EOG Resources EOG
Q2 2012 Earnings Call Transcript

Operator: Brian Lively, Tudor Pickering Holt.

Brian Lively - Tudor Pickering Holt: Mark, on your commentary about potentially doing a JV in one or the other non-core big plays, I'm just thinking about it strategically, in 2013 are you saying that basically that, in combination with just essentially no gas drilling is going to kind of fund that gap for next year and allow you to continue with the high liquids growth?

Mark G. Papa - Chairman and CEO: Our 2013 plan is obviously not specific yet. We'll furnish a much more detailed plan as we do every year on our year-end earnings call in February. That will have specific growth targets for both the liquids and gas. But the predicates to the plan are clearly that the amount of dry drilling we're going to do next year is going to be pretty close to nothing, I mean one rig really, which is just going to be holding acreage primarily in Bradford County in Marcellus. Basically, we're going to attempt to hold to the 30% net debt. We will consider selling some additional properties and we are going to heavily fund the oil plays and the NGL plays, we'll be more – we'll just see what happens to NGL prices. But oil plays are going to get the vast majority of the funding and big plays there that are going to get the funding will be, one, Eagle Ford, and two, the Bakken, because they are primarily oil. The Permian Basin, even though people think of it is an oil play, it's really a combo play as of course is our Barnett combo. So both the Wolfcamp and Leonard have about 40% of that production is oil and the rest of it is NGL. So, what you can look for are those two plays, the Eagle Ford first, Bakken, second, are going to get the lion's share of the money. Then we'll look at some plays other than our big four plays and if it makes sense, we may bring in a JV partner depending on what our cash flow, what our property sales balance is. So, all we want to do really, Brian, is just signal to you that at this stage the plant is clearly there. It will be a further ramp-down July gas drilling and there will be a definite shift of capital even more heavily likely toward the Eagle Ford and toward the Bakken and at some additional plays, which we may look oil combo plays other than big four that we may look at bringing in some outside capital.

Brian Lively - Tudor Pickering Holt: Just my follow-up question, it sort of fits in that context, we saw a pretty attractive at least in my view evaluation done on a JV in Pearsall. Looks like that acreage overlapped on your position probably more so than anyone. Could you provide a little bit of an update in terms of what you’re seeing in the in Pearsall and what you're testing there?

Mark G. Papa - Chairman and CEO: I would just say that in relationship to the Eagle Ford acreage, we realized there are multiple zone that are potentially pay zones above and below the Eagle Ford and it’s not particularly likely that we would be splitting horizons, vertically splitting horizons in that area. That's not our first choice. So that particular area is not one that directionally we’re looking at carbon out some other interval other than Eagle Ford and JV there. That's kind of a little bit messy in our opinion.