WRAPUP 3-Oil & gas profits slide, cost cuts help outperform

* EOG Q3 profit slides, increased production outlook

* Continental, Plains beat est. on lower production costs

* Plains sees lower '10 capex, Continental ups '09 view

* Lower avg realized prices lead to a dip in profits YoY (Adds EOG Resources results, updates share prices)

By Adveith Nair and Arup Roychoudhury

BANGALORE, Nov 5 (Reuters) - Independent oil and gas firms EOG Resources (EOG.N), Petrohawk Energy (HK.N), Plains Exploration (PXP.N) and Continental Resources (CLR.N) all reported sharply lower quarterly profits due to a slump in prices.

The global economic slowdown has reduced demand for natural gas and crude oil, swelling inventories in the third quarter and hammering prices, which cut into the producers' profits.

It is also hammering prices, which cut into the producers' profits. But a dramatic recovery in crude prices in recent months has seen companies gear up for more production.

EOG, the fourth-largest independent U.S. oil and gas company, increased its production outlook after reporting a sharp drop in third-quarter profit. [ID:nN05136688]

Eighth-ranked Petrohawk reported late on Wednesday quarterly earnings below expectations, increased its fourth-quarter production forecast, and said 2010 production would rise 43 percent on a pro forma basis. [ID:nWEN6139]

And lower production costs drove better-than-expected profits at the two smaller companies. Continental reported a 21 percent fall in production expenses, while costs at Plains Exploration & Production fell 9 percent. [ID:nBNG547697] [ID:nBNG501424]

Given the steep drop in commodity prices from a year ago, when oil and gas prices hit record highs, average realized prices at both those companies halved.

Shares of Plains and Petrohawk rose more than 1 percent, while Continental rose by 0.3 percent.

A rebound in oil and gas prices off lows is leading exploration and production companies to lift production plans.

Continental upped its 2009 capital expenditure budget to $415 million from $390 million, saying 2009 production of 13.3 million barrels of oil equivalent would top its prior outlook.

The company forecast 2010 capex of $650 million, which it expects to drive 2010 production growth of 10 percent.