(Reuters) - EOG Resources Inc (EOG.N) posted a smaller-than-expected rise in second-quarter profit on Thursday, as an increase in production failed to offset a steep drop in prices for crude, gas and natural gas liquids and higher expenses.
A shale boom has made the United States the world’s largest oil producer, overtaking Russia and Saudi Arabia, but an oversupply and a lack of new oil and gas pipelines in the region have pushed down prices.
EOG, which also operates in Trinidad and China, said average natural gas liquids prices tumbled 44%, while gas prices fell 19%. Average prices for crude oil and condensate prices also dipped 10%.
This countered gains from a 16% jump in total production to 812,800 barrels of oil equivalent per day (boepd), which was also above analysts’ estimate of 804,746 boepd.
Crude oil volumes grew 18%, exceeding the target range, while natural gas liquids production rose 16% and natural gas volumes increased 10%.
Expenses rose 9%, primarily due to marketing, depreciation, amortization and administrative expenses.
Cash operating costs declined 7% in the second quarter on a per-unit basis, helped by lower transportation, lease and well costs.
The Houston-based company said net income attributable to shareholders rose to $847.8 million, or $1.46 per share, in the June quarter, from $696.7 million, or $1.20 per share, a year earlier.
The income included gains from derivate contracts and asset sales.
Excluding items, EOG earned $1.31 per share, 1 cent below analysts’ average estimate, according IBES data from Refinitiv.
Revenue rose 10.8% to $4.7 billion, beating estimates of $4.43 billion.
Reporting by Arunima Kumar in Bengaluru; Editing by Shinjini Ganguli and Sriraj Kalluvila