The Complete Guide to EOG Resources
(Continued from Prior Part)
EOG Resources’ production mix
As seen in the below chart, EOG Resources’ (EOG) 3Q15 production mix was ~49% crude oil, 37% natural gas, and 14% natural gas liquids. This means that EOG is tilted toward liquids production, which is at 63%. Typically, upstream companies with more liquids production have better operating margins.
EOG’s production mix trend
EOG’s quarterly crude oil percentage in its production mix has increased from ~25% in 1Q11 to ~50% in 4Q14, with an average rate of increase of ~5% QoQ.
However, in the last three quarters, EOG’s crude oil percentage in its production mix has averaged ~49.8%. In 3Q15, crude oil percentage in its production mix increased by ~0.6% when compared with 3Q14.
EOG’s realized prices
Excluding the effect of hedges, EOG’s average worldwide realized crude oil price in 3Q15 was $45.91 per barrel, down ~53% from $97.13 per barrel in 3Q14.
Excluding the effect of hedges, for 3Q15, EOG’s average worldwide realized price for natural gas production decreased ~32% to $2.40 per thousand cubic feet compared to $3.52 per thousand cubic feet for the same period in 2014.
For 3Q15, EOG’s average worldwide realized price for natural gas liquids production decreased ~60% to $13.24 per barrel, compared to $32.67 for the same period in 2014.
EOG’s lower realized prices were compensated partially by its gains on commodity hedges. We will study EOG’s hedges in the next part.
Oil and gas producers
Other upstream companies from the S&P 500 (SPY) that have a similar production mix to EOG Resources are Cimarex Energy (XEC), Pioneer Natural Resources (PXD), and Murphy Oil (MUR).
Continue to Next Part
Browse this series on Market Realist: