We Are Using Technology to Unlock the Future

EOG Resources’ fundamentals were proven rock-solid again in 2006. By continuing to execute the strategy set forth more than seven years ago, EOG grew production through the drillbit, maintained a low debt level and turned in strong returns as measured by both return on equity and return on capital employed. Utilizing these same cornerstones, in recent years EOG has delivered superior shareholder performance in the volatile natural gas market.

Although EOG’s strategy may sound simple and even repetitious, to our more than 1,500 employees, its implementation is neither tedious nor monotonous. Year after year, it remains constant, creating an innovative and energized EOG workforce, whom we consider to be some of the exploration and production industry’s elite. This clear, simple direction propels our employees to excel at their jobs in the company’s highly effective decentralized work environment.

Advances in technology and techniques are playing an integral role as EOG pursues its goal of being the best exploration and production company in North America, not necessarily the biggest. The development, implementation and refinement of technology have become so integral to EOG’s mindset that we now consider it essential to our future.

The breakthrough that helped the company gain efficiency in drilling, well completion or production optimization last week or last month is probably already being modified. Next week brings with it the opportunity to make greater strides in productivity and cost control as we turn even more of our attention to unlocking the complex North American reservoirs that never before have been challenged with this level of intensity and ingenuity.

EOG continues to drill vertical wells in reservoirs where that technology is applicable. Through the prowess we have developed in vertical drilling and fracturing techniques, EOG has successfully recovered natural gas from tight formations for many years. Now with horizontal drilling, EOG is riding the wave of the future to tap into resource plays locked in low permeability zones such as shales, sandstones and carbonates.

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