ITEM 1. Business

General

EOG Resources, Inc., a Delaware corporation organized in 1985, together with its subsidiaries (collectively, EOG), explores for, develops, produces and markets crude oil and natural gas primarily in major producing basins in the United States of America (United States or U.S.), The Republic of Trinidad and Tobago (Trinidad), the United Kingdom (U.K.), The People's Republic of China (China), Canada and, from time to time, select other international areas. EOG's principal producing areas are further described in "Exploration and Production" below. EOG's Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to those reports are made available, free of charge, through EOG's website, as soon as reasonably practicable after such reports have been filed with the United States Securities and Exchange Commission (SEC). EOG's website address is www.eogresources.com. Information on our website is not incorporated by reference into, and does not constitute a part of, this report.

At December 31, 2015, EOG's total estimated net proved reserves were 2,118 million barrels of oil equivalent (MMBoe), of which 1,098 million barrels (MMBbl) were crude oil and condensate reserves, 383 MMBbl were natural gas liquids (NGLs) reserves and 3,825 billion cubic feet, or 637 MMBoe, were natural gas reserves (see Supplemental Information to Consolidated Financial Statements). At such date, approximately 97% of EOG's net proved reserves, on a crude oil equivalent basis, were located in the United States and 3% in Trinidad. Crude oil equivalent volumes are determined using a ratio of 1.0 barrel of crude oil and condensate or NGLs to 6.0 thousand cubic feet (Mcf) of natural gas.

As of December 31, 2015, EOG employed approximately 2,760 persons, including foreign national employees.

EOG's business strategy is to maximize the rate of return on investment of capital by controlling operating and capital costs and maximizing reserve recoveries. This strategy is intended to enhance the generation of cash flow and earnings from each unit of production on a cost-effective basis, allowing EOG to deliver long-term production growth while maintaining a strong balance sheet. EOG is focused on cost-effective utilization of advanced technology associated with three-dimensional seismic and microseismic data, the development of reservoir simulation models, the use of improved drill bits, completion technologies for horizontal drilling and formation evaluation. These advanced technologies are used, as appropriate, throughout EOG to reduce the risks associated with all aspects of oil and gas exploration, development and exploitation. EOG implements its strategy by emphasizing the drilling of internally generated prospects in order to find and develop low-cost reserves. Maintaining the lowest possible operating cost structure that is consistent with prudent and safe operations is also an important goal in the implementation of EOG's strategy.

With respect to information on EOG's working interest in wells or acreage, "net" oil and gas wells or acreage are determined by multiplying "gross" oil and gas wells or acreage by EOG's working interest in the wells or acreage.

Business Segments

EOG's operations are all crude oil and natural gas exploration and production related. For financial information about our reportable segments (including financial information by segment geographic area), see Note 11 to Consolidated Financial Statements. For information regarding the risks associated with EOG's foreign operations, see ITEM 1A, Risk Factors.

Exploration and Production

United States Operations

EOG's operations are focused in most of the productive basins in the United States with a current focus on crude oil and, to a lesser extent, liquids-rich natural gas plays.

At December 31, 2015, on a crude oil equivalent basis, 53% of EOG's net proved reserves in the United States were crude oil and condensate, 19% were NGLs and 28% were natural gas. The majority of these reserves are in long-lived fields with well-established production characteristics. EOG believes that opportunities exist to increase production through continued development in and around many of these fields and through the utilization of applicable technologies. EOG also maintains an active exploration program designed to extend fields and add new trends and resource plays to its already broad portfolio. The following is a summary of significant developments during 2015 and certain 2016 plans for EOG's United States operations.

The Eagle Ford continues to prove itself as a world-class oil field having produced in excess of 1.5 billion barrels of crude oil and condensate. With approximately 549,000 of its 608,000 total net acres in the prolific oil window, EOG continues to be the largest crude oil producer in the Eagle Ford with cumulative gross production in excess of 285 MMBbl of oil. EOG completed 329 net wells in 2015 and net production averaged approximately 209 thousand barrels per day (MBbld) of crude oil and condensate and NGLs, an increase of 3% over 2014. The combination of self-sourced sand, dedicated frac crews and other services along with continuous well optimization programs have made this play the centerpiece of EOG's portfolio. In 2016, EOG expects to complete approximately 150 net wells, continue to improve well productivity and reduce drilling and completion costs as well as operating expenses.

In the Permian Basin, EOG completed 74 net wells primarily in the Leonard, Wolfcamp, and Second Bone Spring Sand plays during 2015, and evaluated multiple development concepts across these liquids-rich plays. In the Delaware Basin Wolfcamp Shale play, where it has approximately 168,000 net acres, EOG tested 500-foot well spacing in both the crude oil and combo portions of this play with positive results. The success of the 2015 Delaware Basin Wolfcamp program was due to refined targeting, high-density stimulations and cost reductions, which will make the play a focal point of EOG's 2016 Permian Basin program. In the Second Bone Spring Sand play, where it holds approximately 111,000 net acres, EOG tested multiple target zones and well spacing as close as 550 feet. With over 1,000 estimated remaining net drilling locations, this high-return oil play is another integral part of EOG's Permian Basin portfolio. In the Leonard Shale play, EOG has approximately 93,000 net acres and continued development at 300- to 500- foot well spacing. Additionally, EOG has approximately 71,000 net acres in the Wolfcamp Shale within the Midland Basin. Net production in the Permian Basin for 2015 averaged approximately 43 MBbld of crude oil and condensate and NGLs, an increase of 30% over 2014. Net natural gas production increased 27% to approximately 108 million cubic feet per day (MMcfd). EOG holds approximately 415,000 net acres throughout the Permian Basin. In 2016, activity will be focused primarily in the Delaware Basin Wolfcamp, Second Bone Spring Sand and Leonard plays by completing approximately 75 net wells.

During 2015, the Rocky Mountain area experienced reduced activity levels due to lower commodity prices but yielded consistent results. In 2015, EOG continued infill drilling on its crude oil acreage in the Williston Basin Bakken core, completing 25 net wells. The 2015 development program also included completing 10 net Codell formation wells in the DJ Basin and 13 net wells in the Turner, Parkman and Niobrara formations in the Powder River Basin. Infrastructure improvements allowed for a substantial reduction in lease operating expenses and a much higher natural gas recovery. Improved efficiencies, lower service company costs both for drilling and completions and lower lease operating expenses resulted in more profitable wells in this challenging price environment. Net production for the entire Rocky Mountain area for 2015 averaged approximately 65 MBbld of crude oil and condensate and NGLs. In 2016, EOG plans to complete approximately 35 net wells, primarily in the Powder River and Williston Basins. EOG holds approximately 985,000 net acres in the Rocky Mountain area.

In the Upper Gulf Coast region, EOG completed six net wells during 2015 and net production averaged approximately 54 MMcfd of natural gas and approximately 4 MBbld of crude oil and condensate and NGLs. In 2016, EOG will continue to defer dry gas drilling in the Haynesville Shale, while working to maintain base production and continue its liquids exploration program. EOG holds approximately 529,000 net acres in the Upper Gulf Coast region and plans to complete approximately five net wells in 2016.

In the Mid-Continent area, EOG continued its successful horizontal exploitation of the Pennsylvanian sandstones in the Anadarko Basin, completing five net wells in 2015. During 2015, EOG's net production averaged approximately 6 MBbld of crude oil and condensate and NGLs and approximately 29 MMcfd of natural gas. EOG holds approximately 250,000 net acres throughout the Mid-Continent area and expects to continue its exploration program in 2016.

During 2015, EOG performed limited development of its liquids-rich Barnett Shale Combo play in the Fort Worth Basin, completing six net wells. In 2015, net production in the Barnett Shale averaged approximately 27 MBbld of crude oil and condensate and NGLs and approximately 272 MMcfd of natural gas. For 2016, EOG will focus on maintaining base production. EOG currently holds approximately 351,000 net acres in the Barnett Shale.

In the South Texas area, total net production during 2015 averaged approximately 6 MBbld of crude oil and condensate and NGLs and approximately 66 MMcfd of natural gas. EOG completed seven net wells with activity focused in San Patricio, Kleberg and Jim Wells counties. In 2016, EOG expects to complete approximately five net wells in the Frio and Vicksburg trends, where it holds approximately 272,000 net acres. Exploration efforts will continue in this region, primarily focusing on liquids-rich hydrocarbons.

Net production in the Marcellus Shale for 2015 averaged approximately 24 MMcfd of natural gas. EOG currently holds approximately 200,000 net acres with Marcellus and Utica Shale potential.

EOG has agreements with certain crude oil refining companies to deliver an average of 58 MBbld and 9 MBbld of crude oil in 2016 and 2017, respectively, to certain refineries. EOG intends to fulfill these crude oil delivery obligations with its Eagle Ford production.

At December 31, 2015, EOG held approximately 2.0 million net undeveloped acres in the United States.

During 2015, EOG continued the expansion of its gathering and processing activities in the Eagle Ford in South Texas, the Bakken and Three Forks plays in North Dakota and the Permian Basin in West Texas and New Mexico. At December 31, 2015, EOG-owned natural gas processing capacity in the Eagle Ford and Barnett Shale totaled 305 MMcfd and 180 MMcfd, respectively.

Also during 2015, EOG continued to use its crude oil loading facility near Stanley, North Dakota, to transport its Williston Basin crude oil production. During 2015, EOG loaded 81 unit trains (each unit train typically consists of 100 cars and has a total aggregate capacity of approximately 70,000 barrels of crude oil) with crude oil for transport to St. James, Louisiana and Stroud, Oklahoma. EOG has net unloading capacity of 100 MBbld and 90 MBbld at St. James and Stroud, respectively. During 2015, a total of 18 crude oil unit trains carrying EOG production were received at the crude oil unloading facility in St. James, Louisiana, which provides access to one of the key markets in the U.S., where sales are based upon the Light Louisiana Sweet (LLS) crude oil index. In addition, EOG utilized its Stroud, Oklahoma, crude oil unloading facility and pipeline to transport 63 unit trainloads of crude oil to the Cushing, Oklahoma trading hub. EOG believes that its marketing and related logistics processes, including crude-by-rail facilities, provide a competitive advantage, giving EOG the flexibility to direct its crude oil shipments via rail car to the most favorable markets. EOG expects to utilize its crude-by-rail network when it is advantageous.

EOG operates its own sand mine and sand processing plants in Hood County, Texas, to reduce costs and to help fulfill EOG's sand needs for its well completion operations in Texas. Additionally, EOG owns a second Hood County sand processing plant, which processes raw sand from Wisconsin, and sand sourced from the north Texas area, as needed.

In 2015, EOG continued to process sand from its Chippewa Falls, Wisconsin, sand plant on an as-needed basis.

EOG placed in service an additional sand unloading facility in Loving, New Mexico, during the first quarter of 2015 to support well completions in the Delaware Basin.

During 2015, EOG shipped the equivalent of 173 sand unit trains from various sources, to support well completions in the Eagle Ford and other plays.

Operations Outside the United States

EOG has operations offshore Trinidad, in the U.K. East Irish Sea, in the China Sichuan Basin and in Canada and is evaluating additional exploration, development and exploitation opportunities in these and other select international areas.

Trinidad. EOG, through several of its subsidiaries, including EOG Resources Trinidad Limited,

• holds an 80% working interest in the exploration and production license covering the South East Coast Consortium (SECC) Block offshore Trinidad, except in the Deep Ibis area in which EOG's working interest decreased as a result of a third-party farm-out agreement;

• holds an 80% working interest in the exploration and production license covering the Pelican Field and its related facilities;

• holds a 50% working interest in the exploration and production licenses covering the Sercan Area (formerly known as the EMZ Area) offshore Trinidad;

• holds a 100% working interest in a production sharing contract with the Government of Trinidad and Tobago for each of the Modified U(a) Block, Modified U(b) Block and Block 4(a);

• owns a 12% equity interest in an anhydrous ammonia plant in Point Lisas, Trinidad, that is owned and operated by Caribbean Nitrogen Company Limited; and

• owns a 10% equity interest in an anhydrous ammonia plant in Point Lisas, Trinidad, that is owned and operated by Nitrogen (2000) Unlimited.

Several fields in the SECC Block, Modified U(a) Block, Modified U(b) Block, Block 4(a) and the Sercan Area have been developed and are producing natural gas and crude oil and condensate. Natural gas from EOG's Trinidad operations currently is sold under various contracts with the National Gas Company of Trinidad and Tobago Limited and its subsidiary (NGC). Crude oil and condensate from EOG's Trinidad operations currently is sold to the Petroleum Company of Trinidad and Tobago Limited (Petrotrin). In 2015, EOG's net production from Trinidad averaged approximately 349 MMcfd of natural gas and approximately 0.9 MBbld of crude oil and condensate.

EOG completed three net wells in 2015, finishing its SECC Block and Modified U(b) Block drilling program which was initiated in 2014.

In 2016, it is anticipated that EOG's Trinidad operations will supply approximately 430 MMcfd (290 MMcfd, net) of natural gas from its existing proved reserves. All of the natural gas produced from EOG's Trinidad operations in 2016 is expected to be supplied to NGC under various contracts with NGC. All crude oil and condensate produced from EOG's Trinidad operations in 2016 is expected to be supplied to Petrotrin under various contracts with Petrotrin. In 2016, EOG expects to complete one net well and install infrastructure in the Sercan Area.

At December 31, 2015, EOG held approximately 40,000 net undeveloped acres in Trinidad.

United Kingdom. EOG's subsidiary, EOG Resources United Kingdom Limited (EOGUK), owns a 25% non-operating working interest in a portion of Block 49/16a, located in the Southern Gas Basin of the North Sea. During 2015, a limited amount of production continued from the Valkyrie field in this block. Production ceased at the end of the third quarter of 2015, and decommissioning is planned for the fourth quarter of 2016.

In 2007, EOGUK was awarded a license for two blocks in the East Irish Sea – Blocks 110/7b and 110/12a. In 2009, EOGUK drilled a successful exploratory well in the East Irish Sea Block 110/12a. The well, in which EOGUK has a 100% working interest, was an oil discovery and was designated the Conwy field. During 2012 and 2013, the Conwy production platform and pipelines were installed. Modifications to the nearby third-party owned Douglas platform, which will be used to process Conwy production, began in 2013 and continued throughout 2014 and 2015. First production from the Conwy field is anticipated in March 2016.

In 2015, production averaged less than 0.1 MMcfd of natural gas, net, in the United Kingdom.

At December 31, 2015, EOG held approximately 7,000 net undeveloped acres in the United Kingdom.

China. In July 2008, EOG acquired rights from ConocoPhillips in a Petroleum Contract covering the Chuan Zhong Block exploration area in the Sichuan Basin, Sichuan Province, China. In October 2008, EOG obtained the rights to shallower zones on the acquired acreage. In 2015, EOG drilled four wells and completed three wells, one of which was drilled in 2014, in the Sichuan Basin, Sichuan Province, China. The successful completions extended the Shaximiao development in the Chuan Zhong Block and provides additional opportunities in the future.

In 2015, production averaged approximately 14 MMcfd of natural gas, net, in China.

Canada. During 2014, EOG sold all of its assets in Manitoba and the majority of its assets in Alberta in two separate transactions that closed on or about December 1, 2014. EOG divested 1.3 million gross acres (1.1 million net), 97 percent of which were in Alberta. Of the approximate 5,800 net producing wells sold, 5,155 were natural gas. In 2015, net production averaged approximately 15 MMcfd of natural gas and less than 0.1 MBbld of NGLs.

Argentina. EOG's activity in Argentina is focused on the Vaca Muerta oil shale formation in the Neuquén Province. Management is currently evaluating options for its investment.

EOG continues to evaluate other select crude oil and natural gas opportunities outside the United States, primarily by pursuing exploitation opportunities in countries where indigenous crude oil and natural gas reserves have been identified.

Marketing

In 2015, EOG's wellhead crude oil and condensate production was sold into local markets or transported either by pipeline, truck or EOG's crude-by-rail assets to downstream markets. In each case, the price received was based on market prices at that specific sales point or based on the price index applicable for that location. Major U.S. sales areas included the Midwest, the Permian Basin, Cushing, Oklahoma, St. James, Louisiana, and other points along the U.S. Gulf Coast. In 2016, the pricing mechanism for such production is expected to remain the same.

In 2015, EOG processed certain of its natural gas production, either at EOG-owned facilities or at third-party facilities, extracting NGLs. NGLs were sold at prevailing market prices. In 2016, the pricing mechanism for such production is expected to remain the same.

In 2015, EOG's United States and Canada wellhead natural gas production was sold into local markets or transported by pipeline to downstream markets. Pricing was based on the spot market at the ultimate sales point. In 2016, the pricing mechanism for such production is expected to remain the same.

In 2015, a large majority of the wellhead natural gas volumes from Trinidad were sold under contracts with prices which were either wholly or partially dependent on Caribbean ammonia index prices and/or methanol prices. The remaining volumes were sold under a contract at prices partially dependent on United States Henry Hub market prices. The pricing mechanisms for these contracts in Trinidad are expected to remain the same in 2016.

In 2015, all wellhead natural gas volumes from the U.K. were sold on the spot market. In December 2014, EOG put in place arrangements to market and sell its U.K. wellhead crude oil production from the Conwy field, which is anticipated to begin in March 2016. The crude oil sales will be based on a Dated Brent price or other market prices, as applicable.

In 2015, all wellhead natural gas volumes from China were sold at regulated prices based on the purchaser's pipeline sales volumes to various local market segments. The pricing mechanism for production in China is expected to remain the same in 2016.

In certain instances, EOG purchases and sells third-party crude oil and natural gas in order to balance firm transportation capacity with production in certain areas and to utilize excess capacity at EOG-owned facilities.

During 2015, two purchasers each accounted for more than 10% of EOG's total wellhead crude oil and condensate, NGL and natural gas revenues and gathering, processing and marketing revenues. Both purchasers are in the crude oil refining industry. EOG does not believe that the loss of any single purchaser would have a material adverse effect on its financial condition or results of operations.

Wellhead Volumes and Prices

The following table sets forth certain information regarding EOG's wellhead volumes of, and average prices for, crude oil and condensate, NGLs and natural gas. The table also presents crude oil equivalent volumes which are determined using a ratio of 1.0 barrel of crude oil and condensate or NGLs to 6.0 Mcf of natural gas for each of the years ended December 31, 2015, 2014 and 2013.

Year Ended December 31	2015	2014	2013

Crude Oil and Condensate Volumes (MBbld) ⁽¹⁾
United States:
Eagle Ford	181.7	178.0	122.3
Other	101.6	104.0	89.8
United States	283.3	282.0	212.1
Trinidad	0.9	1.0	1.2
Other International ⁽²⁾	0.2	5.9	7.1
Total	284.4	288.9	220.4
Natural Gas Liquids Volumes (MBbld) ⁽¹⁾
United States:
Eagle Ford	27.2	24.7	18.6
Other	49.7	55.0	45.7
United States	76.9	79.7	64.3
Other International ⁽²⁾	0.1	0.6	0.9
Total	77.0	80.3	65.2
Natural Gas Volumes (MMcfd) ⁽¹⁾
United States:
Eagle Ford	179	164	115
Other	707	756	793
United States	886	920	908
Trinidad	349	363	355
Other International ⁽²⁾	30	70	84
Total	1,265	1,353	1,347
Crude Oil Equivalent Volumes (MBoed) ⁽³⁾
United States:
Eagle Ford	238.8	230.0	160.2
Other	269.1	285.0	267.7
United States	507.9	515.0	427.9
Trinidad	59.1	61.5	60.4
Other International ⁽²⁾	5.2	18.2	21.8
Total	572.2	594.7	510.1

Total MMBoe ⁽³⁾	208.9	217.1	186.2

Year Ended December 31	2015		2014		2013

Average Crude Oil and Condensate Prices ($/Bbl) ⁽⁴⁾
United States	$	47.55	$	92.73	$	103.81
Trinidad	39.51		84.63		90.30
Other International ⁽²⁾	57.32		86.75		87.08
Composite	47.53		92.58		103.20
Average Natural Gas Liquids Prices ($/Bbl) ⁽⁴⁾
United States	$	14.50	$	31.84	$	32.46
Other International ⁽²⁾	4.61		40.73		39.45
Composite	14.49		31.91		32.55
Average Natural Gas Prices ($/Mcf) ⁽⁴⁾
United States	$	1.97	$	3.93	$	3.32
Trinidad	2.89		3.65		3.68
Other International ⁽²⁾	5.05		4.40		3.39
Composite	2.30		3.88		3.42

(1)Thousand barrels per day or million cubic feet per day, as applicable.

(2)Other International includes EOG's United Kingdom, China, Canada and Argentina operations.

(3)Thousand barrels of oil equivalent per day or million barrels of oil equivalent, as applicable; includes crude oil and condensate, NGLs and natural gas. MMBoe is calculated by multiplying the MBoed amount by the number of days in the period and then dividing that amount by one thousand.

(4)Dollars per barrel or per thousand cubic feet, as applicable. Excludes the impact of financial commodity derivative instruments (see Note 12 to Consolidated Financial Statements).

Competition

EOG competes with major integrated oil and gas companies, government-affiliated oil and gas companies and other independent oil and gas companies for the acquisition of licenses and leases, properties and reserves and access to the facilities, equipment, materials, services, and employees and other contract personnel (including geologists, geophysicists, engineers and other specialists) required to explore for, develop, produce, market and transport crude oil and natural gas. In addition, many of EOG's competitors have financial and other resources substantially greater than those EOG possesses and have established strategic long-term positions and strong governmental relationships in countries in which EOG may seek new or expanded entry. As a consequence, EOG may be at a competitive disadvantage in certain respects, such as in bidding for drilling rights or in accessing necessary services, facilities, equipment, materials and personnel. In addition, many of EOG's larger competitors may have a competitive advantage when responding to factors that affect demand for crude oil and natural gas, such as changing worldwide prices and levels of production and the cost and availability of alternative fuels. EOG also faces competition, to a lesser extent, from competing energy sources, such as alternative energy sources.

Regulation

United States Regulation of Crude Oil and Natural Gas Production. Crude oil and natural gas production operations are subject to various types of regulation, including regulation in the United States by federal and state agencies.

United States legislation affecting the oil and gas industry is under constant review for amendment or expansion. In addition, numerous departments and agencies, both federal and state, are authorized by statute to issue, and have issued, rules and regulations applicable to the oil and gas industry. Such rules and regulations, among other things, require permits for the drilling of wells, regulate the spacing of wells, prevent the waste of natural gas through restrictions on flaring, require surety bonds for various exploration and production operations and regulate the calculation and disbursement of royalty payments (for federal and state leases), production taxes and ad valorem taxes.

A portion of EOG's oil and gas leases in New Mexico, North Dakota, Utah, Wyoming and the Gulf of Mexico, as well as in other areas, are granted by the federal government and administered by the Bureau of Land Management (BLM) and/or the Bureau of Indian Affairs (BIA) or, in the case of offshore leases (which, for EOG, are de minimis), by the Bureau of Ocean Energy Management (BOEM) and the Bureau of Safety and Environmental Enforcement (BSEE), all federal agencies. Operations conducted by EOG on federal oil and gas leases must comply with numerous additional statutory and regulatory restrictions and, in the case of leases relating to tribal lands, certain tribal environmental and permitting requirements and employment rights regulations. In addition, the U.S. Department of the Interior (via various of its agencies, including the BLM, the BIA and the Office of Natural Resources Revenue) has certain authority over our calculation and payment of royalties, bonuses, fines, penalties, assessments and other revenues related to our federal and tribal oil and gas leases.

BLM, BIA and BOEM leases contain relatively standardized terms requiring compliance with detailed regulations and, in the case of offshore leases, orders pursuant to the Outer Continental Shelf Lands Act (which are subject to change by the BOEM or BSEE). Under certain circumstances, the BLM, BIA, BOEM or BSEE (as applicable) may require operations on federal leases to be suspended or terminated. Any such suspension or termination could materially and adversely affect EOG's interests.

The transportation and sale for resale of natural gas in interstate commerce are regulated pursuant to the Natural Gas Act of 1938, as amended (NGA), and the Natural Gas Policy Act of 1978. These statutes are administered by the Federal Energy Regulatory Commission (FERC). Effective January 1993, the Natural Gas Wellhead Decontrol Act of 1989 deregulated natural gas prices for all "first sales" of natural gas, which includes all sales by EOG of its own production. All other sales of natural gas by EOG, such as those of natural gas purchased from third parties, remain jurisdictional sales subject to a blanket sales certificate under the NGA, which has flexible terms and conditions. Consequently, all of EOG's sales of natural gas currently may be made at market prices, subject to applicable contract provisions. EOG's jurisdictional sales, however, may be subject in the future to greater federal oversight, including the possibility that the FERC might prospectively impose more restrictive conditions on such sales. Conversely, sales of crude oil and condensate and NGLs by EOG are made at unregulated market prices.

EOG owns certain gathering and/or processing facilities in the Permian Basin in West Texas and New Mexico, the Barnett Shale in North Texas, the Bakken and Three Forks plays in North Dakota, and the Eagle Ford in South Texas. State regulation of gathering and processing facilities generally includes various safety, environmental and, in some circumstances, nondiscrimination requirements with respect to the provision of gathering and processing services, but does not generally entail rate regulation. EOG's gathering and processing operations could be materially and adversely affected should they be subject in the future to the application of state or federal regulation of rates and services.

EOG's gathering and processing operations also may be, or become, subject to safety and operational regulations relating to the design, installation, testing, construction, operation, replacement and management of such facilities. Additional rules and legislation pertaining to these matters are considered and/or adopted from time to time. Although EOG cannot predict what effect, if any, such legislation might have on its operations and financial condition, EOG could be required to incur additional capital expenditures and increased compliance and operating costs depending on the nature and extent of such future legislative and regulatory changes.

EOG also owns crude oil rail loading facilities in North Dakota and Texas, crude oil rail unloading facilities in Oklahoma and Louisiana and crude oil truck unloading facilities in certain of its U.S. plays. Regulation of such facilities is conducted at the state and federal levels and generally includes various safety, environmental, permitting and packaging/labeling requirements. Additional regulation pertaining to these matters is considered and/or adopted from time to time. Although EOG cannot predict what effect, if any, any such new regulations might have on its crude-by-rail operations and the transportation of its crude oil production by truck, EOG could be required to incur additional capital expenditures and increased compliance and operating costs depending on the nature and extent of such future regulatory changes.

Proposals and proceedings that might affect the oil and gas industry are considered from time to time by Congress, the state legislatures, the FERC and federal, state and local regulatory commissions, agencies, councils and courts. EOG cannot predict when or whether any such proposals or proceedings may become effective. It should also be noted that the oil and gas industry historically has been very heavily regulated; therefore, there is no assurance that the approach currently being followed by such legislative bodies and regulatory commissions, agencies, councils and courts will remain unchanged.

Environmental Regulation - United States. EOG is subject to various federal, state and local laws and regulations covering the discharge of materials into the environment or otherwise relating to the protection of the environment. These laws and regulations affect EOG's operations and costs as a result of their effect on crude oil and natural gas exploration, development and production operations. Failure to comply with these laws and regulations may result in the assessment of administrative, civil and criminal penalties, including the assessment of monetary penalties, the imposition of investigatory and remedial obligations, the suspension or revocation of necessary permits, licenses and authorizations, the requirement that additional pollution controls be installed and the issuance of orders enjoining future operations or imposing additional compliance requirements.

In addition, EOG has acquired certain oil and gas properties from third parties whose actions with respect to the management and disposal or release of hydrocarbons or other wastes were not under EOG's control. Under environmental laws and regulations, EOG could be required to remove or remediate wastes disposed of or released by prior owners or operators. EOG also could incur costs related to the clean-up of third-party sites to which it sent regulated substances for disposal or to which it sent equipment for cleaning, and for damages to natural resources or other claims related to releases of regulated substances at such third-party sites. In addition, EOG could be responsible under environmental laws and regulations for oil and gas properties in which EOG previously owned or currently owns an interest, but was or is not the operator. Moreover, EOG is subject to the U.S. Environmental Protection Agency's (U.S. EPA) rule requiring annual reporting of greenhouse gas (GHG) emissions and may in the future, as discussed further below, be subject to federal, state and local laws and regulations regarding hydraulic fracturing.

Compliance with environmental laws and regulations increases EOG's overall cost of business, but has not had, to date, a material adverse effect on EOG's operations, financial condition or results of operations. In addition, it is not anticipated, based on current laws and regulations, that EOG will be required in the near future to expend amounts (whether for environmental control facilities or otherwise) that are material in relation to its total exploration and development expenditure program in order to comply with such laws and regulations. However, given that such laws and regulations are subject to change, EOG is unable to predict the ultimate cost of compliance or the ultimate effect on EOG's operations, financial condition and results of operations.

Climate Change - United States. Local, state, national and international regulatory bodies have been increasingly focused on GHG emissions and climate change issues. In addition to the U.S. EPA's rule requiring annual reporting of GHG emissions, recent U.S. EPA rulemaking may result in the regulation of GHG emissions as pollutants under the federal Clean Air Act. Also, in December 2015, the U.S. participated in the 21st Conference of the Parties of the United Nations Framework Convention on Climate Change in Paris, France. The Paris Agreement (adopted at the conference) calls for nations to undertake efforts with respect to global temperatures and GHG emissions. If ratified, the Paris Agreement will take effect in 2020.

EOG believes that its strategy to reduce GHG emissions throughout its operations is in the best interest of the environment and is a generally good business practice. EOG has developed a system that is utilized in calculating GHG emissions from its operating facilities. This emissions management system calculates emissions based on recognized regulatory methodologies, where applicable, and on commonly accepted engineering practices. EOG reports GHG emissions for facilities covered under the U.S. EPA's Mandatory Reporting of Greenhouse Gases Rule published in 2009.

EOG is unable to predict the timing, scope and effect of any currently proposed or future investigations, laws, regulations or treaties regarding climate change and GHG emissions, but the direct and indirect costs of such investigations, laws, regulations and treaties (if enacted) could materially and adversely affect EOG's operations, financial condition and results of operations.

Hydraulic Fracturing - United States. Most onshore crude oil and natural gas wells drilled by EOG are completed and stimulated through the use of hydraulic fracturing. Hydraulic fracturing technology, which has been used by the oil and gas industry for more than 60 years and is constantly being enhanced, enables EOG to produce crude oil and natural gas from formations that otherwise would not be recovered. Specifically, hydraulic fracturing is a process in which pressurized fluid is pumped into underground formations to create tiny fractures or spaces that allow crude oil and natural gas to flow from the reservoir into the well so that it can be brought to the surface. Hydraulic fracturing generally takes place thousands of feet underground, a considerable distance below any drinking water aquifers, and there are impermeable layers of rock between the area fractured and the water aquifers. The makeup of the fluid used in the hydraulic fracturing process is typically more than 99% water and sand, and less than 1% of highly diluted chemical additives; lists of the chemical additives most typically used in fracturing fluids are available to the public via internet websites and in other publications sponsored by industry trade associations and through state agencies in those states that require the reporting of the components of fracturing fluids. While the majority of the sand remains underground to hold open the fractures, a significant percentage of the water and chemical additives flow back and are then either reused or safely disposed of at sites that are approved and permitted by the appropriate regulatory authorities. EOG regularly conducts audits of these disposal facilities to monitor compliance with all applicable regulations.

The regulation of hydraulic fracturing is primarily conducted at the state and local level through permitting and other compliance requirements. In March 2015, the BLM issued new regulations applicable to hydraulic fracturing activities on federal and Indian lands, including requirements for chemical disclosure, wellbore integrity and handling of flowback and produced water. In addition, there have been various other proposals to regulate hydraulic fracturing at the federal level. Any new federal regulations that may be imposed on hydraulic fracturing could result in additional permitting and disclosure requirements, additional operating and compliance costs and additional operating restrictions. In April 2012, the U.S. EPA issued regulations specifically applicable to the oil and gas industry that will require operators to significantly reduce volatile organic compounds (VOC) emissions from natural gas wells that are hydraulically fractured through the use of "green completions" to capture natural gas that would otherwise escape into the air. The U.S. EPA also issued regulations that establish standards for VOC emissions from several types of equipment, including storage tanks, compressors, dehydrators, and valves and sweetening units at gas processing plants. In addition, the U.S. EPA recently proposed regulations that would require operators to reduce methane and VOC emissions from crude oil and natural gas wells and equipment located at natural gas production gathering and booster stations, gas processing plants and natural gas transmission compressor stations.

In addition to these federal regulations, some state and local governments have imposed or have considered imposing various conditions and restrictions on drilling and completion operations, including requirements regarding casing and cementing of wells; testing of nearby water wells; restrictions on access to, and usage of, water; disclosure of the chemical additives used in hydraulic fracturing operations; and restrictions on the type of chemical additives that may be used in hydraulic fracturing operations. Such federal, state and local permitting and disclosure requirements and operating restrictions and conditions could lead to operational delays and increased operating and compliance costs and, moreover, could delay or effectively prevent the development of crude oil and natural gas from formations which would not be economically viable without the use of hydraulic fracturing.

EOG is unable to predict the timing, scope and effect of any currently proposed or future laws or regulations regarding hydraulic fracturing in the United States, but the direct and indirect costs of such laws and regulations (if enacted) could materially and adversely affect EOG's operations, financial condition and results of operations.

Other International Regulation. EOG's exploration and production operations outside the United States are subject to various types of regulations, including environmental regulations, imposed by the respective governments of the countries in which EOG's operations are conducted, and may affect EOG's operations and costs of compliance within those countries. EOG currently has operations in Trinidad, the United Kingdom, China, Canada and Argentina. EOG is unable to predict the timing, scope and effect of any currently proposed or future laws, regulations or treaties, including those regarding climate change and hydraulic fracturing, but the direct and indirect costs of such laws, regulations and treaties (if enacted) could materially and adversely affect EOG's operations, financial condition and results of operations. EOG will continue to review the risks to its business and operations associated with all environmental matters, including climate change and hydraulic fracturing. In addition, EOG will continue to monitor and assess any new policies, legislation, regulations and treaties in the areas where it operates to determine the impact on its operations and take appropriate actions, where necessary.

Other Regulation. EOG has sand mining and processing operations in Texas and Wisconsin, which support EOG's exploration and development operations. EOG's sand mining operations are subject to regulation by the federal Mine Safety and Health Administration (in respect of safety and health matters) and by state agencies (in respect of air permitting and other environmental matters). The information concerning mine safety violations and other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K (17 CFR 229.104) is included in Exhibit 95 to this report.

Other Matters

Energy Prices. EOG is a crude oil and natural gas producer and is impacted by changes in prices of crude oil and condensate, NGLs and natural gas. Crude oil and condensate and NGL production comprised a larger portion of EOG's production mix in 2015 than in prior years. Average crude oil and condensate prices received by EOG for production in the United States decreased 49% in 2015, decreased 11% in 2014 and increased 6% in 2013, each as compared to the immediately preceding year. Average NGL prices received by EOG for production in the United States decreased 54% in 2015, 2% in 2014 and 8% in 2013, each as compared to the immediately preceding year. During the last three years, average United States wellhead natural gas prices have fluctuated, at times rather dramatically. These fluctuations resulted in a 50% decrease in the average wellhead natural gas price received by EOG for production in the United States in 2015, an 18% increase in 2014 and a 32% increase in 2013, each as compared to the immediately preceding year. In addition, as of February 12, 2016, the average 2016 U.S. New York Mercantile Exchange (NYMEX) crude oil and natural gas prices were $34.97 per barrel and $2.23 per million British thermal units, respectively, representing declines of 28% and 17%, respectively, from the average NYMEX prices in 2015. Due to the many uncertainties associated with the world political environment (for example, the actions of other crude oil exporting nations, including the

Organization of Petroleum Exporting Countries), the global supply of and demand for crude oil and the availability of other energy supplies, the relative competitive relationships of the various energy sources in the view of consumers and other factors, EOG is unable to predict what changes may occur in prices of crude oil and condensate, NGLs and natural gas in the future. For additional discussion regarding changes in crude oil and natural gas prices and the risks that such changes may present to EOG, see ITEM 1A, Risk Factors.

Based on EOG's tax position, EOG's price sensitivity in 2016 for each $1.00 per barrel increase or decrease in wellhead crude oil and condensate price, combined with the estimated change in NGL price, is approximately $65 million for net income and $81 million for cash flows from operating activities. Including the impact of EOG's 2016 natural gas derivative contracts (exclusive of options) and based on EOG's tax position and the portion of EOG's anticipated natural gas volumes for 2016 for which prices have not been determined under long-term marketing contracts, EOG's price sensitivity for each $0.10 per Mcf increase or decrease in wellhead natural gas price is approximately $15 million for net income and $18 million for cash flows from operating activities. For a summary of EOG's financial commodity derivative contracts at February 25, 2016, see ITEM 7, Management's Discussion and Analysis of Financial Condition and Results of Operations - Capital Resources and Liquidity - Derivative Transactions.

Risk Management. EOG engages in price risk management activities from time to time. These activities are intended to manage EOG's exposure to fluctuations in prices of crude oil and natural gas. EOG utilizes financial commodity derivative instruments, primarily price swap, option, swaption, collar and basis swap contracts, as a means to manage this price risk. See Note 12 to Consolidated Financial Statements. For a summary of EOG's financial commodity derivative contracts at February 25, 2016, see ITEM 7, Management's Discussion and Analysis of Financial Condition and Results of Operations - Capital Resources and Liquidity - Derivative Transactions.

All of EOG's crude oil and natural gas activities are subject to the risks normally incident to the exploration for, and development, production and transportation of, crude oil and natural gas, including rig and well explosions, cratering, fires, loss of well control and leaks and spills, each of which could result in damage to life, property and/or the environment. EOG's onshore and offshore operations are also subject to certain perils, including hurricanes and other adverse weather conditions. Moreover, EOG's activities are subject to governmental regulations as well as interruption or termination by governmental authorities based on environmental and other considerations. Losses and liabilities arising from such events could reduce revenues and increase costs to EOG to the extent not covered by insurance.

Insurance is maintained by EOG against some, but not all, of these risks in accordance with what EOG believes are customary industry practices and in amounts and at costs that EOG believes to be prudent and commercially practicable. Specifically, EOG maintains commercial general liability and excess liability coverage provided by third-party insurers for bodily injury or death claims resulting from an incident involving EOG's onshore or offshore operations (subject to policy terms and conditions). Moreover, in the event an incident involving EOG's onshore or offshore operations results in negative environmental effects, EOG maintains operators extra expense coverage provided by third-party insurers for obligations, expenses or claims that EOG may incur from such an incident, including obligations, expenses or claims in respect of seepage and pollution, cleanup and containment, evacuation expenses and control of the well (subject to policy terms and conditions). In the event of a well control incident resulting in negative environmental effects, such operators extra expense coverage would be EOG's primary coverage, with the commercial general liability and excess liability coverage referenced above also providing certain coverage to EOG. All of EOG's onshore and offshore drilling activities are conducted on a contractual basis with independent drilling contractors and other third-party service contractors. The indemnification and other risk allocation provisions included in such contracts are negotiated on a contract-by-contract basis and are each based on the particular circumstances of the services being provided and the anticipated operations.

In addition to the above-described risks, EOG's operations outside the United States are subject to certain risks, including the risk of increases in taxes and governmental royalties, changes in laws and policies governing the operations of foreign-based companies, expropriation of assets, unilateral or forced renegotiation or modification of existing contracts with governmental entities, currency restrictions and exchange rate fluctuations. Please refer to ITEM 1A, Risk Factors, for further discussion of the risks to which EOG is subject with respect to its operations outside the United States.

Texas Severance Tax Rate Reduction. Natural gas production from qualifying Texas natural gas wells spudded or completed after August 31, 1996 is entitled to a reduced severance tax rate for the first 120 consecutive months of production. However, the cumulative value of the tax reduction cannot exceed 50 percent of the drilling and completion costs incurred on a well-by-well basis.

Executive Officers of the Registrant

The current executive officers of EOG and their names and ages (as of February 25, 2016) are as follows:

Name	Age	Position

William R. Thomas	63	Chairman of the Board and Chief Executive Officer

Gary L. Thomas	66	President and Chief Operating Officer

Lloyd W. Helms, Jr.	58	Executive Vice President, Exploration and Production

David W. Trice	45	Executive Vice President, Exploration and Production

Timothy K. Driggers	54	Vice President and Chief Financial Officer

Michael P. Donaldson	53	Vice President, General Counsel and Corporate Secretary

William R. Thomas was elected Chairman of the Board and Chief Executive Officer effective January 2014. He was elected Senior Vice President and General Manager of EOG's Fort Worth, Texas, office in June 2004, Executive Vice President and General Manager of EOG's Fort Worth, Texas, office in February 2007 and Senior Executive Vice President, Exploitation in February 2011. He subsequently served as Senior Executive Vice President, Exploration from July 2011 to September 2011, as President from September 2011 to July 2013 and as President and Chief Executive Officer from July 2013 to December 2013. Mr. Thomas joined a predecessor of EOG in January 1979. Mr. Thomas is EOG's principal executive officer.

Gary L. Thomas was elected Chief Operating Officer in September 2011 and President in March 2015. He was elected Executive Vice President, North America Operations in May 1998, Executive Vice President, Operations in May 2002, and served as Senior Executive Vice President, Operations from February 2007 to September 2011. He also previously served as Senior Vice President and General Manager of EOG's Midland, Texas, office. Mr. Thomas joined a predecessor of EOG in July 1978.

Lloyd W. Helms, Jr. was elected Executive Vice President, Exploration and Production in August 2013. He was elected Vice President, Engineering and Acquisitions in September 2006, Vice President and General Manager of EOG's Calgary, Alberta, Canada office in March 2008, and served as Executive Vice President, Operations from February 2012 to August 2013. Mr. Helms joined a predecessor of EOG in February 1981.

David W. Trice was elected Executive Vice President, Exploration and Production in August 2013. He served as Vice President and General Manager of EOG's Fort Worth, Texas, office from May 2010 to August 2013. Prior to that, he served in various geological and management positions at EOG. Mr. Trice joined EOG in November 1999.

Timothy K. Driggers was elected Vice President and Chief Financial Officer in July 2007. He was elected Vice President and Controller of EOG in October 1999, was subsequently named Vice President, Accounting and Land Administration in October 2000 and Vice President and Chief Accounting Officer in August 2003. Mr. Driggers is EOG's principal financial officer. Mr. Driggers joined a predecessor of EOG in August 1995.

Michael P. Donaldson was elected Vice President, General Counsel and Corporate Secretary in May 2012. He was elected Corporate Secretary in May 2008, and was appointed Deputy General Counsel and Corporate Secretary in July 2010. Mr. Donaldson joined EOG in September 2007.

EOG - Eog Resources, Inc.