Strong drilling results from the Barnett Shale play in Texas along with solid gains in the state and in North Louisiana helped EOG Resources Inc. to grow its daily oil and natural gas output 13.7% in the third quarter over a year ago. Total North American output was up 12%, with U.S. production up 16.2% from 3Q2004. EOG's 3Q2005 income also scored, more than doubling from a year earlier to $341.9 million ($1.40/share) from $169.6 million ($0.71) in 3Q2004.
Last year's quarterly results included a $22.7 million ($14.6 million after tax, or $0.06/share) gain on the mark-to-market of financial commodity price transactions. Reflecting these items, 3Q2004 net income was $134.1 million ($0.56/share).
"The continued successful execution of EOG's strategy and robust commodity prices are reflected in our third quarter results," said CEO Mark G. Papa. "With an extensive inventory of prospects throughout our operations, we continue to grow EOG at high reinvestment rates of return through the drillbit."
U.S. production increases reflected strong drilling results from its Barnett Shale play in Central Texas, combined with positive results in South Texas, East Texas and North Louisiana. Natural gas volumes in the United States grew to 724 MMcf/d from 623 MMcf/d for the same period a year ago. Canadian volumes reached 950 MMcf/d from 834 MMcf/d.
In the Barnett Shale, EOG is operating nine rigs in Johnson County, TX, where it completed several wells in early August on its western acreage. The company has found success with all of its wells there, and the Campbell Unit #1H in eastern Johnson County, in which EOG has a 100% working interest, came on-line last week at 7.7 MMcf/d. In the western counties of the Barnett Shale Play, EOG is operating one rig in Erath County and another in Parker County. The "operational results from these areas are encouraging," but the company said "further optimization is required" before more drilling begins, currently projected for mid-2006.
"We continue to see favorable organic growth across North America from our extensive drilling program," Papa said. "Based on these results, we are on target to achieve 15.5% organic production growth this year, while significantly reducing our net debt at the same time. We expect to achieve our targeted 9.5% for 2006 and average 9% overall organic growth for 2006 through 2010."
EOG also scored with solid drilling results in Trinidad and the North Sea, with oil and gas production climbing almost 21% over a year ago. In Trinidad, gas volumes rose to 213 MMcf/d from 203 MMcf/d in 3Q2004, while in the North Sea, volumes were up to 44 MMcf/d from 8 MMcf/d.
EOG is planning a conference call on Wednesday at 9 a.m. CST via a webcast. To access the webcast, visit http://www.eogresources.com.
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