Eog Resources, Inc. · NYSE:EOG
Eog Resources — Investor Presentation (January 2007)
23 slides from Eog Resources's investor presentation, January 2007
Slide 1: NYSE Stock Symbol: EOG and Investor Relations Contacts
NYSE Stock Symbol: EOG Investor Relations Contacts Common Dividend: $0.24 Maire A. Baldwin, Vice President - IR Basic Shares Outstanding: 241.9 Million (713) 651-6364, Fax (713) 651-6992 Maire_Baldwin@eogresources.com Internet Address: Elizabeth M. Ivers, Director Investor/ http://www.eogresources.c
Slide 2: Copyright and forward-looking statements
Copyright 2007. Presentation and contents of this presentation are copyright by EOG Resources, Inc. All rights reserved. Copying of the presentation is forbidden without the prior written consent of EOG Resources, Inc. Information in this presentation is provided without warranty of any kind, either
Slide 3: 2007 Game Plan
EOG Resources 2007 Game Plan Achieve Top Tier ROE and ROCE (Every Year) Maintain Lowest Net Debt* Level of Peer Group Continue Best Debt Adjusted Production Per Share Growth in Peer Group Focus on Cost Control - One of Lowest YOY Unit Cost Increases in Peer Group - Second Consecutive Year Exploit Ne
Slide 4: EOG vs. S&P500 Oil and Gas Exploration Group: Focus on Returns
EOG vs. S&P500 Oil and Gas Exploration Group* Focus on Returns Return on Equity Return on Capital Employed 35.5% 30.0% 28.9% 25.3% 19.1% 17.7% 17.9% 12.7% EOG S&P500 EOG S&P500 EOG S&P500 EOG S&P500 Expl Group* Expl Group* Expl Group* Expl Group* 2005 1999 - 2005 2005 1999 - 2005 7 Year Average 7 Ye
Slide 5: Significant Balance Sheet Flexibility
EOG vs. S&P500 Oil and Gas Exploration Group* Significant Balance Sheet Flexibility 70% 60% 50% 40% 30% 20% 10% 0% EOG Co. 1 Co. 2 Co. 3 Peer Co. 4 Co. 5 Average Net Debt to Total Capitalization Ratio (Including Preferreds)** * S&P500 Oil and Gas Exploration Group (Excluding EOG): APA, APC, CHK, DVN
Slide 6: Focus on 2006E Cost Control
EOG Resources Focus on 2006E Cost Control* $6.00 $5.00 Average = $4.18/Mcfe $4.00 $3.00 $2.00 $1.00 $0.00 EOG Co. 1 Co. 2 Co. 3 Co. 4 Co. 5 Co. 6 Co. 7 Co. 8 Co. 9 LOE (Including Transportation) DD&A G&A Net Interest * Source: Merrill Lynch estimates in November 2006 for full year 2006. EOG makes no
Slide 7: 2005-2006E Unit Costs 2 Year Annual Rate of Increase
EOG Resources 2005 - 2006E Unit Costs 2 Year Annual Rate of Increase* 35% 30% 25% 20% 15% 10% 5% 0% EOG Co. 1 Co. 2 Co. 3 Co. 4 Large Co. 5 Co. 6 Co. 7 Co. 8 Co. 9 Co. 10 Cap Avg. Peer Group includes: APC, APA, CHK, DVN, MUR, NFX, NBL, OXY, PXD, XTO * Source: UBS estimates November 2006. Unit costs
Slide 8: 2 Year Average Growth Debt Adjusted Production Per Share
2 Year Average Growth Debt Adjusted Production Per Share* 2005 and 2006E 15.5% 12% 7.5% 5% 4% 3.5% 3% 1.5% 1.5% Co. 8 Co. 9 Co. 10 Co. 11 Co. 12 Co. 13 Co. 14 EOG Co. 1 Co. 2 Co. 3 Co. 4 Co. 5 Co. 6 Co. 7 Wtd -1.5% Avg -3% -7% -9% -11.5% -20% -26% Peer Group includes: APC, APA, CHK, CNQ, DVN, ECA, N
Slide 9: Production Growth Estimates
EOG Resources Production Growth Estimates Annual Growth 2006E* 2007E 2008E - 2010E Total Company 9% 10% 7% - 11% (Avg 9%) North American Gas 11% 19% Avg 11% Tolerance + 2% * Based on mid-point of October 30, 2006 Form 8K filing EOG_0107-8
Slide 10: Continued Production Growth (MMcfed)
EOG Resources Continued Production Growth (MMcfed) 10% 1,715 9% 1,558 1,433 280 318 299 16% 9% 1,435 1,134 1,240 2005 2006E* 2007E North America International * Based on mid-point of October 30, 2006 Form 8K filing EOG_0107-9
Slide 11: Expanded Drilling Inventory
EOG Resources Expanded Drilling Inventory Ft. Worth Barnett Shale Southern Expansion Area - Extension of Johnson County - EOG is First Mover Western Counties - Reserve Targets Achieved – Jack, Hood, Parker and Northern Half Erath Total Captured Reserve Estimate Increased by 1.5 - 2.0 Net Tcf South T
Slide 12: North America Ex Barnett - Development Drivers
EOG Resources North America Ex Barnett - Development Drivers Biggest Portion of Company Production Growth (MMcfed) 2004 6% 2005 7% 2006E ~ ~ 2%* 2007E ~ ~ 6% Area Past Few Years 2007 - 2010 Rocky Mountains Uinta Basin Uinta Basin x 3 Moxa Arch Frontier and Frontier Horizontal Bakken East Texas Cotto
Slide 13: Ft. Worth Barnett Shale
EOG Resources Ft. Worth Barnett Shale DENTON JACK WISE Total Acreage >610,000 Acres YOUNG TARRANT New Acreage Leased STEPHENS PARKER PALO PINTO - 59,000 – Southern Extension (Primarily Hill) Ft. Worth - 44,000 – Western Extension (Primarily Palo Pinto) HOOD JOHNSON EASTLAND LL VE EOG Has Drilled Suc
Slide 14: Ft. Worth Barnett - Johnson County
EOG Resources Ft. Worth Barnett - Johnson County Production Driver 2006 - 2009 Downspacing Being Implemented Average Well Results Becoming Quite Consistent Likely Reserve Potential 1.9 - 2.5 Net Tcfe EOG_0107-13
Slide 15: Ft. Worth Barnett Southern Extension Counties
EOG Resources Ft. Worth Barnett Southern Extension Counties First Mover Advantage (Again) 103,000 Acres – Slightly More Than Johnson County Initial Well Results Similar to Johnson County - Kimbrell #2H 2.7 MMcfd - Radke #1H 3.2 MMcfd Viola Frac Barrier Present Likely Reserve Potential 1.0 - 1.7 Net
Slide 16: Ft. Worth Barnett Western Extension Counties
EOG Resources Ft. Worth Barnett Western Extension Counties EOG Proceeding With Development - Jack, Parker, Hood, Palo Pinto and Northern Half Erath Jack, Parker, Hood, and Northern Erath - Drilling Indicates 0.8 - 1.2 Net Bcfe/Well Palo Pinto Reserves Expected to Be ~ ~ 40% Higher - Better Pay Quali
Slide 17: Ft. Worth Barnett Shale Acreage Potential
EOG Resources Ft. Worth Barnett Shale Acreage Potential Net Potential Net Net Bcfe Direct County Acreage Locations* Bcf/ Well* Potential** ATROR*** Johnson 95,000 Horizontal Wells 1,250 1.4 - 1.8 1,800 - 2,300 55% - 65% (Includes Downspaced Locations) Vertical Wells 130 0.8 - 1.2 100 - 200 40% - 70%
Slide 18: South Texas
EOG Resources South Texas South Texas Sandstone Reservoirs - Horizontal Drilling First in Industry in South Texas 15 Wells Completed to Sales Strong Economics – 60% Direct ATROR Reserve Potential 400 - 600 Net Bcfe EOG_0107-17
Slide 19: Uinta Basin Unbooked Reserves (Vertical Drilling)
EOG Resources Uinta Basin Unbooked Reserves (Vertical Drilling) EOG Legacy Asset 22,000 Net Acres Mesaverde Currently Drilled on 40 Acre Spacing - Reserves Booked on 40 and 20 Acre Spacing Property Will Be Drilled to 10 Acre Spacing - Based on 2005 and 2006 Pressure and Core Testing More Gas in Plac
Slide 20: North Dakota
EOG Resources North Dakota Bakken Horizontal Oil Play 125,000 Acres at $65/Acre, 100% WI Four Wells Completed to Date (Initial Production Rates) - 1,800 Bopd - 880 Bopd - 460 Bopd - 240 Bopd Average Direct ATROR – 50% Need Additional Drilling and Data Points Across Acreage to Estimate Reserve Potent
Slide 21: Financial Strategy
EOG Resources Financial Strategy Strong Demonstrated Preference for Simplicity Over Complexity EOG Reserves Within 5% of Independent Estimates Prepared by DeGolyer and MacNaughton – 18 Straight Years Clean Balance Sheet – Zero Goodwill Conservative – Successful Efforts Accounting Moody’s A3 Rating /
Slide 22: Summary
EOG Resources Summary EOG Has the Assets to Grow Organically at 9 - 10%/Yr 2007 - 2010 Maintain Very Strong Balance Sheet – Debt Will Likely Stay Low Ft. Worth Barnett Position is Expanded Hill County Acreage is Very Attractive Achieved Reserve Targets in Western Extension Counties - Jack, Hood, Par
Slide 23: Copyright and forward-looking statements
Copyright 2007. Presentation and contents of this presentation are copyright by EOG Resources, Inc. All rights reserved. Copying of the presentation is forbidden without the prior written consent of EOG Resources, Inc. Information in this presentation is provided without warranty of any kind, either