UPDATE 1 - EOG has quarterly loss, lowers output forecast
DAN CAN YOU COMMENT?
Tue Nov 2, 2010 5:34pm EDT
* Lowers 2010 output forecast
* EPS in-line with Wall Street
* Shares down 3 pct after-hours
HOUSTON, Nov 2 (Reuters) - EOG Resources Inc (EOG.N) reported a quarterly loss compared with a year-ago profit and the U.S. exploration company lowered its production outlook for the year, citing weak natural gas prices.
EOG said it now expects 2010 oil and gas production growth of 9 percent, down from its August forecast for an increase of 13 percent.
EOG said its third-quarter loss was $70.9 million, or 28 cents per share, compared with a profit of $4.2 million or 2 cents.
Excluding one-time items, EOG had a profit of 18 cents a share, matching the Wall Street consensus estimate of 18 cents per share, according to Thomson Reuters I/B/E/S.
Shares of EOG fell to $95 after the close of regular trading. The stock closed at $97.74 on the New York Stock Exchange. (Reporting by Anna Driver in Houston; Editing by Bernard Orr)
EOG 3QLOSS
Re: EOG loss update
5:07PM EOG Resources reports EPS in-line, beats on revs (EOG) 97.74 +1.67 : Reports Q3 (Sep) earnings of $0.18 per share, excluding non-recurring items, in-line with the Thomson Reuters consensus of $0.18; revenues rose 42.9% year/year to $1.58 bln vs the $1.39 bln consensus. EOG has elected to pursue additional natural gas asset sales in 2011. Proceeds from these sales will be used primarily to offset any funding gap between planned capital expenditures and estimated cash flows. While previously targeting a maximum net debt-to-total capitalization ratio of 25%, EOG has set the maximum net debt-to-total capitalization ratio at 30-35% in order to optimally fund its portfolio of liquids-rich drilling opportunities.
full pr url-----
http://finance.yahoo.com/news/EOG-Resou ... l?x=0&.v=1
full pr url-----
http://finance.yahoo.com/news/EOG-Resou ... l?x=0&.v=1
Re: EOG 3QLOSS
Impairment on the Canadian assets (natural gas) is the big non-cash item that caused the loss. I will take a hard look tomorrow. Obviously, the Market is not going to like the reduction from 13% to 9% production growth in 2010. Delays in getting wells completed is the reason and that is a valid excuse as I'm seeing that with other companies. [Also the reason I'm now quite bullish on the major oilfield service companies like HAL, SLB and WFT.]
> EOG is in a very capital intensive growth phase so DD&A will be high until the engineers give them credit for all the reserves they are proving up.
> News on the Eagle Ford wells is very encouraging
> Shale play in New Mexico is something new.
Dan
"The results for the third quarter 2010 included a $208.3 million, net of tax ($0.82 per share) impairment of certain Canadian shallow natural gas assets held for sale, $41.4 million gain, net of tax ($0.16 per share) on property dispositions and a previously disclosed non-cash net gain of $61.0 million ($39.1 million after tax, or $0.16 per share) on the mark-to-market of financial commodity transactions. During the quarter, the net cash outflow related to financial commodity contracts was $13.6 million ($8.7 million after tax, or $0.03 per share). 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 quarter was $46.6 million, or $0.18 per share. Adjusted non-GAAP net income for the third quarter 2009 was $203.9 million, or $0.81 per share. (Please refer to the attached tables for the reconciliation of adjusted non-GAAP net income to GAAP net income.)"
> EOG is in a very capital intensive growth phase so DD&A will be high until the engineers give them credit for all the reserves they are proving up.
> News on the Eagle Ford wells is very encouraging
> Shale play in New Mexico is something new.
Dan
"The results for the third quarter 2010 included a $208.3 million, net of tax ($0.82 per share) impairment of certain Canadian shallow natural gas assets held for sale, $41.4 million gain, net of tax ($0.16 per share) on property dispositions and a previously disclosed non-cash net gain of $61.0 million ($39.1 million after tax, or $0.16 per share) on the mark-to-market of financial commodity transactions. During the quarter, the net cash outflow related to financial commodity contracts was $13.6 million ($8.7 million after tax, or $0.03 per share). 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 quarter was $46.6 million, or $0.18 per share. Adjusted non-GAAP net income for the third quarter 2009 was $203.9 million, or $0.81 per share. (Please refer to the attached tables for the reconciliation of adjusted non-GAAP net income to GAAP net income.)"
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
-
mdwitte
Re: EOG 3QLOSS
JMHO, but EOG is too heavily weighted to gas...EOG has a long way to go to switch to oil from gas...as I read their latest production figures, it's 287:77, gas:(oil+ngl). They (and many others!) missed the impact of shale gas...
Re: EOG 3QLOSS
More than half of EOG revenues are from the sales of liquids and that percentage will be going way up over the next year.
EOG getting pounded this morning due to lower production growth forecast. I will update my forecast today.
Dan
EOG getting pounded this morning due to lower production growth forecast. I will update my forecast today.
Dan
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: EOG 3QLOSS
Devon profit beats, EOG shares hit on output 11/03 10:37 AM
* Devon tops forecasts, output rises
* EOG to sell assets, trims production forecast
* EOG shares tumble, Devon up 2 pct
NEW YORK/HOUSTON, Nov 3 (Reuters) - Oil and gas producer Devon Energy (DVN:$67.14,00$1.2100,1.84%) posted better-than-expected quarterly profit and output, but its smaller rival EOG Resources (EOG:$86.6500,$-11.0900,-11.35%) disappointed investors by cutting its production forecast.Devon's output grew by 4 percent in the third quarter, excluding properties it has sold as its shifts its strategy to focus on North American onshore fields.
The company has reaped $6.8 billion in pre-tax proceeds from the asset sales so far, and expects that figure to reach $10 billion when its Brazilian sale closes later year.
Devon's shares were up 2 percent in Wednesday trade, and remain cheap versus its peers based on the value of its assets, one analyst said.
"We don't believe the sharp discount to peers is justified, and would continue to look for periods of weakness when the stock/group trades down to accumulate shares," Ticonderoga Securities analyst Daniel Pratt said in a note to investors.
Devon's third-quarter profit jumped more than four-fold from a year ago to $2.1 billion because of a gain from the sale of its Azerbaijan assets.
Excluding that $1.5 billion gain, the Oklahoma City company's earnings per share were $1.44, topping the $1.29 that Wall Street had forecast.
However, EOG shares erased more than 11 percent of their value after the company announced a third-quarter loss of $70.9 million and cut its full-year production growth target to 9 percent from 13 percent.
That decline was largely due to weak cash flows, as well as delays in securing equipment needed for hydrofracturing rock in shale fields.
Sharp increases in production from U.S. shale fields has led to a glut in U.S. natural gas supplies, knocking benchmark gas prices down to their lowest prices in more than a year last month.
Houston-based EOG will sell properties in the Marcellus and Eagle Ford shale fields, Chief Executive Mark Papa said on Wednesday, and has no interest in increasing its natural gas output at current prices.
Also on Wednesday, natural gas producer and pipeline company El Paso Corp (EP:$13.00,00$-0.5300,-3.92%) said its quarterly profit more than doubled to $133 million, as its output grew by 4 percent and energy prices rose from a year ago.
Shares of Devon were up 2 percent at $67.25 on the New York Stock Exchange, while EOG shares tumbled more than 11 percent to $86.69 and El Paso shares slipped 4.1 percent to $12.97.
Shares of Devon, the No. 3 U.S.-based independent oil and gas producer by market value, and EOG, the No. 4 company, are both down by 10 percent so far this year. (Reporting by Matt Daily and Anna Driver, editing by Dave Zimmerman)
* Devon tops forecasts, output rises
* EOG to sell assets, trims production forecast
* EOG shares tumble, Devon up 2 pct
NEW YORK/HOUSTON, Nov 3 (Reuters) - Oil and gas producer Devon Energy (DVN:$67.14,00$1.2100,1.84%) posted better-than-expected quarterly profit and output, but its smaller rival EOG Resources (EOG:$86.6500,$-11.0900,-11.35%) disappointed investors by cutting its production forecast.Devon's output grew by 4 percent in the third quarter, excluding properties it has sold as its shifts its strategy to focus on North American onshore fields.
The company has reaped $6.8 billion in pre-tax proceeds from the asset sales so far, and expects that figure to reach $10 billion when its Brazilian sale closes later year.
Devon's shares were up 2 percent in Wednesday trade, and remain cheap versus its peers based on the value of its assets, one analyst said.
"We don't believe the sharp discount to peers is justified, and would continue to look for periods of weakness when the stock/group trades down to accumulate shares," Ticonderoga Securities analyst Daniel Pratt said in a note to investors.
Devon's third-quarter profit jumped more than four-fold from a year ago to $2.1 billion because of a gain from the sale of its Azerbaijan assets.
Excluding that $1.5 billion gain, the Oklahoma City company's earnings per share were $1.44, topping the $1.29 that Wall Street had forecast.
However, EOG shares erased more than 11 percent of their value after the company announced a third-quarter loss of $70.9 million and cut its full-year production growth target to 9 percent from 13 percent.
That decline was largely due to weak cash flows, as well as delays in securing equipment needed for hydrofracturing rock in shale fields.
Sharp increases in production from U.S. shale fields has led to a glut in U.S. natural gas supplies, knocking benchmark gas prices down to their lowest prices in more than a year last month.
Houston-based EOG will sell properties in the Marcellus and Eagle Ford shale fields, Chief Executive Mark Papa said on Wednesday, and has no interest in increasing its natural gas output at current prices.
Also on Wednesday, natural gas producer and pipeline company El Paso Corp (EP:$13.00,00$-0.5300,-3.92%) said its quarterly profit more than doubled to $133 million, as its output grew by 4 percent and energy prices rose from a year ago.
Shares of Devon were up 2 percent at $67.25 on the New York Stock Exchange, while EOG shares tumbled more than 11 percent to $86.69 and El Paso shares slipped 4.1 percent to $12.97.
Shares of Devon, the No. 3 U.S.-based independent oil and gas producer by market value, and EOG, the No. 4 company, are both down by 10 percent so far this year. (Reporting by Matt Daily and Anna Driver, editing by Dave Zimmerman)
Re: EOG 3QLOSS
NEW YORK (AP) -- Shares of EOG Resources Inc. fell sharply in Wednesday trading after the company posted a third-quarter loss and cut its production forecast for the year.
THE SPARK: The Houston natural gas and crude oil producer posted a loss after the market closed Tuesday, citing charges related to write-downs on certain natural gas assets. Excluding those charges, adjusted earnings of 18 cents per share matched Wall Street's expectations.
THE BIG PICTURE: EOG reported a 30 percent increase in total crude oil and condensate production for the quarter, but reduced its full-year organic production growth forecast to 9 percent from 13 percent, citing reduce cash flows due to weak natural gas prices and equipment delays. It also cut its production forecast for 2011 and 2012.
THE ANALYSIS: Citi analyst Robert S. Morris said the adjusted earnings were boosted by its oil production, while domestic natural gas was "well below the guidance range." EOG did have "encouraging results" in certain drilling areas, but he said they didn't negate the reduced outlook.
Morris cut his rating on the stock to "Hold" from "Buy," reduced his earnings estimates for 2011 and 2012, and dropped his 12-month price target to $95 from $110.
Dan's notes from CC:
> EOG production down because they have decided to reduce NG production due to low prices
and delays in getting Eagle Ford and Bakken wells completed due to the shortage of frac crews.
> Oil production will grow 36% in 2010, 53% in 2011 and 30% in 2012. EOG is quickly becoming an oil company.
> Due to EOG's reduced production forecast, I'm lowering my Fair Value estimate to $120/share.
THE SPARK: The Houston natural gas and crude oil producer posted a loss after the market closed Tuesday, citing charges related to write-downs on certain natural gas assets. Excluding those charges, adjusted earnings of 18 cents per share matched Wall Street's expectations.
THE BIG PICTURE: EOG reported a 30 percent increase in total crude oil and condensate production for the quarter, but reduced its full-year organic production growth forecast to 9 percent from 13 percent, citing reduce cash flows due to weak natural gas prices and equipment delays. It also cut its production forecast for 2011 and 2012.
THE ANALYSIS: Citi analyst Robert S. Morris said the adjusted earnings were boosted by its oil production, while domestic natural gas was "well below the guidance range." EOG did have "encouraging results" in certain drilling areas, but he said they didn't negate the reduced outlook.
Morris cut his rating on the stock to "Hold" from "Buy," reduced his earnings estimates for 2011 and 2012, and dropped his 12-month price target to $95 from $110.
Dan's notes from CC:
> EOG production down because they have decided to reduce NG production due to low prices
and delays in getting Eagle Ford and Bakken wells completed due to the shortage of frac crews.
> Oil production will grow 36% in 2010, 53% in 2011 and 30% in 2012. EOG is quickly becoming an oil company.
> Due to EOG's reduced production forecast, I'm lowering my Fair Value estimate to $120/share.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
-
prince_jake_33
- Posts: 242
- Joined: Mon Apr 26, 2010 2:21 pm
Re: EOG 3QLOSS
Dan I see you have 85000 bbls/day oil for the third quarter and 120000bbls/d oil for the 4 th quarter, production rates. That increase looks about right with eight rigs drilling in each of the three areas of Eagles ford,Barnet and Bakken. The Thirty rigs should produce the 45000bbls/d increase as you show. They spoke of more rigs
EOG has so many numbers under cash flow that I cant determine a final number.
Do you think this stock is a good buy at 88$/sh?
EOG has so many numbers under cash flow that I cant determine a final number.
Do you think this stock is a good buy at 88$/sh?