United States securities and exchange commission logo
September 2, 2022
Timothy K. Driggers
Chief Financial Officer
EOG Resources, Inc.
1111 Bagby, Sky Lobby 2
Houston, Texas 77002
Re: EOG Resources, Inc.
Form 10-K for
Fiscal Year Ended December 31, 2021
Filed February 24,
2022
File No. 001-09743
Dear Mr. Driggers:
We have reviewed your filing and have the following comments. In
some of our
comments, we may ask you to provide us with information so we may better
understand your
disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Form 10-K for Fiscal Year Ended December 31, 2021
Management's Discussion and Analysis of Financial Condition and
Results of Operations, page 34
1. We note you plan to
continue to focus a substantial portion of your exploration and
development
expenditures in your major producing areas in the United States and
expect to continue to
improve well performance and offset inflationary pressure through
efficiency gains and by
locking in certain service costs for drilling and completion
activities. Please
address the following:
disclose any known
trends or uncertainties that have had or are reasonably likely to
have a material
impact on your cash flows, liquidity, capital resources, cash
requirements,
financial position, or results of operations arising from, related to, or
caused by the
inflation;
expand to identify
the principal factors contributing to the inflationary pressures you
have experienced
and clarify the resulting impact to the company; and
Timothy K. Driggers
FirstName LastNameTimothy K. Driggers
EOG Resources, Inc.
Comapany 2,
September NameEOG
2022 Resources, Inc.
September
Page 2 2, 2022 Page 2
FirstName LastName
expand your disclosure to identify specific actions planned or
taken, if any, to
mitigate inflationary pressures.
2. We note you disclosed in your earning call transcripts for the second
quarter ended June
30, 2022 that oil field service capacity remains extremely tight and
is further constrained
by the limited availability of materials and experienced labor,
driving uncertainty in the
cost of services, not only for this year, but also for 2023. Please
address the following:
expand your disclosures to indicate operational constraints that
you have
experienced;
discuss whether theses challenges have materially impacted your
results of operations
or capital resources; and
quantify, to the extent possible, how your sales, profits and/or
liquidity have been
impacted.
Supplemental Information to Consolidated Financial Statements (Unaudited)
Net Proved Reserves, page F-41
3. We note you appear to identify just a single primary factor, either
positive or negative,
that contributed to a revision in the previous estimate of your
reserves, e.g. changes in
commodity prices or removing certain PUD locations from the five-year
development
plan. Please expand your discussion to separately identify and
quantify each factor that
contributed to the overall change in the line item to comply with FASB
ASC 932-235-50-
5.
Your discussion should clearly identify the source of each change and
include an
explanation relating to each of the items you identify. If two or more
unrelated factors,
including offsetting factors, are combined to arrive at the overall
change, please separately
identify and quantify each factor. Your discussion should provide
sufficient details so that
the change in net reserve quantities between periods is fully
reconciled and explained.
The disclosure of revisions in previous estimates in particular should
identify the changes
associated with the individual factors, such as changes caused by
commodity prices, costs,
interest adjustments, well performance, unsuccessful and/or uneconomic
proved
undeveloped locations and changes in a previously adopted development
plan.
This comment also applies to the disclosure of the changes in proved
undeveloped
reserves presented on page F-45. Refer to Item 1203(b) of Regulation
S-K.
4. The change in the net quantities of your total proved reserves
attributed to extensions and
discoveries appears to be significantly greater than the corresponding
change in the net
quantities of your proved undeveloped reserves for each of the last
three fiscal years
presented. For example, the change in net quantities for total proved
reserves is 952
MMBoe compared to a change of 779 MMBoe for proved undeveloped
reserves for the
year ended December 31, 2021.
Timothy K. Driggers
EOG Resources, Inc.
September 2, 2022
Page 3
Please expand the discussion of the changes that occurred in your
total proved reserves
attributed to extensions and discoveries to explain the reason(s) for
this difference. For
example, your discussion should address the net quantities added as
the result of drilling
wells that did not have any proved undeveloped reserves assigned at
the beginning of the
fiscal year but subsequently resulted in the addition new proved
developed reserves by
fiscal year end, if true, and separately the net quantities added as
new proved undeveloped
reserves. Your discussion should provide sufficient details so that
the change in net
reserve quantities between periods is fully reconciled and explained.
Refer to FASB ASC
932-235-50-5.
Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil
and Gas
Reserves, page F-49
5. Please expand the presentation of the standardized measure to clarify,
if true, that future
cash flows take into account the estimated abandonment costs for the
proved properties to
comply with FASB ASC 932-235-50-36.
If the abandonment costs, including such costs related to proved
undeveloped locations,
have not been included for each of the periods presented, e.g. as of
December 31, 2021,
2020 and 2019, please explain to us the rationale for excluding these
costs from the
calculation of the standardized measure.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
You may contact Joanna Lam, Staff Accountant at 202-551-3476 or
Kimberly Calder,
Assistant Chief Accountant at 202-551-3701 if you have questions regarding
comments on the
financial statements and related matters. Please contact John Hodgin, Petroleum
Engineer at 202-551-3699 if you have questions regarding the engineering
comments. Please
contact Craig Arakawa, Accounting Branch Chief at 202-551-3650 with any other
questions.
FirstName LastNameTimothy K. Driggers Sincerely,
Comapany NameEOG Resources, Inc.
Division of
Corporation Finance
September 2, 2022 Page 3 Office of Energy
& Transportation
FirstName LastName