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EOG Misses, Ups Dividend – Analyst Blog

Zacks Market Commentaries — Wed, 10 Feb 2010 15:30:16 +0000

EOG Resources Inc. (EOG), a major independent oil and gas exploration and production company, reported weaker-than-expected fourth quarter results. Quarterly earnings were 92 cents per share, compared with the Zacks Consensus Estimate of 98 cents and a year-ago profit of 74 cents. Despite a significant increase in liquid prices, earnings missed due to higher operating expenses, almost flat production volumes and still struggling natural gas prices.

While EOG’s results came in below our expectations, the company raised cash dividend by nearly 7% from the previous annualized rate. The new quarterly dividend will be 15.5 cents per share (62 cents annualized), representing the 11th increase.

Estimate revisions trend

There was a mixed trend in estimate revisions. For the last 30 days, 7 of the 21 analysts covering the stock raised estimates for full fiscal 2010 while 6 analysts moved in the opposite direction. However, no up and downside movements were noticed in the last 7 days. Currently, the Zacks Consensus Estimate for full fiscal 2010 earnings is $3.89 per share, which would be a significant improvement over the full fiscal 2009 earnings of $3.00 per share.

The company’s earnings surprise for the preceding four quarters varies between a negative 31.5% and a positive 69.8%, with the average being a positive 11.8%.

Year-end 2009 reserves

As of year-end 2009, EOG had 10.8 trillion cubic feet equivalent (Tcfe) of proved reserves. The company’s year-end proved reserves tally was up 24% from the year-earlier level. In 2009, the company replaced 364% of its produced volumes at an all-in cost of $1.18 (vs. $2.60 in 2008) per thousand cubic feet equivalent (Mcfe).

Operational performance

Total volumes during the quarter slightly increased from the year-earlier level to 194.9 billion cubic feet equivalent (Bcfe), or 2,119 million cubic feet equivalent per day (MMcfe/d), 76% of which was natural gas and 24% liquids. Natural gas volumes decreased more than 3% year-over-year.

Crude oil and condensate production during the quarter was 60.9 thousand barrels per day (MBbl/d), up more than 9% from the year-ago level. This was primarily driven by a modest growth in domestic volumes. Natural gas liquids (NGL) volumes increased almost 45% from the year-ago quarter to 24.4 MBbl/d.

Average realized natural gas prices decreased roughly 27% year-over-year to $3.88 per Mcf. Prices decreased across all the geographical segments, with domestic realizations down nearly 25% year-over-year to $4.21 per Mcf. Average realized prices for crude oil and condensates increased approximately 46% year-over-year to $67.50 per barrel. Quarterly NGL prices were $40.25 per barrel, an increase of approximately 51% year-over-year.

Liquidity position

At the end of the quarter, EOG had cash and cash equivalents of $685.8 million and long-term debt of $2.8 billion, representing a debt-to-capitalization ratio of approximately 21.9%. During the quarter, EOG generated approximately $868.3 million ($3.43 per share) in discretionary cash flow (DCF), compared to a DCF of $911 million ($3.64 per share) in the year-ago quarter.

Outlook

EOG has set a full-year target of organic production growth of 13% with a 47% increase in liquid production volumes. The company expects that this year’s increased liquid production will come from an active drilling program in the North Dakota Bakken play, Fort Worth Barnett Combo and the Waskada Field in Manitoba.

We see EOG as a core holding in the large-cap E&P space with an industry leading organic production-growth profile, strong inventory of drilling opportunities, attractive cost and return metrics and impressive long-term growth prospects.
Read the full analyst report on "EOG"
Zacks Investment Research

Zacks Analyst Blog Highlights: EOG Resources Inc., Grupo Televisa S.A., OGE Energy Corp., Edison International and Dynegy Inc. – Press Releases

Zacks Market Commentaries — Mon, 09 Nov 2009 12:40:14 +0000

For Immediate Release

Chicago, IL – November 9, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: EOG Resources Inc. (EOG), Grupo Televisa S.A. (TV), OGE Energy Corp. (OGE), Edison International (EIX) and Dynegy Inc. (DYN).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Friday’s Analyst Blog:

EOG Resources Remains Neutral

EOG Resources Inc. (EOG) reported third-quarter earnings of 81 cents per share, compared with the Zacks Consensus Estimate of 65 cents and a year-ago profit of $2.34. Before adjusting one-time items, earnings were 2 cents per share. Despite an increase in production volumes, earnings were down from the year-earlier level due primarily to significantly lower commodity price realizations.

Total volumes during the quarter increased approximately 4% year-over-year to 195.9 billion cubic feet equivalent (Bcfe), or 2,129 million cubic feet equivalent per day (MMcfe/d), 76% of which was natural gas and 24% liquids. Natural gas volumes decreased 3% year-over-year, led by an approximately 6% decrease in the U.S. volumes to 1,128 MMcf/d, and more than 2% decrease in Canadian volumes to 219 MMcf/d.

Grupo Televisa Reports Mixed Results

Grupo Televisa S.A. (TV), the largest media company in Mexico, reported mixed financial results for the third quarter 2009. Quarterly consolidated net revenue of $970 million was an improvement of 5.5% over the prior-year quarter. However, this was below the Zacks Consensus Estimate of $983 million.

The year-over-year increase in the top-line was mainly attributable to healthy revenue growth in Sky, Cable & Telecom, Programming Exports, Pay television Networks, and Other Business segments, partially offset by a fall in revenue in Publishing and Television Broadcasting segments.

OGE Energy Tops Expectations

OGE Energy Corp. (OGE) reported third quarter earnings per share (EPS) of $1.40, topping the Zacks Consensus EPS estimate of $1.34. However, EPS in the reported quarter came a dime short, compared to the year-ago EPS of $1.50.

Earnings were boosted in the reported quarter by strong results at Oklahoma Gas and Electric Company (OG&E), offset by cooler weather in the OG&E service territory, lower commodity prices in the Enogex midstream pipeline business and an increase in the number of shares outstanding.

Edison Pushes Past Estimate

Edison International’s (EIX) adjusted EPS of $1.09 in the third quarter of fiscal 2009 pushed past the Zacks Consensus Estimate of $1.05 by 4 cents. However, adjusted EPS for the quarter fell short of the year-ago $1.46 EPS.

On a GAAP basis, the company reported quarterly EPS of $1.23, compared to $1.33 in the year-ago quarter. The discrepancy between GAAP and adjusted EPS were due to non-cash accounting benefit from the final regulatory approval to transfer its Mountainview power plant to utility rate base.

Dynegy Sunk on Charges

Dynegy Inc. (DYN) has reported a net loss of $212 million, or 25 cents per share in the third quarter 2009, compared to a net income of $605 million, or 72 cents per share in the year-ago quarter. The net loss in the reported quarter was primarily driven by asset impairment charges and mark-to-market losses. The company recorded mark-to-market losses of $128 million ($78 million after tax), compared to mark-to-market gains of $889 million ($542 million after tax) in the year-ago quarter.

In the reported quarter, however, adjusted earnings rose to $388 million, compared to $269 million in the year-ago quarter. The growth was primarily driven by the sale and assignment of a multi-year power sales contract, higher capacity and tolling revenues and higher realized energy prices in the Midwest.

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Zacks Investment Research

Zacks Analyst Blog Highlights: Apple, Google, Amazon, eBay and EOG Resources Inc. – Press Releases

Zacks Market Commentaries — Mon, 10 Aug 2009 13:30:24 +0000

For Immediate Release

Chicago, IL – August 10, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Apple (AAPL), Google (GOOG), Amazon (AMZN), eBay (EBAY) and EOG Resources Inc. (EOG).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Friday’s Analyst Blog:

Apple's New Foray

Rumor has it that Apple (AAPL) might extend its digital payment processing business by allowing current iTunes Store account holders to purchase digital goods, including movies, TV shows and iPhone apps from third-party wholesalers, resellers, and value-added resellers.

We believe that Apple’s idea is to expand the iTunes platform to other third party vendors selling through other gateways in order to earn a sideway income from these purchases. This new line of business may not be good for Apple as payment processing fees are relatively low particularly for cheaper goods. As a strategy, Apple drives higher-margin business and has succeeded in this respect so far. However, even if this new line of business helps in increasing volumes, we feel that cost per transaction is likely to be high and this might hurt the company’s profitability.

Further, this move would put Apple in direct competition with services offered by recognized players in the payment processing industry such as Google’s (GOOG) Checkout, Amazon’s (AMZN) One-Click-Buying, eBay’s (EBAY) PayPal and Facebook's ‘Pay with Facebook’ platform payment processing solutions.

EOG: Mixed Bag in Second Quarter

EOG Resources Inc. (EOG) reported second quarter earnings of 73 cents per share, compared with the Zacks Consensus Estimate of 43 cents per share and a year-ago profit of $2.52 per share.

The severe year-over-year downfall in earnings was due to a significant decrease in commodity-price realizations, partially offset by sound domestic volumes. Including one-time items, EOG posted a loss of 7 cents per share versus 71 cents per share in the year-earlier quarter.

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517

About Zacks

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Contact:
Mark Vickery
Web Content Editor
312-265-9380
Visit: www.zacks.com

Zacks Investment Research

EOG: Mixed Bag in Second Quarter – Analyst Blog

Zacks Market Commentaries — Fri, 07 Aug 2009 17:56:00 +0000

EOG Resources Inc. (EOG) reported second quarter earnings of 73 cents per share, compared with the Zacks Consensus Estimate of 43 cents per share and a year-ago profit of $2.52 per share.

The severe year-over-year downfall in earnings was due to a significant decrease in commodity-price realizations, partially offset by sound domestic volumes. Including one-time items, EOG posted a loss of 7 cents per share versus 71 cents per share in the year-earlier quarter.

Production

Total volumes during the quarter increased more than 8% year-over-year to 189 billion cubic feet equivalent (Bcfe) or 2,077 million cubic feet equivalent per day (MMcfe/d) (79% natural gas, 21% liquids). Natural gas volumes grew 4% year-over-year, led by an approximately 5% increase in Canadian volumes to 225 MMcf/d and nearly 23% increase in Trinidad volumes to 266 MMcf/d. The U.S. volume was essentially flat year-over-year.

The increase in Canada can be attributable to the British Columbia Horn River Basin production, while in Trinidad, volume growth was driven by increased contractual demand.

Crude oil and condensate production during the quarter was 48.9 thousand barrels per day (MBbl/d), up nearly 19% from the year-ago level. This was primarily driven by a 21% growth in domestic volumes, reflecting increased production in North Dakota. Natural gas liquids (NGL) volumes increased almost 53% from the year-ago quarter to 23.1 MBbl/d on the back of higher volumes from the Fort Worth Basin Barnett Shale.

Management guided towards third-quarter 2009 production in the range of 1,987 - 2,129 MMcfe/d. Full-year production guidance is between 2,050 MMcfe/d and 2,145 MMcfe/d.

Realizations

Average realized natural gas prices decreased roughly 67% year-over-year to $3.07 per Mcf. Prices decreased across all the geographical segments, with domestic realizations down nearly 68% year-over-year to $3.37 per Mcf. Average realized prices for crude oil and condensates decreased approximately 55% year-over-year to $52.47 per barrel.

Prices decreased across all the geographical segments, with domestic realizations down nearly 55% year-over-year to $52.82 per barrel. Quarterly NGL prices were $25.60 per barrel, down approximately 60% year-over-year.

Liquidity and capex

At the end of the quarter, EOG had cash and cash equivalents of $707 million and long-term debt of $2.8 billion, representing a net debt-to-capitalization ratio of approximately 23.2%. During the quarter, EOG generated approximately $787.4 million ($3.14 per share) in discretionary cash flow (DCF), compared to a DCF of $1.37 billion ($5.47 per share) in the year-ago quarter.

The company has set a full-year target of $2.90 billion (excluding acquisitions) for exploration and development activities. Additionally, the company has allocated $280 million for natural gas gathering, processing and other expenditures.

Outlook

We continue to believe that EOG remains better positioned than most of its peers to navigate the current downturn, given its growing resource-play focus and balance sheet strength. The company saw production growth of 15%, 11% and 9% in 2008, 2007 and 2006, respectively.

EOG's deep inventory of natural gas prospects, horizontal drilling expertise and excellent drilling results make it a premier North American producer. Its operating track record is particularly exceptional in the Barnett Shale play. Through its growing Bakken play in North Dakota, EOG's crude oil reserves and volumes are steadily increasing.

Given the company's industry leading organic production-growth profile, strong inventory of drilling opportunities, attractive cost and return metrics, and impressive long-term growth prospects, we see EOG as a core holding in the large-cap E&P space. Therefore, we recommend an Outperform rating for EOG shares.
Read the full analyst report on "EOG"
Zacks Investment Research

Avoid Gassy Names! – Analyst Blog

Zacks Market Commentaries — Fri, 22 May 2009 22:06:31 +0000

Highlights include Nabors Industries Ltd. (NBR), Patterson-UTI Energy, Inc. (PTEN), BJ Services Co. (BJS), EnCana Corp. (ECA), EOG Resources, Inc. (EOG) and Chesapeake Enery Corp. (CHK).

Growing optimism about the economic outlook has pushed the equity markets significantly higher from the March 2009 lows. Crude oil and most of the other commodities have been active participants in the rally.

As this first chart shows, natural gas has largely been absent from this rally. In fact, natural gas prices have been particularly weak in the last couple of days, erasing the gains made in the preceding three weeks and pushing the commodity back under the $4 level.

Blue line: Oil; Red line: Natural Gas (Source: wsj.com)

This decoupling of natural gas prices from other commodities in general and crude oil in particular is rooted in natural gas' peculiar supply-demand fundamentals. As we explain below, this trend is expected to remain in place over the coming months, even as confidence in the economic outlook further improves.

This has major sub-sector and stock selection implications. In the oil and natural gas sector, we would prefer to own "oily" names over "gassy" names -- service players with more of an international rather than U.S. focus, and deepwater rather than onshore U.S drilling exposure.

We remain wary of natural gas centric oilfield service players, though they have been beneficiaries of the ongoing rally. Plenty of drilling and pressure pumping capacity was added in the last cycle, which will keep dayrates and margins under pressure at least through 2010, way after the rig count has stopped falling.

As such, we see no justification for the recent strong gains made by Nabors (NBR) and the Patterson-UTI (PTEN), major land drillers in the U.S. We would also avoid BJ Services (BJS), one of the largest pure-play pressure pumping players.

Among exploration and production (E&P) players, we prefer to own companies with exposure to the shale plays and attractive hedge positions. Companies like EnCana (ECA), EOG (EOG), and Chesapeake (CHK) would fall in that category.

While natural gas' demand side should benefit from the improving economic outlook, particularly demand from industrial consumers, it is the supply side of the equation that, in our view, will keep pricing gains in check. For our near- to medium-term supply needs, there is plenty of natural gas in storage.

The Energy Information Administration (EIA) reported yesterday that current storage levels are 32% above the year-earlier level, and more than 22% above the 5-year average. As the following chart from the EIA shows, current storage levels are close to the top end of the historical range.

The outlook for domestic natural gas production is as good as it has been in decades. This is due to the discovery of prolific shale gas fields in the last few years and the refinement of more efficient drilling and completion techniques. The significant drop in the rig count from the late-summer 2008 all-time high (it has already dropped by more than 50%) is expected to moderate production growth rates.

But with the credit markets coming back to some level of normalcy, it would not take long for the growth momentum to resume. Oilfield cost deflation and the emergence of these shale plays has brought down the breakeven natural gas price required by exploration and production (E&P) players.
Read the full analyst report on "NBR"
Read the full analyst report on ""
Zacks Investment Research

EOG Resources with More Upside – Analyst Blog

Zacks Market Commentaries — Wed, 19 Nov 2008 15:42:04 +0000

EOG Resources, Inc. (EOG) is a major independent oil and gas exploration and production company, with operations in the U.S., Canada, offshore Trinidad, and the U.K. North Sea. The company has historically concentrated on natural gas in preference to exploring for oil.

EOG's third-quarter earnings of $588.3 million were up sharply from the year-earlier level, driven by increased volumes and improved commodity-price realizations, partly offset by higher costs. Domestic natural gas production grew 20%, while liquids volumes rose 65% over last year.

With robust growth from most of its core areas, EOG remains on track to increase production by 15% this year and approximately 12% in 2009. With $886 million in cash and a net debt to total capitalization ratio of 10%, the company is in a strong financial position to face the current downturn in the energy sector.

We maintain our Buy recommendation on EOG shares and see the stock as a core holding in the large-cap E&P space.

Read the full analyst report on EOG.

"EOG" Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research

North Dakota Stocks

Fred Fuld — Sun, 07 Sep 2008 07:46:00 +0000

North Dakota’s economy is mainly dependant on agriculture, 25% of its economic base to be more precise. Natural resources are the most valuable asset this state possesses. Consider the following key facts about North Dakota:

1. It ranks number one nationally for its potential to produce wind power.
2. The state also produces biofuels like ethanol and biodiesel.
3. There are more than 160 certified organic farms in the state.
4. North Dakota lowered its corporate income tax beginning January 1, 2007. North Dakota corporate taxable income percentages vary from 2.6 to 6.5%.
5. The state individual income tax varies from 2.1% to 5.5%.
6. North Dakota allows a corporate tax exemption of up to 5 years for new or expanding technology based businesses.
7. North Dakota is one of the safest states in the country.
8. North Dakota produces about 2.7% of the total U.S. oil production.
9. The state population is only 635,867
10. North Dakota produce approximately 45 million barrels of oil in 2007

The following companies are connected to North Dakota:

MDU Resources Group Inc. (MDU) is a distributor of electricity and natural gas, and is also involved in construction services segment in Montana, North Dakota, South Dakota, and Wyoming. The stock has a PE of 12, a PEG of 0.98, and it pays a yield of 1.9%.

Investors Real Estate Trust (IRET) is an investment trust focused in real estate properties that generate income in the United States. The stock has a PE of 55, a PEG of 2.53, and it pays a yield of 6.6%.

Titan Machinery, Inc. (TITN) runs agricultural stores in North America. It is also a retailer of construction equipment. The stock has a PE of 30, and a PEG of 1.14. The stock has a market cap of $400 million.

Continental Resources Inc. (CLR), although not based in North Dakota, is an oil and natural gas explorer and developer which is the largest land leaseholder in the North Dakota part of the Bakken shale. The stock has a PE of 24, and a PEG of 0.41.

EOG Resources, Inc. (EOG), the oil and gas company, although not based in North Dakota, has successfully drilled in the Bakken Formation in North Dakota where they own approximately 320,000 net acres. The stock has a PE of 24, a PEG of 0.89, and a yield of 0.6%.

Check out stocks from some other states: Arizona stocks, Oregon stocks, and Nevada stocks.

Author does not own any of the above.

By Stockerblog.com

Goldman Sachs Conviction Buy List Removals and Additions

CEO Blogger — Fri, 05 Sep 2008 16:14:56 +0000

Goldman Sachs Conviction Buy List Removals and Additions can be tracked at: http://trackthepros.com/ 9/5 1. Goldman Sachs removed EOG Resources, Inc. from its Conviction Buy List. The firm is maintaining its Buy rating but lowers lowers its price target from $181 to $140. 2. Goldman Sachs removed ConocoPhillips from its Conviction Buy List. The firm is maintaining their [...]