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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
Form 10-Q
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2003
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number: 1-9743
EOG RESOURCES, INC.
(Exact name of registrant as specified in its charter)
Delaware 47-0684736
(State or other (I.R.S. Employer
jurisdiction Identification No.)
of incorporation or
organization)
333 Clay Street, Suite 4200, Houston, Texas 77002-7361
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: 713-651-7000
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes x No .
Indicate by check mark whether the registrant is an accelerated
filer (as defined in Rule 12b-2 of the Act). Yes x No .
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of July 24, 2003.
Title of each class Number of shares
Common Stock, $.01 par value 114,885,338
EOG RESOURCES, INC.
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION Page No.
ITEM 1. Financial Statements
Consolidated Statements of Income - Three Months Ended June 30,
2003 and 2002 And Six Months Ended June 30, 2003 and 2002 3
Consolidated Balance Sheets - June 30, 2003 and December 31, 2002 4
Consolidated Statements of Cash Flows - Six Months Ended June 30,
2003 and 2002 5
Notes to Consolidated Financial Statements 6
ITEM 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 11
ITEM 4. Controls and Procedures 20
PART II.OTHER INFORMATION
ITEM 1. Legal Proceedings 21
ITEM 4. Submission of Matters to a Vote of Security Holders 21
ITEM 6. Exhibits and Reports on Form 8-K 22
SIGNATURES 23
EXHIBIT INDEX 24
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
EOG RESOURCES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Per Share Amounts)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2003 2002 2003 2002
NET OPERATING REVENUES
Natural Gas $377,643 $231,272 $811,734 $407,856
Crude Oil, Condensate and Natural Gas Liquids 61,471 56,635 136,979 103,410
Gains (Losses) on Mark-to-market Commodity
Derivative Contracts (15,753) 693 (60,974) (33,602)
Other, Net 1,393 1,563 1,684 (938)
TOTAL 424,754 290,163 889,423 476,726
OPERATING EXPENSES
Lease and Well 53,620 43,638 101,959 84,229
Exploration Costs 22,139 15,754 39,597 28,690
Dry Hole Costs 3,436 12,836 10,056 23,242
Impairments 25,475 10,683 37,431 22,746
Depreciation, Depletion and Amortization 106,587 97,956 210,140 192,416
General and Administrative 24,934 21,988 45,355 42,701
Taxes Other Than Income 11,695 18,008 41,888 34,048
TOTAL 247,886 220,863 486,426 428,072
OPERATING INCOME 176,868 69,300 402,997 48,654
OTHER INCOME (EXPENSE), NET 2,680 437 2,832 (2,726)
INCOME BEFORE INTEREST EXPENSE AND INCOME TAXES 179,548 69,737 405,829 45,928
INTEREST EXPENSE, NET 13,807 14,182 29,125 26,233
INCOME BEFORE INCOME TAXES 165,741 55,555 376,704 19,695
INCOME TAX PROVISION 56,950 17,447 131,357 5,828
NET INCOME BEFORE CUMULATIVE EFFECT OF CHANGE
IN ACCOUNTING PRINCIPLE 108,791 38,108 245,347 13,867
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
PRINCIPLE, NET OF TAX - - (7,131) -
NET INCOME 108,791 38,108 238,216 13,867
PREFERRED STOCK DIVIDENDS 2,758 2,758 5,516 5,516
NET INCOME AVAILABLE TO COMMON $106,033 $ 35,350 $232,700 $ 8,351
NET INCOME PER SHARE AVAILABLE TO COMMON
Basic
Net Income Available to Common Before
Cumulative Effect of Change in Accounting
Principle $ 0.93 $ 0.31 $ 2.09 $ 0.07
Cumulative Effect of Change in Accounting
Principle, net of tax - - (0.06) -
Net Income Available to Common $ 0.93 $ 0.31 $ 2.03 $ 0.07
Diluted
Net Income Available to Common Before
Cumulative Effect of Change in Accounting
Principle $ 0.91 $ 0.30 $ 2.06 $ 0.07
Cumulative Effect of Change in Accounting
Principle, net of tax - - (0.06) -
Net Income Available to Common $ 0.91 $ 0.30 $ 2.00 $ 0.07
AVERAGE NUMBER OF COMMON SHARES
Basic 114,382 115,737 114,430 115,553
Diluted 116,131 117,689 116,212 117,397
The accompanying notes are an integral part of these consolidated financial statements.
PART I. FINANCIAL INFORMATION - (Continued)
ITEM 1. FINANCIAL STATEMENTS - (Continued)
EOG RESOURCES, INC.
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share Data)
June 30, December 31,
2003 2002
(Unaudited)
ASSETS
CURRENT ASSETS
Cash and Cash Equivalents $ 150,967 $ 9,848
Accounts Receivable, Net 303,804 259,308
Inventories 18,972 18,928
Other 79,038 106,708
TOTAL 552,781 394,792
OIL AND GAS PROPERTIES (SUCCESSFUL EFFORTS METHOD) 7,269,638 6,750,095
Less: Accumulated Depreciation, Depletion
and Amortization (3,674,781) (3,428,547)
Net Oil and Gas Properties 3,594,857 3,321,548
OTHER ASSETS 92,703 97,666
TOTAL ASSETS $ 4,240,341 $ 3,814,006
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable $ 226,408 $ 201,931
Accrued Taxes Payable 29,781 23,170
Dividends Payable 6,151 5,007
Liabilities from Price Risk Management Activities 27,700 5,939
Other 33,080 40,304
TOTAL 323,120 276,351
LONG-TERM DEBT 1,010,822 1,145,132
OTHER LIABILITIES 158,064 59,180
DEFERRED INCOME TAXES 766,531 660,948
SHAREHOLDERS' EQUITY
Preferred Stock, $.01 Par, 10,000,000 Shares
Authorized:
Series B, 100,000 Shares Issued, Cumulative,
$100,000,000 Liquidation Preference 98,471 98,352
Series D, 500 Shares Issued, Cumulative,
$50,000,000 Liquidation Preference 49,736 49,647
Common Stock, $.01 Par, 320,000,000 Shares
Authorized and 124,730,000 Shares Issued 201,247 201,247
Additional Paid in Capital 29 -
Unearned Compensation (17,227) (15,033)
Accumulated Other Comprehensive Gain (Loss) 37,546 (49,877)
Retained Earnings 1,946,331 1,723,948
Common Stock Held in Treasury, 9,853,722 shares
at June 30, 2003 and 10,009,740 shares at
December 31, 2002 (334,329) (335,889)
TOTAL SHAREHOLDERS' EQUITY 1,981,804 1,672,395
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 4,240,341 $ 3,814,006
The accompanying notes are an integral part of these consolidated financial statements.
PART I. FINANCIAL INFORMATION - (Continued)
ITEM 1. FINANCIAL STATEMENTS - (Continued)
EOG RESOURCES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
Six Months Ended
June 30,
2003 2002
CASH FLOWS FROM OPERATING ACTIVITIES
Reconciliation of Net Income to Net Operating
Cash Inflows:
Net Income $ 238,216 $ 13,867
Items Not Requiring Cash
Depreciation, Depletion and Amortization 210,140 192,416
Impairments 37,431 22,746
Deferred Income Taxes 79,975 3,724
Cumulative Effect of Change in Accounting
Principle 7,131 -
Other, Net 3,965 6,386
Exploration Costs 39,597 28,690
Dry Hole Costs 10,056 23,242
Mark-to-market Commodity Derivative Contracts
Total Losses 60,974 33,602
Realized Losses (39,089) (8,828)
Tax Benefits from Stock Options Exercised 4,802 2,403
Other, Net 3,499 1,014
Changes in Components of Working Capital and
Other Liabilities
Accounts Receivable (44,420) (9,722)
Inventories (44) 1,813
Accounts Payable 24,353 (50,786)
Accrued Taxes Payable 16,371 (3,591)
Other Liabilities (1,151) (1,455)
Other, Net 8,337 (25,927)
Changes in Components of Working Capital
Associated with Investing and Financing Activities (6,931) 44,497
NET OPERATING CASH INFLOWS 653,212 274,091
INVESTING CASH FLOWS
Additions to Oil and Gas Properties (325,046) (351,761)
Exploration Costs (39,597) (28,690)
Dry Hole Costs (10,056) (23,242)
Proceeds from Sales of Assets 9,750 4,620
Changes in Components of Working Capital
Associated with Investing Activities 6,879 (45,050)
Other, Net 1,279 212
NET INVESTING CASH OUTFLOWS (356,791) (443,911)
FINANCING CASH FLOWS
Long-Term Debt Borrowings (Repayments) (134,310) 179,874
Dividends Paid (14,480) (14,577)
Treasury Stock Purchased (21,295) -
Proceeds from Sales of Treasury Stock 14,730 13,073
Other, Net 53 (1,856)
NET FINANCING CASH INFLOWS (OUTFLOWS) (155,302) 176,514
INCREASE IN CASH AND CASH EQUIVALENTS 141,119 6,694
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 9,848 2,512
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 150,967 $ 9,206
The accompanying notes are an integral part of these consolidated financial statements.
PART I. FINANCIAL INFORMATION (Continued)
ITEM 1. FINANCIAL STATEMENTS (Continued)
EOG RESOURCES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The consolidated financial statements of EOG Resources, Inc.
and subsidiaries (EOG) included herein have been prepared by
management without audit pursuant to the rules and regulations of
the Securities and Exchange Commission. Accordingly, they reflect
all normal recurring adjustments which are, in the opinion of
management, necessary for a fair presentation of the financial
results for the interim periods. Certain information and notes
normally included in financial statements prepared in accordance
with accounting principles generally accepted in the United States
of America have been condensed or omitted pursuant to such rules and
regulations. However, management believes that the disclosures are
adequate to make the information presented not misleading. These
consolidated financial statements should be read in conjunction with
the consolidated financial statements and the notes thereto included
in EOG's Annual Report on Form 10-K for the year ended December 31,
2002 ("EOG's 2002 Annual Report").
The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could
differ from those estimates.
Certain reclassifications have been made to prior period
financial statements to conform with the current presentation.
As more fully discussed in Note 11 to the consolidated financial
statements included in EOG's 2002 Annual Report, EOG engages in
price risk management activities from time to time. Derivative
financial instruments (primarily price swaps and collars) are
utilized selectively to hedge the impact of market fluctuations
on natural gas and crude oil prices. During the first half of
2003 and 2002, EOG elected not to designate any of its price risk
management activities as accounting hedges, and accordingly,
accounted for them using the mark-to-market accounting method.
In June 2001, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards ("SFAS") No.
143 - "Accounting for Asset Retirement Obligations" effective for
fiscal years beginning after June 15, 2002. As more fully
discussed in Note 1 to the consolidated financial statements
included in EOG's 2002 Annual Report, SFAS No. 143 essentially
requires entities to record the fair value of a liability for
legal obligations associated with the retirement of tangible long-
lived assets and the associated asset retirement costs. EOG
adopted the statement on January 1, 2003. The adoption of SFAS
No. 143 did not have a material effect on the financial condition
or results of operations of EOG (see Note 6).
In December 2002, the FASB issued SFAS No. 148 - "Accounting for
Stock-Based Compensation - Transition and Disclosure - an
amendment of FASB Statement No. 123." This statement provides
alternative methods of transition for a voluntary change to the
fair value based method of accounting for stock-based employee
compensation, along with the requirement of disclosure in both
annual and interim financial statements about the method used and
effect on reported results (see Note 8). Subsequently, at the
April 22, 2003 FASB meeting, the FASB decided to require all
companies to expense the value of employee stock options.
Companies will be required to measure the cost according to the
fair value of the options under a method yet to be determined.
EOG continues to monitor the developments in this area as details
of the implementation of the decision emerge.
PART I. FINANCIAL INFORMATION (Continued)
ITEM 1. FINANCIAL STATEMENTS (Continued)
EOG RESOURCES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In April 2003, the FASB issued SFAS No. 149 - "Amendment of
Statement 133 on Derivative Instruments and Hedging Activities."
This statement amends and clarifies SFAS No. 133 as a result of
various implementation issues and does not impact the accounting
treatment of EOG's derivative financial instruments.
In May 2003, the FASB issued SFAS No. 150 - "Accounting for
Certain Financial Instruments with Characteristics of both
Liabilities and Equity." Currently, EOG does not have any
financial instruments in place which fall under the scope of this
statement.
2. The following table sets forth the computation of net income
per share available to common for the three-month and six-month
periods ended June 30, 2003 and 2002 (in thousands, except per share
amounts):
Three Months Ended Six Months Ended
June 30, June 30,
2003 2002 2003 2002
Numerator for Basic and Diluted
Earnings Per Share -
Net Income Available to Common $106,033 $ 35,350 $232,700 $ 8,351
Denominator for Basic Earnings Per Share -
Weighted Average Shares 114,382 115,737 114,430 115,553
Potential Dilutive Common Shares -
Stock Options 1,509 1,719 1,531 1,609
Restricted Stock and Units 240 233 251 235
Denominator for Diluted Earnings Per Share -
Adjusted Weighted Average Shares 116,131 117,689 116,212 117,397
Net Income Per Share of Common Stock
Basic $ 0.93 $ 0.31 $ 2.03 $ 0.07
Diluted $ 0.91 $ 0.30 $ 2.00 $ 0.07
3. The following table presents the components of EOG's
comprehensive income for the three-month and six-month periods ended
June 30, 2003 and 2002:
Three Months Ended Six Months Ended
June 30, June 30,
2003 2002 2003 2002
(In Thousands)
Net Income $108,791 $ 38,108 $238,216 $ 13,867
Other Comprehensive Income
Foreign Currency Translation Adjustment 48,167 23,413 87,423 23,519
Available-for-Sale Security Transactions - - - 926
Comprehensive Income $156,958 $ 61,521 $325,639 $ 38,312
PART I. FINANCIAL INFORMATION (Continued)
ITEM 1. FINANCIAL STATEMENTS (Continued)
EOG RESOURCES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4. Selected financial information about operating segments is
reported below for the three-month and six-month periods ended
June 30, 2003 and 2002:
Three Months Ended Six Months Ended
June 30, June 30,
2003 2002 2003 2002
(In Thousands)
NET OPERATING REVENUES
United States $328,517 $227,944 $687,022 $368,813
Canada 72,916 45,031 153,605 75,438
Trinidad 23,304 17,175 48,768 32,452
Other 17 13 28 23
TOTAL $424,754 $290,163 $889,423 $476,726
OPERATING INCOME (LOSS)
United States $126,301 $ 52,564 $288,418 $ 21,785
Canada 40,127 8,470 91,517 9,746
Trinidad 10,736 10,613 27,707 19,490
Other (296) (2,347) (4,645) (2,367)
TOTAL 176,868 69,300 402,997 48,654
RECONCILING ITEMS
Other Income (Expense), Net 2,680 437 2,832 (2,726)
Interest Expense, Net 13,807 14,182 29,125 26,233
INCOME BEFORE INCOME TAXES $165,741 $ 55,555 $376,704 $ 19,695
5. EOG and numerous other companies in the natural gas industry
are named as defendants in various lawsuits alleging violations of
the Civil False Claims Act. These lawsuits have been consolidated
for pre-trial proceedings in the United States District Court for
the District of Wyoming. The plaintiffs contend that defendants
have underpaid royalties on natural gas and natural gas liquids
produced on federal and Indian lands through the use of below-market
prices, improper deductions, improper measurement techniques and
transactions with affiliated companies. Plaintiffs allege that the
royalties paid by defendants were lower than the royalties required
to be paid under federal regulations and that the forms filed by
defendants with the Minerals Management Service reporting these
royalty payments were false, thereby violating the Civil False
Claims Act. Based on EOG's present understanding of these cases,
EOG believes that it has substantial defenses to these claims and
intends to vigorously assert these defenses. However, if EOG is
found to have violated the Civil False Claims Act, EOG could be
subject to a variety of sanctions, including treble damages and
substantial monetary fines.
There are various other suits and claims against EOG that have
arisen in the ordinary course of business. However, management
does not believe these suits and claims will individually or in
the aggregate have a material adverse effect on the financial
condition or results of operations of EOG. EOG has been named as
a potentially responsible party in certain Comprehensive
Environmental Response, Compensation, and Liability Act
proceedings. However, management does not believe that any
potential assessments resulting from such proceedings will
individually or in the aggregate have a materially adverse effect
on the financial condition or results of operations of EOG.
PART I. FINANCIAL INFORMATION (Continued)
ITEM 1. FINANCIAL STATEMENTS (Continued)
EOG RESOURCES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
6. EOG adopted SFAS No. 143 - "Accounting for Asset Retirement
Obligations" on January 1, 2003. The impact of adopting the
statement resulted in an after-tax loss of $7.1 million, which
was reported in the first quarter of 2003 as cumulative effect of
change in accounting principle. The following table presents the
reconciliation of the beginning and ending aggregate carrying
amount of short-term and long-term legal obligations associated
with the retirements of oil and gas properties pursuant to SFAS
No. 143 for the three-month periods ended March 31, 2003 and June
30, 2003 (in thousands):
Asset Retirement Obligations
Short-Term Long-Term Total
Balance at December 31, 2002 $ - $ - $ -
Carrying Amount at Adoption 6,384 92,097 98,481
Liabilities Incurred - 1,036 1,036
Liabilities Settled (329) (82) (411)
Accretion 31 1,081 1,112
Foreign Currency Translation 43 697 740
Balance at March 31, 2003 6,129 94,829 100,958
Liabilities Incurred 7 1,985 1,992
Liabilities Settled (250) (393) (643)
Accretion 31 1,172 1,203
Foreign Currency Translation 45 719 764
Balance at June 30, 2003 $ 5,962 $98,312 $104,274
Pro forma net income and earnings per share are not presented for
the three or six-month periods ended June 30, 2002 because the
pro forma application of SFAS No. 143 to the prior period would
not result in pro forma net income and earnings per share
materially different from the actual amounts reported for the
period in the accompanying Consolidated Statements of Income.
7. EOG, through certain wholly-owned subsidiaries, owns equity
interests in two Trinidadian companies: Caribbean Nitrogen
Company Limited ("CNCL") and Nitrogen (2000) Unlimited ("N2000").
During the first quarter of 2003, EOG completed separate share
purchase agreements whereby a portion of the EOG subsidiaries'
shareholdings in CNCL and N2000 was sold to a third party energy
company. The sale left EOG with equity interests of
approximately 12% in CNCL and 27% in N2000 and did not result in
any gain or loss.
8. EOG has various stock plans ("the Plans") under which employees
and non-employee members of the Board of Directors of EOG and its
subsidiaries have been or may be granted certain equity
compensation.
Stock Options. EOG has in place compensatory stock option plans
whereby participants have been or may be granted rights to
purchase shares of common stock of EOG at a price not less than
the market price of the stock as of the date of grant.
Employee Stock Purchase Plan. EOG has in place an employee stock
purchase plan, pursuant to Section 423 of the Internal Revenue
Code of 1986, as amended, whereby participants are granted rights
to purchase shares of common stock of EOG at a price that is 15%
less than the market price of the stock on either the first day
or the last day of a six-month offering period, whichever is
less.
PART I. FINANCIAL INFORMATION (Continued)
ITEM 1. FINANCIAL STATEMENTS (Concluded)
EOG RESOURCES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
EOG's pro forma net income and net income per share of common
stock for the three-month and six-month periods ended June 30,
2003 and 2002, had compensation costs been recorded using the
fair value method in accordance with SFAS No. 123 - "Accounting
for Stock-Based Compensation," as amended by SFAS No. 148 -
"Accounting for Stock-Based Compensation - Transition and
Disclosure - an amendment of FASB Statement No. 123," are
presented below pursuant to the disclosure requirement of SFAS
No. 148 (in thousands except per share data):
Three Months Ended Six Months Ended
June 30, June 30,
2003 2002 2003 2002
Net Income Available to Common - As Reported $106,033 $ 35,350 $232,700 $ 8,351
Deduct: Total Stock-Based Employee
Compensation Expense (2,354) (2,090) (5,647) (6,255)
Net Income Available to Common - Pro Forma $103,679 $ 33,260 $227,053 $ 2,096
Net Income per Share Available to Common
Basic - As Reported $ 0.93 $ 0.31 $ 2.03 $ 0.07
Basic - Pro Forma $ 0.91 $ 0.29 $ 1.98 $ 0.02
Diluted - As Reported $ 0.91 $ 0.30 $ 2.00 $ 0.07
Diluted - Pro Forma $ 0.89 $ 0.28 $ 1.95 $ 0.02
The effects of applying SFAS No. 123, as amended, should not be
interpreted as being indicative of future effects. The statement
does not apply to awards prior to 1995, and the extent and timing
of additional future awards cannot be predicted.
Restricted Stock and Units. Under the Plans, employees may be
granted restricted stock and/or units without cost to them.
Related compensation expense for both three-month periods ended
June 30, 2003 and 2002 was $1.3 million. Related compensation
expense for the six-month periods ended June 30, 2003 and 2002
was $2.6 million and $2.4 million, respectively.
9. On July 23, 2003, EOG entered into a new three-year credit
facility with domestic and foreign lenders which provides for
$600 million in long-term committed credit, and concurrently
cancelled the existing $300 million 364-day credit facility and
$300 million five-year credit facility scheduled to expire in
July 2003 and July 2004, respectively. Advances under the new
agreement bear interest, at the option of EOG, based upon a base
rate or a Eurodollar rate. The new credit facility also provides
for the allocation, at the option of EOG, of up to $75 million of
the $600 million to its Canadian subsidiary. Advances to the
Canadian subsidiary, should they occur, would be guaranteed by
EOG and would bear interest at the option of the Canadian
subsidiary based upon a Canadian prime rate or a Canadian
banker's acceptance rate. EOG also has the option to issue up to
$100 million in letters of credit as part of this new credit
facility.
PART I. FINANCIAL INFORMATION (Continued)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
EOG RESOURCES, INC.
The following review of operations for the three-month periods
ended June 30, 2003 and 2002 should be read in conjunction with the
consolidated financial statements of EOG Resources, Inc. and
subsidiaries (EOG) and Notes thereto.
Results of Operations
Three Months Ended June 30, 2003 vs. Three Months Ended June 30, 2002
Net Operating Revenues. Wellhead volume and price statistics for
the specified quarters were as follows:
Three Months Ended
June 30,
2003 2002
Natural Gas Volumes (MMcf per day)(1)
United States 636 628
Canada 153 159
North America 789 787
Trinidad 148 111
TOTAL 937 898
Average Natural Gas Prices ($/Mcf)(2)
United States $5.06 $3.05
Canada 4.77 2.76
North America Composite 5.00 2.99
Trinidad 1.32 1.27
COMPOSITE 4.42 2.77
Crude Oil/Condensate Volumes (MBbl per day)(1)
United States 17.3 19.2
Canada 2.3 2.0
North America 19.6 21.2
Trinidad 2.3 1.9
TOTAL 21.9 23.1
Average Crude Oil/Condensate Prices ($/Bbl)(2)
United States $28.18 $24.86
Canada 27.00 23.93
North America Composite 28.04 24.77
Trinidad 26.31 24.46
COMPOSITE 27.86 24.74
Natural Gas Liquids Volumes (MBbl per day)(1)
United States 3.0 2.9
Canada 0.4 0.7
TOTAL 3.4 3.6
Average Natural Gas Liquids Prices ($/Bbl)(2)
United States $19.63 $14.86
Canada 14.15 10.53
COMPOSITE 19.00 13.95
Natural Gas Equivalent Volumes (MMcfe per day)(3)
United States 757 760
Canada 170 175
North America 927 935
Trinidad 162 124
TOTAL 1,089 1,059
Total Bcfe(3)Deliveries 99 96
(1) Million cubic feet per day or thousand barrels per day, as
applicable.
(2) Dollars per thousand cubic feet or per barrel, as applicable.
(3) Million cubic feet equivalent per day or billion cubic feet
equivalent, as applicable.
PART I. FINANCIAL INFORMATION (Continued)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (Continued)
EOG RESOURCES, INC.
During the second quarter of 2003, net operating revenues
increased $135 million to $425 million. Total wellhead revenues of
$439 million increased by $155 million, or 55%, as compared to a
year ago.
Wellhead natural gas revenues for the second quarter of 2003
increased approximately $150 million, or 66%, due to an increase in
average wellhead natural gas prices and an increase in natural gas
deliveries. The average wellhead price for natural gas increased
60% to $4.42 per Mcf for the second quarter of 2003 from $2.77 per
Mcf for the same quarter of 2002.
Natural gas deliveries increased to 937 MMcf per day for the
second quarter of 2003 from 898 MMcf per day a year ago. The
increase in natural gas deliveries was primarily due to production
from the U(a) Block in Trinidad, where production did not commence
until May 2002, and to increased production in the Oklahoma City,
Corpus Christi and Midland Divisions.
Wellhead crude oil and condensate revenues for the second quarter
of 2003 increased approximately $4 million, or 7%, as compared to
the prior year period, primarily due to an increase in the average
wellhead crude oil and condensate prices, partially offset by lower
crude oil and condensate deliveries. The average wellhead price for
crude oil and condensate increased 13% to $27.86 per barrel from
$24.74 per barrel for the same quarter of 2002.
Crude oil and condensate deliveries decreased 5% to 21.9 MBbl per
day for the second quarter of 2003 from 23.1 MBbl per day a year
ago. The decrease in volumes was primarily due to a natural decline
in crude oil and condensate production in the Denver, Tyler and
Oklahoma City Divisions, partially offset by increased production in
the Midland Division, Trinidad and Canada.
During the second quarter of 2003, EOG recognized a loss on mark-
to-market commodity derivative contracts of $15.8 million compared
to a gain of $0.7 million for the prior year period. During the
same period, net cash outflows from mark-to-market commodity
derivative contracts were $11.2 million compared to net cash
outflows of $19.8 million for the comparable period in 2002.
Operating Expenses. For the second quarter of 2003, operating
expenses of $248 million were approximately $27 million higher than
the second quarter of 2002.
Impairments increased $15 million to $25 million in the second
quarter of 2003 compared to a year ago due to higher amortization of
unproved leases and impairments to the carrying value of certain
long-lived assets as a result of future cash flow analysis,
primarily in the Pittsburgh Division. For the three-month periods
ended June 30, 2003 and 2002, total impairments under SFAS No. 144 -
"Accounting for the Impairment or Disposal of Long-Lived Assets"
were $8 million and $3 million, respectively, and were included on
the "Impairments" line of the Consolidated Statements of Income.
Lease and well expenses of $54 million were $10 million higher
than the comparable period a year ago due primarily to continually
expanding operations, changes in the Canadian exchange rate,
increased expenditures for workovers and higher production costs
from certain properties in Canada, and the Corpus Christi, Denver,
Midland and Tyler Divisions.
Dry hole costs of $3 million were $9 million lower than the
comparable period a year ago.
PART I. FINANCIAL INFORMATION (Continued)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (Continued)
EOG RESOURCES, INC.
Depreciation, depletion and amortization ("DD&A") expenses of $107
million increased $9 million from the prior year period due
primarily to higher DD&A rates in Canada and the Offshore, Corpus
Christi and Oklahoma City Divisions, and to increased production
volumes as previously described. Second quarter 2003 DD&A expenses
were impacted by changes in the Canadian exchange rate and also
included $1 million of accretion expense related to SFAS No. 143 -
"Accounting for Asset Retirement Obligations."
Exploration costs of $22 million were $6 million higher than a
year ago due primarily to a 3-D seismic project in Trinidad.
Taxes other than income were $6 million lower than the prior year
period primarily due to a $17 million credit from severance tax
adjustments resulting from the qualification of additional wells for
a Texas high cost gas severance tax exemption, partially offset by
the impact of increased wellhead revenue as previously discussed.
General and administrative ("G&A") expenses of $25 million were $3
million higher than a year ago due primarily to increased insurance
expense and expanded operations.
Per-Unit Costs. The following table presents the costs per Mcfe
for the three-month periods ended June 30, 2003 and 2002:
Three Months Ended June 30,
2003 2002
Lease and Well $0.54 $0.45
DD&A 1.08 1.02
G&A 0.25 0.23
Taxes Other than Income 0.12 0.18
Interest Expense 0.14 0.15
Total Per-Unit Costs $2.13 $2.03
The higher per-unit rates of lease and well and G&A, and the lower
per-unit rates of taxes other than income for the three-month period
ended June 30, 2003 compared to the same period in 2002 were due
primarily to the reasons delineated in the above discussion.
The higher per-unit DD&A rate for the three-month period ended
June 30, 2003 compared to the same period in 2002 was due primarily
to increased production from higher cost properties in Canada and
the Corpus Christi and Oklahoma City Divisions. The rate was also
affected by changes in the Canadian exchange rate and the reduced
reserve estimate for a certain offshore field. SFAS No. 143
accretion expense increased the DD&A rate by $0.01 per Mcfe in the
second quarter of 2003.
Income Tax Provision. Income tax provision for the second quarter
of 2003 was $57 million compared to $17 million for the comparable
period of 2002, due to increases of both the pre-tax income and the
effective tax rate. The increase in the effective tax rate for the
second quarter of 2003 to 34% from 31% for the same period of 2002
was due primarily to the expiration of the Section 29 Credit
provision in the Internal Revenue Code as of December 31, 2002.
PART I. FINANCIAL INFORMATION (Continued)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (Continued)
EOG RESOURCES, INC.
Results of Operations
Six Months Ended June 30, 2003 vs. Six Months Ended June 30, 2002
Net Operating Revenues. Wellhead volume and price statistics for
the specified periods were as follows:
Six Months Ended
June 30,
2003 2002
Natural Gas Volumes (MMcf per day)
United States 639 631
Canada 155 152
North America 794 783
Trinidad 152 110
TOTAL 946 893
Average Natural Gas Prices ($/Mcf)
United States $5.49 $2.65
Canada 4.97 2.54
North America Composite 5.39 2.63
Trinidad 1.32 1.27
COMPOSITE 4.74 2.46
Crude Oil/Condensate Volumes (MBbl per day)
United States 17.8 19.6
Canada 2.2 1.9
North America 20.0 21.5
Trinidad 2.4 1.9
TOTAL 22.4 23.4
Average Crude Oil/Condensate Prices ($/Bbl)
United States $30.63 $22.42
Canada 29.26 21.66
North America Composite 30.48 22.36
Trinidad 29.82 21.11
COMPOSITE 30.41 22.26
Natural Gas Liquids Volumes (MBbl per day)
United States 3.1 3.4
Canada 0.5 0.7
TOTAL 3.6 4.1
Average Natural Gas Liquids Prices ($/Bbl)
United States $21.46 $12.83
Canada 19.22 9.51
COMPOSITE 21.13 12.21
Natural Gas Equivalent Volumes (MMcfe per day)
United States 764 769
Canada 172 168
North America 936 937
Trinidad 166 121
TOTAL 1,102 1,058
Total Bcfe Deliveries 199 192
PART I. FINANCIAL INFORMATION (Continued)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (Continued)
EOG RESOURCES, INC.
Wellhead revenues increased 89% to $948 million in the first half
of 2003 from $501 million in the first half of 2002.
Wellhead natural gas revenues increased approximately $413
million, or 104%, due to increases in average wellhead natural gas
prices and natural gas deliveries. The average wellhead price for
natural gas increased 93% to $4.74 per Mcf for the first half of
2003 from $2.46 per Mcf for the same period a year ago.
Natural gas deliveries increased to 946 MMcf per day for the first
half of 2003 from 893 MMcf per day a year ago. The increase in
natural gas deliveries was primarily due to the production from the
U(a) Block in Trinidad, where production did not commence until May
2002, and to increased production in the Oklahoma City and Corpus
Christi Divisions.
Wellhead crude oil and condensate revenues for the first half of
2003 increased approximately $29 million, or 31%, as compared to the
prior year period, primarily due to an increase in the average
wellhead crude oil and condensate prices, partially offset by lower
crude oil and condensate deliveries. The average wellhead price for
crude oil and condensate increased 37% to $30.41 per barrel compared
to $22.26 per barrel for the comparable period a year ago.
Crude oil and condensate deliveries decreased 4% to 22.4 MBbl per
day for the first half of 2003 from 23.4 MBbl per day a year ago.
The decrease in volumes was primarily due to a natural decline in
crude oil and condensate production in the Tyler, Denver and
Oklahoma City Divisions, partially offset by increased production in
Canada, the Corpus Christi Division and Trinidad, where production
from the U(a) Block did not commence until May 2002.
Natural gas liquids revenues were approximately $5 million higher
than a year ago primarily due to a 73% increase in prices, partially
offset by a 12% decrease in deliveries.
During the first six months of 2003, EOG recognized a loss on mark-
to-market commodity derivative contracts of $61.0 million compared
to a loss of $33.6 million for the prior year period. During the
same period, net cash outflows from mark-to-market commodity
derivative contracts were $39.1 million compared to net cash
outflows of $8.8 million for the comparable period in 2002.
Operating Expenses. For the first six months of 2003, operating
expenses of $486 million were approximately $58 million higher than
the first six months of 2002.
Lease and well expenses of $102 million were $18 million higher
than the comparable period a year ago due primarily to continually
expanding operations, changes in the Canadian exchange rate,
increased expenditures for workovers and higher production costs
from certain properties in Canada, and the Corpus Christi, Denver,
Tyler and Midland Divisions.
DD&A expenses of $210 million increased $18 million from the prior
year period due primarily to higher DD&A rates in Canada, and the
Corpus Christi and Offshore Divisions, and to increased production
volumes as discussed above. DD&A expenses for the first six months
of 2003 were impacted by changes in the Canadian exchange rate and
also included $2 million of accretion expense related to SFAS No.
143 - "Accounting for Asset Retirement Obligations."
PART I. FINANCIAL INFORMATION (Continued)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (Continued)
EOG RESOURCES, INC.
Impairments increased $15 million to $37 million in the first six
months of 2003 compared to a year ago due to higher amortization of
unproved leases and impairments to the carrying value of certain
long-lived assets as a result of future cash flow analysis,
primarily in the Pittsburgh Division. For the six-month periods
ended June 30, 2003 and 2002, total impairments under SFAS No. 144 -
"Accounting for the Impairment or Disposal of Long-Lived Assets"
were $8 million and $5 million, respectively, and were included on
the "Impairments" line of the Consolidated Statements of Income.
Dry hole costs of $10 million were $13 million lower than the
comparable period a year ago.
Exploration costs of $40 million were $11 million higher than a
year ago due primarily to a 3-D seismic project in Trinidad,
increased geological and geoscience expenditures in the United
States and increased investment in technical staff across EOG.
Taxes other than income were $8 million higher than the comparable
prior year period due to the impact of increased wellhead revenue,
partially offset by an $18 million credit from severance tax
adjustments resulting from the qualification of additional wells for
a Texas high cost gas severance tax exemption.
G&A expenses of $45 million were $3 million higher than a year ago
due primarily to increased insurance expense and expanded
operations.
Interest Expense, Net. For the first half of 2003, interest
expense increased approximately $3 million compared to the first
half of 2002 due to a slightly higher average debt balance and a $1
million interest charge related to a completed Texas sales tax
audit.
Per-Unit Costs. The following table presents the costs per Mcfe
for the six-month periods ended June 30, 2003 and 2002:
Six Months Ended June 30,
2003 2002
Lease and Well $0.51 $0.44
DD&A 1.05 1.00
G&A 0.23 0.22
Taxes Other than Income 0.21 0.18
Interest Expense 0.15 0.14
Total Per-Unit Costs $2.15 $1.98
The higher per-unit rates of lease and well, taxes other than
income, G&A and interest expense for the six-month period ended June
30, 2003 compared to the same period in 2002 were due primarily to
the reasons delineated in the above discussion.
The higher per-unit DD&A rate for the six-month period ended June
30, 2003 compared to the same period in 2002 was due primarily to
increased production from higher cost properties in Canada, and the
Corpus Christi, Oklahoma City and Midland Divisions. The rate was
also affected by changes in the Canadian exchange rate and the
reduced reserve estimate for a certain offshore field. SFAS No. 143
accretion expense increased the DD&A rate by $0.01 per Mcfe in the
first half of 2003.
PART I. FINANCIAL INFORMATION (Continued)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (Continued)
EOG RESOURCES, INC.
Income Tax Provision. For the first half of 2003, income tax
provision increased $125 million to $131 million compared to the
first half of 2002 due to increases of both the pre-tax income and
the effective tax rate. The increase in the effective tax rate for
the first half of 2003 to 35% from 29% for the same period of 2002
was due primarily to the expiration of the Section 29 Credit
provision in the Internal Revenue Code as of December 31, 2002 and
increases in the overall foreign effective tax rate.
Capital Resources and Liquidity
EOG's primary sources of cash during the six months ended June 30,
2003 included funds generated from operations, proceeds from sales
of partial interests in certain equity investments and proceeds from
stock options exercised. Primary cash outflows included funds used
in operations, exploration and development expenditures, repayment
of debt, common stock repurchases and dividends paid to EOG
shareholders.
Net operating cash flows of $653 million for the first six months
of 2003 increased approximately $379 million as compared to the
first six months of 2002 primarily reflecting higher operating
revenues, partially offset by higher cash operating expenses.
Net investing cash outflows of approximately $357 million for the
first six months of 2003 decreased by $87 million versus the
comparable prior year period due primarily to lower exploration and
development expenditures, including property acquisitions, and
favorable changes in working capital related to investing
activities. Changes in Components of Working Capital Associated
with Investing Activities included changes in accounts payable
associated with the accrual of exploration and development
expenditures and changes in inventories which represent materials
and equipment used in drilling and related activities.
Exploration and development expenditures for the first six months
of 2003 and 2002 are as follows (in millions):
Six Months Ended
June 30,
2003 2002
United States $ 298 $ 266
Canada 54 106
North America 352 372
Trinidad 10 31
United Kingdom 11 -
Other 2 1
Subtotal 375 404
Deferred Income Tax Gross Up - 11
TOTAL $ 375 $ 415
PART I. FINANCIAL INFORMATION (Continued)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (Continued)
EOG RESOURCES, INC.
Total exploration and development expenditures of $375 million for
the first six months of 2003 were $40 million lower than the prior
year period due primarily to decreased development and exploratory
activities in Canada and Trinidad and decreased producing property
acquisitions in Canada, partially offset by increased development
and exploratory activities in the United States. The 2003
expenditures of $375 million included $248 million in development,
$105 million in exploration, $18 million in property acquisitions
and $4 million in capitalized interest. The 2002 expenditures of
$415 million included $256 million in development, $99 million in
exploration, $44 million in property acquisitions, $11 million in
deferred income tax gross up and $5 million in capitalized interest.
The level of exploration and development expenditures, including
acquisitions, will vary in future periods depending on energy market
conditions and other related economic factors. EOG has significant
flexibility with respect to financing alternatives and the ability
to adjust its exploration and development expenditure budget as
circumstances warrant. There are no material continuing commitments
associated with expenditure plans.
Cash used by financing activities was $155 million for the first
six months of 2003 versus cash provided of $177 million for the
comparable prior year period. Financing activities for 2003
included the repayment of the outstanding balances of commercial
paper borrowings and the uncommitted line of credit of $120 million
and $14 million, respectively, repurchases of EOG's common stock of
$21 million, cash dividends payments of $15 million and proceeds of
$15 million from sales of treasury stock attributable to employee
stock option exercises and the employee stock purchase plan.
At June 30, 2003 and December 31, 2002, EOG had cash and cash
equivalents of $151 million and $10 million, respectively.
Based upon existing economic and market conditions, management
believes net operating cash flow and available financing
alternatives will be sufficient to fund net investing and other cash
requirements of EOG for the foreseeable future.
As more fully discussed in Note 11 to the consolidated financial
statements included in EOG's 2002 Annual Report, EOG engages in
price risk management activities from time to time. Derivative
financial instruments (primarily price swaps and collars) are
utilized selectively to hedge the impact of market fluctuations on
natural gas and crude oil prices. During the first six months of
2003 and 2002, EOG elected not to designate any of its price risk
management activities as accounting hedges, and accordingly,
accounted for them using the mark-to-market accounting method.
At June 30, 2003, EOG had outstanding natural gas financial collar
contracts that set floor prices that averaged $3.83 per million
British thermal units ("MMBtu") and ceiling prices that averaged
$5.35 per MMBtu covering notional volumes of 125,000 MMBtu per day
of natural gas for the period July 2003 through December 2003. At
June 30, 2003, the fair value of these natural gas financial collar
contracts was a negative $14 million.
At June 30, 2003, EOG had outstanding natural gas financial price
swap contracts covering net notional volumes of 100,000 MMBtu per
day of natural gas for July 2003 at an average price of $4.77 per
MMBtu and 75,000 MMBtu per day of natural gas for the period August
2003 through October 2003 at an average price of $4.43 per MMBtu.
At June 30, 2003, the fair value of these natural gas financial
price swap contracts was a negative $10 million.
PART I. FINANCIAL INFORMATION (Continued)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (Concluded)
EOG RESOURCES, INC.
At June 30, 2003, EOG had outstanding crude oil financial price
swap contracts covering notional volumes of five MBbl per day of
crude oil for the period July 2003 through December 2003 at an
average price of $25.11 per barrel. At June 30, 2003, the fair
value of these crude oil financial price swap contracts was a
negative $4 million.
Information Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q 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. All
statements other than statements of historical facts, including,
among others, statements regarding EOG's future financial position,
business strategy, budgets, reserve information, projected levels of
production, projected costs and plans and objectives of management
for future operations, are forward-looking statements. EOG
typically uses words such as "expect," "anticipate," "estimate,"
"strategy," "intend," "plan," "target" and "believe" or the negative
of those terms or other variations of them or by comparable
terminology to identify its forward-looking statements. In
particular, statements, express or implied, concerning future
operating results, the ability to replace or increase reserves or to
increase production, or the ability to generate income or cash flows
are forward-looking statements. 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 such 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.
PART I. FINANCIAL INFORMATION (Concluded)
ITEM 4. CONTROLS AND PROCEDURES
EOG RESOURCES, INC.
Based on an evaluation of the disclosure controls and procedures
conducted within 90 days prior to the filing date of this report on
Form 10-Q, the Chairman of the Board and Chief Executive Officer,
Mark G. Papa, and the President and Chief of Staff, and Principal
Financial Officer, Edmund P. Segner, III, have concluded that the
disclosure controls and procedures (as defined in Rules 13a-14(c)
and 15d-14(c) promulgated under the Securities Exchange Act of 1934)
are effective. There were no significant changes in the internal
controls or in other factors that could significantly affect those
controls subsequent to the date of the evaluation thereof.
PART II. OTHER INFORMATION
EOG RESOURCES, INC.
ITEM 1. Legal Proceedings
See Part I, Item 1, Note 5 to Consolidated Financial
Statements, which is incorporated herein by reference.
ITEM 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of Shareholders of EOG Resources, Inc.
was held on May 6, 2003, in Houston, Texas, for the purpose of
electing a board of directors and ratifying the appointment of
auditors. Proxies for the meeting were solicited pursuant to
Section 14(a) of the Securities Exchange Act of 1934, and
there was no solicitation in opposition to management's
solicitations.
(a) Each of the directors nominated by the Board and
listed in the proxy statement was elected with votes as
follows:
Shares Shares
Nominee For Withheld
George A. Alcorn 101,407,606 2,506,552
Charles R. Crisp 101,408,791 2,505,367
Mark G. Papa 102,073,397 1,840,761
Edward Randall, III 101,406,909 2,507,249
Edmund P. Segner, III 102,376,558 1,537,600
Donald F. Textor 101,417,066 2,497,092
Frank G. Wisner 101,408,107 2,506,051
(b) The appointment of Deloitte & Touche LLP, independent public
accountants, as auditors for the year ending December 31, 2003 was
ratified by the following vote: 102,030,767 shares for; 1,340,822
shares against; and 542,570 shares abstaining.
PART II. OTHER INFORMATION (Concluded)
EOG RESOURCES, INC.
ITEM 6. Exhibits and Current Reports on Form 8-K
(a) Exhibits
Exhibit 31.1 - Section 302 Certification of Periodic Report
of Chief Executive Officer.
Exhibit 31.2 - Section 302 Certification of Periodic Report
of Principal Financial Officer.
Exhibit 32.1 - Section 906 Certification of Periodic Report
of Chief Executive Officer.
Exhibit 32.2 - Section 906 Certification of Periodic Report
of Principal Financial Officer.
(b) Current Reports on Form 8-K
During the second quarter of 2003, EOG filed the following
Current Reports on Form 8-K:
- On April 9, 2003, to report the preapproval for retention of
Deloitte & Touche LLP to provide audit services for the year
ending December 31, 2003 and other services for the calendar
year 2003 in Item 5 - Other Information, to provide updated
summaries of the outstanding 2003 natural gas and crude oil
financial price swap and natural gas financial collar contracts
and to report anticipated results of the price risk management
activities for the first quarter of 2003 in Item 9 - Regulation
FD Disclosure.
- On May 5, 2003, to provide estimates for the second quarter
and full year 2003 and to provide updated summaries of the
outstanding 2003 natural gas and crude oil financial price
swap and natural gas financial collar contracts in Item 9 -
Regulation FD Disclosure.
- On May 5, 2003, to report the issuance of the press release for
the first quarter 2003 financial and operational results in
Item 9 - Regulation FD Disclosure.
SIGNATURES
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.
(Registrant)
Date: August 7, 2003 By: /s/ TIMOTHY K. DRIGGERS
Timothy K. Driggers
Vice President, Accounting
and Land Administration
(Principal Accounting Officer)
EXHIBIT INDEX
Exhibit
Number Description
*31.1 -- Section 302 Certification of Periodic Report of Chief
Executive Officer
*31.2 -- Section 302 Certification of Periodic Report of
Principal Financial Officer
*32.1 -- Section 906 Certification of Periodic Report of Chief
Executive Officer
*32.2 -- Section 906 Certification of Periodic Report of
Principal Financial Officer
*Exhibits filed herewith