8-KOther Events

EOG RESOURCES INC 8-K Report (Jan 29, 2002)

Filed January 29, 2002For Securities:EOG

Summary

EOG Resources Inc. (EOG) filed an 8-K on January 29, 2002, to provide updated financial and production guidance for 2002. The company adjusted its North American production targets based on a lower assumed natural gas price. Previously targeting 4% growth predicated on a $3.00 per MMBtu Henry Hub price, EOG now anticipates flat production for 2002 compared to 2001, utilizing a revised assumption of $2.50 per MMBtu (+/- $0.10) for the average annualized Henry Hub natural gas price. The company noted that specific guidance on other income/expense and gains/losses on asset sales is not provided unless explicitly stated, and income tax guidance is withheld due to price volatility. The filing also reiterates that 2002 natural gas financial and physical contracts were previously disclosed in a January 16, 2002, 8-K. Investors should note the cautionary statements regarding forward-looking statements, emphasizing that actual results may differ materially due to various market and operational factors, including commodity prices, hedging activities, reserve estimation accuracy, and global political and financial conditions. EOG does not undertake to update these forward-looking statements.

Key Highlights

  • 1EOG Resources revised its 2002 North American production forecast to flat growth, down from a prior target of 4% growth.
  • 2The revision is driven by a lower assumed average annualized Henry Hub natural gas price for 2002, revised to $2.50/MMBtu (+/- $0.10) from $3.00/MMBtu.
  • 3The company did not provide specific guidance for other income/expense or gains/losses on asset sales in this filing.
  • 4Income tax guidance was withheld due to the volatility of commodity prices and their impact on tax calculations.
  • 5Information on 2002 natural gas financial and physical contracts was previously disclosed in a January 16, 2002, 8-K.
  • 6The filing includes standard forward-looking statement disclaimers, warning investors about the inherent risks and uncertainties that could cause actual results to differ.

Frequently Asked Questions

EOG Resources lowered its 2002 North American production growth target from 4% to flat (compared to 2001) primarily due to a revised expectation of lower natural gas prices. The company is now basing its forecast on an average annualized Henry Hub natural gas price of $2.50 per MMBtu, down from the previous assumption of $3.00 per MMBtu.

For its 2002 forecast, EOG Resources is using an average annualized Henry Hub natural gas price assumption of $2.50 per MMBtu, with a +/- $0.10 range. This is a downward revision from their previous assumption of $3.00 per MMBtu.

No, EOG Resources is not providing income tax guidance at this time. The company cites the current forward price strip for natural gas and crude oil, and the resulting volatility in taxes caused by small price movements, as reasons for withholding this guidance.

Details regarding EOG Resources' outstanding Natural Gas Financial Price Swaps and Natural Gas Physical Contracts for 2002 were previously delineated in the Company's Form 8-K filing on January 16, 2002.