EOG Resources Inc.'s 2009 capital spending will be cut to "approximate its cash flow" to ensure that it ends the year at the same debt level as year-end 2008, the producer said in a regulatory filing.
According to a Securities and Exchange Commission Form 8-K filing, the spending revisions, which were not detailed, are necessary because of the "current uncertainty in hydrocarbon markets." The Houston-based producer plans to update production growth targets and estimated capital spending plans on Feb. 4.
For 4Q2008, EOG expects to record a net gain of $528.8 million from natural gas and crude contracts, which includes $493.3 million from gas contracts. Net cash inflow related to settled contracts was $100.7 million, which included $84.2 million from gas contracts. It said its average floor price for outstanding gas contracts is $10/MMBtu, with an average ceiling price of $12.32.
Chevron, meanwhile, warned late Thursday that 4Q2008 earnings likely will be "significantly lower" than the previous three months because of lower oil and natural gas prices that negatively affected the upstream business. Chevron is scheduled to issue 4Q2008 earnings results on Jan. 30.
The San Ramon, CA-based major expects to take "well above" $300 million in after-tax charges in 4Q2008, and it will have a $625 million gain on an asset-exchange transaction. No details were provided on the asset exchange. Chevron reported a $7.9 billion profit in 3Q2008.
In October and November, which represents two-thirds of 4Q2008, Chevron's net U.S. gas production totaled 1,322 MMcf/d. For the entire 4Q2007, Chevron's U.S. gas output totaled 1,675 MMcf/d. Total oil-equivalent production in the United States in October and November was 608 million boe/d; for 4Q2007, U.S. production totaled 730 million boe/d.
"Total U.S. oil-equivalent production during the first two months of the fourth quarter was 39,000 b/d lower than in the third quarter due mainly to the residual impact of the September hurricanes in the Gulf of Mexico," Chevron stated. International liquids production increased roughly 10%, primarily because of overseas projects in Kazakhstan and offshore Nigeria.
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