USA: EOG Q3 Net Income Drops
EOG Resources reported third quarter 2012 net income of $355.5 million. This compares to third quarter 2011 net income of $540.9 million.
Consistent with some analysts’ practice of matching realizations to settlement months and making certain other adjustments in order to exclude one-time items, adjusted non-GAAP net income for the third quarter 2012 was $468.7 million. Adjusted non-GAAP net income for the third quarter 2011 was $223.2 million. The results for the third quarter 2012 include net gains on asset dispositions of $43.4 million, net of tax and a previously disclosed non-cash net gain of $4.7 million ($3.0 million after tax) on the mark-to-market of financial commodity contracts. During the third quarter, the net cash inflow related to financial commodity contracts was $249.2 million ($159.6 million after tax).
EOG’s overall financial metrics were enhanced by successfully linking a significant portion of its Eagle Ford and Bakken crude oil and condensate production to markets which provide premium crude oil pricing. For the third quarter, adjusted non-GAAP net income per share increased 108 percent, discretionary cash flow increased 37 percent and adjusted EBITDAX increased 39 percent as compared to the third quarter 2011.
EOG exceeded its third quarter crude oil and condensate production forecasts by continuing to modify completion techniques in its South Texas Eagle Ford; North Dakota Bakken and Three Forks; and Permian Basin Wolfcamp and Leonard plays. In North America, crude oil production increased 45 percent in the third quarter and 51 percent for the first nine months of 2012 compared to prior year periods. Total North American liquids (crude oil, condensate and natural gas liquids) production increased 42 percent for the third quarter and 48 percent for the first three quarters of 2012 over the same periods a year ago. On a total company basis, total crude oil and condensate production increased 42 percent and total liquids production rose 40 percent for the third quarter compared to the same period in 2011.
“With especially strong, consistent individual well results, EOG’s best plays have become even better,” said Mark G. Papa, Chairman and Chief Executive Officer. “Therefore, based on nine months of robust crude oil production, we are setting the bar higher for the third time this year. EOG has increased its 2012 crude oil production growth target to 40 percent from 37 percent. Because our outstanding oil results also impact total liquids production, we are also raising our total liquids production growth target to 38 percent from 35 percent and increasing our total company production target to 10.6 percent from 9 percent.”
LNG World News Staff, November 6, 2012; Image: EOG