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EOG Resources Reports First Quarter 2008 Results

PR Newswire, May 1, 2008

- On Track to Achieve 15 Percent Total Company Organic Production Growth Target in 2008

- Strengthens Balance Sheet during First Quarter

- Announces New Horizontal Natural Gas Play in the Texas Panhandle

HOUSTON, May 1 /PRNewswire-FirstCall/ -- EOG Resources, Inc. (EOG) today reported first quarter 2008 net income available to common stockholders of $240.5 million, or $0.96 per share. This compares to first quarter 2007 net income available to common stockholders of $216.8 million, or $0.88 per share.

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The results for the first quarter 2008 included a gain on sale of assets of $130.2 million ($84.7 million after tax, or $0.34 per share) related to the disposition of shallow natural gas assets and surrounding acreage in the Appalachian Basin and a previously disclosed $469.8 million ($302.3 million after tax, or $1.21 per share) loss on the mark-to-market of financial commodity transactions. During the quarter, the net cash realized related to financial commodity contracts was $23.2 million ($14.9 million after tax, or $0.06 per share). Consistent with some analysts' practice of matching realizations to settlement months and making certain other adjustments in order to exclude one-time items, adjusted non-GAAP net income available to common stockholders for the quarter was $473.0 million, or $1.89 per share. Adjusted non-GAAP net income available to common stockholders for the first quarter 2007 was $272.8 million, or $1.11 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

For the first three months of 2008, EOG reported robust volume growth in United States natural gas, crude oil and condensate and natural gas liquids over the first quarter 2007. Domestic natural gas production rose 19 percent, driven by increases from operations in the Fort Worth Barnett Shale and Upper Gulf Coast operating areas.

Total company crude oil, condensate and natural gas liquids volumes increased 38 percent over the same period a year ago. The North Dakota Bakken and Mid Continent areas contributed significantly to a 27 percent rise in total company crude oil and condensate growth over the same period a year ago. Total company natural gas liquids volumes were up 67 percent over the first quarter 2007, with substantial increases recorded from the liquids-rich Fort Worth Barnett Shale natural gas production.

EOG continues to unlock new reserve accumulations through the application of horizontal drilling and completion technology. Adding to its outstanding inventory of drilling locations, EOG has identified a natural gas play in the Mid Continent operating area with an estimated 400 billion cubic feet, net of natural gas potential. EOG has accumulated 60,000 net acres in the Atoka Formation in the Texas Panhandle where it has drilled 17 horizontal wells to date. The most recent well, the Paul 536 #2H, began producing natural gas at a rate of 6.5 million cubic feet per day (MMcfd) in April, while the Price Trust 604 #2H went on production at a rate of 7 MMcfd in the fourth quarter 2007. EOG has a 100 percent working interest in both wells.

"This was a very strong quarter for EOG. Not only were our operational results excellent, but our growing expertise in the application of horizontal drilling and completion technology has helped us identify another natural gas resource play. Our success in the Atoka Formation demonstrates that there are still untapped reservoirs in the United States for companies like EOG that have the skill to find and develop them," said Mark G. Papa, Chairman and Chief Executive Officer.

Capital Structure

At March 31, 2008, EOG's total debt outstanding was $1,185 million. Taking into account cash on the balance sheet of $205 million, at the end of the first quarter EOG's net debt was $980 million. EOG's debt-to-total capitalization ratio was 14 percent at March 31, 2008, unchanged since December 31, 2007. At the end of the first quarter, the net debt-to-total capitalization ratio was 12 percent, down from 14 percent at year-end 2007. (Please refer to the attached tables for the reconciliation of net debt (non-GAAP) to long-term debt (GAAP) and the reconciliation of net debt-to-total capitalization ratio (non-GAAP) to debt-to-total capitalization ratio (GAAP).)

"We are well positioned to achieve EOG's goal of reducing net debt throughout the year. In addition, we are executing our organic growth game plan in order to meet our 15 percent production growth target while maintaining our original capital expenditure estimate of $4.4 billion," said Papa. "This strategy further strengthens our ability to achieve our longstanding goal of delivering strong returns to EOG's stockholders on an ongoing basis."

Conference Call Scheduled for May 2, 2008

EOG's first quarter 2008 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, May 2, 2008. To listen, log on to http://www.eogresources.com/. The webcast will be archived on EOG's website through Friday, May 16, 2008.

EOG Resources Reports First Quarter 2008 Results

PR Newswire, May 1, 2008

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