EOG Resources Inc.
) hit a 52-week high of $195.40 during Thursday's trading
session. However, the stock closed the session at $193.46, which
reflects a stable return of 13.3% over the past six months. The
average trading volume for the last three months aggregated
One of the largest U.S. independent oil and gas exploration and
production companies, EOG is proactive in its liquids ventures.
These efforts are further aided by its deep 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
The company has total capital expenditure budget between $8.1
billion and $8.3 billion for 2014. This compares with the $7.4
billion capex in 2013. Moreover, EOG Resource is keen on its
asset divestiture program.
EOG continues to demonstrate solid execution in its key growth
assets, in particular the Eagle Ford and Bakken plays. The
company's large portfolio of high-return projects and strong
technical competence are the key factors that would lead to its
success over the long term.
Notably, the company's key skills lie in early identification of
prospective areas through its technical expertise at low acreage
prices, thus driving organic growth and delivering attractive
returns on capital employed.
EOG Resources' 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 expects 2014 crude oil production growth at 27%, driven by
29% growth in the U.S. Although
recently increased due to severe winter in North America, EOG's
extensive portfolio of crude oil and liquids-rich resources offer
far superior returns compared to alternative natural gas drilling
However, EOG's results are particularly exposed to fluctuations
in the U.S. natural gas markets, since natural gas accounts for
almost half of the company's reserves. Infrastructure risk
remains as EOG generates production in the high-growth sections
of the U.S. In addition, as is the case with all E&P
companies, EOG's results are vulnerable to historically volatile
prices in world energy markets.
EOG currently retains a Zacks Rank #3 (Hold), implying that it is
expected to perform in-line with the broader U.S. equity market
over the next one to three months.
Meanwhile, one can consider better-ranked players in the energy
Baytex Energy Corp.
TransGlobe Energy Corporation
ARC Resources Ltd.
). All the stocks sport a Zacks Rank #1 (Strong Buy).
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