EOG Resources Earnings Call Insights: CapEx, Eagle Ford
Leo Mariani – RBC Capital Markets: Guys, just a quick question on CapEx. Look like it’s kind of trending a little bit higher in the first quarter on a run rate basis, if I sort of multiply it by four for the year. Can you just talk through how CapEx may change sequentially in the following quarter, just to kind of keep you guys within your guidance?
Timothy K. Driggers – VP and CFO: That’s been a focus for us. As mentioned earlier by Mark, we started off the year, we got the peak at 76 rigs and we did that because we had dropped back to 65 in the 2011 and we wanted to go ahead and get quite a number of these patterns drilled to bring on our production. We’re reducing that to 65 rigs total. That’s dropping rigs even out of the Eagle Ford as well as some of our gas well drilling. With that running 65 rigs, we believe we’ll be able to stay within our CapEx guidance.
A Closer Look: EOG Resources Earnings Cheat Sheet>>
Leo Mariani – RBC Capital Markets: I guess in the Bakken, clearly you guys seem pretty excited about it. Just trying to get a sense of how much additional acreage has kind of come into your development program, and additionally, how much acreage you think is left to be tested in the Bakken and sort of the light area that’s kind of yet to be determined?
Mark G. Papa – Chairman and CEO: Leo, it’s not so much additional acreage. Pretty much all the acreage we have we think is acreage that’s going to turn out to be productive. Out of all the things we described, and we kind of described four things there, the core area down-spacing, the light area down-spacing, actually it’s five things, and then the Antelope area and the stuff out there in the Stateline area and then the waterflood. I’d say that three of those things are definitely working, core area down-spacing, Stateline area antelope, the Bakken Lite area down-spacing we don’t know for sure whether that’s going to work and in the waterflood. But probably the biggest things that could make a difference there are the core area down-spacing which we already checked the box on that and then the waterflood. Those are the ones that are going to the big difference. There is not so much what we’re going to be trying to prove up incremental acreage somewhere it’s really, really now how dense the spacing can we drill on the acreage that we have and then can we make a secondary recovery project work on that. So, that’s the way I look at it. If we can get particularly the waterflood to works then we’ve got I think a significant upgrade in the lively reserves that we’ve got captured in and the likely production we’ll be generating out of the Bakken for the next decade really.
Brian Singer – Goldman Sachs: In the Eagle Ford can you talk to by year-end what (area of) extent are you planning to test at 40 acres versus what you’ve already tested at 65 to 90 and then beyond the down-spacing where you think you are in optimizing completions in the Eagle Ford and whether you see room for further efficiencies?
Mark G. Papa – Chairman and CEO: I’ll give to Bill Thomas.
William R. Thomas – President: Brian, that’s a good question. We have several patterns that we are currently drilling and fracing and just starting to test that are on the lower spacing, below 65 acres per well. So, we’re going to take that kind of slow because that’s pushing it pretty hard, and we really would like to get a couple of those patterns fully tested and developed before we expand that over large, large areas. So, that will just take a little bit of time, and we’ll just kind of see how that goes as we progress. On the frac side, as you know, industry-wide, we are very aggressive on trying new techniques and new styles of frac technology and using microseismic and trying to increase the amount of rock that we are connecting to each one of these horizontal wells. So, we’re making very, very substantial and steady progress in the Eagle Ford. As Mark mentioned earlier, we are being more aggressive in some of the areas on our frac styles in terms of sand. We’re using different kinds of frac fluids and even different kinds of sand sizes and alternating the pump rate as well as alternating the way we distribute the frac along the laterals, and we’re making really good progress. I would say much of the increases in the IPs that you see on the wells are due to just better frac technology than we had a year ago. So, we’re just very pleased. We’re also – as Mark mentioned, the rock quality in the Eagle Ford, it looks like we’ve definitely captured the sweet spot, and so the quality of rock that we had to deal with and work with in the Eagle Ford is very, very, very good.
Brian Singer – Goldman Sachs: Then as a follow-up, is the takeaway from your comments on CapEx going forward that your call on development opportunities in your big four fields is now leading you to pursue more outside partner funding for opportunities for exploration outside those big four fields and then can you just remind us how you are thinking about balancing growth with CapEx and cash flow beyond 2012?
Mark G. Papa – Chairman and CEO: It is fair to say that if you looked at our big four fields and this is our internal assessment in terms of the size of them relative to a year ago and you know this a year ago we were looking at the Eagle Ford at 900 million barrels, now we are looking at 1.6 billion. A year ago we were looking at the Bakken and based on this call we are certainly more excited about the Bakken/Three Forks than we were a year ago, and as we also said in our call, we continue to expand in the Combo play, although nothing that’s discernibly exciting but just gradual expansion and the same in the Wolfcamp, Leonard area. So, they’ve all gotten bigger; some of them considerably bigger, some of them just a bit bigger and then we continue to have an increasing list of greenfield new play ideas and so we just decided that this 30% net debt to cap is a hard line for us and we would just avail ourselves with some external financing on at least one selected oil play. So, I think, on a go-forward basis two things come out of – that you ought to conclude one is the 30% net debt to cap is not a number we take lightly. The second thing is that the comment about not using external funding in the big four plays is just totally inflexible. We’re not going to change at all. But on some of our greenfield ideas for new plays, we may elect from time-to-time to consider using outside financing.