Energy Prospectus

Q1 Highlights
•Reports Strong Operating Results
•­Achieves Record Returns on First Quarter Capital Investments
•U.S. Oil Production Near High End of Target Range
•­U.S. Realized Crude Oil Price Exceeds WTI NYMEX Average
•­Per-Unit Transportation and DD&A Expenses Below Targets

•Maintains Full-Year $5.4-$5.8 Billion Exploration and Development Expenditure Target •­On Track to Reduce Well Costs 5 Percent in 2018

•Reiterates Full-Year 2018 Oil Production Growth Target of 16-20 Percent
•Targets $3 Billion Debt Reduction and Higher Dividend Growth Rate

Updating the forecast/valuation model now.

I have updated my forecast/valuation model for EOG Resources. It will be posted to the EPG website on May 6.

I have increased my valuation of EOG by $11/share to $149.00, primarily because I have increased the oil price in my forecasts. This compares to First Call's Price Target of $126.80.

It is going to take all of the Wall Street Gang that cover EOG a few weeks to update their forecast models and submit new price targets to Reuters. Only Doug Leggate at Merrill Lynch has updated his forecast. His valuation is $130.00/share.

EOG closed at $114.66 on May 4.

EOG is on-track for 16% to 18% YOY production growth in 2018 and they have 15% to 20% annual production growth locked in for several years.
> Cash flow from operations should exceed their 2018 CapEx budget by $1.7 to $2.0 Billion.

Q1 EPS and CFPS beat my forecast and most of the Wall Street Gang's forecasts, but production was down slightly Q to Q. That is why the share price dipped. Use the ignorance of Wall Street to add this Elite Eight company to your portfolio. EOG is a World Class company with extremely valuable real estate.

Production will accelerate into year-end.

Using your “break up valuation” methodology, why does the multiple matter whether they are paying down debt or buying back stock? Are you indicating they are overlevered?

Because the debt would have to be paid off in a takeover.

EOG is not over-levered. They have extremely valuable leasehold, most of which is HBP.