8-K 1 eog8k11-03guid.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: November 3, 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. Fourth Quarter and Full Year 2003 Forecast The forecast items for the fourth quarter and full year 2003 set forth below for EOG Resources, Inc. (EOG) are based on current available information and expectations as of the date of this document. This forecast replaces and supersedes any previously issued guidance or forecast. Estimates are provided in the attached table, which is incorporated by reference herein. II. 2003 Fourth Quarter 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 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 fourth quarter and 2004 natural gas and crude oil financial price swap contracts and natural gas financial collar contracts as of November 3, 2003. EOG did not enter into any additional contracts since EOG filed its Current Report on Form 8-K on October 16, 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 October (closed) $4.70 205,000 November (closed) 4.97 40,000 December 5.19 40,000 2004 January $5.57 30,000 February 5.50 30,000 March 5.37 30,000 April 4.89 30,000 May 4.80 30,000 June 4.80 30,000 July 4.80 30,000 August 4.80 30,000 September 4.78 30,000 October 4.80 30,000
(b) Crude Oil Financial Price Swap Contracts
Average Price Volume ($/Bbl) (Bbld) 2003 October (closed) $24.90 5,000 November 24.70 5,000 December 24.47 5,000 2004 January $29.80 2,000 February 29.37 2,000 March 28.87 2,000 April 28.42 2,000 May 28.05 2,000 June 27.70 2,000 July 26.86 1,000
(c) Natural Gas Financial Collar Contracts
Floor Price Ceiling Price Floor Weighted Ceiling Weighted Volume Range Average Range Average (MMBtud) ($/MMBtu) ($/MMBtu) ($/MMBtu) ($/MMBtu) 2003(1) October (closed) 125,000 $3.60 - 3.90 $3.75 $4.73 - 5.90 $5.27 November (closed) 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) 330,000 $5.06 - 5.88 $5.38 $5.86 - 6.69 $6.29 February(2) 330,000 5.02 - 5.78 5.31 5.82 - 6.62 6.24 March(2) 330,000 4.93 - 5.53 5.16 5.73 - 6.40 6.10 April 375,000 4.47 - 4.71 4.59 4.93 - 5.30 5.13 May 375,000 4.47 - 4.75 4.58 4.93 - 5.19 5.09 June 375,000 4.47 - 4.75 4.58 4.93 - 5.19 5.09 July 375,000 4.47 - 4.75 4.58 4.93 - 5.19 5.09 August 375,000 4.47 - 4.75 4.58 4.93 - 5.19 5.09 September 375,000 4.47 - 4.75 4.58 4.93 - 5.19 5.09 October 375,000 4.47 - 4.75 4.58 4.93 - 5.19 5.09 (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 a reporting period, which could differ significantly from those of the current market place. III. 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 $/Mcf US Dollars per thousand cubic feet $/Mcfe US Dollars per thousand cubic feet equivalent $/MMBtu US Dollars per million British thermal units $MM US Dollars in millions Bbld Barrels per day Mbd Thousand barrels per day MM Millions MMBtu Million British thermal units MMBtud Million British thermal units per day MMcfd Million cubic feet per day NYMEX New York Mercantile Exchange WTI West Texas Intermediate SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. EOG RESOURCES, INC. Date: November 3, 2003 By: /s/ TIMOTHY K. DRIGGERS Timothy K. Driggers Vice President and Chief Accounting Officer (Principal Accounting Officer) Estimated Ranges (See text for additional information)
4Q 2003 Full Year 2003 Daily Production Natural Gas (MMcfd) US 630 - 660 638 - 646 Canada 185 - 200 162 - 166 Trinidad 140 - 160 149 - 154 Total 955 - 1,020 949 - 966 Crude Oil (Mbd) US 19.0 - 21.5 18.2 - 18.8 Canada 2.0 - 3.0 2.2 - 2.4 Trinidad 1.8 - 2.5 2.2 - 2.4 Total 22.8 - 27.0 22.6 - 23.6 Natural Gas Liquids (Mbd) US 1.5 - 2.5 2.6 - 2.9 Canada 0.5 - 1.0 0.6 - 0.7 Total 2.0 - 3.5 3.2 - 3.6 Operating Costs Unit Costs ($/Mcfe) Lease and Well $0.52 - $0.58 $0.52 - $0.53 Depreciation, Depletion and Amortization $1.04 - $1.10 $1.06 - $1.07 Expenses ($MM) Exploration, Dry Hole and Impairment 60.0 - 85.0 199.9 - 224.9 General and Administrative 25.0 - 30.0 96.7 - 101.7 Capitalized Interest 2.0 - 2.4 8.4 - 8.8 Net Interest 12.0 - 17.0 56.8 - 61.8 Taxes Other than Income (% of Revenue) 5.5% - 6.0% 4.8% - 4.9% Taxes Effective Rate 32% - 37% 34% - 35% Deferred Ratio 50% - 80% 60% - 67% Preferred Dividends ($MM) 2.5 - 3.0 10.8 - 11.3 Shares Outstanding (MM) at September 30, 2003 Basic 114.7 Diluted (based on stock price of $41.74) 116.6 Capital Expenditures Including Acquisitions ($MM) - FY 2003 1,300 - 1,375 Pricing Natural Gas ($/Mcf) Differentials (include the effect of physical contracts) United States - below NYMEX Henry Hub $0.25 - $0.45 $0.43 - $0.48 Canada - below NYMEX Henry Hub $0.45 - $0.65 $0.81 - $0.86 Realizations Trinidad $1.15 - $1.35 $1.28 - $1.33 Crude Oil ($/Bbl) Differentials US - below WTI $0.85 - $1.25 $0.82 - $0.92 Canada - below WTI $3.75 - $4.75 $2.46 - $2.71 Trinidad - below WTI $3.75 - $4.25 $2.59 - $2.71