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What are EOG Resources’ 3Q15 Projected Volumes and Realizations?

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EOG Resources’ 3Q15 projected volumes

According to guidance provided by EOG Resources (EOG), crude oil and condensate production estimates will be in the range of 269 to 278 Mbpd (thousand barrels per day) in 3Q15. Natural gas production will be 1,202 to 1,277 MMcfpd (million cubic feet per day) in 3Q15, according to the guidance.

In comparison, crude oil and condensate production was higher at 277.5 Mbpd in 2Q15. Natural gas production was also higher in 2Q15 at 1,257 MMcfpd. Overall, crude oil equivalent production is expected to decrease 1% in 3Q15 from 2Q15. Compared to 3Q14, production is expected to decrease 10% in the next quarter.

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EOG’s peer Continental Resources (CLR) explores, develops, and produces crude oil and natural gas in the northern, southern, and eastern regions of the United States. Compared with EOG, analysts expect Continental Resources to produce ~218 Mbpd in 3Q15, a 4% decrease from 2Q15 production, but a 20% increase over 3Q14 production.

EOG Resources’ projected prices

WTI (West Texas Intermediate) crude, which reflects US producers’ price, fell nearly 20% between July and September this year. In comparison, WTI prices rose 21% from April to June. Lower price realization in 3Q15 will affect EOG Resources’ upstream revenues negatively. EOG Resources is 1.7% of the SPDR S&P Oil & Gas Exploration & Production ETF (XOP).

EOG Resources’ hedging effect

Last disclosed in August, EOG Resources’ 10,000 barrels per day of volume is hedged from August 1, 2015, through December 31, 2015, at a contract price of $89.98. For natural gas, EOG has 175,000 MMBtu (British thermal units in millions) per day, or 175 MMcfpd, under a derivatives contract from September 1 through December 31, 2015, at an average price of $4.51 per MMBtu. In the next part of this series, we’ll discuss EOG Resources’ earnings and measure them against analysts’ estimates.

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