EOG Resources exceeds profit expectations on the back of strong production and higher gas prices

EOG Resources beat estimates for the fourth quarter profit on Tuesday as higher natgas and output prices offset a drop in crude oil prices.

U.S. Natural Gas Futures increased over 11% sequentially during the fourth quarter. This was due to stronger demand, and an increase in pipeline volumes. The rise ended a downward trend that began in the second quarter because of record U.S. Production.

EOG said it produced approximately 1.40 million barrels per day of oil equivalent in the fourth quarter compared to 1.09 million boepd one year ago.

EOG's purchase of Encino Acquisition Partners for $5.6 billion in May has helped to increase production in the Utica Shale, which is one of the most productive natural-gas regions in the United States.

The average realized price for natural gas was $3 per 1,000 cubic feet (Mcf), up from $2.57 a year ago.

The average realized oil price, however, dropped to $59.54 a barrel, from $71.66 a barrel, compared with a year ago.

The global crude oil price has been impacted by the growing fears of a "glut" and the prospect that Venezuela will add more barrels to supply.

The company expects its current-year production to range between 1.37 million and 1.42 million boepd, and for the first three months of the year to be between 1.35 and 1.40 millions boepd.

The forecast also includes annual capital expenditures in the range $6.3 billion to $6.7 billion.

"Looking forward, we have a disciplinary plan for 2026 and are targeting $4.5 billion of free cash flow," said CEO Ezra Yacob.

According to data compiled and analyzed by LSEG, the?Houston based company reported an adjusted 'profit' of $2.27 for the quarter that ended December 31. This compares with an average analyst estimate of $2.19. (Reporting by Sumit Saha in Bengaluru; Editing by Shinjini Ganguli)

(source: Reuters)