EOG to keep net debt to total capital below 35% by selling gas assets

By Jennifer Lanning Drey

Savannah, Ga., Feb. 10 - EOG Resources Inc. plans to keep its net debt to total capital ratio at or below 35% by selling legacy gas assets as it outspends cash flow in 2011 and 2012, Loren Leiker, EOG's senior vice president of exploration, said during a Thursday presentation at the Credit Suisse Energy Summit in Vail, Colo.

The company's net debt to total capital ratio is currently 27%.

The company closed on about $650 million in sales of legacy gas assets in 2010 and expects to sell about $1 billion worth of gas properties in 2011, Leiker said.

"We're having good progress on that in the first quarter. We've got a very strong list of properties that we're marketing currently," he noted.

Regarding EOG's projection that it will outspend cash flow in the coming years, Leiker explained, "That is why we ran such a conservative balance sheet historically. Now we can use some of this firepower to preserve the latent shareholder value of these giant plays."

After spending capital in 2011 and 2012 to become an oil-dominate company, EOG expects to be in an improved financial position going forward, Leiker said.

EOG is based in Houston and is the largest independent non-integrated oil and natural gas company in the United States.

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