Eog Resources Inc
EOG Resources, Inc. (EOG), a Delaware corporation organized in 1985, together
with its subsidiaries, explores for, develops, produces and markets natural gas
and crude oil primarily in major producing basins in the United States of America,
as well as in Canada and Trinidad and, to a lesser extent, selected other international
areas, including the United Kingdom North Sea.
EOGs business strategy is to maximize the rate of return on investment of
capital by controlling all operating and capital costs.'This strategy is intended
to enhance the generation of cash flow and earnings from each unit of production
on a cost- effective basis.'EOG focuses its drilling activity toward natural
gas deliverability in addition to natural gas reserve replacement and to a lesser
extent crude oil exploitation and exploration.'EOG focuses on the cost-effective
utilization of advances in technology associated with the gathering, processing
and interpretation of three-dimensional seismic data, the development of reservoir
simulation models, the use of new and/or improved drill bits, mud motors and
mud additives, and formation logging techniques and reservoir fracturing methods.
Business Segments
EOGs operations are all natural gas and crude oil exploration and production
related.
Marketing
Wellhead Marketing.'EOGs North America wellhead natural gas production is
currently being sold on the spot market and under long-term natural gas contracts
at market-responsive prices.'In many instances, the long-term contract prices
closely approximate the prices received for natural gas being sold on the spot
market.'Wellhead natural gas volumes from Trinidad are sold under either a contract
with a fixed price schedule with annual escalations, or a contract that is price
dependent on Caribbean ammonia index prices.
Competition
EOG competes for reserve acquisitions and exploration/exploitation leases,
licenses and concessions, frequently against companies with substantially larger
financial and other resources.'To the extent EOGs exploration budget is lower
than that of certain of its competitors, EOG may be disadvantaged in effectively
competing for certain reserves, leases, licenses and concessions.'Competitive
factors include price, contract terms and quality of service, including pipeline
connection times and distribution efficiencies.'In addition, EOG faces competition
from other worldwide energy supplies, such as liquefied natural gas imported
into the United States from other countries.