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Market Update Analysis: 
EOG Resources Second Quarter Earnings Call
Author: Albena Toncheva
123jump.com
Last Update: 2:01 PM EDT September 20 2006


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Excluding tax benefits due to rate reductions and one-time items, earnings were $1.16 per share compared with 98 cents per share last year. The oil and gas producer posted a 10.6% organic increase in United States natural gas and natural gas liquids production. Quarterly revenue jumped to $919.1 million from $783.9 million. Natural gas production from the Fort Worth Basin Barnett Shale Play beat expectations. The company further cut long-term debt outstanding to $893 million at June 30, 2006.

 
The company does not anticipate any problems for its ramp up for 2007, 2008, and 2009.

What are you seeing differently on the seismic in Palo Pinto and the 4 counties?

The company faces less costing and experiences fewer geographic problems in the Western areas than in some parts of the Johnson County. In Palo Pinto and Hill in particular the company sees better thickness.

What could attribute the decrease in the drilling clones in Barnett?

The drilling time improved a lot since the previous year. The problem in Barnett is that the holes there are not straight holes and it takes more time for them to be dug. The company hopes to improve the process further in the next year simply by gaining better routine and getting used to the seismologic situation there.

The year 2006 was tight in the North Sea. What are the plans in terms of drilling activity for 2007?

2007 is looking equally tight and equally expensive as 2006. The company has at least one project that considers as a good prospect, and other two viable drilling prospects. EOG is looking for people who have rigs contracted in the North Sea which it can borrow.
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