8-KOther Events

EOG RESOURCES INC 8-K Report (Jul 6, 2004)

Filed July 6, 2004For Securities:EOG

Summary

This 8-K filing from EOG Resources Inc. (EOG) on July 6, 2004, primarily discloses information regarding its financial commodity contracts for the second quarter of 2004 and provides an update on its natural gas financial collar contracts. The company anticipates a loss from mark-to-market financial commodity price swap and collar contracts of $14.6 million for Q2 2004, a slight improvement from a $15.8 million loss in the prior year period. However, the net cash outflow related to settled contracts significantly increased to $35.9 million in Q2 2004, compared to $11.2 million in Q2 2003. An important update is provided on EOG's natural gas financial collar contracts. Since its last filing in May 2004, EOG has entered into new contracts covering 100,000 MMBtu/day for November 2004 at a floor price of $6.35/MMBtu and a ceiling price of $7.61/MMBtu. The filing also details remaining 2004 natural gas collar contracts, indicating specific volumes, floor, and ceiling prices for July through November. Investors should note the company's use of these financial instruments to enhance revenue certainty, while also acknowledging the inherent risks and forward-looking statements presented.

Key Highlights

  • 1EOG Resources anticipates a $14.6 million loss from mark-to-market financial commodity contracts in Q2 2004, an improvement from $15.8 million in Q2 2003.
  • 2Net cash outflow from settled financial commodity contracts rose substantially to $35.9 million in Q2 2004, up from $11.2 million in Q2 2003.
  • 3No new natural gas or crude oil financial price swap contracts have been entered into since the May 4, 2004, 10-Q filing.
  • 4EOG entered into new natural gas financial collar contracts for November 2004, covering 100,000 MMBtu/day with a floor of $6.35/MMBtu and a ceiling of $7.61/MMBtu.
  • 5A detailed summary of remaining 2004 natural gas financial collar contracts is provided, including volumes and price ranges for July through November.
  • 6The company utilizes these financial contracts primarily to enhance the certainty of future revenues.

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