Not willing to commit more capital to the production of natural gas, EOG Resources Inc (NYSE:EOG) had its share price plunge as the cut their production estimates. Citigroup downgraded them from "Buy" to "Hold" in response.
Most of this is driven by the depressed prices of natural gas, which at least in the short term, aren't going to be moving up.
Natural gas companies with heavy exposure have been transferring capital to the oil sector or liquefied natural gas segment, which generate stronger margins and earnings at this time.
Even with lower production estimates, some question if EOG has the capital to pull it off.
EOG closed Wednesday at $88.64, plummeting $9.10, or 9.31 percent. Citigroup slashed their price target from $110 to $95.
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