EOG RESOURCES INC Q3 FY2024 earnings call

• Since 2020, EOG has generated over $22 billion in free cash flow and over $25 billion in adjusted net income, increased dividend 160%, returned over $13 billion to shareholders and reduced debt 35%.
• Third quarter outperformed on oil, natural gas, and NGL volumes, and beat per unit cash operating costs, generating $1.6 billion adjusted net income and $1.5 billion free cash flow.
• Increased regular dividend 7% and boosted share repurchase authorization by $5 billion. Leveraging technology and innovation across basins, including longer laterals and in-house motor program.
• Progress in Utica play with five packages online, 50% increase in activity expected in 2025. Sustainability achievements: GHG intensity and methane emissions below targets, carbon capture pilot operational.

During the third quarter, EOG earned $1.6 billion of adjusted net income and generated $1.5 billion of free cash flow on $1.5 billion capital expenditures. Full year capital expenditures are expected to be about $6.2 billion. Cash on the balance sheet is temporarily higher due to postponed tax payments. The marketing strategy delivered peer-leading US price realizations of $76.95 per barrel of oil and $1.84 per Mcf for natural gas. Year-to-date, $4.1 billion of free cash flow was generated, funding $3.8 billion of cash returned to shareholders.

• Raised full year oil production midpoint by 800 bbl/day, natural gas liquids by 2,800/day, natural gas by 24 MMscf/day. Lowered full year per unit cash operating cost guidance. Full year CapEx unchanged at $6.2B midpoint.
• 2025 activity expected to be relatively flat with minor shifts, 50% increase in Utica activity, one-rig program for Dorado, strategic infrastructure spend on Janus gas plant to be ~$100M in 2025.

• Macro environment dynamics affecting oil and gas inventory, demand, and pricing.
• Election outcomes and potential market volatility impacting the energy industry.
• Uncertainties in natural gas market conditions and drilled but uncompleted wells coming online.

Q: Steve Richardson asked about balance sheet optimization and natural gas demand.

A: Ezra Yacob said the move is to make capital structure more efficient, timing is good with bond maturities and favorable market, and discussed natural gas demand outlook with LNG coming online and power demand driving growth.

Q: Arun Jayaram inquired about 2025 capital movement.

A: Jeff Leitzell stated 2025 activity expected to be relatively flat with minor shifts, 50% increase in Utica activity, one-rig program for Dorado, and strategic infrastructure spend on Janus gas plant to be ~$100M.

Q: Scott Hanold asked about election impact.

A: Ezra Yacob said EOG prepares for potential changes, industry has good relationship with policymakers, and oil and gas will play a long-term role in energy solution.

Q: Leo Mariani asked about Utica costs and PRB.

A: Keith Trasko discussed Utica cost range and progress, Jeff Leitzell provided update on PRB progress and refining completion techniques.

Q: Kalei Akamine asked about gas guide and Dorado production.

A: Jeff Leitzell said no acceleration in midstream development, Ezra Yacob discussed Dorado investment based on returns profile and macro environment.

Q: Neal Dingmann asked about Utica inventory and overall inventory.

A: Keith Trasko talked about Utica prospectivity and decline, Ezra Yacob discussed resource potential and focus on returns over inventory count.

Q: Charles Meade asked about 2025 program and Australia well.

A: Jeff Leitzell said Australia well permit secured, plan to test next year leveraging shallow water expertise.

Q: Scott Gruber asked about carbon capture.

A: Ezra Yacob said carbon capture projects are internal, pilot operational, and looking to deploy technology internally.

Q: Kevin MacCurdy asked about capital structure dynamism and bolt-ons.

A: Ann Janssen said balance sheet has flexibility, Ezra Yacob discussed low-cost property bolt-ons and focus on emerging assets for value creation.