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EOG Resources Stock Makes Like It’s 2008

The Exchange

Oil and gas producer EOG Resources (EOG) was surging Tuesday as quarterly earnings came in much better than expected, lifting the stock to its best level since the days of soaring energy prices in 2008.

Shares of Houston-based EOG were up $10.64, or 8.4%, at $136.68, a not insignificant percentage change for a company with a $37 billion market capitalization. Volume was 50% higher than a normal day two hours into trading. It was the fourth-best stock on the NYSE so far.

EOG said following the previous close that first-quarter earnings rose to $494.7 million, or $1.82 a share, from $324 million, or $1.20 a share, in the prior-year period. Excluding items, EOG had a profit of $1.80 a share, well surpassing the $1.17 consensus estimate carried on FactSet. Revenue rose to $3.36 billion from $2.81 billion and topped the average projection of $3.10 billion.

EOG Resources Stock, One-Year Chart

Total crude oil production rose 33% from last year to 187.3 million barrels a day, helped by a strong quarter in the Eagle Ford Shale in Texas. Analysts were looking for crude output to total around 183.7 million barrels. Natural gas volumes declined year over year but did slightly exceed the Wall Street forecast. For the second quarter, EOG is aiming for crude production in the range of 192.3 million to 208.8 million barrels a day, vs. the analyst estimate of 204.1 million.

EOG is also among the companies working in North Dakota, which has become an energy hotbed in recent years; it said if crude prices remain in their current range, it would expect to increase its drilling there next year. West Texas Intermediate was recently at $95.72 a barrel and has added about 3% from where it started the year.

The move ahead for EOG's stock was its best day in nine months. The last time it had a stronger session was Aug. 3, when it climbed 11.1%. In the past year, EOG has gained 20.3%, though for 2013, it was up only 1.9% before the earnings-driven boost. However, it did make a run at $135 in February, before pulling back under $115 last month. Among similar energy companies, Anadarko Petroleum (APC) was up 15.2% since the year began, while Apache (APA) was down 5.9%.

At its current trading price, EOG is set to close within about $7 of its all-time peak. The only higher finishes it has ever had were recorded in April and May 2008. In July that year, crude futures were flirting with $150.