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Keeping an eye on new and creative ways for bringing energy resources to market is just one of the endearing attributes of EOG Resources (NYSE:EOG). I believe now is the best time to buy EOG Resources, as the company is continuing to improve its methods of crude oil production in the U.S. based on its new "spacing" drilling strategy.

EOG Resources currently has a market cap of $25.8 billion and a P/E ratio of 19.90. The company reported earnings per share of $1.17 for the first quarter, beating the Thomson Reuters consensus estimate of $1.14 by $0.03. The company's quarterly revenue was up 47.9% on a year-over-year basis, and analysts now predict that EOG Resources will post earnings per share of $1.15 for the second quarter. There are other sources voicing opinions and reasons for buying EOG Resources now, and with good reason. EOG Resources is focusing on improving production.

The company's outstanding first quarter performance is trumped only by incredible improvement in its productivity from various wells. The company's crude oil and condensate production improved by more than 49%, while total volume expanded 11.1% from 2011. EOG Resources is at a pace of production of 1,561 MMcfe/day, outpacing competitors Quicksilver Resources (NYSE:KWK), which has 167 MMcfe/day, Forest Oil (NYSE:FST) at 310 MMcfe/day, and Denbury Resources (NYSE:DNR) at 220 MMcfe/day. The rise in production levels is the result of EOG Resources' big four production plays: the North Dakota Bakken, the South Texas Eagle Ford, the Fort Worth Barnett Combo and the Permian Basin Wolfcamp and Leonard.

The increase in production is nothing new for EOG Resources, but is the result of consistently doing the right things repeatedly, and building upon previous success. For 2011, the company's estimated net proved reserves were 2,054 million barrels of oil equivalent (MMBoe), up 5.3% from 2010. About 84% of these reserves were located in the U.S., 9% were in Canada, 6% were in Trinidad, and less than 1% were in the United Kingdom and China. The company's total production for the year was 154.3 MMBoe, and because of a 52% increase in crude oil and condensate production and a 39% increase in natural gas liquids production, the company saw an overall production increase of 9.4% compared to 2010. About 85% of total production is attributed to the U.S. and Canada.

Production for 2012 is not slowing down. The company's primary plays are in the high production areas of Eagle Ford, Barnett and the Permian. Approximately 85% of the company's North American drilling revenue came from liquids in the first quarter, allowing the company to increase its full-year total liquids production growth target from 30% to 33%. Some analysts fear that, because the oil production of EOG Resources is on the rise, the natural gas production and reserves of the company might put a damper on the excitement. Thankfully, there is hope on the horizon for EOG Resources and other natural gas producers. Natural gas prices recently jumped 14%, the largest increase since 2009, after the Energy Department announced stockpiles rose 67 billion cubic feet to 2.944 trillion. The U.S. Energy Information Administration ((NYSEMKT:EIA)) expects that the demand for natural gas will continue to rise and that natural gas consumption will increase more than 20% over the next few decades. Natural gas for electric power generation is expected to rise by more than 60%, due largely to its favorable profile as a low-particulate, clean-burning fossil fuel and more industries switching from coal to natural gas.

Recently, Arch Coal (NYSE:ACI) announced that it is laying off 750 workers in the Kentucky, Virginia and West Virginia coalfields as utilities switch to cleaner and cheaper alternatives, such as natural gas, to generate electricity. The layoffs are the result of a trend of a gradual drop in the use of coal to generate electricity, falling to 40% this year (it was 50% four years ago), and predicted to fall as low as 30% by the end of this decade. According to the Government Accountability Office, power plants that burn coal produce more than 90 times as much sulfur dioxide, five times as much nitrogen oxide and twice as much carbon dioxide as those that run on natural gas. Sulfur dioxide causes acid rain; nitrogen oxides cause smog; and carbon dioxide is a so-called greenhouse gas that traps heat in the atmosphere. Because of this demand for natural gas, prices will rise again and EOG Resources will once again profit from the gas.

EOG Resources continues to shine. Whether upping production through a joint venture (as with Cabot Oil & Gas (NYSE:COG) to develop approximately 18,000 acres in the mature oil window of the Eagle Ford shale in Atascosa County), or implementing a new drilling strategy of only drilling every 320 acres resulting in higher production rates, the company is all about production. In the oil and gas industry, as with any business worthy of consideration as an investment, the basic fundamentals must be in place. EOG Resources has these. The company has a very strong foundation to build upon and continues to ramp up production, layer upon layer, profiting from wise plays which in turn allow the investor to profit. I recommend buying EOG Resources now.

Source: EOG Resources Will Surge On High U.S. Oil Production