At the North American ex-Barnett portion the company expects to generate 6% year-over-year production growth. Three good wells are completed during the quarter, with The Kirk Gas Unit #4 and the Slator Ranch W#1 and #33 wells, which IP’d at gross rates of 13, 18 and 16 million cubic feet a day respectively. EOG has 88% working interest in the first 2 wells, and 50% working interest in the last well.

In East Texas/North Louisiana operations, the company completed two good James Lime wells recently in Louisiana. The Melch #1 and the MacKenzie #1 wells IP’d for 6.2 and 5.1 million cubic feet a day. EOG has a 100% working interest in both wells.

The Rocky Mountain activity is on track to achieve about 13% year-over-year organic production growth this year. This growth comes from the plethora of consistent 1 million cubic feet a day wells.

In the Mid-Continent operating area the company made five 6,500-feet deep 3-D supported morrow sand discoveries that will add 15 million cubic feet a day of sales commencing in August, at very high rates of return. In New Mexico, EOG Resources recently completed several good wells in the Wolfcamp horizontal play. The sand samba B12 #2H and the Congo B10 fee #2H IP’d at 6 and 4 million cubic feet a day. EOG has 75% and 50% working interest in these wells.

In the U.K., North Sea, the Arthur 3 well was a success and flow test at a growth rate of 68 million. The company has a 30% working interest in this well.

Marker Outlook

As a percentage of North American production, the company is about 26% hedged for September and October of this year and only about 7% hedged for November and December of this year. EOG has about 4% of its 2007 North American gas production hedged at a $10 Henry-hub price. Regarding oil, the company had no oil hedges for 2006, and has 3000 barrels a day hedged for calendar year 2007 hedge at an average price of $77.50.

Key questions from the second quarter earnings call conducted by EOG Resources Inc. on August 1, 2006.

Could you comment on the improved drilling time in the Barnett Shale?

EOG is taking delivery on the new, smaller more efficient rig. On average, the company is taking somewhere around 15 days to drill these wells and now it will take about 10 days and less.

Do you have a new target for year-end at this time because you are probably ahead of schedule in Barnett Shale?

The company’s earlier expectation was to finish the year with about 23 rigs in the Barnett. EOG believes that it can accomplish its goals of drilling about the 225 wells by finishing the year with only 18 rigs running. The company believes that it will attack the cost sided equation in the western counties and have a good economics of about 1Bcf per well.

How many rigs do you need to drill the 450 targets per well in 2007?

Probably about 18 to 20 rigs.

Is there opportunity to pick up additionally acreage?

The company believes it can expand acreage position if it gets the positive results from the first well or two.

Will the company continue to remain on the side lines with respect to acquisitions or has it begun to actively screen potential targets?

Year to-date, the company has made very minimal producing property acquisitions - about $6 million. There are a lot of companies desperate to show production growth, willing to pay any price to acquire producing properties; EOG is not willing to do this. There is a very distinct differentiation in the reinvestment rate of returns achieved organically versus the reinvestment rate of return that achieved by design producing properties or making corporate acquisitions. That is why the company will not participate in any big deals.

Could you comment on the scale of the opportunity base in San Patricio success?

There are going to be wells that are going to help carry the Corpus Christi division very clearly. The company has good inventory in that area.