EOG's 4th quarter production came in below my forecast and they now expect production to decline about 5% in 2016. However, they have done a great job of lowering expenses and their new capital program should be totally covered by cash on hand and cash flow from operations. When oil prices do rebound, EOG's growth should ramp up again.
EOG has NONE of their liquids hedged beyond 2015 and only a tiny portion of their gas is hedged. If you are in the camp that thinks oil prices will stay "lower for longer" than you should sell EOG. However, EOG does have a HUGE P2 reserve base which includes the #1 position in the Eagle Ford.
If you are a long-term buy and hold investor, now is a good time to accumulate EOG. This is truly a "Core Holding" quality company.
I have updated by forecast model for EOG and it will be posted to the EPG website later today. My valuation adjusts to $81.70/share, compared to First Call's price target of $80.85.
EOG Resources (EOG)
EOG Resources (EOG)
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group