EXHIBIT 99.1 | ||
EOG Resources, Inc. | ||
News Release | ||
For Further Information Contact: | Investors | |
Maire A. Baldwin | ||
(713) 651-6EOG (651-6364) | ||
Media and Investors | ||
Elizabeth M. Ivers | ||
(713) 651-7132 | ||
EOG RESOURCESREPORTS FIRST QUARTER 2009 RESULTS
- Increases 2009 Total Company Organic Production Growth Target from 3 Percent to 5.5 Percent with Original Capital Expenditure Budget
- Higher Domestic Liquids and Trinidad Natural Gas Production Drive Increased Growth
- Targets Crude Oil and Natural Gas Liquids Growth of 22 Percent in 2009 and 20 Percent in 2010
- Announces Horizontal Crude Oil Success in Canada's Waskada Field
FOR IMMEDIATE RELEASE: Monday, May 4, 2009
HOUSTON - EOG Resources, Inc. (EOG) today reported first quarter 2009 net income available to common stockholders of $158.7 million, or $0.63 per share. This compares to first quarter 2008 net income available to common stockholders of $240.5 million, or $0.96 per share.
The results for the first quarter 2009 included a previously disclosed $351.4 million ($226.1 million after tax, or $0.90 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 $311.0 million ($200.1 million after tax, or $0.80 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 $132.7 million, or $0.53 per share. Adjusted non-GAAP net income available to common stockholders for the first quarter 2008 was $473.0 million, or $1.89 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 available to common stockholders.)
Operational Highlights and Targets
EOG increased its full year 2009 total company organic production growth target from 3 percent to 5.5 percent based on first quarter operational results and stronger than anticipated domestic crude oil and natural gas liquids volumes. During the first quarter, crude oil production in the United States increased 47 percent over the same period last year. The higher level of total liquids recorded during the first quarter and projected for the second half of 2009 is primarily due to higher than expected production from the North Dakota Bakken and the Fort Worth Barnett Shale. In addition, EOG projects greater natural gas production from its Trinidad operations due to reduced plant downtime. EOG expects to achieve its new production target while maintaining its previously announced total capital expenditure budget of $3.1 billion.
"Based on economic investments at current crude oil and natural gas prices, we are increasing our total 2009 production growth target to 5.5 percent, all organic. EOG is positioned to achieve total company liquids growth of 22 percent, to approximately 75,000 barrels per day in 2009. The majority of the increases will come from U.S. crude oil and natural gas liquids production during the second half of the year," said Mark G. Papa, Chairman and CEO. "With this momentum, we are targeting total liquids growth of 20 percent, to roughly 90,000 barrels per day in 2010."
EOG plans to resume full crude oil production in the North Dakota Bakken Parshall Field by July. The completion of wells drilled during EOG's winter program also is expected to commence early in the second half of 2009. To transport its Bakken crude oil production closer to markets, EOG is moving forward with a project that would utilize rail to move volumes from North Dakota to a terminal in Oklahoma by early 2010.
By applying enhanced horizontal drilling and completion technology, EOG has drilled and completed 29 successful horizontal crude oil wells in the Waskada Field in Manitoba, Canada. Recent well results indicate that EOG's current acreage position contains approximately 25 million barrels of net recoverable crude oil reserves.
EOG is continuing its Fort Worth Barnett Shale natural gas development drilling program in Johnson and Hill Counties. With more than 750 remaining drilling locations in Johnson County alone, EOG can remain active in the prolific play for several years.
EOG estimates its total production from the Barnett Shale natural gas and Combo plays will average approximately 460 million cubic feet equivalent per day (MMcfed) in 2009, increasing to 700 MMcfed in 2012, contingent on hydrocarbon prices recovering from current levels.
"We are optimistic that crude oil prices will strengthen in the latter part of 2009 and natural gas prices will recover in 2010," said Papa.
"Given our rich inventory of prospects, we expect our production profile to increase during the second half of 2009, positioning EOG to once again deliver double-digit production growth in 2010."
Conference Call Scheduled for May 5, 2009
EOG's first 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 Tuesday, May 5, 2009. To listen, log on to www.eogresources.com. The webcast will be archived on EOG's website through Tuesday, May 19, 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 North Sea 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, 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 increas e 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 | ||||||||||
| March 31, | ||||||||||
| 2009 | 2008 | |||||||||
| Net Operating Revenues | $ | 1,158.2 | $ | 1,134.0 | ||||||
| Net Income Available to Common Stockholders | $ | 158.7 | $ | 240.5 | ||||||
| Net Income Per Share Available to Common Stockholders | ||||||||||
| Basic | $ | 0.64 | $ | 0.98 | ||||||
| Diluted | $ | 0.63 | $ | 0.96 | ||||||
| Average Number of Shares Outstanding | ||||||||||
| Basic | 248.0 | 245.4 | ||||||||
| Diluted | 250.2 | 249.8 | ||||||||
| SUMMARY INCOME STATEMENTS | ||||||||||
| (Unaudited; in thousands) | ||||||||||
| Three Months Ended | ||||||||||
| March 31, | ||||||||||
| 2009 | 2008 | |||||||||
| Net Operating Revenues | ||||||||||
| Natural Gas | $ | 567,578 | $ | 1,037,638 | ||||||
| Crude Oil, Condensate and Natural Gas Liquids | 200,328 | 394,848 | ||||||||
| Gains (Losses) on Mark-to-Market Commodity Derivative Contracts | 351,383 | (469,844) | ||||||||
| Gathering, Processing and Marketing | 37,842 | 35,985 | ||||||||
| Other, Net | 1,078 | 135,391 | ||||||||
| Total | 1,158,209 | 1,134,018 | ||||||||
| Operating Expenses | ||||||||||
| Lease and Well | 145,506 | 124,107 | ||||||||
| Transportation Costs | 68,862 | 61,967 | ||||||||
| Gathering and Processing Costs | 17,713 | 8,359 | ||||||||
| Exploration Costs | 49,623 | 47,943 | ||||||||
| Dry Hole Costs | 2,994 | 8,428 | ||||||||
| Impairments | 65,471 | 32,574 | ||||||||
| Marketing Costs | 31,953 | 33,045 | ||||||||
| Depreciation, Depletion and Amortization | 389,329 | 297,199 | ||||||||
| General and Administrative | 57,946 | 52,926 | ||||||||
| Taxes Other Than Income | 47,400 | 86,750 | ||||||||
| Total | 876,797 | 753,298 | ||||||||
| Operating Income | 281,412 | 380,720 | ||||||||
| Other Income, Net | 1,739 | 1,583 | ||||||||
| Income Before Interest Expense and Income Taxes | 283,151 | 382,303 | ||||||||
| Interest Expense, Net | 18,376 | 12,191 | ||||||||
| Income Before Income Taxes | 264,775 | 370,112 | ||||||||
| Income Tax Provision | 106,065 | 129,156 | ||||||||
| Net Income | 158,710 | 240,956 | ||||||||
| Preferred Stock Dividends | - | 443 | ||||||||
| Net Income Available to Common Stockholders | $ | 158,710 | $ | 240,513 | ||||||
| Dividends Declared per Common Share | $ | 0.145 | $ | 0.120 | ||||||