Shares of EOG Resources Inc. climbed to a new year high Wednesday after the oil and natural gas company announced oil discoveries and increased some of its oil and gas reserves.

EOG shares rose $6.95, or 7.1 percent, to $104.33 in afternoon trading. The shares hit a 52-week high of $105.24 earlier in the session, topping a prior peak of $101.76 set in December.

The company said the new discoveries will lead to production growth of 19 percent in 2011 and 21 percent in 2012.

The company announced discoveries of oil in Texas, North Dakota and Colorado, including an estimated reserve potential in the Eagle Ford area in Texas of about 900 million barrels of crude oil equivalent.

EOG increased its estimated reserves for the North Dakota Bakken Core, Bakken Lite and Three Forks formations to 420 million barrels of oil equivalent from an earlier estimate of 80 million barrels. It increased estimates for the Fort Worth Barnett shale to 370 million barrels of oil equivalent from 56 million barrels.

It also increased estimated natural gas reserves in the Haynesville shale areas in Louisiana and Texas to 10 trillion cubic feet from 3 trillion to 4 trillion cubic feet.

To help fund development of its capital expenditures program, EOG said it will sell $1 billion to $1.5 billion of its noncore gas properties in North America late this year or early next year.

EOG estimated its 2010 capital expenditure budget at $5.1 billion for this year.

Source: businessweek.com