EOG Resources Retains a Buy

EOG Resources' (EOG - Analyst Report) 4th-quarter earnings were hit hard by significantly reduced commodity-price realizations, which more than offset signfiant volume gains. Total volumes increased more than 17%, with domestic volumes up 30% year-over-year.

In 2008, EOG posted strong organic production growth of 15% and total reserve replacement of 228%, at an attractive unit finding and development cost of $2.60 per Mcfe. Importantly, the company increased its dividend by 7% to $0.145 per share (or $0.58 per share annualized) following two increases in 2008.

The company has prudently lowered its capital budget for 2009 to approximately $3.1 billion, down from the 2008 total of $4.9 billion. Our Buy recommendation remains unchanged, though we have lowered our estimates and price objective.

Read the full analyst report on EOG