EOG Resources, Inc. (NYSE: EOG) (EOG) announced crude oil discoveries in South Texas, North Dakota and Colorado. Potential reserves were increased on its Bakken/Three Forks and Fort Worth Barnett Shale Combo crude oil and liquids-rich acreage. In addition, natural gas reserve estimates were also raised for its Haynesville/Bossier and British Columbia Horn River Basin acreage.

"These results reflect EOG's concerted effort over the last four years to capture early mover positions in new crude oil and liquids-rich plays amenable to horizontal drilling," said Mark G. Papa, Chairman and Chief Executive Officer.

In South Texas, EOG has accumulated acreage across six counties in the Eagle Ford Play where it has drilled 16 delineation wells over a 120 mile trend. Based on initial drilling and production results, as well as technical and core analysis, the estimated reserve potential on EOG's 505,000 net acre position in the oil window is approximately 900 million barrels of crude oil equivalent (MMboe), net after royalty (NAR). Development of this high rate-of-return crude oil play is underway with the first significant production impact projected for 2011.

Having successfully applied horizontal drilling and completion technology to its legacy position in Canada's Waskada Field since 2007, EOG mapped the area directly south of the border and, in 2009, began leasing the Spearfish Play in the United States. After accumulating 57,000 net acres in Waskada South in North Dakota, EOG drilled its first two wells in the first quarter with positive results. Reserves from the United States Spearfish Play are estimated to be 20 MMboe, NAR. In addition, EOG has an estimated 25 MMboe, NAR reserves in Canada's Waskada Field, of which 22 MMboe were booked as proved reserves at December 31, 2009.

In the DJ Basin of Northern Colorado and Southern Wyoming, EOG has accumulated 400,000 net acres and has completed three successful wells in the Niobrara Play to date. EOG is encouraged that the first well, the Jake 2-01H drilled in Northern Colorado, produced 50 thousand barrels of crude oil in the first 90 days. However, due to the complexity of the fracture system, assessment of long-term production performance and further improvements in completion optimization will be required before EOG moves into development mode and estimates its reserve potential. Geologic mapping of EOG's acreage position indicates there may be potential for multiple core areas.

"The combination of these new assets with the expansion of our existing portfolio positions EOG to become one of the largest domestic onshore lower-48 liquids producers by 2012. We believe the South Texas Eagle Ford horizontal crude oil play will prove to be one of the most significant United States oil discoveries in the past 40 years," said Papa.

Based on successful drilling results and improved reserve recoveries from the North Dakota Bakken Core, Bakken Lite and Three Forks Formations, EOG increased the estimated remaining reserve potential on its acreage from an earlier estimate of approximately 80 MMboe, NAR, to 420 MMboe, of which 80 MMboe proved reserves were booked at December 31, 2009. EOG has 580,000 net acres across the Williston Basin.

Through successful drilling in the Fort Worth Barnett Shale Combo Play, EOG expanded the size of its Core position from 90,000 to 125,000 net acres in Montague and Cooke Counties. The Core area is defined as having the thickest pay and largest amount of resource-in-place of EOG's Combo acreage. Following expansion of its Core position and improvement in individual well recoveries, EOG estimates the reserve potential on its Core acreage is approximately 370 MMboe, NAR, of which 56 MMboe were booked as proved reserves at Dec. 31, 2009.

EOG has reaffirmed its total company 2010 organic production growth target of 13 percent and announced 2011 and 2012 total company absolute production growth targets of 19 percent and 21 percent, respectively. Total company production growth over the next three years will be driven primarily by increases in crude oil, condensate and natural gas liquids with growth projections of 47 percent, 60 percent and 41 percent, respectively.

"EOG's new discoveries set us up for double-digit high rate-of-return organic growth for several years," said Papa. "By 2011, the majority of our projected cash flow will emanate from liquids instead of natural gas."

In the Bossier Formation, EOG reported successful drilling results on its Texas acreage that complements its previously announced strong Louisiana well.

These results, coupled with acreage additions made during 2009, have resulted in an increase in EOG's potential natural gas reserves in the Haynesville/Bossier Play from the prior estimate of 3 to 4 trillion cubic feet (Tcf) to 10 Tcf, NAR. At December 31, 2009, EOG had booked 1 Tcf of proved reserves in this play.

Also based on production and increased reserve recoveries from its 2009 drilling program in the British Columbia Horn River Basin, EOG increased its estimated natural gas reserves from the previously stated 6 Tcf to 9 Tcf, NAR. Proved reserves booked at December 31, 2009 were 850 billion cubic feet in the Horn River Basin.

EOG announced plans to divest $1.0 billion to $1.5 billion of North American non-core natural gas properties during late 2010 or early 2011. These asset sales will assist EOG in funding the 2010 and 2011 capital expenditure programs while maintaining a low debt-to-total capitalization ratio. Production targets through 2012 include the effect of these projected asset sales.

EOG's capital expenditure budget for 2010, including gathering and processing expenditures, is projected to be approximately $5.1 billion. The majority of these expenditures will focus on North American crude oil and natural gas liquids-rich prospects, and EOG will continue to pursue exploration efforts to capture other North American horizontal crude oil plays.

"Our long-term strategic goals remain consistent. EOG will focus on returns, be a low cost operator and maintain a strong balance sheet with low net debt. Our game plan is to continue to organically capture horizontal crude oil and liquids-rich assets which will position us to deliver strong returns to stockholders," said Papa.