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Independent oil and natural gas company EOG Resources reported fourth quarter earnings after the market close Tuesday that missed on the bottom line but beat in revenues. $EOG as expected was hurt by production constraints in the Permian pipeline bottleneck but still exceeded production midpoints. 

EOG

$EOG operates and explores its onshore oil and natural gas reserves in the major oil producing Permian Basin in West Texas. 

EOG Resources, Inc. (EOG) Reported Earnings After Close Tuesday

$1.24 Missed $1.35 EPS But $4.57B Beat $4.47 billion forecast in revenue 

Earnings

EOG Resources, Inc. (EOG) on Tuesday reported fourth-quarter earnings that missed analysts' expectations but revenue that topped forecasts. EOG reported earnings per share of $1.24 on revenue of $4.57B. Analysts had forecast EPS of $1.35 on revenue of $4.47 Billion. That compared to EPS of $0.69 on revenue of $3.34B in the same period a year earlier. The company had reported EPS of $1.75 on revenue of $4.78B in the previous quarter.

Although a significant increase in production and realized prices were expected in the fourth quarter, the growth in production volumes was affected with the pipeline bottleneck problem in the prolific Permian Basin. 

EOG Resources, Inc. (EOG)

Market Reaction > After hours $90.90 −$3.01 (-3.21%)

Highlights

  • EOG completed 262 net wells in the Delaware Basin and increased crude oil production 47% to 126,800 Bopd in 2018
  • Exceeds Fourth Quarter Crude Oil and NGL Production Target Midpoints
  • In the South Texas Eagle Ford asset in 2018, the company grew crude oil production 9% to 171,000 Bopd.
  • Of the 304 net wells completed in 2018, EOG drilled a total of 65 wells with lateral lengths greater than 10,000 feet.
  • Increases Proved Reserves by 16% and Replaces 238% of 2018 Production at Sub-$10 Finding Cost
  • Targets Improved Capital Efficiency, Significant Investment in High-Quality New Drilling Potential and 12-16%
  • U.S. Crude Oil Volume Growth in 2019, Funded with Net Cash from Operating Activities at $50 Oil

EOG Drilling Areas

Outlook

EOG expects to grow U.S. crude oil production by 12 to 16 percent, fund capital investment and pay the dividend with net cash from operating activities in 2019 at $50 oil. Exploration and development expenditures for 2019 are expected to range from $6.1 to $6.5 billion, including facilities and gathering, processing and other expenditures, excluding acquisitions and non-cash exchanges. EOG expects to complete approximately 740 net wells in 2019 compared to 763 net wells in 2018.

Activity will remain focused in EOG’s highest rate-of-return oil assets in the Delaware Basin, Eagle Ford, Rockies, Woodford and Bakken. The company’s investment in new potential areas in the United States includes spending for leasing and related infrastructure to drill wells in a number of new prospects in 2019.

Map of EOG Texas Wells

About EOG Resources

EOG Resources is among the leading oil and natural gas exploration and production players, with operations spreading across the United States, United Kingdom, China, Canada and Trinidad. The company has vast acres in the prospective domestic shale resources like Eagle Ford, Permian and Bakken. Like any other explorers and producers, the fate of EOG Resources is positively correlated to oil and gas prices and production volumes. 

Source: Zacks, EOG Press Release

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