K, appreciate your research and input on EOG. Too bad there's not more good discussion on this board. I've been thinking for quite a while that EOG will have higher earnings this quarter than 2Q. Something else to think about--the unhedged nat gas should bring much better revenue this quarter. It's only a small part of revenue, but it's positive and should add a few pennies to earnings. Nat gas production will be down, but the price is a lot better now, and that should continue going forward.
I have not done precise calculations, but I'm thinking we should get non-gaap income of around $1.25 based on better pricing, better production, and small cost reductions.
I think patience will be rewarded here. Mark Papa has been saying for some time now that "big oilfields tend to get bigger", and that is what we're seeing. At the end of the year, companies will be calculating proved and probable reserves. I think those numbers will jump significantly, particularly for the best Bakken and Eagle Ford operators. My 2 favorites are KOG and EOG. Good luck.
Tarpon., I drilled down on the 3rdq a little more. My assumptions are as follows...
Crude production will avg 165/d (158/d 2ndq), Crude prices will avg $2 more than last q,
they will receive $3. premuim to WTI, hedging will elevate prices some but not in any significant
way, revenues for natgas liquids and natgas will be flat with 2ndq and costs will remain the
same as 2ndq on a percentage basis. Without getting in the weeds too much, I come up with Non-GAAP EPS of $1.29....vs $1.12 avg estimated EPS on Yahoo. This matches pretty close to your estimate of $1.25...I hope we are right since this I feel will push EOG well above the $115 mark.
Good article on EOG as a buyout candidate....