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ENRON OIL & GAS REPORTS 21 PERCENT EARNINGS INCREASE TO $54.9 MILLION OR $.72 PER SHARE IN 1991

 ENRON OIL & GAS REPORTS 21 PERCENT EARNINGS INCREASE TO
 $54.9 MILLION OR $.72 PER SHARE IN 1991
 HOUSTON, Jan. 29 /PRNewswire/ -- Enron Oil & Gas Company (NYSE: EOG) today reported net income of $54.9 million, or 72 cents per share for 1991, compared to $45.5 million, or 60 cents per share for the previous year.
 EOG's discretionary cash flow increased to $251.6 million in 1991 compared to $237 million a year ago, even though producing volumes were voluntarily held back and average wellhead natural gas prices declined 9 percent. Net operating revenues were $387.6 million in 1991 compared to $371.3 million in 1990.
 "I am pleased with the 21 percent growth in earnings and a 6 percent growth in discretionary cash flow in light of general industry conditions that deteriorated throughout 1991," said Forrest E. Hoglund, chairman, president and CEO of EOG.
 EOG's wellhead natural gas sales volumes increased 8 percent in 1991 to 491 MMcf/d. However, wellhead natural gas prices averaged 14 cents per thousand cubic feet (Mcf) lower in 1991 than 1990 and more than offset the beneficial results of the higher volumes. EOG held more than 25 percent of its deliverability off the market during 1991, refusing to sell full volumes in times of low prices.
 Wellhead natural gas sales prices averaged $1.37/Mcf in 1991 compared to $1.51/Mcf a year ago. Wellhead crude oil and condensate sales prices averaged $18.78/barrel during 1991 vs. $21.67/barrel in 1990.
 "Other marketing margin continues to contribute significantly to both income and cash flow," he said. "This margin increased to $79.7 million in 1991 from $51 million in 1990. It is associated with our marketing sales and purchases of natural gas and crude oil under both long-term and short-term arrangements, including price swap agreements and commodity price hedging using futures market transactions.
 "Our continued focus on controlling operating costs contributed positively to 1991 results," Hoglund noted. "We were able to reduce depreciation, depletion and amortization expense another $.03 per Mcf equivalent (Mcfe) to $.81/Mcfe in 1991 from $.84/Mcfe in 1990 after having achieved a $.09/Mcfe reduction in 1990. Exploration expenses, totaling $59 million, were down $9.6 million from 1990.
 "As a result, EOG achieved operating income of $63.4 million in 1991, up by $21.6 million from 1990," he said.
 EOG's 1991 results include $15 million of pretax gain on property sales, significantly less than the $31.8 million realized in 1990.
 The company's net interest expense was $7.1 million lower in 1991 averaging $.15/Mcfe compared to $.20/Mcfe in 1990. The company also continued to realize net federal income tax benefits in 1991 with the utilization of its remaining net operating loss carryforwards and benefits from new tight gas sand tax credits generated through eligible production from 1991 drilling activities.
 At year end, EOG had tight gas sand deliverability in excess of 150 MMcf/d, and annual production averaged more than 80 MMcf/d in 1991, generating approximately $17 million in net income contribution from federal tight gas sand tax credits.
 "We drilled approximately 170 net tight gas sand wells in 1991 and plan to drill approximately 170 net in 1992, which should result in average tight gas sand sales in 1992 of approximately 200 MMcf/d," Hoglund said. "The federal income tax credit on tight gas sand volumes combined with a Texas severance tax exemption on tight gas sand revenues is estimated to generate 1992 after-tax net income contribution of more than $40 million.
 "In spite of current low natural gas prices, EOG is well-positioned to achieve higher net income in 1992 than 1991 due largely to its other marketing efforts, increased tight gas sand tax credits and an expectation that interest expense will be lower," Hoglund added.
 EOG is a significant beneficiary of the current lower interest rate environment. Since the first of the year, the company has swapped $225 million of floating rate obligations to one to two year fixed rate obligations. The fixed rates average about 4.9 percent, which is approximately 180 basis points below original operating plans for 1992.
 EOG reported an 11 percent increase in net income to $22.4 million, or 29 cents per share, for the fourth quarter of 1991 compared to $20.2 million, or 27 cents per share, for the same period a year ago. Net operating revenues for the period totaled $119.8 million compared to $118 million in 1990. Discretionary cash flow totaled $94 million versus $77.1 million in 1990. Fourth quarter 1991 natural gas production increased 14 percent, averaging 612 MMcf/d versus 539 MMcf/d a year ago.
 Enron Oil & Gas Company is one of the largest independent (non- integrated) oil and gas companies in the United States in terms of domestic proved reserves. The company's reserve base is about 90 percent domestic and about 90 percent natural gas.
 ENRON OIL & GAS COMPANY
 Financial Report
 (Unaudited; millions except per share)
 Three months ended Dec. 31 1991 1990
 Net Operating Revenues $119.8 $118.0
 Net Income 22.4 20.2
 Per Share Net Income $0.29 $0.27
 Average Number of Shares Used in
 Computation 75.9 75.9
 Twelve months ended Dec. 31 1991 1990
 Net Operating Revenues $387.6 $371.3
 Net Income 54.9 45.5
 Per Share Net Income $0.72 $0.60
 Average Number of Shares Used in
 Computation 75.9 75.9
 Operating Highlights
 (Unaudited)
 3 Mo. Ended 12/31 12 Mo. Ended 12/31
 1991 1990 1991 1990
 Wellhead Sales
 Nat. Gas Vol. (MMcf/d)
 Domestic 581 520 466 437
 Canada 31 19 25 18
 Total 612 539 491 455
 Avg. Natural Gas Prices ($/Mcf)
 Domestic $1.62 $1.69 $1.38 $1.51
 Canada 1.30 1.49 1.32 1.47
 Composite 1.60 1.68 1.37 1.51
 Crude/Condensate Vol. (MBD)
 Domestic 6.0 6.2 5.9 5.8
 Canada 2.4 2.4 2.3 2.4
 Total 8.4 8.6 8.2 8.2
 Avg. Crude/Condensate Price ($/Bbl)
 Domestic $19.19 $27.42 $19.24 $21.95
 Canada 16.26 27.66 17.58 21.01
 Composite 18.34 27.49 18.78 21.67
 Natural Gas Liquids Vol. (MBD)
 Domestic 0.4 0.3 0.3 0.4
 Other Nat. Gas Marketing
 Volumes (MMcf/d) 277 196 237 154
 Avg. Sales Price
 ($/Mcf) $2.58 $2.75 $2.63 $2.90
 Avg.Purchase
 Costs($/Mcf) $2.03 $2.09 $1.75 $1.99
 (including transportation)
 Summary Income
 (Unaudited; in thousands)
 3 Mo. Ended 12/31 12 Mo. Ended 12/31
 1991 1990 1991 1990
 Net Operating Revenues
 Natural Gas $104,156 $95,264 $321,603 $301,645
 Crude Oil, Condensate &
 Nat. Gas Liquids 15,457 21,641 62,836 66,165
 Other 171 1,131 3,166 3,525
 Total 119,784 118,036 387,605 371,335
 Operating Expenses
 Lease and Well 15,604 13,366 49,922 43,806
 Exploration 8,810 12,249 31,470 35,031
 Dry Hole 5,433 1,962 14,698 12,986
 Unproved Lease
 Impairment 3,733 5,895 12,791 20,571
 Depreciation, Depletion,
 and Amortization 51,107 46,382 160,885 155,877
 General &
 Administrative 4,960 8,434 36,216 38,254
 Taxes Other than Income 4,824 6,122 18,222 22,966
 Total 94,471 94,410 324,204 329,491
 Operating Income 25,313 23,626 63,401 41,844
 Other Income (Expense) 971 (1,177) 11,344 28,953
 Income Before Interest
 & Taxes 26,284 22,449 74,745 70,797
 Interest Expense - Net 6,624 9,179 29,076 36,183
 Income Tax Benefit (2,708) (6,905) (9,265) (10,854)
 Net Income 22,368 20,175 54,934 45,468
 -0- 1/29/92
 /CONTACT: Diane Bazelides, 713-853-6285, or E.P. Segner, 713-853-5299, or Paula Rieker, 713-853-5981, all of Enron Oil & Gas Company/
 (EOG) CO: Enron Oil & Gas Company ST: Texas IN: OIL SU: ERN


CK -- NY083 -- 4924 01/29/92 16:50 EST
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