EOG Resources Inc (NYSE:EOG) has been one of the most impressive oil and gas production companies in the industry lately, as it has been able to navigate the turbulent energy markets while staying profitable. With natural-gas prices starting to recover, the company could see further tailwinds to its results. Let’s take an early look at what’s been happening with EOG Resources Inc (NYSE:EOG) over the past quarter and what we’re likely to see in its quarterly report.
Stats on EOG Resources
| Analyst EPS Estimate | $1.17 |
| Change From Year-Ago EPS | 0% |
| Revenue Estimate | $3.04 billion |
| Change From Year-Ago Revenue | 8.3% |
| Earnings Beats in Past 4 Quarters | 4 |
Source: Yahoo! Finance.
Will EOG Resources keep hitting earnings out of the park this quarter?
In recent months, analysts have gotten a bit less optimistic about EOG Resources Inc (NYSE:EOG)’s earnings prospects, reducing their first-quarter estimates by about 10% and chopping $0.36 per share from their full year 2013 consensus figures. The stock has also been stuck in neutral, falling about 2% since late January.
EOG Resources Inc (NYSE:EOG)’s success has largely hinged on its being in the right place at the right time. The company has exposure to some of the most lucrative unconventional plays in the nation, including the Eagle Ford in South Texas and the Bakken play in North Dakota. With its high-efficiency operations, EOG has managed its oil and nat-gas liquids mix high, with levels expected to approach 90% this year.
Moreover, EOG Resources Inc (NYSE:EOG) has made smart moves to enhance production. In the Eagle Ford, the company has increased well density, boosting overall production from the play. Meanwhile, EOG pioneered the use of railcars to get oil out of the Bakken in light of a lack of pipeline capacity serving the area, and Bakken rival Continental Resources, Inc. (NYSE:CLR) now moves more than two-thirds of its Bakken production out of the region by rail. In addition, both EOG and Apache Corporation (NYSE:APA) have used rail transport to get Permian Basin oil to more lucrative Gulf Coast markets in Louisiana, where it can get higher Brent crude prices for the oil.
The big question is whether EOG Resources Inc (NYSE:EOG) will start to look more closely at boosting natural-gas production. Prices have started to rise, and some players have started looking at boosting gas-drilling activity in response. Chesapeake Energy Corporation (NYSE:CHK) and other major players have resisted the move, but if nat-gas prices rise even further, the temptation may be great to move back toward gas.
In EOG’s quarterly report, pay attention to whether the company comments on more favorable conditions in the natural-gas market. For now, though, it seems much more likely that the company will continue focusing on the winning strategy it already as in place.
The article How Will EOG Resources Handle the Nat-Gas Rebound? originally appeared on Fool.com and is written by Dan Caplinger.
Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter: @DanCaplinger. The Motley Fool owns shares of Apache and has options on Chesapeake Energy.
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