UPDATE 1-EOG Resources shares jump on upbeat Q3 earnings

(Adds details from call, share price)

Nov 7 (Reuters) - Shares of shale producer EOG Resources Inc. rose as much as 5.6% on Thursday after the company topped its third-quarter oil production targets and pared its 2019 capital spending plan.

The company increased its forecast for oil volume growth to 15% from 14% over 2018 and tightened its spending forecast for the year as it benefited from efficiency gains and lower service costs. EOG plans to run an average of 36 rigs for the year, compared with 40 in February.

Investors have been pressuring oil and gas companies to rein in spending and boost shareholder returns instead of embarking on costly growth projects, especially with oil prices hovering in the mid-$50s-a-barrel range.

EOG, which reported $337 million in free cash flow for the quarter, said it could increase production, boost its dividend and generate free cash flow at $55-a-barrel oil. U.S. oil futures were trading at about $57.50 on Thursday.

Shares of EOG were up 4.5% in morning trade at $74.63 after rising nearly 6% earlier.

The company tightened its 2019 spending forecast to between $6.2 billion and $6.4 billion versus $6.1 billion to $6.5 billion previously, even as it said it was adding two more plays in the Delaware basin.

“For the 3rd quarter in a row, EOG exceeded oil production expectations and CAPEX was below expectations. We sensed some investor apprehension ahead of earnings, so this solid print should quell any fears that were out there,” analysts for Capital One Securities wrote in a note on Thursday.

Lower capital spending comes as oilfield services pricing has fallen and “not have much room to go lower,” executives told investors on a conference call.

They also emphasized that EOG would not pursue any large corporate mergers or acquisitions.

EOG disclosed that about 49% of its “premium” acreage is located on federal lands, potentially exposing it to drilling cutbacks. Democratic presidential candidates Elizabeth Warren and Bernie Sanders have indicated they would ban fracking or end new drilling leases on federal lands if elected in 2020.

EOG’s executives said they have between two and four years of drilling permits in hand, and could modify their operations if stringent regulatory measures were enacted. (Reporting by Liz Hampton Editing by Chizu Nomiyama and Jonathan Oatis)