EOG Resources Inc.: One Proud And Well-Paid Papa

April 18, 2007
Independent oil and gas company separates itself from scandal, prospers in North America.

Two years before the lid blew off the Enron scandal, Enron Oil & Gas Co. decided to change its name to EOG Resources Inc. -- and for good reason. Who would want to have Enron in their name? Especially amid all the rumors of Enron's irregular accounting.

Also in 1999, the company declared its independence from Enron Corp. and elected a new chairman and CEO, Mark G. Papa.

Since its independence, the Houston-based oil and natural gas company has consistently grown revenues. And in 2006 it increased overall organic year-over-year production by 9% and increased natural gas production in the U.S. by 14%.

"In 2006, EOG remained true to its strategy by focusing on organic production growth, managing costs and maintaining a strong balance sheet," said Papa in a Feb. 1 statement announcing fourth quarter 2006 results. "For the year, we achieved 26% return on equity and 25% return on capital employed."

According to the company, 86% of EOG's production was natural gas and 14% was crude oil and natural gas liquids. Of this production, 79% came from the U.S. and Canada. Specifically, the company produced 1,561 MMcfed (million cubic feet equivalent per day) in 2006, which is up from 1,433 MMcfed in 2005.

In 2006 the company's natural gas reserves were 6,095 billion cubic feet and estimated net proved crude oil, condensate and natural gas liquids reserves were 118 million barrels. Approximately 60% of EOG's reserves on a natural gas equivalent basis were located in the United States, 20% in Canada, 20% in Trinidad and less than 1% in the United Kingdom North Sea.

EOG Resources Inc.
At A Glance


EOG Resources Inc.
Houston, Texas
Primary Industry: Petroleum & Coal Products
Number of Employees: 1,500
2005 In Review
Revenue: $3.6 billion
Profit Margin: 34.79%
Sales Turnover: 0.47
Inventory Turnover: 7.23
Revenue Growth: 59.39%
Return On Assets: 21.72%
Return On Equity: 42.76%

In addition to strong results in natural gas drilling, EOG has completed five horizontal oil wells to date in the North Dakota Bakken Formation. The most recent was completed in mid-January and is producing over 1,100 barrels of oil per day. EOG plans to increase drilling activity from one to three rigs in early 2007.

"2006 represented a break-out year for EOG; we not only gained a much better understanding of the application of horizontal drilling to resource plays, we also built up a deep drilling inventory," said Papa. "We exited 2006 on track with our operational goals and with strong momentum in the organization."

For his part of the success, Papa was compensated nicely in 2006. According to the company's proxy statement to the SEC dated March 29, 2007, his base salary is $940,000 annually. His stock awards totaled nearly $2.2 million, the open stock appreciation rights awards were $3.2 million, the non-equity incentive plan compensation was $1.14 million and all other compensation was just over $532,000. The grand total for Papa: $7.96 million. Nice work if you can get it.

Interested in information related to this topic? Subscribe to our weekly Leadership Insights From The IW 50 eNewsletter.

Popular Sponsored Recommendations

Gain a competitive edge with real-world lessons on private 5G networks

Nov. 16, 2023
The use of private networks in manufacturing applications is rapidly growing. In this paper, we present valuable insights and lessons learned from the field with the goal of enhancing...

You Cannot Stay Competitive by Bolting New Technologies to a Legacy ERP

Oct. 20, 2023
Read this white paper to understand the benefits of shifting to a next-generation ERP system as part of a DOP.

Food and Beverage 2024 Trends and Outlook for North America

Oct. 29, 2023
Ready to hear what 200 of your peers said are the top challenges and opportunities in 2024? Don’t fall behind. Uncover actionable insights to better prepare for 2024 in this whitepaper...

How to Build Zero-Cost On-Site Solar and Storage Projects

Nov. 25, 2023
The Inflation Reduction Act offers tax credits, incentives, and financing that enable no-cost projects. In Enel’s eBook, discover the critical role that incentives play in your...

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!