UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM10-Q
 
(Mark One)

           QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2020March 31, 2021
or
         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 1-9743
 
EOG RESOURCES, INC.
(Exact name of registrant as specified in its charter)
Delaware 47-0684736
(State or other jurisdiction
of incorporation or organization)
 (I.R.S. Employer
Identification No.)
1111 Bagby, Sky Lobby 2, Houston, Texas 77002
(Address of principal executive offices)       (Zip Code)
713-651-7000
(Registrant's telephone number, including area code)

    Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbol(s)Name of each exchange on which registered
Common Stock, par value $0.01 per shareEOGNew York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.      Yes  No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).      Yes   No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer     Accelerated filer     Non-accelerated filer 
Smaller reporting company    Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  
Yes   No 

Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date.
Title of each class Number of shares
Common Stock, par value $0.01 per share 582,243,561583,605,122 (as of July 30, 2020)April 29, 2021)

    


EOG RESOURCES, INC.

TABLE OF CONTENTS


PART I.FINANCIAL INFORMATIONPage No.
   
 ITEM 1.Financial Statements (Unaudited) 
    
  
    
  
    
  
    
  
    
 ITEM 2.
    
 ITEM 3.
    
 ITEM 4.
    
PART II.OTHER INFORMATION 
    
 ITEM 1.
ITEM 1A.
 ITEM 2.
    
 ITEM 4.
    
 ITEM 6.
    
 
    
-2-

    


PART I.  FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS
EOG RESOURCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)
(In Thousands,Millions, Except Per Share Data)
(Unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
Three Months Ended
March 31,
202020192020201920212020
Operating Revenues and OtherOperating Revenues and OtherOperating Revenues and Other
Crude Oil and CondensateCrude Oil and Condensate$614,627  $2,528,866  $2,680,125  $4,729,269  Crude Oil and Condensate$2,251 $2,065 
Natural Gas LiquidsNatural Gas Liquids93,909  186,374  254,444  405,012  Natural Gas Liquids314 161 
Natural GasNatural Gas141,696  269,892  351,460  604,864  Natural Gas625 210 
Gains (Losses) on Mark-to-Market Commodity Derivative ContractsGains (Losses) on Mark-to-Market Commodity Derivative Contracts(126,362) 177,300  1,079,411  156,720  Gains (Losses) on Mark-to-Market Commodity Derivative Contracts(367)1,206 
Gathering, Processing and MarketingGathering, Processing and Marketing362,786  1,501,386  1,401,432  2,787,040  Gathering, Processing and Marketing848 1,039 
Gains on Asset Dispositions, Net13,233  8,009  29,693  4,173  
Gains (Losses) on Asset Dispositions, NetGains (Losses) on Asset Dispositions, Net(6)16 
Other, NetOther, Net3,485  25,803  24,501  69,194  Other, Net29 21 
TotalTotal1,103,374  4,697,630  5,821,066  8,756,272  Total3,694 4,718 
Operating ExpensesOperating Expenses    Operating Expenses  
Lease and WellLease and Well245,346  347,281  575,005  683,572  Lease and Well270 330 
Transportation CostsTransportation Costs151,728  174,101  360,024  350,623  Transportation Costs202 208 
Gathering and Processing CostsGathering and Processing Costs96,767  112,643  225,249  223,938  Gathering and Processing Costs139 128 
Exploration CostsExploration Costs27,283  32,522  66,960  68,846  Exploration Costs33 40 
Dry Hole CostsDry Hole Costs87  3,769  459  3,863  Dry Hole Costs11 
ImpairmentsImpairments305,415  112,130  1,878,350  184,486  Impairments44 1,573 
Marketing CostsMarketing Costs444,444  1,500,915  1,553,437  2,770,972  Marketing Costs838 1,110 
Depreciation, Depletion and AmortizationDepreciation, Depletion and Amortization706,679  957,304  1,706,739  1,836,899  Depreciation, Depletion and Amortization900 1,000 
General and AdministrativeGeneral and Administrative131,855  121,780  246,128  228,452  General and Administrative110 114 
Taxes Other Than IncomeTaxes Other Than Income80,319  204,414  237,679  397,320  Taxes Other Than Income215 157 
TotalTotal2,189,923  3,566,859  6,850,030  6,748,971  Total2,762 4,660 
Operating Income (Loss)(1,086,549) 1,130,771  (1,028,964) 2,007,301  
Operating IncomeOperating Income932 58 
Other Income (Expense), NetOther Income (Expense), Net(4,500) 8,503  13,608  14,115  Other Income (Expense), Net(4)18 
Income (Loss) Before Interest Expense and Income Taxes(1,091,049) 1,139,274  (1,015,356) 2,021,416  
Income Before Interest Expense and Income TaxesIncome Before Interest Expense and Income Taxes928 76 
Interest Expense, NetInterest Expense, Net54,213  49,908  98,903  104,814  Interest Expense, Net47 45 
Income (Loss) Before Income Taxes(1,145,262) 1,089,366  (1,114,259) 1,916,602  
Income Tax Provision (Benefit)(235,878) 241,525  (214,688) 433,335  
Net Income (Loss)$(909,384) $847,841  $(899,571) $1,483,267  
Net Income (Loss) Per Share    
Income Before Income TaxesIncome Before Income Taxes881 31 
Income Tax ProvisionIncome Tax Provision204 21 
Net IncomeNet Income$677 $10 
Net Income Per ShareNet Income Per Share  
BasicBasic$(1.57) $1.47  $(1.55) $2.57  Basic$1.17 $0.02 
DilutedDiluted$(1.57) $1.46  $(1.55) $2.56  Diluted$1.16 $0.02 
Average Number of Common SharesAverage Number of Common Shares    Average Number of Common Shares  
BasicBasic578,719  577,460  578,581  577,333  Basic580 578 
DilutedDiluted578,719  580,247  578,581  580,204  Diluted583 580 
Comprehensive Income (Loss)    
Net Income (Loss)$(909,384) $847,841  $(899,571) $1,483,267  
Comprehensive IncomeComprehensive Income  
Net IncomeNet Income$677 $10 
Other Comprehensive Income (Loss)Other Comprehensive Income (Loss)    Other Comprehensive Income (Loss)  
Foreign Currency Translation AdjustmentsForeign Currency Translation Adjustments(2,831) (1,665) (1,490) (3,449) Foreign Currency Translation Adjustments(2)
Other, Net of TaxOther, Net of Tax  12  12  Other, Net of Tax
Other Comprehensive Income (Loss)Other Comprehensive Income (Loss)(2,825) (1,659) (1,478) (3,437) Other Comprehensive Income (Loss)(2)
Comprehensive Income (Loss)$(912,209) $846,182  $(901,049) $1,479,830  
Comprehensive IncomeComprehensive Income$675 $12 


The accompanying notes are an integral part of these condensed consolidated financial statements.
-3-

    


EOG RESOURCES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands,Millions, Except Share Data)
(Unaudited)
June 30,
2020
December 31,
2019
March 31,
2021
December 31,
2020
ASSETSASSETSASSETS
Current AssetsCurrent AssetsCurrent Assets
Cash and Cash EquivalentsCash and Cash Equivalents$2,416,501  $2,027,972  Cash and Cash Equivalents$3,388 $3,329 
Accounts Receivable, NetAccounts Receivable, Net943,354  2,001,658  Accounts Receivable, Net1,828 1,522 
InventoriesInventories676,580  767,297  Inventories562 629 
Assets from Price Risk Management ActivitiesAssets from Price Risk Management Activities207,019  1,299  Assets from Price Risk Management Activities65 
Income Taxes ReceivableIncome Taxes Receivable196,958  151,665  Income Taxes Receivable23 
OtherOther156,979  323,448  Other413 294 
TotalTotal4,597,391  5,273,339  Total6,191 5,862 
Property, Plant and EquipmentProperty, Plant and Equipment  Property, Plant and Equipment  
Oil and Gas Properties (Successful Efforts Method)Oil and Gas Properties (Successful Efforts Method)64,406,245  62,830,415  Oil and Gas Properties (Successful Efforts Method)65,645 64,793 
Other Property, Plant and EquipmentOther Property, Plant and Equipment4,665,815  4,472,246  Other Property, Plant and Equipment4,590 4,479 
Total Property, Plant and EquipmentTotal Property, Plant and Equipment69,072,060  67,302,661  Total Property, Plant and Equipment70,235 69,272 
Less: Accumulated Depreciation, Depletion and AmortizationLess: Accumulated Depreciation, Depletion and Amortization(39,838,595) (36,938,066) Less: Accumulated Depreciation, Depletion and Amortization(41,569)(40,673)
Total Property, Plant and Equipment, NetTotal Property, Plant and Equipment, Net29,233,465  30,364,595 ��Total Property, Plant and Equipment, Net28,666 28,599 
Deferred Income TaxesDeferred Income Taxes1,846  2,363  Deferred Income Taxes
Other AssetsOther Assets1,388,969  1,484,311  Other Assets1,310 1,342 
Total AssetsTotal Assets$35,221,671  $37,124,608  Total Assets$36,171 $35,805 
LIABILITIES AND STOCKHOLDERS' EQUITYLIABILITIES AND STOCKHOLDERS' EQUITYLIABILITIES AND STOCKHOLDERS' EQUITY
Current LiabilitiesCurrent Liabilities  Current Liabilities  
Accounts PayableAccounts Payable$1,281,166  $2,429,127  Accounts Payable$1,945 $1,681 
Accrued Taxes PayableAccrued Taxes Payable193,763  254,850  Accrued Taxes Payable449 206 
Dividends PayableDividends Payable217,004  166,273  Dividends Payable239 217 
Liabilities from Price Risk Management ActivitiesLiabilities from Price Risk Management Activities—  20,194  Liabilities from Price Risk Management Activities188 
Current Portion of Long-Term DebtCurrent Portion of Long-Term Debt21,121  1,014,524  Current Portion of Long-Term Debt39 781 
Current Portion of Operating Lease LiabilitiesCurrent Portion of Operating Lease Liabilities252,642  369,365  Current Portion of Operating Lease Liabilities269 295 
OtherOther188,685  232,655  Other183 280 
TotalTotal2,154,381  4,486,988  Total3,312 3,460 
Long-Term DebtLong-Term Debt5,703,141  4,160,919  Long-Term Debt5,094 5,035 
Other LiabilitiesOther Liabilities2,138,696  1,789,884  Other Liabilities2,178 2,149 
Deferred Income TaxesDeferred Income Taxes4,837,896  5,046,101  Deferred Income Taxes4,825 4,859 
Commitments and Contingencies (Note 8)Commitments and Contingencies (Note 8)Commitments and Contingencies (Note 8)00
Stockholders' EquityStockholders' Equity  Stockholders' Equity  
Common Stock, $0.01 Par, 1,280,000,000 Shares Authorized and 582,386,619 Shares Issued at June 30, 2020 and 582,213,016 Shares Issued at December 31, 2019205,824  205,822  
Common Stock, $0.01 Par, 1,280,000,000 Shares Authorized and 583,843,561 Shares Issued at March 31, 2021 and 583,694,850 Shares Issued at December 31, 2020 Common Stock, $0.01 Par, 1,280,000,000 Shares Authorized and 583,843,561 Shares Issued at March 31, 2021 and 583,694,850 Shares Issued at December 31, 2020206 206 
Additional Paid in CapitalAdditional Paid in Capital5,886,298  5,817,475  Additional Paid in Capital5,979 5,945 
Accumulated Other Comprehensive LossAccumulated Other Comprehensive Loss(6,130) (4,652) Accumulated Other Comprehensive Loss(14)(12)
Retained EarningsRetained Earnings14,312,493  15,648,604  Retained Earnings14,606 14,170 
Common Stock Held in Treasury, 142,025 Shares at June 30, 2020 and 298,820 Shares at December 31, 2019(10,928) (26,533) 
Common Stock Held in Treasury, 232,249 Shares at March 31, 2021 and 124,265 Shares at December 31, 2020 Common Stock Held in Treasury, 232,249 Shares at March 31, 2021 and 124,265 Shares at December 31, 2020(15)(7)
Total Stockholders' EquityTotal Stockholders' Equity20,387,557  21,640,716  Total Stockholders' Equity20,762 20,302 
Total Liabilities and Stockholders' EquityTotal Liabilities and Stockholders' Equity$35,221,671  $37,124,608  Total Liabilities and Stockholders' Equity$36,171 $35,805 

The accompanying notes are an integral part of these condensed consolidated financial statements.
-4-

    


EOG RESOURCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In Thousands,Millions, Except Per Share Data)
(Unaudited)
Common
Stock
Additional
Paid In
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Retained
Earnings
Common
Stock
Held In
Treasury
Total
Stockholders'
Equity
Common
Stock
Additional
Paid In
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Retained
Earnings
Common
Stock
Held In
Treasury
Total
Stockholders'
Equity
Balance at March 31, 2020$205,824  $5,852,821  $(3,305) $15,440,142  $(24,807) $21,470,675  
Net Loss—  —  —  (909,384) —  (909,384) 
Common Stock Issued Under Stock Plans—  —  —  —  —  —  
Common Stock Dividends Declared, $0.375 Per Share—  —  —  (218,265) —  (218,265) 
Balance at December 31, 2020Balance at December 31, 2020$206 $5,945 $(12)$14,170 $(7)$20,302 
Net IncomeNet Income677 677 
Common Stock Dividends Declared, $0.4125 Per ShareCommon Stock Dividends Declared, $0.4125 Per Share(241)(241)
Other Comprehensive LossOther Comprehensive Loss—  —  (2,825) —  —  (2,825) Other Comprehensive Loss(2)(2)
Change in Treasury Stock - Stock Compensation Plans, NetChange in Treasury Stock - Stock Compensation Plans, Net—  (6,635) —  —  14,872  8,237  Change in Treasury Stock - Stock Compensation Plans, Net(9)(9)
Restricted Stock and Restricted Stock Units, NetRestricted Stock and Restricted Stock Units, Net—  541  —  —  (541) —  Restricted Stock and Restricted Stock Units, Net(1)
Stock-Based Compensation ExpensesStock-Based Compensation Expenses—  39,571  —  —  —  39,571  Stock-Based Compensation Expenses35 35 
Treasury Stock Issued as CompensationTreasury Stock Issued as Compensation—  —  —  —  (452) (452) Treasury Stock Issued as Compensation
Balance at June 30, 2020$205,824  $5,886,298  $(6,130) $14,312,493  $(10,928) $20,387,557  
Balance at March 31, 2021Balance at March 31, 2021$206 $5,979 $(14)$14,606 $(15)$20,762 
Common
Stock
Additional
Paid In
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Retained
Earnings
Common
Stock
Held In
Treasury
Total
Stockholders'
Equity
Common
Stock
Additional
Paid In
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Retained
Earnings
Common
Stock
Held In
Treasury
Total
Stockholders'
Equity
Balance at March 31, 2019$205,807  $5,695,197  $(2,869) $14,050,676  $(45,014) $19,903,797  
Balance at December 31, 2019Balance at December 31, 2019$206 $5,817 $(5)$15,649 $(27)$21,640 
Net IncomeNet Income—  —  —  847,841  —  847,841  Net Income10 10 
Common Stock Issued Under Stock Plans—  —  —  —  —  —  
Common Stock Dividends Declared, $0.2875 Per Share—  —  —  (166,908) —  (166,908) 
Other Comprehensive Loss—  —  (1,659) —  —  (1,659) 
Common Stock Dividends Declared, $0.375 Per ShareCommon Stock Dividends Declared, $0.375 Per Share(219)(219)
Other Comprehensive IncomeOther Comprehensive Income
Change in Treasury Stock - Stock Compensation Plans, NetChange in Treasury Stock - Stock Compensation Plans, Net—  (5,834) —  —  12,027  6,193  Change in Treasury Stock - Stock Compensation Plans, Net(4)(4)
Restricted Stock and Restricted Stock Units, NetRestricted Stock and Restricted Stock Units, Net 1,788  —  —  (1,790) —  Restricted Stock and Restricted Stock Units, Net(4)
Stock-Based Compensation ExpensesStock-Based Compensation Expenses—  38,566  —  —  —  38,566  Stock-Based Compensation Expenses40 40 
Treasury Stock Issued as CompensationTreasury Stock Issued as Compensation—  (399) —  —  2,845  2,446  Treasury Stock Issued as Compensation
Balance at June 30, 2019$205,809  $5,729,318  $(4,528) $14,731,609  $(31,932) $20,630,276  
Balance at March 31, 2020Balance at March 31, 2020$206 $5,853 $(3)$15,440 $(25)$21,471 

The accompanying notes are an integral part of these condensed consolidated financial statements.


-5-



EOG RESOURCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In Thousands, Except Per Share Data)
(Unaudited)
 Common
Stock
Additional
Paid In
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Retained
Earnings
Common
Stock
Held In
Treasury
Total
Stockholders'
Equity
Balance at December 31, 2019$205,822  $5,817,475  $(4,652) $15,648,604  $(26,533) $21,640,716  
Net Loss—  —  —  (899,571) —  (899,571) 
Common Stock Issued Under Stock Plans—  (14) —  —  —  (14) 
Common Stock Dividends Declared, $0.75 Per Share—  —  —  (436,540) —  (436,540) 
Other Comprehensive Loss—  —  (1,478) —  —  (1,478) 
Change in Treasury Stock - Stock Compensation Plans, Net—  (7,011) —  —  10,673  3,662  
Restricted Stock and Restricted Stock Units, Net (3,415) —  —  3,413  —  
Stock-Based Compensation Expenses—  79,643  —  —  —  79,643  
Treasury Stock Issued as Compensation—  (380) —  —  1,519  1,139  
Balance at June 30, 2020$205,824  $5,886,298  $(6,130) $14,312,493  $(10,928) $20,387,557  
 Common
Stock
Additional
Paid In
Capital
Accumulated
Other
Comprehensive
Income (Loss)
Retained
Earnings
Common
Stock
Held In
Treasury
Total
Stockholders'
Equity
Balance at December 31, 2018$205,804  $5,658,794  $(1,358) $13,543,130  $(42,182) $19,364,188  
Net Income—  —  —  1,483,267  —  1,483,267  
Common Stock Issued Under Stock Plans—  —  —  —  —  —  
Common Stock Dividends Declared, $0.5075 Per Share—  —  —  (294,521) —  (294,521) 
Other Comprehensive Loss—  —  (3,437) —  —  (3,437) 
Change in Treasury Stock - Stock Compensation Plans, Net—  (7,074) —  —  7,478  404  
Restricted Stock and Restricted Stock Units, Net 384  —  —  (389) —  
Stock-Based Compensation Expenses—  77,653  —  —  —  77,653  
Treasury Stock Issued as Compensation—  (439) —  —  3,161  2,722  
Cumulative Effect of Adoption of ASU 2018-02, "Income Statement - Reporting Comprehensive Income (Topic 220)"—  —  267  (267) —  —  
Balance at June 30, 2019$205,809  $5,729,318  $(4,528) $14,731,609  $(31,932) $20,630,276  

The accompanying notes are an integral part of these condensed consolidated financial statements.


-6-


EOG RESOURCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)Millions)
(Unaudited)
Six Months Ended
June 30,
Three Months Ended
March 31,
2020201920212020
Cash Flows from Operating ActivitiesCash Flows from Operating ActivitiesCash Flows from Operating Activities
Reconciliation of Net Income (Loss) to Net Cash Provided by Operating Activities:
Net Income (Loss)$(899,571) $1,483,267  
Reconciliation of Net Income to Net Cash Provided by Operating Activities:Reconciliation of Net Income to Net Cash Provided by Operating Activities:
Net IncomeNet Income$677 $10 
Items Not Requiring (Providing) CashItems Not Requiring (Providing) Cash  Items Not Requiring (Providing) Cash  
Depreciation, Depletion and AmortizationDepreciation, Depletion and Amortization1,706,739  1,836,899  Depreciation, Depletion and Amortization900 1,000 
ImpairmentsImpairments1,878,350  184,486  Impairments44 1,573 
Stock-Based Compensation ExpensesStock-Based Compensation Expenses79,643  77,653  Stock-Based Compensation Expenses35 40 
Deferred Income TaxesDeferred Income Taxes(207,692) 324,294  Deferred Income Taxes(36)45 
Gains on Asset Dispositions, Net(29,693) (4,173) 
(Gains) Losses on Asset Dispositions, Net(Gains) Losses on Asset Dispositions, Net(16)
Other, NetOther, Net171  5,439  Other, Net(9)
Dry Hole CostsDry Hole Costs459  3,863  Dry Hole Costs11 
Mark-to-Market Commodity Derivative ContractsMark-to-Market Commodity Derivative Contracts  Mark-to-Market Commodity Derivative Contracts  
Total Gains(1,079,411) (156,720) 
Net Cash Received from Settlements of Commodity Derivative Contracts723,761  31,290  
Total (Gains) LossesTotal (Gains) Losses367 (1,206)
Net Cash Received from (Payments for) Settlements of Commodity Derivative ContractsNet Cash Received from (Payments for) Settlements of Commodity Derivative Contracts(30)84 
Other, NetOther, Net(720) 1,639  Other, Net
Changes in Components of Working Capital and Other Assets and LiabilitiesChanges in Components of Working Capital and Other Assets and Liabilities  Changes in Components of Working Capital and Other Assets and Liabilities  
Accounts ReceivableAccounts Receivable1,191,457  (69,746) Accounts Receivable(308)722 
InventoriesInventories84,575  (11,259) Inventories64 103 
Accounts PayableAccounts Payable(1,184,718) 126,853  Accounts Payable172 434 
Accrued Taxes PayableAccrued Taxes Payable(61,087) 53,280  Accrued Taxes Payable243 (55)
Other AssetsOther Assets252,978  487,387  Other Assets(103)58 
Other LiabilitiesOther Liabilities(64,403) (58,106) Other Liabilities(89)(66)
Changes in Components of Working Capital Associated with Investing and Financing Activities282,154  (22,034) 
Changes in Components of Working Capital Associated with Investing ActivitiesChanges in Components of Working Capital Associated with Investing Activities(91)(132)
Net Cash Provided by Operating ActivitiesNet Cash Provided by Operating Activities2,672,992  4,294,312  Net Cash Provided by Operating Activities1,870 2,585 
Investing Cash FlowsInvesting Cash Flows  Investing Cash Flows  
Additions to Oil and Gas PropertiesAdditions to Oil and Gas Properties(1,990,033) (3,446,497) Additions to Oil and Gas Properties(875)(1,566)
Additions to Other Property, Plant and EquipmentAdditions to Other Property, Plant and Equipment(147,366) (116,881) Additions to Other Property, Plant and Equipment(42)(123)
Proceeds from Sales of AssetsProceeds from Sales of Assets43,368  17,642  Proceeds from Sales of Assets26 
Changes in Components of Working Capital Associated with Investing ActivitiesChanges in Components of Working Capital Associated with Investing Activities(282,154) 22,056  Changes in Components of Working Capital Associated with Investing Activities91 132 
Net Cash Used in Investing ActivitiesNet Cash Used in Investing Activities(2,376,185) (3,523,680) Net Cash Used in Investing Activities(821)(1,531)
Financing Cash FlowsFinancing Cash Flows  Financing Cash Flows  
Long-Term Debt Borrowings1,483,852  —  
Long-Term Debt RepaymentsLong-Term Debt Repayments(1,000,000) (900,000) Long-Term Debt Repayments(750)
Dividends PaidDividends Paid(384,100) (254,681) Dividends Paid(219)(167)
Treasury Stock PurchasedTreasury Stock Purchased(5,057) (8,403) Treasury Stock Purchased(10)(5)
Proceeds from Stock Options Exercised and Employee Stock Purchase Plan8,614  8,695  
Debt Issuance Costs(2,635) (4,902) 
Repayment of Finance Lease LiabilitiesRepayment of Finance Lease Liabilities(8,445) (6,403) Repayment of Finance Lease Liabilities(9)(3)
Changes in Components of Working Capital Associated with Financing Activities—  (22) 
Net Cash Provided by (Used in) Financing Activities92,229  (1,165,716) 
Net Cash Used in Financing ActivitiesNet Cash Used in Financing Activities(988)(175)
Effect of Exchange Rate Changes on CashEffect of Exchange Rate Changes on Cash(507) (65) Effect of Exchange Rate Changes on Cash(2)
Increase (Decrease) in Cash and Cash Equivalents388,529  (395,149) 
Increase in Cash and Cash EquivalentsIncrease in Cash and Cash Equivalents59 879 
Cash and Cash Equivalents at Beginning of PeriodCash and Cash Equivalents at Beginning of Period2,027,972  1,555,634  Cash and Cash Equivalents at Beginning of Period3,329 2,028 
Cash and Cash Equivalents at End of PeriodCash and Cash Equivalents at End of Period$2,416,501  $1,160,485  Cash and Cash Equivalents at End of Period$3,388 $2,907 

The accompanying notes are an integral part of these condensed consolidated financial statements.
-7--6-

EOG RESOURCES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1.    Summary of Significant Accounting Policies

General. The condensed consolidated financial statements of EOG Resources, Inc., together with its subsidiaries (collectively, EOG), included herein have been prepared by management without audit pursuant to the rules and regulations of the United States Securities and Exchange Commission (SEC). Accordingly, they reflect all normal recurring adjustments which are, in the opinion of management, necessary for a fair presentation of the financial results for the interim periods presented. Certain information and notes normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) have been condensed or omitted pursuant to such rules and regulations. However, management believes that the disclosures included either on the face of the financial statements or in these notes are sufficient to make the interim information presented not misleading. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in EOG's Annual Report on Form 10-K for the year ended December 31, 2019,2020, filed on February 27,25, 2021 (EOG's 2020 (EOG's 2019 Annual Report).

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The operating results for the three and six months ended June 30, 2020,March 31, 2021, are not necessarily indicative of the results to be expected for the full year.

Effective January 1, 2020,2021, EOG adopted the provisions of Accounting Standards Update (ASU) 2016-13, "Measurement of Credit Losses on Financial Instruments"2019-12, "Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes" (ASU 2016-13)2019-12). ASU 2016-13 changes2019-12 amends certain aspects of accounting for income taxes, including the impairment modelremoval of specific exceptions within existing U.S. GAAP related to the incremental approach for financial assetsintraperiod tax allocation and certainupdates to the general methodology for calculating income taxes in interim periods, among other instruments by requiring entitieschanges. ASU 2019-12 also requires an entity to adopt a forward-looking expected loss model that will resultreflect the effect of an enacted change in earlier recognition of credit losses. EOG elected to adopt ASU 2016-13 using the modified retrospective approach with a cumulative-effect adjustment to retained earnings as of the effective date. Financial results reported in periods prior to January 1, 2020, are unchanged. EOG assessed its applicable financial assets, which are primarily its accounts receivable from hydrocarbon sales and joint interest billings to third-party companies, including foreign state-owned entitiestax laws or rates in the oil and gas industry. Basedannual effective tax rate computation in the interim period that includes the enactment date, among other requirements. The effects of ASU 2019-12 applicable to EOG were all required on its assessment and various potential remedies ensuring collection, EOG did not record ana prospective basis. There was no impact to retained earnings upon adoption and expects current and future credit lossesof ASU 2019-12 to be immaterial. EOG continues to monitor the credit risk from third-party companies to determine if expected credit losses may become material.its consolidated financial statements or related disclosures.

Recently Issued Accounting Standards. In March 2020, the Financial Accounting Standards Board (FASB) issued ASU 2020-04, "Reference Rate Reform (Topic 848)" (ASU 2020-04), which provides optional expedients and exceptions for accounting treatment of contracts which are affected by the anticipated discontinuation of the London InterBank Offered Rate (LIBOR) and other rates resulting from rate reform. Contract terms that are modified due to the replacement of a reference rate are not required to be remeasured or reassessed under relevant accounting standards. Early adoption is permitted. ASU 2020-04 covers certain contracts which reference these rates and that are entered into on or before December 31, 2022. EOG is evaluating the provisions of ASU 2020-04 and has not determined the full impact on its consolidated financial statements and related disclosures related to its $2.0 billion senior unsecured Revolving Credit Agreement.

In December 2019, the FASB issued ASU 2019-12, "Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes" (ASU 2019-12), which amends certain aspects of accounting for income taxes. ASU 2019-12 removes specific exceptions within existing U.S. GAAP related to the incremental approach for intraperiod tax allocation and to the general methodology for calculating income taxes in interim periods, among other changes. ASU 2019-12 also requires an entity to reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date, among other requirements. ASU 2019-12 is effective for interim and annual periods beginning after December 15, 2020, and early adoption is permitted. EOG is continuing to evaluate the provisions of ASU 2019-12 and has not determined the full impact on its consolidated financial statements and related disclosures.


-8--7-

EOG RESOURCES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)

2.    Stock-Based Compensation

As more fully discussed in Note 7 to the Consolidated Financial Statements included in EOG's 20192020 Annual Report, EOG maintains various stock-based compensation plans. Stock-based compensation expense is included on the Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) based upon the job function of the employees receiving the grants as follows (in millions):
Three Months Ended
June 30,
Six Months Ended
June 30,
Three Months Ended
March 31,
2020201920202019 20212020
Lease and WellLease and Well$15.1  $13.6  $30.2  $27.3  Lease and Well$14 $15 
Gathering and Processing CostsGathering and Processing Costs0.4  0.3  0.6  0.5  Gathering and Processing Costs
Exploration CostsExploration Costs6.8  6.5  14.0  13.0  Exploration Costs
General and AdministrativeGeneral and Administrative17.3  18.2  34.8  36.9  General and Administrative15 18 
TotalTotal$39.6  $38.6  $79.6  $77.7  Total$35 $40 

The Amended and Restated EOG Resources, Inc. 2008 Omnibus Equity Compensation Plan (2008 Plan) providesprovided for grants of stock options, stock-settled stock appreciation rights (SARs), restricted stock and restricted stock units, performance units and other stock-based awards.

At June 30, 2020,March 31, 2021, approximately 7.02 million common shares remained available for grant under the 2008 Plan.

EOG's stockholders approved the EOG Resources, Inc. 2021 Omnibus Equity Compensation Plan (2021 Plan) at the 2021 Annual Meeting of Stockholders. Therefore, no further grants will be made from the 2008 Plan from and after the April 29, 2021 effective date of the 2021 Plan. The 2021 Plan provides for grants of stock options, SARs, restricted stock and restricted stock units and other stock-based awards, up to an aggregate maximum of 20 million shares of common stock, plus any shares that are subject to outstanding awards under the 2008 Plan as of April 29, 2021, that are subsequently canceled, forfeited, expire or are otherwise not issued or are settled in cash. Under the 2021 Plan, grants may be made to employees and non-employee members of EOG's Board of Directors (Board). EOG's policy is to issue shares related to 20082021 Plan grants from previously authorized unissued shares or treasury shares to the extent treasury shares are available.

Stock Options and Stock-Settled Stock Appreciation Rights and Employee Stock Purchase Plan. The fair value of stock option grants and SAR grants is estimated using the Hull-White II binomial option pricing model. The fair value of Employee Stock Purchase Plan (ESPP) grants is estimated using the Black-Scholes-Merton model. Stock-based compensation expense related to stock option, SAR and ESPP grants totaled $15.0$10 million and $13.6$14 million during the three months ended June 30,March 31, 2021 and 2020, and 2019, respectively, and $29.1 million and $27.5 million during the six months ended June 30, 2020 and 2019, respectively.

Weighted average fair values and valuation assumptions used to value stock option, SAR and ESPP grants during the six-monththree-month periods ended June 30,March 31, 2021 and 2020 and 2019 are as follows:
Stock Options/SARsESPP Stock Options/SARsESPP
Six Months Ended
June 30,
Six Months Ended
June 30,
Three Months Ended
March 31,
Three Months Ended
March 31,
2020201920202019 2021202020212020
Weighted Average Fair Value of GrantsWeighted Average Fair Value of Grants$16.94  $25.68  $20.80  $22.98  Weighted Average Fair Value of Grants$17.03 $19.67 $14.69 $20.80 
Expected VolatilityExpected Volatility42.10 %31.50 %35.24 %36.31 %Expected Volatility47.18 %33.43 %54.99 %35.24 %
Risk-Free Interest RateRisk-Free Interest Rate0.93 %2.38 %1.56 %2.48 %Risk-Free Interest Rate0.28 %1.43 %0.09 %1.56 %
Dividend YieldDividend Yield1.94 %0.96 %1.56 %0.83 %Dividend Yield3.25 %1.60 %3.41 %1.56 %
Expected LifeExpected Life5.1 years5.1 years0.5 years0.5 yearsExpected Life5.2 years5.0 years0.5 years0.5 years

Expected volatility is based on an equal weighting of historical volatility and implied volatility from traded options in EOG's common stock. The risk-free interest rate is based upon United States Treasury yields in effect at the time of grant. The expected life is based upon historical experience and contractual terms of stock option, SAR and ESPP grants.

-9--8-

EOG RESOURCES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)

The following table sets forth stock option and SAR transactions for the six-monththree-month periods ended June 30,March 31, 2021 and 2020 and 2019 (stock options and SARs in thousands):
Six Months Ended
June 30, 2020
Six Months Ended
June 30, 2019
Three Months Ended
March 31, 2021
Three Months Ended
March 31, 2020
Number of
Stock
Options/SARs
Weighted
Average
Grant
Price
Number of
Stock
Options/SARs
Weighted
Average
Grant
Price
Number of
Stock
Options/SARs
Weighted
Average
Grant
Price
Number of
Stock
Options/SARs
Weighted
Average
Grant
Price
Outstanding at January 1Outstanding at January 19,395  $94.53  8,310  $96.90  Outstanding at January 110,186 $84.08 9,395 $94.53 
GrantedGranted16  58.40  32  93.29  Granted53.98 75.44 
Exercised (1)
Exercised (1)
(23) 69.59  (157) 73.39  
Exercised (1)
(26)63.25 (23)69.59 
ForfeitedForfeited(389) 91.39  (107) 105.47  Forfeited(103)89.21 (47)96.81 
Outstanding at June 30 (2)
8,999  $94.66  8,078  $97.23  
Outstanding at March 31 (2)
Outstanding at March 31 (2)
10,064 $84.06 9,334 $94.56 
Vested or Expected to Vest (3)
Vested or Expected to Vest (3)
8,670  $94.67  7,741  $96.78  
Vested or Expected to Vest (3)
9,749 $84.74 8,998 $94.55 
Exercisable at June 30 (4)
4,963  $94.61  3,905  $86.71  
Exercisable at March 31 (4)
Exercisable at March 31 (4)
6,288 $96.47 5,249 $94.33 
(1)The total intrinsic value of stock options/SARs exercised during the sixthree months ended June 30,March 31, 2021 and 2020 and 2019 was $0.4$0.2 million and $3.9$0.4 million, respectively. The intrinsic value is based upon the difference between the market price of EOG's common stock on the date of exercise and the grant price of the stock options/SARs.
(2)The total intrinsic value of stock options/SARs outstanding at June 30,March 31, 2021 and 2020 and 2019 was $0.1$71 million and $45.0 million,0, respectively. At June 30,March 31, 2021 and 2020, and 2019, the weighted average remaining contractual life was 3.9 years and 4.0 years, respectively.years.
(3)The total intrinsic value of stock options/SARs vested or expected to vest at June 30,March 31, 2021 and 2020 and 2019 was $0.1$66 million and $44.4 million,0, respectively. At June 30,March 31, 2021 and 2020, and 2019, the weighted average remaining contractual life was 3.9 years and 3.9 years, respectively.4.0 years.
(4)The total intrinsic value of stock options/SARs exercisable at June 30,March 31, 2021 and 2020 was $3 million and 2019 was 0, and $37.1 million, respectively. At June 30,March 31, 2021 and 2020, and 2019, the weighted average remaining contractual life was 2.73.0 years and 2.52.8 years, respectively.

At June 30, 2020,March 31, 2021, unrecognized compensation expense related to non-vested stock option, SAR and ESPP grants totaled $61.6$47 million. Such unrecognized expense will be amortized on a straight-line basis over a weighted average period of 1.51.9 years.

Restricted Stock and Restricted Stock Units. Employees may be granted restricted (non-vested) stock and/or restricted stock units without cost to them. Stock-based compensation expense related to restricted stock and restricted stock units totaled $23.4$24 million and $23.1$25 million for the three months ended June 30,March 31, 2021 and 2020, and 2019, respectively, and $48.2 million and $46.4 million for the six months ended June 30, 2020 and 2019, respectively.


-9-

EOG RESOURCES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)

The following table sets forth restricted stock and restricted stock unit transactions for the six-monththree-month periods ended June 30,March 31, 2021 and 2020 and 2019 (shares and units in thousands):
Six Months Ended
June 30, 2020
Six Months Ended
June 30, 2019
Three Months Ended
March 31, 2021
Three Months Ended
March 31, 2020
Number of
Shares and
Units
Weighted
Average
Grant Date
Fair Value
Number of
Shares and
Units
Weighted
Average
Grant Date
Fair Value
Number of
Shares and
Units
Weighted
Average
Grant Date
Fair Value
Number of
Shares and
Units
Weighted
Average
Grant Date
Fair Value
Outstanding at January 1Outstanding at January 14,546  $90.16  3,792  $96.64  Outstanding at January 14,742 $74.97 4,546 $90.16 
GrantedGranted67  51.83  401  96.22  Granted12 60.27 26 63.48 
Released (1)
Released (1)
(304) 88.58  (395) 93.84  
Released (1)
(430)90.27 (259)88.19 
ForfeitedForfeited(36) 90.61  (68) 98.27  Forfeited(25)71.16 (11)89.86 
Outstanding at June 30 (2)
4,273  $89.67  3,730  $96.86  
Outstanding at March 31 (2)
Outstanding at March 31 (2)
4,299 $73.42 4,302 $90.12 
(1)The total intrinsic value of restricted stock and restricted stock units released during the sixthree months ended June 30,March 31, 2021 and 2020 and 2019 was $13.1$31 million and $35.7$11 million, respectively. The intrinsic value is based upon the closing price of EOG's common stock on the date the restricted stock and restricted stock units are released.
(2)The total intrinsic value of restricted stock and restricted stock units outstanding at June 30,March 31, 2021 and 2020 and 2019 was $216.5$312 million and $347.5$155 million, respectively.
-10-

EOG RESOURCES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)


At June 30, 2020,March 31, 2021, unrecognized compensation expense related to restricted stock and restricted stock units totaled $154.2$153 million. Such unrecognized expense will be amortized on a straight-line basis over a weighted average period of 1.41.5 years.

Performance Units. EOG grants performance units annually to its executive officers without cost to them. As more fully discussed in the grant agreements, the performance metric applicable to the performance units is EOG's total shareholder return over a three-yearthree-year performance period relative to the total shareholder return of a designated group of peer companies (Performance Period). Upon the application of the performance multiple at the completion of the Performance Period, a minimum of 0% and a maximum of 200% of the performance units granted could be outstanding. The fair value of the performance units is estimated using a Monte Carlo simulation. Stock-based compensation expense related to the performance unit grants totaled $1.2$1 million and $1.9 million for the each of the three months ended June 30, 2020March 31, 2021 and 2019, respectively, and $2.3 million and $3.8 million for the six months ended June 30, 2020 and 2019, respectively.2020.


-10-

EOG RESOURCES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)

The following table sets forth the performance unit transactions for the six-monththree-month periods ended June 30,March 31, 2021 and 2020 and 2019 (units in thousands):
Six Months Ended
June 30, 2020
Six Months Ended
June 30, 2019
Three Months Ended
March 31, 2021
Three Months Ended
March 31, 2020
Number of
Units
Weighted
Average
Price per
Grant Date
Number of
Units
Weighted
Average
Price per
Grant Date
Number of
Units
Weighted
Average
Price per
Grant Date
Number of
Units
Weighted
Average
Price per
Grant Date
Outstanding at January 1Outstanding at January 1598  $92.19  539  $101.53  Outstanding at January 1613 $79.10 598 $92.19 
GrantedGranted—  — ��—  —  Granted49.86 
Granted for Performance Multiple (1)
Granted for Performance Multiple (1)
66  100.95  72  69.43  
Granted for Performance Multiple (1)
19 96.29 66 100.95 
Released (2)
Released (2)
(121) 104.69  (83) 85.65  
Released (2)
(98)96.29 (121)104.69 
ForfeitedForfeited—  —  —  —  Forfeited
Outstanding at June 30 (3)
543  (4)$90.48  528  $99.64  
Outstanding at March 31 (3)
Outstanding at March 31 (3)
542 (4)$76.18 543 $90.48 
(1)Upon completion of the Performance Period for the performance units granted in 20162017 and 2015,2016, a performance multiple of 150%125% and 200%150%, respectively, was applied to each of the grants resulting in additional grants of performance units in February 20202021 and February 2019,2020, respectively.
(2)The total intrinsic value of performance units released during the sixthree months ended June 30,March 31, 2021 and 2020 and 2019 was $9.0$6 million and $7.7$9 million, respectively. The intrinsic value is based upon the closing price of EOG's common stock on the date the performance units are released.
(3)The total intrinsic value of performance units outstanding at June 30,March 31, 2021 and 2020 and 2019 was approximately $27.5$39 million and $49.2$20 million, respectively.
(4)Upon the application of the relevant performance multiple at the completion of each of the remaining Performance Periods, a minimum of 17976,785 and a maximum of 9071,007,705 performance units could be outstanding.

At June 30, 2020,March 31, 2021, unrecognized compensation expense related to performance units totaled $6.4$7 million. Such unrecognized expense will be amortized on a straight-line basis over a weighted average period of 1.71.9 years.


-11-

EOG RESOURCES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)

3.    Net Income (Loss) Per Share

The following table sets forth the computation of Net Income (Loss) Per Share for the three-month and six-month periods ended June 30,March 31, 2021 and 2020 and 2019 (in thousands,millions, except per share data):
Three Months Ended
June 30,
Six Months Ended
June 30,
Three Months Ended
March 31,
2020201920202019 20212020
Numerator for Basic and Diluted Earnings Per Share -Numerator for Basic and Diluted Earnings Per Share -Numerator for Basic and Diluted Earnings Per Share -
Net Income (Loss)$(909,384) $847,841  $(899,571) $1,483,267  
Net IncomeNet Income$677 $10 
Denominator for Basic Earnings Per Share -Denominator for Basic Earnings Per Share -    Denominator for Basic Earnings Per Share -  
Weighted Average SharesWeighted Average Shares578,719  577,460  578,581  577,333  Weighted Average Shares580 578 
Potential Dilutive Common Shares -Potential Dilutive Common Shares -    Potential Dilutive Common Shares -  
Stock Options/SARs/ESPPStock Options/SARs/ESPP—  434  —  452  Stock Options/SARs/ESPP
Restricted Stock/Units and Performance UnitsRestricted Stock/Units and Performance Units—  2,353  —  2,419  Restricted Stock/Units and Performance Units
Denominator for Diluted Earnings Per Share -Denominator for Diluted Earnings Per Share -    Denominator for Diluted Earnings Per Share -  
Adjusted Diluted Weighted Average SharesAdjusted Diluted Weighted Average Shares578,719  580,247  578,581  580,204  Adjusted Diluted Weighted Average Shares583 580 
Net Income (Loss) Per Share    
Net Income Per ShareNet Income Per Share  
BasicBasic$(1.57) $1.47  $(1.55) $2.57  Basic$1.17 $0.02 
DilutedDiluted$(1.57) $1.46  $(1.55) $2.56  Diluted$1.16 $0.02 

The diluted earnings per share calculation excludes stock options, SARs, restricted stock, restricted stock units and performance unitsoption, SAR, and ESPP grants that were anti-dilutive. Shares underlying the excluded stock options, SARsoption, SAR and ESPP grants were 9.38 million and 6.09 million shares for the three months ended June 30,March 31, 2021 and 2020, and 2019, respectively, and were 9.3 million and 6.0 million shares for the six months ended June 30, 2020 and 2019, respectively. For the three and six months ended June 30, 2020, 4.8 million shares of restricted stock, restricted stock units and performance units were excluded.

4.    Supplemental Cash Flow Information

Net cash paid (received) for interest and income taxes was as follows for the six-monththree-month periods ended June 30,March 31, 2021 and 2020 and 2019 (in thousands)millions):
Six Months Ended
June 30,
Three Months Ended
March 31,
20202019 20212020
Interest (1)
Interest (1)
$68,730  $108,994  
Interest (1)
$49 $47 
Income Taxes, Net of Refunds ReceivedIncome Taxes, Net of Refunds Received$(76,489) $(331,778) Income Taxes, Net of Refunds Received$20 $15 
(1)Net of capitalized interest of $17$8 million and $18$9 million for the sixthree months ended June 30,March 31, 2021 and 2020, and 2019, respectively.

EOG's accrued capital expenditures at June 30,March 31, 2021 and 2020 and 2019 were $246$436 million and $626$642 million, respectively.

Non-cash investing activities for the sixthree months ended June 30,March 31, 2021 and 2020, and 2019, included additions of $55$25 million and $72$29 million, respectively, to EOG's oil and gas properties as a result of property exchanges. Non-cash investing activities for the sixthree months ended June 30, March 31, 2021 and 2020, also included additions of $73$74 million and $49 million, respectively, to EOG's other property, plant and equipment primarilymade in connection with a finance lease transaction.transactions for storage facilities.

-12-

EOG RESOURCES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)

5.    Segment Information

Selected financial information by reportable segment is presented below for the three-month and six-month periods ended June 30,March 31, 2021 and 2020 and 2019 (in thousands)millions):
Three Months Ended
June 30,
Six Months Ended
June 30,
Three Months Ended
March 31,
2020201920202019 20212020
Operating Revenues and OtherOperating Revenues and OtherOperating Revenues and Other
United StatesUnited States$1,055,673  $4,611,789  $5,716,408  $8,588,808  United States$3,606 $4,661 
TrinidadTrinidad33,899  71,132  75,542  141,000  Trinidad76 42 
Other International (1)
Other International (1)
13,802  14,709  29,116  26,464  
Other International (1)
12 15 
TotalTotal$1,103,374  $4,697,630  $5,821,066  $8,756,272  Total3,694 4,718 
Operating Income (Loss)Operating Income (Loss)    Operating Income (Loss)  
United States (2)
United States (2)
$(1,079,201) $1,107,910  $(973,795) $1,958,810  
United States (2)
890 105 
TrinidadTrinidad10,234  34,390  22,897  73,222  Trinidad43 13 
Other International (1) (3)
Other International (1) (3)
(17,582) (11,529) (78,066) (24,731) 
Other International (1) (3)
(1)(60)
TotalTotal(1,086,549) 1,130,771  (1,028,964) 2,007,301  Total932 58 
Reconciling ItemsReconciling Items    Reconciling Items  
Other Income (Expense), NetOther Income (Expense), Net(4,500) 8,503  13,608  14,115  Other Income (Expense), Net(4)18 
Interest Expense, NetInterest Expense, Net(54,213) (49,908) (98,903) (104,814) Interest Expense, Net(47)(45)
Income (Loss) Before Income Taxes$(1,145,262) $1,089,366  $(1,114,259) $1,916,602  
Income Before Income TaxesIncome Before Income Taxes$881 $31 
(1)    Other International primarily consists of EOG's China and Canada operations. EOG began an exploration program in Oman in the third quarter of 2020.
(2)    EOG recorded pretax impairment charges of $6 million and $1,462$1,456 million for the three and six months ended June 30,March 31, 2020, respectively, for proved oil and gas properties, leasehold costs and other assets due to the decline in commodity prices. See Note 11. In addition, EOG recorded pretax impairment charges of $219 million for the three and six months ended June 30, 2020, for sand and crude-by-rail assets.
(3)    EOG recorded pretax impairment charges of $19$60 million for the three months ended June 30,March 31, 2020, and $79 million for the six months ended June 30, 2020, for proved oil and gas properties and firm commitment contracts related to its decision to exit the Horn River Basin in British Columbia, Canada.

Total assets by reportable segment are presented below at June 30, 2020March 31, 2021 and December 31, 20192020 (in thousands)millions):
At
June 30,
2020
At
December 31,
2019
At
March 31,
2021
At
December 31,
2020
Total AssetsTotal AssetsTotal Assets
United StatesUnited States$34,534,344  $36,274,942  United States$35,395 $35,048 
TrinidadTrinidad531,454  705,747  Trinidad586 546 
Other International (1)
Other International (1)
155,873  143,919  
Other International (1)
190 211 
TotalTotal$35,221,671  $37,124,608  Total$36,171 $35,805 
(1)    Other International primarily consists of EOG's China and Canada operations. EOG began an exploration program in Oman in the third quarter of 2020.

-13-

EOG RESOURCES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)

6.    Asset Retirement Obligations

The following table presents the reconciliation of the beginning and ending aggregate carrying amounts of short-term and long-term legal obligations associated with the retirement of property, plant and equipment for the six-monththree-month periods ended June 30,March 31, 2021 and 2020 and 2019 (in thousands)millions):
Six Months Ended
June 30,
Three Months Ended
March 31,
20202019 20212020
Carrying Amount at January 1Carrying Amount at January 1$1,110,710  $954,377  Carrying Amount at January 1$1,217 $1,111 
Liabilities IncurredLiabilities Incurred16,715  56,490  Liabilities Incurred12 15 
Liabilities Settled (1)
Liabilities Settled (1)
(24,480) (41,650) 
Liabilities Settled (1)
(5)(24)
AccretionAccretion23,153  20,523  Accretion11 11 
RevisionsRevisions19,990  8,006  Revisions
Foreign Currency Translations(223) 219  
Carrying Amount at June 30$1,145,865  $997,965  
Carrying Amount at March 31Carrying Amount at March 31$1,237 $1,113 
Current PortionCurrent Portion$38,792  $27,416  Current Portion$49 $38 
Noncurrent PortionNoncurrent Portion$1,107,073  $970,549  Noncurrent Portion$1,188 $1,075 
(1)Includes settlements related to asset sales.

The current and noncurrent portions of EOG's asset retirement obligations are included in Current Liabilities - Other and Other Liabilities, respectively, on the Condensed Consolidated Balance Sheets.

7.    Exploratory Well Costs

EOG's net changes in capitalized exploratory well costs for the six-monththree-month period ended June 30, 2020,March 31, 2021, are presented below (in thousands)millions):
 SixThree Months Ended
June 30, 2020March 31, 2021
Balance at January 1$25,89729 
Additions Pending the Determination of Proved Reserves55,66912 
Reclassifications to Proved Properties(2,178)(3)
Costs Charged to Expense (1)
(10,988)(5)
Balance at June 30March 31$68,40033 
(1)Includes capitalized exploratory well costs charged to either dry hole costs or impairments.

At June 30, 2020, all capitalized
Three Months Ended
March 31, 2021
Capitalized exploratory well costs that have been capitalized for a period of one year or less$18 
Capitalized exploratory well costs that have been capitalized for a period greater than one year (1)
15 
Balance at March 31$33 
Number of exploratory wells that have been capitalized for a period greater than one year
(1)Consists of costs had been capitalized for periods of less than one year.related to a project in Trinidad at March 31, 2021.


-14-

EOG RESOURCES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)

8.    Commitments and Contingencies

There are currently various suits and claims pending against EOG that have arisen in the ordinary course of EOG's business, including contract disputes, personal injury and property damage claims and title disputes. While the ultimate outcome and impact on EOG cannot be predicted, management believes that the resolution of these suits and claims will not, individually or in the aggregate, have a material adverse effect on EOG's consolidated financial position, results of operations or cash flow. EOG records reserves for contingencies when information available indicates that a loss is probable and the amount of the loss can be reasonably estimated.

-14-

EOG RESOURCES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)

9.    Pension and Postretirement Benefits

Pension Plans.EOG has a defined contribution pension plansplan in place for most of its employees in the United States, and a defined benefitStates. EOG's contributions to the pension plan covering certainare based on various percentages of its employeescompensation and, in Trinidad. Forsome instances, are based upon the six months ended June 30, 2020 and 2019,amount of the employees' contributions. EOG's total costs recognized for thesethe pension plansplan were $20.7$12 million and $23.0$9 million for the three months ended March 31, 2021 and 2020, respectively. EOG also has postretirement medicalIn addition, EOG's Trinidadian subsidiary maintains a contributory defined benefit pension plan and dental plans in place for eligiblea matched savings plan, both of which are available to most of its employees and their dependents inof the United States and Trinidad,Trinidadian subsidiary, the costs of which are not material.

Postretirement Health Care. EOG has postretirement medical and dental benefits in place for eligible United States and Trinidad employees and their eligible dependents, the costs of which are not material.

10.    Long-Term Debt and Common Stock

Long-Term Debt. EOG had 0 outstanding commercial paper borrowings at June 30, 2020March 31, 2021 and December 31, 2019,2020, and did not utilize any commercial paper borrowings during the sixthree months ended June 30, 2020March 31, 2021 and 2019.2020.

At June 30, 2020, $750 million aggregate principal amount of EOG's 4.100% Senior Notes due 2021 was reclassified as long-term debt as a result of EOG's intent and ability to ultimately replace such amounts with other long-term debt.

EOG currently has a $2.0 billion senior unsecured Revolving Credit Agreement (Agreement) with domestic and foreign lenders (Banks). The Agreement has a scheduled maturity date of June 27, 2024, and includes an option for EOG to extend, on up to two occasions, the term for successive one-year periods subject to certain terms and conditions. The Agreement (i) commits the Banks to provide advances up to an aggregate principal amount of $2.0 billion at any one time outstanding, with an option for EOG to request increases in the aggregate commitments to an amount not to exceed $3.0 billion, subject to certain terms and conditions and (ii) includes a swingline subfacility and a letter of credit subfacility. Advances under the Agreement will accrue interest based, at EOG's option, on either LIBOR plus an applicable margin (Eurodollar rate) or the base rate (as defined in the Agreement) plus an applicable margin. The Agreement contains representations, warranties, covenants and events of default that EOG believes are customary for investment-grade, senior unsecured commercial bank credit agreements, including a financial covenant for the maintenance of a ratio of total debt-to-total capitalizationdebt-to-capitalization (as such terms are defined in the Agreement) of no greater than 65%. At June 30, 2020,March 31, 2021, EOG was in compliance with this financial covenant. At June 30, 2020March 31, 2021 and December 31, 2019,2020, there were 0 borrowings or letters of credit outstanding under the Agreement. The Eurodollar rate and base rate (inclusive of the applicable margin), had there been any amounts borrowed under the Agreement at June 30, 2020,March 31, 2021, would have been 1.06%1.01% and 3.25%, respectively.

On AprilFebruary 1, 2020,2021, EOG repaid upon maturity the $500 million aggregate principal amount of its 2.45% Senior Notes due 2020.

On April 14, 2020, EOG closed on its offering of $750 million aggregate principal amount of its 4.375%4.100% Senior Notes due 2030 and $750 million aggregate principal amount of its 4.950% Senior Notes due 2050 (together, the Notes). Interest on the Notes is payable semi-annually in arrears on April 15 and October 15 of each year, beginning on October 15, 2020. EOG received net proceeds of approximately $1.48 billion from the issuance of the Notes, which were used to repay the 4.40% Senior Notes due 2020 when they matured on June 1, 2020 (see below), and have also been used (and will continue to be used) for general corporate purposes, including the funding of capital expenditures.

On June 1, 2020, EOG repaid upon maturity the $500 million aggregate principal amount of its 4.40% Senior Notes due 2020.2021.

Common Stock. On February 27, 2020,25, 2021, EOG's Board of Directors increased the quarterly cash dividend on the common stock from the previous $0.2875$0.375 per share to $0.375$0.4125 per share, effective beginning with the dividend paid on April 30, 2020,2021, to stockholders of record as of April 16, 2020.2021. In addition, on May 6, 2021, EOG's Board declared a special cash dividend on the common stock of $1.00 per share. The special cash dividend, which is in addition to the quarterly cash dividend, is payable on July 30, 2021 to stockholders of record as of July 16, 2021.

-15-

EOG RESOURCES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)

11.    Fair Value Measurements

Recurring Fair Value Measurements. As more fully discussed in Note 13 to the Consolidated Financial Statements included in EOG's 20192020 Annual Report, certain of EOG's financial and nonfinancial assets and liabilities are reported at fair value on the Condensed Consolidated Balance Sheets. The following table provides fair value measurement information within the fair value hierarchy for certain of EOG's financial assets and liabilities carried at fair value on a recurring basis at June 30, 2020March 31, 2021 and December 31, 20192020 (in thousands)millions):
 Fair Value Measurements Using:
 Quoted
Prices in
Active
Markets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Total
At June 30, 2020    
Financial Assets: (1)
    
Crude Oil Swaps$—  $224,256  $—  $224,256  
Crude Oil Roll Differential Swaps—  2,396  —  2,396  
Natural Gas Liquids Swaps—  7,064  —  7,064  
Natural Gas Collars—  4,338  —  4,338  
Natural Gas Swaps—  2,533  —  2,533  
Natural Gas Basis Swaps—   —   
Financial Liabilities:
Crude Oil Roll Differential Swaps$—  $16,855  $—  $16,855  
Natural Gas Basis Swaps—  10,671  —  10,671  
Natural Gas Liquids Swaps—  166  —  166  
Natural Gas Collars—  4,313  —  4,313  
At December 31, 2019
Financial Assets: (1)
Natural Gas Liquids Swaps$—  $3,401  $—  $3,401  
Natural Gas Basis Swaps—  970  —  970  
Financial Liabilities: (2)
Crude Oil Swaps$—  $23,266  $—  $23,266  
 Fair Value Measurements Using:
 Quoted
Prices in
Active
Markets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Total
At March 31, 2021    
Financial Assets:    
Natural Gas Swaps$$23 $$23 
Financial Liabilities:
Natural Gas Swaps
Crude Oil Swaps175 175 
Crude Oil Roll Differential Swaps20 20 
Natural Gas Liquids Swaps18 18 
At December 31, 2020
Financial Assets:
Natural Gas Swaps$$66 $$66 
Financial Liabilities:
Crude Oil Roll Differential Swaps

(1) $207 millionSee Note 12 for the balance sheet amounts and $1 million are included in "Current Assets - Assets from Price Risk Management Activities"classification of EOG's financial derivative instruments at June 30, 2020March 31, 2021 and December 31, 2019, respectively, on the Condensed Consolidated Balance Sheets. $2 million is included in "Other Assets" at June 30, 2020, on the Condensed Consolidated Balance Sheets.
(2) $20 million is included in "Current Liabilities - Liabilities from Price Risk Management Activities" at December 31, 2019, on the Condensed Consolidated Balance Sheets.2020.

The estimated fair value of commodity derivative contracts was based upon forward commodity price curves based on quoted market prices. Commodity derivative contracts were valued by utilizing an independent third-party derivative valuation provider who uses various types of valuation models, as applicable.

Non-Recurring Fair Value Measurements. The initial measurement of asset retirement obligations at fair value is calculated using discounted cash flow techniques and based on internal estimates of future retirement costs associated with property, plant and equipment. Significant Level 3 inputs used in the calculation of asset retirement obligations include plugging costs and reserve lives. A reconciliation of EOG's asset retirement obligations is presented in Note 6.


-16-

EOG RESOURCES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)

When circumstances indicate that proved oil and gas properties may be impaired, EOG compares expected undiscounted future cash flows at a depreciation, depletion and amortization group level to the unamortized capitalized cost of the asset. If the expected undiscounted future cash flows, based on EOG's estimate of (and assumptions regarding) significant Level 3 inputs, including future crude oil, NGLs and natural gas prices, operating costs, development expenditures, anticipated production from proved reserves and other relevant data, are lower than the unamortized capitalized cost, the capitalized cost is reduced to fair value. Fair value is generally calculated using the Income Approach described in the Fair Value Measurement Topic of the ASC. In certain instances, EOG utilizes accepted offers from third-party purchasers as the basis for determining fair value.

During the first half of 2020, due to the decline in commodity prices, proved oil and gas properties with a carrying amount of $1,424 million were written down to their fair value of $264 million, resulting in pretax impairment charges of $1,160 million for the six months ended June 30, 2020. In addition, EOG recorded pretax impairment charges of $72 million for the six months ended June 30, 2020, for a commodity price-related write-down of other assets.

EOG utilized average prices per acre from comparable market transactions and estimated discounted cash flows as the basis for determining the fair value of unproved and proved properties, respectively, received in non-cash property exchanges. See Note 4.

Fair Value Disclosures. EOG's financial instruments, other than commodity derivative contracts, consist of cash and cash equivalents, accounts receivable, accounts payable and current and long-term debt. The carrying values of cash and cash equivalents, accounts receivable and accounts payable approximate fair value.

At June 30, 2020March 31, 2021 and December 31, 2019,2020, respectively, EOG had outstanding $5,640$4,890 million and $5,140$5,640 million aggregate principal amount of senior notes, which had estimated fair values at such dates of approximately $6,416$5,478 million and $5,452$6,505 million, respectively. The estimated fair value of debt was based upon quoted market prices and, where such prices were not available, other observable (Level 2) inputs regarding interest rates available to EOG at the end of each respective period.

12.    Risk Management Activities

Commodity Price Risk. As more fully discussed in Note 12 to the Consolidated Financial Statements included in EOG's 20192020 Annual Report, EOG engages in price risk management activities from time to time. These activities are intended to manage EOG's exposure to fluctuations in commodity prices for crude oil, NGLs 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. EOG has not designated any of its financial commodity derivative contracts as accounting hedges and, accordingly, accounts for financial commodity derivative contracts using the mark-to-market accounting method.

Crude OilCommodity Derivative Contracts. Prices received by EOG for its crude oil production generally vary from U.S. New York Mercantile Exchange (NYMEX) West Texas Intermediate (WTI) prices due to adjustments for delivery location (basis) and other factors. EOG has entered into crude oil basis swap contracts in order to fix the differential between Intercontinental Exchange (ICE) Brent pricing and pricing in Cushing, Oklahoma (ICE Brent Differential). Presented below is a comprehensive summary of EOG's ICE Brent Differential basis swapfinancial commodity derivative contracts as of June 30, 2020. The weighted average price differential expressedMarch 31, 2021. Crude oil and NGL volumes are presented in thousand barrels per day (MBbld) and prices are presented in dollars per barrel ($/Bbl) represents the amount of addition to Cushing, Oklahoma, prices for the notional. Natural gas volumes expressedare presented in barrelsmillion British Thermal Units per day (Bbld) covered by the basis swap contracts.(MMBtud) and prices are presented in dollars per million British Thermal Units ($/MMBtu).
ICE Brent Differential Basis Swap Contracts
 Volume (Bbld)Weighted Average Price Differential
($/Bbl)
2020
May 2020 (closed)10,000  $4.92  

Crude Oil Financial Price Swap Contracts
Contracts Sold
PeriodSettlement IndexVolume
(MBbld)
Weighted Average Price
($/Bbl)
January 2021 (closed)New York Mercantile Exchange (NYMEX) West Texas Intermediate (WTI)151 $50.06 
February - March 2021 (closed)NYMEX WTI201 51.29 
April - June 2021NYMEX WTI150 51.68 
July - September 2021NYMEX WTI150 52.71 

-17-

EOG RESOURCES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)

EOG has also entered into crude oil basis swap contracts in order to fix the differential between pricing in Houston, Texas, and Cushing, Oklahoma (Houston Differential). Presented below
Crude Oil Basis Swap Contracts
Contracts Sold
PeriodSettlement IndexVolume
(MBbld)
Weighted Average Price Differential
($/Bbl)
February 2021 (closed)
NYMEX WTI Roll Differential (1)
30 $0.11 
March - April 2021 (closed)
NYMEX WTI Roll Differential (1)
125 0.17 
May - December 2021
NYMEX WTI Roll Differential (1)
125 0.17 
January - December 2022
NYMEX WTI Roll Differential (1)
125 0.15 
_________________
(1)    This settlement index is a comprehensive summary of EOG's Houston Differential basis swap contracts as of June 30, 2020. The weighted average price differential expressed in $/Bbl represents the amount of addition to Cushing, Oklahoma, prices for the notional volumes expressed in Bbld covered by the basis swap contracts.
Houston Differential Basis Swap Contracts
 Volume (Bbld)Weighted Average Price Differential
($/Bbl)
2020
May 2020 (closed)10,000  $1.55  

EOG has also entered into crude oil swaps in orderused to fix the differential in pricing between the NYMEX calendar month average and the physical crude oil delivery month (Roll Differential). Presented below is a comprehensive summary of EOG's Roll Differential swap contracts as of June 30, 2020. The weighted average price differential expressed in $/Bbl represents the amount of net addition (reduction) to delivery month prices for the notional volumes expressed in Bbld covered by the swap contracts.
Roll Differential Swap Contracts
 Volume (Bbld)Weighted Average Price Differential
($/Bbl)
2020
February 1, 2020 through June 30, 2020 (closed)10,000  $0.70  
July 2020 (closed)88,000  (1.16) 
August 1, 2020 through September 30, 202088,000  (1.16) 
October 1, 2020 through December 31, 202066,000  (1.16) 
month.


NGL Financial Price Swap Contracts
Contracts Sold
PeriodSettlement IndexVolume
(MBbld)
Weighted Average Price
($/Bbl)
January - March 2021 (closed)Mont Belvieu Propane (non-Tet)15 $29.44 
April - December 2021Mont Belvieu Propane (non-Tet)15 29.44 


Natural Gas Financial Price Swap Contracts
Contracts SoldContracts Purchased
PeriodSettlement IndexVolume
(MMBtud in thousands)
Weighted AveragePrice ($/MMBtu)Volume (MMBtud in thousands)Weighted Average Price ($/MMBtu)
January - March 2021 (closed)NYMEX Henry Hub500 $2.99 500 $2.43 
April - September 2021NYMEX Henry Hub500 2.99 570 2.81 
October - December 2021NYMEX Henry Hub500 2.99 500 2.83 
January - December 2022 (closed) (1)
NYMEX Henry Hub20 2.75 
April 2021 (closed)Japan Korea Marker (JKM)70 6.65 
May - September 2021JKM70 6.65 
_________________
(1)    In May 2020,January 2021, EOG entered into crude oil Roll Differentialexecuted the early termination provision granting EOG the right to terminate all of its open 2022 natural gas price swap contracts for the period from July 1, 2020 through September 30, 2020, with notional volumes of 22,000 Bbld at a weighted average price differential of $(0.43) per Bbl, and for the period from October 1, 2020 through December 31, 2020, with notional volumes of 44,000 Bbld at a weighted average price differential of $(0.73) per Bbl. These contracts partially offset certain outstanding Roll Differential swap contracts for the same time periods and volumes at a weighted average price differential of $(1.16) per Bbl.contracts. EOG expects to payreceived net cash of $3.2$0.6 million for the settlement of these contracts. The offsetting contracts were excluded from the above table.

Presented below is a comprehensive summary of EOG's crude oil NYMEX WTI price swap contracts as of June 30, 2020, with notional volumes expressed in Bbld and prices expressed in $/Bbl.
Crude Oil NYMEX WTI Price Swap Contracts
 Volume (Bbld)Weighted Average Price ($/Bbl)
2020
January 1, 2020 through March 31, 2020 (closed)200,000  $59.33  
April 1, 2020 through May 31, 2020 (closed)265,000  51.36  


-18-

EOG RESOURCES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)(Concluded)
(Unaudited)

In April and May 2020, EOG entered into crude oil NYMEX WTI price swap contracts for the period from June 1, 2020 through June 30, 2020, with notional volumes of 265,000 Bbld at a weighted average price of $33.80 per Bbl, for the period from July 1, 2020 through July 31, 2020, with notional volumes of 254,000 Bbld at a weighted average price of $33.75 per Bbl, for the period from August 1, 2020 through September 30, 2020, with notional volumes of 154,000 Bbld at a weighted average price of $34.18 per Bbl and for the period from October 1, 2020 through December 31, 2020, with notional volumes of 47,000 Bbld at a weighted average price of $30.04 per Bbl. These contracts offset the remaining NYMEX WTI price swap contracts for the same time periods and volumes at a weighted average price of $51.36 per Bbl for the period from June 1, 2020 through June 30, 2020, $42.36 per Bbl for the period from July 1, 2020 through July 31, 2020, $50.42 per Bbl for the period from August 1, 2020 through September 30, 2020 and $31.00 per Bbl for the period from October 1, 2020 through December 31, 2020.EOG expects to receive net cash of $364.0 million for the settlement of these contracts. The offsetting contracts were excluded from the above table.

Presented below is a comprehensive summary of EOG's crude oil ICE Brent price swap contracts as of June 30, 2020, with notional volumes expressed in Bbld and prices expressed in $/Bbl.

Crude Oil ICE Brent Price Swap Contracts
 Volume (Bbld)Weighted Average Price
($/Bbl)
2020
April 2020 (closed)75,000  $25.66  
May 2020 (closed)35,000  26.53  

NGLs Derivative Contracts. Presented below is a comprehensive summary of EOG's Mont Belvieu propane (non-TET) financial price swap contracts (Mont Belvieu Propane Price Swap Contracts) as of June 30, 2020, with notional volumes expressed in Bbld and prices expressed in $/Bbl.
Mont Belvieu Propane Price Swap Contracts
 Volume (Bbld)Weighted Average Price ($/Bbl)
2020
January 1, 2020 through February 29, 2020 (closed)4,000  $21.34  
March 1, 2020 through April 30, 2020 (closed)25,000  17.92  

In April and May 2020, EOG entered into Mont Belvieu propane price swap contracts for the period from May 1, 2020 through December 31, 2020, with notional volumes of 25,000 Bbld at a weighted average price of $16.41 per Bbl. These contracts offset the remaining Mont Belvieu propane price swap contracts for the same time period with notional volumes of 25,000 Bbld at a weighted average price of $17.92 per Bbl. EOG expects to receive net cash of $9.2 million for the settlement of these contracts. The offsetting contracts were excluded from the above table.

Natural Gas Derivative Contracts. Presented below is a comprehensive summary of EOG's natural gas price swap contracts as of June 30, 2020, with notional volumes expressed in million British thermal units (MMBtu) per day (MMBtud) and prices expressed in dollars per MMBtu ($/MMBtu).
Natural Gas Price Swap Contracts
 Volume (MMBtud)Weighted Average Price ($/MMBtu)
2021
January 1, 2021 through December 31, 202150,000  $2.75  


-19-

EOG RESOURCES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)

EOG has entered into natural gas collar contracts, which establish ceiling and floor prices for the sale of notional volumes of natural gas as specified in the collar contracts. The collars require that EOG pay the difference between the ceiling price and the NYMEX Henry Hub natural gas price for the contract month (Henry Hub Index Price) in the event the Henry Hub Index Price is above the ceiling price. The collars grant EOG the right to receive the difference between the floor price and the Henry Hub Index Price in the event the Henry Hub Index Price is below the floor price. In March 2020, EOG executed the early termination provision granting EOG the right to terminate certain 2020 natural gas collar contracts with notional volumes of 250,000 MMBtud at a weighted average ceiling price of $2.50 per MMBtu and a weighted average floor price of $2.00 per MMBtu for the period from April 1, 2020 through July 31, 2020. The net cash EOG received for settling these contracts was $7.8 million. Presented below is a comprehensive summary of EOG's natural gas collar contracts as of June 30, 2020, with notional volumes expressed in MMBtud and prices expressed in $/MMBtu.
Natural Gas Collar Contracts
Weighted Average Price ($/MMBtu)
 Volume (MMBtud)Ceiling PriceFloor Price
2020
April 1, 2020 through July 31, 2020 (closed)250,000  $2.50  $2.00  

In April 2020, EOG entered into natural gas collar contracts for the period from August 1, 2020 through October 31, 2020, with notional volumes of 250,000 MMBtud at a ceiling price of $2.50 per MMBtu and a floor price of $2.00 per MMBtu. These contracts offset the remaining natural gas collar contracts for the same time period with notional volumes of 250,000 MMBtud at a ceiling price of $2.50 per MMBtu and a floor price of $2.00 per MMBtu. EOG expects to receive net cash of $1.1 million for the settlement of these contracts. The offsetting contracts were excluded from the above table.

Prices received by EOG for its natural gas production generally vary from NYMEX Henry Hub prices due to adjustments for delivery location (basis) and other factors. EOG has entered into natural gas basis swap contracts in order to fix the differential between pricing in the Rocky Mountain area and NYMEX Henry Hub prices (Rockies Differential). Presented below is a comprehensive summary of EOG's Rockies Differential basis swap contracts as of June 30, 2020. The weighted average price differential expressed in $/MMBtu represents the amount of reduction to NYMEX Henry Hub prices for the notional volumes expressed in MMBtud covered by the basis swap contracts.
Rockies Differential Basis Swap Contracts
 Volume (MMBtud)Weighted Average Price Differential
($/MMBtu)
2020
January 1, 2020 through June 30, 2020 (closed)30,000  $0.55  
July 1, 2020 through December 31, 202030,000  0.55  
EOG has also entered into natural gas basis swap contracts in order to fix the differential between pricing at the Houston Ship Channel (HSC) and NYMEX Henry Hub prices (HSC Differential). In March 2020, EOG executed the early termination provision granting EOG the right to terminate certain 2020 HSC Differential basis swaps with notional volumes of 60,000 MMBtud at a weighted average price differential of $0.05 per MMBtu for the period from April 1, 2020 through December 31, 2020. The net cash EOG paid for settling these contracts was $0.4 million. Presented below is a comprehensive summary of EOG's HSC Differential basis swap contracts as of June 30, 2020. The weighted average price differential expressed in $/MMBtu represents the amount of reduction to NYMEX Henry Hub prices for the notional volumes expressed in MMBtud covered by the basis swap contracts.
HSC Differential Basis Swap Contracts
 Volume (MMBtud)Weighted Average Price Differential
($/MMBtu)
2020
January 1, 2020 through December 31, 2020 (closed)60,000  $0.05  
-20-

EOG RESOURCES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)


EOG has also entered into natural gas basis swap contracts in order to fix the differential between pricing at the Waha Hub in West Texas and NYMEX Henry Hub prices (Waha Differential). Presented below is a comprehensive summary of EOG's Waha Differential basis swap contracts as of June 30, 2020. The weighted average price differential expressed in $/MMBtu represents the amount of reduction to NYMEX Henry Hub prices for the notional volumes expressed in MMBtud covered by the basis swap contracts.
Waha Differential Basis Swap Contracts
 Volume (MMBtud)Weighted Average Price Differential
($/MMBtu)
2020
January 1, 2020 through April 30, 2020 (closed)50,000  $1.40  

In April 2020, EOG entered into Waha Differential basis swap contracts for the period from May 1, 2020 through December 31, 2020, with notional volumes of 50,000 MMBtud at a weighted average price differential of $0.43 per MMBtu. These contracts offset the remaining Waha Differential basis swap contracts for the same time period with notional volumes of 50,000 MMBtud at a weighted average price differential of $1.40 per MMBtu. EOG expects to pay net cash of $11.9 million for the settlement of these contracts. The offsetting contracts were excluded from the above table.

Commodity Derivatives Location on Balance Sheet. The following table sets forth the amounts and classification of EOG's outstanding financial derivative instruments at June 30, 2020March 31, 2021 and December 31, 2019.2020.  Certain amounts may be presented on a net basis on the Condensed Consolidated Financial Statements when such amounts are with the same counterparty and subject to a master netting arrangement (in thousands)millions):
  Fair Value at   Fair Value at
DescriptionDescriptionLocation on Balance SheetJune 30, 2020December 31, 2019DescriptionLocation on Balance SheetMarch 31, 2021December 31, 2020
Asset DerivativesAsset Derivatives Asset Derivatives 
Crude oil, NGLs and natural gas derivative contracts -Crude oil, NGLs and natural gas derivative contracts - Crude oil, NGLs and natural gas derivative contracts - 
Current portionCurrent portion
Assets from Price Risk Management Activities (1)
$207,019  $1,299  Current portionAssets from Price Risk Management Activities$$65 
Noncurrent PortionNoncurrent PortionOther Assets$1,569  $—  Noncurrent PortionOther Assets
Liability DerivativesLiability DerivativesLiability Derivatives
Crude oil, NGLs and natural gas derivative contracts -Crude oil, NGLs and natural gas derivative contracts -Crude oil, NGLs and natural gas derivative contracts -
Current portionCurrent portion
Liabilities from Price Risk Management Activities (2)
$—  $20,194  Current portion
Liabilities from Price Risk Management Activities (1)
$188 $
Noncurrent portionNoncurrent portionOther Liabilities
(1) The current portion of Assets from Price Risk Management Activities consists of gross assets of $239 million, partially offset by gross liabilities of $32 million at June 30, 2020. The current portion of Assets from Price Risk Management Activities consists of gross assets of $3 million, partially offset by gross liabilities of $2 million, at December 31, 2019.
(2)    The current portion of Liabilities from Price Risk Management Activities consists of gross liabilities of $23$211 million, partially offset by gross assets of $3$23 million, at DecemberMarch 31, 2019.2021.

Credit Risk. Notional contract amounts are used to express the magnitude of a financial derivative. The amounts potentially subject to credit risk, in the event of nonperformance by the counterparties, are equal to the fair value of such contracts (see Note 11). EOG evaluates its exposureexposures to significant counterparties on an ongoing basis, including thatthose arising from physical and financial transactions. In some instances, EOG renegotiates payment terms and/or requires collateral, parent guarantees or letters of credit to minimize credit risk.


-21-

EOG RESOURCES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)

All of EOG's derivative instruments are covered by International Swap Dealers Association Master Agreements (ISDAs) with counterparties. The ISDAs may contain provisions that require EOG, if it is the party in a net liability position, to post collateral when the amount of the net liability exceeds the threshold level specified for EOG's then-current credit ratings. In addition, the ISDAs may also provide that as a result of certain circumstances, including certain events that cause EOG's credit ratings to become materially weaker than its then-current ratings, the counterparty may require all outstanding derivatives under the ISDAs to be settled immediately. See Note 11 for the aggregate fair value of all derivative instruments that were in a net liability position at March 31, 2021 and a net asset position at June 30, 2020 and December 31, 2019.2020. EOG had 0$19 million of collateral posted and 0 collateral held collateral of $62 million at June 30, 2020,March 31, 2021, and had 0 collateral posted andor held 0 collateral at December 31, 2019.2020.

13.  Acquisitions and Divestitures

During the sixthree months ended June 30,March 31, 2021, EOG paid cash for property acquisitions of $6 million in the United States. Additionally, during the three months ended March 31, 2021, EOG recognized net losses on asset dispositions of $6 million and received proceeds of approximately $5 million.

During the three months ended March 31, 2020, EOG paid cash for property acquisitions of $46$44 million in the United States. Additionally, during the sixthree months ended June 30,March 31, 2020, EOG recognized net gains on asset dispositions of $30$16 million, primarily due to the sale of proved properties and non-cash property exchanges of unproved leasehold in Texas, New Mexico and the Rocky Mountain area, and received proceeds of approximately $43 million. During the six months ended June 30, 2019, EOG paid cash for property acquisitions of $304 million in the United States. Additionally, during the six months ended June 30, 2019, EOG recognized net gains on asset dispositions of $4 million and received proceeds of approximately $18$26 million.


-22--19-




PART I.  FINANCIAL INFORMATION

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
EOG RESOURCES, INC.

Overview

EOG Resources, Inc., together with its subsidiaries (collectively, EOG), is one of the largest independent (non-integrated) crude oil and natural gas companies in the United States with proved reserves in the United States, Trinidad and China. EOG operates under a consistent business and operational strategy that focuses predominantly on maximizing the rate of return on investment of capital by controlling operating and capital costs and maximizing reserve recoveries. EachPursuant to this strategy, each prospective drilling location is evaluated by its estimated rate of return. 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 maintainingin shareholder value and maintain a strong balance sheet. EOG implements its strategy primarily 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 consistentcoupled with efficient and safe operations and environmentally responsible operationsrobust environmental stewardship practices and performance, is also an important goalintegral in the implementation of EOG's strategy.

Recent Developments. The COVID-19 pandemic and the measures being taken to address and limit the spread of the virus have adversely affected the economies and financial markets of the world, resulting in an economic downturn beginning in early 2020 that has negatively impacted and may continue to negatively impact, global demand and prices for crude oil and condensate, natural gas liquids (NGLs) and natural gas. The effects of COVID-19 mitigation efforts, including the wide availability of vaccines, combined with the waning intensity of the pandemic, have resulted in increased demand (and prices) for crude oil and condensate. In the first quarter of 2021, demand and prices for crude oil and condensate returned to near pre-pandemic levels. See PART II, ITEM 1A, "Risk Factors" below,Risk Factors, of our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, filed on February 25, 2021 (Annual Report), for further discussion.

In early March 2020, due to the failure of2021, the members of the Organization of the Petroleum Exporting Countries and Russia (OPEC+) met and agreed to reach an agreement on individual crude oiltaper off certain of their production limits,curtailments (agreed to in April 2020) through March 2021. Subsequent to the meeting, Saudi Arabia unilaterally reduced the sales price of its crude oil and announced that it would increaseunilaterally cut its crude oil production. The combination of these actionsproduction by an additional one million barrels per day in February 2021 and March 2021. Further, in April 2021, OPEC+ indicated it would continue to ease production curtailments starting in May 2021 as it expected the effectsintensity of the COVID-19 pandemic onwould subside and containment measures would be scaled back, leading to expected increases in demand for crude oil demand, resultedproduction in lower commodity prices in March and April 2020. In April 2020, the memberssecond half of OPEC+ reached an agreement to cut production beginning in May 2020 and extending through April 2022 with the quantity of the production cuts decreasing over time. In May and June 2020, crude oil prices recovered, but remain significantly below average prices in 2019 as a result of the2021.

The continuing rebalancing of crude oil demand and supply resulting from the actions of OPEC+improving or stabilizing conditions in certain economies and the continuing effectfinancial markets of the COVID-19 pandemicworld, combined with continuing actions taken by OPEC+, have had a positive impact on global demand.crude oil prices in the first quarter of 2021.

In responseWe will continue to monitor and assess any executive orders or legislative or regulatory actions that could impact the current commodity price environment, EOG updated its 2020 capitaloil and operating plangas industry, to reduce activity across its operating areasdetermine the impact on our business and decrease its total anticipated 2020 capital expenditures. EOG also elected to reduce its 2020 crude oil production, including delaying initial production from new wellsoperations, and shutting-in or otherwise curtailing existing production. As a result, EOG expects its full-year 2020 total crude oil production to be lower than its full-year 2019 total crude oil production. See "2020 Capitaltake appropriate actions where necessary.For related discussion, see ITEM 1, Business – Regulation, ITEM 1A, Risk Factors and Operating Plan" below for further discussion.ITEM 7, Management's Discussion and Analysis of Financial Condition and Results of Operations - Overview, of our Annual Report.

Commodity Prices. As a result ofPrices for crude oil and condensate, natural gas liquids (NGLs) and natural gas have historically been volatile. This volatility is expected to continue due to the many uncertainties associated with (i) the world political and economic environment (ii) the COVID-19 pandemic and its continuing effect on the economies and financial markets of the world and (iii) any future actions by the members of OPEC+, and the effect of these uncertainties on worldwide suppliesglobal supply of, and demand for, crude oil, and condensate, NGLs and natural gas EOG is unable to predict what changes may occur in crude oil and condensate, NGLs, and natural gas pricesthe availability of other energy supplies, the relative competitive relationships of the various energy sources in the future. However, prices for crude oilview of consumers and condensate, NGLs and natural gas have historically been volatile, and this volatility is expected to continue.other factors.

The market prices of crude oil and condensate, NGLs and natural gas during the remainder of 2020 will impact the amount of cash generated from EOG's operating activities, which, will in turn, impact EOG's financial position and results of operations.


-20-



For the first sixthree months of 2020,2021, the average U.S. New York Mercantile Exchange (NYMEX) crude oil and condensate and natural gas prices were $36.97$57.80 per barrel and $1.85$2.69 per million British thermal units (MMBtu), respectively, both representing decreasesincreases of 25% and 36%, respectively, from the average NYMEX prices for the same period in 2019.2020. Market prices for NGLs are influenced by the components extracted, including ethane, propane and butane and natural gasoline, among others, and the respective market pricing for each component. In February 2021, EOG realized higher-than-average daily prices on certain days for deliveries of natural gas volumes due to disruptions throughout the United States from Winter Storm Uri.


-23-



United States. EOG's efforts to identify plays with large reserve potential have proven to be successful. EOG has placed an emphasis on applying its horizontal drilling and completion expertise to unconventional crude oil and liquids-rich reservoirs, EOG continues to drill numerous wells in large acreage plays, which in the aggregate have contributed substantially to, and are expected to continue to contribute substantially to, EOG's crude oil and condensate, NGLs and natural gas production. EOG has placed an emphasis on applying its horizontal drilling and completion expertise to unconventional crude oil and, to a lesser extent, liquids-rich natural gas production.plays.

During the first sixthree months of 2020,2021, EOG continued to focus on increasing drilling, completion and operating efficiencies gained in prior years. Such efficiencies, combined with new innovation, resulted in lower drilling and completion costs. Winter Storm Uri negatively impacted Lease and Well, Transportation and Gathering and Processing Costs in the first quarter of 2021. In addition, EOG continued to evaluate certain potential crude oil and liquids-richcondensate, NGLs and natural gas exploration and development prospects and to look for opportunities to add drilling inventory through leasehold acquisitions, farm-ins, exchanges or tactical acquisitions. On a volumetric basis, as calculated using the ratio of 1.0 barrel of crude oil and condensate or NGLs to 6.0 thousand cubic feet of natural gas, crude oil and condensate and NGLNGLs production accounted for approximately 76%75% and 77% of EOG's United States production during the first sixthree months of  20202021 and 2019,2020, respectively. During the first sixthree months of 2020,2021, EOG's drilling and completion activities occurred primarily in the Delaware Basin play, Eagle Ford play, Delaware Basin play and Rocky Mountain area. EOG's major producing areas in the United States are in New Mexico and Texas. InEOG faced interruptions to sales in certain markets due to disruptions throughout the second quarter of 2020, EOG delayed initial productionUnited States from most newly-completed wells and shut in some existing production.Winter Storm Uri.

Trinidad. In Trinidad, EOG continues to deliver natural gas under existing supply contracts. Several fields in the South East Coast Consortium (SECC) Block, Modified U(a) Block, Block 4(a), Modified U(b) Block, the Banyan Field and the Sercan Area have been developed and are producing natural gas which is sold to the National Gas Company of Trinidad and Tobago Limited and its subsidiary, and crude oil and condensate which is sold to Heritage Petroleum Company Limited. Limited (Heritage).

In March 2021, EOG signed a farmout agreement with Heritage, which allows EOG to earn a 65% working interest in an offshore block located on the first half of 2020,South West Coast Block. EOG completed the drilling ofis currently planning and preparing to drill one net exploratory well and was in the processsecond half of drilling2021. EOG continues to make progress on the design and completingfabrication of a second well on a different block as of June 30, 2020. Subsequent toplatform and related facilities for our previously-announced discovery in the second quarter of 2020, it was announced that one of the exploratory wells found commercial quantities of proved reserves. During the remainder of 2020, EOG plans to drill two additional net wells, continue its evaluation of the remaining exploratory well and begin formulating development plans.Modified U(a) Block.

Other International. In the Sichuan Basin, Sichuan Province, China, EOG continues to work closely with its partner, PetroChina, under the Production Sharing Contracta production sharing contract and other related agreements, to ensure uninterrupted production in order to reach the level allowed by pipeline capacity.production. All natural gas produced from the Baijaochang Field is sold under a long-term contract to PetroChina.

In April 2021, EOG entered into a sale and purchase agreement for the sale of the subsidiary which holds all of its assets in China for proceeds of approximately $140 million. Closing, subject to customary conditions, is expected in the second quarter of 2021. Current net production is approximately 25 million cubic feet per day (MMcfd) of natural gas.

In the Sultanate of Oman, a Royal Decree was issued on March 2020,9, 2021, and EOG beganbecame a participant in the processExploration and Production Sharing Agreement for Block 49, holding a 50% working interest. EOG's partner in Block 49 completed the drilling and testing of exiting its Canada operations.one gross exploratory well. The results are currently being evaluated. EOG continues to plan and prepare for the drilling of two net exploratory wells in Block 36, which are expected to be drilled later in 2021.

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.


-21-



2021 Capital and Operating Plan. Total anticipated 2021 capital expenditures are estimated to range from approximately $3.7 billion to $4.1 billion, including facilities and gathering, processing and other expenditures, and excluding acquisitions and non-cash transactions. EOG plans to continue to focus a substantial portion of its exploration and development expenditures in its major producing areas in the United States. In particular, EOG will be focused on United States crude oil drilling activity in its Delaware Basin play, Eagle Ford play and Rocky Mountain area where it generates its highest rates-of-return. To further enhance the economics of these plays, EOG expects to continue to improve well performance and lower drilling and completion costs through efficiency gains, new innovation and initiatives to manage procurement and service costs. In addition, EOG expects to spend a portion of its anticipated 2021 capital expenditures on leasing acreage and evaluating new prospects.

In 2021, total crude oil production is expected to remain at fourth quarter 2020 levels. Further, EOG expects to continue to focus on reducing operating costs in 2021 through efficiency improvements.

Management continues to believe EOG has one of the strongest prospect inventories in EOG's history. When it fits EOG's strategy, EOG will make acquisitions that bolster existing drilling programs or offer incremental exploration and/or production opportunities.

2020 Capital and Operating Plan. Total anticipated 2020 capital expenditures are estimated to range from approximately $3.4 billion to $3.6 billion, including facilities and gathering, processing and other expenditures, and excluding acquisitions and non-cash transactions. The updated 2020 capital and operating plan represents a reduction in total anticipated capital expenditures compared to the original 2020 capital and operating plan and, as a result, EOG expects its full-year 2020 total crude oil production to be lower than its full-year 2019 total crude oil production.

EOG's 2020 capital expenditures will continue to be focused on drilling operations in its high rate-of-return plays as well as targeted infrastructure, exploration and environmental projects that support the long-term value of EOG. EOG remains flexible and will continue to evaluate its 2020 capital and operating plan. EOG expects to continue monitoring market conditions in the second half of the year and adjust its production volumes accordingly, with the anticipation of increasing production as prices improve. EOG will also continue to exercise financial flexibility with a goal toward preserving liquidity while supporting its dividend.

Capital Structure. One of management's key strategies is to maintain a strong balance sheet with a consistently below average debt-to-total capitalization ratio as compared to those in EOG's peer group. EOG's debt-to-total capitalization ratio was 22%20% at June 30, 2020March 31, 2021 and 19%22% at December 31, 2019.2020. As used in this calculation, total capitalization represents the sum of total current and long-term debt and total stockholders' equity.

-24-

On February 1, 2021, EOG repaid upon maturity the $750 million aggregate principal amount of its 4.100% Senior Notes due 2021.


At June 30, 2020,March 31, 2021, EOG maintained a strong financial and liquidity position, including $2.4$3.4 billion of cash and cash equivalents and $2.0 billion of availability under its senior unsecured revolving credit facility. EOG's cash and cash equivalents as of June 30, 2020 included $62 million of collateral deposits from counterparties in anticipation of future settlements of financial commodity derivative contracts.

On April 1, 2020, EOG repaid, with cash on hand, the $500 million aggregate principal amount of its 2.45% Senior Notes due 2020 that matured on that date.

On April 14, 2020, EOG closed on its offering of $750 million aggregate principal amount of its 4.375% Senior Notes due 2030 and $750 million aggregate principal amount of its 4.950% Senior Notes due 2050 (together, the Notes). EOG received net proceeds of approximately $1.48 billion from the issuance of the Notes, which were used to repay the 4.40% Senior Notes due 2020 when they matured on June 1, 2020 (see below), and have also been used (and will continue to be used) for general corporate purposes, including the funding of capital expenditures.

Additionally, on June 1, 2020, EOG repaid, with cash on hand, the $500 million aggregate principal amount of its 4.40% Senior Notes due 2020 that matured on that date.

EOG believes it has significant flexibility and availability with respect to financing alternatives, including borrowings under its commercial paper program, bank borrowings, borrowings under its senior unsecured revolving credit facility, joint development agreements and similar agreements and equity and debt offerings.


-25--22-

    


Results of Operations

The following review of operations for the three months ended March 31, 2021 and six months ended June 30, 2020 and 2019 should be read in conjunction with the Condensed Consolidated Financial Statements of EOG and notes thereto included in this Quarterly Report on Form 10-Q.

Three Months Ended June 30, 2020March 31, 2021 vs. Three Months Ended June 30, 2019March 31, 2020

    Operating Revenues.Revenues and Other. During the secondfirst quarter of 2020,2021, operating revenues decreased $3,595$1,024 million, or 77%22%, to $1,103$3,694 million from $4,698$4,718 million for the same period of 2019.2020. Total wellhead revenues, which are revenues generated from sales of EOG's production of crude oil and condensate, NGLs and natural gas, for the secondfirst quarter of 2020 decreased $2,1352021 increased $754 million, or 72%31%, to $850$3,190 million from $2,985$2,436 million for the same period of 2019.2020. EOG recognized net losses on the mark-to-market of financial commodity derivative contracts of $126$367 million for the secondfirst quarter of 20202021 compared to net gains of $177$1,206 million for the same period of 2019.2020. Gathering, processing and marketing revenues for the secondfirst quarter of 20202021 decreased $1,138$191 million, or 76%18%, to $363$848 million from $1,501$1,039 million for the same period of 2019.2020. Net gainslosses on asset dispositions were $13$6 million for the secondfirst quarter of 20202021 compared to net gains of $8$16 million for the same period of 2019.2020.

-26--23-

    


    Wellhead volume and price statistics for the three-month periods ended June 30,March 31, 2021 and 2020 and 2019 were as follows:
Three Months Ended
June 30,
Three Months Ended
March 31,
20202019 20212020
Crude Oil and Condensate Volumes (MBbld) (1)
Crude Oil and Condensate Volumes (MBbld) (1)
Crude Oil and Condensate Volumes (MBbld) (1)
United StatesUnited States330.9  454.9  United States428.7 482.7 
TrinidadTrinidad0.1  0.6  Trinidad2.2 0.5 
Other International (2)
Other International (2)
0.1  0.2  
Other International (2)
0.1 0.1 
TotalTotal331.1  455.7  Total431.0 483.3 
Average Crude Oil and Condensate Prices ($/Bbl) (3)
Average Crude Oil and Condensate Prices ($/Bbl) (3)
 
Average Crude Oil and Condensate Prices ($/Bbl) (3)
 
United StatesUnited States$20.40  $61.01  United States$58.07 $46.97 
TrinidadTrinidad0.60  49.56  Trinidad49.77 34.93 
Other International (2)
Other International (2)
48.78  55.07  
Other International (2)
38.61 57.51 
CompositeComposite20.40  60.99  Composite58.02 46.96 
Natural Gas Liquids Volumes (MBbld) (1)
Natural Gas Liquids Volumes (MBbld) (1)
Natural Gas Liquids Volumes (MBbld) (1)
United StatesUnited States101.2  131.1  United States124.3 161.3 
Other International (2)
—  —  
TotalTotal101.2  131.1  Total124.3 161.3 
Average Natural Gas Liquids Prices ($/Bbl) (3)
Average Natural Gas Liquids Prices ($/Bbl) (3)
  
Average Natural Gas Liquids Prices ($/Bbl) (3)
  
United StatesUnited States$10.20  $15.63  United States$28.03 $10.94 
Other International (2)
—  —  
CompositeComposite10.20  15.63  Composite28.03 10.94 
Natural Gas Volumes (MMcfd) (1)
Natural Gas Volumes (MMcfd) (1)
Natural Gas Volumes (MMcfd) (1)
United StatesUnited States939  1,047  United States1,100 1,139 
TrinidadTrinidad174  273  Trinidad217 201 
Other International (2)
Other International (2)
34  36  
Other International (2)
25 38 
TotalTotal1,147  1,356  Total1,342 1,378 
Average Natural Gas Prices ($/Mcf) (3)
Average Natural Gas Prices ($/Mcf) (3)
  
Average Natural Gas Prices ($/Mcf) (3)
  
United StatesUnited States$1.11  $1.98  United States$5.52 $1.50 
TrinidadTrinidad2.13  2.69  Trinidad3.38 2.17 
Other International (2)
Other International (2)
4.36  4.25  
Other International (2)
5.66 4.32 
CompositeComposite1.36  2.19  Composite5.17 1.67 
Crude Oil Equivalent Volumes (MBoed) (4)
Crude Oil Equivalent Volumes (MBoed) (4)
Crude Oil Equivalent Volumes (MBoed) (4)
United StatesUnited States588.5  760.4  United States736.4 833.8 
TrinidadTrinidad29.2  46.1  Trinidad38.5 34.0 
Other International (2)
Other International (2)
5.7  6.3  
Other International (2)
4.0 6.3 
TotalTotal623.4  812.8  Total778.9 874.1 
Total MMBoe (4)
Total MMBoe (4)
56.7  74.0  
Total MMBoe (4)
70.1 79.5 
(1)Thousand barrels per day or million cubic feet per day, as applicable.
(2)Other International includes EOG's China and Canada operations.
(3)Dollars per barrel or per thousand cubic feet, as applicable. Excludes the impact of financial commodity derivative instruments (see Note 12 to the Condensed Consolidated Financial Statements).
(4)Thousand barrels of oil equivalent per day or million barrels of oil equivalent, as applicable; includes crude oil and condensate, NGLs and natural gas. 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 of 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.

-27--24-

    


    Wellhead crude oil and condensate revenues for the secondfirst quarter of 2020 decreased $1,9142021 increased $186 million, or 76%9%, to $615$2,251 million from $2,529$2,065 million for the same period of 2019.2020. The decreaseincrease was due to a lowerhigher composite average price ($1,223431 million) and, partially offset by a decrease of 12552 MBbld, or 27%11%, in wellhead crude oil and condensate production ($691245 million). Decreased production was primarily in the Eagle Ford, the Rocky Mountain area and the Permian Basin.Ford. EOG's composite wellhead crude oil and condensate price for the secondfirst quarter of 2020 decreased 67%2021 increased 24% to $20.40$58.02 per barrel compared to $60.99$46.96 per barrel for the same period of 2019.2020.

    NGL revenues for the secondfirst quarter of 2020 decreased $922021 increased $153 million, or 50%95%, to $94$314 million from $186$161 million for the same period of 20192020 due to a lowerhigher composite average price ($50191 million) and, partially offset by a decrease of 3037 MBbld, or 23%, in NGL deliveries ($4238 million). Decreased production was primarily in the Eagle Ford, the Permian Basin and the Rocky Mountain area.Eagle Ford. EOG's composite NGL price for the secondfirst quarter of 2020 decreased 35%2021 increased 156% to $10.20$28.03 per barrel compared to $15.63$10.94 per barrel for the same period of 2019.2020.

    Wellhead natural gas revenues for the secondfirst quarter of 2020 decreased $1282021 increased $415 million, or 47%198%, to $142$625 million from $270$210 million for the same period of 2019.2020. The decreaseincrease was due to a lowerhigher average composite price ($86422 million) and, partially offset by a decrease in natural gas deliveries ($427 million). Natural gas deliveries for the secondfirst quarter of 20202021 decreased 20936 MMcfd, or 15%3%, compared to the same period of 20192020 due primarily to the disposition of the Marcellus Shale assets in the third quarter of 2020 and lower natural gas volumes in Trinidad, the Rocky Mountain areaSouth Texas and the Marcellus Shale.Barnett Shale, partially offset by increased production of associated natural gas from the Permian Basin. EOG's composite wellhead natural gas price for the secondfirst quarter of 2020 decreased 38%2021 increased 210% to $1.36$5.17 per Mcf compared to $2.19$1.67 per Mcf for the same period of 2019.2020.

    During the secondfirst quarter of 2020,2021, EOG recognized net losses on the mark-to-market of financial commodity derivative contracts of $126$367 million compared to net gains of $177$1,206 million for the same period of 2019.2020. During the secondfirst quarter of 2020,2021, net cash received frompaid for settlements of financial commodity derivative contracts was $639$30 million compared to net cash received of $10$84 million for the same period of 2019.2020.

    Gathering, processing and marketing revenues are revenues generated from sales of third-party crude oil, NGLs and natural gas, as well as fees associated with gathering third-party natural gas and revenues from sales of EOG-owned sand. Purchases and sales of third-party crude oil and natural gas may be utilized in order to balance firm transportation capacity with production in certain areas and to utilize excess capacity at EOG-owned facilities. EOG sells sand in order to balance the timing of firm purchase agreements with completion operations and to utilize excess capacity at EOG-owned facilities. Marketing costs represent the costs to purchase third-party crude oil, natural gas and sand and the associated transportation costs, as well as costs associated with EOG-owned sand sold to third parties.

    Gathering, processing and marketing revenues less marketing costs for the secondfirst quarter of 2020 decreased $822021 increased $81 million as compared to the same period of 20192020 primarily due to lowerhigher margins on crude oil marketing activities. The marginactivities, partially offset by lower margins on crude oilnatural gas marketing activities for the second quarter of 2020 was negatively impacted by the decision early in the second quarter of 2020 to reduce commodity price volatility by selling May and June 2020 deliveries under fixed price arrangements.

activities.

-28--25-

    


Operating and Other Expenses. For the secondfirst quarter of 2020,2021, operating expenses of $2,190$2,762 million were $1,377$1,898 million lower than the $3,567$4,660 million incurred during the secondfirst quarter of 2019.2020.  The following table presents the costs per barrel of oil equivalent (Boe) for the three-month periods ended June 30, 2020March 31, 2021 and 2019:2020:
Three Months Ended
June 30,
Three Months Ended
March 31,
20202019 20212020
Lease and WellLease and Well$4.32  $4.70  Lease and Well$3.85 $4.14 
Transportation CostsTransportation Costs2.67  2.35  Transportation Costs2.88 2.62 
Gathering and Processing CostsGathering and Processing Costs1.98 1.62 
Depreciation, Depletion and Amortization (DD&A) -Depreciation, Depletion and Amortization (DD&A) -Depreciation, Depletion and Amortization (DD&A) -
Oil and Gas PropertiesOil and Gas Properties11.84  12.55  Oil and Gas Properties12.31 12.18 
Other Property, Plant and EquipmentOther Property, Plant and Equipment0.62  0.39  Other Property, Plant and Equipment0.53 0.39 
General and Administrative (G&A)General and Administrative (G&A)2.32  1.65  General and Administrative (G&A)1.57 1.44 
Interest Expense, NetInterest Expense, Net0.96  0.67  Interest Expense, Net0.67 0.56 
Total (1)
Total (1)
$22.73  $22.31  
Total (1)
$23.79 $22.95 
(1)Total excludes gathering and processing costs, exploration costs, dry hole costs, impairments, marketing costs and taxes other than income.

The primary factors impacting the cost components of per-unit rates of lease and well, transportation, DD&A and G&A and net interest expense for the three months ended June 30, 2020,March 31, 2021, compared to the same period of 2019,2020, are set forth below. See "Operating Revenues"Revenues and Other" above for a discussion of wellhead volumes.

Lease and well expenses include expenses for EOG-operated properties, as well as expenses billed to EOG from other operators where EOG is not the operator of a property. Lease and well expenses can be divided into the following categories: costs to operate and maintain crude oil and natural gas wells, the cost of workovers and lease and well administrative expenses. Operating and maintenance costs include, among other things, pumping services, salt water disposal, equipment repair and maintenance, compression expense, lease upkeep and fuel and power. Workovers are operations to restore or maintain production from existing wells.

    Each of these categories of costs individually fluctuates from time to time as EOG attempts to maintain and increase production while maintaining efficient, safe and environmentally responsible operations. EOG continues to increase its operating activities by drilling new wells in existing and new areas. Operating and maintenance costs within these existing and new areas, as well as the costs of services charged to EOG by vendors, fluctuate over time.

    Lease and well expenses of $245$270 million for the secondfirst quarter of 20202021 decreased $102$60 million from $347$330 million for the same prior year period primarily due to decreased operating and maintenance costs ($5030 million) and decreased workover expenditures ($4421 million), both in the United States. Lease and well expenses decreased in the United States andprimarily due to decreased operating activities resulting from decreased production, efficiency improvements and maintenance costs in Canada ($8 million).service cost reductions.

    Transportation costs represent costs associated with the delivery of hydrocarbon products from the lease or an aggregation point on EOG's gathering system to a downstream point of sale. Transportation costs include transportation fees, the cost of compression (the cost of compressing natural gas to meet pipeline pressure requirements), the cost of dehydration (the cost associated with removing water from natural gas to meet pipeline requirements), gathering fees and fuel costs.

    Transportation costs of $152$202 million for the secondfirst quarter of 20202021 decreased $22$6 million from $174$208 million for the same prior year period primarily due to decreased transportation costs in the Rocky Mountain area ($14 million), Eagle Ford ($10 million) and Barnett Shale ($713 million), partially offset by increased transportation costs in the Permian Basin ($8 million) and South Texas ($310 million).


-29--26-

    


DD&A of the cost of proved oil and gas properties is calculated using the unit-of-production method. EOG's DD&A rate and expense are the composite of numerous individual DD&A group calculations. There are several factors that can impact EOG's composite DD&A rate and expense, such as field production profiles, drilling or acquisition of new wells, disposition of existing wells and reserve revisions (upward or downward) primarily related to well performance, economic factors and impairments. Changes to these factors may cause EOG's composite DD&A rate and expense to fluctuate from period to period. DD&A of the cost of other property, plant and equipment is generally calculated using the straight-line depreciation method over the useful lives of the assets.

DD&A expenses for the secondfirst quarter of 20202021 decreased $250$100 million to $707$900 million from $957$1,000 million for the same prior year period. DD&A expenses associated with oil and gas properties for the secondfirst quarter of 20202021 were $256$106 million lower than the same prior year period. The decrease primarily reflects decreased production in the United States ($202119 million) and in Trinidad ($8 million) and lower, partially offset by higher unit rates in the United States ($479 million). Unit rates in the United States decreasedincreased primarily due to upwarddownward reserve revisions related to lower average crude oil, NGL and reserves added at lower costsnatural gas prices used in the reserve estimation process as a result of increased efficiencies. DD&A expenses associated with other property, plant and equipment for the second quarter of 2020 were $6 million higher than the samecompared to prior year period primarily due to an increase in expense related to gathering and storage assets and equipment.prices.

G&A expenses of $132$110 million for the secondfirst quarter of 2020 increased $102021 decreased $4 million from $122 million for the same prior year period primarily due to idle equipment and termination fees ($26 million) and increased information system costs ($2 million), partially offset by a decrease in professional and other services ($11 million) and employee-related costs ($5 million).

Exploration costs of $27 million for the second quarter of 2020 decreased $5 million from $33$114 million for the same prior year period primarily due to decreased geologicalemployee-related costs ($2 million) and geophysical costs in the United States.

Interest expense, net of $54 million for the second quarter of 2020 increased $4 million compared to the same prior year period primarily due to the issuance of the Notes in April 2020decreased professional and legal services ($15 million), partially offset by repayment in June 2019 of the $900 million aggregate principal amount of 5.625% Senior Notes due 2019 ($92 million).

Gathering and processing costs represent operating and maintenance expenses and administrative expenses associated with operating EOG's gathering and processing assets as well as natural gas processing fees and certain NGL fractionation fees paid to third parties. EOG pays third parties to process the majority of its natural gas production to extract NGLs.

Gathering and processing costs decreased $16increased $11 million to $97$139 million for the secondfirst quarter of 20202021 compared to $113$128 million for the same prior year period primarily due to decreasedincreased operating costsand maintenance expenses in the Rocky Mountain area ($85 million) and decreasedincreased gathering and processing feesG&A costs in the United States ($64 million).

Exploration costs of $33 million for the first quarter of 2021 decreased $7 million from $40 million for the same prior year period due primarily to decreased geological and geophysical expenditures ($4 million) and G&A expenses ($3 million), bothall in the Eagle Ford.United States.

Impairments include: amortization of unproved oil and gas property costs as well as impairments of proved oil and gas properties; other property, plant and equipment; and other assets. Unproved properties with acquisition costs that are not individually significant are aggregated, and the portion of such costs estimated to be nonproductive is amortized over the remaining lease term. Unproved properties with individually significant acquisition costs are reviewed individually for impairment. When circumstances indicate that a proved property may be impaired, EOG compares expected undiscounted future cash flows at a DD&A group level to the unamortized capitalized cost of the asset. If the expected undiscounted future cash flows, based on EOG's estimates of (and assumptions regarding) future crude oil, NGLs and natural gas prices, operating costs, development expenditures, anticipated production from proved reserves and other relevant data, are lower than the unamortized capitalized cost, the capitalized cost is reduced to fair value. Fair value is generally calculated by using the Income Approach described in the Fair Value Measurement Topic of the Financial Accounting Standards Board's Accounting Standards Codification. In certain instances, EOG utilizes accepted offers from third-party purchasers as the basis for determining fair value.


-27-



The following table represents impairments for the first quarter of 2021 and 2020 (in millions):

Three Months Ended
March 31,
 20212020
Proved properties$— $1,385 
Unproved properties43 57 
Other assets— 71 
Firm commitment contracts60 
Total$44 $1,573 

Impairments of $305 million forproved properties and other assets in the secondfirst quarter of 2020 were $193 million higher than impairments for the same prior year period primarily due to the impairments of sanddecline in commodity prices and crude-by-rail assetswere primarily related to legacy and non-core natural gas, crude oil and combo plays in the United States ($219 million),States. Impairments of proved properties asfirm commitment contracts in the first quarter of 2020 were a result of the decision to exit the Horn River Basin in Canada ($19 million) and increased amortization of unproved property costs in the United States ($14 million), partially offset by lower impairments of other assets in the United States ($60 million). EOG recorded impairments of proved properties, other property, plant and equipment and other assets of $245 million and $65 million for the second quarters of 2020 and 2019, respectively.Canada.

-30-



Taxes other than income include severance/production taxes, ad valorem/property taxes, payroll taxes, franchise taxes and other miscellaneous taxes. Severance/production taxes are generally determined based on wellhead revenues, and ad valorem/property taxes are generally determined based on the valuation of the underlying assets.

Taxes other than income for the secondfirst quarter of 2020 decreased $1242021 increased $58 million to $80$215 million (9.4%(6.7% of wellhead revenues) from $204$157 million (6.8%(6.5% of wellhead revenues) for the same prior year period. The decreaseincrease in taxes other than income was primarily due to decreasedincreased severance/production taxes ($119 million) and decreased ad valorem/property taxes ($8 million), partially offset by a decrease in credits available to EOG in the second quarter of 2020 for state incentive severance tax rate reductions ($4 million), all in the United States.States ($49 million) and the absence of state severance tax refunds recorded in the first quarter of 2021 ($12 million).

Other income (expense), net for the secondfirst quarter of 20202021 decreased $13$22 million compared to the same prior year period primarily due to an increase in deferred compensation expense ($7 million) and decrease in interest income ($5 million).

        In response to the economic impacts of the COVID-19 pandemic, the President of the United States signed the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) into law on March 27, 2020. The CARES Act provides economic support to individuals and businesses through enhanced loan programs, expanded unemployment benefits, and certain payroll and income tax relief, among other provisions.  The primary tax benefit of the CARES Act for EOG was the acceleration of approximately $150 million of additional refundable alternative minimum tax (AMT) credits into tax year 2019.  These credits originated from AMT paid by EOG in years prior to 2018 and were reflected as a deferred tax asset and a non-current receivable as of December 31, 2019 since they had been expected to either offset future current tax liabilities or be refunded on a declining balance schedule through 2021. As a result of the CARES Act, EOG has reclassified these credits from a non-current receivable in Other Assets to a current receivable in Income Taxes Receivable on the Condensed Consolidated Balance Sheet at June 30, 2020. The $150 million of additional refundable AMT credits were received in July 2020.

        EOG recognized an income tax benefit of $236 million for the second quarter of 2020 compared to an income tax provision of $242 million for the second quarter of 2019, primarily due to decreased pretax income.  The net effective tax rate for the second quarter of 2020 decreased to 21% from 22% in 2019.


Six Months Ended June 30, 2020 vs. Six Months Ended June 30, 2019

        Operating Revenues. During the first six months of 2020, operating revenues decreased $2,935 million, or 34%, to $5,821 million from $8,756 million for the same period of 2019. Total wellhead revenues for the first six months of 2020 decreased $2,453 million, or 43%, to $3,286 million from $5,739 million for the same period of 2019. During the first six months of 2020, EOG recognized net gains on the mark-to-market of financial commodity derivative contracts of $1,079 million compared to net gains of $157 million for the same period of 2019. Gathering, processing and marketing revenues for the first six months of 2020 decreased $1,386 million, or 50%, to $1,401 million from $2,787 million for the same period of 2019. Net gains on asset dispositions were $30 million for the first six months of 2020 compared to net gains of $4 million for the same period of 2019.

-31-



        Wellhead volume and price statistics for the six-month periods ended June 30, 2020 and 2019 were as follows:
Six Months Ended
June 30,
 20202019
Crude Oil and Condensate Volumes (MBbld)
United States406.8  445.1  
Trinidad0.3  0.7  
Other International0.1  —  
Total407.2  445.8  
Average Crude Oil and Condensate Prices ($/Bbl) (1)
  
United States$36.17  $58.63  
Trinidad27.75  46.62  
Other International53.41  57.78  
Composite36.16  58.61  
Natural Gas Liquids Volumes (MBbld)
United States131.2  125.4  
Other International—  —  
Total131.2  125.4  
Average Natural Gas Liquids Prices ($/Bbl) (1)
  
United States$10.65  $17.84  
Other International—  —  
Composite10.65  17.84  
Natural Gas Volumes (MMcfd)
United States1,039  1,025  
Trinidad188  270  
Other International35  37  
Total1,262  1,332  
Average Natural Gas Prices ($/Mcf) (1)
  
United States$1.32  $2.37  
Trinidad2.15  2.80  
Other International4.34  4.31  
Composite1.53  2.51  
Crude Oil Equivalent Volumes (MBoed)
United States711.1  741.3  
Trinidad31.6  45.6  
Other International6.1  6.4  
Total748.8  793.3  
Total MMBoe136.3  143.6  
(1) Excludes the impact of financial commodity derivative instruments (see Note 12 to the Condensed Consolidated Financial Statements).

-32-



        Wellhead crude oil and condensate revenues for the first six months of 2020 decreased $2,049 million, or 43%, to $2,680 million from $4,729 million for the same period of 2019 due to a lower composite average price ($1,663 million) and a decrease of 39 MBbld, or 9%, in wellhead crude oil and condensate production ($386 million). Decreased production was primarily due to decreases in the Eagle Ford and the Rocky Mountain area, partially offset by increased production in the Permian Basin. EOG's composite wellhead crude oil and condensate price for the first six months of 2020 decreased 38% to $36.16 per barrel compared to $58.61 per barrel for the same period of 2019.

        NGL revenues for the first six months of 2020 decreased $151 million, or 37%, to $254 million from $405 million for the same period of 2019 due to a lower composite average price ($172 million), partially offset by an increase of 6 MBbld, or 5%, in NGL deliveries ($21 million). Increased production was primarily in the Permian Basin. EOG's composite NGL price for the first six months of 2020 decreased 40% to $10.65 per barrel compared to $17.84 per barrel for the same period of 2019.

        Wellhead natural gas revenues for the first six months of 2020 decreased $254 million, or 42%, to $351 million from $605 million for the same period of 2019. The decrease was due to a lower composite wellhead natural gas price ($225 million) and a decrease in natural gas deliveries ($29 million). Natural gas deliveries for the first six months of 2020 decreased 70 MMcfd, or 5%, compared to the same period of 2019 due primarily to lower natural gas volumes in Trinidad, the Rocky Mountain area and the Marcellus Shale, partially offset by higher deliveries in South Texas and increased production of associated natural gas from the Permian Basin. EOG's composite wellhead natural gas price for the first six months of 2020 decreased 39% to $1.53 per Mcf compared to $2.51 per Mcf for the same period of 2019.

        During the first six months of 2020, EOG recognized net gains on the mark-to-market of financial commodity derivative contracts of $1,079 million compared to net gains of $157 million for the same period of 2019. During the first six months of 2020, net cash received from settlements of financial commodity derivative contracts was $724 million compared to net cash received for settlements of financial commodity derivative contracts of $31 million for the same period of 2019.

        Gathering, processing and marketing revenues less marketing costs for the first six months of 2020 decreased $168 million as compared to the same period of 2019 primarily due to lower margins on crude oil marketing activities, partially offset by higher margins on natural gas marketing activities. The margin on crude oil marketing activities for the first six months of 2020 was negatively impacted by the decline in price on crude oil in inventory awaiting delivery to customers and the decision early in the second quarter of 2020 to reduce commodity price volatility by selling May and June 2020 deliveries under fixed price arrangements.

Operating and Other Expenses. For the first six months of 2020, operating expenses of $6,850 million were $101 million higher than the $6,749 million incurred during the same period of 2019. The following table presents the costs per Boe for the six-month periods ended June 30, 2020 and 2019:
Six Months Ended
June 30,
 20202019
Lease and Well$4.22  $4.76  
Transportation Costs2.64  2.44  
DD&A -
Oil and Gas Properties12.03  12.40  
Other Property, Plant and Equipment0.49  0.39  
G&A1.81  1.59  
Interest Expense, Net0.73  0.73  
Total (1)
$21.92  $22.31  
(1)Total excludes gathering and processing costs, exploration costs, dry hole costs, impairments, marketing costs and taxes other than income.

        The primary factors impacting the cost components of per-unit rates of lease and well, transportation, DD&A, G&A and net interest expense for the six months ended June 30, 2020, compared to the same period of 2019 are set forth below. See "Operating Revenues" above for a discussion of wellhead volumes.

-33-



        Lease and well expenses of $575 million for the first six months of 2020 decreased $109 million from $684 million for the same prior year period primarily due to decreased workover expenditures ($5417 million) and decreased operating and maintenance costsinterest income ($506 million), both in the United States, and decreased operating and maintenance costs in Canada ($14 million), partially offset by increased lease and well administrative expenses in the United States ($13 million).

        Transportation costs of $360 million for the first six months of 2020 increased $9 million from $351 million for the same prior year period primarily due to increased transportation costs in the Permian Basin ($43 million) and South Texas ($8 million), partially offset by decreased transportation costs in the Barnett Shale ($17 million), Rocky Mountain area ($10 million), Eagle Ford ($10 million) and Marcellus Shale ($2 million).

DD&A expenses for the first six months of 2020 decreased $130 million to $1,707 million from $1,837 million for the same prior year period. DD&A expenses associated with oil and gas properties for the first six months of 2020 were $141 million lower than the same prior year period. The decrease primarily reflects lower unit rates in the United States ($71 million) and decreased production in the United States ($61 million) and in Trinidad ($12 million). Unit rates in the United States decreased primarily due to upward reserve revisions and reserves added at lower costs as a result of increased efficiencies. DD&A expenses associated with other property, plant and equipment for the first six months of 2020 were $11 million higher than the same prior year period primarily due to an increase in expense related to gathering and storage assets and equipment.

        G&A expenses of $246 million for the first six months of 2020 increased $18 million from $228 million for the same prior year period primarily due to idle equipment and termination fees ($26 million) and increased information system costs ($5 million), partially offset by a decrease in professional and other services ($8 million) and employee-related costs ($7 million).

        Interest expense, net of $99 million for the first six months of 2020 decreased $6 million compared to the same prior year period primarily due to repayment in June 2019 of the $900 million aggregate principal amount of 5.625% Senior Notes due 2019 ($21 million), partially offset by the issuance of the Notes in April 2020 ($15 million).

Impairments of $1,878 million for the first six months of 2020 were $1,694 million higher than impairments for the same prior year period primarily due to increased impairments of proved properties and other assets, primarily related to legacy and non-core natural gas, crude oil and combo plays in the United States ($1,374 million), sand and crude-by-rail assets in the United States ($219 million), as a result of the decision to exit the Horn River Basin in Canada ($79 million) and increased amortization of unproved property costs in the United States ($23 million). EOG recorded impairments of proved properties, other property, plant and equipment and other assets of $1,761 million and $91 million for the first six months of 2020 and 2019, respectively.

Taxes other than income for the first six months of 2020 decreased $159 million to $238 million (7.2% of wellhead revenues) from $397 million (6.9% of wellhead revenues) for the same prior year period. The decrease in taxes other than income was primarily due to decreased severance/production taxes ($128 million), decreased ad valorem/property taxes ($27 million) and an increase in credits available to EOG in the first six months of 2020 for state incentive severance tax rate reductions ($5 million), all in the United States.

EOG recognized an income tax benefitprovision of $215$204 million for the first six monthsquarter of 20202021 compared to an income tax provision of $433$21 million for the first six monthsquarter of 2019,2020, primarily due to decreasedincreased pretax income.  The net effective tax rate for the first six monthsquarter of 2021 decreased to 23% from 68% for the first quarter of 2020 decreaseddue mostly to 19% from 23% in the first six monthshigher level of 2019. The lowerpretax income which caused the effective rate to be less sensitive to reconciling items and the absence of certain foreign losses for which tax rate is mostly due to EOG's foreign operations, primarily related to increased losses in Canada, which havebenefits are not been tax effectedrecorded due to valuation allowances.


-34-



Capital Resources and Liquidity

Cash Flow. The primary sources of cash for EOG during the sixthree months ended June 30, 2020,March 31, 2021, were funds generated from operations, net proceeds from the issuance of long-term debt and net cash received from settlements of commodity derivative contracts.operations. The primary uses of cash were funds used in operations; exploration and development expenditures; funds used in operations; long-term debt repayments; dividend payments to stockholders; and other property, plant and equipment expenditures.expenditures; and net cash paid for settlements of commodity derivative contracts. During the first sixthree months of 2020,2021, EOG's cash balance increased $389$59 million to $2,417$3,388 million from $2,028$3,329 million at December 31, 2019.2020.

Net cash provided by operating activities of $2,673$1,870 million for the first sixthree months of 20202021 decreased $1,621$715 million compared to the same period of 20192020 primarily due to a decreasean unfavorable change in working capital ($1,478 million) and an increase in net cash paid for settlements of commodity derivative contracts ($114 million), partially offset by an increase in wellhead revenues ($2,453 million), a decrease in net cash received relating to income taxes ($255754 million) and a decreasean increase in gathering, processing and marketing revenues less marketing costs ($168 million), partially offset by an increase in net cash received for settlements of commodity derivative contracts ($692 million), a decrease in cash operating expenses ($239 million) and a favorable change in working capital ($9581 million).

Net cash used in investing activities of $2,376$821 million for the first sixthree months of 20202021 decreased by $1,147$710 million compared to the same period of 20192020 due to a decrease in additions to oil and gas properties ($1,456691 million) and an increasea decrease in proceeds from the sale of assetsadditions to other property, plant and equipment ($2681 million), partially offset by an unfavorable change in components of working capital associated with investing activities ($30441 million) and an increasea decrease in additions to other property, plant and equipment ($30 million).

        Net cash provided by financing activities of $92 million for the first six months of 2020 included net proceeds from the issuancesale of long-term debtassets ($1,484 million). Net cash used in financing activities for the first six months of 2020 included repayments of long-term debt ($1,000 million) and cash dividend payments ($384 million). Net cash used in financing activities of $1,166 million for the first six months of 2019 included repayments of long-term debt ($900 million) and cash dividend payments ($25521 million).


-35--28-

    


Net cash used in financing activities of $988 million for the first three months of 2021 included repayments of long-term debt ($750 million), cash dividend payments ($219 million), purchases of treasury stock in connection with stock compensation plans ($10 million) and repayment of finance lease liabilities ($9 million). Net cash used in financing activities of $175 million for the first three months of 2020 included cash dividend payments ($167 million), purchases of treasury stock in connection with stock compensation plans ($5 million) and repayment of finance lease liabilities ($3 million).

Total Expenditures. For the year 2020,2021, EOG's updated budget for exploration and development and other property, plant and equipment expenditures is estimated to range from approximately $3.4$3.7 billion to $3.6$4.1 billion, excluding acquisitions and non-cash transactions. The table below sets out components of total expenditures for the six-monththree-month periods ended June 30,March 31, 2021 and 2020 and 2019 (in millions):
Six Months Ended
June 30,
Three Months Ended
March 31,
2020201920212020
Expenditure CategoryExpenditure CategoryExpenditure Category
CapitalCapitalCapital
Exploration and Development DrillingExploration and Development Drilling$1,694  $2,692  Exploration and Development Drilling$733 $1,313 
FacilitiesFacilities210  338  Facilities82 179 
Leasehold Acquisitions (1)
Leasehold Acquisitions (1)
75  145  
Leasehold Acquisitions (1)
58 45 
Property Acquisitions (2)
Property Acquisitions (2)
51  322  
Property Acquisitions (2)
48 
Capitalized InterestCapitalized Interest17  18  Capitalized Interest
SubtotalSubtotal2,047  3,515  Subtotal890 1,594 
Exploration CostsExploration Costs67  69  Exploration Costs33 40 
Dry Hole CostsDry Hole Costs—   Dry Hole Costs11 — 
Exploration and Development ExpendituresExploration and Development Expenditures2,114  3,588  Exploration and Development Expenditures934 1,634 
Asset Retirement CostsAsset Retirement Costs25  60  Asset Retirement Costs17 20 
Total Exploration and Development ExpendituresTotal Exploration and Development Expenditures2,139  3,648  Total Exploration and Development Expenditures951 1,654 
Other Property, Plant and Equipment (3)
Other Property, Plant and Equipment (3)
221  117  
Other Property, Plant and Equipment (3)
116 172 
Total ExpendituresTotal Expenditures$2,360  $3,765  Total Expenditures$1,067 $1,826 
(1)    Leasehold acquisitions included $48$22 million and $54$24 million for the six-monththree-month periods ended June 30,March 31, 2021 and 2020, and 2019, respectively, related to non-cash property exchanges.
(2)    Property acquisitions included $7$3 million and $18$5 million for the six-monththree-month periods ended June 30,March 31, 2021 and 2020, and 2019, respectively, related to non-cash property exchanges.
(3)    Other property, plant and equipment included $73$74 million and $49 million of non-cash additions for the six-month periodthree-month periods ended June 30,March 31, 2021 and 2020, made in connection with arespectively, primarily related to finance lease transaction.transactions for storage facilities.

Exploration and development expenditures of $2,114$934 million for the first sixthree months of 20202021 were $1,474$700 million lower than the same period of 20192020 primarily due to decreased exploration and development drilling expenditures in the United States ($1,021575 million) and Other InternationalTrinidad ($9 million), decreased property acquisitions ($27111 million), decreased facilities expenditures ($12897 million) and decreased leaseholdproperty acquisitions ($7039 million), partially offset by increased exploration and development drilling expenditures in Trinidadleasehold acquisitions ($3112 million). Exploration and development expenditures for the first sixthree months of 20202021 of $2,114$934 million consisted of $1,840$812 million in development drilling and facilities, $206$105 million in exploration, $51$9 million in property acquisitions and $17$8 million in capitalized interest. Exploration and development expenditures for the first sixthree months of 20192020 of $3,588$1,634 million consisted of $3,010$1,465 million in development drilling and facilities, $322$112 million in exploration, $48 million in property acquisitions $238 million in exploration and $18$9 million in capitalized interest.

The level of exploration and development expenditures, including acquisitions, will vary in future periods depending on energy market conditions and other economic factors. EOG believes it has significant flexibility and availability with respect to financing alternatives and the ability to adjust its exploration and development expenditure budget as circumstances warrant. While EOG has certain continuing commitments associated with expenditure plans related to its operations, such commitments are not expected to be material when considered in relation to the total financial capacity of EOG.


-36--29-

    


Commodity Derivative Transactions. As more fully discussed in Note 12 to the Consolidated Financial Statements included in EOG's Annual Report on Form 10-K for the year ended December 31, 2019,2020, filed on February 27, 2020,25, 2021, EOG engages in price risk management activities from time to time. These activities are intended to manage EOG's exposure to fluctuations in commodity prices for crude oil, NGLs 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. EOG has not designated any of its financial commodity derivative contracts as accounting hedges and, accordingly, accounts for financial commodity derivative contracts using the mark-to-market accounting method. Under this accounting method, changes in the fair value of outstanding financial instruments are recognized as gains or losses in the period of change and are recorded as Gains (Losses) on Mark-to-Market Commodity Derivative Contracts on the Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss).Income. The related cash flow impact is reflected in Cash Flows from Operating Activities on the Condensed Consolidated Statements of Cash Flows.

The total fair value of EOG's commodity derivative contracts was reflected on the Condensed Consolidated Balance Sheets at June 30, 2020,March 31, 2021, as a net assetliability of $209$195 million.

Crude OilCommodity Derivative Contracts. Prices received by EOG for its crude oil production generally vary from NYMEX West Texas Intermediate (WTI) prices due to adjustments for delivery location (basis) and other factors. EOG has entered into crude oil basis swap contracts in order to fix the differential between Intercontinental Exchange (ICE) Brent pricing and pricing in Cushing, Oklahoma (ICE Brent Differential). Presented below is a comprehensive summary of EOG's ICE Brent Differential basis swapfinancial commodity derivative contracts through July 30, 2020. The weighted average price differential expressedas of April 29, 2021. Crude oil and NGL volumes are presented in MBbld and prices are presented in $/Bbl. Natural gas volumes are presented in MMBtu per day (MMBtud) and prices are presented in dollars per barrelMMBtu ($/Bbl) represents the amount of addition to Cushing, Oklahoma, prices for the notional volumes expressed in barrels per day (Bbld) covered by the basis swap contracts.
ICE Brent Differential Basis Swap Contracts
 Volume (Bbld)Weighted Average Price Differential
($/Bbl)
2020
May 2020 (closed)10,000  $4.92  

MMBtu).

        EOG has also entered into crude oil basis swap contracts in order to fix the differential between pricing in Houston, Texas, and Cushing, Oklahoma (Houston Differential). Presented below is a comprehensive summary of EOG's Houston Differential basis swap contracts through July 30, 2020. The weighted average price differential expressed in $/Bbl represents the amount of addition to Cushing, Oklahoma, prices for the notional volumes expressed in Bbld covered by the basis swap contracts.
Houston Differential Basis Swap Contracts
 Volume (Bbld)Weighted Average Price Differential
($/Bbl)
2020
May 2020 (closed)10,000  $1.55  
Crude Oil Financial Price Swap Contracts
Contracts Sold
PeriodSettlement IndexVolume
(MBbld)
Weighted Average Price
($/Bbl)
January 2021 (closed)NYMEX West Texas Intermediate (WTI)151 $50.06 
February - March 2021 (closed)NYMEX WTI201 51.29 
April - June 2021NYMEX WTI150 51.68 
July - September 2021NYMEX WTI150 52.71 

-37-

Crude Oil Basis Swap Contracts
Contracts Sold
PeriodSettlement IndexVolume
(MBbld)
Weighted Average Price Differential
($/Bbl)
February 2021 (closed)
NYMEX WTI Roll Differential (1)
30 $0.11 
March - May 2021 (closed)
NYMEX WTI Roll Differential (1)
125 0.17 
June - December 2021
NYMEX WTI Roll Differential (1)
125 0.17 
January - December 2022
NYMEX WTI Roll Differential (1)
125 0.15 

_________________

        EOG has also entered into crude oil swaps in order(1)    This settlement index is used to fix the differential in pricing between the NYMEX calendar month average and the physical crude oil delivery month (Roll Differential). Presented below is a comprehensive summary of EOG's Roll Differential swap contracts through July 30, 2020. The weighted average price differential expressed in $/Bbl represents the amount of net addition (reduction) to delivery month prices for the notional volumes expressed in Bbld covered by the swap contracts.
Roll Differential Swap Contracts
 Volume (Bbld)Weighted Average Price Differential
($/Bbl)
2020
February 1, 2020 through June 30, 2020 (closed)10,000  $0.70  
July 1, 2020 through August 31, 2020 (closed)88,000  (1.16) 
September 202088,000  (1.16) 
October 1, 2020 through December 31, 202066,000  (1.16) 

        In May 2020, EOG entered into crude oil Roll Differential swap contracts for the period from July 1, 2020 through September 30, 2020, with notional volumes of 22,000 Bbld at a weighted average price differential of $(0.43) per Bbl, and for the period from October 1, 2020 through December 31, 2020, with notional volumes of 44,000 Bbld at a weighted average price differential of $(0.73) per Bbl. These contracts partially offset certain outstanding Roll Differential swap contracts for the same time periods and volumes at a weighted average price differential of $(1.16) per Bbl. EOG expects to pay net cash of $3.2 million for the settlement of these contracts. The offsetting contracts were excluded from the above table.

        Presented below is a comprehensive summary of EOG's crude oil NYMEX WTI price swap contracts through July 30, 2020, with notional volumes expressed in Bbld and prices expressed in $/Bbl.
Crude Oil NYMEX WTI Price Swap Contracts
 Volume (Bbld)Weighted Average Price ($/Bbl)
2020
January 1, 2020 through March 31, 2020 (closed)200,000  $59.33  
April 1, 2020 through May 31, 2020 (closed)265,000  51.36  

        In April and May 2020, EOG entered into crude oil NYMEX WTI price swap contracts for the period from June 1, 2020 through June 30, 2020, with notional volumes of 265,000 Bbld at a weighted average price of $33.80 per Bbl, for the period from July 1, 2020 through July 31, 2020, with notional volumes of 254,000 Bbld at a weighted average price of $33.75 per Bbl, for the period from August 1, 2020 through September 30, 2020, with notional volumes of 154,000 Bbld at a weighted average price of $34.18 per Bbl and for the period from October 1, 2020 through December 31, 2020, with notional volumes of 47,000 Bbld at a weighted average price of $30.04 per Bbl. These contracts offset the remaining NYMEX WTI price swap contracts for the same time periods and volumes at a weighted average price of $51.36 per Bbl for the period from June 1, 2020 through June 30, 2020, $42.36 per Bbl for the period from July 1, 2020 through July 31, 2020, $50.42 per Bbl for the period from August 1, 2020 through September 30, 2020 and $31.00 per Bbl for the period from October 1, 2020 through December 31, 2020.EOG expects to receive net cash of $364.0 million for the settlement of these contracts. The offsetting contracts were excluded from the above table.month.


-38--30-

    


        Presented below is a comprehensive summary of EOG's crude oil ICE Brent price swap contracts through July 30, 2020, with notional volumes expressed in Bbld and prices expressed in $/Bbl.
Crude Oil ICE Brent Price Swap Contracts
 Volume (Bbld)Weighted Average Price ($/Bbl)
2020
April 2020 (closed)75,000  $25.66  
May 2020 (closed)35,000  26.53  
NGL Financial Price Swap Contracts
Contracts Sold
PeriodSettlement IndexVolume
(MBbld)
Weighted Average Price
($/Bbl)
January - March 2021 (closed)Mont Belvieu Propane (non-Tet)15 $29.44 
April - December 2021Mont Belvieu Propane (non-Tet)15 29.44 

NGLs Derivative Contracts. Presented below is a comprehensive summary of EOG's Mont Belvieu propane (non-TET) financial price swap contracts (Mont Belvieu Propane Price Swap Contracts) through July 30, 2020, with notional volumes expressed in Bbld and prices expressed in $/Bbl.
Natural Gas Financial Price Swap Contracts
Contracts SoldContracts Purchased
PeriodSettlement IndexVolume
(MMBtud in thousands)
Weighted Average Price ($/MMBtu)Volume (MMBtud in thousands)Weighted Average Price ($/MMBtu)
January - March 2021 (closed)NYMEX Henry Hub500 $2.99 500 $2.43 
April - May 2021 (closed)NYMEX Henry Hub500 2.99 570 2.81 
June - September 2021NYMEX Henry Hub500 2.99 570 2.81 
October - December 2021NYMEX Henry Hub500 2.99 500 2.83 
January - December 2022 (closed) (1)
NYMEX Henry Hub20 2.75 — — 
April - May 2021 (closed)Japan Korea Marker (JKM)70 6.65 — — 
June - September 2021JKM70 6.65 — — 
Mont Belvieu Propane Price Swap Contracts
 Volume (Bbld)Weighted Average Price ($/Bbl)
2020
January 1, 2020 through February 29, 2020 (closed)4,000  $21.34  
March 1, 2020 through April 30, 2020 (closed)25,000  17.92  
_________________
(1)    In April and May 2020, EOG entered into Mont Belvieu propane price swap contracts for the period from May 1, 2020 through December 31, 2020, with notional volumes of 25,000 Bbld at a weighted average price of $16.41 per Bbl. These contracts offset the remaining Mont Belvieu propane price swap contracts for the same time period with notional volumes of 25,000 Bbld at a weighted average price of $17.92 per Bbl. EOG expects to receive net cash of $9.2 million for the settlement of these contracts. The offsetting contracts were excluded from the above table.

Natural Gas Derivative Contracts. Presented below is a comprehensive summary of EOG's natural gas price swap contracts through July 30, 2020, with notional volumes expressed in million British thermal units (MMBtu) per day (MMBtud) and prices expressed in dollars per MMBtu ($/MMBtu).
Natural Gas Price Swap Contracts
 Volume (MMBtud)Weighted Average Price ($/MMBtu)
2021
January 1, 2021 through December 31, 202150,000  $2.75  


-39-



        EOG has entered into natural gas collar contracts, which establish ceiling and floor prices for the sale of notional volumes of natural gas as specified in the collar contracts. The collars require that EOG pay the difference between the ceiling price and the NYMEX Henry Hub natural gas price for the contract month (Henry Hub Index Price) in the event the Henry Hub Index Price is above the ceiling price. The collars grant EOG the right to receive the difference between the floor price and the Henry Hub Index Price in the event the Henry Hub Index Price is below the floor price. In March 2020,January 2021, EOG executed the early termination provision granting EOG the right to terminate certain 2020all of its open 2022 natural gas collar contracts with notional volumes of 250,000 MMBtud at a weighted average ceiling price of $2.50 per MMBtu and a weighted average floor price of $2.00 per MMBtu for the period from April 1, 2020 through July 31, 2020. The net cashswap contracts. EOG received for settling these contracts was $7.8 million. Presented below is a comprehensive summary of EOG's natural gas collar contracts through July 30, 2020, with notional volumes expressed in MMBtud and prices expressed in $/MMBtu.
Natural Gas Collar Contracts
Weighted Average Price ($/MMBtu)
 Volume (MMBtud)Ceiling PriceFloor Price
2020
April 1, 2020 through July 31, 2020 (closed)250,000  $2.50  $2.00  

        In April 2020, EOG entered into natural gas collar contracts for the period from August 1, 2020 through October 31, 2020, with notional volumes of 250,000 MMBtud at a ceiling price of $2.50 per MMBtu and a floor price of $2.00 per MMBtu. These contracts offset the remaining natural gas collar contracts for the same time period with notional volumes of 250,000 MMBtud at a ceiling price of $2.50 per MMBtu and a floor price of $2.00 per MMBtu. EOG expects to receive net cash of $1.1$0.6 million for the settlement of these contracts. The offsetting contracts were excluded from the above table. 

        Prices received by EOG for its natural gas production generally vary from NYMEX Henry Hub prices due to adjustments for delivery location (basis) and other factors. EOG has entered into natural gas basis swap contracts in order to fix the differential between pricing in the Rocky Mountain area and NYMEX Henry Hub prices (Rockies Differential). Presented below is a comprehensive summary of EOG's Rockies Differential basis swap contracts through July 30, 2020. The weighted average price differential expressed in $/MMBtu represents the amount of reduction to NYMEX Henry Hub prices for the notional volumes expressed in MMBtud covered by the basis swap contracts.
Rockies Differential Basis Swap Contracts
 Volume (MMBtud)Weighted Average Price Differential
($/MMBtu)
2020
January 1, 2020 through July 31, 2020 (closed)30,000  $0.55  
August 1, 2020 through December 31, 202030,000  0.55  
        EOG has also entered into natural gas basis swap contracts in order to fix the differential between pricing at the Houston Ship Channel (HSC) and NYMEX Henry Hub prices (HSC Differential). In March 2020, EOG executed the early termination provision granting EOG the right to terminate certain 2020 HSC Differential basis swaps with notional volumes of 60,000 MMBtud at a weighted average price differential of $0.05 per MMBtu for the period from April 1, 2020 through December 31, 2020. The net cash EOG paid for settling these contracts was $0.4 million. Presented below is a comprehensive summary of EOG's HSC Differential basis swap contracts through July 30, 2020. The weighted average price differential expressed in $/MMBtu represents the amount of reduction to NYMEX Henry Hub prices for the notional volumes expressed in MMBtud covered by the basis swap contracts.
HSC Differential Basis Swap Contracts
 Volume (MMBtud)Weighted Average Price Differential
($/MMBtu)
2020
January 1, 2020 through December 31, 2020 (closed)60,000  $0.05  
-40-




        EOG has also entered into natural gas basis swap contracts in order to fix the differential between pricing at the Waha Hub in West Texas and NYMEX Henry Hub prices (Waha Differential). Presented below is a comprehensive summary of EOG's Waha Differential basis swap contracts through July 30, 2020. The weighted average price differential expressed in $/MMBtu represents the amount of reduction to NYMEX Henry Hub prices for the notional volumes expressed in MMBtud covered by the basis swap contracts.
Waha Differential Basis Swap Contracts
 Volume (MMBtud)Weighted Average Price Differential
($/MMBtu)
2020
January 1, 2020 through April 30, 2020 (closed)50,000  $1.40  

        In April 2020, EOG entered into Waha Differential basis swap contracts for the period from May 1, 2020 through December 31, 2020, with notional volumes of 50,000 MMBtud at a weighted average price differential of $0.43 per MMBtu. These contracts offset the remaining Waha Differential basis swap contracts for the same time period with notional volumes of 50,000 MMBtud at a weighted average price differential of $1.40 per MMBtu. EOG expects to pay net cash of $11.9 million for the settlement of these contracts. The offsetting contracts were excluded from the above table.

-41-



Information Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, including, among others, statements and projections regarding EOG's future financial position, operations, performance, business strategy, goals, returns and rates of return, budgets, reserves, levels of production, capital expenditures, costs and asset sales, statements regarding future commodity prices and statements regarding the plans and objectives of EOG's management for future operations, are forward-lookingforward‐looking statements. EOG typically uses words such as "expect," "anticipate," "estimate," "project," "strategy," "intend," "plan," "target," "aims," "goal," "may," "will," "focused on," "should" and "believe" or the negative of those terms or other variations or comparable terminology to identify its forward-lookingforward‐looking statements. In particular, statements, express or implied, concerning EOG's future operating results and returns or EOG's ability to replace or increase reserves, increase production, generate returns and rates of return, replace or increase drilling locations, reduce or otherwise control operating costs and capital expenditures, generate cash flows, pay down or refinance indebtedness, or pay and/or increase dividends are forward-lookingforward‐looking statements. Forward-looking statements are not guarantees of performance. Although EOG believes the expectations reflected in its forward-looking statements are reasonable and are based on reasonable assumptions, no assurance can be given that these assumptions are accurate or that any of these expectations will be achieved (in full or at all) or will prove to have been correct. Moreover, EOG's forward-looking statements may be affected by known, unknown or currently unforeseen risks, events or circumstances that may be outside EOG's control. Important factors that could cause EOG's actual results to differ materially from the expectations reflected in EOG's forward-looking statements include, among others:

the timing, extent and duration of changes in prices for, supplies of, and demand for, crude oil and condensate, natural gas liquids, natural gas and related commodities;
the extent to which EOG is successful in its efforts to acquire or discover additional reserves;
-31-



the extent to which EOG is successful in its efforts to (i) economically develop its acreage in, (ii) produce reserves and achieve anticipated production levels and rates of return from, (iii) decrease or otherwise control its drilling, completion, operating and capital costs related to, and (iv) maximize reserve recovery from, its existing and future crude oil and natural gas exploration and development projects and associated potential and existing drilling locations;
the extent to which EOG is successful in its efforts to market its production of crude oil and condensate, natural gas liquids, and natural gas and related commodity production;gas;
security threats, including cybersecurity threats and disruptions to our business and operations from breaches of our information technology systems, physical breaches of our facilities and other infrastructure or breaches of the information technology systems, facilities and infrastructure of third parties with which we transact business;
the availability, proximity and capacity of, and costs associated with, appropriate gathering, processing, compression, storage, transportation, refining, and refiningexport facilities;
the availability, cost, terms and timing of issuance or execution of, and competition for, mineral licenses and leases and governmental and other permits and rights-of-way, and EOG’sEOG's ability to retain mineral licenses and leases;
the impact of, and changes in, government policies, laws and regulations, including any changes or other actions which may result from the recent U.S. elections and change in U.S. administration and including tax laws and regulations; climate change and other environmental, health and safety laws and regulations relating to air emissions, disposal of produced water, drilling fluids and other wastes, hydraulic fracturing and access to and use of water; laws and regulations affecting the leasing of acreage and permitting for oil and gas drilling and the calculation of royalty payments in respect of oil and gas production; laws and regulations imposing additional permitting and disclosure requirements, additional operating restrictions and conditions or restrictions on drilling and completion operations and on the transportation of crude oil and natural gas; laws and regulations with respect to derivatives and hedging activities; and laws and regulations with respect to the import and export of crude oil, natural gas and related commodities;
EOG's ability to effectively integrate acquired crude oil and natural gas properties into its operations, fully identify existing and potential problems with respect to such properties and accurately estimate reserves, production and drilling, completing and operating costs with respect to such properties;
the extent to which EOG's third-party-operated crude oil and natural gas properties are operated successfully and economically;
competition in the oil and gas exploration and production industry for the acquisition of licenses, leases and properties, employees and other personnel, facilities, equipment, materials and services;
the availability and cost of employees and other personnel, facilities, equipment, materials (such as water and tubulars) and services;
the accuracy of reserve estimates, which by their nature involve the exercise of professional judgment and may therefore be imprecise;
-42-



weather, including its impact on crude oil and natural gas demand, and weather-related delays in drilling and in the installation and operation (by EOG or third parties) of production, gathering, processing, refining, compression, storage, transportation, and transportationexport facilities;
the ability of EOG's customers and other contractual counterparties to satisfy their obligations to EOG and, related thereto, to access the credit and capital markets to obtain financing needed to satisfy their obligations to EOG;
EOG's ability to access the commercial paper market and other credit and capital markets to obtain financing on terms it deems acceptable, if at all, and to otherwise satisfy its capital expenditure requirements;
the extent to which EOG is successful in its completion of planned asset dispositions;
the extent and effect of any hedging activities engaged in by EOG;
the timing and extent of changes in foreign currency exchange rates, interest rates, inflation rates, global and domestic financial market conditions and global and domestic general economic conditions;
the duration and economic and financial impact of epidemics, pandemics or other public health issues, including the COVID-19 pandemic;
geopolitical factors and political conditions and developments around the world (such as the imposition of tariffs or trade or other economic sanctions, political instability and armed conflict), including in the areas in which EOG operates;
the use of competing energy sources and the development of alternative energy sources;
the extent to which EOG incurs uninsured losses and liabilities or losses and liabilities in excess of its insurance coverage;
acts of war and terrorism and responses to these acts; and
-32-



the other factors described under ITEM 1A, Risk Factors on pages 13 through 23 of EOG's Annual Report on Form 10-K for the fiscal year ended December 31, 2019, under ITEM 1A, Risk Factors, on page 37 of EOG's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2020, and under ITEM 1A, Risk Factors, in this Quarterly Report on Form 10-Q, and any updates to those factors set forth in EOG's subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K.

In light of these risks, uncertainties and assumptions, the events anticipated by EOG's forward-looking statements may not occur, and, if any of such events do, we may not have anticipated the timing of their occurrence or the duration or extent of their impact on our actual results. Accordingly, you should not place any undue reliance on any of EOG's forward-looking statements. EOG's forward-looking statements speak only as of the date made, and EOG undertakes no obligation, other than as required by applicable law, to update or revise its forward-looking statements, whether as a result of new information, subsequent events, anticipated or unanticipated circumstances or otherwise.

-43--33-

    


PART I.  FINANCIAL INFORMATION


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
EOG RESOURCES, INC.

EOG's exposure to commodity price risk, interest rate risk and foreign currency exchange rate risk is discussed in (i) the "Commodity Derivative Transactions," "Financing," "Foreign Currency Exchange Rate Risk" and "Outlook" sections of "Management's Discussion and Analysis of Financial Condition and Results of Operations - Capital Resources and Liquidity" on pages 4045 through 4653 of EOG's Annual Report on Form 10-K for the year ended December 31, 2019,2020, filed on February 27,25, 2021 (EOG's 2020 (EOG's 2019 Annual Report); and (ii) Note 12, "Risk Management Activities," to EOG's Consolidated Financial Statements on pages F-30F-31 through F-33F-36 of EOG's 20192020 Annual Report. There have been no material changes in this information. For additional information regarding EOG's financial commodity derivative contracts and physical commodity contracts, see (i) Note 12, "Risk Management Activities," to EOG's Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q; (ii) "Management's Discussion and Analysis of Financial Condition and Results of Operations - Results of Operations - Operating Revenues" in this Quarterly Report on Form 10-Q; and (iii) "Management's Discussion and Analysis of Financial Condition and Results of Operations - Capital Resources and Liquidity - Commodity Derivative Transactions" in this Quarterly Report on Form 10-Q.


ITEM 4. CONTROLS AND PROCEDURES
EOG RESOURCES, INC.

Disclosure Controls and Procedures. EOG's management, with the participation of EOG's principal executive officer and principal financial officer, evaluated the effectiveness of EOG's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (Exchange Act)) as of the end of the period covered by this Quarterly Report on Form 10-Q (Evaluation Date). Based on this evaluation, EOG's principal executive officer and principal financial officer have concluded that EOG's disclosure controls and procedures were effective as of the Evaluation Date in ensuring that information that is required to be disclosed in the reports EOG files or furnishes under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the United States Securities and Exchange Commission's rules and forms and (ii) accumulated and communicated to EOG's management, as appropriate, to allow timely decisions regarding required disclosure.

Internal Control Over Financial Reporting. There were no changes in EOG's internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act) that occurred during the quarterly period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, EOG's internal control over financial reporting.



-44--34-

    


PART II. OTHER INFORMATION

EOG RESOURCES, INC.

ITEM 1.    LEGAL PROCEEDINGS

See Part I, Item 1, Note 8 to Condensed Consolidated Financial Statements, which is incorporated herein by reference.

ITEM 1A. RISK FACTORS

        There have beenItem 103 of Regulation S-K promulgated under the Securities Exchange Act of 1934, as amended, requires disclosure regarding certain proceedings arising under federal, state or local environmental laws when a governmental authority is a party to the proceedings and such proceedings involve potential monetary sanctions that EOG reasonably believes will exceed a specified threshold. Pursuant to recent amendments to this item, EOG will be using a threshold of $1 million for purposes of determining whether disclosure of any such proceedings is required. EOG believes proceedings under this threshold are not material to EOG's business and financial condition. Applying this threshold, there are no material changes from the risk factors disclosed in Item 1A. Risk Factors of our Annual Report on Form 10-Kenvironmental proceedings to disclose for the yearquarter ended DecemberMarch 31, 2019, other than the following:

Outbreaks of communicable diseases can adversely affect our business, financial condition and results of operations.

        Global or national health concerns, including a widespread outbreak of contagious disease, can, among other impacts, negatively impact the global economy, reduce demand and pricing for crude oil, natural gas liquids (NGLs) and natural gas, lead to operational disruptions and limit our ability to execute on our business plan, any of which could materially and adversely affect our business, financial condition and results of operations. Furthermore, uncertainty regarding the impact of any outbreak of contagious disease could lead to increased volatility in crude oil, NGLs and natural gas prices.

For example, the current pandemic involving a highly transmissible and pathogenic coronavirus (COVID-19) and the measures being taken to address and limit the spread of the virus have adversely affected the economies and financial markets of the world, resulting in an economic downturn that has negatively impacted, and may continue to negatively impact, global demand and prices for crude oil and condensate, natural gas liquids (NGLs) and natural gas.The resulting decline in commodity prices has materially and adversely affected our cash flows and results of operations; if such decline were to continue for an extended period of time or worsen, our cash flows and results of operations would be further adversely affected.For further discussion regarding the potential impacts on us of lower commodity prices and extended declines in commodity prices, see ITEM 1A, Risk Factors, of our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed on February 27, 2020.

If the COVID-19 outbreak should continue or worsen, we may also experience disruptions to commodities markets, equipment supply chains and the availability of our workforce, which could adversely affect our ability to conduct our business and operations.Further, if the resulting economic downturn and adverse impact on commodity prices should continue or worsen, our customers and other contractual parties may be unable to pay amounts owed to us from time to time and to otherwise satisfy their contractual obligations to us, and may be unable to access the credit and capital markets for such purposes.Such inability of our customers and other contractual counterparties may materially and adversely affect our business, financial condition, results of operations and cash flows.

There are still too many variables and uncertainties regarding the COVID-19 pandemic - including the ultimate geographic spread of the virus, the duration and severity of the outbreak and the extent of travel restrictions and business closures imposed in affected countries - to fully assess the potential impact on our business, financial condition and results of operations.

-45-



2021.

ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table sets forth, for the periods indicated, EOG's share repurchase activity:
Period
Total
Number of
Shares Purchased (1)
Average
Price Paid Per Share
Total Number of
Shares Purchased as
Part of Publicly
Announced Plans or Programs
Maximum Number
of Shares that May Yet
Be Purchased Under The Plans or Programs (2)
April 1, 2020 - April 30, 20202,164  $46.39  —  6,386,200  
May 1, 2020 - May 31, 20204,165  49.50  —  6,386,200  
June 1, 2020 - June 30, 20201,871  51.01  —  6,386,200  
Total8,200  49.03  —   
Period
Total
Number of
Shares Purchased (1)
Average
Price Paid Per Share
Total Number of
Shares Purchased as
Part of Publicly
Announced Plans or Programs
Maximum Number
of Shares that May Yet
Be Purchased Under The Plans or Programs (2)
January 1, 2021 - January 31, 20216,614 $51.36 — 6,386,200 
February 1, 2021 - February 28, 202123,168 63.20 — 6,386,200 
March 1, 2021 - March 31, 2021112,488 74.45 — 6,386,200 
Total142,270 71.55 —  
(1)The 8,200142,270 total shares for the quarter ended June 30, 2020,March 31, 2021, consist solely of shares that were withheld by or returned to EOG (i) in satisfaction of tax withholding obligations that arose upon the exercise of employee stock options or stock-settled stock appreciation rights or the vesting of restricted stock, restricted stock unit, or performance unit grants or (ii) in payment of the exercise price of employee stock options. These shares do not count against the 10 million aggregate share repurchase authorization by EOG's Board of Directors (Board) discussed below.
(2)In September 2001, the Board authorized the repurchase of up to 10 million shares of EOG's common stock. During the secondfirst quarter of 2020,2021, EOG did not repurchase any shares under the Board-authorized repurchase program. EOG last repurchased shares under this program in March 2003.

ITEM 4.    MINE SAFETY DISCLOSURES

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 Quarterly Report on Form 10-Q.

-46--35-

    


ITEM 6.  EXHIBITS
Exhibit No.  
Description
    3.1(a)-
    3.1(b)-
    3.1(c)-
    3.1(d)-
    3.1(e)-
    3.1(f)-
    3.1(g)-
    3.1(h)-
    3.1(i)-
    3.1(j)-
    3.1(k)-
    3.1(l)-
    3.1(m)-
    3.1(n)-
    3.2-
  4.1
10.1
-
-47--36-

    


Exhibit No.Description
    4.210.2-
      4.3-
    31.1-
    31.2-
    32.1-
    32.2-
    95-
  101.INS-Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
*101.SCH-Inline XBRL Schema Document.
*101.CAL-Inline XBRL Calculation Linkbase Document.
*101.DEF-Inline XBRL Definition Linkbase Document.
*101.LAB-Inline XBRL Label Linkbase Document.
*101.PRE-Inline XBRL Presentation Linkbase Document.
  104-Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

*Attached as Exhibit 101 to this report are the following documents formatted in XBRL (Extensible Business Reporting Language): (i) the Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) - Three Months ended March 31, 2021 and Six Months Ended June 30, 2020, and 2019, (ii) the Condensed Consolidated Balance Sheets - June 30, 2020March 31, 2021 and December 31, 2019,2020, (iii) the Condensed Consolidated Statements of Stockholders' Equity - Three Months Ended March 31, 2021 and Six Months Ended June 30, 2020, and 2019, (iv) the Condensed Consolidated Statements of Cash Flows - SixThree Months Ended June 30,March 31, 2021 and 2020 and 2019 and (v) the Notes to Condensed Consolidated Financial Statements.
-48--37-

    


SIGNATURES



Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


  EOG RESOURCES, INC.
  (Registrant)
   
   
   
Date:AugustMay 6, 20202021By:
/s/ TIMOTHY K. DRIGGERS
Timothy K. Driggers
Executive Vice President and Chief Financial Officer
(Principal Financial Officer and Duly Authorized Officer)
-49--38-