EOG Reports 3Q14 Earnings -- November 4, 2014

A lot of stuff has been posted very, very quickly. I assume there are errors. If this information is important to you, go to the source. This is not an investment site. Do not make any investment, financial, or relationship decisions based on what you read here or think you may have read here. Do not make any travel plans based on what you read here. 

I've been saying / suggesting / wondering whether EOG has backed off the Bakken; their last reported well was back in July, 2014. Since then no EOG wells have been reported. It appears there is more to the story (as there always is). At least at one level, EOG appears to be "studying" the Bakken very, very closely and doing some interesting work. See press release below and data points from the file reports. EOG is a great, great case study in developing a new basin or a new formation. 

EOG reports:

http://investor.shareholder.com/eogresources/releaseDetail.cfm?ReleaseID=880460

From the AP:

On a per-share basis, the Houston-based company said it had profit of $2.01. Earnings, adjusted for non-recurring gains, came to $1.31 per share.

The results topped Wall Street expectations. The average estimate of analysts surveyed by Zacks Investment Research was for earnings of $1.28 per share.

From the press release:

In the third quarter, EOG's U.S. crude oil and condensate production increased 29 percent, compared to the same prior year period. Production gains from the South Texas Eagle Ford, North Dakota Bakken and Delaware Basin led EOG's crude oil production growth. Driven by the Delaware Basin and Eagle Ford, total natural gas liquids (NGLs) production increased 25 percent, and total company natural gas production increased 3 percent, compared to the third quarter 2013. Total company production increased 17 percent.          

EOG's Bakken drilling activity for the year has concentrated on its Parshall Core and Antelope Extension acreage. In the Core, EOG continues to test various spacing patterns to determine a development program that maximizes the field's resource potential. While preliminary results from 700-foot spaced wells are encouraging, EOG will continue to analyze production data. EOG is simultaneously testing well patterns of less than 700 feet. In the Antelope Extension area, EOG has pursued development drilling in the Bakken and tested various Three Forks intervals to determine the prospectivity of the formation across its acreage. Additionally, EOG has reduced its overall Bakken drilling costs by integrating self-sourced sand and identifying drilling efficiencies, as well as refining completion techniques in both areas.

In the Core area, the Parshall 44-1004H, 45-1004H and 46-1004H, in which EOG has 69 percent working interest, were turned to production at initial rates of 2,710, 2,005 and 2,105 Bopd with 875, 665 and 860 Mcfd of rich natural gas, respectively. The Parshall 47-2226H, 48-2226H and 49-2226H began production at a cumulative rate of 5,105 Bopd with 2.3 MMcfd of rich natural gas. EOG has 70 percent working interest in these three Core wells.

In the Antelope Extension area, EOG had successful drilling results from the first, second and third Three Forks benches. The first well drilled in the third interval of the Three Forks was the Mandaree 134-05H, in which EOG has 70 percent working interest. It came online at 1,410 Bopd with 2.2 MMcfd of rich natural gas. In the second interval, the Mandaree 135-05H, in which EOG has 69 percent working interest, had an initial rate of 1,620 Bopd with 2.5 MMcfd of rich natural gas. EOG has 42 percent working interest in the Mandaree 17-05H, which began producing at 1,745 Bopd with 2.8 MMcfd of rich natural gas from the first bench. EOG is continuing to test and drill Three Forks wells in all three intervals across its Antelope acreage.

From the file reports: 

• 26769, conf, EOG, Mandaree 134-05H, no production data, geologist's report said Three Forks third bench; application said Three Forks B3;
• 26777, conf, EOG, Mandaree 135-05H, producing but still confidential; geologist report said "lower section of the Three Forks formation, in the second bench"; application said Three Forks 3rd B.
• 26779, conf, EOG, Mandaree 17-05H, no production data, application simply said "Bakken"; geologist's report said Three Fork first bench; 

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A Note to the Granddaughters

Update, December 5, 2014: my readers were correct; I was wrong. I was really wrong on this on. It turns out this 27-year-old is a liar and a fraud. Here's the correction at Yahoo!Finance.  Here's the full story -- at least as much as could be obtained.

Update, November 17, 2014: Yahoo!Finance is now researching information that this 27-year-old millionaire inherited some family money. The 27-year--old is not responding. So far, it sounds like Yahoo!Finance is checking out some "rumors." This is all they have so far:  

Since the publication of this story, new details have come to light which have brought Anton Ivanov's claims of becoming a self-made millionaire into question. Ivanov has not responded to requests for comment, but Yahoo Finance is currently investigating allegations that a part of his wealth was, in fact, inherited from his parents. We will be updating this post as we get more information.

I can hardly wait.

Original post in this "note to the granddaughters:

There's a great story over at Yahoo!Finance right now about a 27-year-old who is now a millionaire doing really what many others are doing and many, many others could do if they wanted. His story should not be unique.

I read the story very closely and it seems to be genuine.

The individual's first big "break": joining the US Navy. His only "mistake" (LOL): he waited until he was 20. He could have joined with a parent's signature at age 17.

If you are bright enough to get a college degree, the US military will pick up the entire tab, as noted in the article. The military bends over backwards encouraging folks to get that college degree. This high school graduate was earning a $50,000 annual salary while getting a college degree, which gave him the option in several years to stay in or get out.

In addition to maxing out his Roth IRA, he also had the opportunity to max out his Military Thrift Savings Program which is essentially a 401(k) with a lot more flexibility (for example: one can take out cash from the Thrifts Savings Program at any time but must be paid back to yourself with 8& interest). With all the conflicts worldwide, it is easy even in the Air Force or US Navy to be assigned to areas designated for Combat Pay even if nowhere near "combat" in the classical sense. Combat Pay is tax-free and if I remember correctly can be socked away in another military savings program earning interest, also tax-free (it's been a long time since I did that, so I may have the details wrong). The point is: the military has multiple ways to save money, invest money, and much of it is tax-free.

In addition to one's basic salary, one might qualify for any number of special pays (aside from Combat Pay). My hunch is that military folks being sent to Ebolaland are receiving multiple special pays. 

The housing allowance, again tax-free, is particularly remarkable. The pay for the most part has kept up with the "real world" and it is increased for high cost areas like San Diego and Boston. Young, unmarried men and women often share an apartment -- especially if they are in the Navy and out at sea for extended periods of time -- and save much of their housing allowance. 

Once you get your college degree, more doors open up: officer rank and increased pay, but also the opportunity to attend graduate school in civilian clothes, on any number of prestigious US university campuses and then return to active duty after four years. You retain all the benefits, including medical coverage. Generally, the four years in civilian status won't build toward 20- or 30-year retirment, but there may be exceptions. Again, it's been a long time, and I've forgotten a lot of the benefits, and most of them have changed (for the better, I suppose).

Another benefit: "choosing" one's state in which to be taxed. Even California has a military exclusion (at least it did when I was in the service): no state income tax if assigned outside the state. Texas and Florida have a huge military population and no state income tax. The goal of many military members is to have at least one assignment in an income-tax free state and establish residence there which is viable for the duration of one's career if one maintains certain "commitments" to the state (such as registering one's car there and voting). 

The military is all-volunteer now. There are an incredible number of opportunities and an incredibly number of options.

The most interesting thing about the military is that it shouldn't feel like a "job" or "work." If the first four years is drudgery, perhaps one should separate. But for those who stay in, it is often because it doesn't feel like work. They stay in for other reasons. I never stayed in for the money; it was simply the most rewarding "thing" I thought I could do. For school tuition, etc.,  I owed the Air Force four years. I had planned to get out at the end of four years, but I found the service so rewarding I stayed for another four years, and then another four years, and before I knew it, a 30-year-plus-one-day career.

There's a funny story why I wanted a military career. It had nothing to do with income. I will save that for later. It has to do with an experience in Naples, Italy, before I was even in college, and years before I was even in the military.