August 2, 2018 / 9:52 PM / 3 months ago

UPDATE 1-EOG Resources profit jumps, but falls below analysts' forecast

(Adds details from earnings release)

By Liz Hampton

HOUSTON, Aug 2 (Reuters) - Oil and gas producer EOG Resources Inc on Thursday reported sharply higher second-quarter profit, but missed Wall Street per-share estimates, earning $1.20 compared with analysts’ expectations for $1.23.

EOG grew its total crude production by 15 percent from a year ago to a company record of 384,600 barrels per day, pushing profit for the quarter to $696.7 million from $23.1 million a year earlier.

The company said it was targeting 18 percent growth in its crude production for the year.

U.S. producers are benefiting from a bump in oil activity, as benchmark U.S. crude futures have climbed almost 40 percent in the past year to around $70 a barrel. EOG said it increased crude derivative contracts during the second quarter, and received an average crude and condensate price of $67.91, up from $47.51 a year ago.

Results at rivals including Devon Energy Corp and Anadarko Petroleum Corp took a hit during the quarter because of the settlement of commodity derivatives. Companies hedged production at about $55 a barrel, losing out on revenue gains from market prices that rose above $70 a barrel last quarter.

EOG also said it increased its estimated resource potential in Wyoming’s Powder River Basin oil field to 2.1 billion barrels of oil equivalent. That basin is now its third largest asset, the company said.

EOG said it would operate a two-rig program in the Powder River Basin during 2018 and would expand its drilling activity next year. It is targeting well costs between $4.5 million and $6.1 million per well.

The company reported net operating revenues of $4.24 billion, up from $2.61 billion a year ago.

Anadarko said this week it had grown its footprint in the Powder River Basin to 300,000 acres (121,400 hectares) and had begun an appraisal effort for the development of oil production there. (Reporting by Liz Hampton; Editing by Jonathan Oatis and Peter Cooney)

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