EOG Resources PT Raised By Wunderlich On Strong Growth In Reserves, Lower Debt

In a report published Friday, Wunderlich analyst Irene O. Haas maintained a Buy rating on

, while raising the price target from $100 to $113. Although EOG's growth trajectory is "somewhat dampened," the analyst expects the company to "do the right thing and emerge stronger and better." In the report, Wunderlich noted, "EPS of $0.79 was below the consensus of $1.00 and our estimate of $1.14. CFPS of $3.46 and EBITDA of $1,852mm were also below the consensus of $3.56 and $2,124mm, respectively. Production of 610 Mboepd was in line with our estimate of 612 Mboepd. Composite pricing of 3.38/mcf for gas and $72.74/bbl for oil were in line with our estimates. G&A expense was 23% higher than expected due to $21.5mm in exit costs related to the Canada assets, which also resulted in higher taxes." The company announced $4.9-$5.1B in capex, representing a 40% decline from the 2014 levers. "Oil production will remain flat with a U-shaped profile with the lowest production in 2Q15 and 3Q15. The company will allow natural gas production to decline. EOG is entering 2015 with a backlog of 200 uncompleted wells and will exit with 285 uncompleted wells. If oil prices rise in 2016, this backlog along with the Irish Sea production on line in 3Q15 could set EOG up for double-digit oil growth in 2016," Haas commented.