EOG Resources Inc. (EOG)

[OilStockReport]

Looks like EOG will be seeing some continued upside.

EOG Resources (EOG) is converting to liquids production. It has the strongest horizontal oil inventory in the exploration and production industry. EOG has 1.8 Bnboe, which is 69% crude and 18% NGLs. Like Chesapeake, EOG was in early. This decreased per acre costs, and allowed for large leaseholds in good locations. EOG believes it can be cash flow neutral in 2011 (including asset sales). EOG closed $673 million in asset sales for 2010, and plans $1 billion in 2011. EOG differentiates itself from other companies by not participating in JVs. EOG will have full control and receive 100% revenue from its resource plays. It is currently creating organic liquids growth:

2010-33% growth
2011(estimated)-49% growth
2012(estimated)-27% growth
EOG's acreage in the United States' shale plays is formidable. Its current shale plays are:

600000 net acres in the Bakken Three Forks
520000 net acres in the Eagle Ford
300000 net acres in the Niobrara
120000 net acres in the Wolfcamp
120000 net acres in the Leonard
Strong position in the Barnett Combo
EOG is also re-activating vertical oil fields:

Permian Basin (Bone Spring)
Manitoba Waskada
Mid-Continent Cleveland
Horn River- convert gas field to oil indexed field
EOG is well known for gas production:

183000 net acres in the Haynesville/Bossier (11Tcf)
210000 net acres in the Marcellus (3.3Tcf)
Uinta Basin (7Tcf)
Barnett, South Texas, Green River, etc.
EOG's 2011 estimated cap ex will be $6.4 to $6.6 billion. 80% will be focused on liquids, with the other 20% spent on dry gas to hold acreage. In 2006, EOG's revenue mix was 21% liquids. It is estimated by 2012, liquids revenue will be 73%. Even though the change is quite large, it is possible with these assets.