EOG - Earnings call transcript Q3 2018

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Operator

Good day, everyone, and welcome to EOG Resources Third Quarter 2018 Earnings Results 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 the Chief Financial Officer of EOG Resources, Mr. Tim Driggers. Please go ahead, sir.

Timothy K. Driggers

you. Thank thanks and joining for morning, us. Good call conference includes forward-looking statements. This those with The SEC been incorporate this forward-looking outlined associated filings, reference call. in we EOG's have and statements risks for release the and by earnings conference measures. non-GAAP call also This certain financial contains for measures to schedules be measures comparable www.eogresources.com. non-GAAP website our on at these reconciliation GAAP can The found

by Ezra accordance of of reference at guidelines. reserves not Participating on Production; Lance EVP potential Senior CEO; the include may estimated Chief and reporting to Billy Relations. note reserve Some cautionary release Exploration VP the the Chairman Terveen, Helms, Streit, David Marketing; reserve calculated the Public estimates yesterday. this Production; with call Operating and in Officer; U.S. call We appears Bill SEC's EVP VP on incorporate our this Yacob, Thomas, conference Thomas, that issued Trice, the necessarily Investor President; investors are earnings bottom & Gary David and morning & Exploration

Thomas. Bill Here's

William R. Thomas

Tim, a quarter, and we and we In free third morning what flow. a well is lowered high delivering are company EOG promised: organic cash everyone. growth improved combination disciplined high-return well growth and of the returns, and Thanks, costs performance. we compelling to good

a over industry are billion market. We triple-digit XX% generated flow. returns. XX%. the or broader in a production result, As free year-to-date, even we performance our $X.X is grew seen production This we generating rare often And oil well in level in year-over-year total cash not and our

Innovations, field results continually a data-driven, to by of redeployment results rapid culture quarter innovation, unique company. non-bureaucratic real-time rich through are supported the analytics gathering, of third learnings the and history improving value a of data producing the EOG's Our demonstrate flat organization. of

same and cost we're is making and discovering significant The drilling are finding breaking better driving progress For Woodford our Oil targets, Likewise, the more down time. our code costs true of to techniques just fundamental believe sustainable in And continuous on well progress progress seeing year. Play, like importantly, we lowering on in in drilling the better completion Delaware continue at Delaware, completion we the excited to the side, are focus the for plenty where innovation improvements are we of Basin, EOG's optimum significant costs. spacing. example, We're for improved our exploration we and this making in momentum XXXX. there's model. unique business get about all are to the and same culture

improvements optimizing maximizing continuous play our the and leasehold develop, development finding of costs. drives innovation each in of we culture value by Our NPV, returns and

two E&P strong this XX% unique broader deliver dividend a not and EOG compelling and Our makes the through the EOG debt continue flow premium organic milestone that our machine, prospect-generating cash track returning for prospects the in production generation EOG's in And business our shareholders significant evaluating. of double-digit in quality combined shareholders. Those make creates exploration we're clear only the adding be we're of market. interested encouraged new substantial reduction free year, the focus investment, the model new we but plays increase with about and industry, it, in key to generate XXXX. with and ROC a ideas. a currently Innovation will new long-term only achievements, we're on on sustainable growth and to inventory, and in to value to exploration cash and We're double-digit are to increase

increase the not going we're XXXX, and expense of to to forward capital Looking returns. efficiencies at

well our against continue next sustainable learning year. productivity growth of will allocation the returns improve matter to We and will is Any our measured capital improvement curve structure. capital and assets that develop cost strictly of prices allocation disciplined flat pace will a our $X.XX commodity our and Furthermore, flat $XX at production result assets. capital and allow return no gas deck spend high if natural be on prices, premium to price to oil based optimize

being global of in oil the of producers not lowest changed. has the Our cost market one goal

resetting the company deliver continuously in low even environment. oil returns, a price moderate are We to strong to

to are Next the up third into XXXX. performance plan quarter highlights discuss how to is Billy well-executed we for results operational year and the and of capital remainder that of a the and that plan maintain

Lloyd W. Helms, Jr.

Thanks, Bill.

XXXX our Our operating solid to executing continue performance teams deliver program. on

returns achieved As the reach on a basis previously levels seeing history in a direct the result, we not of are company.

at recycling consistent and local on all the New more X% we targets infrastructure year-end same reducing of and cost increasing XXXX. with technology average lowering achieving drilling reductions our our Combined are to stretch projects, way drilling time. cost, cost from goal is speeds, water by sand, well

Our pleased to very are our cost be the lowest goal E&P of industry, with in the through is global one and we the third producers quarter. progress

is quarter of To is through Consequently, period continuity program. our service we slowing. high-performing service a As these some conditions, sector the in to advantage XXXX. the of market end service of activity industry the softness we secure existing This for and will operational the experiencing of year's of sustain capture next fourth near providers elected the market. take favorable providers prices into XXXX,

planned our crews to these XX to additional accomplish complete quarter. means high-performing maintaining retained momentum a we and wells completion into prior in crews had objective year. Retaining our number release of will we the our forecast fourth For we next initially net example, that of compared

past negotiated level year to of so, structure we our in these for cost for the contracted The XXXX. in EOG materials than activity higher XXXX. reduce services a again in is with XX% provides in adjust have point services in We to total about well deal doing our expect anticipated this By which XXXX, and of years. great needs calendar at flexibility

capture We also before additional to year-end. leasehold anticipate opportunities

premium inventory. mentioned, model our our of key by to our both sustainable the As efforts are improving and proven quality Bill replenishing exploration business

We capital first. returns focusing planning begin by-product XXXX, for view key. of we as As on allocation a is disciplined growth

guidance provide specific up. plan providing we today, the can aren't shaping we broad XXXX for of some outlines how While is

We aren't arbitrary targeting an growth rate.

to point efficiencies. continue gas. oil to the Again, premium against be reinvest and $X.XX Basin allows measured lower our $XX to turn natural Ford. update the seeking on price Eagle to will continue improve returns to that us you to of over Delaware deck Ezra based allocation capital the I'll on and are capital to cost call We and

Ezra Y. Yacob

technically-complex Thanks, remarkable Basin, the Billy. to determining progress made Delaware this In develop optimally how basin. we've

optimizing The across type we in spacing zipper is been Like complex, observations three benefiting significant targets wells improve return. this are of sales ultimate consistently numerous But During and our We're capital and Basin throughout completions and costs. cost, efficiency ongoing a quarters answer days per of areas. most decrease our returns Drilling finding Delaware are size; of in a there are local of from down increase is the than in direct variable XXX% of and package generated contributing than incorporated and results not their various well first number to rate use outperforming operators, more by spacing XXX to in put to development basin which and stages year, in XX%. target more after-tax patterns, production net curves on or the drivers sand. of XX% increased the the early goal respective a however, further costs many day XXXX, our all making progress well we will maximize NPV. gains operational XX% from be single data productivity. reducing to of future also are fracs We've so have the steadily a efficiencies. geology into completed Well

Finally, is in infrastructure our paying off. water investment

We well produced our water and are moving pipe. of used That drilling includes XX% for operations, completion water. on as as water

in and prime EOG's entrepreneurship. example a culture is progress the innovation Basin of Delaware Our of

our to supported during a performance we well and growing drilling for XX proportion third We operations completions, mix quarter. targeting included completions data wells. logistics of deliver this the experiment and in The quickly continues changing Ford to the real-time with western after well with experimenting wells higher targeting Eagle is spacing. consistent at We've lower conditions asset continue quarter been changes and field Eagle years better operational still production, world-class level. The are respond result acreage to to innovating all quarter and Ford the costs. by advances, The almost at and capture and

less position and over this the year the in there's the and laterals. While for laterals you faulting, west, drilled per Ford allows of will day the our in Ford X,XXX These gained make highest undrilled we XXX,XXX the which of the lateral delivering have NPV longer X,XXX future. during in long Eagle is the development Eagle net program. drill, locations. massive Eagle efficiencies to averaging of better up Eagle inventory our pay Oil west completions. Wells direct are The are longer Across our thinner can feet be drilling Ford Western net-acre premium a wells a Window, growing in the proportion Ford total

one value driving Ford to to Eagle continue remains wells. business progress core additional in We innovation most technical through the make efficiency, assets premium The growth. and operational important of maximizing turn generates EOG's our which and production

Trice. David Here's

David W. Trice

Ezra. Thanks,

XXX-foot-space Window is and are XX-day Ted four and finding up We at second however, since day the landing and we are a actively the plays; Anadarko per IP and lowering also of results per have other well year. matching various targets, started the held decline the wells play four-well, Woodford oil supports are we The are delivered initial exceeding million our barrels have our These average innings Woodford per than Oil same Ted's optimal in they our production and over package barrel XXX in play. the performance or their last cost. have a type the designs, quarter, brought costs. our in that with play with development Initial barrels and IPs consistent initial confirming targeted estimate this production spacing oil economics performance the Woodford per those Basin Late testing this of in initial seen XXX The of The that delivers four-well equivalent tend in XXX experimenting days be rate. zone. XX-day low XXX-foot lower the spacing of premium to completion in curve developing day. online for lower we well package at X well

spacing, multiple while to will be targeting we optimize landing forward, zones. working Going

we making significant $X.X operations. being reduction On that water the our in progress well. program targeted One reuse cost our and below the source rolled or below of in is target million. come Oklahoma cost cost future $X.X XXXX even million of our in toward costs great at average Recent wells per have we're is that side, could anticipate well cost out

time. over We're real-time, least through needs moving Woodford. learning then recycling, our at the XX% that expect with data EOG up we've will redeploying innovating learned of the water currently sourced in typical technology, We capturing experimenting and be rapidly In will what fashion, and completion increase in field. curve the we're in XXXX and percentage targeting in

activity to Historically, to contribute the meaningfully cost to more months. productivity to decided Bakken. to As conditions, so take structure this the a continue a our we a due expect higher Woodford on at to result, We minimize premium call has EOG's improve play's a activity winter year seasonal it we decided harsher as returns. the that make and mentioned practice cost winter come to grows year-end to and developing we starting approach to through in well it the production

production of in third most our second Bakken XXXX result, started quarter. program a the As and

low third very Bakken the flexibility about feet. premium are reinvestment price of almost well. The plays, to for $X structure cost our net solidly in laterals reasons return deliver consistently oil rate. at XX X,XXX in premium and During equivalent primary hurdle due XX-day wells of sustainable high barrels EOG's the the Bakken rates for diverse cost million per providing an we that The quarter portfolio cycles. asset the commodity through X,XXX third brought of wells low economics remains approximately in an average IP decline that we per premium of with These averaged well The cuts, costs. are one is important wells day oil quarter, completed online

currently day where early Our well the the an to go-forward dialing that days. we life River well expect play activity to process In oil of equivalent In in in quarter. to net Turner collect per both a the XX technical fourth are right as and third the the produced Basin during quarter Mowry and we well as data the on barrels XX wells we execution that new of play, identification drilled focused first information and we Powder From plays, Niobrara standpoint, rapidly was a of this as fine-tune two integrate practices. completed X,XXX continue average per spud in we an any completion wells the on basis. the tends in target iterative be new completing a

We in target will planning that spacing tests and also two are Niobrara. initial stages the for Mowry

to Niobrara these drive planning we the of lower going and by help the results in returns River and determine spud are increase We efficiencies, will will Basin. year-end, how and Mowry targets cost co-develop additional the Co-development the long-term forward. tests Powder

third-party As are production we providers we beyond. have transport to next we capacity year active plan ensure and to XXXX, and service for discussions with in process

In River it to us control out greater and dramatically planning lowers higher our Basin, can that access will gathering increase growth in commensurate to which we EOG-owned recycling and of with result a facilities, oil, addition, pay-as-you-go development. water terminals with will Powder and markets, oil efficiency, lease flexibility, is newest even advantage is potentially In with maintain netback we EOG-owned we're multiple as expenses, at we long-term, addition future transportation infrastructure will will to and the the begin our to the prices. include facilities, pace This gas capital associated cost ultimately stations. well also basin. infrastructure premium water water as for It activity strategy infrastructure handling. The compressor of add in portfolio as that gives capital that high-return main along ensure assets. operating EOG-owned summary,

Here's Tim.

Timothy K. Driggers

David. Thanks, a billion, same dividends. million. XX% billion, cash $XXX capitalization third This was EOG the was in for cash $X.X was to total total ratio net flow improved generated flow million financial of year XX%. quarter. debt company balance ratio Cash discretionary $X.X at development on expenditures exploration debt in sheet invested significantly XX and EOG's the just September paid a of during The $XXX Free billion. $X.X position billion and ago. was $X.X and

billion goal is through $X repay to XXXX. Our of debt

$XXX that a for X, was came XXXX. repayment million first maturity The bond October to

an also UK before to asset expect of our year-end. reached operations, the agreement We Conway close and to including divest

of considerably, prices, projections strong of basis. and return recent a invest position. around cash maintain commodity priorities With discipline, the rate in EOG's volatility future on flow on a are financial even steadfast: But move with daily focus

for I'll value always, now shareholder Our back over is remarks. goal, significant as to closing create turn it over the Bill to long-term.

William R. Thomas

Tim. to Thanks, would following I the share like remarks. concluding

are progress the and increase be optimizing we the Basin year breaking efficiency plays. feel while our capital costs First, will how significant to productivity We on making finding in development on Delaware and next well code optimizing NPV. and well spacing We're much-improved. other lower

we reduce Second, to well XXXX. and costs X% year-end continue further costs reduce can to we're by believe we in track XXXX, on

much plays, high drilling it. the inventory than faster and Third, significant Powder premium to Mowry addition as Niobrara company drilling last we demonstrated new with continues add organically quarter of return River, the the we're

oil Better inventory make and delivering but productivity provides EOG's company's and And not generating innovative new and to Fourth, pleased performance shareholder ideas systematically enhance are returns our not Thanks energy company's high company. is of in ability real-time our wells step in company. The market. quality, the by that with capital We're resetting deployment we're satisfied advantage quantity. with delivering culture, global any a double-digit believe future. the in one results to EOG's in ideas now to better sector demonstrates of sector is encouraged the top significant It's Step deliver and rare in market. sustainable to and This are and to the the combination free growth lowest the the of importantly, of quarter sustainable and technology improving production cash new significant continuously performers we our Q&A. returns through the industry-leading cost is ability for combination across return combination the places the we'll EOG long-term third unique on EOG's in double-digit finally, Fifth. competitive efforts. flow. strong through cost improvements and strong for value. just a information and And analytics rocks quick exploration company employed, go creates produce to growing field the listening commodity culture the advanced deliver compelling cycles. gathering, we're data producers results be generate the we unique the More price line strong

Operator

Thank will you. session electronically. question-and-answer be conducted The

Our first Todd go of Please question Simmons from will Energy. ahead. today come Ryan

Ryan Todd

CapEx think a spending start know of over the in in $XXX fourth one an us you would you I rate congratulations and it. a result. could I budget. Can of you just we million mean, about increase And on give break the could be of Maybe with if quarter, maybe drivers some maybe capital. questions to implied Thanks, – A obviously the right – on with on Great. mentioned as the follow-up. good CapEx few normalized or falling to And down couple what which run I $X idea a now? low, is have billion I

Lloyd W. Helms, Jr.

Helms. Yeah, Ryan, Billy this is

to the expect So, planned third way that's the simply that activity quarter, was yes, down to start quarter because at the the of be our we and fourth relative year.

into to-date, cost we'd continue additional wells give fewer able capturing maintain completing that efficiency high-performing wells that we'll going realized going the completed to be to We maintaining these XXXX to so, are trying be really that'll XX seeing We're majority drive the previously down across we gains of well plays. to costs the well providers to our up pretty equipment planned doing the we're increase our and service that In some release. we've about costs say retain we'll down, momentum in end and third. are down fourth made than the we And by quarter. as fourth X% momentum are going of election about That in driving into progress the have on did general, to we In us lowering the quarter our XXXX. we'd have year-to-date an our about cost. in will excited well on

average, the down And our X% Wolfcamp, X%. headed the down Eagle For making X%. We're believe accomplish about X% of in similar all Bakken, about In the quarter. we're goal which we the towards we're on of across fourth we'll about progress In example, Ford. X%, we're the for down our about we're company, in down plays.

as plan our this was, to the it CapEx. intended rate with loaded The capital third up quarter. our to really a this bit quarter, year So, bit front quarter in on everybody a little All was the basis recognized, a little drop in fourth so run was the by production end showed year lopsided.

XXXX, we thing. the do into expect Going to not do same

more little then Our We we whole year program which we guidance rate But the be efficiency. continue continue be capital numbers going a into to allocate basis our we working going XXXX and so as only to can balanced. expect that at We're next yet. improve and give would run improve, is more that's on do the can't efficiency to balanced capital any to capital would or these still you we're that. any days, on

Ryan Todd

or – philosophy. and growth is And I talk I a is cash know about the maybe output, flow guess, given rates appreciate think but get opportunity you I it, growth balancing you or a a capital right of more to high clearly reinvestment think Thanks. flow? effort I I free of far just do Great. how do But, but growth an way about higher are about have more any you And then How got less to than in profile. you've year. returns free mean, relatively-unique to your return the less deploy at at with cash more level. part

or line leave cash? amount you're it a a draw I'll amount of free lower that to versus you grow there. do where So, willing Thanks. higher the between

William R. Thomas

to very this year. committed and within flow certainly, cash every we're is Brian, free Yeah, generate flow Bill. operating cash

flow cash year. goal to generate free is every Our

volume So, really every at at We year the about the we a better. we've number to program focused on. that talked get to program really already with continue look we're as not look extensively

we've continue model, marginal oil, to below want the because improve finding efficiency, believe returns. improve we which believe we the So, development capital to it's lower and we business of well a $XX cost got And is costs based sustainable oil. and on

the we're returns. as and increasing but very already ability created, we've you really a getting powerful focused we engine very focused So, commented have grow have better got on on we've really on, We're at growth. not to certainly fast,

see years year learn we we as to back the at allow throttle do new continue every dropping long prices. significantly add and get believe in So, And we not plays, we us next to better. growth to current as several our

Ryan Todd

Thanks, Bill.

Operator

from Our Jayaram JPMorgan. next go question Please will ahead. come Arun of

Arun Jayaram

your good capital a about morning. oil – better on dollar per in deliver that year-over-year I'm Bill, basis, if more to basis could I wanted on being CapEx of efficiency thinking Do that spending you will per and a on growth your you believe unit elaborate oil, Yeah, a comments invested? dollar XXXX. versus on XXXX production

William R. Thomas

Yes, Arun. number absolutely based what of That's different It's on ideas. believe. a we

productivity forward. data, continue put learn, with going analyze the into very capture believe costs as to And the we better we then to did data we the we faster cost to entering than at Billy be going next than ability improve and and to to has well year continue XXXX. improve, entered be our that productivity And continue and able year off back we're data, in quickly, lower one, the lower our get to going integrate first a continue start higher patterns, XXXX. really to start, commented improve field on, to a it already we will we're patterns believe development The spacing well to and

in for culture in goal not every to just is years core process. that many, end better. of we see get not that's do done a the it company. consistently and any many, our XXXX, And So year, We've many

Arun Jayaram

fact allocates a on totally capital Bill, had But Great. EOG just And growth. the I a basis. follow-up, philosophical on returns appreciate my that question just

XX% oil growth in assuming terms think would highlighted of guys size, $XX. grow of growth. You to essentially part range, oil the to of if get Parsley a organization outlook, have have One terms the of you to about, of Energy middle kind question previously XX% we to a kind in that $XX

So we'd range, maybe love towards a of be argue that. end thoughts the lower may Would hear to perspective. longer-term that on your from better

William R. Thomas

Arun, Well, currently continuously people, the put to plays, oil the potential as these improve, to that as that prices. long give specific proper of growth numbers. place whole process we we can you year next significantly company, we process, every will at But don't that our and believe drop our have years not again, because different general, structure continue one add we very we commented, through proper because new several the current company as just I've in to the the in have in any in developing a divisions each multiple plays, XX decentralized we focus we're on plays

Arun Jayaram

you much. very Thank

Operator

next Our question will Singer go of from Brian Please Goldman Sachs. ahead. come

Brian Singer

well down you've you for costs based deliver to decision to in? the keep in you lock costs services XXXX bars year-on-year to from And terms have like you. waterfall already think slide morning. Thank market XX seeing Can Specifically, do near efficiency locked down? here green multiple that well discuss trough? were and need XXXX for for then pricing Or in a you are gains prices think the you do on Good you XXXX, costs create are to you XXXX? on you if

Lloyd W. Helms, Jr.

out to Brian, those like very favorable that Yeah, are crews of feel was that is We at do favorable is bottom this efficient or at getting that really service we highly the prices. the probably like we're in Helms. providers prices providers near the very capture near we we the Yeah, today, end. know don't We at believe maintain the and ahead trough, have can some or go feel low we decision to the Billy some capturing capture best lock if we we're but of efficiencies. think these market what there conditions absolute

able believe to all to I cost our we're categories So it seeing we continue deliver that Yeah, plays we mentioned started the get as that very us we're at we're push today we continue a those one's every time. the over continue our lower And we've We decision. it continue to want into And the levels to better which to of solid to certainly to gives those momentum reason efficiency while believe gains Wolfcamp. XXXX. satisfied us progress operate or XXXX. up and expect. maintain want be of get that I quite whole well going will confidence a but took there created efficiency there, Yeah, anticipate And to just to across one going improvement. we're are to where on continuous you that – on slide equipment. to the we XXXX, on few XX, results believe, is We the pick and that XXXX, crews progress making for the had we going into to and made don't this we in

Brian Singer

are? Great. follow-up the Arun's there, up where And XXXX mentioned to you on productivity about that efficiency the capital then Thanks. follow point of talk what improve improving you and that Can in drivers next you expect year. well and to

William R. Thomas

And we're our is targets very This stay precisely even which to significant in learn execution pick past. multiple we to frac improvements. really a in different We're technology how and than in continue able better. our years faster It's We're Yeah, window targets, drill Brian. better seeing still seeing even in more narrow very Bill. applications done and areas. we've to

quality incrementally the so better, is improving selection target continuously target that our So time. we are in is over moving and just all these time. of And the the general, rock same at

see improve an to company the in or forward. don't going a just able end being really So we plateau

to We very the information model, on to in things of I'll sustainable think we're maybe information business have continue that sophisticated a I doing improve. comment Sandeep ask the a to some And very technology process. system

Sandeep Bhakhri

sure, Yeah, Bill the to fracs of almost maybe of and efficiency, to advantage in a – to at basis, dialing really and unique steered G&G through getting main to data engineers. of is the crossing innovation towards and real-time and level rock geared cost. improve that and better to us inventiveness all ability make said, very, ability system to of the very, much to The very better game-changer our deliver the me designs data, in design of means level better And is been really the on faster. take stay whole into assimilating of even understanding an fine-tune regardless becoming target it Brian, continue high the potential wells basis. zones ongoing that the running is we depletion, to with folks our the back faults custom capital frequency and their amaze to continues continue currently geosteerers and completion that frac ability for The wells has to Bill. that of for for capture us Yeah, lower like engineers drilling goal the our real-time in granular our that terms we're at very seeing a the into

of in drilling, in the on going improving optimization, with completions, efficiency. all goal innovations there's in So production capital

capital improvements efficiency almost. of levers countless are would XXXX, just say, in numerous, I the So

Brian Singer

much. very you Thank Great.

Operator

go question next Please Leo from Securities. of Our Mariani will come NatAlliance ahead.

Leo P. Mariani

Hey, guys.

in efficiency. you out, in Just bit sort fallen. have on XXXX, your really costs well wanted around certainly here had comments you nice production little a and Obviously, follow pointed guys of capital a to have ramp up as

to versus it things all certainly guess see like XXXX flows being XXXX higher I looks So operating going we're here. in cash equal,

overall go flow expect So up. cash just And activity looks like to free from just high we will should level, higher EOG? obviously some see levels

So talk of next uses sort the maybe just prioritizing year. about

William R. Thomas

strict Yeah, going to Leo, maintain very again, discipline. we're

going we So increase to only we're the get governor is better. if spending can

the thing. that's So absolute

I think that. you've heard

priorities So the have at at prices, level. returns We're not current currently, of getting well the triple-digit rates changed. we're getting

for company. So new we're that's inside the excited very the generating that about exploration potential We're first priority cash.

this retire in to already low to the priority period. up reduction as work and next dividend. continue continue to by then, company. million the debt pick four-year plan we said, – million next cost, certainly and $XXX Tim And want want on we So, $XXX high we have $X very we increasing billion a reduction have target and to debt over reduced we've of another to rock we're the in And year, year over as at better

And to We to evaluate XX% just then, very historical through on have as if at stronger the quarterly XX% increase And we goal business it to is rate. reiterate. than a have a annual rate dividend commitment that returning want we'll continue but our of to to shareholders environment, I increased compounded healthy strong our cash a growth year. that, this we

about have interest, in expensive no no need M&As. corporate thinking We even

So, we're we're very focused and on very better. getting by disciplined, to remain focused to going returns and increasing continue

Leo P. Mariani

on also an wanted this for you Chalk. focus I play obviously And quickly in to color. play emerging is just great folks, while. That's but Okay. the been the know I Austin for you've a

on sense a well sort got guys extent Just the productive get time? of I better do the your sizable this position as the in of in at you handle evolution you've as where a feel we like point are of acreage just wanted to economics, here. mean,

Ezra Y. Yacob

our I Ford, is Ford now the We've certainly. more yeah, Leo. been as and, co-developing Ezra This Chalk. we've Yacob than developing program a complicated it, Eagle the and of it's little think a been talked it we've with play bit Hey, about Austin Eagle

data good across are we've core tied data our extends we've the collected Eagle there, while position coverage, position. that prospective South entire our our that little a spots the acreage only it's Texas while seismic log so, also integrating into Ford, acreage sweet across we've entire job And done which a discontinuous. more developing not but we've and And been very

with Austin that infrastructure. of good the we co-develop the from from existing have a Austin benefit increase obviously, there we the it's do the the performance we feeling to also continue that. has that since to Eagle operational in core our continues Ford, benefits that The it. that we're and yeah, Eagle Chalk lot all And, is benefit very Chalk it with the it So, area, within Ford

XX-day this barrels oil over of day. quarter just They had brought a we average X,XXX net rate on So XX wells. of there per

And very performance happy so, we the it. with of are

Leo P. Mariani

for Thanks color. Okay. the

Operator

ahead. will of question go Sanford come from next Bernstein. Our Please Brackett Bob

Robert Alan Brackett

Good morning. Hey.

anticipated approximately What services XXXX that XX% been is secured. have mentioned XX% You of? of that

Lloyd W. Helms, Jr.

This the typical That's our Helms, way. XX% company. cost – this the by is is Billy in Bob, of XX% well average

somewhere range, about well typical at So, number. it's that $X-million in costs that we being XX% look our and of

Robert Alan Brackett

Okay.

number? per-well number, a that's So, total a capital it's not

Lloyd W. Helms, Jr.

average No. well. an It's It's per a drill complete cost. for the and per-well

Robert Alan Brackett

X,XXX fairly-wide oil depth Okay. feet, in function That's from color? those the understood. a of where A Can well Delaware and some And how seem it to to range fixed you What's Basin, that separate doesn't be you spacing up of I question. cut. spacing? there's numbers? give in sort feet XXX driving If at a or are look are

Ezra Y. Yacob

Yeah, is Bob. Ezra This Yacob.

I appreciate So good that's you the observation a question. have.

actually of oil first well spacing, our part the does it with cut. begin The

I is for type Reeves a an curve which be there. bit down Permian on some spacing XXX,XXX we County to tied a curves think less going bit the our for the on acres local is oil be But combo the across oil little that, based net play, of then XXX-foot to type our And that is acreage that is our have And really geology. XXX-foot more would the cut, spacing. then play announced little based shallower, of where an spacing. than

the XXX-foot the and It Basin. we've long-term We the targeting basically XXX-foot I such. oil of window in on we've on what a where continue local of to complicated as the spacing, of depending and the different Delaware targets, is spacing been play to we to calls down very confident barrels million geology, number equivalents. feel XXX-foot tested. But spacing testing kind performance, discussed curve X,XXX-foot we our We progress for again, optimal of we've and acreage a core that of to see wells reinforced year, made on targeting this X.X it's that positions. for Wolfcamp is that's in and tremendous this And type defining spacing. on year sales with resource XXX lateral announced our brought at at the spacing patterns a we've monitor packages that And those our potential lot in kind those past think

acreage way our good if very about think premium good in that XXX we increase ultimately increase position. year going inventory, our We NPV ability I you the feet look be think that feel to the to over remaining is just that's average a at about into this finish XXXX. up the to move as and Permian; work been and returns efficiency and that's done the XXXX optimize capital

Robert Alan Brackett

Appreciate that. Great.

things numbers for child to Just well interference those be down-spacing, and explicit, like account effects? parent relationships

Ezra Y. Yacob

Yeah, we in. we've there, our of that's that potential correct, curves When type out baked put our on resource all Bob.

the data, we not package as our wells, from early the data. so integrate to profiles and our early completions continue only production development, And of the long-term real-time

improvements consider that integrate we into gains the make and we're upside. as As next that the able really the packages, well to of we

Robert Alan Brackett

Appreciate Great. it.

Operator

will come Rice. from of Charles Johnson ahead. next go question Please The Meade

Charles A. Meade

morning, and was at go I ranking your would your little wanted good to you makes your at play back that explore idea and bit still Yes, listening to and Bill, team me there. I It plays intensively oil. $XX way $XX to how would $XX. prepared different or a whole to at these Bob also $XX those would or to be you're seems comments, the your at best that it go $XX. after me up that you the it you pick on best patterns, or develop your your $XX assets at point, assets $XX Brackett's be than or But to play spacing sense would

you talk you you how your program? if agree density do, modulate about you of that point with And So whether that can of aspect view?

William R. Thomas

our $X.XX on premium of price $XX economics flat Charles, deck gas we and run based natural our all prices. flat of

improve NPV. our efficiency, develop improve to to capital really, our lower important; to properties continue returns really on to that's of ultimately, really, the to continue really to and important; focus those That's continue the So is finding all the the costs. to to optimize

to and And of double-digit And flat price is $XX manage really that strict the us lowest continue believe us in the company what commodity continue will that oil have believe to structure price cycles double-digit very and a become cost the the flat, will to those of we what we to through company. to help all that generate believe, able, at we on. And optimize $X.XX global that returns we improve And cost help so continue will market. we're deck once. the the one we growth is producers

So, we're very focused, to we're process. we're and very committed strict that

Charles A. Meade

it Thanks Bill. that for That's from me. clarification,

Operator

Our next go Irene of Haas Capital. from will question Please Imperial ahead. come

Irene Haas

the state guys And factor see also, and Yes. do My Powder just that on gating company glad is my ramp progress really, infrastructure. oil any really is River and as it Very takeaway. coming level, along? gas EIS? to up, on that is has federal question the Any Basin. needs care be how of And on working you taken question to really with to preemptively before the on such permitting

David W. Trice

Trice. is This Irene. Yes, David

On the the out regulatory side, permits captured we need that have there. we operatorship for

doing busy the couple been we've for really last So, that years.

is capture-the-flag a actually As the operatorship you know, your get Wyoming's so of kind you to no interest file have matter state, there. what permit to

that that on focused be of last And done as infrastructure acreage we're our XXXX mentioned out to adding we there. as we've the on and our infrastructure for all so going call And takeaway. far had goes, was essentially really where

in ahead and in pieces slightly be the going be will mainly to to focus there, but in It'll place beyond. focused go XXXX in on up XXXX the XXXX. more activity drilling probably up significantly forward putting Powder not the Our and be bring is

Irene Haas

benefits really I May of Okay. up? and well-organized a kind producers have of Feels like larger follow scope basin kind with like the EOG scale.

that there down that bolt-on sense not are buying are for line any make companies? So, understanding might you EOG, into guys big the

David W. Trice

cost. always to add at Yeah, said again, these I Bill in I mean, we're any what expensive We're acquisitions. corporate-level reiterate think looking acreage earlier. of low interested high-quality I'd not certainly

and would cost, it's bolt-on sense again, is our And on But cost, acreage. would exploration finding we make certainly more some then high-quality so, the low look it. at low if side, focus

Irene Haas

you. Thank

Operator

of Subash will Chandra question Guggenheim from next come go The Please ahead. Partners.

Subash Chandra

hoping you some I just comment that's there. out could was guys morning. thanks. Yeah, on Good public data

incrementally Mexico just of guess well if integrity the sort in interim data something being and New that's a event. an of sort in I if on prior else And showing results lower thing, going or there's than this years. is Just

Ezra Y. Yacob

This Subash. Ezra is Yeah, Yacob.

if sure the I'm you're there we're not with the out pleased I speak is New data Basin what portion, the in very directly seeing, can that in will Mexico that state seeing results say Delaware there. but results the I the to we're With

are in tremendous remarks, I And opening outperforming respective for we've progress of well As their year. plays curves made actually the performance our we're a amount type of the that drilling. discussed this earlier all of each

of done our wells, XX-day been job the and really side this in from move and you're will results those basin. making some some there we've packages the that's really, productivity bringing that on and think completion increasing think think, quarter. the which spacing adjustments out of a integrating as that little are the drilling our up quarter's I part wells of early data on has quarter-over-quarter in this showing year, the a as bit, around And just of general, But, which depending in the of here well numbers early a of the great targeting, team little package year I year. time to I those bit the from this is actually highest on part last well

which we're well gains is Billy translating to our good addition that, costs. pretty on lower into In operational making highlighted, efficiency, as

which combine And finding you capital together, a and in efficiency, costs our is which seeing when the basin. so, development we're are resulting goal is plays what that and decrease higher returns in two for in things our those better a

Subash Chandra

data State I'd be Yeah, That's why can I ask. thought thing. a Ezra. thanks, dangerous

this just as that rate so, in geo-pressured of you plays next the second the prefer? if not the maybe question lift. typically is high some Eastern areas in If open up very this sort batch was Anadarko. artificial The of wells for And would as you are other similar

William R. Thomas

of understand the We sentence. quite first your question? Could we first the part didn't get

Subash Chandra

are the at is, Yeah. wells understanding there. gas with Sure, that lift. in could be high rate least My is on Anadarko, brought I And very sure. East wrong

it apply less up. or the end And the other there's similar if better plays is, plays that's if situation front that can open the not. just curious lift So you if on to a geo-pressured areas in artificial

David W. Trice

really the in We is on we lift, company. use there. and Basin gas use this gas throughout those Trice. Anadarko lift We lift bring Yes, initially well. life really gas wells Yeah, throughout David with do the the of

method bit Anadarko, but In it it's very do us. Eastern and do we a return So we a the and a that's it's company. the low-cost use same around in on LOE little that the And very that. different basically, areas, we other nothing good than new for get we

Subash Chandra

it. you the Thank Got for clarification.

Operator

Brothers Please Sankey Jeffrey to go question Tuohy The question. Investment next from question we'll will Securities. Research. Campbell of next come Mizuho move Paul on come of And ahead. from Please next will the go The ahead.

Jeffrey L. Campbell

maybe return Or even develop for congratulations of the others? premium of put later? some wait for the than though now that to it Good to choice them they're what morning, this informs others of and way, locations on better locations potential are quickly and on to another just wanted the to outperforming, have think it all discussion to since great, some high the I is and fair quarter. just the premium locations all ask

William R. Thomas

quite the well are that locations I average believe, They're different, industry's premium outstanding. drilling. the quite than all Yes, the

like others. it's the as of So of of inventory, that they're of add and continue at than level. up, a inventory. huge our to drill, It's And build course, goal bring just some them a better inventory elevated much are we'd to the premium quantity locations And, X,XXX we quality high, to inventory. the very the is

we all got inventory believe develop in inventory do that improvement and going for of the play room every we every forward. has And well continuous in so that And it.

in And the strictly returns, is on company and capital develop the the allocation the returns. based based so of we plays on

culture have rank highest technology pace increase. we so in to learning year. the and them drill play of basis. of And continues on the rate develop return in company, a And them the every company, wells company the And information of in we the because and the we the

Jeffrey L. Campbell

of be I'll mentioned Niobrara Mowry and the ask the follow-up. going a Okay. that for together. helpful. that. spacing I on you call was test more Well, very a narrow appreciate there's noticed my question the I

that from Turner wondering, that spots premium are just Niobrara mentioned, I'm the and imply so discrete locations? since wasn't does sweet the Mowry And the Turner

David W. Trice

again. David is This Jeff. Yeah,

been feel Turner done the have a lot years should Turner. we Turner, and the and drilling tests good On years, over that We've what in already we better. be understand the for a like we've so spacing on various the handle the play we

Mowry that Niobrara some to the did and Just new, in what to do ahead the are the we're test and go spacing going the fact we there, similar Woodford.

at do those. we're planning going tests do XXX-foot and And so, we're those are spacing. Those two separate to to

Jeffrey L. Campbell

Thanks clarification. I Okay. Great. that appreciate for it.

Operator

like will session. time, Mr. Ladies I'd and conference the conclude this to turn question-and-answer this our to back over Thomas. gentlemen, At

William R. Thomas

that Many lowering were employees third continues to all and with In improving again the EOG productivity The innovative, to for systematically efficiency costs company EOG outstanding. our improve closing, makes demonstrating gains. the and quarter by new cultures results thanks successful. returns-focused technology

is shareholder your culture long-term of our for and a model we're force and business thanks to significant company's sustainable future value. ability the excited driving Our about Thanks to the continue create listening and for support.

Operator

We concluded. for thank today's you now has presentation. conference The attending

may your lines. disconnect You now

EOG Resources (EOG) 2 Nov 182018 Q3 Earnings call transcript