Skip to content
AnalystLens

EOG RESOURCES INC Annual Report, Year Ended Dec 31, 2003

Filing Date
Filed March 11, 2004
Period End
December 31, 2003
Security
EOG
In the record · 2016–202610-K1110-Q328-K137

EOG filed 11 annual reports (10-K), 32 quarterly reports (10-Q) and 137 current reports (8-K) between 2016 and 2026.

  1. FY2016 annual report10-K · Feb ’17Feb ’17
  2. Material agreement8-K · Jul ’19Jul ’19
  3. Leadership change8-K · Sep ’21Sep ’21
  4. Leadership change8-K · Dec ’25Dec ’25

01—Abstract

Summary

Summary of the 10-K filed March 11, 2004. Cited figures are marked; the original filing is the authoritative source.

EOG Resources' 10-K for fiscal 2003 shows a company that is primarily a natural gas producer with a rapidly strengthening financial profile.

Net operating revenues rose to $1.74 billiona in 2003 from $1.09 billion in 2002, and operating income climbed to $697 million from $181 million. Net income available to common reached $419 million, or $3.60 per diluted share, versus $0.65 in 2002. Gas prices were the main driver: the composite wellhead gas price averaged $4.40/Mcf versus $2.60 in 2002, while crude realizations rose to roughly $29.92/Bbl.

Note that the 2003 figure includes a $7.1 millionb cumulative accounting-change charge (SFAS 143). The balance sheet strengthened meaningfully. Total assets grew to $4.75 billion and shareholders' equity rose to $2.22 billion, while long-term debt eased slightly to $1.11 billion.

Proved reserves were 5,216 Bcfe at year-end 2003, about 89% natural gas, with roughly 49% in the U.S., 27% in Trinidad, 23% in Canada and 1% in the UK North Sea. Capital spending on drilling and acquisitions was about $1.33 billionc, including a $320 million acquisition of primarily gas properties in Canada in October 2003. Production is roughly 955 MMcf/d of gas and 23 MBbl/d of oil in 2003, with the company guiding to continued growth in 2004.

Investors should weigh several items. Results are highly sensitive to natural gas prices, and EOG hedges with collars and swaps through October 2004. The company also has significant international exposure through Trinidad, including equity stakes in ammonia plants (CNCL and N2000) that rely on non-recourse project debt.

The filing also notes a 2001 $19.2 milliond Enron-related charge and that the 2002 auditor change involved Arthur Andersen. EOG's 10-K largely incorporates financial statements by reference from an 8-K filed February 24, 2004, so the detailed financials are not contained in this document.

02—Key points

Key Highlights

  1. Net operating revenues rose 59% to $1.74 billion in 2003 from $1.09 billion in 2002, while operating income more than tripled to $697 million from $181 million.
  2. Diluted EPS of $3.60 in 2003 versus $0.65 in 2002, after a $7.1 million cumulative accounting-change charge under SFAS 143.
  3. Composite average natural gas price rose to $4.40/Mcf from $2.60/Mcf, reflecting EOG's heavy exposure to gas (about 89% of proved reserves).
  4. Proved reserves of 5,216 Bcfe at year-end 2003, with geographic mix of 49% U.S., 27% Trinidad, 23% Canada and 1% UK.
  5. Acquired primarily gas properties in Canada for about US$320 million in October 2003, the largest asset purchase in company history, plus another US$46 million deal in late December.
  6. Shareholders' equity increased to $2.22 billion from $1.67 billion, while long-term debt declined slightly to $1.11 billion.
  7. Capital spending on drilling and acquisitions was about $1.33 billion in 2003, up from $836 million in 2002, with 2004 plans calling for more Permian, Cleveland, Bakken and Canadian shallow gas drilling.

03—Questions

Frequently Asked Questions

  1. How much did EOG earn in 2003 and how does that compare to 2002?

    EOG reported net income of $430.1 million for 2003, or $419.1 million available to common shareholders, which equals $3.60 per diluted share. In 2002, net income was $87.2 million, or $0.65 per diluted share. The 2003 result includes a $7.1 million after-tax charge from adopting SFAS No. 143.

  2. What is driving EOG's revenue and profit growth?

    Natural gas prices were the main factor. The U.S. wellhead gas price averaged $5.06/Mcf in 2003 versus $2.89 in 2002, and the composite average rose to $4.40 from $2.60. Oil and liquids prices also increased, with crude composite at about $29.92/Bbl versus $24.56, while production volumes stayed roughly flat at about 955 MMcf/d of gas in 2003.

  3. How exposed is EOG to natural gas price swings, and how is it hedging?

    EOG is primarily a natural gas company, so it is more sensitive to gas prices than to oil prices. It uses price swaps and collars to manage this risk. As of March 2004, its collars and swaps extend only through October 2004, and it had added no new financial hedges since December 31, 2003. This leaves exposure to prices beyond late 2004.

  4. What are the main risks to investors beyond commodity prices?

    Key risks include international operations in Trinidad and the UK North Sea, which carry expropriation, tax, and political risks. EOG also holds equity stakes in Trinidadian ammonia plants (CNCL and N2000) financed with non-recourse debt, and it faces regulatory changes affecting federal royalties and natural gas transportation. The filing also discloses a $19.2 million charge in 2001 related to Enron's bankruptcy.

  5. Does this 10-K contain EOG's full financial statements?

    No. Most of the financial information, including the financial statements, notes, MD&A, and reserve data, is incorporated by reference from the Form 8-K filed February 24, 2004 (Exhibit 99.1). This 10-K contains the business description, selected five-year financial data, property and drilling statistics, and exhibits, so investors should review that 8-K for the full financial detail.

04—Continue

← View all 10-K filings