Edgar Filing: EOG RESOURCES INC

2014.12.31 10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)


ý	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2014


o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 1-9743

EOG RESOURCES, INC.

(Exact name of registrant as specified in its charter)



Delaware		47-0684736
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1111 Bagby, Sky Lobby 2, Houston, Texas 77002

(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: 713-651-7000

Securities registered pursuant to Section 12(b) of the Act:



Title of each class		Name of each exchange on which registered
Common Stock, par value $0.01 per share		New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:

None.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ý No o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes o No ý

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ý Accelerated filer o Non-accelerated filer o Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No ý

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant's most recently completed second fiscal quarter. Common Stock aggregate market value held by non-affiliates as of June 30, 2014: $63,532 million.

Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date. Class: Common Stock, par value $0.01 per share, 548,445,003 shares outstanding as of February 10, 2015.

Documents incorporated by reference. Portions of the Definitive Proxy Statement for the registrant's 2015 Annual Meeting of Stockholders, to be filed within 120 days after December 31, 2014, are incorporated by reference into Part III of this report.

TABLE OF CONTENTS



		Page
PART I

ITEM 1.	Business	1
	General	1
	Business Segments	1
	Exploration and Production	2
	Marketing	5
	Wellhead Volumes and Prices	5
	Competition	7
	Regulation	7
	Other Matters	10
	Executive Officers of the Registrant	12
ITEM 1A.	Risk Factors	13
ITEM 1B.	Unresolved Staff Comments	20
ITEM 2.	Properties	20
	Oil and Gas Exploration and Production - Properties and Reserves	20
ITEM 3.	Legal Proceedings	24
ITEM 4.	Mine Safety Disclosures	24

PART II

ITEM 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	25
ITEM 6.	Selected Financial Data	28
ITEM 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	29
ITEM 7A.	Quantitative and Qualitative Disclosures About Market Risk	45
ITEM 8.	Financial Statements and Supplementary Data	45
ITEM 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	45
ITEM 9A.	Controls and Procedures	45
ITEM 9B.	Other Information	45

PART III

ITEM 10.	Directors, Executive Officers and Corporate Governance	46
ITEM 11.	Executive Compensation	46
ITEM 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	46
ITEM 13.	Certain Relationships and Related Transactions, and Director Independence	48
ITEM 14.	Principal Accounting Fees and Services	48

PART IV

ITEM 15.	Exhibits, Financial Statement Schedules	48

SIGNATURES

(i)

PART I

ITEM 1. Business

General

EOG Resources, Inc., a Delaware corporation organized in 1985, together with its subsidiaries (collectively, EOG), explores for, develops, produces and markets crude oil and natural gas primarily in major producing basins in the United States of America (United States or U.S.), Canada, The Republic of Trinidad and Tobago (Trinidad), the United Kingdom (U.K.), The People's Republic of China (China) and, from time to time, select other international areas. EOG's principal producing areas are further described in "Exploration and Production" below. EOG's Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to those reports are made available, free of charge, through EOG's website, as soon as reasonably practicable after such reports have been filed with the United States Securities and Exchange Commission (SEC). EOG's website address is www.eogresources.com.

At December 31, 2014, EOG's total estimated net proved reserves were 2,497 million barrels of oil equivalent (MMBoe), of which 1,140 million barrels (MMBbl) were crude oil and condensate reserves, 467 MMBbl were natural gas liquids (NGL) reserves and 5,343 billion cubic feet, or 890 MMBoe, were natural gas reserves (see Supplemental Information to Consolidated Financial Statements). At such date, approximately 97% of EOG's net proved reserves, on a crude oil equivalent basis, were located in the United States and 3% in Trinidad. Crude oil equivalent volumes are determined using the ratio of 1.0 barrel of crude oil and condensate or NGL to 6.0 thousand cubic feet (Mcf) of natural gas.

As of December 31, 2014, EOG employed approximately 3,000 persons, including foreign national employees.

EOG's business strategy is to maximize the rate of return on investment of capital by controlling operating and capital costs and maximizing reserve recoveries. This strategy is intended to enhance the generation of cash flow and earnings from each unit of production on a cost-effective basis. EOG is focused on cost-effective utilization of advanced technology associated with three-dimensional seismic and microseismic data, the development of reservoir simulation models, the use of improved drill bits, mud motors and mud additives for horizontal drilling, formation evaluation and horizontal completion methods. These advanced technologies are used, as appropriate, throughout EOG to reduce the risks associated with all aspects of oil and gas exploration, development and exploitation. EOG implements its strategy by emphasizing the drilling of internally generated prospects in order to find and develop low-cost reserves. Maintaining the lowest possible operating cost structure that is consistent with prudent and safe operations is also an important goal in the implementation of EOG's strategy.

With respect to information on EOG's working interest in wells or acreage, "net" oil and gas wells or acreage are determined by multiplying "gross" oil and gas wells or acreage by EOG's working interest in the wells or acreage.

Business Segments

EOG's operations are all crude oil and natural gas exploration and production related. For financial information about our reportable segments (including financial information by segment geographic area), see Note 11 to Consolidated Financial Statements. For information regarding the risks associated with EOG's foreign operations, see ITEM 1A. Risk Factors.

Exploration and Production

United States and Canada Operations

EOG's operations are focused in most of the productive basins in the United States with a current focus on crude oil and, to a lesser extent, liquids-rich natural gas plays.

At December 31, 2014, on a crude oil equivalent basis, 47% of EOG's net proved reserves in the United States were crude oil and condensate, 19% were NGL and 34% were natural gas. The majority of these reserves are in long-lived fields with well-established production characteristics. EOG believes that opportunities exist to increase production through continued development in and around many of these fields and through the utilization of applicable technologies. EOG also maintains an active exploration program designed to extend fields and add new trends and resource plays to its already broad portfolio. The following is a summary of significant developments during 2014 and certain 2015 plans for EOG's United States and Canada operations.

United States. The Eagle Ford continues to prove itself as a world-class oil field. By year-end 2014, the field had produced in excess of one billion barrels of crude oil and condensate, reaching this milestone more quickly than the Bakken. With approximately 561,000 of the 624,000 total net acres that EOG controls in the prolific oil window, EOG completed 534 net wells in 2014. EOG continues to be the biggest oil producer in the Eagle Ford play with cumulative gross production in excess of 200 million barrels of crude oil. Year-end net production approximated 203 thousand barrels per day (MBbld) of crude oil and condensate, an increase of 43% over year-end 2013. The combination of self-sourced sand, dedicated frac crews and other services along with continual well optimization programs have made this play the centerpiece of EOG's portfolio. In 2015, EOG expects to complete approximately 345 net wells, continue to improve well productivity and reduce drilling and completion costs.

The Rocky Mountain area continues to provide strong liquids growth. In 2014, EOG continued infill drilling on its crude oil acreage in the Williston Basin Bakken core, completing 59 net wells. EOG tested downspacing to 700-foot interwell distances with encouraging results and is in the process of evaluating further downspacing. In 2014, EOG ramped up its development program in the DJ Basin, completing 21 net wells in the Codell and Niobrara formations. EOG continued its development program in the Powder River Basin, completing 30 net wells with production from the Parkman and Turner formations. Net average production for the entire Rocky Mountain area for 2014 was approximately 72 MBbld of crude oil and condensate and NGL, an increase of 18% over the prior year. In 2015, EOG plans to complete approximately 35 net wells, primarily in the Williston Basin Bakken and, to a lesser extent, in the Powder River Basin.

In 2014, EOG completed 62 net wells in the Permian Basin to develop its liquids-rich Leonard, Wolfcamp, and Second Bone Spring Sand plays. EOG is well positioned with approximately 80,000 net acres in the Leonard Shale, 140,000 net acres in the Wolfcamp Shale and 90,000 net acres in the Second Bone Spring Sand, all within the Delaware Basin. Additionally, EOG has approximately 113,000 net acres in the Wolfcamp Shale within the Midland Basin. Net production in the Permian Basin for 2014 averaged 33 MBbld of crude oil and condensate and NGL, an increase of 43% over 2013. Net natural gas production increased 57% to 85 million cubic feet per day (MMcfd). EOG holds approximately 420,000 net acres throughout the Permian Basin. In 2015, EOG plans to continue the expansion and development, primarily in the Delaware Basin Second Bone Spring Sand, Wolfcamp and Leonard plays by completing approximately 95 net wells.

In the Upper Gulf Coast region, EOG completed 27 net wells during 2014 and net production averaged 82 MMcfd of natural gas and 5 MBbld of crude oil and condensate and NGL. In 2015, EOG will continue to defer dry gas drilling in the Haynesville, work to maintain base production and continue its liquids exploration program. EOG holds approximately 874,000 net acres in the Upper Gulf Coast region.

In the Mid-Continent area, EOG continued to expand its activities in the Anadarko Basin. During 2014, EOG averaged net production of 8 MBbld of crude oil and condensate and NGL and 30 MMcfd of natural gas. EOG continued its successful horizontal exploitation of the Pennsylvanian sandstones in the Anadarko Basin, completing 18 net wells in 2014. EOG holds approximately 250,000 net acres throughout the trend and plans to complete approximately 10 net crude oil wells in 2015.

During 2014, EOG continued development of its liquids-rich Barnett Shale Combo play in the Fort Worth Basin. EOG completed 90 net Barnett Combo wells and continued to upgrade the quality of its acreage position and add potential drilling locations in the Barnett Combo core area. In 2014, net total production in the Barnett Shale averaged approximately 35 MBbld of crude oil and condensate and NGL and approximately 289 MMcfd of natural gas. For 2015, EOG will focus on maintaining base production. EOG currently holds approximately 380,000 net acres in the Barnett.

In the South Texas area, EOG completed 22 net wells in 2014. Net production during 2014 averaged 6 MBbld of crude oil and condensate and NGL and 83 MMcfd of natural gas. EOG’s activity was focused in San Patricio, Kleberg and Brooks counties. In 2015, EOG’s activity will target the Frio and Vicksburg trends in South Texas. EOG has approximately 306,000 net acres and plans to reduce its activity, completing approximately 10 net wells in 2015.

During 2014, EOG focused on maintaining base production in the Marcellus Shale. Net production for 2014 averaged 30 MMcfd of natural gas. In 2015, the focus in the Marcellus Shale will be on infrastructure projects that will support additional development in the coming years. EOG currently holds approximately 208,000 net acres with Marcellus Shale potential, most of which are held as fee or by production.

EOG has agreements with certain crude oil refining companies to deliver an average of 56.5 MBbld, 59.4 MBbld and 10.0 MBbld of crude oil in 2015, 2016 and 2017, respectively, to certain refineries. EOG intends to fulfill these crude oil delivery obligations with its Eagle Ford production.

At December 31, 2014, EOG held approximately 2.4 million net undeveloped acres in the United States.

During 2014, EOG continued the expansion of its gathering and processing activities in the Eagle Ford in South Texas, the Bakken and Three Forks plays in North Dakota, the Permian Basin in West Texas and New Mexico and the Barnett Shale in North Texas. At December 31, 2014, EOG-owned natural gas processing capacity in the Eagle Ford and Barnett Shale was 225 MMcfd and 180 MMcfd, respectively.

In support of its operations in the Williston Basin, EOG continued to utilize its crude oil loading facility near Stanley, North Dakota, to transport its crude oil production and, from time to time, crude oil purchased from third-party producers. EOG loaded 350 unit trains (each unit train typically consists of 100 cars and has a total aggregate capacity of approximately 70,000 barrels of crude oil) with crude oil for transport to St. James, Louisiana, and Stroud, Oklahoma.

A total of 260 crude oil unit trains carrying EOG production were received at a crude oil unloading facility in St. James, Louisiana, during 2014. Owned by EOG and NuStar Energy L.P., this facility provides access to one of the key markets in the U.S., where sales are based upon the Light Louisiana Sweet (LLS) crude oil index. The St. James facility accommodates multiple trains at a single time and has a capacity of approximately 120 MBbld. EOG's share of that capacity is 100 MBbld.

During 2014, EOG utilized its Stroud, Oklahoma, crude oil unloading facility and pipeline to transport 72 unit trainloads of crude oil to the Cushing, Oklahoma, trading hub. These facilities have the capacity to unload approximately 90 MBbld of crude oil.

EOG believes that its crude-by-rail facilities and logistics provide a competitive advantage, giving EOG the flexibility to direct its crude oil shipments via rail car to the most favorable markets.

Since 2008, EOG has been operating its own sand mine and sand processing plant located in Hood County, Texas, to reduce costs and to help fulfill EOG's sand needs for its well completion operations in the Barnett Shale Combo play. EOG purchased a second Hood County sand processing plant in 2011, and utilizes that facility to process raw EOG-owned sand from Wisconsin, as needed, to support EOG's well completion activities in several key EOG plays.

In 2014, EOG increased the use of processed sand from its Chippewa Falls, Wisconsin, sand plant, which processes sand from multiple EOG-owned mines nearby.

During 2014, EOG shipped 162 sand unit trains of approximately 100 cars each, from various sources, to EOG's sand storage and distribution facility in Refugio, Texas, primarily for use in its Eagle Ford well completions. Also during 2014, EOG shipped the equivalent of 110 unit trains of processed sand for well completions in other plays.

Canada. During 2014, EOG sold all of its assets in Manitoba and the majority of its assets in Alberta in two separate transactions that closed on or about December 1, 2014. EOG divested 1.3 million gross acres (1.1 million net), 97 percent of which were in Alberta. Of the approximate 5,800 producing wells sold, 5,155 were natural gas.

At December 31, 2014, EOG held approximately 183,500 net undeveloped acres in Canada.

Operations Outside the United States and Canada

EOG has operations offshore Trinidad, in the U.K. North Sea and East Irish Sea, and in the China Sichuan Basin and is evaluating additional exploration, development and exploitation opportunities in these and other select international areas.

Trinidad. EOG, through several of its subsidiaries, including EOG Resources Trinidad Limited,


•	holds an 80% working interest in the exploration and production license covering the South East Coast Consortium (SECC) Block offshore Trinidad, except in the Deep Ibis area in which EOG's working interest decreased as a result of a third-party farm-out agreement;


•	holds an 80% working interest in the exploration and production license covering the Pelican Field and its related facilities;


•	holds a 50% working interest in the exploration and production license covering the EMZ Area offshore Trinidad;


•	holds a 100% working interest in a production sharing contract with the Government of Trinidad and Tobago for each of the Modified U(a) Block, Modified U(b) Block and Block 4(a);


•	owns a 12% equity interest in an anhydrous ammonia plant in Point Lisas, Trinidad, that is owned and operated by Caribbean Nitrogen Company Limited; and


•	owns a 10% equity interest in an anhydrous ammonia plant in Point Lisas, Trinidad, that is owned and operated by Nitrogen (2000) Unlimited.

Several fields in the SECC Block, Modified U(a) Block, Modified U(b) Block, Block 4(a) and the EMZ Area have been developed and are producing natural gas and crude oil and condensate. Natural gas from EOG's Trinidad operations currently is sold under various contracts with the National Gas Company of Trinidad and Tobago and its subsidiary (NGC). Crude oil and condensate from EOG's Trinidad operations currently is sold to the Petroleum Company of Trinidad and Tobago Limited. In 2014, EOG's average net production from Trinidad was 363 MMcfd of natural gas and 1.0 MBbld of crude oil and condensate.

In the fourth quarter of 2014, EOG initiated a three-net well drilling program in the SECC and Modified U(b) Blocks, completing one well in 2014. In 2015, EOG expects to drill and complete the remaining two net wells in this program.

In 2015, it is anticipated that EOG's Trinidad operations will supply approximately 480 MMcfd (350 MMcfd, net) of natural gas from its existing proved reserves. All of the natural gas produced from EOG's Trinidad operations in 2015 is expected to be supplied to NGC pursuant to the requirements of the NGC contracts.

At December 31, 2014, EOG held approximately 39,000 net undeveloped acres in Trinidad.

United Kingdom. EOG's subsidiary, EOG Resources United Kingdom Limited (EOGUK), owns a 25% non-operating working interest in a portion of Block 49/16a, located in the Southern Gas Basin of the North Sea. During 2014, a limited amount of production continued from the Valkyrie field in this block.

In 2007, EOGUK was awarded a license for two blocks in the East Irish Sea – Blocks 110/7b and 110/12a. In 2009, EOGUK drilled a successful exploratory well in the East Irish Sea Block 110/12a. Well 110/12-6, in which EOGUK has a 100% working interest, was an oil discovery and was designated the Conwy field. During 2012 and 2013, the Conwy production platform and pipelines were installed. Modifications to the nearby third-party owned Douglas platform, which will be used to process Conwy production, began in 2013 and continued throughout 2014. First production from the Conwy field is anticipated in the third quarter of 2015. During the fourth quarter of 2014, EOG recognized a $351 million impairment of the Conwy project as a result of crude oil price declines.

In 2014, production averaged less than 0.1 MMcfd of natural gas, net, in the United Kingdom.

At December 31, 2014, EOG held approximately 35,000 net undeveloped acres in the United Kingdom.

China. In July 2008, EOG acquired rights from ConocoPhillips in a Petroleum Contract covering the Chuan Zhong Block exploration area in the Sichuan Basin, Sichuan Province, China. In October 2008, EOG obtained the rights to shallower zones on the acquired acreage. In 2014, EOG drilled two wells and completed two wells, one of which was originally drilled in 2013. In 2015, EOG expects to complete the second well that was drilled in 2014 and drill and complete four additional wells.

In 2014, production averaged 8.5 MMcfd of natural gas, net, in China.

At December 31, 2014, EOG held no net undeveloped acres in China.

Argentina. In 2011, EOG signed two exploration contracts and one farm-in agreement covering approximately 95,000 net acres in the Neuquén Basin in Neuquén Province, Argentina. In 2014, EOG completed a vertical well in the Cerro Avispa Block that was drilled in late 2013 and determined the well to be a dry hole. Also during 2014, EOG participated in the drilling of two wells in the Bajo del Toro Block, both of which were determined to be dry holes. In the fourth quarter of 2014, EOG recognized an impairment charge of $44 million for the balance of its investment in Argentina. Management is currently evaluating options for its investment.

Other International. EOG continues to evaluate other select crude oil and natural gas opportunities outside the United States and Canada, primarily by pursuing exploitation opportunities in countries where indigenous crude oil and natural gas reserves have been identified.

Marketing

In 2014, EOG's wellhead crude oil and condensate production was sold into local markets or transported either by pipeline, truck or EOG's crude-by-rail assets to downstream markets. In each case, the price received was based on market prices at that specific sales point or based on the price index applicable for that location. Major sales points included Cushing, Oklahoma, St. James, Louisiana, and other points along the U.S. Gulf Coast. In 2015, the pricing mechanism for such production is expected to remain the same.

In 2014, EOG processed certain of its natural gas production, either at EOG-owned facilities or at third-party facilities, extracting NGL. NGL were sold at prevailing market prices. In 2015, the pricing mechanism for such production is expected to remain the same.

In 2014, EOG's United States and Canada wellhead natural gas production was sold into local markets or transported by pipeline to downstream markets. Pricing, based on the spot market and long-term natural gas contracts, was at prevailing market prices. In 2015, the pricing mechanism for such production is expected to remain the same.

In 2014, a large majority of the wellhead natural gas volumes from Trinidad were sold under contracts with prices which were either wholly or partially dependent on Caribbean ammonia index prices and/or methanol prices. The remaining volumes were sold under a contract at prices partially dependent on United States Henry Hub market prices. The pricing mechanisms for these contracts in Trinidad are expected to remain the same in 2015.

In 2014, all wellhead natural gas volumes from the U.K. were sold on the spot market. The 2015 marketing strategy for wellhead natural gas volumes from the U.K. is expected to remain the same. In December 2014, EOG put in place arrangements to market and sell its U.K. wellhead crude oil production, which is anticipated to begin in the second quarter of 2015.

In 2014, all wellhead natural gas volumes from China were sold at regulated prices based on the purchaser's pipeline sales volumes to various local market segments. The pricing mechanism for production in China is expected to remain the same in 2015.

In certain instances, EOG purchases and sells third-party crude oil and natural gas in order to balance firm transportation capacity with production in certain areas and to utilize excess capacity at EOG-owned facilities.

During 2014, two purchasers each accounted for more than 10% of EOG's total wellhead crude oil and condensate, NGL and natural gas revenues and gathering, processing and marketing revenues. Both purchasers are in the crude oil refining industry. EOG does not believe that the loss of any single purchaser would have a material adverse effect on its financial condition or results of operations.

Wellhead Volumes and Prices

The following table sets forth certain information regarding EOG's wellhead volumes of, and average prices for, crude oil and condensate, NGL and natural gas. The table also presents crude oil equivalent volumes which are determined using the ratio of 1.0 barrel of crude oil and condensate or NGL to 6.0 Mcf of natural gas for each of the years ended December 31, 2014, 2013 and 2012.



Year Ended December 31	2014	2013	2012

Crude Oil and Condensate Volumes (MBbld) ⁽¹⁾
United States:
Eagle Ford	178.0	122.3	72.3
Barnett	9.5	11.7	13.0
Other	94.5	78.1	64.0
United States	282.0	212.1	149.3
Canada	5.8	7.0	7.0
Trinidad	1.0	1.2	1.5
Other International ⁽²⁾	0.1	0.1	0.1
Total	288.9	220.4	157.9
Natural Gas Liquids Volumes (MBbld) ⁽¹⁾
United States:
Eagle Ford	24.7	18.6	11.2
Barnett	25.1	24.2	25.8
Other	29.9	21.5	18.1
United States	79.7	64.3	55.1
Canada	0.6	0.9	0.8
Total	80.3	65.2	55.9
Natural Gas Volumes (MMcfd) ⁽¹⁾
United States:
Eagle Ford	164	115	65
Barnett	289	305	368
Other	467	488	601
United States	920	908	1,034
Canada	61	76	95
Trinidad	363	355	378
Other International ⁽²⁾	9	8	9
Total	1,353	1,347	1,516
Crude Oil Equivalent Volumes (MBoed) ⁽³⁾
United States:
Eagle Ford	230.0	160.2	94.4
Barnett	82.7	86.8	100.1
Other	202.3	180.9	182.1
United States	515.0	427.9	376.6
Canada	16.7	20.5	23.6
Trinidad	61.5	60.4	64.5
Other International ⁽²⁾	1.5	1.3	1.7
Total	594.7	510.1	466.4

Total MMBoe ⁽³⁾	217.1	186.2	170.7



Year Ended December 31	2014		2013		2012

Average Crude Oil and Condensate Prices ($/Bbl) ⁽⁴⁾
United States	$	92.73	$	103.81	$	98.38
Canada	86.71		87.05		86.08
Trinidad	84.63		90.30		92.26
Other International ⁽²⁾	90.03		89.11		89.57
Composite	92.58		103.20		97.77
Average Natural Gas Liquids Prices ($/Bbl) ⁽⁴⁾
United States	$	31.84	$	32.46	$	35.41
Canada	40.73		39.45		44.13
Composite	31.91		32.55		35.54
Average Natural Gas Prices ($/Mcf) ⁽⁴⁾
United States	$	3.93	$	3.32	$	2.51
Canada	4.32		3.08		2.49
Trinidad	3.65		3.68		3.72
Other International ⁽²⁾	5.03		6.45		5.71
Composite	3.88		3.42		2.83


(1)	Thousand barrels per day or million cubic feet per day, as applicable.


(2)	Other International includes EOG's United Kingdom, China and Argentina operations.


(3)	Thousand barrels of oil equivalent per day or million barrels of oil equivalent, as applicable; includes crude oil and condensate, NGL and natural gas. MMBoe is calculated by multiplying the MBoed amount by the number of days in the period and then dividing that amount by one thousand.


(4)	Dollars per barrel or per thousand cubic feet, as applicable. Excludes the impact of financial commodity derivative instruments (see Note 12 to Consolidated Financial Statements).

Competition

EOG competes with major integrated oil and gas companies, government-affiliated oil and gas companies and other independent oil and gas companies for the acquisition of licenses and leases, properties and reserves and access to the facilities, equipment, materials, services and employees and other contract personnel (including geologists, geophysicists, engineers and other specialists) required to explore for, develop, produce, market and transport crude oil and natural gas. In addition, many of EOG's competitors have financial and other resources substantially greater than those EOG possesses and have established strategic long-term positions and strong governmental relationships in countries in which EOG may seek new or expanded entry. As a consequence, EOG may be at a competitive disadvantage in certain respects, such as in bidding for drilling rights or in accessing necessary services, facilities, equipment, materials and personnel. In addition, many of EOG's larger competitors may have a competitive advantage when responding to factors that affect demand for crude oil and natural gas, such as changing worldwide prices and levels of production and the cost and availability of alternative fuels. EOG also faces competition, to a lesser extent, from competing energy sources, such as alternative energy sources.

Regulation

United States Regulation of Crude Oil and Natural Gas Production. Crude oil and natural gas production operations are subject to various types of regulation, including regulation in the United States by federal and state agencies.

United States legislation affecting the oil and gas industry is under constant review for amendment or expansion. In addition, numerous departments and agencies, both federal and state, are authorized by statute to issue, and have issued, rules and regulations applicable to the oil and gas industry. Such rules and regulations, among other things, require permits for the drilling of wells, regulate the spacing of wells, prevent the waste of natural gas through restrictions on flaring, require surety bonds for various exploration and production operations and regulate the calculation and disbursement of royalty payments (for federal and state leases), production taxes and ad valorem taxes.

A portion of EOG's oil and gas leases in New Mexico, North Dakota, Utah, Wyoming and the Gulf of Mexico, as well as some in other areas, are granted by the federal government and administered by the Bureau of Land Management (BLM) and

the Bureau of Indian Affairs (BIA) or, in the case of offshore leases (which, for EOG, are de minimis), by the Bureau of Ocean Energy Management (BOEM) and the Bureau of Safety and Environmental Enforcement (BSEE), all federal agencies. Operations conducted by EOG on federal oil and gas leases must comply with numerous additional statutory and regulatory restrictions and, in the case of leases relating to tribal lands, certain tribal environmental and permitting requirements and employment rights regulations. In addition, the U.S. Department of the Interior (via various of its agencies, including the BLM, the BIA and the Office of Natural Resources Revenues) has certain authority over our payment of royalties, bonuses, fines, penalties, assessments and other revenues related to our federal and tribal oil and gas leases.

BLM, BIA and BOEM leases contain relatively standardized terms requiring compliance with detailed regulations and, in the case of offshore leases, orders pursuant to the Outer Continental Shelf Lands Act (which are subject to change by the BOEM or BSEE). Under certain circumstances, the BLM, BIA, BOEM or BSEE (as applicable) may require operations on federal leases to be suspended or terminated. Any such suspension or termination could materially and adversely affect EOG's interests.

The transportation and sale for resale of natural gas in interstate commerce are regulated pursuant to the Natural Gas Act of 1938 (NGA) and the Natural Gas Policy Act of 1978. These statutes are administered by the Federal Energy Regulatory Commission (FERC). Effective January 1993, the Natural Gas Wellhead Decontrol Act of 1989 deregulated natural gas prices for all "first sales" of natural gas, which includes all sales by EOG of its own production. All other sales of natural gas by EOG, such as those of natural gas purchased from third parties, remain jurisdictional sales subject to a blanket sales certificate under the NGA, which has flexible terms and conditions. Consequently, all of EOG's sales of natural gas currently may be made at market prices, subject to applicable contract provisions. EOG's jurisdictional sales, however, are subject to the future possibility of greater federal oversight, including the possibility that the FERC might prospectively impose more restrictive conditions on such sales. Conversely, sales of crude oil and condensate and NGL by EOG are made at unregulated market prices.

EOG owns certain gathering and/or processing facilities in the Permian Basin in West Texas and New Mexico, the Barnett Shale in North Texas, the Bakken and Three Forks plays in North Dakota, and the Eagle Ford in South Texas. State regulation of gathering and processing facilities generally includes various safety, environmental and, in some circumstances, nondiscrimination requirements with respect to the provision of gathering and processing services, but does not generally entail rate regulation. EOG's gathering and processing operations could be materially and adversely affected should they be subject in the future to the application of state or federal regulation of rates and services.

EOG's gathering and processing operations also may be, or become, subject to safety and operational regulations relating to the design, installation, testing, construction, operation, replacement and management of such facilities. Additional rules and legislation pertaining to these matters are considered and/or adopted from time to time. Although EOG cannot predict what effect, if any, such legislation might have on its operations and financial condition, the industry could be required to incur additional capital expenditures and increased costs depending on future legislative and regulatory changes.

EOG also owns crude oil rail loading facilities in North Dakota and Texas, crude oil rail unloading facilities in Oklahoma and Louisiana and crude oil truck unloading facilities in certain of its U.S. plays. Regulation of such facilities is conducted at the state and federal levels and generally includes various safety, environmental, permitting and packaging/labeling requirements. Additional regulation pertaining to these matters is considered and/or adopted from time to time. Although EOG cannot predict what effect, if any, any such new regulations might have on its crude-by-rail operations and the transportation of its crude oil production by truck, EOG could be required to incur additional capital expenditures and increased compliance costs depending on the nature and extent of such future regulatory changes.

Proposals and proceedings that might affect the oil and gas industry are considered from time to time by Congress, the state legislatures, the FERC and federal, state and local regulatory commissions, agencies, councils and courts. EOG cannot predict when or whether any such proposals or proceedings may become effective. It should also be noted that the oil and gas industry historically has been very heavily regulated; therefore, there is no assurance that the approach currently being followed by such legislative bodies and regulatory commissions, agencies, councils and courts will remain unchanged.

Environmental Regulation - United States. EOG is subject to various federal, state and local laws and regulations covering the discharge of materials into the environment or otherwise relating to the protection of the environment. These laws and regulations affect EOG's operations and costs as a result of their effect on crude oil and natural gas exploration, development and production operations. Failure to comply with these laws and regulations may result in the assessment of administrative, civil and criminal penalties, including the assessment of monetary penalties, the imposition of investigatory and remedial obligations, the suspension or revocation of necessary permits, licenses and authorizations, the requirement that additional pollution controls be installed and the issuance of orders enjoining future operations or imposing additional compliance requirements.

In addition, EOG has acquired certain oil and gas properties from third parties whose actions with respect to the management and disposal or release of hydrocarbons or other wastes were not under EOG's control. Under environmental laws and regulations, EOG could be required to remove or remediate wastes disposed of or released by prior owners or operators. EOG also could incur costs related to the clean-up of third-party sites to which it sent regulated substances for disposal or to which it sent equipment for cleaning, and for damages to natural resources or other claims related to releases of regulated substances at such third-party sites. In addition, EOG could be responsible under environmental laws and regulations for oil and gas properties in which EOG previously owned or currently owns an interest, but was or is not the operator. Moreover, EOG is subject to the U.S. Environmental Protection Agency's (U.S. EPA) rule requiring annual reporting of greenhouse gas (GHG) emissions and may in the future, as discussed further below, be subject to federal, state and local laws and regulations regarding hydraulic fracturing.

Compliance with environmental laws and regulations increases EOG's overall cost of business, but has not had, to date, a material adverse effect on EOG's operations, financial condition or results of operations. It is not anticipated, based on current laws and regulations, that EOG will be required in the near future to expend amounts (whether for environmental control facilities or otherwise) that are material in relation to its total exploration and development expenditure program in order to comply with such laws and regulations. However, given that such laws and regulations are subject to change, EOG is unable to predict the ultimate cost of compliance or the ultimate effect on EOG's operations, financial condition and results of operations.

Climate Change - United States. Local, state, national and international regulatory bodies have been increasingly focused on GHG emissions and climate change issues. In addition to the U.S. EPA's rule requiring annual reporting of GHG emissions, recent U.S. EPA rulemaking may result in the regulation of GHGs as pollutants under the federal Clean Air Act. EOG supports efforts to understand and address the contribution of human activities to global climate change through the application of sound scientific research and analysis. Moreover, EOG believes that its strategy to reduce GHG emissions throughout its operations is in the best interest of the environment and is a generally good business practice.

EOG has developed a system that is utilized in calculating GHG emissions from its operating facilities. This emissions management system calculates emissions based on recognized regulatory methodologies, where applicable, and on commonly accepted engineering practices. EOG is now reporting GHG emissions for facilities covered under the U.S. EPA's Mandatory Reporting of Greenhouse Gases Rule published in October 2009. EOG is unable to predict the timing, scope and effect of any currently proposed or future laws, regulations or treaties regarding climate change and GHG emissions, but the direct and indirect costs of such laws, regulations and treaties (if enacted) could materially and adversely affect EOG's operations, financial condition and results of operations.

Hydraulic Fracturing - United States. Most onshore crude oil and natural gas wells drilled by EOG are completed and stimulated through the use of hydraulic fracturing. Hydraulic fracturing technology, which has been used by the oil and gas industry for more than 60 years and is constantly being enhanced, enables EOG to produce crude oil and natural gas from formations that otherwise would not be recovered. Specifically, hydraulic fracturing is a process in which pressurized fluid is pumped into underground formations to create tiny fractures or spaces that allow crude oil and natural gas to flow from the reservoir into the well so that it can be brought to the surface. Hydraulic fracturing generally takes place thousands of feet underground, a considerable distance below any drinking water aquifers, and there are impermeable layers of rock between the area fractured and the water aquifers. The makeup of the fluid used in the hydraulic fracturing process is typically more than 99% water and sand, and less than 1% of highly diluted chemical additives; lists of the chemical additives most typically used in fracturing fluids are available to the public via internet websites and in other publications sponsored by industry trade associations and through state agencies in those states that require the reporting of the components of fracturing fluids. While the majority of the sand remains underground to hold open the fractures, a significant percentage of the water and chemical additives flow back and are then either reused or safely disposed of at sites that are approved and permitted by the appropriate regulatory authorities. EOG regularly conducts audits of these disposal facilities to monitor compliance with all applicable regulations.

Currently, the regulation of hydraulic fracturing is primarily conducted at the state and local level through permitting and other compliance requirements. However, there have been various proposals to regulate hydraulic fracturing at the federal level. Any new federal regulations that may be imposed on hydraulic fracturing could result in additional permitting and disclosure requirements and in additional operating restrictions. In April 2012, the U.S. EPA issued regulations specifically applicable to the oil and gas industry that will require operators to significantly reduce volatile organic compounds (VOC) emissions from natural gas wells that are hydraulically fractured through the use of "green completions" to capture natural gas that would otherwise escape into the air. The U.S. EPA also issued regulations that establish standards for VOC emissions from several types of equipment, including storage tanks, compressors, dehydrators, and valves and sweetening units at gas processing plants. In addition to these federal regulations, some state and local governments have imposed or have considered imposing various conditions and restrictions on drilling and completion operations, including requirements regarding casing and cementing of wells; testing of nearby water wells; restrictions on access to, and usage of, water; disclosure of the chemical additives used in hydraulic fracturing operations; and restrictions on the type of chemical additives that may be used in hydraulic fracturing operations. Such federal, state and local

permitting and disclosure requirements and operating restrictions and conditions could lead to operational delays and increased operating and compliance costs and, moreover, could delay or effectively prevent the development of crude oil and natural gas from formations which would not be economically viable without the use of hydraulic fracturing.

EOG is unable to predict the timing, scope and effect of any currently proposed or future laws or regulations regarding hydraulic fracturing in the United States, but the direct and indirect costs of such laws and regulations (if enacted) could materially and adversely affect EOG's operations, financial condition and results of operations.

Other International Regulation. EOG's exploration and production operations outside the United States are subject to various types of regulations, including environmental regulations, imposed by the respective governments of the countries in which EOG's operations are conducted, and may affect EOG's operations and costs of compliance within those countries. EOG currently has operations in Canada, Trinidad, the United Kingdom, China and Argentina. EOG is unable to predict the timing, scope and effect of any currently proposed or future laws, regulations or treaties, including those regarding climate change and hydraulic fracturing, but the direct and indirect costs of such laws, regulations and treaties (if enacted) could materially and adversely affect EOG's operations, financial condition and results of operations. EOG will continue to review the risks to its business and operations associated with all environmental matters, including climate change and hydraulic fracturing. In addition, EOG will continue to monitor and assess any new policies, legislation, regulations and treaties in the areas where it operates to determine the impact on its operations and take appropriate actions, where necessary.

Other Regulation. EOG has sand mining and processing operations in Texas and Wisconsin, which support EOG's exploration and development operations. EOG's sand mining operations are subject to regulation by the federal Mine Safety and Health Administration (in respect of safety and health matters) and by state agencies (in respect of air permitting and other environmental matters). The information concerning mine safety violations and other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K (17 CFR 229.104) is included in Exhibit 95 to this report.

Other Matters

Energy Prices. EOG is a crude oil and natural gas producer and is impacted by changes in prices of crude oil and condensate, NGL and natural gas. Crude oil and condensate and NGL production comprised a larger portion of EOG's production mix in 2014 than in prior years. Average crude oil and condensate prices received by EOG for production in the United States and Canada decreased 10% in 2014, and increased 6% in 2013 and 5% in 2012, each as compared to the immediately preceding year. Average NGL prices received by EOG for production in the United States and Canada decreased 2% in 2014, 8% in 2013 and 30% in 2012, each as compared to the immediately preceding year. During the last three years, average United States and Canada wellhead natural gas prices have fluctuated, at times rather dramatically. These fluctuations resulted in a 20% increase in the average wellhead natural gas price received by EOG for production in the United States and Canada in 2014, a 31% increase in 2013 and a 36% decrease in 2012, each as compared to the immediately preceding year. In addition, as of January 30, 2015, the average 2015 U.S. New York Mercantile Exchange (NYMEX) crude oil and natural gas price was $51.86 and $2.85, respectively, representing declines of 44% and 35%, respectively, from the average NYMEX prices in 2014. Due to the many uncertainties associated with the world political environment (for example, the actions of other crude oil exporting nations, including the Organization of Petroleum Exporting Countries), the availability of other energy supplies, the relative competitive relationships of the various energy sources in the view of consumers and other factors, EOG is unable to predict what changes may occur in prices of crude oil and condensate, NGL and natural gas in the future. For additional discussion regarding changes in crude oil and natural gas prices and the risks that such changes may present to EOG, see ITEM 1A. Risk Factors.

Including the impact of EOG's 2015 crude oil derivative contracts (exclusive of options) and based on EOG's tax position, EOG's price sensitivity in 2015 for each $1.00 per barrel increase or decrease in wellhead crude oil and condensate price, combined with the estimated change in NGL price, is approximately $63 million for net income and $93 million for cash flows from operating activities. Including the impact of EOG's 2015 natural gas derivative contracts (exclusive of options) and based on EOG's tax position and the portion of EOG's anticipated natural gas volumes for 2015 for which prices have not been determined under long-term marketing contracts, EOG's price sensitivity for each $0.10 per Mcf increase or decrease in wellhead natural gas price is approximately $15 million for net income and $22 million for cash flows from operating activities. For a summary of EOG's financial commodity derivative contracts at February 16, 2015, see ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Capital Resources and Liquidity - Derivative Transactions. For a summary of EOG's financial commodity derivative contracts at December 31, 2014, see Note 12 to Consolidated Financial Statements.

Risk Management. EOG engages in price risk management activities from time to time. These activities are intended to manage EOG's exposure to fluctuations in prices of crude oil and natural gas. EOG utilizes financial commodity derivative instruments, primarily price swap, option, swaption, collar and basis swap contracts, as a means to manage this price risk. See Note 12 to Consolidated Financial Statements. For a summary of EOG's financial commodity derivative contracts at February 16, 2015, see ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Capital Resources and Liquidity - Derivative Transactions. For a summary of EOG's financial commodity derivative contracts at December 31, 2014, see Note 12 to Consolidated Financial Statements.

All of EOG's crude oil and natural gas activities are subject to the risks normally incident to the exploration for, and development, production and transportation of, crude oil and natural gas, including rig and well explosions, cratering, fires, loss of well control and leaks and spills, each of which could result in damage to life, property and/or the environment. EOG's onshore and offshore operations are also subject to usual customary perils, including hurricanes and other adverse weather conditions. Moreover, EOG's activities are subject to governmental regulations as well as interruption or termination by governmental authorities based on environmental and other considerations. Losses and liabilities arising from such events could reduce revenues and increase costs to EOG to the extent not covered by insurance.

Insurance is maintained by EOG against some, but not all, of these risks in accordance with what EOG believes are customary industry practices and in amounts and at costs that EOG believes to be prudent and commercially practicable. Specifically, EOG maintains commercial general liability and excess liability coverage provided by third-party insurers for bodily injury or death claims resulting from an incident involving EOG's onshore or offshore operations (subject to policy terms and conditions). Moreover, in the event an incident involving EOG's onshore or offshore operations results in negative environmental effects, EOG maintains operators extra expense coverage provided by third-party insurers for obligations, expenses or claims that EOG may incur from such an incident, including obligations, expenses or claims in respect of seepage and pollution, cleanup and containment, evacuation expenses and control of the well (subject to policy terms and conditions). In the event of a well control incident resulting in negative environmental effects, such operators extra expense coverage would be EOG's primary coverage, with the commercial general liability and excess liability coverage referenced above also providing certain coverage to EOG. All of EOG's onshore and offshore drilling activities are conducted on a contractual basis with independent drilling contractors and other third-party service contractors. The indemnification and other risk allocation provisions included in such contracts are negotiated on a contract-by-contract basis and are each based on the particular circumstances of the services being provided and the anticipated operations.

In addition to the above-described risks, EOG's operations outside the United States are subject to certain risks, including the risk of increases in taxes and governmental royalties, changes in laws and policies governing the operations of foreign-based companies, expropriation of assets, unilateral or forced renegotiation or modification of existing contracts with governmental entities, currency restrictions and exchange rate fluctuations. Please refer to ITEM 1A. Risk Factors for further discussion of the risks to which EOG is subject with respect to its operations outside the United States.

Texas Severance Tax Rate Reduction. Natural gas production from qualifying Texas natural gas wells spudded or completed after August 31, 1996 is entitled to a reduced severance tax rate for the first 120 consecutive months of production. However, the cumulative value of the tax reduction cannot exceed 50 percent of the drilling and completion costs incurred on a well-by-well basis.

Executive Officers of the Registrant

The current executive officers of EOG and their names and ages (as of February 18, 2015) are as follows:



Name	Age	Position

William R. Thomas	62	Chairman of the Board and Chief Executive Officer

Gary L. Thomas	65	Chief Operating Officer

Lloyd W. Helms, Jr.	57	Executive Vice President, Exploration and Production

David W. Trice	44	Executive Vice President, Exploration and Production

Timothy K. Driggers	53	Vice President and Chief Financial Officer

Michael P. Donaldson	52	Vice President, General Counsel and Corporate Secretary

William R. Thomas was elected Chairman of the Board and Chief Executive Officer effective January 2014. He was elected Senior Vice President and General Manager of EOG's Fort Worth, Texas, office in June 2004, Executive Vice President and General Manager of EOG's Fort Worth, Texas, office in February 2007 and Senior Executive Vice President, Exploitation in February 2011. He subsequently served as Senior Executive Vice President, Exploration from July 2011 to September 2011, as President from September 2011 to July 2013 and as President and Chief Executive Officer from July 2013 to December 2013. Mr. Thomas joined a predecessor of EOG in January 1979. Mr. Thomas is EOG's principal executive officer.

Gary L. Thomas was elected Chief Operating Officer in September 2011. He was elected Executive Vice President, North America Operations in May 1998, Executive Vice President, Operations in May 2002, and served as Senior Executive Vice President, Operations from February 2007 to September 2011. He also previously served as Senior Vice President and General Manager of EOG's Midland, Texas, office. Mr. Thomas joined a predecessor of EOG in July 1978.

Lloyd W. Helms, Jr. was elected Executive Vice President, Exploration and Production in August 2013. He was elected Vice President, Engineering and Acquisitions in September 2006, Vice President and General Manager of EOG's Calgary, Alberta, Canada office in March 2008, and served as Executive Vice President, Operations from February 2012 to August 2013. Mr. Helms joined a predecessor of EOG in February 1981.

David W. Trice was elected Executive Vice President, Exploration and Production in August 2013. He served as Vice President and General Manager of EOG's Fort Worth, Texas, office from May 2010 to August 2013. Prior to that, he served in various geological and management positions at EOG. Mr. Trice joined EOG in November 1999.

Timothy K. Driggers was elected Vice President and Chief Financial Officer in July 2007. He was elected Vice President and Controller of EOG in October 1999, was subsequently named Vice President, Accounting and Land Administration in October 2000 and Vice President and Chief Accounting Officer in August 2003. Mr. Driggers is EOG's principal financial officer. Mr. Driggers joined a predecessor of EOG in August 1995.

Michael P. Donaldson was elected Vice President, General Counsel and Corporate Secretary in May 2012. He was elected Corporate Secretary in May 2008, and was appointed Deputy General Counsel and Corporate Secretary in July 2010. Mr. Donaldson joined EOG in September 2007.

ITEM 1A. Risk Factors

Our business and operations are subject to many risks. The risks described below may not be the only risks we face, as our business and operations may also be subject to risks that we do not yet know of, or that we currently believe are immaterial. If any of the events or circumstances described below actually occurs, our business, financial condition, results of operations or cash flows could be materially and adversely affected and the trading price of our common stock could decline. The following risk factors should be read in conjunction with the other information contained herein, including the consolidated financial statements and the related notes. Unless the context requires otherwise, "we," "us," "our" and "EOG" refer to EOG Resources, Inc. and its subsidiaries.

A substantial or extended decline in crude oil and/or natural gas prices could have a material and adverse effect on us.

Prices for crude oil and natural gas (including prices for natural gas liquids (NGL) and condensate) fluctuate widely. Among the factors that can or could cause these price fluctuations are:


•	the level of consumer demand;


•	domestic and worldwide supplies of crude oil, NGL and natural gas;


•	the price and quantity of imported and exported crude oil, NGL and natural gas;


•	domestic and international drilling activity;


•	the actions of other crude oil exporting nations, including the Organization of Petroleum Exporting Countries;


•	weather conditions and changes in weather patterns;


•	the availability, proximity and capacity of appropriate transportation facilities, gathering, processing and compression facilities and refining facilities;


•	worldwide economic and political conditions, including political instability or armed conflict in oil and gas producing regions;


•	the price and availability of, and demand for, competing energy sources, including alternative energy sources;


•	the nature and extent of governmental regulation, including environmental regulation, regulation of derivatives transactions and hedging activities, tax laws and regulations and laws and regulations with respect to the import and export of crude oil, natural gas and related commodities;


•	the level and effect of trading in commodity futures markets, including trading by commodity price speculators and others; and


•	the effect of worldwide energy conservation measures.

Our cash flows and results of operations depend to a great extent on the prevailing prices for crude oil and natural gas. Prolonged or substantial declines in crude oil and/or natural gas prices may materially and adversely affect our liquidity, the amount of cash flows we have available for our capital expenditures and other operating expenses, our ability to access the credit and capital markets and our results of operations.

Lower crude oil and/or natural gas prices may also reduce the amount of crude oil and/or natural gas that we can produce economically. Substantial declines in crude oil and/or natural gas prices may render uneconomic a significant portion of our exploration, development and exploitation projects, which may result in our having to make significant downward adjustments to our estimated proved reserves. As a result, a prolonged or substantial decline in crude oil and/or natural gas prices may materially and adversely affect our future business, financial condition, results of operations, liquidity and ability to finance capital expenditures and, in turn, the trading price of our common stock.

In addition, if we expect or experience significant sustained decreases in crude oil and natural gas prices such that the expected future cash flows from our crude oil and natural gas properties falls below the net book value of our properties, we may be required to write down the value of our crude oil and natural gas properties. Any such asset impairments could materially and adversely affect our results of operations and, in turn, the trading price of our common stock.

Drilling crude oil and natural gas wells is a high-risk activity and subjects us to a variety of risks that we cannot control.

Drilling crude oil and natural gas wells, including development wells, involves numerous risks, including the risk that we may not encounter commercially productive crude oil and natural gas reserves (including "dry holes"). As a result, we may not recover all or any portion of our investment in new wells.

Specifically, we often are uncertain as to the future cost or timing of drilling, completing and operating wells, and our drilling operations and those of our third-party operators may be curtailed, delayed or canceled, the cost of such operations may increase and/or our results of operations and cash flows from such operations may be impacted, as a result of a variety of factors, including:


•	unexpected drilling conditions;


•	title problems;


•	pressure or irregularities in formations;


•	equipment failures or accidents;


•	adverse weather conditions, such as winter storms, flooding and hurricanes, and changes in weather patterns;

•

compliance with, or changes in, environmental, health and safety laws and regulations relating to air emissions, hydraulic fracturing, access to and use of water, and disposal of produced water, drilling fluids and other wastes, laws and regulations imposing conditions or restrictions on drilling and completion operations and on the transportation of crude oil and natural gas, and other laws and regulations, such as tax laws and regulations;


•	the availability and timely issuance of required federal, state, tribal and other permits and licenses, which may be affected by (among other things) government shutdowns or other suspensions of, or delays in, government services;


•	the availability of, costs associated with and terms of contractual arrangements for properties, including mineral licenses and leases, pipelines, rail cars, crude oil hauling trucks and qualified drivers and facilities and equipment to gather, process, compress, transport and market crude oil, natural gas and related commodities; and


•	the costs of, or shortages or delays in the availability of, drilling rigs, hydraulic fracturing services, pressure pumping equipment and supplies, tubular materials, water, sand, disposal facilities, qualified personnel and other necessary facilities, equipment, materials, supplies and services.

Our failure to recover our investment in wells, increases in the costs of our drilling operations or those of our third-party operators, and/or curtailments, delays or cancellations of our drilling operations or those of our third-party operators in each case due to any of the above factors or other factors, may materially and adversely affect our business, financial condition and results of operations. For related discussion of the risks and potential losses and liabilities inherent in our crude oil and natural gas operations generally, see the immediately following risk factor.

Our crude oil and natural gas operations and supporting activities and operations involve many risks and expose us to potential losses and liabilities, and insurance may not fully protect us against these risks and potential losses and liabilities.

Our crude oil and natural gas operations and supporting activities and operations are subject to all of the risks associated with exploring and drilling for, and producing, gathering, processing, compressing and transporting, crude oil and natural gas, including the risks of:


•	well blowouts and cratering;


•	loss of well control;


•	crude oil spills, natural gas leaks and pipeline ruptures;


•	pipe failures and casing collapses;


•	uncontrollable flows of crude oil, natural gas, formation water or drilling fluids;


•	releases of chemicals, wastes or pollutants;


•	adverse weather conditions, such as winter storms, flooding and hurricanes, and other natural disasters;


•	fires and explosions;


•	terrorism, vandalism and physical, electronic and cyber security breaches;


•	formations with abnormal or unexpected pressures;


•	leaks or spills in connection with, or associated with, the gathering, processing, compression and transportation of crude oil and natural gas; and


•	malfunctions of, or damage to, gathering, processing, compression and transportation facilities and equipment and other facilities and equipment utilized in support of our crude oil and natural gas operations.

If any of these events occur, we could incur losses, liabilities and other additional costs as a result of:


•	injury or loss of life;


•	damage to, or destruction of, property, facilities, equipment and crude oil and natural gas reservoirs;


•	pollution or other environmental damage;


•	regulatory investigations and penalties as well as clean-up and remediation responsibilities and costs;


•	suspension or interruption of our operations, including due to injunction;


•	repairs necessary to resume operations; and


•	compliance with laws and regulations enacted as a result of such events.

We maintain insurance against many, but not all, such losses and liabilities in accordance with what we believe are customary industry practices and in amounts and at costs that we believe to be prudent and commercially practicable. The occurrence of any of these events and any losses or liabilities incurred as a result of such events, if uninsured or in excess of our insurance coverage, would reduce the funds available to us for our onshore and offshore operations and could, in turn, have a material adverse effect on our business, financial condition and results of operations.

Our ability to sell and deliver our crude oil and natural gas production could be materially and adversely affected if adequate gathering, processing, compression and transportation facilities and equipment are unavailable.

The sale of our crude oil and natural gas production depends on a number of factors beyond our control, including the availability, proximity and capacity of, and costs associated with, gathering, processing, compression and transportation facilities and equipment owned by third parties. These facilities may be temporarily unavailable to us due to market conditions, regulatory reasons, mechanical reasons or other factors or conditions, and may not be available to us in the future on terms we consider acceptable, if at all. In particular, in certain newer plays, the capacity of gathering, processing, compression and transportation facilities and equipment may not be sufficient to accommodate potential production from existing and new wells. In addition, lack of financing, construction and permitting delays, permitting costs and regulatory or other constraints could limit or delay the construction, manufacture or other acquisition of new gathering, processing, compression and transportation facilities and equipment by third parties or us, and we may experience delays or increased costs in accessing the pipelines, gathering systems or rail systems necessary to transport our production to points of sale or delivery.

Any significant change in market or other conditions affecting gathering, processing, compression or transportation facilities and equipment or the availability of these facilities, including due to our failure or inability to obtain access to these facilities and equipment on terms acceptable to us or at all, could materially and adversely affect our business and, in turn, our financial condition and results of operations.

If we fail to acquire or find sufficient additional reserves over time, our reserves and production will decline from their current levels.

The rate of production from crude oil and natural gas properties generally declines as reserves are produced. Except to the extent that we conduct successful exploration, exploitation and development activities, acquire additional properties containing reserves or, through engineering studies, identify additional behind-pipe zones or secondary recovery reserves, our reserves will decline as they are produced. Maintaining our production of crude oil and natural gas at, or increasing our production from, current levels, is, therefore, highly dependent upon our level of success in acquiring or finding additional reserves. To the extent we are unsuccessful in acquiring or finding additional reserves, our future cash flows and results of operations and, in turn, the trading price of our common stock could be materially and adversely affected.

We incur certain costs to comply with government regulations, particularly regulations relating to environmental protection and safety, and could incur even greater costs in the future.

Our crude oil and natural gas operations and supporting activities are regulated extensively by federal, state, tribal and local governments and regulatory agencies, both domestically and in the foreign countries in which we do business, and are subject to interruption or termination by governmental and regulatory authorities based on environmental, health, safety or other considerations. Moreover, we have incurred and will continue to incur costs in our efforts to comply with the requirements of environmental, health, safety and other regulations. Further, the regulatory environment could change in ways that we cannot predict and that might substantially increase our costs of compliance and, in turn, materially and adversely affect our business, results of operations and financial condition.

Specifically, as a current or past owner or lessee and operator of crude oil and natural gas properties, we are subject to various federal, state, tribal, local and foreign regulations relating to the discharge of materials into, and the protection of, the environment. These regulations may, among other things, impose liability on us for the cost of pollution cleanup resulting from current or past operations, subject us to liability for pollution damages and require suspension or cessation of operations in affected areas. Moreover, we are subject to the United States (U.S.) Environmental Protection Agency's (U.S. EPA) rule requiring annual reporting of greenhouse gas (GHG) emissions. Changes in, or additions to, these regulations could lead to increased operating and compliance costs and, in turn, materially and adversely affect our business, results of operations and financial condition.

Local, state, national and international regulatory bodies have been increasingly focused on GHG emissions and climate change issues in recent years. EOG is unable to predict the timing, scope and effect of any currently proposed or future laws,

regulations or treaties regarding climate change and GHG emissions, but the direct and indirect costs of such laws, regulations and treaties (if enacted) could materially and adversely affect EOG's operations, financial condition and results of operations.

In addition, there have been various proposals to regulate hydraulic fracturing in the U.S. at the federal level. Currently, the regulation of hydraulic fracturing in the U.S. is primarily conducted at the state level through permitting and other compliance requirements. Any new federal regulations that may be imposed on hydraulic fracturing could result in additional permitting and disclosure requirements and in additional operating restrictions. Moreover, some state and local governments have imposed or have considered imposing various conditions and restrictions on drilling and completion operations. Any such federal or state requirements, restrictions or conditions could lead to operational delays and increased operating and compliance costs and, moreover, could delay or effectively prevent the development of crude oil and natural gas from formations which would not be economically viable without the use of hydraulic fracturing. Accordingly, our production of crude oil and natural gas could be materially and adversely affected. For additional discussion regarding climate change regulation and hydraulic fracturing regulation, see Climate Change - United States and Hydraulic Fracturing - United States under ITEM 1. Business - Regulation.

We will continue to monitor and assess any proposed or new policies, legislation, regulations and treaties in the areas where we operate to determine the impact on our operations and take appropriate actions, where necessary. We are unable to predict the timing, scope and effect of any currently proposed or future laws, regulations or treaties, but the direct and indirect costs of such laws, regulations and treaties (if enacted) could materially and adversely affect our business, results of operations and financial condition. For related discussion, see the risk factor below regarding the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act with respect to regulation of derivatives transactions and entities (such as EOG) that participate in such transactions.

Certain U.S. federal income tax deductions currently available with respect to crude oil and natural gas exploration and production may be eliminated as a result of future legislation.

Legislation may be proposed that would, if enacted into law, make significant changes to U.S. tax laws, including the elimination of certain U.S. federal income tax incentives currently available to crude oil and natural gas exploration and production companies. Such changes may include, but not be limited to, the elimination of current deductions for intangible drilling and development costs. It is unclear whether such changes or similar changes will be proposed and, if enacted, how soon any such changes would become effective. The enactment of such changes or any other similar changes in U.S. federal income tax laws could materially and adversely affect our cash flows, results of operations and financial condition.

A portion of our crude oil and natural gas production may be subject to interruptions that could have a material and adverse effect on us.

A portion of our crude oil and natural gas production may be interrupted, or shut in, from time to time for various reasons, including, but not limited to, as a result of accidents, weather conditions, the unavailability of gathering, processing, compression, transportation or refining facilities or equipment or field labor issues, or intentionally as a result of market conditions such as crude oil or natural gas prices that we deem uneconomic. If a substantial amount of our production is interrupted or shut in, our cash flows and, in turn, our financial condition and results of operations could be materially and adversely affected.

We have limited control over the activities on properties we do not operate.

Some of the properties in which we have an interest are operated by other companies and involve third-party working interest owners. As a result, we have limited ability to influence or control the operation or future development of such properties, including compliance with environmental, safety and other regulations, or the amount of capital expenditures that we will be required to fund with respect to such properties. Moreover, we are dependent on the other working interest owners of such projects to fund their contractual share of the capital expenditures of such projects. In addition, a third-party operator could also decide to shut-in or curtail production from wells, or plug and abandon marginal wells, on properties owned by that operator during periods of lower crude oil or natural gas prices. These limitations and our dependence on the operator and third-party working interest owners for these projects could cause us to incur unexpected future costs, lower production and materially and adversely affect our financial condition and results of operations.

If we acquire crude oil and natural gas properties, our failure to fully identify existing and potential problems, to accurately estimate reserves, production rates or costs, or to effectively integrate the acquired properties into our operations could materially and adversely affect our business, financial condition and results of operations.

From time to time, we seek to acquire crude oil and natural gas properties. Although we perform reviews of properties to be acquired in a manner that we believe is duly diligent and consistent with industry practices, reviews of records and properties

may not necessarily reveal existing or potential problems (such as title or environmental issues), nor may they permit us to become sufficiently familiar with the properties in order to assess fully their deficiencies and potential. Even when problems with a property are identified, we often may assume environmental and other risks and liabilities in connection with acquired properties pursuant to the acquisition agreements. In addition, there are numerous uncertainties inherent in estimating quantities of crude oil and natural gas reserves (as discussed further below), actual future production rates and associated costs with respect to acquired properties. Actual reserves, production rates and costs may vary substantially from those assumed in our estimates. In addition, an acquisition may have a material and adverse effect on our business and results of operations, particularly during the periods in which the operations of the acquired properties are being integrated into our ongoing operations or if we are unable to effectively integrate the acquired properties into our ongoing operations.

We have substantial capital requirements, and we may be unable to obtain needed financing on satisfactory terms, if at all.

We make, and will continue to make, substantial capital expenditures for the acquisition, exploration, development, production and transportation of crude oil and natural gas reserves. We intend to finance our capital expenditures primarily through our cash flows from operations, commercial paper borrowings, sales of non-core assets and borrowings under other uncommitted credit facilities and, to a lesser extent and if and as necessary, bank borrowings, borrowings under our revolving credit facility and public and private equity and debt offerings.

Lower crude oil and natural gas prices, however, reduce our cash flows. Further, if the condition of the credit and capital markets materially declines, we might not be able to obtain financing on terms we consider acceptable, if at all. In addition, weakness and/or volatility in domestic and global financial markets or economic conditions may increase the interest rates that lenders and commercial paper investors require us to pay and adversely affect our ability to finance our capital expenditures through equity or debt offerings or other borrowings. A reduction in our cash flows (for example, as a result of lower crude oil and natural gas prices or unanticipated well shut-ins) and the corresponding adverse effect on our financial condition and results of operations may also increase the interest rates that lenders and commercial paper investors require us to pay. In addition, a substantial increase in interest rates would decrease our net cash flows available for reinvestment. Any of these factors could have a material and adverse effect on our business, financial condition and results of operations.

The inability of our customers and other contractual counterparties to satisfy their obligations to us may have a material and adverse effect on us.

We have various customers for the crude oil, natural gas and related commodities that we produce as well as various other contractual counterparties, including several financial institutions and affiliates of financial institutions. Domestic and global economic conditions, including the financial condition of financial institutions generally, while weakened in recent years, have improved somewhat. However, there continues to be weakness and volatility in domestic and global financial markets, and there is the possibility that lenders may react by tightening credit. These conditions and factors may adversely affect the ability of our customers and other contractual counterparties to pay amounts owed to us from time to time and to otherwise satisfy their contractual obligations to us, as well as their ability to access the credit and capital markets for such purposes.

Moreover, our customers and other contractual counterparties may be unable to satisfy their contractual obligations to us for reasons unrelated to these conditions and factors, such as the unavailability of required facilities or equipment due to mechanical failure or market conditions. Furthermore, if a customer is unable to satisfy its contractual obligation to purchase crude oil, natural gas or related commodities from us, we may be unable to sell such production to another customer on terms we consider acceptable, if at all, due to the geographic location of such production, the availability, proximity or capacity of gathering, processing, compression and transportation facilities or market or other factors and conditions.

The inability of our customers and other contractual counterparties to pay amounts owed to us and to otherwise satisfy their contractual obligations to us may materially and adversely affect our business, financial condition, results of operations and cash flows.

Competition in the oil and gas exploration and production industry is intense, and many of our competitors have greater resources than we have.

We compete with major integrated oil and gas companies, government-affiliated oil and gas companies and other independent oil and gas companies for the acquisition of licenses and leases, properties and reserves and access to the facilities, equipment, materials, services and employees and other contract personnel (including geologists, geophysicists, engineers and other specialists) necessary to explore for, develop, produce, market and transport crude oil and natural gas. In addition, many of our competitors have financial and other resources substantially greater than those we possess and have established strategic long-term positions and strong governmental relationships in countries in which we may seek new or expanded entry. As a consequence,

we may be at a competitive disadvantage in certain respects, such as in bidding for drilling rights or in accessing necessary services, facilities, equipment, materials and personnel. In addition, many of our larger competitors may have a competitive advantage when responding to factors that affect demand for crude oil and natural gas, such as changing worldwide prices and levels of production and the cost and availability of alternative fuels. We also face competition, to a lesser extent, from competing energy sources, such as alternative energy sources.

Reserve estimates depend on many interpretations and assumptions that may turn out to be inaccurate. Any significant inaccuracies in these interpretations and assumptions could cause the reported quantities of our reserves to be materially misstated.

Estimating quantities of crude oil, NGL and natural gas reserves and future net cash flows from such reserves is a complex, inexact process. It requires interpretations of available technical data and various assumptions, including assumptions relating to economic factors, made by our management and our independent petroleum consultants. Any significant inaccuracies in these interpretations or assumptions could cause the reported quantities of our reserves and future net cash flows from such reserves to be overstated or understated. Also, the data for a given reservoir may also change substantially over time as a result of numerous factors including, but not limited to, additional development activity, evolving production history and continual reassessment of the viability of production under varying economic conditions.

To prepare estimates of our economically recoverable crude oil, NGL and natural gas reserves and future net cash flows from our reserves, we analyze many variable factors, such as historical production from the area compared with production rates from other producing areas. We also analyze available geological, geophysical, production and engineering data, and the extent, quality and reliability of this data can vary. The process also involves economic assumptions relating to commodity prices, production costs, gathering, processing, compression and transportation costs, severance, ad valorem and other applicable taxes, capital expenditures and workover and remedial costs, many of which factors are or may be beyond our control. Our actual reserves and future net cash flows from such reserves most likely will vary from our estimates. Any significant variance, including any significant revisions or "write-downs" to our existing reserve estimates, could materially and adversely affect our business, financial condition and results of operations and, in turn, the trading price of our common stock. For related discussion, see ITEM 2. Properties - Oil and Gas Exploration and Production - Properties and Reserves and Supplemental Information to Consolidated Financial Statements.

Weather and climate may have a significant and adverse impact on us.

Demand for crude oil and natural gas is, to a significant degree, dependent on weather and climate, which impacts, among other things, the price we receive for the commodities we produce and, in turn, our cash flows and results of operations. For example, relatively warm temperatures during a winter season generally result in relatively lower demand for natural gas (as less natural gas is used to heat residences and businesses) and, as a result, lower prices for natural gas production.

In addition, our exploration, exploitation and development activities and equipment can be adversely affected by extreme weather conditions, such as winter storms, flooding and hurricanes in the Gulf of Mexico, which may cause a loss of production from temporary cessation of activity or lost or damaged facilities and equipment. Such extreme weather conditions could also impact other areas of our operations, including access to our drilling and production facilities for routine operations, maintenance and repairs, the installation and operation of gathering, processing, compression and transportation facilities and the availability of, and our access to, necessary third-party services, such as gathering, processing, compression and transportation services. Such extreme weather conditions and changes in weather patterns may materially and adversely affect our business and, in turn, our financial condition and results of operations.

Our hedging activities may prevent us from benefiting fully from increases in crude oil and natural gas prices and may expose us to other risks, including counterparty risk.

We use derivative instruments (primarily financial price swaps, options, swaptions and collar and basis swap contracts) to hedge the impact of fluctuations in crude oil and natural gas prices on our results of operations and cash flows. To the extent that we engage in hedging activities to protect ourselves against commodity price declines, we may be prevented from fully realizing the benefits of increases in crude oil and natural gas prices above the prices established by our hedging contracts. In addition, our hedging activities may expose us to the risk of financial loss in certain circumstances, including instances in which the counterparties to our hedging contracts fail to perform under the contracts.

Federal legislation and related regulations regarding derivatives transactions could have a material and adverse impact on our hedging activities.

As discussed in the risk factor immediately above, we use derivative instruments to hedge the impact of fluctuations in crude oil and natural gas prices on our results of operations and cash flows. In 2010, Congress adopted the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), which, among other matters, provides for federal oversight of the over-the-counter derivatives market and entities that participate in that market and mandates that the Commodity Futures Trading Commission (CFTC) adopt rules or regulations implementing the Dodd-Frank Act and providing definitions of terms used in the Dodd-Frank Act. The Dodd-Frank Act establishes margin requirements and requires clearing and trade execution practices for certain categories of swaps and may result in certain market participants needing to curtail their derivatives activities. Although some of the rules necessary to implement the Dodd-Frank Act are yet to be adopted, the CFTC has issued numerous rules to implement the Dodd-Frank Act, including a rule establishing an "end-user" exception to mandatory clearing (End-User Exception), a proposed rule regarding margin for uncleared swaps (Margin Rule) and a proposed rule imposing position limits (Position Limits Rule).

We qualify as a “non-financial entity” for purposes of the End-User Exception and, as such, we are eligible for, and expect to utilize, such exception. As a result, our hedging activities will not be subject to mandatory clearing or the margin requirements imposed in connection with mandatory clearing. We also qualify as a “non-financial entity” for purposes of the Margin Rule; therefore, if such rule is adopted, our uncleared swaps will not be subject to regulatory margin requirements. Finally, we believe our hedging activities would constitute bona fide hedging under the Position Limits Rule and would not be subject to limitation under such rule if it is enacted. However, many of our hedge counterparties and many other market participants may not be eligible for the End-User Exception, may be subject to mandatory clearing or the Margin Rule for swaps with some or all of their other swap counterparties, and/or may be subject to the Position Limits Rule.

The Dodd-Frank Act and the rules adopted thereunder could increase the cost of derivative contracts, alter the terms of derivative contracts, reduce the availability of derivatives to protect against the price risks we encounter, reduce our ability to monetize or restructure our existing derivative contracts, and increase our exposure to less creditworthy counterparties. If our use of derivatives is reduced as a result of the Dodd-Frank Act and related regulations, our results of operations may become more volatile, and our cash flows may be less predictable, which could adversely affect our ability to plan for and fund our capital expenditure requirements. Any of these consequences could have a material and adverse effect on our business, financial condition and results of operations.

Our business and prospects for future success depend to a significant extent upon the continued service and performance of our management team.

Our business and prospects for future success, including the successful implementation of our strategies and handling of issues integral to our future success, depend to a significant extent upon the continued service and performance of our management team. The loss of any member of our management team, and our inability to attract, motivate and retain substitute management personnel with comparable experience and skills, could materially and adversely affect our business, financial condition and results of operations.

We operate in other countries and, as a result, are subject to certain political, economic and other risks.

Our operations in jurisdictions outside the U.S. are subject to various risks inherent in foreign operations. These risks include, among other risks:


•	increases in taxes and governmental royalties;


•	changes in laws and policies governing operations of foreign-based companies;


•	loss of revenue, loss of or damage to equipment, property and other assets and interruption of operations as a result of expropriation, nationalization, acts of terrorism, war, civil unrest and other political risks;


•	unilateral or forced renegotiation, modification or nullification of existing contracts with governmental entities;


•	difficulties enforcing our rights against a governmental agency because of the doctrine of sovereign immunity and foreign sovereignty over international operations; and


•	currency restrictions and exchange rate fluctuations.

Our international operations may also be adversely affected by U.S. laws and policies affecting foreign trade and taxation. The realization of any of these factors could materially and adversely affect our business, financial condition and results of operations.

Unfavorable currency exchange rate fluctuations could adversely affect our results of operations.

The reporting currency for our financial statements is the U.S. dollar. However, certain of our subsidiaries are located in countries other than the U.S. and have functional currencies other than the U.S. dollar. The assets, liabilities, revenues and expenses of certain of these foreign subsidiaries are denominated in currencies other than the U.S. dollar. To prepare our consolidated financial statements, we must translate those assets, liabilities, revenues and expenses into U.S. dollars at then-applicable exchange rates. Consequently, increases and decreases in the value of the U.S. dollar versus other currencies will affect the amount of these items in our consolidated financial statements, even if the amount has not changed in the original currency. These translations could result in changes to our results of operations from period to period. For the fiscal year ended December 31, 2014, approximately 4% of our net operating revenues related to operations of our foreign subsidiaries whose functional currency was not the U.S. dollar.

Our business could be adversely affected by security threats, including cybersecurity threats.

As a producer of crude oil and natural gas, we face various security threats, including cybersecurity threats to gain unauthorized access to our sensitive information or to render our information or systems unusable, and threats to the security of our facilities and infrastructure or third-party facilities and infrastructure, such as gathering and processing facilities, refineries, rail facilities and pipelines. The potential for such security threats subjects our operations to increased risks that could have a material adverse effect on our business, financial condition and results of operations. For example, unauthorized access to our seismic data, reserves information or other proprietary information could lead to data corruption, communication interruptions, or other disruptions to our operations.

Our implementation of various procedures and controls to monitor and mitigate such security threats and to increase security for our information, systems, facilities and infrastructure may result in increased capital and operating costs. Moreover, there can be no assurance that such procedures and controls will be sufficient to prevent security breaches from occurring. If any of these security breaches were to occur, they could lead to losses of, or damage to, sensitive information or facilities, infrastructure and systems essential to our business and operations, as well as data corruption, communication interruptions or other disruptions to our operations, which, in turn, could have a material adverse effect on our business, financial position and results of operations.

Terrorist activities and military and other actions could materially and adversely affect us.

Terrorist attacks and the threat of terrorist attacks, whether domestic or foreign, as well as military or other actions taken in response to these acts, could cause instability in the global financial and energy markets. The U.S. government has at times issued public warnings that indicate that energy assets might be specific targets of terrorist organizations. Any such actions and the threat of such actions could materially and adversely affect us in unpredictable ways, including the disruption of energy supplies and markets, increased volatility in crude oil and natural gas prices or the possibility that the infrastructure on which we rely could be a direct target or an indirect casualty of an act of terrorism, and, in turn, could materially and adversely affect our business, financial condition and results of operations.

ITEM 1B. Unresolved Staff Comments

Not applicable.

ITEM 2. Properties

Oil and Gas Exploration and Production - Properties and Reserves

Reserve Information. For estimates of EOG's net proved and proved developed reserves of crude oil and condensate, natural gas liquids (NGL) and natural gas, as well as discussion of EOG's proved undeveloped reserves, the qualifications of the preparers of EOG's reserve estimates, EOG's independent petroleum consultants and EOG's processes and controls with respect to its reserve estimates, see "Supplemental Information to Consolidated Financial Statements."

There are numerous uncertainties inherent in estimating quantities of proved reserves and in projecting future rates of production and timing of development expenditures, including many factors beyond the control of the producer. The reserve data set forth in "Supplemental Information to Consolidated Financial Statements" represent only estimates. Reserve engineering is a subjective process of estimating underground accumulations of crude oil and condensate, NGL and natural gas that cannot be measured in an exact manner. The accuracy of any reserve estimate is a function of the amount and quality of available data and of engineering and geological interpretation and judgment. As a result, estimates by different engineers normally vary. In addition, results of drilling, testing and production subsequent to the date of an estimate may justify revision of such estimate (upward or

downward). Accordingly, reserve estimates are often different from the quantities ultimately recovered. The meaningfulness of such estimates is highly dependent upon the accuracy of the assumptions upon which they were based. For related discussion, see ITEM 1A. Risk Factors and "Supplemental Information to Consolidated Financial Statements."

In general, the rate of production from crude oil and natural gas properties declines as reserves are produced. Except to the extent EOG acquires additional properties containing proved reserves, conducts successful exploration, exploitation and development activities or, through engineering studies, identifies additional behind-pipe zones or secondary recovery reserves, the proved reserves of EOG will decline as reserves are produced. The volumes to be generated from future activities of EOG are therefore highly dependent upon the level of success in finding or acquiring additional reserves. For related discussion, see ITEM 1A. Risk Factors. EOG's estimates of reserves filed with other federal agencies agree with the information set forth in "Supplemental Information to Consolidated Financial Statements."

Acreage. The following table summarizes EOG's developed and undeveloped acreage at December 31, 2014. Excluded is acreage in which EOG's interest is limited to owned royalty, overriding royalty and other similar interests.



	Developed		Undeveloped		Total
	Gross	Net	Gross	Net	Gross	Net

United States	2,243,353	1,621,498	3,621,549	2,590,927	5,864,902	4,212,425
Canada	123,970	94,565	213,964	183,474	337,934	278,039
Trinidad	75,667	65,669	48,520	38,816	124,187	104,485
United Kingdom	8,797	2,570	50,186	35,268	58,983	37,838
China	130,548	130,548	—	—	130,548	130,548
Argentina	—	—	211,016	95,052	211,016	95,052
Total	2,582,335	1,914,850	4,145,235	2,943,537	6,727,570	4,858,387

Most of our undeveloped oil and gas leases, particularly in the United States, are subject to lease expiration if initial wells are not drilled within a specified period, generally between three and five years. Approximately 0.6 million net acres will expire in 2015, 0.4 million net acres will expire in 2016 and 0.2 million net acres will expire in 2017 if production is not established or we take no other action to extend the terms of the leases or concessions. In the ordinary course of business, based on our evaluations of certain geologic trends and prospective economics, we have allowed certain lease acreage to expire and may allow additional acreage to expire in the future.

Producing Well Summary. EOG operated 9,678 gross and 8,357 net producing crude oil and natural gas wells at December 31, 2014. Gross crude oil and natural gas wells include 201 wells with multiple completions.



	Crude Oil		Natural Gas		Total
	Gross	Net	Gross	Net	Gross	Net

United States	4,706	3,732	5,699	4,931	10,405	8,663
Canada	11	4	120	82	131	86
Trinidad	13	10	31	27	44	37
United Kingdom	—	—	1	—	1	—
China	—	—	28	28	28	28
Argentina	3	1	—	—	3	1
Total	4,733	3,747	5,879	5,068	10,612	8,815

Drilling and Acquisition Activities. During the years ended December 31, 2014, 2013 and 2012, EOG expended $7.9 billion, $7.0 billion and $7.1 billion, respectively, for exploratory and development drilling and acquisition of leases and producing properties, including asset retirement obligations of $196 million, $134 million and $127 million, respectively. The following tables set forth the results of the gross crude oil and natural gas wells drilled and completed for the years ended December 31, 2014, 2013 and 2012:



	Gross Development Wells Completed				Gross Exploratory Wells Completed
	Crude Oil	Natural Gas	Dry Hole	Total	Crude Oil	Natural Gas	Dry Hole	Total
2014
United States	901	47	8	956	12	—	5	17
Canada	42	—	—	42	—	—	—	—
Trinidad	—	1	—	1	—	—	—	—
United Kingdom	—	—	—	—	—	—	1	1
China	—	—	—	—	—	2	—	2
Argentina	—	—	—	—	—	—	3	3
Total	943	48	8	999	12	2	9	23
2013
United States	909	57	22	988	7	2	3	12
Canada	85	—	—	85	1	—	—	1
Trinidad	—	1	—	1	—	1	—	1
United Kingdom	3	—	—	3	—	—	1	1
China	—	—	—	—	—	1	—	1
Argentina	—	—	—	—	1	—	—	1
Total	997	58	22	1,077	9	4	4	17
2012
United States	844	135	8	987	8	7	1	16
Canada	83	3	—	86	3	—	—	3
China	—	—	—	—	—	—	1	1
Argentina	—	—	—	—	2	—	—	2
Total	927	138	8	1,073	13	7	2	22

The following tables set forth the results of the net crude oil and natural gas wells drilled and completed for the years ended December 31, 2014, 2013 and 2012:



	Net Development Wells Completed				Net Exploratory Wells Completed
	Crude Oil	Natural Gas	Dry Hole	Total	Crude Oil	Natural Gas	Dry Hole	Total
2014
United States	807	39	7	853	11	—	5	16
Canada	35	—	—	35	—	—	—	—
Trinidad	—	1	—	1	—	—	—	—
United Kingdom	—	—	—	—	—	—	1	1
China	—	—	—	—	—	2	—	2
Argentina	—	—	—	—	—	—	1	1
Total	842	40	7	889	11	2	7	20
2013
United States	788	50	15	853	6	2	3	11
Canada	76	—	—	76	1	—	—	1
Trinidad	—	1	—	1	—	1	—	1
United Kingdom	3	—	—	3	—	—	1	1
China	—	—	—	—	—	1	—	1
Argentina	—	—	—	—	1	—	—	1
Total	867	51	15	933	8	4	4	16
2012
United States	705	100	7	812	7	6	1	14
Canada	80	3	—	83	3	—	—	3
China	—	—	—	—	—	—	1	1
Argentina	—	—	—	—	1	—	—	1
Total	785	103	7	895	11	6	2	19

EOG participated in the drilling of wells that were in progress at the end of the period as set out in the table below for the years ended December 31, 2014, 2013 and 2012:



	Wells in Progress at End of Period
	2014		2013		2012
	Gross	Net	Gross	Net	Gross	Net

United States	388	327	320	280	324	267
Canada	—	—	13	8	—	—
Trinidad	1	1	—	—	1	1
United Kingdom	—	—	—	—	—	—
China	2	2	2	2	—	—
Argentina	—	—	1	1	—	—
Total	391	330	336	291	325	268

EOG acquired wells, which includes the acquisition of additional interests in certain wells in which EOG previously owned an interest, as set out in the tables below for the years ended December 31, 2014, 2013 and 2012:



	Gross Acquired Wells			Net Acquired Wells
	Crude Oil	Natural Gas	Total	Crude Oil	Natural Gas	Total
2014
United States	91	10	101	41	9	50
Total	91	10	101	41	9	50
2013
United States	68	27	95	50	21	71
Total	68	27	95	50	21	71
2012
United States	49	272	321	23	136	159
Total	49	272	321	23	136	159

All of EOG's drilling activities are conducted on a contractual basis with independent drilling contractors and other third-party service contractors. EOG's other property, plant and equipment primarily includes gathering, transportation and processing infrastructure assets, crude-by-rail assets, and sand mine and sand processing assets which support EOG's exploration and production activities. EOG does not own drilling rigs or rail cars.

ITEM 3. Legal Proceedings

The information required by this Item is set forth under the "Contingencies" caption in Note 8 of the Notes to Consolidated Financial Statements and is incorporated by reference herein.

ITEM 4. Mine Safety Disclosures

The information concerning mine safety violations and other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K (17 CFR 229.104) is included in Exhibit 95 to this report.

PART II

ITEM 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

EOG's common stock is traded on the New York Stock Exchange (NYSE) under the ticker symbol "EOG." The following table sets forth, for the periods indicated, the high and low sales price per share for EOG's common stock, as reported by the NYSE, and the amount of the cash dividend declared per share. The quarterly cash dividend on EOG's common stock has historically been declared in the quarter immediately preceding the quarter of payment and paid on January 31, April 30, July 31 and October 31 of each year (or, if such day is not a business day, the immediately preceding business day). On February 24, 2014, EOG's Board of Directors (Board) approved a two-for-one stock split in the form of a stock dividend, paid on March 31, 2014, to stockholders of record as of March 17, 2014. The information below has been adjusted for the stock split.



	Price Range
	High		Low		Dividend Declared
2014
First Quarter	$	99.75	$	80.63	$	0.1250
Second Quarter	118.89		96.01		0.1250
Third Quarter	118.81		97.45		0.1675
Fourth Quarter	103.04		81.07		0.1675
2013
First Quarter	$	69.10	$	60.38	$	0.0938
Second Quarter	69.50		56.03		0.0938
Third Quarter	86.96		66.62		0.0938
Fourth Quarter	94.15		78.01		0.0938

On February 24, 2014, the Board increased the quarterly cash dividend on the common stock by 33% from $0.0938 per share to $0.125 per share, effective beginning with the dividend paid on April 30, 2014, to stockholders of record as of April 16, 2014. On August 5, 2014, the Board increased the quarterly cash dividend on the common stock by 34% from $0.125 per share to $0.1675 per share, effective beginning with the dividend paid on October 31, 2014, to stockholders of record as of October 17, 2014.

As of February 10, 2015, there were approximately 2,000 record holders and approximately 365,000 beneficial owners of EOG's common stock.

EOG currently intends to continue to pay quarterly cash dividends on its outstanding shares of common stock in the future. However, the determination of the amount of future cash dividends, if any, to be declared and paid will depend upon, among other factors, the financial condition, cash flow, level of exploration and development expenditure opportunities and future business prospects of EOG.

The following table sets forth, for the periods indicated, EOG's share repurchase activity:



Period	(a) Total Number of Shares Purchased ⁽¹⁾	(b) Average Price Paid per Share		(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs ⁽²⁾

October 1, 2014 - October 31, 2014	24,137	$	94.49	—	6,386,200
November 1, 2014 - November 30, 2014	49,964	$	97.95	—	6,386,200
December 1, 2014 - December 31, 2014	59,747	$	89.75	—	6,386,200
Total	133,848	$	93.67

(1)

The 133,848 total shares for the quarter ended December 31, 2014, and the 1,209,247 shares for the full year 2014, consist solely of shares that were withheld by or returned to EOG (i) in satisfaction of tax withholding obligations that arose upon the exercise of stock-settled stock appreciation rights or the vesting of restricted stock or restricted stock unit grants or (ii) in payment of the exercise price of employee stock options. These shares do not count against the 10 million aggregate share repurchase authorization of EOG's Board discussed below.


(2)	In September 2001, the Board authorized the repurchase of up to 10,000,000 shares of EOG's common stock. During 2014, EOG did not repurchase any shares under the Board-authorized repurchase program.

Comparative Stock Performance

The following performance graph and related information shall not be deemed "soliciting material" or to be "filed" with the United States Securities and Exchange Commission, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933, as amended, or Securities Exchange Act of 1934, as amended, except to the extent that EOG specifically requests that such information be treated as "soliciting material" or specifically incorporates such information by reference into such a filing.

The performance graph shown below compares the cumulative five-year total return to stockholders on EOG's common stock as compared to the cumulative five-year total returns on the Standard and Poor's 500 Index (S&P 500) and the Standard and Poor's 500 Oil & Gas Exploration & Production Index (S&P O&G E&P). The comparison was prepared based upon the following assumptions:


1.	$100 was invested on December 31, 2009 in each of the following: common stock of EOG, the S&P 500 and the S&P O&G E&P.


2.	Dividends are reinvested.

Comparison of Five-Year Cumulative Total Returns

EOG, S&P 500 and S&P O&G E&P

(Performance Results Through December 31, 2014)



	2009		2010		2011		2012		2013		2014
EOG	$	100.00	$	94.50	$	102.52	$	126.53	$	176.51	$	194.69
S&P 500	$	100.00	$	115.06	$	117.49	$	136.29	$	180.43	$	205.13
S&P O&G E&P	$	100.00	$	109.27	$	102.24	$	105.98	$	135.11	$	120.80

ITEM 6. Selected Financial Data

(In Thousands, Except Per Share Data)



Year Ended December 31	2014		2013		2012		2011		2010

Statement of Income Data:
Net Operating Revenues	$	18,035,340	$	14,487,118	$	11,682,636	$	10,126,115	$	6,099,896
Operating Income	$	5,241,823	$	3,675,211	$	1,479,797	$	2,113,309	$	523,319
Net Income	$	2,915,487	$	2,197,109	$	570,279	$	1,091,123	$	160,654
Net Income Per Share ⁽¹⁾
Basic	$	5.36	$	4.07	$	1.07	$	2.08	$	0.32
Diluted	$	5.32	$	4.02	$	1.05	$	2.05	$	0.32
Dividends Per Common Share ⁽¹⁾	$	0.585	$	0.375	$	0.34	$	0.32	$	0.31
Average Number of Common Shares ⁽¹⁾
Basic	543,443		540,341		535,155		525,470		501,752
Diluted	548,539		546,227		541,524		532,536		509,000


(1)	All share and per share amounts have been restated to reflect the two-for-one stock split effective March 31, 2014.



At December 31	2014		2013		2012		2011		2010

Balance Sheet Data:
Total Property, Plant and Equipment, Net	$	29,172,644	$	26,148,836	$	23,337,681	$	21,288,824	$	18,680,900
Total Assets	34,762,687		30,574,238		27,336,578		24,838,797		21,624,233
Long-Term Debt and Current Portion of Long-Term Debt	5,909,933		5,913,221		6,312,181		5,009,166		5,223,341
Total Stockholders' Equity	17,712,582		15,418,459		13,284,764		12,640,904		10,231,632

ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

Overview

EOG Resources, Inc., together with its subsidiaries (collectively, EOG), is one of the largest independent (non-integrated) crude oil and natural gas companies in the United States with proved reserves in the United States, Canada, Trinidad, the United Kingdom and China. EOG operates under a consistent business and operational strategy that focuses predominantly on maximizing the rate of return on investment of capital by controlling operating and capital costs and maximizing reserve recoveries. This strategy is intended to enhance the generation of cash flow and earnings from each unit of production on a cost-effective basis, allowing EOG to deliver long-term production growth while maintaining a strong balance sheet. EOG implements its strategy by emphasizing the drilling of internally generated prospects in order to find and develop low-cost reserves. Maintaining the lowest possible operating cost structure that is consistent with prudent and safe operations is also an important goal in the implementation of EOG's strategy.

Net income for 2014 totaled $2,915 million as compared to $2,197 million for 2013. At December 31, 2014, EOG's total estimated net proved reserves were 2,497 million barrels of oil equivalent (MMBoe), an increase of 378 MMBoe from December 31, 2013. During 2014, net proved crude oil and condensate and natural gas liquids (NGL) reserves increased by 329 million barrels (MMBbl), and net proved natural gas reserves increased by 298 billion cubic feet or 50 MMBoe.

Operations

Several important developments have occurred since January 1, 2014.

United States and Canada. EOG's efforts to identify plays with large reserve potential have proven to be successful. EOG continues to drill numerous wells in large acreage plays, which in the aggregate have contributed substantially to, and are expected to continue to contribute substantially to, EOG's crude oil and liquids-rich natural gas production. EOG has placed an emphasis on applying its horizontal drilling and completion expertise to unconventional crude oil and liquids-rich reservoirs. In 2014, EOG remained focused on developing its existing North American crude oil and liquids-rich acreage. In addition, increasing drilling and completion efficiencies and testing methods to improve the recovery factor of oil-in-place remained areas of emphasis in 2014. EOG continues to evaluate certain potential crude oil and liquids-rich natural gas exploration and development prospects. On a volumetric basis, as calculated using the ratio of 1.0 barrel of crude oil and condensate or NGL to 6.0 thousand cubic feet of natural gas, crude oil and condensate and NGL production accounted for approximately 69% of total North American production during 2014 compared to 63% in 2013. This liquids growth primarily reflects increased production from the South Texas Eagle Ford, the North Dakota Bakken and the Permian Basin. In 2014, EOG's net Eagle Ford production averaged 202.7 thousand barrels per day (MBbld) of crude oil and condensate and NGL as compared to 140.9 MBbld in 2013. EOG's major producing areas are in New Mexico, North Dakota, Texas, Utah and Wyoming.

EOG continues to deliver its crude oil to various markets in the United States, including sales points on the Gulf Coast where sales are based upon the Light Louisiana Sweet crude oil index. EOG's crude-by-rail facilities provide EOG the flexibility to direct its crude oil shipments via rail car to the most favorable markets, including the Gulf Coast, Cushing, Oklahoma, and other markets.

During the fourth quarter of 2014, EOG completed the divestiture of all its assets in Manitoba, Canada and the majority of its assets in Alberta, Canada in two separate transactions. Proceeds from the divestitures were approximately 400 million United States dollars, net of customary transaction adjustments. As a result of these transactions, approximately 150 million United States dollars of restricted cash related to future abandonment liabilities was released. The proceeds and cash were utilized for general corporate purposes. Production from the divested assets totaled approximately 7,050 barrels of crude oil per day, 580 barrels of NGL per day and 43.5 million cubic feet of natural gas per day. Net proved reserves divested are estimated to be 7.7 million barrels of oil, 0.8 million barrels of NGL and 78.7 billion cubic feet of natural gas. EOG divested 1.3 million gross acres (1.1 million net acres), 97 percent of which were in Alberta, and approximately 5,800 producing wells of which 5,155 were natural gas. EOG reclassified approximately $383 million of accumulated translation adjustments from Accumulated Other Comprehensive Income to Net Income as the divestitures represented a substantially complete liquidation of EOG's Canadian operations. See Note 17 to the Consolidated Financial Statements.

International. In Trinidad, EOG continued to deliver natural gas under existing supply contracts. Several fields in the South East Coast Consortium (SECC) Block, Modified U(a) Block, Block 4(a) and Modified U(b) Block and the EMZ Area have been developed and are producing natural gas which is sold to the National Gas Company of Trinidad and Tobago and its subsidiary and crude oil and condensate which is sold to the Petroleum Company of Trinidad and Tobago Limited. In the fourth quarter of

2014, EOG initiated a three-net well drilling program in the SECC and Modified U(b) Blocks, completing one well in 2014. In 2015, EOG expects to drill and complete the remaining two net wells in this program.

In the United Kingdom, EOG continues to make progress in the development of its 100% working interest East Irish Sea Conwy crude oil discovery. Modifications to the nearby third-party owned Douglas platform, which will be used to process Conwy production, began in 2013 and continued throughout 2014. First production from the Conwy field is anticipated in the third quarter of 2015. In the fourth quarter of 2014, EOG recognized a $351 million impairment of the Conwy project as a result of crude oil price declines.

In the Sichuan Basin, Sichuan Province, China, in 2014, EOG drilled two wells and completed two wells, one of which was originally drilled in 2013. In 2015, EOG expects to complete the second well that was drilled in 2014 and drill and complete four additional wells.

EOG's activity in Argentina is focused on the Vaca Muerta oil shale formation in the Neuquén Basin in Neuquén Province. In 2014, EOG completed a vertical well in the Cerro Avispa Block that was drilled in late 2013 and determined the well to be a dry hole. Also during 2014, EOG participated in the drilling of two wells in the Bajo del Toro Block, both of which were determined to be dry holes. In the fourth quarter of 2014, EOG recognized an impairment charge of $44 million for the balance of its investment in Argentina. Management is currently evaluating options for its investment.

EOG continues to evaluate other select crude oil and natural gas opportunities outside the United States and Canada primarily by pursuing exploitation opportunities in countries where indigenous crude oil and natural gas reserves have been identified.

Capital Structure

One of management's key strategies is to maintain a strong balance sheet with a consistently below average debt-to-total capitalization ratio as compared to those in EOG's peer group. EOG's debt-to-total capitalization ratio was 25% at December 31, 2014 and 28% at December 31, 2013. As used in this calculation, total capitalization represents the sum of total current and long-term debt and total stockholders' equity. At December 31, 2014, $500 million aggregate principal amount of its 2.95% Senior Notes due 2015 were reclassified as long-term debt based upon EOG's intent and ability to ultimately replace such amount with other long-term debt.

On March 21, 2014, EOG closed its sale of the $500 million aggregate principal amount of its 2.45% Senior Notes due 2020 (Notes). Interest on the Notes is payable semi-annually in arrears on April 1 and October 1 of each year, beginning October 1, 2014. Net proceeds from the Notes offering of approximately $496 million were used for general corporate purposes.

On March 17, 2014, EOG repaid upon maturity the $150 million aggregate principal amount of its 4.75% Subsidiary Debt due 2014 (Subsidiary Debt) and settled the foreign currency swap entered into contemporaneously with the issuance of the Subsidiary Debt for $32 million.

On February 3, 2014, EOG repaid upon maturity the $350 million aggregate principal amount of its Floating Rate Senior Notes due 2014 (Floating Rate Notes). On the same date, EOG settled the interest rate swap entered into contemporaneously with the issuance of the Floating Rate Notes for $0.8 million.

During 2014, EOG funded $8.4 billion in exploration and development and other property, plant and equipment expenditures (excluding asset retirement obligations), repaid at maturity $500 million aggregate principal amount of long-term debt, paid $280 million in dividends to common stockholders and purchased $127 million of treasury stock in connection with stock compensation plans, primarily by utilizing cash provided from its operating activities, net proceeds of $569 million from the sale of assets, net proceds from the sale of the Notes and $99 million of excess tax benefits from stock compensation.

Total anticipated 2015 capital expenditures are estimated to range from approximately $4.9 billion to $5.1 billion, excluding acquisitions. The majority of 2015 expenditures will be focused on United States crude oil drilling activities. EOG has significant flexibility with respect to financing alternatives, including borrowings under its commercial paper program and other uncommitted credit facilities, bank borrowings, borrowings under its $2.0 billion senior unsecured Revolving Credit Agreement and equity and debt offerings.

When it fits EOG's strategy, EOG will make acquisitions that bolster existing drilling programs or offer EOG incremental exploration and/or production opportunities. Management continues to believe EOG has one of the strongest prospect inventories in EOG's history.

Results of Operations

The following review of operations for each of the three years in the period ended December 31, 2014, should be read in conjunction with the consolidated financial statements of EOG and notes thereto beginning on page F-1.

Net Operating Revenues

During 2014, net operating revenues increased $3,548 million, or 24%, to $18,035 million from $14,487 million in 2013. Total wellhead revenues, which are revenues generated from sales of EOG's production of crude oil and condensate, NGL and natural gas, increased $1,837 million, or 17%, to $12,593 million in 2014 from $10,756 million in 2013. Revenues from the sales of crude oil and condensate and NGL in 2014 were approximately 85% of total wellhead revenues compared to 84% in 2013. During 2014, EOG recognized net gains on the mark-to-market of financial commodity derivative contracts of $834 million compared to net losses of $166 million in 2013. Gathering, processing and marketing revenues, which are revenues generated from sales of third-party crude oil and condensate, NGL and natural gas as well as gathering fees associated with gathering third-party natural gas, increased $402 million during 2014, to $4,046 million from $3,644 million in 2013. Gains on asset dispositions, net, totaled $508 million and $198 million in 2014 and 2013, respectively.

Wellhead volume and price statistics for the years ended December 31, 2014, 2013 and 2012 were as follows:



Year Ended December 31	2014		2013		2012

Crude Oil and Condensate Volumes (MBbld) ⁽¹⁾
United States	282.0		212.1		149.3
Canada	5.8		7.0		7.0
Trinidad	1.0		1.2		1.5
Other International ⁽²⁾	0.1		0.1		0.1
Total	288.9		220.4		157.9
Average Crude Oil and Condensate Prices ($/Bbl) ⁽³⁾
United States	$	92.73	$	103.81	$	98.38
Canada	86.71		87.05		86.08
Trinidad	84.63		90.30		92.26
Other International ⁽²⁾	90.03		89.11		89.57
Composite	92.58		103.20		97.77
Natural Gas Liquids Volumes (MBbld) ⁽¹⁾
United States	79.7		64.3		55.1
Canada	0.6		0.9		0.8
Total	80.3		65.2		55.9
Average Natural Gas Liquids Prices ($/Bbl) ⁽³⁾
United States	$	31.84	$	32.46	$	35.41
Canada	40.73		39.45		44.13
Composite	31.91		32.55		35.54
Natural Gas Volumes (MMcfd) ⁽¹⁾
United States	920		908		1,034
Canada	61		76		95
Trinidad	363		355		378
Other International ⁽²⁾	9		8		9
Total	1,353		1,347		1,516
Average Natural Gas Prices ($/Mcf) ⁽³⁾
United States	$	3.93	$	3.32	$	2.51
Canada	4.32		3.08		2.49
Trinidad	3.65		3.68		3.72
Other International ⁽²⁾	5.03		6.45		5.71
Composite	3.88		3.42		2.83
Crude Oil Equivalent Volumes (MBoed) ⁽⁴⁾
United States	515.0		427.9		376.6
Canada	16.7		20.5		23.6
Trinidad	61.5		60.4		64.5
Other International ⁽²⁾	1.5		1.3		1.7
Total	594.7		510.1		466.4

Total MMBoe ⁽⁴⁾	217.1		186.2		170.7


(1)	Thousand barrels per day or million cubic feet per day, as applicable.


(2)	Other International includes EOG's United Kingdom, China and Argentina operations.


(3)	Dollars per barrel or per thousand cubic feet, as applicable. Excludes the impact of financial commodity derivative instruments (see Note 12 to Consolidated Financial Statements).

(4)

Thousand barrels of oil equivalent per day or million barrels of oil equivalent, as applicable; includes crude oil and condensate, NGL and natural gas. Crude oil equivalents are determined using the ratio of 1.0 barrel of crude oil and condensate or NGL to 6.0 thousand cubic feet of natural gas. MMBoe is calculated by multiplying the MBoed amount by the number of days in the period and then dividing that amount by one thousand.

2014 compared to 2013. Wellhead crude oil and condensate revenues in 2014 increased $1,441 million, or 17%, to $9,742 million from $8,301 million in 2013, due to an increase of 68.5 MBbld, or 31%, in wellhead crude oil and condensate deliveries ($2,558 million), partially offset by a lower composite average wellhead crude oil and condensate price ($1,117 million). The increase in deliveries primarily reflects increased production in the Eagle Ford, the North Dakota Bakken and the Permian Basin. EOG's composite wellhead crude oil and condensate price for 2014 decreased 10% to $92.58 per barrel compared to $103.20 per barrel in 2013.

NGL revenues in 2014 increased $160 million, or 21%, to $934 million from $774 million in 2013, due to an increase of 15 MBbld, or 23%, in NGL deliveries ($179 million), partially offset by a lower composite average price ($19 million). The increase in deliveries primarily reflects increased volumes in the Eagle Ford and the Permian Basin. EOG's composite NGL price in 2014 decreased 2% to $31.91 per barrel compared to $32.55 per barrel in 2013.

Wellhead natural gas revenues in 2014 increased $235 million, or 14%, to $1,916 million from $1,681 million in 2013, primarily due to a higher composite wellhead natural gas price. EOG's composite average wellhead natural gas price increased 13% to $3.88 per Mcf in 2014 compared to $3.42 per Mcf in 2013. Natural gas deliveries in 2014 increased less than 1% to 1,353 MMcfd as compared to 1,347 MMcfd in 2013. Increased production in the United States (12 MMcfd) and Trinidad (8 MMcfd) was offset by lower production in Canada (15 MMcfd). In the United States, increased production of associated natural gas in the Eagle Ford and Permian Basin areas was partially offset by lower production in the Upper Gulf Coast and Fort Worth Basin Barnett Shale areas.

During 2014, EOG recognized net gains on the mark-to-market of financial commodity derivative contracts of $834 million, which included net cash received from settlements of crude oil and natural gas financial derivative contracts of $34 million. During 2013, EOG recognized net losses on the mark-to-market of financial commodity derivative contracts of $166 million, which included net cash received from settlements of crude oil and natural gas financial derivative contracts of $116 million.

Gathering, processing and marketing revenues were primarily related to sales of third-party crude oil and natural gas. Purchases and sales of third-party crude oil and natural gas are utilized in order to balance firm transportation capacity with production in certain areas and to utilize excess capacity at EOG-owned facilities. Marketing costs represent the costs of purchasing third-party crude oil and natural gas and the associated transportation costs.

Gathering, processing and marketing revenues less marketing costs in 2014 declined $75 million compared to 2013, primarily due to lower margins on crude oil marketing activities.

2013 compared to 2012. Wellhead crude oil and condensate revenues in 2013 increased $2,642 million, or 47%, to $8,301 million from $5,659 million in 2012, due to an increase of 63 MBbld, or 40%, in wellhead crude oil and condensate deliveries ($2,205 million) and a higher composite average wellhead crude oil and condensate price ($437 million). The increase in deliveries primarily reflects increased production in the Eagle Ford, the North Dakota Bakken and the Permian Basin. EOG's composite average wellhead crude oil and condensate price for 2013 increased 6% to $103.20 per barrel compared to $97.77 per barrel in 2012.

NGL revenues in 2013 increased $47 million, or 6%, to $774 million from $727 million in 2012, due to an increase of 9 MBbld, or 17%, in NGL deliveries ($118 million), partially offset by a lower composite average price ($71 million). The increase in deliveries primarily reflects increased volumes in the Eagle Ford. EOG's composite average NGL price in 2013 decreased 8% to $32.55 per barrel compared to $35.54 per barrel in 2012.

Wellhead natural gas revenues in 2013 increased $109 million, or 7%, to $1,681 million from $1,572 million in 2012. The increase was due to a higher composite average wellhead natural gas price ($288 million), partially offset by decreased natural gas deliveries ($179 million). EOG's composite average wellhead natural gas price increased 21% to $3.42 per Mcf in 2013 compared to $2.83 per Mcf in 2012. Natural gas deliveries in 2013 decreased 169 MMcfd, or 11%, primarily due to decreased production in the United States (126 MMcfd), Trinidad (23 MMcfd) and Canada (19 MMcfd). The decrease in the United States was attributable to asset sales and reduced natural gas drilling activity. The decrease in Trinidad was primarily attributable to higher contractual deliveries in 2012.

During 2013, EOG recognized net losses on the mark-to-market of financial commodity derivative contracts of $166 million, which included net cash received from settlements of commodity derivative contracts of $116 million. During 2012, EOG recognized net gains on the mark-to-market of financial commodity derivative contracts of $394 million, which included net cash received from settlements of commodity derivative contracts of $711 million.

During 2013, gathering, processing and marketing revenues and marketing costs increased, compared to 2012, primarily as a result of increased crude oil marketing activities. Gathering, processing and marketing revenues less marketing costs in 2013 decreased $66 million, compared to 2012, due primarily to lower margins on crude oil marketing activities.

Operating and Other Expenses

2014 compared to 2013. During 2014, operating expenses of $12,794 million were $1,982 million higher than the $10,812 million incurred during 2013. The following table presents the costs per barrel of oil equivalent (Boe) for the years ended December 31, 2014 and 2013:



	2014		2013

Lease and Well	$	6.53	$	5.94
Transportation Costs	4.48		4.58
Depreciation, Depletion and Amortization (DD&A) -
Oil and Gas Properties	17.90		18.79
Other Property, Plant and Equipment	0.53		0.55
General and Administrative (G&A)	1.85		1.87
Net Interest Expense	0.93		1.26
Total ⁽¹⁾	$	32.22	$	32.99


(1)	Total excludes gathering and processing costs, exploration costs, dry hole costs, impairments, marketing costs and taxes other than income.

The primary factors impacting the cost components of per-unit rates of lease and well, transportation costs, DD&A, G&A and net interest expense for 2014 compared to 2013 are set forth below. See "Net Operating Revenues" above for a discussion of production volumes.

Lease and well expenses include expenses for EOG-operated properties, as well as expenses billed to EOG from other operators where EOG is not the operator of a property. Lease and well expenses can be divided