EOG Resources Earnings Call Insights: Lifting Recovery Rates and the Eagle Ford

EOG Resources (NYSE:EOG) recently reported its fourth quarter earnings and discussed the following topics in its earnings conference call.

Lifting Recovery Rates

Doug Leggate – Bank of America – Merrill Lynch: Thanks for all the color Mark on the down-spacing. You’ve talked in the past about continued efforts to try and increase your recovery rates there, obviously you’ve done a good job on that. Would you now say that 8% is the – is that pretty much target achieved or do you think there is still more running room there. I’m just curious as to what else you might do in terms of trying to lift your recovery rates, and I have a follow up please.

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Mark G. Papa – Chairman and CEO: Yes. Doug, there’s – no we can’t say that the 8% is the final, final, final answer at all in terms of what we are still looking at doing there. There is the continued work on potential additional spacing, improvements from frac enhancements and then the one that I think, is the big hitter, potential hitter out there is secondary recovery. In the case of the Eagle Ford it would be through gas injection and we have commenced our pilot gas injection project on there in the Eagle Ford and the reason I didn’t mention it on the script is that it may be as long as two years before we really have a read on the outcome of the pilot project. I just don’t even want to give a timeline on it. But just if it’s worse, our investors knowing that we are – that the pilot project is underway, but it’s not anything that we are going to be able to provide a quarter by quarter feedback as to how the pilot is coming or anything like that. But it is fair that say that we are cautiously optimistic that we will come up with a method of significantly enhancing the recovery above the 8% number.

Doug Leggate – Bank of America – Merrill Lynch: My follow-up is really going back to the – you have been very disciplined with obviously your balance sheet and so on. But when you take a write-down obviously you are inflating your net debt to cap and it kind of makes me wonder, given you have got so much resource opportunity particular the upgrade in the Leonard, is that still the right metric the 30% net debt to cap, is that still the right limiter in terms of pacing your development and if you could maybe share any updated thoughts on how you might look to monetize or bring forward some of those non-core assets, not much non-core but like you said, the Eagle Ford and the Bakken through a joint venture or something that may not be a churn out, I will leave it there Mark.