8-K 1 eog8k09-10hedge.txt FORM 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report: September 10, 2003 _______________ EOG RESOURCES, INC. (Exact name of registrant as specified in its charter) Delaware 1-9743 47-0684736 (State or other (Commission (I.R.S. Employer jurisdiction File Identification No.) of incorporation or Number) organization) 333 Clay Suite 4200 77002 Houston, Texas (Zip code) (Address of principal executive offices) 713/651-7000 (Registrant's telephone number, including area code) EOG RESOURCES, INC. Item 9. Regulation FD Disclosure I. 2003 Second Half and 2004 Natural Gas and Crude Oil Financial Price Swap and Natural Gas Financial Collar Contracts With the objective of enhancing the certainty of future revenues, from time to time EOG Resources, Inc. (EOG) enters into NYMEX-related financial commodity price swap and collar contracts. In addition to these financial transactions, EOG is a party to various physical commodity contracts for the sale of hydrocarbons that cover varying periods of time and have varying pricing provisions. The financial impact of these various physical commodity contracts is included in revenues which in turn affects average realized hydrocarbon prices. Presented below is a summary of EOG's 2003 second half and 2004 natural gas and crude oil financial price swap contracts and natural gas financial collar contracts as of September 10, 2003. EOG accounts for these price swap and collar contracts using the mark-to-market accounting method. (a) Natural Gas Financial Price Swap Contracts
Average Price Net Volume ($/MMBtu) (MMBtud) 2003 July (closed) $4.77 100,000 August (closed) 4.46 75,000 September (closed) 4.42 75,000 October 4.70 205,000 November 5.28 10,000 December 5.49 10,000 2004 January $5.57 30,000 February 5.50 30,000 March 5.37 30,000 April 4.89 30,000 May 4.80 30,000 June 4.80 30,000 July 4.80 30,000 August 4.80 30,000 September 4.78 30,000 October 4.80 30,000
(b) Crude Oil Financial Price Swap Contracts
Average Price Volume 2003 ($/Bbl) (Bbld) July (closed) $25.90 5,000 August (closed) 25.49 5,000 September 25.19 5,000 October 24.90 5,000 November 24.70 5,000 December 24.47 5,000
(c) Natural Gas Financial Collar Contracts
Natural Gas Financial Collar Contracts Floor Price Ceiling Price Floor Weighted Ceiling Weighted Volume Range Average Range Average (MMBtud) ($/MMBtu) ($/MMBtu) ($/MMBtu) ($/MMBtu) 2003(1) July (closed) 125,000 $3.59 - 3.91 $3.76 $4.73 - 5.91 $5.27 August (closed) 125,000 3.60 - 3.91 3.76 4.73 - 5.91 5.27 September (closed) 125,000 3.60 - 3.89 3.75 4.73 - 5.89 5.26 October 125,000 3.60 - 3.90 3.75 4.73 - 5.90 5.27 November 255,000 3.77 - 5.07 4.38 4.90 - 6.04 5.42 December 255,000 3.92 - 5.27 4.57 5.05 - 6.18 5.61 2004 January(2) 150,000 $5.10 - 5.39 $5.25 $6.11 - 6.43 $6.25 February(2) 150,000 5.05 - 5.32 5.19 6.06 - 6.37 6.20 March(2) 150,000 4.94 - 5.19 5.08 5.96 - 6.27 6.09 April 195,000 4.47 - 4.71 4.58 5.00 - 5.30 5.14 May 195,000 4.47 - 4.75 4.58 5.00 - 5.17 5.07 June 195,000 4.47 - 4.75 4.58 5.00 - 5.17 5.07 July 195,000 4.47 - 4.75 4.58 5.00 - 5.17 5.07 August 195,000 4.47 - 4.75 4.58 5.00 - 5.17 5.07 September 195,000 4.47 - 4.75 4.58 5.00 - 5.17 5.07 October 195,000 4.47 - 4.75 4.58 5.00 - 5.17 5.07 (1) 50,000 MMBtud of each of the 2003 monthly contract volumes were purchased at a premium of $0.10 per MMBtu. (2) The collar contracts for January 2004 to March 2004 were purchased at a premium of $0.10 per MMBtu.
Mark-to-Market Line Item on the Income Statement The mark-to-market line item on the income statement, which can be approximated using the data above and prices for closed and open NYMEX contracts at any time, would include not only the effect of cash settlements for the period, but also the gains or losses resulting from the changes in mark-to-market values at the beginning and end of the period for contracts in place as described above. This mark-to-market computation is very sensitive to prices (can move up or down) and will largely be determined by closing NYMEX prices on the last day of the reporting period, which could differ significantly from those of the current market place. II. Forward-Looking Statements This document includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are not guarantees of performance. Although EOG believes its expectations reflected in forward-looking statements are based on reasonable assumptions, no assurance can be given that these expectations will be achieved. Important factors that could cause actual results to differ materially from the expectations reflected in the forward-looking statements include, among others: the timing and extent of changes in commodity prices for crude oil, natural gas and related products, foreign currency exchange rates and interest rates; the timing and impact of liquefied natural gas imports; the extent and effect of any hedging activities engaged in by EOG; the extent of EOG's success in discovering, developing, marketing and producing reserves and in acquiring oil and gas properties; the accuracy of reserve estimates, which by their nature involve the exercise of professional judgment and may therefore be imprecise; political developments around the world, including terrorist activities and responses to terrorist activities; acts of war; and financial market conditions. In light of these risks, uncertainties and assumptions, the events anticipated by EOG's forward-looking statements might not occur. EOG undertakes no obligations to update or revise its forward-looking statements, whether as a result of new information, future events or otherwise. Definitions $/Bbl US Dollars per barrel $/MMBtu US Dollars per million British thermal units Bbld Barrels per day MMBtud Million British thermal units per day NYMEX New York Mercantile Exchange SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. EOG RESOURCES, INC. Date: September 10, 2003 By: /s/ TIMOTHY K. DRIGGERS Timothy K. Driggers Vice President and Chief Accounting Officer (Principal Accounting Officer)