Enron Oil and Gas EOG (NYSE:EOG)’s Advice to the Investors
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The sudden decrease in oil prices has left the investors worried about the future investments in the sector. A decreasing investing trend later appeared in the market, leading the managerial teams to devise their strategies very cautiously in deciding the right move. However the managerial teams appear to be calm and relaxed. The reason for their calmness can be clearly seen in their third quarterly report conference indicating their stable sales.
The Chief executives reassured and gave reasons of why they were not agitated because of this. First they talked about a continuous improvement in the extraction of oil through latest technologies and modern means. Then they gave their plans and objectives to efficiently utilize these technologies. The company wishes to proceed with achieving a high productivity with minimum costs. The CEO Bill Thomas told the investors that the company focuses on competitive edge strategy enabling it to yield high results with a diminishing costs program.
He proved this with a diagram showing data and statistics from the year 2010 to year 2014. In this the lease operating expenses continued to improve and the continuous decline in the costs of EOG (NYSE:EOG) is the main reason why the company is not affected by the decreasing oil prices balancing the company’s overall performance. The second reason he talked about was the increase in EOG (NYSE:EOG)’s productivity. According to him the company managed to increase their oil extraction for the second time in the same year.
The company’s production capacity is meeting the management’s expectations. He says that production improving strategies are delivering expected satisfying results. Having a high productivity under diminishing costs, the company is not going to retreat from the market given the rise in prices. In general, Thomas emphasized that the investors should have high hopes for the company rather than losing trust in it. Thirdly according to Thomas, the company is continuously improving its high tech oil drilling portfolio.
Through its advanced targeting and improved completions the company has become the leader in organic growth. The best examples are Delaware wolfcamp oils and Second bone spring sand. He says that the company will keep Eagle Ford as its base even though they will keep on focusing on increasing their portfolio. He said the recent addition of ‘two plays’ in the company’s portfolio is an example of their improved, more productive technology efficient portfolio.
According to him these plays are capable of giving 100% after tax returns even with lowered prices. Finally in the end EOG (NYSE:EOG)’s principal focus is on stronger and bigger returns with lowered oil prices. According to Thomas, the company enjoys exceptional profits with the same $80 oil all thanks to its high tech enhanced drilling portfolio. He directed the company’s investors towards the strong balance sheet of the company to further know about the financial position.
Therefore the EOG (NYSE:EOG) resources aren’t really concerned about declining oil prices and flow of capital as they have built a strong leading financial status among its rivals.