EOG Resources Reports Second Quarter 2009 Results
HOUSTON, Aug. 6 /PRNewswire-FirstCall/ — EOG Resources, Inc. (NYSE: EOG) (EOG) today reported its second quarter 2009 operating and financial results. For the second quarter, EOG reported a net loss available to common stockholders of $16.7 million, or $0.07 per share. This compares to second quarter 2008 net income available to common stockholders of $178.2 million, or $0.71 per share.
The results for the second quarter 2009 included a previously disclosed $33.6 million ($21.6 million after tax, or $0.09 per share) net gain on the mark-to-market of financial commodity transactions. During the quarter, the net cash inflow related to financial commodity contracts was $344.8 million ($221.9 million after tax, or $0.89 per share). Consistent with some analysts’ practice of matching realizations to settlement months, adjusted non-GAAP net income available to common stockholders for the quarter was $183.6 million, or $0.73 per share. Adjusted non-GAAP net income available to common stockholders for the second quarter 2008 was $631.7 million, or $2.52 per share. (Please refer to the attached tables for the reconciliation of adjusted non-GAAP net income available to common stockholders to GAAP net income (loss) available to common stockholders.)
Operational Highlights and Targets
EOG continues to adapt and apply its horizontal gas drilling and completion expertise to develop unconventional crude oil and liquids rich reservoirs. Positive drilling results were reported recently from its three primary areas of focus in North America – the Fort Worth Barnett Combo, North Dakota Bakken and Manitoba Waskada.
- In the Fort Worth Barnett Combo Play where drilling operations are planned in multi-well packages to maximize resource potential, three Bowen wells, the A#1H, A#2H and B#1H, began sales at individual production rates ranging from 150 to 400 barrels of oil per day (Bopd) with 1.2 to 1.6 million cubic feet per day (MMcfd) of liquids rich natural gas. EOG has 100 percent working interest in the wells. The Seibold Unit #3H and #4H wells were completed at gross rates of 500 Bopd with 1.8 MMcfd and 550 Bopd with 1.2 MMcfd, respectively. EOG has 96 percent working interest in the wells. The Tunnicliff B#1H and B#2H were also brought to sales at 400 Bopd each with 3.0 and 1.8 MMcfd, respectively. EOG has 100 percent working interest in the wells. While EOG is currently operating a four-rig drilling program, it plans to increase its activity level to seven rigs later in the year. Subsequent to the second quarter, EOG completed the acquisition of 25,000 net unproved acres and approximately 2,000 net barrels of oil equivalents per day of production in Montague and Cooke Counties for $134 million, comprised of cash and shares of EOG common stock. EOG currently holds approximately 194,000 net acres in Montague and Cooke Counties.
- With six rigs operating across its 500,000 total net acreage position in the North Dakota Bakken, EOG is drilling in both the Core and Lite areas. With initial production rates of 1,700 and 1,600 Bopd, respectively, the Austin #17-20H and #20-29H are characteristic of previously completed Bakken Core wells. EOG has 63 and 75 percent working interest in the wells, respectively. EOG further extended the productive limits of its acreage beyond the Core area with the Ross #7-17H and Sidonia #1-06H. Drilled in the Bakken Lite, the wells began initial production at 500 and 700 Bopd, respectively. EOG has 100 and 44 percent working interest in these wells, respectively. In total, EOG plans to drill 17 gross wells in the Bakken Lite area during 2009 and an additional 58 gross wells in the Bakken Core.
- In Manitoba, EOG reported excellent well results from the development of its Waskada Oil Field. Thirteen wells were completed with average peak month production rates of approximately 200 Bopd per well. EOG has 100 percent working interest in the wells.
“Through our application of horizontal drilling and completion technology, EOG has developed a solid early mover position in economic crude oil and liquids rich resource plays,” said Mark G. Papa, Chairman and CEO. “The results from our exploration efforts in these types of reservoirs clearly position EOG as the dominant player in both the Core and Lite areas of the North Dakota Bakken, as well as in the Fort Worth Barnett Combo and Manitoba’s Waskada Field.”
Reflecting ongoing success from its portfolio of crude oil and liquids rich plays, EOG increased its full year 2009 total company liquids production growth target from 22 to 25 percent and maintained its 20 percent growth target for 2010.
EOG has a deep inventory of natural gas prospects and reported excellent drilling results in the United States. With four rigs operating in the Haynesville, EOG reported notable initial production rates from five wells recently completed in DeSoto Parish. The Johnson 6#1 and DN Bell #1 flowed at initial gross production rates of 14.3 and 14.4 MMcfd of natural gas, respectively. EOG has 64 and 100 percent working interest in the wells, respectively. The Thompson 11#1 was completed at a gross rate of 14.9 MMcfd. EOG has 70 percent working interest in the well. The Lafitte 34 #1 and Billingsley 35 #1 began sales at gross rates of 15.7 and 14.6 MMcfd, respectively. EOG has 65 and 63 percent working interest in the wells, respectively.
EOG also announced the Conwy crude oil discovery in Block 110/12 off the western coast of the United Kingdom in the East Irish Sea. Drilled to approximately 2,900 feet in June, the well has estimated net recoverable reserves of 11 million barrels of oil that can be developed at attractive economic rates of return. Beginning later this year, EOG plans to drill two additional exploration wells with initial production targeted for early 2012. EOG is the operator and has 100 percent working interest in the block.
“Our strong operational results from the quarter are consistent with EOG’s corporate strategy – add more crude oil and liquids assets to complement our already strong natural gas portfolio, lead the industry in horizontal completions and maintain a focus on returns,” said Papa.
Third Quarter and Full Year 2009 Forecast
Based on current data, forecast and benchmark commodity pricing information for the third quarter and full year 2009 are included in the accompanying table. EOG continues to target 5.5 percent total company organic production growth in 2009 over 2008, contingent on storage limitations in the North American natural gas market and the impact on natural gas prices.
Conference Call Scheduled for August 7, 2009
EOG’s second quarter 2009 results conference call will be available via live audio webcast at 8 a.m. Central Daylight Time (9 a.m. Eastern Daylight Time) on Friday, August 7, 2009. To listen, log on to www.eogresources.com. The webcast will be archived on EOG’s website through Friday, August 21, 2009.
EOG Resources, Inc. is one of the largest independent (non-integrated) oil and natural gas companies in the United States with proved reserves in the United States, Canada, Trinidad, the United Kingdom and China. EOG Resources, Inc. is listed on the New York Stock Exchange and is traded under the ticker symbol “EOG.”
This press release (including the accompanying forecast and benchmark commodity pricing information) includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, including, among others, statements and projections regarding EOG’s future financial position, operations, performance, business strategy, budgets, reserve information, levels of production and costs and statements regarding the plans and objectives of EOG’s management for future operations, are forward-looking statements. EOG typically uses words such as “expect,” “anticipate,” “estimate,” “project,” “strategy,” “intend,” “plan,” “target,” “goal,” “may,” “will” and “believe” or the negative of those terms or other variations or comparable terminology to identify its forward-looking statements. In particular, statements, express or implied, concerning EOG’s future operating results and returns or EOG’s ability to replace or increase reserves, increase production or generate income or cash flows are forward-looking statements. Forward-looking statements are not guarantees of performance. Although EOG believes the expectations reflected in its forward-looking statements are reasonable and are based on reasonable assumptions, no assurance can be given that these assumptions are accurate or that these expectations will be achieved or will prove to have been correct. Moreover, EOG’s forward-looking statements may be affected by known and unknown risks, events or circumstances that may be outside EOG’s control. Important factors that could cause EOG’s actual results to differ materially from the expectations reflected in EOG’s forward-looking statements include, among others:
- the timing and extent of changes in prices for natural gas, crude oil and related commodities;
- changes in demand for natural gas, crude oil and related commodities, including ammonia and methanol;
- the extent to which EOG is successful in its efforts to discover, develop, market and produce reserves and to acquire natural gas and crude oil properties;
- the extent to which EOG can optimize reserve recovery and economically develop its plays utilizing horizontal and vertical drilling and advanced completion technologies;
- the extent to which EOG is successful in its efforts to economically develop its acreage in the Barnett Shale, the Bakken Formation, its Horn River Basin and Haynesville plays and its other exploration and development areas;
- EOG’s ability to achieve anticipated production levels from existing and future natural gas and crude oil development projects, given the risks and uncertainties inherent in drilling, completing and operating natural gas and crude oil wells and the potential for interruptions of production, whether involuntary or intentional as a result of market or other conditions;
- the availability, proximity and capacity of, and costs associated with, gathering, processing, compression and transportation facilities;
- the availability, cost, terms and timing of issuance or execution of, and competition for, mineral licenses and leases and governmental and other permits and rights of way;
- competition in the oil and gas exploration and production industry for employees and other personnel, equipment, materials and services and, related thereto, the availability and cost of employees and other personnel, equipment, materials and services;
- EOG’s ability to obtain access to surface locations for drilling and production facilities;
- the extent to which EOG’s third-party-operated natural gas and crude oil properties are operated successfully and economically;
- EOG’s ability to effectively integrate acquired natural gas and crude oil properties into its operations, fully identify existing and potential problems with respect to such properties and accurately estimate reserves, production and costs with respect to such properties;
- weather, including its impact on natural gas and crude oil demand, and weather-related delays in drilling and in the installation and operation of gathering and production facilities;
- the ability of EOG’s customers and other contractual counterparties to satisfy their obligations to EOG and, related thereto, to access the credit and capital markets to obtain financing needed to satisfy their obligations to EOG;
- EOG’s ability to access the commercial paper market and other credit and capital markets to obtain financing on terms it deems acceptable, if at all;
- the accuracy of reserve estimates, which by their nature involve the exercise of professional judgment and may therefore be imprecise;
- the timing and extent of changes in foreign currency exchange rates, interest rates, inflation rates, global and domestic financial market conditions and global and domestic general economic conditions;
- the extent and effect of any hedging activities engaged in by EOG;
- the timing and impact of liquefied natural gas imports;
- the use of competing energy sources and the development of alternative energy sources;
- political developments around the world, including in the areas in which EOG operates;
- changes in government policies, legislation and regulations, including environmental regulations;
- the extent to which EOG incurs uninsured losses and liabilities;
- acts of war and terrorism and responses to these acts; and
- the other factors described under Item 1A, “Risk Factors,” on pages 13 through 19 of EOG’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008 and any updates to those factors set forth in EOG’s subsequent Quarterly Reports on Form 10-Q.
In light of these risks, uncertainties and assumptions, the events anticipated by EOG’s forward-looking statements may not occur, and you should not place any undue reliance on any of EOG’s forward-looking statements. EOG’s forward-looking statements speak only as of the date made and EOG undertakes no obligation to update or revise its forward-looking statements, whether as a result of new information, future events or otherwise.
The United States Securities and Exchange Commission (SEC) currently permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. As noted above, statements of proved reserves are only estimates and may be imprecise. Any reserve estimates provided in this press release that are not specifically designated as being estimates of proved reserves may include not only proved reserves, but also other categories of reserves that the SEC’s guidelines strictly prohibit EOG from including in filings with the SEC. Investors are urged to consider closely the disclosure in EOG’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008, available from EOG at P.O. Box 4362, Houston, Texas 77210-4362 (Attn: Investor Relations). You can also obtain this report from the SEC by calling 1-800-SEC-0330 or from the SEC’s website at www.sec.gov.
EOG RESOURCES, INC.
FINANCIAL REPORT
----------------
(Unaudited; in millions, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2009 2008 2009 2008
---- ---- ---- ----
Net Operating Revenues $861.0 $1,095.5 $2,019.2 $2,229.5
====== ======== ======== ========
Net Income (Loss)
Available to Common
Stockholders $(16.7) $178.2 $142.0 $418.7
====== ====== ====== ======
Net Income (Loss) Per Share
Available to Common
Stockholders
Basic $(0.07) $0.72 $0.57 $1.70
====== ===== ===== =====
Diluted $(0.07) $0.71 $0.57 $1.67
====== ===== ===== =====
Average Number of Shares
Outstanding
Basic 248.2 246.5 248.1 246.0
===== ===== ===== =====
Diluted 248.2 251.1 250.5 250.6
===== ===== ===== =====
SUMMARY INCOME STATEMENTS
-------------------------
(Unaudited; in thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2009 2008 2009 2008
---- ---- ---- ----
Net Operating Revenues
Natural Gas $460,044 $1,340,557 $1,027,622 $2,378,195
Crude Oil, Condensate
and Natural Gas
Liquids 287,134 524,793 487,462 919,641
Gains (Losses) on Mark-
to-Market Commodity
Derivative Contracts 33,570 (842,822) 384,953 (1,312,666)
Gathering, Processing
and Marketing 77,284 63,777 115,126 99,762
Other, Net 3,007 9,207 4,085 144,598
----- ----- ----- -------
Total 861,039 1,095,512 2,019,248 2,229,530
------- --------- --------- ---------
Operating Expenses
Lease and Well 134,599 129,949 280,105 254,056
Transportation Costs 66,011 63,102 134,873 125,069
Gathering and
Processing Costs 13,521 8,922 31,234 17,281
Exploration Costs 34,307 59,511 83,930 107,454
Dry Hole Costs 33,643 6,785 36,637 15,213
Impairments 47,046 48,875 112,517 81,449
Marketing Costs 74,050 62,986 106,003 96,031
Depreciation,
Depletion and
Amortization 375,592 315,294 764,921 612,493
General and
Administrative 58,760 61,640 116,706 114,566
Taxes Other Than Income 23,492 95,345 70,892 182,095
------ ------ ------ -------
Total 861,021 852,409 1,737,818 1,605,707
------- ------- --------- ---------
Operating Income 18 243,103 281,430 623,823
Other Income, Net 1,237 13,309 2,976 14,892
----- ------ ----- ------
Income Before Interest
Expense and Income Taxes 1,255 256,412 284,406 638,715
Interest Expense, Net 24,811 9,029 43,187 21,220
------ ----- ------ ------
Income (Loss) Before
Income Taxes (23,556) 247,383 241,219 617,495
Income Tax Provision
(Benefit) (6,850) 69,177 99,215 198,333
------ ------ ------ -------
Net Income (Loss) (16,706) 178,206 142,004 419,162
Preferred Stock Dividends - - - 443
--- --- --- ---
Net Income (Loss)
Available to Common
Stockholders $(16,706) $178,206 $142,004 $418,719
======== ======== ======== ========
Dividends Declared per
Common Share $0.145 $0.120 $0.290 $0.240
====== ====== ====== ======
EOG RESOURCES, INC.
OPERATING HIGHLIGHTS
--------------------
(Unaudited)
Three Months Six Months
Ended Ended
June 30, June 30,
-------- --------
2009 2008 2009 2008
---- ---- ---- ----
Wellhead Volumes and Prices
---------------------------
Natural Gas Volumes (MMcfd) (A)
United States 1,139 1,139 1,167 1,112
Canada 225 215 227 215
Trinidad 266 217 264 224
Other International (B) 15 12 15 15
-- -- -- --
Total 1,645 1,583 1,673 1,566
===== ===== ===== =====
Average Natural Gas Prices
($/Mcf) (C)
United States $3.37 $10.36 $3.72 $9.23
Canada 3.40 9.42 3.92 8.42
Trinidad 1.51 3.64 1.42 3.76
Other International (B) 3.55 9.95 4.84 9.89
Composite 3.07 9.31 3.39 8.34
Crude Oil and Condensate Volumes
(MBbld) (A)
United States 42.9 35.4 43.8 33.0
Canada 2.9 2.6 3.1 2.5
Trinidad 3.0 3.2 3.0 3.4
Other International (B) 0.1 - 0.1 -
--- --- --- ---
Total 48.9 41.2 50.0 38.9
==== ==== ==== ====
Average Crude Oil and Condensate
Prices ($/Bbl) (C)
United States $52.82 $117.60 $42.85 $105.78
Canada 52.52 112.55 44.53 101.41
Trinidad 47.50 113.29 40.49 99.92
Other International (B) 46.75 114.40 46.73 96.84
Composite 52.47 116.94 42.82 104.97
Natural Gas Liquids Volumes
(MBbld) (A)
United States 22.1 14.2 21.9 15.5
Canada 1.0 0.9 1.1 0.9
--- --- --- ---
Total 23.1 15.1 23.0 16.4
==== ==== ==== ====
Average Natural Gas Liquids
Prices ($/Bbl) (C)
United States $25.60 $63.62 $23.88 $60.19
Canada 25.60 66.39 25.56 61.52
Composite 25.60 63.78 23.96 60.26
Natural Gas Equivalent Volumes
(MMcfed) (D)
United States 1,529 1,437 1,561 1,403
Canada 249 236 252 236
Trinidad 284 236 282 244
Other International (B) 15 12 16 15
-- -- -- --
Total 2,077 1,921 2,111 1,898
===== ===== ===== =====
Total Bcfe (D) 189.0 174.8 382.1 345.4
(A) Million cubic feet per day or thousand barrels per day, as
applicable.
(B) Other International includes EOG's United Kingdom operations and,
effective July 1, 2008, EOG's China operations.
(C) Dollars per thousand cubic feet or per barrel, as applicable.
(D) Million cubic feet equivalent per day or billion cubic feet
equivalent, as applicable; includes natural gas, crude oil and
condensate and natural gas liquids. Natural gas equivalents are
determined using the ratio of 6.0 thousand cubic feet of natural gas
to 1.0 barrel of crude oil and condensate or natural gas liquids.
EOG RESOURCES, INC.
SUMMARY BALANCE SHEETS
----------------------
(Unaudited; in thousands, except share data)
June 30, December 31,
2009 2008
---- ----
ASSETS
Current Assets
Cash and Cash Equivalents $706,964 $331,311
Accounts Receivable, Net 570,262 722,695
Inventories 243,614 187,970
Assets from Price Risk Management
Activities 606,595 779,483
Income Taxes Receivable 19,078 27,053
Other 63,763 59,939
------ ------
Total 2,210,276 2,108,451
Property, Plant and Equipment
Oil and Gas Properties (Successful
Efforts Method) 22,292,107 20,803,629
Other Property, Plant and Equipment 1,172,546 1,057,888
--------- ---------
Total Property, Plant and Equipment 23,464,653 21,861,517
Less: Accumulated Depreciation,
Depletion and Amortization (9,018,974) (8,204,215)
---------- ----------
Total Property, Plant and Equipment,
Net 14,445,679 13,657,302
Other Assets 136,797 185,473
------- -------
Total Assets $16,792,752 $15,951,226
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable $720,053 $1,122,209
Accrued Taxes Payable 78,470 86,265
Dividends Payable 35,983 33,461
Liabilities from Price Risk Management
Activities 11,758 4,429
Deferred Income Taxes 213,413 368,231
Current Portion of Long-Term Debt 37,000 37,000
Other 92,943 113,321
------ -------
Total 1,189,620 1,764,916
Long-Term Debt 2,760,000 1,860,000
Other Liabilities 550,339 498,291
Deferred Income Taxes 3,033,271 2,813,522
Commitments and Contingencies
Stockholders' Equity
Common Stock, $0.01 Par, 640,000,000
Shares Authorized and 250,528,510
Shares Issued at June 30, 2009 and
249,758,577 Shares Issued at December
31, 2008 202,505 202,498
Additional Paid In Capital 395,128 323,805
Accumulated Other Comprehensive Income 130,503 27,787
Retained Earnings 8,535,559 8,466,143
Common Stock Held in Treasury, 76,279
Shares at June 30, 2009 and 126,911
Shares at December 31, 2008 (4,173) (5,736)
------ ------
Total Stockholders' Equity 9,259,522 9,014,497
--------- ---------
Total Liabilities and Stockholders' Equity $16,792,752 $15,951,226
=========== ===========
EOG RESOURCES, INC.
SUMMARY STATEMENTS OF CASH FLOWS
--------------------------------
(Unaudited; in thousands)
Six Months Ended
June 30,
--------
2009 2008
---- ----
Cash Flows from Operating Activities
Reconciliation of Net Income to Net Cash
Provided by Operating Activities:
Net Income $142,004 $419,162
Items Not Requiring (Providing) Cash
Depreciation, Depletion and Amortization 764,921 612,493
Impairments 112,517 81,449
Stock-Based Compensation Expenses 48,479 44,566
Deferred Income Taxes 62,161 123,330
Other, Net 1,689 (127,693)
Dry Hole Costs 36,637 15,213
Mark-to-Market Commodity Derivative Contracts
Total (Gains) Losses (384,953) 1,312,666
Realized Gains (Losses) 655,740 (114,859)
Other, Net 6,865 9,077
Changes in Components of Working Capital and
Other Assets and Liabilities
Accounts Receivable 149,021 (395,526)
Inventories (22,151) (9,176)
Accounts Payable (414,823) 255,495
Accrued Taxes Payable (17,743) (92,738)
Other Assets (7,487) (61,623)
Other Liabilities (24,842) (8,440)
Changes in Components of Working Capital
Associated with Investing and Financing
Activities 169,183 (775)
------- ----
Net Cash Provided by Operating Activities 1,277,218 2,062,621
Investing Cash Flows
Additions to Oil and Gas Properties (1,433,591) (2,144,769)
Additions to Other Property, Plant and
Equipment (151,845) (196,353)
Proceeds from Sales of Assets 828 354,413
Changes in Components of Working Capital
Associated with Investing Activities (169,101) 648
Other, Net 1,384 (20,429)
----- -------
Net Cash Used in Investing Activities (1,752,325) (2,006,490)
Financing Cash Flows
Long-Term Debt Borrowing 900,000 -
Long-Term Debt Repayments - (38,000)
Dividends Paid (69,516) (51,647)
Redemption of Preferred Stock - (5,395)
Excess Tax Benefits from Stock-Based
Compensation 21,874 55,552
Treasury Stock Purchased (6,125) (6,865)
Proceeds from Stock Options Exercised and
Employee Stock Purchase Plan 8,026 48,509
Debt Issuance Costs (8,741) -
Other, Net (82) 127
--- ---
Net Cash Provided by Financing Activities 845,436 2,281
Effect of Exchange Rate Changes on Cash 5,324 (4,542)
----- ------
Increase in Cash and Cash Equivalents 375,653 53,870
Cash and Cash Equivalents at Beginning of
Period 331,311 54,231
------- ------
Cash and Cash Equivalents at End of Period $706,964 $108,101
======== ========
EOG RESOURCES, INC.
QUANTITATIVE RECONCILIATION OF ADJUSTED NET INCOME
--------------------------------------------------
AVAILABLE TO COMMON STOCKHOLDERS (Non-GAAP)
--------------------------------------------------
TO NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS (GAAP)
------------------------------------------------------------
(Unaudited; in thousands, except per share data)
The following chart adjusts three-month and six-month periods ended June
30, 2009 and 2008 reported Net Income (Loss) Available to Common
Stockholders (GAAP) to reflect actual net cash realized from financial
commodity price transactions by eliminating the unrealized mark-to-market
(gains) losses from these transactions and to eliminate the gain on the
sale of EOG's Appalachian assets in the first quarter of 2008. EOG
believes this presentation may be useful to investors who follow the
practice of some industry analysts who adjust reported company earnings to
match realizations to production settlement months and make certain other
adjustments to exclude one-time items. EOG management uses this
information for comparative purposes within the industry.
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2009 2008 2009 2008
---- ---- ---- ----
Reported Net
Income (Loss)
Available to
Common
Stockholders
(GAAP) $(16,706) $178,206 $142,004 $418,719
Mark-to-Market
(MTM) Commodity
Derivative
Contracts Impact
Total (Gains)
Losses (33,570) 842,822 (384,953) 1,312,666
Realized Gains
(Losses) 344,776 (138,069) 655,740 (114,859)
------- -------- ------- --------
Subtotal 311,206 704,753 270,787 1,197,807
------- ------- ------- ---------
After Tax MTM
Impact 200,261 453,509 174,251 770,789
------- ------- ------- -------
Less: Gain on
Sale of
Appalachian
Assets, Net of
Tax - - - (84,748)
--- --- --- -------
Adjusted Net
Income Available
to Common
Stockholders
(Non-GAAP) $183,555 $631,715 $316,255 $1,104,760
======== ======== ======== ==========
Net Income (Loss)
Per Share
Available to
Common
Stockholders
(GAAP)
Basic $(0.07) $0.72 $0.57 $1.70
====== ===== ===== =====
Diluted $(0.07) $0.71 $0.57 $1.67
====== ===== ===== =====
Adjusted Net
Income Per Share
Available to
Common
Stockholders
(Non-GAAP)
Basic $0.74 $2.56 $1.27 $4.49
===== ===== ===== =====
Diluted $0.73 $2.52 $1.26 $4.41
===== ===== ===== =====
Average Number of
Shares (GAAP)
Basic 248,207 246,536 248,095 245,950
======= ======= ======= =======
Diluted 248,207 251,135 250,499 250,553
======= ======= ======= =======
Average Number of
Shares (Non-GAAP)
Basic 248,207 246,536 248,095 245,950
======= ======= ======= =======
Diluted 250,703 251,135 250,499 250,553
======= ======= ======= =======
EOG RESOURCES, INC.
QUANTITATIVE RECONCILIATION OF DISCRETIONARY CASH FLOW
-------------------------------------------------------
AVAILABLE TO COMMON STOCKHOLDERS (Non-GAAP)
--------------------------------------------
TO NET CASH PROVIDED BY OPERATING ACTIVITIES (GAAP)
----------------------------------------------------
(Unaudited; in thousands)
The following chart reconciles three-month and six-month periods ended
June 30, 2009 and 2008 Net Cash Provided by Operating Activities (GAAP) to
Discretionary Cash Flow Available to Common Stockholders (Non-GAAP). EOG
believes this presentation may be useful to investors who follow the
practice of some industry analysts who adjust Net Cash Provided by
Operating Activities for Exploration Costs (excluding Stock-Based
Compensation Expenses), Changes in Components of Working Capital and Other
Assets and Liabilities, Changes in Components of Working Capital
Associated with Investing and Financing Activities and Preferred Stock
Dividends. EOG management uses this information for comparative purposes
within the industry.
Three Months Six Months
Ended June 30, Ended June 30,
---------------- ----------------
2009 2008 2009 2008
---- ---- ---- ----
Net Cash Provided by
Operating Activities
(GAAP) $671,379 $1,135,536 $1,277,218 $2,062,621
Adjustments
Exploration Costs
(excluding Stock-Based
Compensation Expenses) 29,359 55,168 73,830 99,091
Changes in Components of
Working Capital and Other
Assets and Liabilities
Accounts Receivable 7,905 217,842 (149,021) 395,526
Inventories (745) 12,461 22,151 9,176
Accounts Payable 62,201 (162,043) 414,823 (255,495)
Accrued Taxes Payable 32,221 63,473 17,743 92,738
Other Assets 8,917 59,878 7,487 61,623
Other Liabilities 6,772 (13,725) 24,842 8,440
Changes in Components of
Working Capital Associated
with Investing and
Financing Activities (30,585) 5,967 (169,183) 775
Preferred Stock Dividends - - - (443)
--- --- --- ----
Discretionary Cash Flow
Available to Common
Stockholders (Non-GAAP) $787,424 $1,374,557 $1,519,890 $2,474,052
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EOG RESOURCES, INC.
THIRD QUARTER AND FULL YEAR 2009 FORECAST AND BENCHMARK
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COMMODITY PRICING
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(a) Third Quarter and Full Year 2009 Forecast
The forecast items for the third quarter and full year 2009 set forth
below for EOG Resources, Inc. (EOG) are based on current available
information and expectations as of the date of the accompanying press
release. This forecast replaces and supersedes any previously issued
guidance or forecast.
(b) Benchmark Commodity Pricing
EOG bases United States and Canada natural gas price differentials upon
the natural gas price at Henry Hub, Louisiana using the simple average of
the NYMEX settlement prices for the last three trading days of the
applicable month.
EOG bases United States, Canada and Trinidad crude oil and condensate
price differentials upon the West Texas Intermediate crude oil price at
Cushing, Oklahoma using the simple average of the NYMEX settlement prices
for each trading day within the applicable calendar month.
Estimated Ranges
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(Unaudited)
Full Year
3Q 2009 2009
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Daily Production
Natural Gas (MMcfd)
United States 1,110 - 1,135 1,130 - 1,160
Canada 200 - 220 215 - 227
Trinidad 230 - 255 250 - 265
Other International 8 - 13 12 - 15
Total 1,548 - 1,623 1,607 - 1,667
Crude Oil and Condensate (MBbld)
United States 46.8 - 49.0 45.5 - 47.5
Canada 3.5 - 5.0 3.5 - 4.3
Trinidad 2.3 - 3.3 2.8 - 3.2
Total 52.6 - 57.3 51.8 - 55.0
Natural Gas Liquids (MBbld)
United States 20.0 - 24.4 21.2 - 23.7
Canada 0.6 - 1.0 0.9 - 1.0
Total 20.6 - 25.4 22.1 - 24.7
Natural Gas Equivalent Volumes
(MMcfed)
United States 1,511 - 1,575 1,530 - 1,587
Canada 224 - 256 241 - 259
Trinidad 244 - 275 267 - 284
Other International 8 - 13 12 - 15
Total 1,987 - 2,119 2,050 - 2,145
Estimated Ranges
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(Unaudited)
3Q 2009 Full Year 2009
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Operating Costs
Unit Costs ($/Mcfe)
Lease and Well $0.73 - $0.77 $0.72 - $0.76
Transportation Costs $0.33 - $0.36 $0.34 - $0.36
Depreciation, Depletion
and Amortization $2.03 - $2.09 $2.01 - $2.06
Expenses ($MM)
Exploration, Dry Hole and
Impairment $125.0 - $135.0 $480.0 - $500.0
General and Administrative $64.0 $68.0 $240.0 $248.0
Gathering and Processing $13.0 - $16.0 $58.0 - $64.0
Capitalized Interest $12.5 - $16.0 $50.5 - $58.0
Net Interest $28.0 - $32.0 $95.0 - $105.0
Taxes Other Than Income
(% of Revenue) 7.0% - 7.5% 5.0% - 6.5%
Income Taxes
Effective Rate 30% - 40% > 35%
Current Taxes ($MM) $5 - $10 $50 - $70
Capital Expenditures ($MM) -
FY 2009
Exploration and Development,
excluding Acquisitions Approximately $2,900
Gathering, Processing and Other Approximately $280
Acquisitions Approximately $140
Pricing - (Refer to Benchmark
Commodity Pricing in text)
Natural Gas ($/Mcf)
Differentials (include the
effect of physical contracts)
United States - below
NYMEX Henry Hub $0.25 - $0.50 $0.35 - $0.55
Canada - below
NYMEX Henry Hub $0.60 - $1.00 $0.40 - $0.80
Realizations
Trinidad $1.25 - $1.60 $1.37 - $1.57
Other International $3.40 - $4.00 $4.10 - $4.60
Crude Oil and Condensate ($/Bbl)
Differentials
United States - below WTI $8.00 - $12.00 $8.50 - $10.50
Canada - below WTI $4.35 - $7.50 $4.50 - $6.50
Trinidad - below WTI $8.50 - $12.50 $9.75 - $11.75
Definitions
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$/Bbl U.S. Dollars per barrel
$/Mcf U.S. Dollars per thousand cubic feet
$/Mcfe U.S. Dollars per thousand cubic feet equivalent
$MM U.S. Dollars in millions
MBbld Thousand barrels per day
MMcfd Million cubic feet per day
MMcfed Million cubic feet equivalent per day
NYMEX New York Mercantile Exchange
WTI West Texas Intermediate
SOURCE EOG Resources, Inc.