If it's a dry natural gas asset owned by EOG Resources Inc., chances are it could be for sale. In the low gas price era, the company is shifting its focus to oil as fast as it can.

In 2007 EOG's North American production was 77% dry natural gas with the remainder crude oil and natural gas liquids (NGL). By next year about 33% of EOG's North American production will be dry gas, with the rest -- 67% -- crude oil and NGLs, said CEO Mark Papa

And don't think that crude and NGLs are seen as equals. Oil economics are better than those for NGLs, the company said, noting that its "proper positioning" has 75% of its liquids production in crude oil with only 25% of it in NGLs.

EOG said it expects to sell between $600 million and $1 billion of both producing and nonproducing properties, primarily natural gas, in North America. The majority of the deals are expected to close during the fourth quarter.

"What we'll be looking at selling over the next 18 months are properties...perhaps the long-life existing gas properties that it may be time to pass down to another operator," Papa told financial analysts during a conference call Wednesday. "We're a company that over the last decade we haven't sold much. We've been in accumulating mode that whole time, so we've got a pretty good inventory of existing properties to liquidate. And there are buyers out there even at these kind of gas price conditions.

"What we want to do is, we want to emerge from this with the horsepower for gas...If gas turns out to be a bullish commodity over the next five or eight years, then we've got horsepower there...We want to emerge from this with essentially 100% of all of our oil and combo plays. We believe we can do that over the next year or two even while we're liquidating some gas-producing assets and some portions of some acreage.

"I'd love to be more optimistic on gas. I hope I'm wrong, but we are so long on gas assets in this company that we can liquidate some of these gas assets and still retain tremendous horsepower if we decide to grow gas assets in 2013, 2014 or 2015."

Proceeds from the sales will be used primarily to offset any funding gap between planned capital expenditures and estimated cash flows. While previously targeting a maximum net debt-to-total capitalization ratio of 25%, EOG said it has now set the maximum net debt-to-total capitalization ratio at 30-35% to fund its portfolio of liquids-rich drilling opportunities.

"...EOG does not intend to sell down or joint venture any of its crude oil resource plays as we continue our strategic shift from natural gas to liquids. The growth potential of these robust assets is expected to accelerate EOG's shift toward liquids, while increasing our margins in the coming years," Papa said.

Based on reduced cash flows resulting from weak gas prices and hydraulic fracturing equipment delays, EOG said it reduced its 2010 total company organic production growth forecast from 13% to 9%. Decreases in North American gas drilling activity account for 70% of the reduction. For 2011 and 2012 EOG said preliminary total company organic production growth forecasts are 10% and 12%, respectively, and it expects crude oil and condensate production increases of 53% and 30%, respectively, to drive growth for the two-year period.

In the South Texas Eagle Ford Shale play, EOG has escalated drilling and completion operations. Results from the 77 wells drilled to date across its 120-mile, 505,000-net acre position in the mature oil window reinforce EOG's confidence in its estimated 900 million boe, net after royalty resource potential, 77% of which is crude oil, the company said.

EOG said it is drilling and completing wells in batches to optimize recovery. "Significant production increases are expected in 2011 as numerous clusters of wells are turned to production," it said. Currently operating a 10-rig drilling program in the Eagle Ford, EOG said it plans to add one rig by year-end and average 14 rigs in 2011.

"Well data generated throughout the year from the Eagle Ford reflects an increase in our estimates of recoveries per well relative to our April 2010 estimates. This upside not only enhances the rate of return of the play but indicates fewer wells than we originally anticipated will be needed to capture our net reserve potential of 900 million boe," said Papa.

With a 16-rig drilling program in the Fort Worth Barnett Combo, the asset is in "full development mode," EOG said. After alleviating fracture crew constraints during the first half of 2010, EOG is focusing on multi-well development patterns in Montague and western Cooke counties.

"In the current natural gas environment, Combo economics are bolstered by the mix of oil and rich natural gas production with total liquids production contributing over 90% of revenue," EOG said. "In the past, liquids had contributed roughly 66% of the revenue stream from the play." In EOG's largest crude oil producing asset, the North Dakota Bakken, well completion operations resumed during the second quarter following the winter 2009-2010 drilling program. A significant number of wells began flowing to sales, contributing to EOG's overall crude oil production increase, the company said. In its sixth year of development in the Bakken, EOG is operating a 10-rig drilling program in North Dakota and Montana.

In the New Mexico Leonard Shale, EOG reported continued drilling success on an additional 18,000 acres and, combined with previous reported success on 31,000 acres, has now proven up 49,000 of its 120,000-total net acre position.

EOG reported a third quarter net loss of $70.9 million, or 28 cents/share, compared to net income of $4.2 million, 2 cents/share, a year ago. Third quarter results included a $208.3 million, net of tax (82 cents/share) impairment of certain Canadian shallow natural gas assets held for sale, a $41.4 million gain, net of tax (16 cents) on property dispositions and a previously disclosed noncash net gain of $61 million ($39.1 million after tax, or 16 cents/share) on the mark-to-market of financial commodity transactions.

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