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EOG Resources Inc. (NYSE:EOG) -- Another big beat and guidance increase.

  • Reported $1.17 vs. expectations of $1.04.
  • 2007 production guidance raised from 10 to 11.5%.
  • Strong results in the Bakken field of N Dakota.
  • Wetter gas in recently drilled western Barnett Shales wells yielding higher natural gas liquids production.
  • Conference Call: 10 am ET. As usual, EOG’s press release provides a glimpse of a few trees but little forest. The call will hopefully provide that kind of bigger picture meat.
  • I’ll be interested to hear updates on the South Texas horizontal play and on their work in the Uinta where the gas saturation is massive -- 250 bcf per section! That beats the pants off any old shale play!!
  • While they have a longer than average reserve life, given the high, organic nature of their growth they deserve a higher multiple than their peers. The simple annualized math leads us back to a current multiple to CF of 6.4x, which is by no means excessive.

EOG 03 08 2007

Source: EOG Resources: Earnings Review