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EOG Resources’ Production Volumes and Sales Prices Diverge

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EOG Resources’ sales price and volume

In the previous part of this series, we discussed how EOG Resources’ (EOG) revenue is closely tied to production volume and realized prices. We’ll discuss this in more detail.

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EOG’s average realized prices

EOG Resources’ average crude oil and condensates realized prices fell 36% from 4Q14 to 1Q15. Its natural gas and NGLs (natural gas liquids) realized prices fell 26% and 33%, respectively, during the same period.

The fall in average crude oil and natural gas realized prices was even sharper at 53% and 45%, respectively, from 1Q14 to 1Q15. As noted in the above chart, the average realized prices for all of EOG’s energy products in 1Q15 were the lowest in the past 13 quarters.

EOG’s production

In 1Q15, EOG Resources’ production volumes rose 4.7% to 53 MMboe (million barrels of oil equivalent)—compared to 50.7 MMboe in 1Q14. Over the past 13 quarters, EOG Resources’ production growth is still positive. For a detailed analysis of EOG Resources’ production and reserves, read EOG Production Adjusts to Weak Energy Prices.

In comparison, Cenovus Energy’s (CVE) 1Q15 production rose 37% from the previous quarter. Marathon Oil’s (MRO) total production fell 3.2% from 4Q14. Continental Resources’ (CLR) 1Q15 production rose 4.6% over 4Q14. EOG Resources accounts for 0.26% of the SPDR S&P 500 ETF Trust (SPY) and 2.97% of the iShares U.S. Energy ETF (IYE).

EOG’s recent operational focus

In 1Q15, among the key unconventional US resources plays, EOG Resources focused primarily on the Eagle Ford Shale, Delaware Basin, North Dakota Bakken, and Rockies plays. Its natural gas deliveries for 1Q15 fell 6% to 1,273 million cubic feet per day—compared to the same period of 2014. This was mainly a result of falling production in Trinidad due to lower contractual deliveries. This drop was partially offset by higher US production.

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