Fiscal 2007 Outlook

- There is no change to either full year 10% 2007 organic production growth expectation or to mix that indicates 18% organic North American gas growth and 16% total North American growth.

- The company continues to believe that concerns regarding domestic gas supply growth are overstated. The company predicts domestic supply will grow 1.4% this year, and recent EIA-914 data is showing a relatively flat supply pattern over the past nine months.
- In Canada, the company expects production to fall 2.5% this year.
- The bottom line the company expects for full year 2007 prices to average $8 to $8.50, Henry Hub, and the current NYMEX is indicating $7.90.

- The company intends to execute original $3.4 billion CapEx budget. Using prices of $8 Henry Hub and $66 oil, 10% total company production growth and a 3.4 billion CapEx plan, the company would end 2007 with a strong balance sheet of about 11% net debt. This is well within a very conservative leverage range.

- The company is going to disclose quarterly Barnett production results except to say that they are on target with projections.
- The company will recover more reserves from Johnson County than the 1.9 to 2.5 net Bcfs the company is indicating, primarily because of technical improvements in well completions.
- The pipeline in Palo Pinto County is expected in September.

- Using the lower end of 0.8 to 1.0 Bcf net reserve range and the $1.4 million completed well cost, the company would achieve a $1.75 direct net finding cost in the Western Barnett. This compares to $2.40 direct net finding costs reported in the Oklahoma Woodford Shale and a $2 per Mcf direct net finding cost reported in the Fayetteville Shale.

- Last year the company encountered two downstream obstacles to growth – offshore hurricane infrastructure issues and delays in the East Texas Branton Field gas-processing plant. The offshore infrastructure issue has been resolved and the Branton Field gas-processing issue has been partially resolved, and the company expects it to be totally resolved later in the year. Although resolution of these infrastructure issues was slower than projected, the company still expects to achieve overall 6% full year targeted production growth goals for the ex-Barnett assets.
- The company is excited about the Barrocito #6 well, which may set up about 20 offset drilling locations. South Texas horizontal Wilcox program is also continuing to yield good results.

- Trinidad quarterly and full year production is expected to lag last year’s levels since the company will likely be ratcheted back to contract sales levels this year as compared to contract over deliveries last year. The company expects to have Block 4(a) gas contract finalized in the third quarter, and it has commenced platform design for this project. Sales under this project will boost overall Trinidad production in late 2009 or early 2010, by approximately 60 million a day net.

- In the North Sea the company plans to participate in the drilling of two gross exploratory appraisal wells this year. The company will have a 25% interest in a follow up to fourth quarter gas condensate discovery in Central North Sea Block 2316(f) and also a 40% working interest in a Southern Basin gas exploration test.

- The guidance 8-K has an effective tax range of 33% to 37% and a deferral percentage of 65% to 85%.

Key questions from the first quarter earnings call conducted by EOG Resources, Inc. on May 01, 2007.

Could you be specific on the applicability of the geologic characteristics of the Fowler 1H and any tweaks to your completion process and how would that apply to other parts of the Barnett acreage?

The Fowler well is located in the eastern or central eastern Johnson County. Out of EOG’s monster wells which are having an initial production rate of anywhere over about 7 million a day, about two thirds or three quarters of them end up in central or eastern Johnson County and the remainder are in western Johnson County. What the company is seeing is that with some enhancements for its completion technology, its monster wells are getting better, they have higher rates than a year ago. Projecting over the next year or two, there could be some wells that end up even better than the Fowler well. The most marked improvements that the company has made in the Barnett Shale over the last year have been in how it completes wells. It has seen this both in the western counties and in the eastern counties, and what that translates to be basically more reserves recovered. That fact is going to allow EOG to drill more of its acreage than it had thought. The company has seen on a 12-month basis, a marked improvement in what it is doing on the well completion side. Well cost in some cases has gone up for the well completion portion of it. The wells are costing more in some cases, but the incremental reserves the company is getting for that are worth it.

The Western Barnett extension is 0.8 to 1 Bcf for $1.4 million. How much upside would you see based on some of the recent drilling that you have done to both of those numbers?

The company would still hold to that reserve range of 0.8 to 1 for the $1.4 million well cost. What is seen in the West is a contrast between what EOG is achieving and what most other operators get there as well. There is a differentiation at what other operators are reporting. They are generally reporting less than consistently successful results, whereas EOG is reporting consistently successful results. That differentiation is how the company is completing the wells versus others.

Do you have an update on the Western Canada winter drilling exploration program?

The company is not providing any update at this time on that.

Could you say whether you were able to drill the wells that you expected without speaking to the results?

The company did conduct some activity up there this winter, but no specifics.

Given your success in the Barnett, could you discuss which basins and horizons elsewhere might hold the greatest potential for horizontal drilling for EOG?