EOG Resources (EOG, Financial) is primarily a domestic producer of oil and natural gas with operations focused in most of the productive basins in the United States (the Eagle Ford, Permian and Bakken, among others). EOG is widely regarded as one of the best operators in the oil and gas business. Part of the company’s “secret sauce” is a devout commitment to return on invested capital. Not surprisingly, EOG has outperformed its larger peers in this all important category over time and we expect more of the same in the years to come. With oil and gas prices well below our view of the marginal cost of supply and exploration and production (E&P) stocks generally out of favor, we were able to establish a position in EOG in the low-to-mid-$70s at a healthy discount to intrinsic value.
From Wallace Weitz (Trades, Portfolio)'s 3Q 2015 commentary.
