Press Releases

EOG RESOURCES REPORTS 2008 RESULTS AND INCREASES DIVIDEND

• Recorded 26 Percent Return on Capital Employed
  
• Delivered 15 Percent Total Company Year-Over-Year Organic Production Growth
  
• Reported Progress in Barnett Oil, Bakken Extension and Haynesville Plays
  
• Posted Total Reserve Replacement of 228 Percent at Attractive Finding Costs
  
• Defines 2009 Operations Strategy
  
• Increases Dividend on Common Stock

FOR IMMEDIATE RELEASE: Wednesday, February 4, 2009

HOUSTON - EOG Resources, Inc. (EOG) today reported fourth quarter 2008 net income available to common stockholders of $461.5 million, or $1.84 per share. This compares to fourth quarter 2007 net income available to common stockholders of $358.0 million, or $1.44 per share. For the full year 2008, EOG reported net income available to common stockholders of $2,436.5 million, or $9.72 per share as compared to $1,083.3 million, or $4.37 per share, for the full year 2007.

The results for the fourth quarter 2008 included a previously disclosed $528.8 million ($340.3 million after tax, or $1.36 per share) net gain on the mark-to-market of financial commodity transactions. During the quarter, the net cash inflow related to financial commodity contracts was $100.7 million ($64.8 million after tax, or $0.26 per share). Consistent with some analysts' practice of matching realizations to settlement months, adjusted non-GAAP net income available to common stockholders for the quarter was $186.0 million, or $0.74 per share. Adjusted non-GAAP net income available to common stockholders for the fourth quarter 2007 was $319.4 million, or $1.29 per share. On a similar basis, eliminating the items detailed in the attached table, adjusted non-GAAP net income available to common stockholders for the full year 2008 was $1,879.1 million, or $7.50 per share, and for the full year 2007 was $1,074.2 million, or $4.34 per share. (Please refer to the attached tables for the reconciliation of adjusted non-GAAP net income available to common stockholders to GAAP net income available to common stockholders.)

Operational Highlights

Meeting the full year production growth target set in February 2008, EOG posted strong operational results by increasing total company production 15 percent over 2007, all organic. Crude oil production increased by 46 percent, driven primarily by continued drilling success from the North Dakota Bakken Play.

Stepping outside its established footprint in the natural gas area of the Fort Worth Basin Barnett Shale, EOG also reported strong test results from the Barnett Crude Oil Play (retitled the Barnett Combo Play). EOG has a dominant acreage position in the Barnett Combo, an oil play with a liquids rich natural gas stream. During the second half of 2008, drilling efforts were focused on defining acreage limits and testing wells with various completion methodologies. A total of 22 horizontal wells were completed during the second half of the year with average daily initial production rates of 300 barrels of crude oil, 130 barrels of natural gas liquids and 940 thousand cubic feet of associated natural gas. EOG recently commissioned its natural gas processing plant for this area, which will allow the company to move into development mode. EOG plans to drill 60 Barnett Combo wells in 2009.

During the past year EOG drilled five successful exploratory oil wells in the North Dakota Bakken outside its core area, the Parshall Field. By applying the same horizontal drilling and enhanced completion technology to this extension called the North Dakota Bakken Lite, EOG increased the potential for crude oil reserves on its acreage and added several years to its drilling inventory. EOG's total position in both the North Dakota Bakken Core and Bakken Lite was approximately 400,000 net acres at year-end 2008.

Testing the Haynesville Shale in North Louisiana, EOG drilled two horizontal wells on its acreage during 2008. The Martin Timber #2H tested at a rate of 17.4 million cubic feet per day (MMcfd), gross with 4,700 psi flowing tubing pressure. The Bedsole 27#1H tested at a rate of 17.5 MMcfd, gross with 7,400 psi flowing tubing pressure. EOG has 100 and 57 percent working interest in the wells, respectively. Due to pipeline limitations, the wells are currently producing at a combined restricted rate of 17 MMcfd until additional infrastructure is in place. EOG has estimated net reserve potential of 3 to 4 trillion cubic feet of natural gas on its 116,000 net acres and expects to drill 14 Haynesville wells in 2009.

"EOG had an outstanding year in 2008. We delivered conclusive results on the targets we laid out early last year and made significant progress in developing new plays such as the Horn River, Haynesville and Marcellus," said Mark G. Papa, Chairman and CEO. "With our consistent philosophy and focus on returns, we again reported very strong return on capital employed - 26 percent for the year."

For the 10-year period ended 2008, EOG reported return on capital employed (ROCE) of 20 percent. On a non-GAAP net income basis, EOG reported ROCE of 20 percent for 2008. (Please refer to the attached tables for the calculation of ROCE and the related reconciliations of after-tax interest expense (non-GAAP), adjusted net income (non-GAAP) and net debt (non-GAAP), as used in the calculations of ROCE, to interest expense (GAAP), net income (GAAP) and current and long-term debt (GAAP).)

Reserves

At December 31, 2008, total company reserves were approximately 8.7 trillion cubic feet equivalent, an increase of 944 billion cubic feet equivalent (Bcfe), or 12 percent higher than year-end 2007. In 2008:

• Total reserve replacement from all sources - the ratio of net reserve additions from drilling, acquisitions, total revisions and dispositions to total production - was 228 percent at a total reserve replacement cost of $2.60 per thousand cubic feet equivalent (Mcfe).
  

• In the United States, EOG added 1,703 Bcfe of reserves from drilling and acquisitions, net of total revisions, with capital expenditures of $4,295 million, excluding gathering systems, processing plant and other expenditures. Total reserve replacement from all sources was 270 percent at a reserve replacement cost of $2.52 per Mcfe.
  
• Excluding the impact of price related revisions of 75 Bcfe due to lower natural gas and crude oil prices, total reserve replacement was 238 percent at a reserve replacement cost of $2.50 per Mcfe. Price related revisions were based on year-end 2008 benchmark Henry Hub natural gas pricing of $5.71 per million British thermal unit and year-end benchmark West Texas Intermediate crude oil pricing of $44.60 per barrel as posted on the New York Mercantile Exchange, as compared to year-end 2007 pricing of $6.80 and $95.98, respectively. (Please see attached tables for supporting data for the reconciliation of non-GAAP drilling capital expenditures to GAAP total costs incurred in exploration and development activities and for the calculation of reserve replacement percentages and reserve replacement costs.)
  

For the 21^st consecutive year, internal reserve estimates were within 5 percent of those prepared by the independent reserve engineering firm of DeGolyer and MacNaughton (D&M). For 2008, D&M prepared a complete independent engineering analysis of properties containing 79 percent of EOG's proved reserves on a Bcfe basis.

"We are pleased with our 2008 results. We did not have any significant property impairments or any meaningful price related reserve revisions. This speaks to the efficacy of EOG's long-term conservative strategy of growing production organically while focusing on returns," said Papa.

Capital Structure

At December 31, 2008, EOG's total debt outstanding was $1,897 million for a debt-to-total capitalization ratio of 17 percent. Taking into account cash on the balance sheet of $331 million, at the end of the year EOG's net debt was $1,566 million and the net debt-to-total capitalization ratio was 15 percent. (Please refer to the attached tables for the reconciliation of net debt (non-GAAP) to current and long-term debt (GAAP) and the reconciliation of net debt-to-total capitalization ratio (non-GAAP) to debt-to-total capitalization ratio (GAAP).)

2009 Operational Plans and Targets

In response to the current weakness in commodity prices, EOG has structured this year's operational plan with the goal of keeping its year-end 2009 net debt relatively flat with that of year-end 2008. While remaining flexible, EOG's production growth targets and the capital expenditure program will be a function of cash flow generation and reinvestment rates of return. Based on the current futures market for natural gas and crude oil, EOG plans to execute a total capital program of approximately $3.1 billion in 2009, of which $2.85 billion will be allocated to exploration and development activities, to generate approximately 3 percent total company organic production growth. The production increases will be driven by United States crude oil and natural gas liquids production.

In the North Dakota Bakken, EOG is temporarily reducing roughly half of its crude oil and associated natural gas production. This moderation is in response to current low crude oil prices coupled with high transportation costs related to trucking and correspondingly wide commodity price differentials due to location. Resumption of full production in this area will depend upon the strengthening of hydrocarbon prices and the development of crude oil transportation alternatives.

"With natural gas and crude oil prices thus far in 2009 reflecting a worldwide decline in demand, EOG's long-term strategy of profitability and maintaining a strong balance sheet gives us the flexibility to successfully weather diverse economic cycles. Although we plan to keep capital expenditures in line with cash flow during 2009, we will balance that with an active horizontal exploration program to set us up for an expected rebound in commodity prices in 2010," said Papa.

Dividend Increase

Following two increases during 2008, EOG's Board of Directors has again increased the cash dividend on the common stock. Effective with the dividend payable on April 30, 2009 to holders of record as of April 16, 2009, the quarterly dividend on the common stock will be $0.145 per share, an increase of 7 percent over the previous indicated annual rate. The indicated annual rate of $0.58 per share is the tenth increase in 10 years.

Conference Call Scheduled for February 5, 2009

EOG's fourth quarter and full year 2008 results conference call will be available via live audio webcast at 8 a.m. Central Standard Time (9 a.m. Eastern Standard Time) on Thursday, February 5, 2009. To listen, log on to www.eogresources.com. The webcast will be archived on EOG's website through Thursday, February 19, 2009.

EOG Resources, Inc. is one of the largest independent (non-integrated) oil and natural gas companies in the United States with proved reserves in the United States, Canada, Trinidad, the United Kingdom North Sea and China. EOG Resources, Inc. is listed on the New York Stock Exchange and is traded under the ticker symbol "EOG."

This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, including, among others, statements and projections regarding EOG's future financial position, operations, performance, business strategy, budgets, reserve information, levels of production and costs and statements regarding the plans and objectives of EOG's management for future operations, are forward-looking statements. EOG typically uses words such as "expect," "anticipate," "estimate," "project," "strategy," "intend," "plan," "target," "goal," "may," "will" and "believe" or the negative of those terms or other variations or comparable terminology to identify its forward-looking statements. In particular, statements, express or implied, concerning EOG's future operating results and returns or EOG's ability to replace or increase reserves, increase production or generate income or cash flows are forward-looking statements. Forward-looking statements are not guarantees of performance. Although EOG believes the expectations reflected in its forward-looking statements are reasonable and are based on reasonable assumptions, no assurance can be given that these assumptions are accurate or that these expectations will be achieved or will prove to have been correct. Moreover, EOG's forward-looking statements may be affected by known and unknown risks, events or circumstances that may be outside EOG's control. Important factors that could cause EOG's actual results to differ materially from the expectations reflected in EOG's forward-looking statements include, among others:

In light of these risks, uncertainties and assumptions, the events anticipated by EOG's forward-looking statements may not occur, and you should not place any undue reliance on any of EOG's forward-looking statements. EOG's forward-looking statements speak only as of the date made and EOG undertakes no obligation to update or revise its forward-looking statements, whether as a result of new information, future events or otherwise.

The United States Securities and Exchange Commission (SEC) currently permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. As noted above, statements of proved reserves are only estimates and may be imprecise. Any reserve estimates provided in this press release that are not specifically designated as being estimates of proved reserves may include not only proved reserves, but also other categories of reserves that the SEC's guidelines strictly prohibit EOG from including in filings with the SEC. Investors are urged to consider closely the disclosure in EOG's Annual Report on Form 10-K for the fiscal year ended December 31, 2007, available from EOG at P.O. Box 4362, Houston, Texas 77210-4362 (Attn: Investor Relations). You can also obtain this report from the SEC by calling 1-800-SEC-0330 or from the SEC's website at www.sec.gov.

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Investors
Maire A. Baldwin
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