EOG - Earnings call transcript Q3 2017

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Operator

Good day, everyone, and welcome to the EOG Resources Third Quarter 2017 Earnings Conference Call.

As a reminder, this call is being recorded. At this time, for opening remarks and introductions, I would like to turn the call over to Chief Financial Officer of EOG Resources, Mr. Tim Driggers. Please go ahead, sir.

Timothy K. Driggers

you. Thank morning. Good us. joining Thanks for We hope quarter release third the has earnings and seen XXXX press operational announcing everyone results. This conference call includes forward-looking statements. with and and associated the reference risk forward-looking been call. have The outlined for earnings this release incorporate EOG's we filings, SEC those by statements in call contains also conference non-GAAP financial This measures. certain measures for measures comparable can at be The reconciliation to website schedules found www.eogresources.com. these non-GAAP GAAP on our probable with permits proved the gas their as also SEC reserves disclose and companies The oil possible filings SEC as only to not but reserves. reserves well in

bottom Bhakhri, and review Thomas I Bill Gary structure, This remarks. quarter in Senior note Some David VP, and contemplated EVP, our updated call Chief and Thomas, of release. EVP Production; Bill necessarily Helms. CEO; reserves Gary in Exploration estimated conference press financials for guidance and and Participating and on the year reserve Information following VP Marketing and reference are the reserve Thomas, quarter followed Operating at Chief to Exploration will Terveen, Trice full or Production; Helms, Billy Streit, website and estimates An cautionary posted We concluding Technology not Lance EOG's XXXX the by IR on yesterday's and release. provide and Public of U.S. will and webcast Officer; Chairman Officer; this call Relations. to the guidelines. Bill investors press calculated Billy was reserves with included and we by third reporting topics by Thomas, and and morning, potential we'll Senior Investor morning results that David VP, presentation our Sandeep may evening Operations; this yesterday accordance SEC's Trice, in include discuss the incorporate highlights, appears fourth David will order: discuss other the President operational capital from the

Thomas. Bill Here's

William R. Thomas

Anadarko on and cost returns. in We We EOG performance. new continued is well third resource Bone Delaware The the equivalent and XXX strong drilling of in quarter. two barrels afternoon, net oil good focused premium EOG. Basin Woodford million added reductions to the locations oil focus delivered and demonstrate in window potential plays, Tim, Thanks, Spring and the add the everyone. Basin that XXX oil premium First

exceeded organically a times after-tax targets both earlier reminder, We increased locations, of made per-unit rate an XXXX. be XX% costs: planned drilling a LOE, our pace. our DD&A. EOG as quarter. oil. As greater its $XX better which it also the by have in substantially quality for locations, highlighted Strong we inventory, year, wells beyond was expense across and at well must better from the of many complete of as transportation continues to the have faster four improve delivered we than X,XXX premium, return adding and premium is execution to size our and the with or we operational Combined production expectations classified and additions all all in inventory to

within on dividend multi-basin EOG's to This We're oil portfolio. deliver nicely. target the Our growth premium together XXXX plan to and moment discuss cash like is I'd pay all a take coming XX% to morning, flow.

with point discussed We well play Every to exploration not before, drives that geologic productivity. rock equal. As most want has not the to play. own many the we've that superior all are important do times spots, rocks understand is quality whole about sweet

solidified Delaware that the Basin last plays. in Our year Eagle Bakken We XXXX, to acquisition. with in River spot we Ford rock and it in did the acreage and in is best capture sweet best did the only the focus Yates again we the in the in Powder XXXX,

outperform rock productivity the is identify to capture and ability wells returns. best consistently the industry major in EOG Our and the reason

locations of inventory geologic premium X,XXX oil now U.S. assets. oil the totals don't a think in there's With drilling six sweet the addition massive spots our comparable crude company window in Spring, Bone in horizontal plays. We contained the another Woodford First major with all oil the across

or risk of Specifically, the returns will benefits. EOG's premium This multiple advantage is limited will many our on have enormous a industry-leading to One inventory. size The inventory for therefore, a EOG's EOG basin, powerful as in diversity multiple market competitive is of minimized. conditions that temporary impact performance. basins, and is with our tightness active across fuel quality premium weather years such is come. single-basin portfolio single event

EOG's the are its maximize technical grow two value. at the a unique points drive to the asset. Each has and and easy cost company other multi-basin optimum home value Additionally, want curve. of to this learning too portfolio and is profitability and long-term to asset It's There optimization go each fast to risk long-term potentially diverse allows morning. pace I play

was today, decentralized our the have future. be structure premium the will to that in we portfolio and success continue to our critical to accumulating is instrumental First

rock covering means We individual and productivity and have prospect-generating are every Exploring These sets seven in maximize generating offices each America. diverse multiple asset seven of specializing our developing information machines armed in cost-savings idea down play. each seven basin dedicated multiple in powerful well data. the teams costs, technology, focused drive diverse major with and wells each means North team and of teams, dedicated operating to play. basins That increase value

organization. want its quarter, we is play has can our The on discipline return-incentivized founding has return incentive EOG's been this capital capital disciplined, entire is of history through innovation the that geologic Evidence directly company often that company. in learnings of financial since to The calculated transfers a return-based employed. discussed Last statements demonstrated return-based by discipline of and While across pace and driven be technical since accelerates transparent a from runs the other to allocation. capital as structure make EOG point basins. that formation, turn unique, plays all learning our each is final I

reinvestment the XX%. the initiated our premium redefined is drive performance investment and reason cycle permanently prices to we're price last the patiently we ROCE our this in we wait reason peers. decision-making industry-leading shift to Rather the the core are drilling the acreage largest to commodity to our and and year reset among and within to diverse all and historic XX% strategy permanently importantly, our is it's allow for reason capture year. have dividend returns Return-based a our the than U.S. averages improve our to the and highest drilling. by low positions are Our be cover to the company best been able oil ability plays successful in in rock environment. is generating the We believe we best production rate Most reason the cash EOG's commodity flow. premium profitability, grow discretionary multiple quality inventory we able U.S., hurdle over

will third Gary discuss in our to to production detail. more I it over cost Thomas and Now quarter achievements turn

Gary L. Thomas

you, of an challenge, Bill. that with in kind a multi-disciplined one our Hurricane excellent operational EOG first San teams Thank In the Harvey third job Corpus decentralized, its quarter, did Antonio tackling. and presented Christi

the major performance San during a employees to facilities, of our environmental the report related storm. to and concern time. Christi, our to very or Houston I experienced in difficult congratulate and happy I'm and and damage was want thank largest their Corpus safety exceptional Antonio we incidence no employees Our for

performance. rate low benefits finding the ongoing low of our this addition being money despite and our cleanup completion continued to and few the double efficiencies, notable continue drilling reduce in premium reserves of in year Per-unit a were and achievements time and to drilling there X% LOE expectations and Time After impact up our time. less quarter, beat record highlight. in beginning third production. coming teams drilled the we below in time DD&A every end to XX are cost development decline cost another Basin to Eagle of repair to range. place, TD Ford operational spud from curtailed of wells well The targeted XX% During newer The show play. Delaware wells, is both our are of the Harvey years in the and reduced and financial

As noted adjustments we the quarter. completion to our quarter. was to of and few up tie production oil To secure per expect and in impact day based accommodate in return oil additional their the issued of This rate the in our production crews a on barrels the to volumes X, remainder XX,XXX schedule, to performance X-K that offset September performance With was the fourth and a tightness on new for decision. impact during all schedule, we were we the this year. completion elected able of we Harvey those the market, about crews

the best release performing assembled. year, rigs to for throughout to The plan of limited XXX to additional a for gained for crews As and the a wells give and We our start top-tier now XX our do year, of as impact wells not timing We has change result, to a we to volumes have in total XXXX. will don't XX we services completing us additional bringing there and any want we're the the XXXX. we efficiencies need this the XX on approximately ever year. completed EOG wells service savings providers. guidance. these working have Due late stellar Due capital rigs net the head additional the full be cost

one the pricing towards of of as lower securing the few likely result, locked our E&P cost the is to are companies we EOG in we services it of portion to high a ability the right a agreements. and However, We've commit further and in range. returns improve is XXXX. major suppliers spend with end now, and capital will favorable

new up David news is our with exciting the play. Oklahoma Trice Next about

David W. Trice

Basin. morning window rock. the Located new the the play Woodford a Thanks, and oil oil as spot condensate quality adjacent sweet to introduced with plays gas the a play properly in a McClain STACK, premium of oil in Gary. known Eastern This we concentrated primarily the high County, Oklahoma, black SCOOP is Anadarko

a of discovery Eastern for structure a growth. organic example Our fit great Anadarko-Woodford decentralized EOG's play is perfect exploration-driven the is how oil

historical We area the production position Oklahoma our accumulated data an Our cost XX,XXX at in City team log and in net average per identified based of and XXXX. just potential acre. leasing acre $XXX began this of on

this which premium on then collected potentially that XD window the two-mile of up of to at the of Curry feet. the Ford, data vast to to is performance $XX model on correct X,XXX believe first rock current is Oklahoma. and to EOG-style oil the last X,XXX the IP-ed about to over vertical the to well completions of quality oil dial in Woodford and barrels the confirm four applied available play publicly of consistent strip, sweet of to #XVH, wells with analysis We determine well an had completed decline in well. proprietary EOG's the through the the drilled collected most to-date of plays logs, against of sweet was and day compare data oil potential on XX,XXX window Curry amount the very the the core in techniques Furthermore, in of Curry premium speak EOG initial we lateral The oil a wells additional three target the drilled using the was in data day, in Data low the Woodford seismic the Based per the Woodford data, longest equivalent three Similar rock production XX-day relatively this well, the NPV drilled fairly shale and barrels cut the spot. is and production were oil other as average years, was the over The Over horizontal third the drilling August, evident play. while and equivalent prolific horizontal and spot. million. quality XX-day Woodford The good targeting a We two geology. we XX%. oil holding before per with used average is able Curry wells is refined the collected premium viability all play. XXX delineate Eagle return at

are reiterate XXX,XXX XXX royalty is of gross more what is update on of of potential oil leasing for the First will one Anadarko equivalent EOG's We on low estimate compete tell XXX recovery well. now quarter on oil per of of well example Woodford cost for entire window So To EOG, in return estimated total Bone the net the maximize EOG's acreage than perfect Woodford rest barrels interested we NPV about Basin basis. window leasing locations this instead. a is The based strategy. support that capital, using a acreage the premium spacing. and the this will X not sweet with foot Within oil and play long-term and we've focused growth. million estimated window oil a returns, ultimate and on of costs said geologic after inventory XX% of a XXX essentially the is in Eastern to earlier, you resource ROCE Delaware million paid projects are equivalent, Spring which play's the position barrels spots at basis for all Woodford with entire a an in competitive but currently the premium plays, Bill new oil. Ford. provide the Helms Billy we in Eagle Basin on The rate

Lloyd W. Helms, Jr.

Thanks, David.

understanding the has focused the testing position. patterns spacing complexities Delaware in and geological on delineating intervals, our of target various increasing plan XXXX our Our Basin acreage development the of been

barrels result, to distance over First tests are oil of initial our we million of cut of assessment span the After of initial in X,XXX be sand. first XX resource equivalent the potential miles and day, seven of the barrels Bone of per with from XXX providing target, remain we XXX have on wells to which position, yet XXX The a completed locations, define the days. produced net across oil equivalent XX Spring XX% of our another a As successful oil XX drilled. XXXX, average confidence

The of target estimate We Basin rest of X,XXX that of cost cut equivalent barrels all a through of lateral initial well sand laterals that the oil at resource Spring royalty. EUR in a hurdle the a typical the estimate is with well our exceed million. premium for estimated meet the For and the is $X.X foot in play, It of our and First the wells the or point Bone for Delaware life oil will gross, X,XXX X,XXX,XXX will return rate XX%. well to barrels foot equivalent, net XXX,XXX capital out is producing compete important with program. after

defined used investor high-density latest Our intervals. position into and industry-leading target the technical is presentation. as along interpretation drill evidenced in horizons XX yielding to geosteer our has our bit slide our Midland across performance, the team the in best completions, acreage multiple latest number Targeting, of with

inventory over current locations, inventory at our years now pace XX almost of total Basin Delaware well Our premium stands development. X,XXX which represents drilling of at

quarter, completed Wolfcamp wells third the Combo XX we Oil and the For in plays.

define Basin been feet. per XX-day year and rich and averaged oil of average explore of has laterals to active of the well wells the All potential reserves. IPs for day XXX apart each of both X,XXX area. the areas expectations X,XXX three-well continue Lea activity, about of from target that This year Out another to meet or barrels exceed and Southern drilled The in feet I are stellar like County. our this third package a quarter Antietam the as would Delaware performance we for team, highlight

to to asset. development well the timing spacing address We are of needed value and net present this maximize the our advancing plans

economics we this and in this to over of maximize teams have allow recovery large a address of experience We challenges the inventory. horizontal and decade these challenge Once acreage. multi-target the again, on culture with developing use technical order our of knowledge and the focus to our organization to decentralized programs our

well XX the XX-day about is third to $X.X to in close basin. consistent the suited which every maximizing focused are are and well of completion be are pads government We of pay the The the Lower Upper adding many Ford for cost The acre as we of economic multi-well multi-well In for Eagle an rigs production we XX% on by the the delivering both tremendous quarter, Ford, drilling well to the operations. are and appropriate. pad majority the completed excited reserves. are moves volumes initial source value In the vast net see a efforts lateral-lengths. with intervals additional continues the million. drilled per and efficient larger oil our potential with production Ford where average barrels crews of wells through in increasing on units, these Acreage Ford of and that was from present within wells rate Eagle Eagle as held oil production average Eagle X,XXX about allow targeting day, quick the

Angus to a generated and The As with on we pattern harvesting identified example targeted deliver investor predictable that the improved results. spacing. XXX-foot each are more result, staggered in of development is per well and resource continues of of the program unit productivity our slide presentation, an the tightly number XX results spaced drilling steady

to proximity priced market. EOG's Eagle point to about a its important remember is Ford Another asset higher

of WTI. from already foundation EOG's Eagle X,XXX and All a will the receives a boost the oil trades premium to continue premium the to than and remaining, results solid success. typically provides at a to for the be Ford This prices Eagle Ford LLS more premium locations with

again, David, Chalk a on Trinidad. the update quick for here's in Now Austin

David W. Trice

feet. paid well than IP the of In highly per a month. well third in spot out that barrels premium of XX-day was oil impressive to continue length lateral of million. day each prolific remain $X.X a Billy. this the of We've lateral on a quarter, Unit an averaging delineated Chalk Incredibly, most per that that compete The quarter the oil in costs X,XXX Austin Thanks, equivalent wells. Elbrus exceeded and drill average XX whose wells with we IP a In day South this from under delivers the very Karnes feet. day sweet treated economics sweet Well County delivered economic rest average we of completed about XXXH portfolio. handily consistently spot our in almost X,XXX equivalent the eight X,XXX barrels of only X,XXX low, Texas during well rate less

Our identifying complex exploration Trinidad, exploration activity acreage. drill really feet two gas. and in rates to time. focused In cubic take will million play spots completed with in and quarter in the production each in the sweet work across excess efforts additional is up initial our Banyan and The Austin wells geologically wells water stepped good we expect during areas, and Trinidad. offshore Chalk South third stratigraphically Texas we've natural shallow of reservoirs ongoing XX our on the day the is Osprey of continue a prolific We

us wells that another the to these out We billion of is potential before the expect over to to maintain three cubic strong complete year to wells in Tim asset. gas financials feet over allow now generate XXX structure. and life. discuss capital ahead this rates and have turn production of from the This their and return it economic estimate cash to some produce of generating years will I'll Driggers

Timothy K. Driggers

Thanks, David.

expenditure capital of $X.X maintaining are $X.X to guidance full XXXX our We year billion.

we as billion high and quarter mentioned, are hold exchanges at retirement range XXXX. and Gary third prepare including we obligations. expenditures on the the facilities property services end in be As excluding the $XXX for likely were and of for non-cash equipment to $X.X to Total and million more development to acquisitions, exploration order of asset

Capitalized third plants was $XX and gathering property addition, In quarter equipment other the for systems, million. expenditures plant million. and processing $X interest for were

In rate was and net ratio XXX%. we was cap XX%. billion effective was million for of our Considering million. debt September At deferred X.XXX% third XXXX, cash tax quarter tax XX% $X.X debt-to-total-capitalization September, total was ratio impairments were total $XXX During $XXX total $XX the of on-hand XX, senior the repaid the at third quarter-end, a outstanding XX%. of million notes. quarter to for debt The

Bill. Now back it I'll turn to over

William R. Thomas

closing, a points. In I with you leave Tim. important few will Thanks,

quarter investment months, emphasis few what the end discipline said when certainly grown. last repeat I began I'll has what capital the on every we at and downturn virtually of have XXXX the Over communities' the repeated since.

and sheet. to pursue result sake. growth's the should outspending We cash believe committed within drilling fans be balance means maintaining been have for a and We of production our growth in living growth flow of to returns, are high-return investing never strong

we become have permanently a premium Second, company.

premium-level our evident is strategy sustainable. that adding inventory is the over track Our record last two of years premium

Our resource totals premium and locations. the to still exploring, double don't resource double introduced of potential more billion start the the That's than locations end barrels our than strategy. now oil the X.X potential are the more still more in X,XXX when we Furthermore, from portfolio of equivalent opportunities plays, XXXX further. improving premium any see we to we expand existing than and

a without Third, to EOG, difficult real sustain growth returns the benefits that asset. both focused, never returns And, for high the of high provide. and that a give the result strong, premium to growth growth. competitive disciplined, of the assets, Houston a maximizes each high the diverse EOG profile and Astros. flexibility stable a value is road It's generates drive advantage is assets multiple portfolio diverse high-return We up. With finally, like

we low-cost never wells premium satisfied. our growth. adding are getting are strong quit We cost We Quarter-by-quarter, never better. drive deliver and down to

return differentiated sweet portfolio decentralized Going E&P forward, drive space. up, spot focus and a bottoms will in the of supported performance our organization assets, ROCE flat, by

goal Our value. create or this average historical ROCE is XX%, best back for to the one to shareholder We our way better. number listening. of is long-term Thanks sustainable believe getting

Now we'll to Q&A. go

Operator

first We'll with question take Calio Morgan Evan our Stanley. from

Evan Calio

guys. morning, Good Hey.

William R. Thomas

morning, Good Evan.

Evan Calio

the location additions. organic on Congratulations premium Hey.

that SCOOP? mentioned premium is as of you timing acquired the sweet or drove what it yet And Woodford, believe in the could? do spot, see it the the characteristics all you mean, a reveal? extensive how you Woodford prolific I On you've with you the

William R. Thomas

history the with pretty we of of drilled have it's a done the we've first simple shale all, lot have we analysis Evan, Yeah. play, got three a play plays. it. but and the we've data. a of lot the in in done Woodford modeling We and confidence we've wells, And

kind bit on more to little the this some, expound and to on going David I'm you detail. ask color give of So a

David W. Trice

play. other Bill Yes, the plays a shale mentioned, Like the Woodford is the with some of Evan. and is that difference Woodford Yes. the

this and So And had data. a XXXX, started XXXX premium a began simple collecting we good it's we it be in and in pretty so from that work idea back could standpoint. fairly area geological

over petrophysical acreage to And years to some XXX what to models. nearly and got in oil sophisticated we've reservoir been of do tied and built very able we've at data. the collect then around gotten these So data full plays horizontal the we've all able been models core building that's drilling good our is we've

did so the And play particular took we ahead completions, modeled data. particularly this compared versus this against, took We the Ford. in and what time. is we on And We it the petrophysical models all Eagle compared of it industry case, the reservoir response.

going confident into felt wells it, could so Woodford. the make And we in very here that premium we

that And well so that we with confirm had. we've were able the to results

this And the so of releasing just pretty of we feel results on status world this. going then confident timing it, held in premium and about comfortable so felt of we the it's ahead it. the tightly acreage And the part

Evan Calio

just I mean, to scale me responses. XX,XXX Let to acres follow and is up sufficient your develop?

David W. Trice

Yeah.

we drilling I increase but to cost we remarks, and going finding the sweet that identifying focus the be spots, our want sweet on our is drill over think time Austin premium spots just that continue talked and Chalk our ROCE. Woodford, are to to like our lower prepared about in or wells

So and at works instance, an can like really for had a well. to – we speed. us, this it different it company develop said, mean a This allocate play decentralized is as a the appropriate Bill where capital I is

And we scale. so, think sufficient yeah, it's

Operator

to go Sankey next Paul Research. with We'll Wolfe

Paul Sankey

Hi. Good morning, everyone.

William R. Thomas

Paul. morning, Good

Paul Sankey

when cash Thanks. was the wondering shareholders? start I growing a going direct we Bill, are return to get growth bigger it's standpoint. very When dividend? you will impressive a from

William R. Thomas

to consistent dividend and Paul, goal We've the the evaluate business the times very dividend with increased priority that XX our quarter appropriate. our cash in board And environment the of EOG. the dividend a with years. increasing is last XX every through to continues when the strong for returning shareholders commitment,

very and as that. that's environment will be on business and it. the to our And evaluating that improving list proves high continue So are work we stable to we hopeful on

Paul Sankey

the a It thing observe, just paying. the and – perhaps How how to to scale has harder to going which it with is operationally, $XXX have the big, just could you you're here there quarter. at to adding S&P disposals at and XXX the geologically adding? all about worth at to of optimal Thanks. doesn't size an like the looking to I'm least off having seem table the to I million and you're it. too of other company. be as big about If at taking least stuff success really that Yeah. think ask is be double opposed above yield Bill, I'd onerous

William R. Thomas

Helms talk divestitures. I'll ask Billy our to about

Lloyd W. Helms, Jr.

Yeah. is Helms. Billy Paul, this

of which think think, in managed I keep of to end quality, plays to certainly adding the of our high these the we're fair it's to end company. the net value adding At so are that same all we premium they're mind portfolio, the bottom portfolio. we adds our the time, present always

If the you look back assets. of we've over last several years, sold over $X billion

asset to play. our do overall to to it's big life of our of long-term the base continue its and that property and And year cycle every part fluctuates, not a of so. where part managing that's on so It's in be is And overlooked. depending strategy development

it's So do and constantly something year. actually each evaluate at we and look

Operator

Bob We'll Citi. with go to next Morris

Robert Scott Morris

you. Thank

on my premium question inventory grading addressed on that. effectively continuing to add which, with locations by You to these way, the the just high congratulations

on the to and to the as As manufacturing have or you I for do has on that plays exploration. repeatable more opportunity Woodford announced focus your discipline type on created look capital you for things mode, that, do focusing manufacturing you morning? continuing to to flexibility like opportunity locations million others this look new of more premium at further identify quarter you you that sort companies of a $XXX and for And a turning with to notice lot spend continue about

William R. Thomas

that focus, already our additive very be robust need high-quality our of continue and for exploration is locations. We inventory. just more That the locations to to we better quality the looking Bob. a Yes, and to We that's effort. have are don't reason

So the the about in premium First talked fall part we two and today, will our upper the Spring already of inventory. plays Bone the Woodford,

premium focus the get more other have some we of than even they'll company. the inventory So in

before, had two we're times quality, on use wells. many said to of that we're huge continue learning the amount the curve we've productivity technology said, of And that so the we the as we've our and for. wells – geology going difference decade to believe of in and and rock a looking plays we productivity the a increase makes So to horizontal

continue to we're of We're get lot the of opportunity better. satisfied. to the in. we And So increase out a plays quality never see we want there to

Robert Scott Morris

you're hedged add that very minimally My the the only, you're is didn't in does maybe one that of XXXX. great. and What and if few, speak your on That's that? to say, how price commodity to that question companies still managing second hedges very view quarter or does the in

William R. Thomas

Yes.

Our I view certainly and The market Inventories look encouraged is market, obviously, we're, we as improving forward. to continuing macro are we closely for rebalance average, market moving think, opportunities. the five-year on the towards the conditions nicely. the is are by watching

I'm to going a ask Now Lance that. bit little more on comment

D. Lance Terveen

good Really, we're stay we as Bob, morning. it, Yeah. think poised. about going to

been others And think estimated. globally, growing and in the view, quite you in continue look U.S. so. Also, market, we U.S. production WTI mentioned, Bill As to hasn't backwardation, draw too, Brent, then but prolific have our originally as at what also it's inventories the as for in

poised and for look here. at we as we're this XXXX, been we've been the disciplined dynamics going market, stay turn. really waiting to in those since So And we've

XXXX. here watch we're into going to So going continue to

Operator

with We'll go Mariani Securities. NatAlliance Leo next to

Leo P. Mariani

Yeah. Hey, guys.

Obviously, of Bone years the been First the target Spring has Permian Spring for the on in there question out Bone Basin. number a a quick here. Just

could discuss for guys guys move while. that some Maybe position? recently a a of this you been into dramatic active that to you premium have that You wells little change bit. happened Was a here little just kind up drilling there caused

Lloyd W. Helms, Jr.

Leo, Helms. Billy this Yeah, is

announced in For certainly – pay previously been been highly yet estimate. or it's the another that has resource been Second And been the our just two and year testing we've got we've most is and also First Spring's which multiple focused We've we've zone the certainly, the prolific Spring, there. the Bone over have several zones on, activity identified last past Bone Wolfcamp, years. of

very on fairly XX delineate and a those come and with zone and enough competitive Bone So wells potential a there. certainly we've Spring about had this delineated program step. the area is the First extensive to just over resource and with prolific the acreage our is confidence next The targets highly now out

the So it of Basin. step the the was evolution in just next really Delaware

Leo P. Mariani

to That's production I bit helpful. of guys on you the quarter. oil in the some wanted kind follow-up little XX-day third just a of Okay. data rate provided

plays, Just a from while Eagle that little down and DJ, Ford were noticing averages. various your XX-day still bit second Delaware rates, in different oil strong, quarter the just

see to anything there in sort driving of if was wanted that. particular Just

William R. Thomas

there. quarter-to-quarter ordinary on lengths from play. up the No, of you in quarter. there's out nothing of draw distinct part based kind where we're and can It's little lateral the every They no, vary down from drilling it. and each trend of really, bit There's a

as appropriate pretty tests, doing Delaware we're are the especially spacing new We in Basin.

And so of quarter-to-quarter. that little volumes quite may bit play from then the bit. a affect a And parts vary the

the that ordinary. So be in would there's I out to of of wouldn't nothing unusual read any there. that anything try

Leo P. Mariani

Okay. Thanks, guys.

Operator

of We'll go America. Doug next with Bank to Leggate

Doug Leggate

disclosed, Good high-quality you I'm dated long wonder I as inventory. you locations. X% is cost had everybody. point point location the given think obviously there on of about I bring if And positions, the your of ask I wondering some it's here a how premium be there's mean, but line is portfolio? my guess smaller now into of The another these if smaller your great assets to Thanks. morning, about your different there's locations. now portfolio slightly to optimization I where inventory premium these is start (XX:XX). decision these a the of that could Bakken Woodford, news, as The a it's about X% question Bill, monetizing

William R. Thomas

lot that of and those and and It's Doug, of would this the at specifically, the is not of Bakken, our monetizing mentioned to would premium inventory, end think about point we upside. be has ones you still the the too. upside high got also the the obviously it tremendous got a on Woodford we has believe Bakken because, Woodford quality

as the is opening, there, that both premium have, I bit quite we and in said of there additional to continue We those. captured think of drilling spot go to sweet a the on that

disburse And each very XX plays one and in slide in each confidence believe company to we of the it and drill execute fairly shows And like that I that returns deck, drive speed can our very, have it's proper continue will plays, it we with And strong. And that a in or assets really the NPV And with strong so discipline. work they're the allows company premium of the is lot multiple put at is that slide because returns plays, our we the have allows have increase one maximize of to that capital very, very of what having capital equal. if we to those us high-quality the slide you we capital forward. the ROC wells, to costs. improvements in one each to a going finding all

the and a and And at advantage improve the can quality value wells decentralized reduce maximize of of same the so focus, plays that's the them. of having of organization cost one and time that having multiple each the

Doug Leggate

I a I portfolio think stretch, know to the take wanted of your it's but I just a on opinion high-grading. bit

seems my $XX growth at that lower you follow to with up, it do range had, XX% you've Bill, a the us same at it strikes $XX XX% can oil of results So deck. the well to probably

to my a sacrosanct guess back growth? Would I at for healthier you beyond I'll just is as are case and capital? in about or see it XX% the goes XX% anything to the about it production least how thinking upside to question we be shareholders how of out there. that And leave So oil little allocation incremental starting years, bit think you is the would get

William R. Thomas

flow if discretionary is If rise. increasing prices very don't even cash our very, strong. obviously, prices rise, It's

is, think in highest reinvest we returns thing returns And, first it sacrifice in going advantage place we cash that or do not the a plays equal we're better. decide an invest discipline. have system to So our decentralized are incrementally that if again, going multiple faster. What to We're to we want want and to increase it additional lower the sheet to also our because to I'd is way now. up priority value. firm to believe inventory really we what reinvest down to getting company continue in to the the and than is work we only of net with is But when in to I We grow shareholder balance to say on that's execute debt that. best continue that the the premium

as strong we the be a to then the want So very the to dividend, thing, the already, to through cash very, increase will to is so forward. dividend continue priority. that a I about third shareholders commitment we have talked And going

Operator

to next RBC. go We'll Hanold Scott with

Scott Hanold

Could about of to above I'll your bit where presentation on Good Yeah. more that it perspective marked You morning. see I Can expect Woodford? little ask working you, you have talk that as in over XX,XXX – interest you and where there? the acres. box a you a you go drew the do expect And on time? do

David W. Trice

David. is this Scott, Yeah.

average, probably far So bit vary to there right interest, going probably a very wells XX%. probably forward it's think been probably around XXX%. going but, they've Woodford, on drilled to in I would across play, now, the we've average the working the it's quite high close on we're

and as got we've like to work as (XX:XX) do that. So far things there

probably the far now acreage locations So around that's given all net as numbers, position numbers But estimate, we've net XX%. say resource you it's there. and as the right XXX I'd

Scott Hanold

Right.

gross So a you've good location XXX plus on got a like. it sounds

are what that you in now? kind up ramping opportunity generally when so pace you thinking XXXX, about talk And about of

David W. Trice

Yeah.

give on we're that call going next intend think guidance we the to do year. would of kind until wait ramp say to we plan, that our up next to any I but specific

Operator

Charles to next go We'll with Johnson Meade Rice.

Charles A. Meade

your and you there. to Bill, morning, team Good

William R. Thomas

Charles. Good morning,

Charles A. Meade

is, you're question. your from into going levels. if prepared guys was unhedged. a for given And those was And to wondering putting the maturing read, pretty near you levels. asking two activity the Morris, like your to an bullish I'm it service management new on have about team two those on I'd fair that to lookouts remarks go secure made to CapEx earlier was together that's any you in activity points need But I any me is on really XXXX. And to comment and teams if Bob the end plays. in of just your the congratulations high the back looks pinch commodity premium your going macro another but to if availability that you're like believe outlook there guidance concerns services be you not on XXXX. or commodity the for And it

William R. Thomas

doubt on in prices think, are like oil the price. macro flow even is do no that. cash off confidence at But feel our stay improving year, about $XX, they this the situation. We no our, if than our first I is growing the There's discretionary an and in oil Charles, substantially. market just better

to there. and So ask and of on to equipment availability Gary I'm services going kind pricing Thomas of comment maybe the the the

Gary L. Thomas

Yes, Charles.

on been pinch that added price rigs, increase in and our to year. also top-tier we services, reduce and just more services, to wells; return As our is in available. little just add to respond produce really intent over the cost rate return. assembling develop I'd XX oil, our outstanding our we available flexibility the our the investment. to to the those our here But best-performing last additional probably with And increased ensure continue of couple to about divisions which up would have best Charles, morning, mentioned have capital decisions was services of drilling reasons ever. to brought cost point we've all reduce of be just our low-cost time. to an it's over years. just careful to always our done those, the to are services our main like not just And is that's thinking that all that activity lose pinch next going the whatever There's And increasing you the that one of and various this continue point, presents we be want based itself oil to equipment because built on just is completion probably job of

manage how our if we much we're term So and that a put versus business. short thinking on that our equipment about long-term what built it thinking into of contract and and always we how

Charles A. Meade

perhaps Thank Helms. maps Bone would is emergence if as have Springs but Wolfcamp together, the the section your guys as about investor right as Bone whole there and best the this the Delaware I one And one That's this look question that question, you, on this Billy Springs put could or color. now. quarter, for I at Gary. Bill just Billy, then, identifying thick First have my guys helpful follow-up section target you you're book, charts in Basin, of had other be you and

about are guys to you the next talk the horizon could the So you within coming what for mature another Wolfcamp? prospects over quarters

Lloyd W. Helms, Jr.

pay pattern spacing to asset, between of target develop we're so is What's a intervals, different a well, of – a the within the focus we're the mainly the things. on intervals, mode, wells, – say, target of Charles. we between tested best so different into what identifying how way patterns. right best each is different Yeah, our target and testing Wolfcamp, intervals lot testing targets. we've of perspective yeah, spacing there to really, move the and number kind been And as we're within along has trying better lot and understand those development I'd testing then, with

every get know, play. as horizontal you the be to you manage offset and interference, appropriately to have able recovery these of maximize the to you depletion parent-child economics large programs, as So, into the the

plays. a decade thing doing of that of Just we've various got kind reminder, over in a

utilizing understand these to different So that. how to gained plays in all that we've better we're knowledge do that all

and Basin. you a see would we for about out tell Delaware continued upside that in think of very potential but I'd So it's basin the excited we're the to for we next, we see early say little certainly growth, roll what the bit about I'd what there's

Operator

with to next Bank. Ryan Deutsche go We'll Todd

Ryan Todd

new Then, So similar towards versus some think relative I Maybe right the we working additional is relative now, Thanks. we you're on to a portfolio Or two should the budget XXXX? about shift mean, prioritization allocation assets? think I capital. we on we we know mix be to in look Ford versus how capital there amongst particular, Permian of the to going maybe question there. other? as the other about should allocation the as how to capital a XXXX? Good. for Eagle within in assets but saw expect should into start

William R. Thomas

in Ryan, certainly, will plays had this we get into high can talked generating we're think Eagle get have Permian Woodford yeah. priority. certainly capital Rockies, a in the to year. continues We'll the it the be about, Obviously, a new a then all The and development a mode allocation, plays lot the that than decentralized David high and on returns. really Ford obviously very structure, the that. capital. very, again And we And I have play, quite disburse capital that quality. of advantage would as get that of very company the a the more And the confidence high is it's easily are capital because lot bit and our of

disburse it. and a So it's lot easy have confidence us in of to out for pretty capital

Ryan Todd

would right kind the driver, a Eagle Is Ford current of of to in $XX the trajectory. think the guess, to high-single framework? that at of about I be Ford about would the that largest point, $XX world within this some more mid kind Permian the Eagle framework, probably way growth digit that within the be that you to in talked past And had

William R. Thomas

that's priority on top And to we of them the ROCE. that's But first. a our really position all that want of are Permian, Eagle on returns the now. getting That's of thinking company yes. The the it. Ryan, of to We're the secondary and good Delaware growth Ford is way is the do and primary about driver focused it. maximize right fantastic the And in way the returns.

Operator

to with We'll JPMorgan. Jayaram go Arun next

Arun Jayaram

if I at for XXXX. kind just slide your Hey. thinking give commentary was next growth just could year? was Good given I on planning your us, about us for you're us some XX% Bill, could is XX% On give Street XX, how CAGR. how you've thinking if you to morning. of, wondering XX% about The long-term wondering growth. you you're XXXX

William R. Thomas

at point. going to specific not this a number out Arun, we're give

plan that still wait to outlook Certainly, call everybody But just is So, February through know long-term until that. our the and let in our you'll XX%, on everybody, have valid. the we'll February. we'll to we've specifics XX% work then given,

Arun Jayaram

a read crews into any that fact have and of as you've we couple next added frac added Can rigs anything, about the year? indication

William R. Thomas

No.

high is You that wanted you're new. that. very, those secure really to very of equipment if that because quality, trying kind anything get something shouldn't to We to hard read they're in add

lock anything. wanted really, want But And go. cost, we let to so into that wouldn't through you And that February. read in. working so let I our still low very too, it and know anything we didn't plan to captured it at in We're we'll then we

Operator

next with Simmons go Kistler Dave to Jaffray. We'll Piper

David Kistler

guys. morning, Good

to decentralized even term lot bit capital redirect returns you a little it's the not flexible and capital though little in be you an optimize can how a basically or can activity annual structure bit in just Speaking a talk about, of that to regarding Eagle So, doing allocation, about but questions decentralized, How in a quickly environment Service example, or capital a you redirect basis, as basis? now. can as environment? you right shorter LLS decentralized Ford great for in areas. prices about are do isn't quite pressured think other

Gary L. Thomas

to is the down. The a We this share Thomas. different us as We get other. turn Dave, helps as up, structured this are, is the all way brought the us from with able our nature groups. got and to Bill ramp our what of vendors, technical we can our to plays – one these dime. Gary equipment decentralized ramp can together on We've working. breakthroughs contracts move of we've EOG Really often with efficiencies. the And far up, being

of up that right starting those the be have We going year. after are here conferences the first

tremendous different ways better finding are of divisions these So plays, and continually different improve are a that efficiencies shared. sharing new to amount our just that divisions among there's to ensure working

really think like of works for having it think So as tanks well and we us. various to it

David Kistler

macro total one you obviously And the scarcity Well, appreciate But enhanced question, advantaged, together. outlook. and resources that the I you've guys across talked able of tremendously. put premium that what your has been about so, rightfully of in macro feel U.S. have then, that last maybe past, kind and you to with

premium U.S. continue to of grow organically longer macro mean on As acreage total outside that example with your Woodford also what content base, premium supply resource inventory resources the as within in an the your change thoughts of you might basis? term in current it, or but to terms a and guys total that does

William R. Thomas

Dave, We a And very plays, we compared small doesn't. much no, is the plays you oil the really economic. think crude sweet to $XX highest parts not oil oil relatively the there look spot are horizontal and quality it certainly wells across economic, a believe, be need of U.S. to when price oil, total. large at the of are percent higher that,

sweet are economic oil not the plays, these we're premium on, these ones acreage. the interested plays, in the are really of We're and of spots obviously, those focused really parts the horizontal So most only.

at the oil, limits stayed oil somewhat of U.S. if $XX, believe are we by industry, So economic horizontal the limited that.

Operator

Thomas back over to the Mr. the At this question-and-answer call. this like of time, today's any call time, final At I'd this does conclude to turn for portion remarks.

William R. Thomas

EOG's remarkable closing, In were ways. in third results quarter many

As reported size by on of great drilling today, our the costs, increasing focused reducing wells the is inventory. delivering completing quality strong returns company and and

long-term about EOG's We have ability shareholder we're a excited and sustainable model value. to business create

tremendous say to you In relief. the would money Harvey for to thank I addition, like Hurricane time family of the to EOG contribution and

your thank $X.X combined efforts Our support. you Thank over for and million. for you raised listening,

Operator

you does call. today's conference conclude your for participation. Thank This

disconnect. now may You

EOG Resources (EOG) 3 Nov 172017 Q3 Earnings call transcript