Energy companies delivered a gusher of earnings announcements tonight, as EOG Resources (NYSE:EOG) was one of three top-tier oil companies to report results. Its results were probably the best of the bunch, as its earnings beat analysts' estimates and the company raised its crude oil production growth target again this year. Let's take a closer look at the results.

Drilling down into the numbers
EOG Resources reported net income of $1.1 billion, or $2.01 per share, well above last year's third quarter, when the company reported net income of $462.5 million, or $0.85 per share. However, on an adjusted basis, which is what Wall Street looks at, the company reported earnings of $720.6 million, or $1.21 per share. This was not only well ahead of last year's results of $634.3 million, or $1.16 per share, but it also beat analysts' estimates by a penny per share. Finally, the company's discretionary cash flow increased 10% to $2.2 billion, which shows the big disconnect between reported earnings and actual cash flowing out of the oil wells and into EOG Resources' pocket.

The company's strong financial results were fueled by its stronger-than-expected production. EOG Resources' third-quarter production was up 17% from last year's third quarter, with oil production up even higher as it surged 29%. Strong production gains in the Eagle Ford, Bakken, and Delaware Basin led the surge. The highlight, however, continues to be the monster wells EOG Resources drills in the Eagle Ford. One well topped 4,170 barrels of oil per day on an initial test, while dozens of others drilled in the quarter produced more than 1,200 barrels a day during initial tests.

The other item worth noting is that EOG Resources has now confirmed that 90,000 acres of its 140,000-net-acre position in the Delaware Basin in Texas is in a highly overpressured crude oil window of the Wolfcamp formation. The company therefore sees a significant enhancement in the play's reinvestment rate of return, and it now plans to increase its drilling activities in the area.

A look at the outlook
As a result of its strong showing this quarter, EOG Resources now expects to deliver much stronger full-year production than its previous forecast. Total production is now expected to grow by 16.5% this year, up from the 14% growth it previously expected. Fueling that better-than-expected outlook is the company's oil production, which is now expected to grow 31% and is up from the previous outlook of 29% growth.

Investor takeaway
EOG Resources has delivered another really excellent quarter. The company was still able to produce really strong earnings despite weakening oil prices, as its unparalleled position across the top U.S. tight oil plays is delivering incredible results. The company doesn't expect that situation to change, as its strong balance sheet and exceptional operations should continue to produce strong returns even as oil prices are weak.

 

Matt DiLallo has no position in any stocks mentioned. The Motley Fool owns shares of EOG Resources. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.