OREANDA-NEWS. EOG Resources, Inc. today reported a first quarter 2015 net loss of USD 169.7 million, or USD 0.31 per share. This compares to first quarter 2014 net income of USD 660.9 million, or USD 1.21 per share.

Adjusted non-GAAP net income for the first quarter 2015 was USD 16.8 million, or USD 0.03 per share, compared to the same prior year period adjusted non-GAAP net income of USD 767.7 million, or USD 1.40 per share. Adjusted non-GAAP net income is calculated by matching realizations to settlement months and making certain other adjustments in order to exclude one-time items. (Please refer to the attached tables for the reconciliation of non-GAAP measures to GAAP measures.)

EOG's first quarter 2015 financial results were significantly impacted by low commodity prices. Increased liquids production volumes, higher cash settlements from commodity derivative contracts and lower operating expenses were more than offset by lower commodity price realizations, resulting in decreases to adjusted non-GAAP net income, discretionary cash flow and EBITDAX during the first quarter 2015 compared to the first quarter 2014. (Please refer to the attached tables for the reconciliation of non-GAAP measures to GAAP measures.)

Excluding production from EOG's Canadian operations, which were sold in the fourth quarter 2014, crude oil and condensate production increased 16 percent compared to the same prior year period. Overall total company production, excluding the divested Canadian operations, increased eight percent compared to first quarter 2014. The South Texas Eagle Ford and Delaware Basin plays drove production gains for the quarter.

EOG will direct 85 percent of its 2015 capital spending to its top oil plays - the South Texas Eagle Ford, the Delaware Basin in New Mexico and Texas, and the Bakken in North Dakota. In the first quarter 2015, the company continued to make significant improvements in well productivity in these plays through integrated completions technology. EOG is also making substantial progress in reducing well and operating costs through operational efficiencies and service cost reductions. The combination of increased well productivity and lower costs will substantially improve EOG's capital returns.

EOG's capital spending plan remains on schedule to achieve a 40 percent year-over-year decrease in 2015. As previously stated, the company has no interest in accelerating oil production at the bottom of the commodity cycle. EOG's primary goal for 2015 is to position the company to resume strong oil growth when oil prices improve. Therefore, the company chose to defer a significant number of well completions.

By deferring completions until prices improve, EOG increases capital returns and builds an inventory of uncompleted wells to prepare for strong growth in a better price environment. If prices continue to improve, EOG will begin to increase well completions in the third quarter. This will produce a "U" shaped production profile in 2015. Second and third quarter production will be the low point for the year. Fourth quarter growth will build momentum heading into 2016. If oil prices recover and stabilize at the USD 65 level, EOG is prepared to resume strong double-digit oil growth in 2016 with balanced capital spending and discretionary cash flow.

"EOG is on track to deliver a disciplined 2015 capital program that is focused on achieving strong returns on capital invested. We continue to adjust to the lower oil price environment by reducing well costs and operating expenses and by making significant well productivity improvements through technology advancements," said William R. "Bill" Thomas, Chairman and Chief Executive Officer. "EOG is focused on creating long-term shareholder value through disciplined, high-return investments. We are resetting the bar to be successful in a lower commodity price environment."

For the period May 1 through June 30, 2015, EOG has crude oil financial price swap contracts in place for 47,000 Bopd at a weighted average price of USD 91.22 per barrel. For the period July 1 through December 31, 2015, EOG has crude oil financial price swap contracts in place for 10,000 Bopd at a weighted average price of USD 89.98 per barrel, excluding unexercised options.

During the first quarter, EOG increased its natural gas hedges and now has hedges in place for approximately 22 percent of its North American natural gas production for the remainder of 2015. For the period June 1 through December 31, 2015, EOG has natural gas financial price swap contracts in place for approximately 203,500 million British thermal units per day at a weighted average price of USD 4.31 per million British thermal units, excluding unexercised options. (For a comprehensive summary of crude oil and natural gas derivative contracts, please refer to the attached tables.)