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EOG Resources, Inc. (EOG)

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  • Yesterday, 7:11 PM
    • A lawsuit in Oklahoma highlights a new worry for energy companies: the possibility of being forced to pay for damages from earthquakes if the tremors can be linked to oil and gas activity.
    • Oklahoma has experienced 585 quakes of 3.0 or greater magnitude last year, more than the state had in the previous 30 years combined and the most of any state in the contiguous U.S. - even California.
    • The tremors under investigation in Oklahoma and other oil-producing states have been too small to cause major damage, but the prospect of facing juries over quake-related claims is reverberating throughout the energy industry, which fears lawsuits and tighter regulations could increase costs and stall drilling.
    • In financial statements, major area operators such as Continental Resources (NYSE:CLR) have flagged potential financial risks if earthquakes lead to stricter regulations; in Arkansas, BHP and Chesapeake Energy settled a case by five homeowners in 2013 for an undisclosed sum, and in Texas, a lawsuit against EOG Resources (NYSE:EOG) for quake-related damages is pending.
    • Separately, a Bloomberg article today says CLR and its CEO, Harold Hamm, have tried to put pressure on scientific inquiries that linked Oklahoma earthquakes to fracking wastewater.
    | 3 Comments
  • Wed, Mar. 25, 6:08 PM
    • The number of drill rigs in North Dakota’s oil patch has slipped below 100 for the first time in five years thanks to weaker crude oil prices.
    • Only 98 rigs are now drilling in the area, 100 fewer than on the same day a year ago and the lowest since March 2010.
    • North Dakota has been producing ~1.2M bbl/day of oil, and industry officials say ~115 rigs need to be drilling to keep that level of production.
    • Top Bakken producers: CLR, EOG, WLL, HES, XOM, OAS, NOG, EOX, MRO
    | 13 Comments
  • Fri, Mar. 20, 10:33 AM
    • No matter how unfavorable market fundamentals may be to Bakken operators, North Dakota likely will see a big surge in production this June, potentially besting another supply record even if prices continue to crater, according to the director of the state's Department of Mineral Resources.
    • Production is expected to remain at 1.1M-1.2M bbl/day over the next few months before skyrocketing in June by nearly 10%, or an additional 75K-100K bbl/day, propelled by a state-mandated time limit on drilling and the expected trigger of a major oil tax incentive.
    • Top Bakken producers: CLR, EOG, WLL, HES, XOM, OAS, NOG, EOX, MRO
    | 19 Comments
  • Wed, Mar. 18, 3:43 PM
    • Stifel analysts say oil prices could be headed even lower, but that investors should buy high quality E&P companies with strong assets and/or balance sheets before prices bottom.
    • Stifel says the current cycle resembles previous patterns where large-cap E&P stocks lead the oil price, which in turn leads the rig count, thus the firm does not expect shares of the strong companies to track an oil price bottom; small-cap energy stocks, however, followed oil prices closely through the last cycle and even lagged the commodity’s recovery.
    • The firm is favorably disposed to Anadarko Petroleum (APC +2.4%), Cabot Oil & Gas (COG +1%), EOG Resources (EOG +4.2%), Noble Energy (NBL +5.3%), Rosetta Resources (ROSE +5.3%) and Whiting Petroleum (WLL +8.6%).
    | 18 Comments
  • Tue, Mar. 17, 7:40 PM
    • Crude oil production at three major U.S. shale oil fields - the Eagle Ford in south Texas, the Bakken in North Dakota, and the Niobrara in Colorado and adjacent states - is projected to fall this month for the first time in six years, the Energy Information Administration says.
    • Net production from the three fields is expected to drop by a combined 24K bbl/day, but overall losses likely will be masked by production gains in the Permian Basin in west Texas and other regions.
    • It is one of the first signs that idling hundreds of drilling rigs and billions of dollars in corporate cutbacks are starting to affect the U.S. oil patch, but it also shows that drilling technology and techniques have advanced to the point that productivity gains may be negligible in some shale plays.
    • Top Eagle Ford producers: EOG, BHP, COP, CHK, MRO, APC
    • Top Bakken producers: CLR, EOG, WLL, HES, XOM, OAS, NOG, EOX, MRO
    • Top Niobrara producers: NBL, APC, ECA, CHK, EOG, WPX
    | 37 Comments
  • Tue, Mar. 17, 7:12 PM
    • Most of the top 15 shale oil producers in the U.S. are heavily concentrated in basins expected by NavPort to be severely affected by the decline in prices, with one major exception: ConocoPhillips (NYSE:COP).
    • COP has the lowest well completion concentration in basins expected to suffer the greatest production cuts this year, implying less disruption than other shale competitors, according to NavPort, which collates oil well and rig data using regulatory reports.
    • All 14 of the other top producers tracked by NavPort have at least two-thirds of well completion concentrated in the basins rated with "strong" or "severe" exposure: CHK, APC, EOG, DVN, SWN, MRO, APA, SD, XOM, CLR, PXD, NBL, BHP, WLL.
    • Operators concentrated in basins that have been less severely affected - such as the Woodford, Utica and Haynesville basins - should enjoy more production than their peers through a higher volume of well completions, NavPort says.
    • The study sees the Mississippi Lime, Granite Wash, Bakken and Permian basins suffering at least a 40% Y/Y reduction in drilling.
    | 17 Comments
  • Tue, Mar. 17, 2:28 PM
    • The positives clearly outweigh the negatives for E&P stocks such as EOG Resources (NYSE:EOG), Anadarko Petroleum (NYSE:APC) and Noble Energy (NYSE:NBL), J.P. Morgan's Joseph Allman says of his three preferred stocks in the sector.
    • Allman is "slightly bullish" on the group because of an improving oil market improving, low oil prices with futures in contango, declining service costs, improved wells with new completion designs, and room for improved sentiment as investors remain tentative.
    • The best companies - with high quality assets that give investors the most leverage to the best parts of the best plays, plus strong balance sheets and operating and/or financial catalysts - can still perform very well in this market, Allman writes.
    | 6 Comments
  • Mon, Mar. 16, 10:17 AM
    • Street chatter says Statoil (STO -2.8%) may be pursuing EOG Resources (EOG +0.5%) in a merger or acquisition that could exceed $50B.
    • Analysts say the deal would make sense for STO, which is seeking to expand its U.S. shale presence; STO also has been mentioned as one of several companies showing interest in Whiting Petroleum (WLL -8%).
    • Color Raymond James analyst Andrew Coleman skeptical, saying that a 25% premium over EOG's recent $85 share price - suggesting an offer near $60B - would be needed just to get a returned phone call.
    | 15 Comments
  • Thu, Mar. 12, 6:32 PM
    • North Dakota says production of crude oil from the Bakken Shale fell in January from all-time highs the previous month, slipping 3.3% 1.19M bbl/day from a record 1.23M bbl/day in December, according to a new report from the state's department of mineral resources.
    • As prices for Bakken sweet crude fell to a six-year low of an average of $31.41/bbl in January, down from $40.74 December, the number of completions of previously drilled wells fell sharply to 47 from 183 in the prior month.
    • The number of active rigs used to drill new wells in North Dakota sank to 111 as of today, the fewest since April 2010 and about half the peak of 218 rigs in May 2012; the state's mineral resources director predicts a bottom 100 rigs, noting that 115 active rigs are needed to maintain stable production.
    • Top Bakken producers: CLR, EOG, WLL, HES, XOM, OAS, NOG, EOX, MRO
    | 38 Comments
  • Fri, Mar. 6, 5:57 PM
    • Oil drillers expecting prices to rebound have come up with an alternative to storing their crude in tanks: They’re keeping it in the ground, as drillers who have spent millions boring holes through petroleum-rich shale are just waiting for prices to go up before actually turning on the spigot.
    • The backlog of unfracked wells is one reason U.S. crude output is poised to climb even as companies have idled more than a third of the rigs that were drilling for oil in October; Continental Resources' (NYSE:CLR) Harold Hamm says ~85% of U.S. wells aren’t being completed right now.
    • Examples: Anadarko Petroleum (NYSE:APC) says it expects to have as many as 440 uncompleted wells by year's end, EOG started the year with ~200 uncompleted wells and plans to let that inventory build through H1, and Canadian Natural Resources (NYSE:CNQ) says it has 161 uncompleted wells.
    • Initial production from a new well typically is 750-1,000 bbl/day, meaning the "fracklog" could represent as much as 3M bbl/day of new output, at least at the outset - a major reason an oil price recovery will prove to be an extended process, analysts say.
    • ETFs: USO, OIL, UCO, SCO, BNO, DTO, DBO, UWTI, USL, DWTI, DNO, SZO, OLO, TWTI, OLEM
    • Earlier: Oil glut's latest dilemma: where to store it all
    | 60 Comments
  • Mon, Mar. 2, 7:35 PM
    • The crude oil aboard the train that derailed and exploded two weeks ago in West Virginia contained so much combustible gas that it would have been barred from rail transport under safety regulations set to go into effect next month, WSJ reports.
    • The oil’s vapor pressure was 13.9 psi, which exceeds the limit of 13.7 psi that North Dakota is set to impose in April on oil moving by truck or rail from the Bakken Shale.
    • Plains All American Pipeline (NYSE:PAA), which shipped the oil, says it follows regulations governing the shipping and testing of crude; CSX, the railroad that carried the oil, says it had stepped up its inspections of the track along the route.
    • The new information about the West Virginia accident likely will increase regulators’ focus on the makeup of oil being shipped by train; oil from sahle formations is known to contain far more combustible gas than traditional crude oil, which has a vapor pressure of ~6 psi.
    • Top Bakken producers: CLR, EOG, WLL, HES, XOM, OAS, NOG, EOX, MRO
    | 16 Comments
  • Thu, Feb. 26, 2:58 PM
    • North Dakota's oil producers have cut the number of active rigs in the state to just 121 from 190 a year ago, according to a new list published by the state’s Department of Mineral Resources.
    • The rig count is now below the threshold of “at least 130” the DMR director had identified last month as needed to sustain output at the current level of slightly more than 1.2M bbl/day.
    • Of the 121 active rigs, 115 are drilling in just four counties at the heart of the Bakken - Dunn, McKenzie, Mountrail and Williams.
    • With the number of rigs in even the core areas down by 30% in just over two months, production likely will begin to plateau or fall in the coming months, Reuters' John Kemp writes.
    • Top Bakken producers: CLR, EOG, WLL, HES, XOM, OAS, NOG, EOX, MRO
    | 11 Comments
  • Mon, Feb. 23, 1:00 PM
    • Shale oil producers are cutting output so quickly that U.S. crude production could fall sooner than expected, according to several CEOs who told Reuters they were taken aback by the scale and speed of the cutbacks and that the current oil price downturn is different from previous episodes in their careers.
    • Just a few weeks ago, the prevailing view among industry insiders and analysts was that U.S. oil production would keep rising for several months despite falling rig numbers because of rising productivity of active wells and drilling inertia.
    • Many companies have announced 25%-70% reductions in drilling and a total of at least $25B in spending cuts; Magnum Hunter (NYSE:MHR) is one that went even further, halting all drilling and telling services firms it will not resume work unless its costs fall 40%, and CEO Gary Evans predicts such cuts foreshadow falling U.S. production within the next two months.
    • After years of breakneck growth, top shale companies Apache (NYSE:APA) and EOG Resources (NYSE:EOG) have said their oil and gas output this year will be flat.
    • Continental Resources' (NYSE:CLR) President Jack Stark calls the precipitous decline in the number of active U.S. land rigs to roughly the level EIA had forecast would be reached in October as "probably faster than I've ever seen."
    • ETFs: USO, OIL, UCO, SCO, BNO, DTO, DBO, UWTI, USL, DWTI, DNO, SZO, OLO, TWTI, OLEM
    | 35 Comments
  • Fri, Feb. 20, 12:44 PM
    • EOG Resources (EOG -3.1%) is downgraded to Neutral from Buy with a $102 price target, down from $108, at UBS after EOG cut its 2015 capex by 40% and likely leading to flat Y/Y production likely.
    • While UBS believes EOG's ability to rapidly bring on deferred well completions will enable it to return to greater than 10% oil growth in 2016 and 7% company-wide growth, the firm still cuts its 2015 and 2016 cash flow/share estimates by ~15% to a respective $7 and $8.40 following the company's guidance.
    • Similarly, Citigroup cut its rating on EOG to Neutral from Buy with a $96 target, and Macquarie lowered shares to Neutral from Outperform also with a $96 target.
    | Comment!
  • Thu, Feb. 19, 2:49 PM
    • EOG Resources (EOG -0.9%) has recouped most of its big early losses following its worse than expected Q4 results and a scaled-back outlook that would mark the first time in years the company's crude and natural gas output does not jump more than 10%.
    • EOG told analysts on its earnings conference call this morning that it is "intentionally choosing returns over growth," but that it could resume double-digit growth next year if prices rebound to $65/bbl.
    • CEO Bill Thomas said EOG’s strategy of waiting for oil prices to recover will allow it to “not only weather the current low price environment but to take advantage of it."
    • EOG can afford to wait, since it is one of the most financially sound E&P companies, with a return on capital that is significantly higher and debts that are significantly lower than the average for its sector.
    • "Returns are what matter," so EOG plans to focus on the Eagle Ford, Bakken and Delaware Basin plays, which the CEO says deliver direct after-tax rate of return at greater than 35% at $55 oil.
    • EOG says it will cut in half the number of rigs it runs this year to 27 and intentionally delay many completions, which makes sense given that well completion typically represents 60%-65% of the total cost of a well.
    | 4 Comments
  • Thu, Feb. 19, 9:12 AM
    | 3 Comments
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Company Description
EOG Resources Inc explores for, develops, produces and markets crude oil and natural gasin the USA, Trinidad, United Kingdom, China, Argentina and, from time to time, select other international areas.