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EOG Resources (EOG) Expects Q1 Mark-to-Market Loss of $367M

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Zacks Equity Research
·2 min read
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EOG Resources Inc. EOG anticipates incurring a net loss of $367 million on mark to market of its financial commodity derivative contracts for first-quarter 2021.

The company undertakes financial swap, option, swaption, collar and basis swap contracts in order to improve the certainty of future revenue and profit growth. The shale oil and gas producer executes the financial commodity derivative contracts with the help of the mark-to-market accounting method.

EOG Resources mentioned that the net cash paid for the settlement of the financial commodity derivative contracts was $30 million in the quarter ended Mar 31. Notably, the cash settlement method involves the transfer of the associated cash position from the buyer to the seller on the settlement date.

In first-quarter 2021, NYMEX WTI crude oil averaged $57.80 per barrel, while NYMEX natural gas at Henry Hub averaged $2.69 per MMBtu.

Company profile & Price Performance

Headquartered in Houston, TX, EOG Resources is a leading upstream company, which is primarily involved in the exploration and production of oil and natural gas.

Shares of the company have outperformed the industry in the past month. The stock has gained 4.5% compared with the industry’s 2.4% growth.

Zacks Rank & Other Stocks to Consider

The company currently sports a Zack Rank #1 (Strong Buy).

Some other top-ranked players in the energy space are Ecopetrol S.A. EC, Whiting Petroleum Corporation WLL and Matador Resources Company MTDR, each currently flaunting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Ecopetrol’s earnings for 2021 are expected to rise 27% year over year.

Whiting Petroleum’s earnings for 2021 are expected to increase 6.1% year over year.

Matador’s earnings for 2021 are expected to rise 16% year over year.

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