In a Securities and Exchange Commission (SEC) filing on Wednesday, Houston-based EOG Resources Inc. said it is adjusting its production and drilling activity downward through the rest of the year and now does not expect to meet its earlier production forecast because of falling natural gas prices.

“The company projects full year North American natural gas and condensate production to be lower than previously projected due to production moderation in September, October and November 2001 in the current gas environment,” it said in its SEC filing. “The company is no longer attempting to achieve the previously stated 4% target growth for North America.”

Now focused on “achieving above average rates of return on reinvested capital,” EOG expects a mark-to-market gain in the third quarter from outstanding commodity price swaps and collars of $58.7 million. In the third quarter, the swaps and collars will total approximately $28.9 million.

Price swap contracts are in place covering notional volumes of 115,000 MMBtu/d for August through November 2001 at an average price of $3.27/MMBtu and 200,000 MMBtu for December 2001 at an average price of $3.62/MMBtu. Price collars are in place for natural gas from July 2001 through November 2001 that set a floor price of $4.40/MMBtu and a ceiling price that averages $6.15/MMBtu covering notional volumes of 200,000 MMBtu/d at an average premium of $0.15/MMBtu.

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