EOG Resources - Impact of Harvey

[dan_s]

EOG Resources Inc. (EOG) filed a Form 8K - Regulation FD Disclosure - with the U.S Securities and Exchange Commission on September 05, 2017.

On Tuesday, September 5, 2017, EOG Resources, Inc. (EOG) updated certain guidance items for third quarter 2017 to reflect the impact of hurricane and tropical storm Harvey on its South Texas and Eagle Ford operating areas. Compared to its guidance issued with second quarter 2017 results on August 1, 2017, EOG reduced the midpoint of its third quarter 2017 U.S. crude oil and condensate volume guidance range by 15 thousand barrels of oil per day, while full year 2017 U.S. crude oil and condensate volume guidance remains unchanged. In addition, third quarter and full year 2017 total natural gas liquids and U.S. natural gas volume guidance and full year 2017 capital expenditures guidance remain unchanged. See table below for the updated and confirmed guidance ranges.

For the safety of its employees and protection of facilities and equipment, EOG suspended drilling and completion operations and shut in production in certain areas of South Texas and the Eagle Ford in preparation for hurricane and tropical storm Harvey. Suspended operations and shut-ins are temporary and serve to defer production to a later date. EOG has begun to resume production as conditions permit, and expects the majority of the impact will be realized in the company's third quarter 2017 crude oil and condensate volumes. The relative impact to full year 2017 crude oil and condensate volumes is smaller and EOG expects to offset the impact through adjustments to its drilling schedule.

Estimated Ranges

(Unaudited)

3Q 2017 Full Year 2017

Daily Sales Volumes

Crude Oil and Condensate Volumes (MBbld)

United States 320 330 332 338

Natural Gas Liquids Volumes (MBbld)

Total 77 83 80

Natural Gas Volumes (MMcfd)

United States 720 760 730 760

Capital Expenditures (Excluding Acquisitions, $MM)

Exploration and Development, Excluding Facilities $ 3,000 $ 3,350

Exploration and Development Facilities $ 475 $ 510

Gathering, Processing and Other $ 225 $ 240

Definitions

MBbld Thousand barrels per day

MMcfd Million cubic feet per day

$MM U.S. Dollars in millions

EOG is not updating or confirming any other ranges for the third quarter and full year 2017 included in guidance issued with second quarter 2017 results on August 1, 2017.

Due to EOG's diversity of operations, assets, midstream partners, takeaway and processing options, and downstream customers, EOG does not expect hurricane and tropical storm Harvey to have a material impact on its long-term operations, returns or growth prospects or on its business, financial condition or results of operations.

The full text of this SEC filing can be retrieved at: http://www.sec.gov/Archives/edgar/data/ ... 221d8k.htm

Any exhibits and associated documents for this SEC filing can be retrieved at: http://www.sec.gov/Archives/edgar/data/ ... -index.htm

Public companies must file a Form 8-K, or current report, with the SEC generally within four days of any event that could materially affect a company's financial position or the value of its shares.

[dan_s]

I have updated my forecast model for EOG and it will be posted to the EPG website later today. My valuation remains $103/share.

Read: https://www.fool.com/investing/2017/09/ ... yptr=yahoo

The article above does a good job of comparing EOG to DVN. The one flaw that I see in the article that it does not give much weight to Devon's STACK position, which I believe has incredible upside. Devon and Continental Resources (CLR) control a lot of leasehold in the over-pressured area of STACK were they are getting VERY GOOD well results and they have thousands of horizontal drilling locations.

None of EOG's oil is hedged, so it has more commodity price risk. It also has more upside if oil prices do go higher. EOG also trades at a much higher multiple of cash flow from operations than DVN.

These are both solid companies. I own them both myself.