I. 2009 Production Growth Targets and Capital Expenditure Budget

Due to the current uncertainty in hydrocarbon markets, EOG Resources, Inc. (EOG) plans to update its 2009 production growth targets and provide its estimated 2009 capital expenditure budget in its fourth quarter and full year 2008 results press release to be issued on Wednesday, February 4, 2009. It is expected that EOG's 2009 capital expenditures will approximate its cash flow during the year, with the goal of ending the year with approximately the same net debt as year-end 2008 ("net debt" is a non-GAAP term, which is equal to current and long-term debt (GAAP) less cash (GAAP)).

II. Price Risk Management

With the objective of enhancing the certainty of future revenues, from time to time EOG enters into New York Mercantile Exchange (NYMEX) related financial collar, price swap and basis swap contracts. EOG accounts for these financial commodity derivative contracts using the mark-to-market accounting method. In addition to financial transactions, EOG is a party to various physical commodity contracts for the sale of hydrocarbons that cover varying periods of time and have varying pricing provisions. The financial impact of these physical commodity contracts is included in revenues at the time of settlement, which in turn affects average realized hydrocarbon prices.

For the fourth quarter of 2008, EOG anticipates a net gain of $528.8 million from its natural gas and crude oil financial collar, price swap and basis swap contracts, comprised of $493.3 million from its natural gas financial collar, price swap and basis swap contracts and $35.5 million from its crude oil financial price swap contracts. During the fourth quarter of 2008, net cash inflow related to settled natural gas and crude oil financial price swap contracts was $100.7 million, comprised of $84.2 million related to settled natural gas financial price swap contracts and $16.5 million related to crude oil financial price swap contracts.

III. Natural Gas Financial Collar, Price Swap and Basis Swap Contracts

Since EOG filed its Quarterly Report on Form 10-Q on November 3, 2008 (Third Quarter 2008 Form 10-Q), EOG has not entered into any natural gas financial collar or price swap contracts. Presented below is a comprehensive summary of EOG's natural gas financial collar and price swap contracts as of January 8, 2009, with notional volumes expressed in million British thermal units per day (MMBtud) and prices expressed in dollars per million British thermal units ($/MMBtu).

The average floor price of EOG's outstanding natural gas financial collar contracts is $10.00 per million British thermal units (MMBtu) and the average ceiling price is $12.32 per MMBtu.

Natural Gas Financial Collar Contracts

                                 Floor Price               Ceiling Price
                                          Weighted                   Weighted
                                           Average                    Average
                   Volume   Floor Range     Price     Ceiling Range    Price
                  (MMBtud)   ($/MMBtu)    ($/MMBtu)     ($/MMBtu)    ($/MMBtu)
        2010
        January     40,000 $11.44 - 11.47    $11.45   $13.79 - 13.90    $13.85
        February    40,000  11.38 - 11.41     11.40    13.75 - 13.85     13.80
        March       40,000  11.13 - 11.15     11.14    13.50 - 13.60     13.55
        April       40,000   9.40 -  9.45      9.42    11.55 - 11.65     11.60
        May         40,000   9.24 -  9.29      9.26    11.41 - 11.55     11.48
        June        40,000   9.31 -  9.36      9.34    11.49 - 11.60     11.55
        July        40,000   9.40 -  9.45      9.43    11.60 - 11.70     11.65
        August      40,000   9.47 -  9.52      9.50    11.68 - 11.80     11.74
        September   40,000   9.50 -  9.55      9.52    11.73 - 11.85     11.79
        October     40,000   9.58 -  9.63      9.61    11.83 - 11.95     11.89
        November    40,000   9.88 -  9.93      9.91    12.30 - 12.40     12.35
        December    40,000   9.87 - 10.30     10.09    12.55 - 12.71     12.63

The average price of EOG's natural gas financial price swap contracts for 2009 is $9.71 per MMBtu and for 2010 is $9.87 per MMBtu.

                         Financial Price Swap Contracts
                                   Natural Gas
                                                 Weighted
                                       Volume  Average Price
                                      (MMBtud)   ($/MMBtu)
                     2009
                     January (closed)  585,000        $10.76
                     February          585,000         10.74
                     March             585,000         10.50
                     April             610,000          9.24
                     May               610,000          9.16
                     June              610,000          9.21
                     July              610,000          9.29
                     August            610,000          9.34
                     September         610,000          9.36
                     October           610,000          9.42
                     November          610,000          9.66
                     December          610,000          9.98

                     2010
                     January            20,000        $11.20
                     February           20,000         11.15
                     March              20,000         10.89
                     April              20,000          9.29
                     May                20,000          9.13
                     June               20,000          9.21
                     July               20,000          9.31
                     August             20,000          9.38
                     September          20,000          9.40
                     October            20,000          9.49
                     November           20,000          9.80
                     December           20,000         10.21

Prices received by EOG for its natural gas production generally vary from NYMEX prices due to adjustments for delivery location (basis) and other factors. Since filing its Third Quarter 2008 Form 10-Q, EOG has entered into additional natural gas financial basis swap contracts covering a portion of its production in the Rocky Mountain area in order to fix the differential between prices in the Rocky Mountain area and NYMEX Henry Hub prices. Presented below is a comprehensive summary of EOG's natural gas financial basis swap contracts outstanding as of January 8, 2009. The weighted average price differential represents the amount of reduction to NYMEX gas prices per MMBtu for the notional volumes covered by the basis swap.

                         Financial Basis Swap Contracts
                                   Natural Gas
                                                Weighted
                                              Average Price
                                      Volume  Differential
                                     (MMBtud)   ($/MMBtu)
                      2009
                      Second Quarter   65,000       $(2.54)
                      Third Quarter    65,000        (2.60)
                      Fourth Quarter   65,000        (3.03)

                      2010
                      First Quarter    65,000       $(1.72)
                      Second Quarter   65,000        (2.56)
                      Third Quarter    65,000        (3.17)
                      Fourth Quarter   65,000        (3.73)

                      2011
                      First Quarter    65,000       $(1.89)

IV. Forward-Looking Statements

This document includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts, including, among others, statements regarding EOG's future financial position, business strategy, budgets, reserve information, projected levels of production, projected costs and plans and objectives of management for future operations, are forward-looking statements. EOG typically uses words such as "expect," "anticipate," "estimate," "strategy," "intend," "plan," "target" and "believe" or the negative of those terms or other variations or comparable terminology to identify its forward-looking statements. In particular, statements, express or implied, concerning future operating results, the ability to replace or increase reserves or to increase production, or the ability to generate income or cash flows are forward-looking statements. Forward-looking statements are not guarantees of performance. Although EOG believes the expectations reflected in its forward-looking statements are based on reasonable assumptions, no assurance can be given that these expectations will be achieved. Important factors that could cause actual results to differ materially from the expectations reflected in EOG's forward-looking statements include, among others:

º the timing and extent of changes in commodity prices for crude oil, natural gas and related products, foreign currency exchange rates, interest rates and financial market conditions;
º the extent and effect of any hedging activities engaged in by EOG;
º the timing and impact of liquefied natural gas imports;
º changes in demand or prices for ammonia or methanol;
º the extent of EOG's success in discovering, developing, marketing and producing reserves and in acquiring oil and gas properties;
º the accuracy of reserve estimates, which by their nature involve the exercise of professional judgment and may therefore be imprecise;
º the ability to achieve production levels from existing and future oil and gas development projects due to operating hazards, drilling risks and the inherent uncertainties in predicting oil and gas reservoir performance;
º the availability and cost of drilling rigs, experienced drilling crews, tubular steel and other materials, equipment and services used in drilling and well completions;
º the availability, terms and timing of mineral licenses and leases and governmental and other permits and rights of way;
º access to surface locations for drilling and production facilities;
º the availability and capacity of gathering, processing and pipeline transportation facilities;
º the availability of compression uplift capacity;
º the extent to which EOG can economically develop its Barnett Shale acreage outside of Johnson County, Texas;
º whether EOG is successful in its efforts to more densely develop its acreage in the Barnett Shale and other production areas;
º political developments around the world and the enactment of new government policies, legislation and regulations, including environmental regulations;
º acts of war and terrorism and responses to these acts; and
º weather, including weather-related delays in the installation of gathering and production facilities.

In light of these risks, uncertainties and assumptions, the events anticipated by EOG's forward-looking statements may not occur. EOG's forward-looking statements speak only as of the date made and EOG undertakes no obligation to update or revise its forward-looking statements, whether as a result of new information, future events or otherwise.