By Christopher Helman
EOG Resources EOG -2.65% reported earnings on Wednesday, and they were terrible. Analysts expected $1.02 per share for the fourth quarter, but EOG did just 81 cents per share. Its net income for the quarter was $445 million versus $580 million a year ago.
The company recorded a non-cash charge to earnings of $536 million, reflecting the reduction in value of oil and gas acreage that at these low prices is no longer economic to drill.
And yet EOG’s results should be received as great news if you’re looking for reasons to be bullish on oil prices. EOG, a shale-drilling pioneer and biggest oil producer in the Lower 48, expects to be producing less oil at the end of the year than it is now.
Why is this a good thing? Because it means that America’s oil and gas drillers are responding quickly to low oil prices by circling the wagons, shutting down drilling rigs, cutting back on fracking and conserving capital.
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