EOG reported net income of $43.2 million, or 28 cents/share for Q4 1997, up from $35.1 million, or 22 cents/share, for Q4 1996. Net operating revenues totaled $238 million, up from $204.3 million in Q4 1996. Discretionary cash flow totaled $173.6 million, up from $153.2 million for Q4 1996.

EOG’s 1997 net income was $122 million, or 78 cents/share, down from $140 million, or 88 cents/share, for 1996. Net 1997 operating revenues were $783.5 million in 1997 up from $730.6 million in 1996. Discretionary cash flow was $545 million, up from $543.3 million in 1996.

The company also reported a 12% increase in total proved reserves at year-end 1997 to 4.467 Tcfe compared to 4.006 Tcfe at year-end 1996. Both figures include deep Paleozoic reserves of 1.18 Tcfe. This is the 10th consecutive year in which EOG has more than replaced production through its drilling and workover programs and the third consecutive year with a greater than 200% production replacement ratio. All-in finding cost, net of revisions, was 80 cents/Mcfe.

EOG average wellhead gas prices increased 16% to $2.07/Mcf in 1997 from $1.78/Mcf in 1996. North America wellhead gas prices increased 15% to $2.20/Mcf in 1997 compared to $1.92/Mcf in 1996. Other EOG activities, including commodity price hedging, reduced revenues by $61.1 million in 1997 compared to a $4.4 million increase in 1996. The majority of the revenue reduction occurred in the first quarter of 1997. Results from these other marketing activities for the fourth quarter improved by $19.1 million, with a revenue reduction of $5.7 million in 1997 versus $24.8 million in the fourth quarter of 1996.

Total operating costs, including interest, per unit of production increased 9% to $1.37/Mcfe in 1997 from $1.26/Mcfe in 1996. The cash costs portion increased from 55 cents/Mcfe in 1996 to 63 cents/Mcfe in 1997, primarily driven by increased lease and well costs industry-wide and higher interest costs associated with expanded international operations.

Merger Cuts Burlington Resources Results

Burlington Resources reported Q4 1997 operating income of $87 million and net income of $36 million, or 20 cents/share. The period includes a one-time pre-tax charge of $80 million – $71 million after tax and 40 cents/share – related to the merger with Louisiana Land and Exploration. For the same period last year, operating income was $222 million, and net income was $139 million, or 78 cents/share. “Our strong fourth-quarter results, excluding non-recurring items, contributed to record earnings for the second consecutive year, despite the impact of lower oil prices,” said Bobby S. Shackouls, CEO. “While the recent weakness in commodity prices is disappointing, we are very bullish for the longer term and will remain focused on our aggressive plans for growth.”

Burlington gas prices increased from $2.45/Mcf in Q4 1996 to $2.53/Mcf in the fourth quarter of 1997. For the year ended Dec. 31, operating income was $503 million, and net income was $319 million, or $1.80/share. Net income includes $31 million, 18 cents/share, in profit on the sale of assets as well as an $80 million pre-tax charge – $71 million after tax or 40 cents/share – relating to the Louisiana Land merger.

Joe Fisher, Houston

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