components of Working Capital Associated with Investing and Financing

         

        Activities

 

(63,324)

   

2,228

Net Cash Provided by Operating Activities

 

898,049

   

291,591

           

Investing Cash Flows

         

     Additions to Oil and Gas Properties

 

(912,227)

   

(547,399)

     Additions to Other Property, Plant and Equipment

 

(34,336)

   

(25,792)

     Proceeds from Sales of Assets

 

46,812

   

6,667

     Changes in Components of Working Capital Associated with Investing Activities

 

63,324

   

(2,228)

Net Cash Used in Investing Activities

 

(836,427)

   

(568,752)

           

Financing Cash Flows

         

     Net Commercial Paper Repayments

 

-

   

(259,718)

     Long-Term Debt Borrowings

 

-

   

991,097

     Long-Term Debt Repayments

 

-

   

(400,000)

     Dividends Paid

 

(96,707)

   

(92,170)

     Treasury Stock Purchased

 

(18,628)

   

(12,672)

     Proceeds from Stock Options Exercised and Employee Stock Purchase Plan 

 

2,356

   

2,688

     Debt Issuance Costs

 

-

   

(1,592)

     Repayment of Capital Lease Obligation

 

(1,619)

   

(1,569)

Net Cash (Used in) Provided by Financing Activities

 

(114,598)

   

226,064

           

Effect of Exchange Rate Changes on Cash

 

(353)

   

1,072

           

Decrease in Cash and Cash Equivalents

 

(53,329)

   

(50,025)

Cash and Cash Equivalents at Beginning of Period

 

1,599,895

   

718,506

Cash and Cash Equivalents at End of Period

$

1,546,566

 

$

668,481

 

EOG RESOURCES, INC.

Quantitative Reconciliation of Adjusted Net Income (Loss) (Non-GAAP)

To Net Income (Loss) (GAAP)

(Unaudited; in thousands, except per share data)

                               
                               

The following chart adjusts the three-month periods ended March 31, 2017 and 2016 reported Net Income (Loss) (GAAP) to reflect actual net cash received from settlements of commodity derivative contracts by eliminating the unrealized mark-to-market gains from these transactions, to eliminate the net (gains) losses on asset dispositions in 2017 and 2016, to add back impairment charges related to certain of EOG's assets in 2017 and to add back certain voluntary retirement expense in 2016.  EOG believes this presentation may be useful to investors who follow the practice of some industry analysts who adjust reported company earnings to match hedge realizations to production settlement months and make certain other adjustments to exclude non-recurring items.  EOG management uses this information for purposes of comparing its financial performance with the financial performance of other companies in the industry.

                               
 

Three Months Ended 

 

Three Months Ended 

 

March 31, 2017

 

March 31, 2016

                               
     

Income

     

Diluted

     

Income

     

Diluted

 

Before

 

Tax

 

After

 

Earnings

 

Before

 

Tax

 

After

 

Earnings

 

Tax

 

Impact

 

Tax

 

per Share

 

Tax

 

Impact

 

Tax

 

per Share

Reported Net Income (Loss) (GAAP)

$  39,382

 

$(10,865)

 

$28,517

 

$      0.05

 

$(710,968)

 

$239,192

 

$(471,776)

 

$     (0.86)

Adjustments:

                             

   Gains on Mark-to-Market Commodity

                             

         Derivative Contracts

(62,020)

 

22,191

 

(39,829)

 

(0.07)

 

(5,435)

 

1,938

 

(3,497)

 

(0.01)

   Net Cash Received from Settlements of

                             

        Commodity Derivative Contracts

1,912

 

(684)

 

1,228

 

-

 

17,687

 

(6,306)

 

11,381

 

0.02

Add:  Net (Gains) Losses on Asset Dispositions

16,758

 

(5,736)

 

11,022

 

0.02

 

(9,147)

 

3,210

 

(5,937)

 

(0.01)

Add:  Impairments

137,751

 

(49,287)

 

88,464

 

0.15

 

-

 

-

 

-

 

-

Add:  Voluntary Retirement Expense

-

 

-

 

-

 

-

 

22,391

 

(7,982)

 

14,409

 

0.03

Adjustments to Net Income (Loss)

94,401

 

(33,516)

 

60,885

 

0.10

 

25,496

 

(9,140)

 

16,356

 

0.03

                               

Adjusted Net Income (Loss) (Non-GAAP)

$133,783

 

$(44,381)

 

$89,402

 

$      0.15

 

$(685,472)

 

$230,052

 

$(455,420)

 

$     (0.83)

                               

Average Number of Common Shares (GAAP)

                             

        Basic

           

573,935

             

546,715

        Diluted

           

578,593

             

546,715

                               

Average Number of Common Shares (Non-GAAP)

                             

       Basic

           

573,935

             

546,715

       Diluted

           

578,593

             

546,715

 

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 periods ended March 31, 2017 and 2016 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), Excess Tax Benefits from Stock-Based Compensation, 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,

 

2017

 

2016

           

Net Cash Provided by Operating Activities (GAAP)

$

898,049

 

$

291,591

           

Adjustments:

         

Exploration Costs (excluding Stock-Based Compensation Expenses) 

 

50,734

   

23,357

Changes in Components of Working Capital and Other Assets

         

and Liabilities

         

Accounts Receivable

 

(28,688)

   

(132,398)

Inventories

 

(24,736)

   

(57,578)

Accounts Payable

 

(20,426)

   

289,627

Accrued Taxes Payable

 

38,613

   

(2,460)

Other Assets

 

44,677

   

(3,946)

Other Liabilities

 

51,251

   

(7,992)

Changes in Components of Working Capital Associated with 

         

Investing and Financing Activities

 

63,324

   

(2,228)

 

Discretionary Cash Flow (Non-GAAP)

$

1,072,798

 

$

397,973

           

Discretionary Cash Flow (Non-GAAP) - Percentage Increase

 

170%

     
 
 

EOG RESOURCES, INC.

Quantitative Reconciliation of Adjusted Earnings Before Interest Expense, Net, 

Income Taxes, Depreciation, Depletion and Amortization, Exploration Costs, 

Dry Hole Costs, Impairments and Additional Items (Adjusted EBITDAX)

 (Non-GAAP) to Net Income (Loss) (GAAP)

(Unaudited; in thousands)

             

The following chart adjusts the three-month periods ended March 31, 2017 and 2016 reported Net Income (Loss) (GAAP) to Earnings Before Interest Expense, Net, Income Taxes (Income Tax Provision (Benefit)), Depreciation, Depletion and Amortization, Exploration Costs, Dry Hole Costs and Impairments (EBITDAX) (Non-GAAP) and further adjusts such amount to reflect actual net cash received from settlements of commodity derivative contracts by eliminating the unrealized mark-to-market (MTM) gains from these transactions and to eliminate the net (gains) losses on asset dispositions.  EOG believes this presentation may be useful to investors who follow the practice of some industry analysts who adjust reported Net Income (Loss) (GAAP) to add back Interest Expense, Net, Income Taxes (Income Tax Provision (Benefit)), Depreciation, Depletion and Amortization, Exploration Costs, Dry Hole Costs and Impairments and further adjust such amount to match realizations to production settlement months and make certain other adjustments to exclude non-recurring and certain other items.  EOG management uses this information for purposes of comparing its financial performance with the financial performance of other companies in the industry.

             
 

Three Months Ended

 
 

March 31,

 
 

2017

 

2016

 
             

Net Income (Loss) (GAAP)

$

28,517

 

$

(471,776)

 
             

Adjustments:

           

     Interest Expense, Net

 

71,515

   

68,390

 

     Income Tax Provision (Benefit)

 

10,865

   

(239,192)

 

     Depreciation, Depletion and Amortization

 

816,036

   

928,891

 

     Exploration Costs

 

56,894

   

29,829

 

     Dry Hole Costs

 

-

   

246

 

     Impairments 

 

193,187

   

71,617

 

             EBITDAX (Non-GAAP)

 

1,177,014

   

388,005

 

     Total Gains on MTM Commodity Derivative Contracts  

 

(62,020)

   

(5,435)

 

     Net Cash Received from Settlements of Commodity

           

         Derivative Contracts

 

1,912

   

17,687

 

     (Gains) Losses on Asset Dispositions, Net

 

16,758

   

(9,147)

 
             

Adjusted EBITDAX (Non-GAAP)

$

1,133,664

 

$

391,110

 
             

Adjusted EBITDAX (Non-GAAP) - Percentage Increase

 

190%

       
 
 

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.

           
 

At

 

At

 

March 31,

 

December 31,

 

2017

 

2016

           

Total Stockholders' Equity - (a)

$

13,928

 

$

13,982

           

Current and Long-Term Debt (GAAP) - (b)

 

6,987

   

6,986

Less: Cash 

 

(1,547)

   

(1,600)

Net Debt (Non-GAAP) - (c)

 

5,440

   

5,386

           

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

$

20,915

 

$

20,968

           

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

$

19,368

 

$

19,368

           

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

 

33%

   

33%

           

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

 

28%

   

28%

 

EOG RESOURCES, INC.

Crude Oil and Natural Gas Financial Commodity

Derivative Contracts

                       

EOG accounts for financial commodity derivative contracts using the mark-to-market accounting method.  On March 14, 2017, EOG executed the optional early termination provision granting EOG the right to terminate certain crude oil price swaps with notional volumes of 30,000 Bbld at a weighted average price of $50.05 per Bbl for the period March 1, 2017 through June 30, 2017.  EOG received cash of $4.6 million for the early termination of these contracts.  Presented below is a comprehensive summary of EOG's crude oil price swap contracts through May 8, 2017, with notional volumes expressed in Bbld and prices expressed in $/Bbl.  

                       
                       

Crude Oil Price Swap Contracts

                 

Weighted

                 

Volume

 

Average Price

                 

(Bbld) 

 

($/Bbl) 

2017

                   

January 1, 2017 through February 28, 2017 (closed)

           

35,000

 

$           50.04

March 1, 2017 through June 30, 2017 (closed)

           

30,000

 

50.05

                       

On March 14, 2017, EOG entered into a crude oil price swap contract for the period March 1, 2017 through June 30, 2017, with notional volumes of 5,000 Bbld at a price of $48.81 per Bbl.  This contract offsets the remaining crude oil price swap contract for the same time period with notional volumes of 5,000 Bbld at a price of $50.00 per Bbl.  The net cash EOG will receive for settling these contracts is $0.7 million.  The offsetting contracts were excluded from the above table.

                       

Presented below is a comprehensive summary of EOG's natural gas price swap contracts through May 8, 2017, with notional volumes expressed in MMBtud and prices expressed in $/MMBtu.

                       
                       

Natural Gas Price Swap Contracts

                     

Weighted

                 

Volume

 

Average Price

                 

(MMBtud)

 

($/MMBtu)

2017

                   

March 1, 2017 through May 31, 2017 (closed)

           

30,000

 

$             3.10

June 1, 2017 through November 30, 2017

           

30,000

 

3.10

                       

2018

                   

March 1, 2018 through November 30, 2018

           

35,000

 

$             3.00

                       
                       

EOG has sold call options which establish a ceiling price for the sale of notional volumes of natural gas as specified in the call option contracts.  The call options require that EOG pay the difference between the call option strike price and either the average or last business day NYMEX Henry Hub natural gas price for the contract month (Henry Hub Index Price) in the event the Henry Hub Index Price is above the call option strike price.  In addition, EOG has purchased put options which establish a floor price for the sale of notional volumes of natural gas as specified in the put option contracts.  The put options grant EOG the right to receive the difference between the put option strike price and the Henry Hub Index Price in the event the Henry Hub Index Price is below the put option strike price.  Presented below is a comprehensive summary of EOG's natural gas call and put option contracts through May 8, 2017, with notional volumes expressed in MMBtud and prices expressed in $/MMbtu.

                       
                       

Natural Gas Option Contracts

         

Call Options Sold

 

Put Options Purchased

             

Weighted

     

Weighted

         

Volume

 

Average Price

 

Volume

 

Average Price

         

(MMBtud) 

 

($/MMBtu) 

 

(MMBtud)

 

($/MMBtu)

2017

                   

March 1, 2017 through May 31, 2017 (closed)

   

213,750

 

$                     3.44

 

171,000

 

$             2.92

June 1, 2017 through November 30, 2017

   

213,750

 

3.44

 

171,000

 

2.92

                       

2018

                   

March 1, 2018 through November 30, 2018

   

120,000

 

$                     3.38

 

96,000

 

$             2.94

                       
                       

EOG has also entered into natural gas collar contracts, which establish ceiling and floor prices for the sale of notional volumes of natural gas as specified in the collar contracts.  The collars require that EOG pay the difference between the ceiling price and the Henry Hub Index Price in the event the Henry Hub Index Price is above the ceiling price.  The collars grant EOG the right to receive the difference between the floor price and the Henry Hub Index Price in the event the Henry Hub Index Price is below the floor price.  Presented below is a comprehensive summary of EOG's natural gas collar contracts through May 8, 2017, with notional volumes expressed in MMBtud and prices expressed in $/MMbtu.  

                       
                       

Natural Gas Collar Contracts

                 

Weighted Average Price ($/MMBtu)

             

 Volume (MMBtud) 

 

Ceiling Price

 

Floor Price

2017

                   

March 1, 2017 through May 31, 2017 (closed)

       

80,000

 

$           3.69

 

$             3.20

June 1, 2017 through November 30, 2017

       

80,000

 

3.69

 

3.20

                       
                       

Definitions

                   

Bbld

Barrels per day

                 

$/Bbl

Dollars per barrel

                 

MMBtud      

Million British thermal units per day

                 

$/MMBtu

Dollars per million British thermal units

                 

NYMEX

New York Mercantile Exchange

                 

 

EOG RESOURCES, INC.

Direct After-Tax Rate of Return (ATROR)

 

The calculation of our direct after-tax rate of return (ATROR) with respect to our capital expenditure program for a particular play or well is based on the estimated proved reserves ("net" to EOG's interest) for all wells in such play or such well (as the case may be), the estimated net present value (NPV) of the future net cash flows from such reserves (for which we utilize certain assumptions regarding future commodity prices and operating costs) and our direct net costs incurred in drilling or acquiring (as the case may be) such wells or well (as the case may be).  As such, our direct ATROR with respect to our capital expenditures for a particular play or well cannot be calculated from our consolidated financial statements. 

 
 

Direct ATROR

Based on Cash Flow and Time Value of Money

  - Estimated future commodity prices and operating costs

  - Costs incurred to drill, complete and equip a well, including facilities

Excludes Indirect Capital

  - Gathering and Processing and other Midstream

  - Land, Seismic, Geological and Geophysical

 

Payback ~12 Months on 100% Direct ATROR Wells

First Five Years ~1/2 Estimated Ultimate Recovery Produced but ~3/4 of NPV Captured

 
 

Return on Equity / Return on Capital Employed 

Based on GAAP Accrual Accounting

Includes All Indirect Capital and Growth Capital for Infrastructure

  - Eagle Ford, Bakken, Permian Facilities

  - Gathering and Processing

Includes Legacy Gas Capital and Capital from Mature Wells

 

EOG RESOURCES, INC.

Quantitative Reconciliation of After-Tax Net Interest Expense (Non-GAAP), Adjusted Net Income (Loss)

(Non-GAAP), Net Debt (Non-GAAP) and Total Capitalization (Non-GAAP) as used in the Calculations of

Return on Capital Employed (Non-GAAP) and Return on Equity (Non-GAAP) to Net Interest Expense (GAAP),

Net Income (Loss) (GAAP), Current and Long-Term Debt (GAAP) and Total Capitalization (GAAP), Respectively

(Unaudited; in millions, except ratio data)

                       

The following chart reconciles Net Interest Expense (GAAP), Net Income (Loss) (GAAP), Current and Long-Term Debt (GAAP) and Total Capitalization (GAAP) to After-Tax Net Interest Expense (Non-GAAP), Adjusted Net Income (Loss) (Non-GAAP), Net Debt (Non-GAAP) and Total Capitalization (Non-GAAP), respectively, as used in the Return on Capital Employed (ROCE) and Return on Equity (ROE) calculations.  EOG believes this presentation may be useful to investors who follow the practice of some industry analysts who utilize After-Tax Net Interest Expense, Adjusted Net Income (Loss), Net Debt and Total Capitalization (Non-GAAP) in their ROCE and ROE calculations.  EOG management uses this information for purposes of comparing its financial performance with the financial performance of other companies in the industry.

                       
   

2016

   

2015

   

2014

   

2013

Return on Capital Employed (ROCE) (Non-GAAP)

                     
                       

Net Interest Expense (GAAP)

$

282

 

$

237

 

$

201

     

Tax Benefit Imputed (based on 35%) 

 

(99)

   

(83)

   

(70)

     

After-Tax Net Interest Expense (Non-GAAP) - (a) 

$

183

 

$

154

 

$

131

     
                       

Net Income (Loss) (GAAP) - (b)                                                   

$

(1,097)

 

$

(4,525)

 

$

2,915

     

Adjustments to Net Income (Loss), Net of Tax (See Accompanying Schedules)

204

 (a) 

 

4,559

 (b) 

 

(199)

 (c) 

   

Adjusted Net Income (Loss) (Non-GAAP) - (c)   

$

(893)

 

$

34

 

$

2,716

     
                       

Total Stockholders' Equity - (d)   

$

13,982

 

$

12,943

 

$

17,713

 

$

15,418

                       

Average Total Stockholders' Equity * - (e)   

$

13,463

 

$

15,328

 

$

16,566

     
                       

Current and Long-Term Debt (GAAP) - (f) 

$

6,986

 

$

6,655

 

$

5,906

 

$

5,909

Less: Cash                                                       

 

(1,600)

   

(719)

   

(2,087)

   

(1,318)

Net Debt (Non-GAAP) - (g) 

$

5,386

 

$

5,936

 

$

3,819

 

$

4,591

                       

Total Capitalization (GAAP) - (d) + (f)  

$

20,968

 

$

19,598

 

$

23,619

 

$

21,327

                       

Total Capitalization (Non-GAAP) - (d) + (g) 

$

19,368

 

$

18,879

 

$

21,532

 

$

20,009

                       

Average Total Capitalization (Non-GAAP) * - (h)   

$

19,124

 

$

20,206

 

$

20,771

     
                       

ROCE (GAAP Net Income) - [(a) + (b)] / (h)       

 

-4.8%

   

-21.6%

   

14.7%

     
                       

ROCE (Non-GAAP Adjusted Net Income) - [(a) + (c)] / (h)       

 

-3.7%

   

0.9%

   

13.7%

     
                       

Return on Equity (ROE)

                     
                       

ROE (GAAP) (GAAP Net Income) - (b) / (e)

 

-8.1%

   

-29.5%

   

17.6%

     
                       

ROE (Non-GAAP) (Non-GAAP Adjusted Net Income) - (c) / (e)

 

-6.6%

   

0.2%

   

16.4%

     
                       

* Average for the current and immediately preceding year

                     
                       
                       
                       
                       
                       

Adjustments to Net Income (Loss) (GAAP)

                     
                       
                       

(a) See below schedule for detail of adjustments to Net Income (Loss) (GAAP) in 2016:

                 
   

Year Ended December 31, 2016

     
   

 Before 

   

 Income Tax  

   

 After 

     
   

 Tax 

   

 Impact 

   

 Tax 

     

Adjustments:

                     

    Add:

Mark-to-Market Commodity Derivative Contracts Impact

$

77

 

$

(28)

 

$

49

     

    Add:

Impairments of Certain Assets

 

321

   

(113)

   

208

     

    Less:

Net Gains on Asset Dispositions

 

(206)

   

62

   

(144)

     

    Add:

Trinidad Tax Settlement

 

-

   

43

   

43

     

    Add:

Voluntary Retirement Expense

 

42

   

(15)

   

27

     

    Add:

Acquisition - State Apportionment Change

 

-

   

16

   

16

     

    Add:

Acquisition Costs

 

5

   

-

   

5

     

Total

$

239

 

$

(35)

 

$

204

     
                       

(b) See below schedule for detail of adjustments to Net Income (Loss) (GAAP) in 2015:

                 
   

Year Ended December 31, 2015

     
   

 Before 

   

 Income Tax  

   

 After 

     
   

 Tax 

   

 Impact 

   

 Tax 

     

Adjustments:

                     

    Add:

Mark-to-Market Commodity Derivative Contracts Impact

$

668

 

$

(238)

 

$

430

     

    Add:

Impairments of Certain Assets

 

6,308

   

(2,183)

   

4,125

     

    Less:

Texas Margin Tax Rate Reduction

 

-

   

(20)

   

(20)

     

    Add:

Legal Settlement - Early Leasehold Termination

 

19

   

(6)

   

13

     

    Add:

Severance Costs

 

9

   

(3)

   

6

     

    Add:

Net Losses on Asset Dispositions

 

9

   

(4)

   

5

     

Total

$

7,013

 

$

(2,454)

 

$

4,559

     
                       

(c) See below schedule for detail of adjustments to Net Income (Loss) (GAAP) in 2014:

                 
   

Year Ended December 31, 2014

     
   

 Before 

   

 Income Tax  

   

 After 

     
   

 Tax 

   

 Impact 

   

 Tax 

     

Adjustments:

                     

    Less:

Mark-to-Market Commodity Derivative Contracts Impact

$

(800)

 

$

285

 

$

(515)

     

    Add:

Impairments of Certain Assets

 

824

   

(271)

   

553

     

    Less:

Net Gains on Asset Dispositions

 

(508)

   

21

   

(487)

     

    Add

Tax Expense Related to the Repatriation of Accumulated

                     
 

     Foreign Earnings in Future Years

 

-

   

250

   

250

     

Total

$

(484)

 

$

285

 

$

(199)

     

 

EOG RESOURCES, INC.

Second Quarter and Full Year 2017 Forecast and Benchmark Commodity Pricing

                       

     (a)  Second Quarter and Full Year 2017 Forecast

           
                       

The forecast items for the second quarter and full year 2017 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 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 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)

         
   

2Q 2017

   

Full Year 2017

Daily Sales Volumes

                     

     Crude Oil and Condensate Volumes (MBbld)

                     

          United States

 

322.0

-

 

332.0

   

320.0

-

 

335.0

          Trinidad

 

0.2

-

 

0.4

   

0.3

-

 

0.5

          Other International

 

0.0

-

 

0.0

   

4.0

-

 

7.0

               Total

 

322.2

-

 

332.4

   

324.3

-

 

342.5

                       

     Natural Gas Liquids Volumes (MBbld)

                     

               Total

 

72.0

-

 

78.0

   

72.0

-

 

82.0

                       

     Natural Gas Volumes (MMcfd)

                     

          United States

 

710

-

 

750

   

725

-

 

760

          Trinidad

 

280

-

 

320

   

275

-

 

315

          Other International

 

18

-

 

24

   

25

-

 

30

               Total

 

1,008

-

 

1,094

   

1,025

-

 

1,105

                       

     Crude Oil Equivalent Volumes (MBoed)  

                     

          United States

 

512.3

-

 

535.0

   

512.8

-

 

543.7

          Trinidad

 

46.9

-

 

53.7

   

46.1

-

 

53.0

          Other International

 

3.0

-

 

4.0

   

8.2

-

 

12.0

               Total

 

562.2

-

 

592.7

   

567.1

-

 

608.7

                       
           

Estimated Ranges

         
           

(Unaudited)

         
 

2Q 2017

   

Full Year 2017

Operating Costs

                     

     Unit Costs ($/Boe)

                     

          Lease and Well

$

4.60

-

$

5.00

 

$

4.25

-

$

4.95

          Transportation Costs

$

3.20

-

$

3.60

 

$

3.10

-

$

3.70

          Depreciation, Depletion and Amortization

$

15.70

-

$

16.10

 

$

15.50

-

$

16.00

                       

Expenses ($MM)

                     

     Exploration, Dry Hole and Impairment

$

95

-

$

125

 

$

415

-

$

465

     General and Administrative

$

85

-

$

95

 

$

365

-

$

395

     Gathering and Processing 

$

28

-

$

30

 

$

125

-

$

145

     Capitalized Interest

$

6

-

$

8

 

$

25

-

$

30

     Net Interest

$

69

-

$

72

 

$

273

-

$

283

                       

Taxes Other Than Income (% of Wellhead Revenue)

 

6.9%

-

 

7.3%

   

6.5%

-

 

6.9%

                       

Income Taxes

                     

     Effective Rate 

 

32%

-

 

37%

   

31%

-

 

36%

     Current Taxes ($MM)

$

50

-

$

85

 

$

135

-

$

175

                       

Capital Expenditures (Excluding Acquisitions, $MM)

                     

     Exploration and Development, Excluding Facilities

           

$

3,000

-

$

3,350

     Exploration and Development Facilities

           

$

475

-

$

510

     Gathering, Processing and Other

           

$

225

-

$

240

                       

Pricing - (Refer toBenchmark Commodity Pricingin text)

                     

     Crude Oil and Condensate ($/Bbl)

                     

          Differentials

                     

               United States - above (below) WTI

$

(2.00)

-

$

0.00

 

$

(2.50)

-

$

(0.50)

               Trinidad - above (below) WTI

$

(11.00)

-

$

(9.00)

 

$

(11.00)

-

$

(9.00)

               Other International - above (below) WTI

$

(4.00)

-

$

2.00

 

$

(7.00)

-

$

1.00

                       

     Natural Gas Liquids

                     

          Realizations as % of WTI

 

36%

-

 

44%

   

36%

-

 

44%

                       

     Natural Gas ($/Mcf)

                     

          Differentials

                     

               United States - above (below) NYMEX Henry Hub

$

(1.10)

-

$

(0.60)

 

$

(1.15)

-

$

(0.65)

                       

          Realizations

                     

               Trinidad

$

2.20

-

$

2.60

 

$

2.10

-

$

2.70

               Other International

$

3.30

-

$

3.80

 

$

3.30

-

$

4.30

                       

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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