EOG Resources Scales a 52-Week High - Analyst Blog

Shares of EOG Resources Inc. EOG touched a 52-week high of $110.75 on Jun 9, 2014. However, the stock closed the session at $109.51, which reflects a stable return of 15.3% over the past three months. The average trading volume for the last three months stood at 3,595,240 shares.

One of the leading U.S. independent oil and gas exploration and production companies, EOG is proactive in its liquids ventures. Such dedicated efforts are further aided by the company's relentless focus on major oil and liquids rich plays, while holding its core natural gas and Combo acreage in the Barnett, Leonard and Wolfcamp plays for the long term.

The company projects a total capital expenditure budget of $8.1–$8.3 billion for 2014. This compares favorably with the $7.4 billion capex in 2013. Moreover, EOG's plan to carry on with its asset divestiture program is expected to prove beneficial.

EOG continues to reap considerable returns from key growth assets, especially the Eagle Ford and Bakken plays. Also, the company's extensive portfolio of high-return projects and superior technical competence are the key factors that should drive earnings over the long term.

Notably, EOG's potential to identify prospective areas at low acreage prices through its technical expertise drives organic growth while delivering attractive returns on the capital employed.

EOG's increasing interest in oil is appreciable in a favorable price environment. It will be augmented by its deep focus on major oil and liquids rich plays. Holding core natural gas and Combo acreage in the Barnett, Leonard and Wolfcamp plays for the long term also bode well.

EOG has set its full-year 2014 crude oil production growth target at 29%. Although natural gas prices have increased owing to a severe winter in North America, EOG's wide-ranging portfolio of crude oil and liquids-rich resources offers greater returns when compared to alternative natural gas drilling investments. For 2014, the company expects crude oil and condensate volumes in the range of 270.2 MBbls/d to 286.4 MBbls/d and 272.1 MBbls/d to 295.7 MBbls/d, respectively.

For the second quarter of 2014, total production is expected between 552.3 MBoe/d and 587.8 MBoe/d, comprising 68.5–78.7 MBbls/d NGL and 1,282.0–1,336.0 MMcf/d gas. For full-year 2014, EOG projects total volume in the band of 551.2 MBoe/d–595.4 MBoe/d, with estimation of NGL in the 68.6–77.8 MBbl/d range and natural gas in the 1,263–1,331 MMcf/d band.

Other Stocks to Consider

EOG carries a Zacks Rank #2 (Buy). Other well-performing stocks worth considering in the industry include Encana Corp. ECA, WPX Energy, Inc. WPX and Matrix Service Co. MTRX. All these stocks sport a Zacks Rank #1 (Strong Buy).

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