- Overall Organic Year-Over-Year Production Increased 11 Percent
HOUSTON, Feb. 7 /PRNewswire-FirstCall/ -- EOG Resources, Inc. (EOG)
today reported fourth quarter 2007 net income available to common
stockholders of $358.0 million, or $1.44 per share. This compares
to fourth quarter 2006 net income available to common stockholders
of $237.2 million, or $0.96 per share. For the full year 2007, EOG
reported net income available to common stockholders of $1,083.3
million or $4.37 per share as compared to $1,288.9 million, or
$5.24 per share, for the full year 2006. The results for the fourth
quarter 2007 included a tax benefit of $30.3 million ($0.12 per
share) related to a Canadian federal tax rate reduction, a $2.3
million ($0.01 per share) charge related to the premium and fees on
the repurchase of $38 million of EOG's Series B preferred stock and
a previously disclosed $45.2 million ($29.1 million after tax, or
$0.12 per share) net gain on the mark-to-market of financial
commodity price transactions. During the quarter, the net cash
realized related to financial commodity contracts was $28.8 million
($18.5 million after tax, or $0.08 per share). Consistent with some
analysts' practice of matching realizations to settlement months
and making certain other adjustments to exclude one-time items,
adjusted non-GAAP net income available to common stockholders for
the quarter was $319.4 million, or $1.29 per share. Adjusted
non-GAAP net income available to common stockholders for the fourth
quarter 2006 was $252.0 million, or $1.02 per share. On a similar
basis, eliminating the items detailed in the attached table,
adjusted non-GAAP net income available to common stockholders for
the full year 2007 was $1,074.2 million, or $4.34 per share, and
for the full year 2006 was $1,189.4 million, or $4.83 per share.
(Please refer to the attached tables for the reconciliation of
adjusted non-GAAP net income available to common stockholders to
net income available to common stockholders.) "Despite volatile
natural gas prices, 2007 was an excellent year for EOG. Total
company production grew 11 percent and total reserves increased 14
percent at an attractive replacement cost. We were able to
accomplish these goals while maintaining a sound balance sheet,"
said Mark G. Papa, Chairman and Chief Executive Officer. "These
positive results are a reflection of our consistent game plan -- to
grow organically through the drillbit with a focus on high returns
supported by a very conservative capital structure." Operational
Highlights EOG posted outstanding total company operational results
during 2007: -- Production increased 11 percent over 2006, driven
by the Fort Worth and Rocky Mountain operating areas. -- Natural
gas production rose 19 percent in the United States and 10 percent
overall primarily due to strong performance from operations in the
Fort Worth, East Texas and Rocky Mountain areas. -- Crude oil and
condensate production grew by 19 percent in the United States and
11 percent overall versus the prior year with the most significant
increase recorded in the North Dakota Bakken. -- Natural gas
liquids volumes increased 31 percent over 2006 with excellent
results from the Fort Worth, South Texas and Rocky Mountain
operating areas. Reserves At December 31, 2007, total company
reserves were approximately 7.7 trillion cubic feet equivalent, an
increase of 944 billion cubic feet equivalent (Bcfe), or 14 percent
higher than year-end 2006. In 2007: -- Total reserve replacement
from all sources -- the ratio of net reserve additions from
drilling, acquisitions, revisions and dispositions to total
production -- was 248 percent at a total reserve replacement cost
of $2.24 per thousand cubic feet equivalent (Mcfe), excluding
gathering systems, processing plant and other expenditures. -- From
drilling alone, EOG added 1,534 Bcfe of reserves with drilling
capital expenditures of $3,548 million, excluding gathering
systems, processing plant and other expenditures, at a reserve
replacement cost of $2.31 per Mcfe prior to revisions, replacing
241 percent of production, -- In the United States, EOG added 1,580
Bcfe of reserves from drilling and acquisitions, net of revisions
with capital expenditures of $3,010 million, excluding gathering
systems, processing plant and other expenditures, at a reserve
replacement cost of $1.90 per Mcfe. (Please see attached tables for
supporting data for the reconciliation of non-GAAP drilling capital
expenditures to GAAP total costs incurred in exploration and
development activities and for the calculation of reserve
replacement percentages and reserve replacement costs.) For the
20th consecutive year, internal reserve estimates were within 5
percent of those prepared by the independent reserve engineering
firm of DeGolyer and MacNaughton. The firm prepared a complete
independent engineering analysis of properties containing 79
percent of EOG's proved reserves on a Bcfe basis. Capital Structure
At December 31, 2007, EOG's total debt outstanding was $1,185
million, and cash on the balance sheet was $54 million, for net
debt of $1,131 million. (Please refer to the attached tables for
the reconciliation of non-GAAP net debt to long-term debt.) EOG's
debt-to-total capitalization ratio was 14 percent at December 31,
2007. Further simplifying its capital structure, EOG repurchased
the remaining $43 million outstanding Series B preferred stock in
December 2007 and January 2008. Outlook for 2008 Consistent with
EOG's strategy of adding new reserves at high rates of return
through organic growth, the company plans to continue expansion of
its North American drilling program. The company expects
significant production gains from two high rate of return plays,
the Fort Worth Barnett Shale and North Dakota Bakken. EOG has
increased its total crude oil and condensate production growth
target from the previously stated 33 percent to 36 percent,
primarily as a result of expanded drilling operations in the North
Dakota Bakken. Natural gas liquids volumes are expected to rise by
40 percent over 2007 as EOG increases drilling activity in the
western extension counties of the Fort Worth Barnett Shale and
processes more of its rich natural gas. EOG's 2008 planned
exploration and development capital program is approximately $4.1
billion, which excludes acquisitions, gathering systems, processing
plant and other expenditures of approximately $280 million.
Considering the anticipated proceeds from the previously announced
divestiture of its Appalachian shallow natural gas assets, EOG is
targeting net debt at year-end 2008 to be relatively flat with
December 31, 2007. "Based on the current North American natural gas
market in which we expect 2008 Henry Hub gas prices will average at
least $7.50, we are targeting approximately 15 percent total
company production growth in 2008, the mid-point of our previously
stated range. Essentially all of our projected production growth
will emanate from our U.S. operations, since we expect production
from Canada, Trinidad and the United Kingdom to be relatively flat
with 2007 levels," said Papa. "Although we have a strong hedge
position in place, by closely monitoring natural gas fundamentals
and staying flexible, we are positioned to adjust our 2008 drilling
activity in response to a higher or lower gas price environment
while maintaining a conservative balance sheet." Dividend Increase
Following a 50 percent increase in 2007, EOG's Board of Directors
again increased the cash dividend on the common stock. Effective
with the dividend payable on April 30, 2008 to holders of record as
of April 16, 2008, the quarterly dividend on the common stock will
be $0.12 per share. The indicated annual rate of $0.48 per share
reflects a 33 percent increase from 2007, the eighth increase in
nine years. Conference Call Scheduled for February 8, 2008 EOG's
fourth quarter and full year 2007 results conference call will be
available via live audio webcast at 8 a.m. Central Standard Time (9
a.m. Eastern Standard Time) on Friday, February 8, 2008. To listen,
log on to http://www.eogresources.com/. The webcast will be
archived on EOG's website through Friday, February 22, 2008. 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, offshore Trinidad and the
United Kingdom North Sea. 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 and Section
21E of the Securities Exchange Act of 1934. All statements other
than statements of historical facts, including, among others,
statements regarding EOG's future financial position, business
strategy, budgets, reserve information, projected levels of
production, projected costs and plans and objectives of management
for future operations, are forward-looking statements. EOG
typically uses words such as "expect," "anticipate," "estimate,"
"strategy," "intend," "plan," "target" 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 future
operating results, the ability to replace or increase reserves or
to increase production, or the ability to 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 based
on reasonable assumptions, no assurance can be given that these
expectations will be achieved. Important factors that could cause
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 commodity prices for crude oil,
natural gas and related products, foreign currency exchange rates,
interest rates and financial market conditions; -- the extent and
effect of any hedging activities engaged in by EOG; -- the timing
and impact of liquefied natural gas imports; -- changes in demand
or prices for ammonia or methanol; -- the extent of EOG's success
in discovering, developing, marketing and producing reserves and in
acquiring oil and gas properties; -- the accuracy of reserve
estimates, which by their nature involve the exercise of
professional judgment and may therefore be imprecise; -- the
ability to achieve production levels from existing and future oil
and gas development projects due to operating hazards, drilling
risks and the inherent uncertainties in predicting oil and gas
reservoir performance; -- the availability and cost of drilling
rigs, experienced drilling crews, tubular steel and other
materials, equipment and services used in drilling and well
completions; -- the availability, terms and timing of mineral
licenses and leases and governmental and other permits and rights
of way; -- access to surface locations for drilling and production
facilities; -- the availability and capacity of gathering,
processing and pipeline transportation facilities; -- the
availability of compression uplift capacity; -- the extent to which
EOG can economically develop its Barnett Shale acreage outside of
Johnson County, Texas; -- whether EOG is successful in its efforts
to more densely develop its acreage in the Barnett Shale and other
production areas; -- political developments around the world and
the enactment of new government policies, legislation and
regulations, including environmental regulations; -- acts of war
and terrorism and responses to these acts; and -- weather,
including weather-related delays in the installation of gathering
and production facilities. In light of these risks, uncertainties
and assumptions, the events anticipated by EOG's forward-looking
statements may not occur. 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) 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 fiscal year ended December 31, 2006, 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 http://www.sec.gov/.
EOG RESOURCES, INC. FINANCIAL REPORT (Unaudited; in millions,
except per share data) Quarter Twelve Months Ended December 31,
Ended December 31, 2007 2006 2007 2006 Net Operating Revenues
$1,250.8 $931.4 $4,190.8 $3,912.5 Net Income Available to Common
Stockholders $358.0 $237.2 $1,083.3 $1,288.9 Net Income Per Share
Available to Common Stockholders Basic $1.46 $0.98 $4.45 $5.33
Diluted $1.44 $0.96 $4.37 $5.24 Average Number of Common Shares
Basic 244.4 242.5 243.5 241.8 Diluted 248.5 246.5 247.6 246.1
SUMMARY INCOME STATEMENTS (Unaudited; in thousands) Quarter Twelve
Months Ended December 31, Ended December 31, 2007 2006 2007 2006
Net Operating Revenues Wellhead Natural Gas $840,583 $709,295
$3,050,973 $2,803,245 Wellhead Crude Oil, Condensate and Natural
Gas Liquids 335,690 191,102 987,523 761,580 Gains on Mark-to-
Market Commodity Derivative Contracts 45,215 31,518 93,108 334,260
Other, Net 29,316 (542) 59,187 13,457 Total 1,250,804 931,373
4,190,791 3,912,542 Operating Expenses Lease and Well 132,215
104,431 479,819 372,895 Transportation Costs 46,852 29,687 170,404
110,328 Exploration Costs 44,005 45,129 150,445 155,008 Dry Hole
Costs 40,710 37,817 115,382 79,567 Impairments 60,657 40,699
147,517 108,258 Depreciation, Depletion and Amortization 282,234
230,438 1,065,545 817,089 General and Administrative 66,047 47,721
205,210 164,981 Taxes Other Than Income 58,267 46,245 208,073
200,863 Total 730,987 582,167 2,542,395 2,008,989 Operating Income
519,817 349,206 1,648,396 1,903,553 Other Income, Net 7,014 10,833
29,250 52,246 Income Before Interest Expense and Income Taxes
526,831 360,039 1,677,646 1,955,799 Interest Expense, Net 15,751
7,519 46,778 43,158 Income Before Income Taxes 511,080 352,520
1,630,868 1,912,641 Income Tax Provision 149,885 109,895 540,950
612,756 Net Income 361,195 242,625 1,089,918 1,299,885 Preferred
Stock Dividends 3,161 5,421 6,663 10,995 Net Income Available to
Common Stockholders $358,034 $237,204 $1,083,255 $1,288,890 EOG
RESOURCES, INC. OPERATING HIGHLIGHTS (Unaudited) Quarter Twelve
Months Ended December 31, Ended December 31, 2007 2006 2007 2006
Wellhead Volumes and Prices Natural Gas Volumes (MMcfd) United
States 1,010 894 971 817 Canada 225 227 224 226 United States &
Canada 1,235 1,121 1,195 1,043 Trinidad 241 254 252 264 United
Kingdom 20 32 23 30 Total 1,496 1,407 1,470 1,337 Average Natural
Gas Prices ($/Mcf) United States $6.52 $6.09 $6.32 $6.56 Canada
6.36 5.85 6.25 6.41 United States & Canada Composite 6.49 6.04
6.31 6.53 Trinidad 3.84 2.92 2.71 2.44 United Kingdom 9.45 6.13
6.19 7.69 Composite 6.11 5.48 5.69 5.74 Crude Oil and Condensate
Volumes (MBbld) United States 27.6 21.8 24.6 20.7 Canada 2.3 2.4
2.4 2.5 United States & Canada 29.9 24.2 27.0 23.2 Trinidad 3.8
4.4 4.1 4.8 United Kingdom 0.1 0.1 0.1 0.1 Total 33.8 28.7 31.2
28.1 Average Crude Oil and Condensate Prices ($/Bbl) United States
$84.83 $56.49 $68.85 $62.68 Canada 79.98 50.59 65.27 57.32 United
States & Canada Composite 84.45 55.91 68.53 62.09 Trinidad
78.37 58.41 69.84 63.87 United Kingdom 86.70 49.57 66.84 57.74
Composite 83.77 56.39 68.69 62.38 Natural Gas Liquids Volumes
(MBbld) United States 13.7 9.1 11.1 8.5 Canada 1.1 1.0 1.1 0.8
Total 14.8 10.1 12.2 9.3 Average Natural Gas Liquids Prices ($/Bbl)
United States $56.27 $36.80 $47.63 $39.95 Canada 53.18 36.56 44.54
43.69 Composite 56.04 36.78 47.36 40.25 Natural Gas Equivalent
Volumes (MMcfed) United States 1,257 1,079 1,184 992 Canada 246 247
245 246 United States & Canada 1,503 1,326 1,429 1,238 Trinidad
264 281 276 292 United Kingdom 20 33 24 31 Total 1,787 1,640 1,729
1,561 Total Bcfe 164.4 150.8 631.3 569.9 EOG RESOURCES, INC.
SUMMARY BALANCE SHEETS (Unaudited; in thousands, except share data)
December 31, December 31, 2007 2006 ASSETS Current Assets Cash and
Cash Equivalents $54,231 $218,255 Accounts Receivable, Net 835,670
754,134 Inventories 103,613 113,591 Assets from Price Risk
Management Activities 100,912 130,612 Income Taxes Receivable
110,370 94,311 Deferred Income Taxes 33,533 - Other 55,001 39,177
Total 1,293,330 1,350,080 Property, Plant and Equipment Oil and Gas
Properties (Successful Efforts Method) 16,991,687 13,575,528 Other
Property, Plant and Equipment 584,876 318,323 17,576,563 13,893,851
Less: Accumulated Depreciation, Depletion and Amortization
(7,138,974) (5,949,804) Total Property, Plant and Equipment, Net
10,437,589 7,944,047 Long-Term Assets Held for Sale 244,750 - Other
Assets 113,238 108,033 Total Assets $12,088,907 $9,402,160
LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts
Payable $1,152,140 $896,572 Accrued Taxes Payable 104,647 130,984
Dividends Payable 22,045 14,718 Liabilities from Price Risk
Management Activities 3,404 - Deferred Income Taxes 108,980 144,615
Other 82,954 68,123 Total 1,474,170 1,255,012 Long-Term Debt
1,185,000 733,442 Other Liabilities 368,336 300,907 Deferred Income
Taxes 2,071,307 1,513,128 Stockholders' Equity Preferred Stock,
$0.01 Par, 10,000,000 Shares Authorized: Series B, Cumulative,
$1,000 Liquidation Preference Per Share, 5,000 Shares Outstanding
at December 31, 2007 and 53,260 Shares Outstanding at December 31,
2006 4,977 52,887 Common Stock, $0.01 Par, 640,000,000 Shares
Authorized and 249,460,000 Shares Issued 202,495 202,495 Additional
Paid In Capital 221,102 129,986 Accumulated Other Comprehensive
Income 466,702 176,704 Retained Earnings 6,156,721 5,151,034 Common
Stock Held in Treasury, 2,935,313 Shares at December 31, 2007 and
5,724,959 Shares at December 31, 2006 (61,903) (113,435) Total
Stockholders' Equity 6,990,094 5,599,671 Total Liabilities and
Stockholders' Equity $12,088,907 $9,402,160 EOG RESOURCES, INC.
SUMMARY STATEMENTS OF CASH FLOWS (Unaudited; in thousands) Twelve
Months Ended December 31, 2007 2006 Cash Flows from Operating
Activities Reconciliation of Net Income to Net Cash Provided by
Operating Activities: Net Income $1,089,918 $1,299,885 Items Not
Requiring (Providing) Cash Depreciation, Depletion and Amortization
1,065,545 817,089 Impairments 147,517 108,258 Stock-Based
Compensation Expenses 67,253 49,875 Deferred Income Taxes 426,827
385,842 Other, Net (44,138) (18,404) Dry Hole Costs 115,382 79,567
Mark-to-Market Commodity Derivative Contracts Total Gains (93,108)
(334,260) Realized Gains 127,969 215,063 Other, Net 24,268 20,670
Changes in Components of Working Capital and Other Assets and
Liabilities Accounts Receivable (85,024) 9,905 Inventories 9,638
(50,370) Accounts Payable 228,354 222,012 Accrued Taxes Payable
(40,002) (106,324) Other Assets (8,416) 13,060 Other Liabilities
4,976 (9,477) Changes in Components of Working Capital Associated
with Investing and Financing Activities (104,094) (123,838) Net
Cash Provided by Operating Activities 2,932,865 2,578,553 Investing
Cash Flows Additions to Oil and Gas Properties (3,401,986)
(2,750,262) Additions to Other Property, Plant and Equipment
(277,076) (99,861) Proceeds from Sales of Assets 83,295 20,041
Changes in Components of Working Capital Associated with Investing
Activities 104,168 123,890 Other, Net (3,675) (4,181) Net Cash Used
in Investing Activities (3,495,274) (2,710,373) Financing Cash
Flows Net Commercial Paper and Revolving Credit Facility Borrowings
10,000 65,000 Long-Term Debt Borrowings 600,000 - Long-Term Debt
Repayments (158,442) (316,625) Dividends Paid (84,020) (60,443)
Excess Tax Benefits from Stock-Based Compensation 27,339 28,188
Redemption of Preferred Stock (51,197) (50,199) Proceeds from Stock
Options Exercised and Employee Stock Purchase Plans 55,320 36,033
Debt Issuance Costs (5,206) (615) Other, Net (71) (221) Net Cash
Provided by (Used in) Financing Activities 393,723 (298,882) Effect
of Exchange Rate Changes on Cash 4,662 5,146 Decrease in Cash and
Cash Equivalents (164,024) (425,556) Cash and Cash Equivalents at
Beginning of Period 218,255 643,811 Cash and Cash Equivalents at
End of Period $54,231 $218,255 EOG RESOURCES, INC. QUANTITATIVE
RECONCILIATION OF ADJUSTED NET INCOME AVAILABLE TO COMMON
STOCKHOLDERS (Non-GAAP) TO NET INCOME AVAILABLE TO COMMON
STOCKHOLDERS (GAAP) (Unaudited; in thousands, except per share
data) The following chart adjusts three-month and twelve-month
periods ended December 31 reported Net Income Available to Common
Stockholders (GAAP) to reflect actual cash realized from financial
commodity price transactions by eliminating the unrealized
mark-to-market gains from these transactions, to add the premium
and fees for preferred stock redemptions in the third and fourth
quarters of 2007 and the fourth quarter of 2006, to add the
one-time tax expense related to Texas (US) franchise tax law
revision in the second quarter of 2006, and to eliminate the effect
of the income tax rate reductions enacted by Alberta (Canada) in
the second quarter of 2006 and by the Canadian federal government
in the second and fourth quarters of 2007 and the second quarter of
2006. 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 comparitive
purposes within the industry. Quarter Twelve Months Ended December
31, Ended December 31, 2007 2006 2007 2006 Reported Net Income
Available to Common Stockholders (GAAP) $358,034 $237,204
$1,083,255 $1,288,890 Mark-to-Market (MTM) Commodity Derivative
Contracts Impact Total Gains (45,215) (31,518) (93,108) (334,260)
Realized Gains 28,782 48,171 127,969 215,063 Subtotal (16,433)
16,653 34,861 (119,197) After Tax MTM Impact (10,575) 10,716 22,433
(76,703) Add: Premium and Fees for Preferred Stock Redemption 2,296
4,049 2,937 4,049 Add: Tax Expense Related to Texas (US) Franchise
Tax Law Revision - - - 5,221 Less: Tax Benefit Related to Alberta
(Canada) Provincial Tax Rate Reduction - - - (13,449) Less: Tax
Benefit Related to Canadian Federal Tax Rate Reduction (30,338) -
(34,419) (18,593) Adjusted Net Income Available to Common
Stockholders (Non-GAAP) $319,417 $251,969 $1,074,206 $1,189,415
Adjusted Net Income Per Share Available to Common Stockholders
(Non-GAAP) Basic $1.31 $1.04 $4.41 $4.92 Diluted $1.29 $1.02 $4.34
$4.83 Average Number of Common Shares Basic 244,440 242,515 243,469
241,782 Diluted 248,537 246,477 247,637 246,100 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 twelve-month periods ended December 31
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,
Other Assets and Liabilities and Preferred Stock Dividends. EOG
management uses this information for comparative purposes within
the industry. Quarter Twelve Months Ended December, Ended December,
2007 2006 2007 2006 Net Cash Provided by Operating Activities
(GAAP) $786,917 $599,005 $2,932,865 $2,578,553 Adjustments
Exploration Costs (excluding Stock-Based Compensation Expenses)
40,275 42,634 137,117 144,147 Changes in Components of Working
Capital and Other Assets and Liabilities Accounts Receivable
163,307 100,612 85,024 (9,905) Inventories (5,406) (3,651) (9,638)
50,370 Accounts Payable (185,524) (117,420) (228,354) (222,012)
Accrued Taxes Payable 17,168 57,241 40,002 106,324 Other Assets 636
14,563 8,416 (13,060) Other Liabilities (8,741) 2,573 (4,976) 9,477
Changes in Components of Working Capital Associated with Investing
and Financing Activities 59,780 57,842 104,094 123,838 Preferred
Stock Dividends (3,161) (5,421) (6,663) (10,995) Discretionary Cash
Flow Available to Common Stockholders (Non-GAAP) $865,251 $747,978
$3,057,887 $2,756,737 EOG RESOURCES, INC. RESERVES SUPPLEMENTAL
DATA (Unaudited) 2007 NET PROVED RESERVES RECONCILIATION SUMMARY
United North NATURAL GAS (Bcf) States Canada America Trinidad
Beginning Reserves 3,470.9 1,309.6 4,780.5 1,295.4 Revisions (63.2)
(64.3) (127.5) (16.9) Purchases in place 1.2 1.2 2.4 29.6
Extensions, discoveries and other additions 1,177.5 54.9 1,232.4 -
Sales in place (5.7) - (5.7) - Production (360.6) (81.6) (442.2)
(91.8) Ending Reserves 4,220.1 1,219.8 5,439.9 1,216.3 LIQUIDS
(MMBbls) (a) Beginning Reserves 96.6 9.6 106.2 11.5 Revisions 27.9
1.2 29.1 (1.2) Purchases in place - - - 0.1 Extensions, discoveries
and other additions 49.4 0.9 50.3 - Sales in place (0.9) - (0.9) -
Production (13.0) (1.3) (14.3) (1.5) Ending Reserves 160.0 10.4
170.4 8.9 NATURAL GAS EQUIVALENTS (Bcfe) Beginning Reserves 4,050.6
1,367.1 5,417.7 1,364.4 Revisions 104.4 (57.3) 47.1 (23.9)
Purchases in place 1.5 1.2 2.7 30.0 Extensions, discoveries and
other additions 1,474.0 60.2 1,534.2 - Sales in place (11.4) -
(11.4) - Production (438.9) (89.2) (528.1) (100.8) Ending Reserves
5,180.2 1,282.0 6,462.2 1,269.7 Net Proved Developed Reserves
(Bcfe) At December 31, 2006 2,893.5 1,218.8 4,112.3 646.7 At
December 31, 2007 3,861.5 1,140.3 5,001.8 960.0 (a) Includes crude
oil, condensate and natural gas liquids. 2007 EXPLORATION AND
DEVELOPMENT EXPENDITURES ($ Million) Acquisition Cost of Unproved
Properties $233.3 $45.8 $279.1 $- Exploration Costs 435.9 75.5
511.4 45.2 Development Costs 2,336.5 254.3 2,590.8 91.0 Total
Drilling 3,005.7 375.6 3,381.3 136.2 Acquisition Cost of Proved
Properties 3.9 0.7 4.6 15.4 Total Exploration & Development
Expenditures 3,009.6 376.3 3,385.9 151.6 Gathering, Processing and
Other 275.1 1.5 276.6 0.4 Asset Retirement Costs 21.8 9.3 31.1 0.3
Total Expenditures 3,306.5 387.1 3,693.6 152.3 Proceeds from Sales
in Place (77.9) (5.4) (83.3) - Net Expenditures $3,228.6 $381.7
$3,610.3 $152.3 RESERVE REPLACEMENT COSTS ($ / Mcfe)* Total
Drilling, Before Revisions $2.04 $6.24 $2.20 $ - All-in Total, Net
of Revisions $1.90 $91.78 $2.14 $24.85 RESERVE REPLACEMENT*
Drilling Only 336% 67% 291% 0% All-in Total, Net of Revisions &
Dispositions 357% 5% 298% 6% 2007 NET PROVED RESERVES
RECONCILIATION SUMMARY United Other Total NATURAL GAS (Bcf) Kingdom
Int'l Int'l Total Beginning Reserves 19.0 - 1,314.4 6,094.9
Revisions 2.5 - (14.4) (141.9) Purchases in place - - 29.6 32.0
Extensions, discoveries and other additions - - - 1,232.4 Sales in
place - - - (5.7) Production (8.6) - (100.4) (542.6) Ending
Reserves 12.9 - 1,229.2 6,669.1 LIQUIDS (MMBbls) (a) Beginning
Reserves 0.1 - 11.6 117.8 Revisions - - (1.2) 27.9 Purchases in
place - - 0.1 0.1 Extensions, discoveries and other additions - - -
50.3 Sales in place - - - (0.9) Production (0.1) - (1.6) (15.9)
Ending Reserves - - 8.9 179.3 NATURAL GAS EQUIVALENTS (Bcfe)
Beginning Reserves 19.4 - 1,383.8 6,801.5 Revisions 2.6 - (21.3)
25.8 Purchases in place - - 30.0 32.7 Extensions, discoveries and
other additions - - - 1,534.2 Sales in place - - - (11.4)
Production (8.8) - (109.6) (637.7) Ending Reserves 13.2 - 1,282.9
7,745.1 Net Proved Developed Reserves (Bcfe) At December 31, 2006
19.4 - 666.1 4,778.4 At December 31, 2007 13.2 - 973.2 5,975.0 (a)
Includes crude oil, condensate and natural gas liquids. 2007
EXPLORATION AND DEVELOPMENT EXPENDITURES ($ Million) Acquisition
Cost of Unproved Properties $(1.2) $ - $(1.2) $277.9 Exploration
Costs 27.8 5.3 78.3 589.7 Development Costs (1.4) - 89.6 2,680.4
Total Drilling 25.2 5.3 166.7 3,548.0 Acquisition Cost of Proved
Properties - - 15.4 20.0 Total Exploration & Development
Expenditures 25.2 5.3 182.1 3,568.0 Gathering, Processing and Other
0.1 - 0.5 277.1 Asset Retirement Costs - - 0.3 31.4 Total
Expenditures 25.3 5.3 182.9 3,876.5 Proceeds from Sales in Place -
- - (83.3) Net Expenditures $25.3 $5.3 $182.9 $3,793.2 RESERVE
REPLACEMENT COSTS ($ / Mcfe)* Total Drilling, Before Revisions $ -
$ - $ - $ 2.31 All-in Total, Net of Revisions $9.69 $ - $20.93 $
2.24 RESERVE REPLACEMENT* Drilling Only 0% - 0% 241% All-in Total,
Net of Revisions & Dispositions 30% - 8% 248% * See attached
reconciliation schedule for calculation methodology EOG RESOURCES,
INC. Quantitative Reconciliation of Total Exploration and
Development Expenditures for Drilling Only (Non-GAAP) and Total
Exploration and Development Expenditures (Non-GAAP) as Used In the
Calculation of Reserve Replacement Costs ($ / Mcfe) to Total Costs
Incurred in Exploration and Development Activities (GAAP)
(Unaudited; In Millions, Except Ratio Information) The following
chart reconciles Total Costs Incurred in Exploration and
Development Activities (GAAP) to Total Exploration and Development
Expenditures for Drilling Only (Non-GAAP) and Total Exploration and
Development Expenditures (Non-GAAP), as used in the calculation of
Reserve Replacement Costs per Mcfe. There are numerous ways that
industry participants present Reserve Replacement Costs, including
"Drilling Only" and "All-In", which reflect total exploration and
development expenditures divided by total net reserve additions
from extensions and discoveries only, or from all sources. Combined
with Reserve Replacement, these statistics provide management and
investors with an indication of the results of the current year
capital investment program. Reserve Replacement Cost statistics are
widely recognized and reported by industry participants and are
used by EOG management and other third parties for comparative
purposes within the industry. Please note that the actual cost of
adding reserves will vary from the reported statistics due to
timing differences in reserve bookings and capital expenditures.
Accordingly, some analysts use three or five year averages of
reported statistics, while others prefer to estimate future cost.
EOG has not included future capital costs to develop proved
undeveloped reserves in Total Exploration and Development
Expenditures. United North States Canada America Trinidad Total
Costs Incurred in Exploration and Development Activities (GAAP)
3,031.4 385.6 3,417.0 151.9 Less: Asset Retirement Costs (21.8)
(9.3) (31.1) (0.3) Less: Acquisition Cost of Proved Properties
(3.9) (0.7) (4.6) (15.4) Total Exploration & Development
Expenditures for Drilling Only (Non-GAAP) (a) 3,005.7 375.6 3,381.3
136.2 Total Costs Incurred in Exploration and Development
Activities (GAAP) 3,031.4 385.6 3,417.0 151.9 Less: Asset
Retirement Costs (21.8) (9.3) (31.1) (0.3) Total Exploration &
Development Expenditures (Non-GAAP) (b) 3,009.6 376.3 3,385.9 151.6
Net Reserve Additions From All Sources - Natural Gas Equivalents
(Bcfe) Revisions 104.4 (57.3) 47.1 (23.9) Purchases in place 1.5
1.2 2.7 30.0 Extensions, discoveries and other additions (c)
1,474.0 60.2 1,534.2 - Total Reserve Additions (d) 1,579.9 4.1
1,584.0 6.1 Sales in place (11.4) - (11.4) - Net Reserve Additions
From All Sources (e) 1,568.5 4.1 1,572.6 6.1 Production (f) 438.9
89.2 528.1 100.8 RESERVE REPLACEMENT COSTS ($ / Mcfe) Total
Drilling, Before Revisions (a / c ) $2.04 $6.24 $2.20 - All-in
Total, Net of Revisions (b / d) $1.90 $91.78 $2.14 $24.85 RESERVE
REPLACEMENT Drilling Only (c / f) 336% 67% 291% - All-in Total, Net
of Revisions & Dispositions (e / f) 357% 5% 298% 6% United
Other Total Kingdom Int'l Int'l Total Total Costs Incurred in
Exploration and Development Activities (GAAP) 25.2 5.3 182.4
3,599.4 Less: Asset Retirement Costs - - (0.3) (31.4) Less:
Acquisition Cost of Proved Properties - - (15.4) (20.0) Total
Exploration & Development Expenditures for Drilling Only
(Non-GAAP) (a) 25.2 5.3 166.7 3,548.0 Total Costs Incurred in
Exploration and Development Activities (GAAP) 25.2 5.3 182.4
3,599.4 Less: Asset Retirement Costs - - (0.3) (31.4) Total
Exploration & Development Expenditures (Non-GAAP) (b) 25.2 5.3
182.1 3,568.0 Net Reserve Additions From All Sources - Natural Gas
Equivalents (Bcfe) Revisions 2.6 - (21.3) 25.8 Purchases in place -
- 30.0 32.7 Extensions, discoveries and other additions (c) - - -
1,534.2 Total Reserve Additions (d) 2.6 - 8.7 1,592.7 Sales in
place - - - (11.4) Net Reserve Additions From All Sources (e) 2.6 -
8.7 1,581.3 Production (f) 8.8 - 109.6 637.7 RESERVE REPLACEMENT
COSTS ($ / Mcfe) Total Drilling, Before Revisions (a / c) - - -
$2.31 All-in Total, Net of Revisions (b / d) $9.69 - $20.93 $2.24
RESERVE REPLACEMENT Drilling Only (c / f) - - - 241% All-in Total,
Net of Revisions & Dispositions (e / f ) 30% - 8% 248% EOG
RESOURCES, INC. Quantitative Reconciliation of Net Debt (Non-GAAP)
to Long-Term Debt (GAAP) (Unaudited; in millions) The following
chart reconciles Long-Term Debt (GAAP) to Net Debt (Non-GAAP). 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 in their calculation.
EOG management uses this information for comparative purposes
within the industry. 12/31/2007 Long-Term Debt (GAAP) $1,185 Less:
Cash (54) Net Debt (Non-GAAP) $1,131 DATASOURCE: EOG Resources,
Inc. CONTACT: Investors, Maire A. Baldwin, +1-713-651-6EOG
(651-6364), or Media and Investors, Elizabeth M. Ivers,
+1-713-651-7132, both of EOG Resources, Inc. Web site:
http://www.eogresources.com/
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