What is EOG's anticipated debt level at the end of 2003?

EOG Resources, Inc. anticipates its 2003 year-end debt balance to be $1,109 million.

What is the expected impact of financial commodity contracts on EOG's Q4 2003 results?

EOG expects a loss of $43 million from mark-to-market financial commodity price swap and collar contracts for the fourth quarter of 2003. This compares to a loss of $7 million for the same period in 2002. The company also notes a net cash inflow of $1 million from settled contracts in Q4 2003, versus a net cash outflow of $11 million in Q4 2002.

Has EOG entered into any new hedging arrangements for 2004?

Yes, EOG has entered into additional crude oil financial price swap contracts for 2004. These contracts cover notional volumes of 2,000 barrels per day from January through August 2004 at an average price of $29.62 per barrel. These contracts are accounted for using the mark-to-market method.

How does EOG account for its financial commodity contracts?

EOG accounts for its financial commodity contracts, specifically the crude oil price swap contracts entered into for 2004, using the mark-to-market accounting method. This method means that changes in the market value of these contracts are recognized in earnings during the reporting period.

EOG 8-K SEC Disclosure

Summary

EOG Resources Inc. (EOG) has filed an 8-K report on January 9, 2004, disclosing key financial updates for the 2003 year-end and expectations for the 2004 crude oil hedging program. The company anticipates a year-end 2003 debt balance of $1,109 million. For the fourth quarter of 2003, EOG expects a $43 million loss from mark-to-market financial commodity price contracts, a significant increase from the $7 million loss in the prior year's fourth quarter. This is attributed to changes in contract valuations. Operationally, EOG has entered into new crude oil financial price swap contracts for 2004, covering notional volumes of 2,000 barrels per day from January to August 2004 at an average price of $29.62 per barrel. These contracts are accounted for using the mark-to-market method. The filing also reiterates the company's use of financial contracts to enhance revenue certainty and includes a standard forward-looking statements disclaimer, highlighting sensitivities to commodity price fluctuations and other market factors.

Key Highlights

1EOG Resources anticipates a 2003 year-end debt balance of $1,109 million.
2A $43 million loss from mark-to-market financial commodity contracts is expected for Q4 2003, compared to a $7 million loss in Q4 2002.
3EOG entered into new crude oil financial price swap contracts for 2004, covering 2,000 Bbld at an average price of $29.62/bbl from January to August 2004.
4These new crude oil contracts are accounted for using the mark-to-market method.
5No new natural gas financial contracts were entered into since the November 3, 2003, filing.
6The company uses financial commodity contracts to enhance the certainty of future revenues.
7The filing includes a cautionary statement about the sensitivity of mark-to-market valuations to price changes and other risks.

EOG RESOURCES INC 8-K Report (Jan 9, 2004)

Summary

Key Highlights

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