Barron's Sees Value In EOG Resources (EOG)

Mon. September 07, 2009; Posted: 07:49 PM

Sep 07, 2009 (SmarTrend(R) News Watch via COMTEX) -- EOG | Quote | Chart | News | PowerRating -- 9/7/2009-In Barron's most recent publication, Christopher C. Williams wrote a piece on shares of EOG Resources (NYSE:EOG) and natural gas prices. Williams said that while light sweet crude has rallied following its plummet last fall, there has been no rebound in "its cousin, natural gas." Instead, the price of the commodity has dropped to a seven-year low as "supply threatens to exceed storage capacity and overwhelm demand." This decline in natural gas prices would seem like horrible news for EOG Resources , Houston, Texas-based natural-gas producer, at first glance. However, "EOG's three-year effort to pump up its production of crude oil -- in part by using the same horizontal-drilling technology that has made it one of the largest independent gas producers in the U.S. -- looks expertly timed."

Williams said, "The diversification could help EOG boost revenue and income, especially if, as expected, oil prices continue to rise. It also could attract more investors. EOG shares (ticker: EOG | Quote | Chart | News | PowerRating) have fallen more than 30%, to around 70, from an August 2008 high. They could rally to above 80, a gain of more than 15%, in the coming year. EOG boasts 8,689 billion cubic-feet equivalent of energy reserves. The vast majority is natural gas, which accounts for more than 80% of annual production. Management is aiming for a 50/50 North American production split by 2013 between oil and natural-gas liquids, on the one hand, and natural gas. That's a smart move, since oil will probably continue to trade at a significant premium to gas."

Write to Chip Brian at cbrian@tradethetrend.com

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For full details on Eog Resources Inc (EOG) click here. Eog Resources Inc (EOG) has Short Term PowerRatings of 5. Details on Eog Resources Inc (EOG) Short Term PowerRatings is available at This Link.

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