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). Shares of EOG Resources fell largely in sympathy with oil prices during the quarter. While EOG continues to set the standard for cost and capital efficiency among independent domestic oil producers, lower prices continue to weigh on returns and cash generation. The global crude market still has a ways to go before supply and demand come into balance, but when it does, we see oil prices significantly higher than present levels. EOG is likely among the best-positioned producers in a rising-price environment given its large inventory of drilled uncompleted wells (DUCs), high-return drilling opportunities and healthy balance sheet.
From Weitz Funds' Balanced Fund fourth quarter 2015 commentary.
