EOG - Earnings call transcript Q3 2019

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Operator

Good day everyone and welcome to EOG Resources Third Quarter 2019 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.

Tim Driggers

for thanks and morning joining us. Good everyone quarter XXXX hope has seen third announcing release press earnings the We and results. operational call conference includes statements. This forward-looking in EOG's The earnings for incorporate this associated with statements reference been risks forward-looking those by release filings SEC outlined in call. and we have the

Definitions www.eogresources.com. found non-GAAP conference comparable measures This measures. GAAP also on reconciliation as measures certain contains well call be our to at website schedules financial can non-GAAP as for these

conference this potential call in of of the reserve on Some may in resource estimates investor reporting accompanying estimated potential calculated slides SEC's and and presentation with necessarily reserve the estimates the accordance guidelines. reserves, include not other

earnings by to Helms, VP on cautionary and note Participating Public EVP Production; Lance reference are: appears the David Yacob, U.S. call incorporate Senior Production; and this at Marketing; Officer; Exploration Thomas, Operating the Exploration Billy issued of Streit, CEO; Relations. release and Chairman Investor and Ezra VP morning yesterday. that We Boedeker, our Ken Bill Chief investors the Terveen, bottom EVP

Here's Thomas. Bill

Bill Thomas

morning and everyone. has rooted competitive a good advantage our and Tim Thanks culture. deeply that is EOG

drives innovation Most history and long and importantly, drives of improvement our continuous culture Our a culture resiliency. success.

the gas fostered demonstrated our in first-mover technology. when an as supply, the In made and past so vertical shale In we do short this XX prospects that in culture will we business XXXXs ever-changing time EOG environment, forward. horizontal have moving years, time were resiliency again during innovations continue our to

discovery. oil prices horizontal the with Eagle As late Ford came natural XXXXs, shale in pressure introduced gas the under we

world. producers is lowest in oil states Lower a and among the result the EOG cost now largest the onshore of producer As first-mover our XX the in advantage,

switching XXXX In company by remained the high-return strategy. has leader the late cycle commodity in oil of in growth a down to premium low-cost, wake a price beginning drilling pronounced a

flat produces using performance in $XX price gas even hurdle company economic scenario uses commodity and Our the strong ensuring financial investment a natural cycles. premium a strong strict that returns down that strategy $X.XX generate will

of our our After be third raised history. our we well we from performance, with the XX% cost operating oil have company's per our unit XX% target EOG's year-to-date results, growth along To XXXX exceptional performance U.S. consecutive reflect believe will best cost targets. quarter to operational in lowering and that

target have the to compounded Strong With capital further EOG of of allowing investment. lower-than-expected dividend. the third with in results flow reductions the in strong over efficiency, confident paying well company above delivered cash $XXX improve growth cost production benefit to quarter, deliver the million capital growth strong returns after free

EOG free continues XXX. flow returns, best companies competitive the deliver cash and in growth S&P the with to

outstanding both quality. to premium results, and operating to grow addition size inventory organically our we In in well continue

This quarter represents That program brings premium we of of pace. current drilling premium replacement rate our wells. times more years added net our more a which net than XXXX at X drilling drilling and wells to XXXX XX XX,XXX inventory than is total our

premium and political and X,XXX exploration-led well and position X premium locations adjust more company and model assets years the navigate changes. basins to tremendous regulatory over representing operations identified to acreage. flexibility X diverse different EOG's has business on across than The company maintains nonfederal of activity drilling

much in size approximately position can areas leases. and company's we nonfederal on In of is premium premium of XX% most in than the have the that our our organically acreage, is we grow are and U.S. which approximately by we years faster total will XX% drill. continue active leases confident drilling quality we X.X million nonfederal XX the of to Permian, inventory production of one acreage legacy of net held our The federal acres inventory

performance. operational same throughout our the in to reuse emissions focused improve footprint to water through initiatives expanding environmental aimed operations. innovate reducing approached gas reducing looks has and at that continues greenhouse The EOG company manner returns it

project Last is many Basin. that quarter we one to economic pilot we is emissions our working gas-powered of compression combined in This team station projects reducing for gas introduced just on our will and a generate solar the natural that, greenhouse returns. believe the contribute Delaware and positive

improve and on are environmental address are going environmental in finding stewardship. continue employees its we we new EOG initiatives leader are opportunities believe committed focused and to We to stewardship a to our to forward.

close begins turn end the of in our year, to on to the we as focus Finally XXXX.

the delivering number investing it's strong firmly year, in cash we too have the production and dividend free following: long-term generating specifics flow priorities not our next While early changed. growth, delivers to value. of growth business high-return our one, highest can We that plan discuss say substantial believe

we operational our unit growth, WTI outlook flow. plan our continue two, is to on a can $XX mid-teens commodity production decline. grow Number for believe and and cost At well costs three, deliver based conservative we per generate significant cash prices. Number will free dividend

Number will our of in four, large add ability high our for expensive and drilling inventory are premium believe faster efficiency drilling. we we have no and plans costs the to we exploration Number six, organic improve. F&D have confidence And M&A. improve number five, than capital to we continue efforts

drilling our must acquisition premium compete bolt-on potential Any returns. with

in can change. know continue But on. to we to is competitive that head ensure future these culture, business meet look rooted the advantage we challenges that environment our As will our the we

that any a company in resilient leader value differentiate our any S&P to creating among continue a XXX itself company will long-term of as the by significant sector shareholders. is EOG for

outlook quarter operational review to Billy remainder for the is XXXX. of up third and performance Next our

Billy Helms

Bill. Thanks

of oil range target $X.X we spent range coming less beat our quarter forecasted production quarter. expectations the for capital of row than the we high at day Oil more barrels low third billion. than start per of and in a end the right XXX,XXX in end delivering at of we capital less the over expected exceeded the at For target the

high Well our drive performance continues to production the to estimates. end of

selection. for quarter enhanced reasons are primary on heightened second use during the the of call a performance well and designs improved discussed target diverters completion with the along focus As the

of to well the continue expectations our to low new end teams identified to expenditures to operating costs trend Capital efficiency. improve lower capital techniques as

third We As by service I of reducing well the can by cost cost not reduction is have believe continued X%. of our that be report as goal achieved we driven efficiency quarter, year-end improvements the it cost reductions. to sustainable

Ford our reduced drill active For if collectively time you Basin by the look to plays; most example Eagle a average the well at been and has Delaware the XX%. two

compared push year. rigs last fewer we As times, to drilling our to maintain drilling their require reduce steady our teams program execute to

only were this tremendous as This year XX testament to rigs to rigs plan EOG's now efficiencies back in to average the compared drilling we February. realize They able to XX of teams. Specifically, is a year with about plan growth such drilling this in-house XXX motors wells designed, to drilling reduce entering expect times innovative quarter-over-quarter faster We as still performance production complete engineered XXXX. to advancements improve failures. and and

in expense. throughout areas: new prices projects -- mid-XXs, from Capital high-return beginning to plays -- Bill operating expect are be earlier, lowering the growth of leasing the allocated infrastructure in to XXXX stated XXXX. similar year efficiencies and exploration two that are acreage As lease oil one savings and we realized are to if expenditures capital

the on up XXXX expenses. expense start company-wide year-over-year. our was is be per the of across At XXXX, year shaping best Across notable operationally basis had unit we've to lease forecasted a the and operating be particularly operating initially to flat board, unit is

XXXX However, now LOE lower we X% full year XXXX. be than expect to

rate the were At lowest track $XX.XX, the of since EOG's gas midpoint natural oil. a we of our to on company XXXX DD&A deliver guidance transition from range to

to continues reducing the double-digit to deliver cycles. switch company, D&A enabling development permanent drilling finding premium returns driving and EOG down transform price commodity Our throughout and to costs,

into to gas additional Consistent BTU third in for of with in products, arrangements and goal for realized supply arrangements note we per pricing strategy quarter, XXX our starting during Also up markets diversity growing our having natural Energy. with the flexibility long-term our the day these marketing provide of low-cost and entered of production ultimate gas. price million for with the maximizing XXXX of diversity Cheniere off-take

color of to of barrels Rockies oil feet cubic natural In a wells million per Bakken of provide and day XX NGLs would barrels and XXX the day, Now I Bakken the on gas. XXXX we like completed X of with IP-XX some average this quarter plays. other an

completion well results strong Our precision new targeting techniques. the reflect our and impact of EOG

entire well for see an the quarter wells testament completed the was Creek was strong highlight the of IP-XX in oil along continued best with performance date Bakken, XX we per The other the with of quarter to across well to that well a our are Forks improvements this our from completed Clarks the is inventory. barrels Three day. This which XXXX in

the four inventory the including the Turner River wells and wells the combined Basin, Niobrara. worth Turner completed we well that the the play. the we one in noting River of Powder total includes It Parkman, premium a our wells eight in Parkman with now is have which Basin three in in Powder In

The natural million day Niobrara feet per with and XXX of barrels NGLs oil completion, XXX cubic barrels Arbalest of an the of day IP-XX XXXX had X of gas. a

and We continue to in to be its our look program the future. results growth the Powder near forward in of encouraged River by the

Eagle Next Ken the up Ford. to is discuss

Ken Boedeker

continued high-return Billy. of with Ford the strong oil results decline The XXXX EOG's delivered quarter asset delivers and quarter-after-quarter no Year-after-year, well growth different. costs. Thanks, third in was Eagle a Ford consistent Eagle volume

cost year goal of continued in X% efficiencies. improvement full We have third by reduction operational exceeded quarter our the in

the been XX% Specifically, XX% to of reduced the quarter on time in to lateral XXXX. our depending third drilling by XXXX has compared length

Meadowlark remarkable our a XX,XXX section depth drilled in fastest We lateral drilled days. BXH, X.X feet to also to was date measured the a Eagle in X,XXX-foot which Ford, well a with of

Ford at inventory our after representing of XXXX activity over a in decade at remains current of premium six the strong years Even drilling nearly Eagle locations net levels. development well

our We confidence this grow in continue premium ability to to inventory in have high play. our

well our XXXX cost that cost. is best to has Our average a below well XX% date

to and has remaining time. cost locations it been in the evidence approximately over average ahead This well in flagship the of value difference is best in position our this this the maximize to opportunity asset. XXXX best ever to our the is well premium between non-premium EOG convert of year

Ezra for an here's update Now an Basin. or on the upgrade -- Delaware

Ezra Yacob

net Bone we net Middle two premium the net XXX XXXX Thanks, of locations the new which premium or addition In XXX just locations accounts the Wolfcamp under short, contributes Basin announced M premium and locations. Third which Delaware Ken. for plays, the Spring, for including

M of to the The equivalents Third Bone combined Spring X.X billion barrels approximately net -- Wolfcamp of incremental potential resource added and EOG.

Additionally, over reflect the plays and our delineation well Basin. benefit previously greater premium net from further of XXX performance not and in year's costs only reduced this core confidence we These Delaware outside in position. also increased identified well acreage locations added from locations but areas

making an EOG through began in play Spring of our example Bone years sand Mexico New horizontal an Third old new reservoir Red these The Third development Bone Southeast and Spring Hills is core over drilling ago high-quality to the exploit again. in area vertical sands. XX

forward to has allowed with logs large of sands Fast drilling and technology and Third Spring. the completion today, along to the rocks where core data in benefit set Bone carbonate a and of samples shales modern EOG exploit tighter the

have drilled horizontal XXXX across less target sand wells reservoir targets. wells over XX While Spring the the in exploited than Bone been these basin, tighter have traditional Third

plays somewhat With the the of and of of shallower with barrel is trove development result EOG the cost these other a and targets per the advantage profile finding rich spots has $X technical than sweet a of Delaware an Basin. equivalent production data, new in decline identified

wells the targeted per completed well gross X.X developing Bone anticipate approximately reserve equivalents barrels of spacing cost between of at with Spring of We approximately for XXX-foot potential well Third million. a $X.X million

premium Eddy, EOG's with net the new announced expanse in wide of Loving M and Counties. Wolfcamp across position We locations Lea, also Reeves XXX a identified acreage

planned of sits cost. on with plays well expected M the developed completed XXXX-foot Wolfcamp life typical for approximately targeted million X.X a spacing. barrels $X.X is to This combo Wolfcamp A million equivalents play below over Upper produce XX% well be is and liquids to its

by of to the over EOG and delineation to began and have XX% our specific quality XXXX portion XXXX compared precision XX% refined target days the software, reduced interval steering highest we analysis while reservoir. the targets this decreasing our delineation Utilizing proprietary simultaneously data drilling of in tests. our collection drilling by

now premium The gas has another EOG's of lowering approximately drilling XX the the Delaware of efficiency oil of EOG and has well locations or in at years and pace. productivity, current utilization delivered costs portfolio. combination operational well net of drilling infrastructure future to inventory Altogether inventory water, premium XXXX play increased an Basin,

acre to completions integrate our targets every and within actual and improve our to position over the This the of inventory is from and pay. XXX,XXX use spacing thick customized core future local We log locations drill data well to geology on proprietary XXXX-foot across includes based real-time data determine multiple we targets column and wells.

to one-size-fits-all us continual and finding data and development and to net manufacturing process improving and our In collection, contrast, value continue of analysis costs development present our application for mode, each returns optimize lower wells, unit. allows

confident locations lower costs, to well future We're through increased outside well premium also our in delineation to inventory current additional productivity add area. ability of our core and of targets our

For Wolfcamp developed averages the count at across example, well XXX,XXX spacing single oil play. being acre in the play, the XXX-foot target a

per two-mile through million equivalent $X averaged is including of very a Atlantis on the During finding X-well XXXX EOG wells EOG three lot The barrel bottom in XH, at this Unit payouts spacing. remains and laterals a the approximately development These of in generate drilled tighter NPV spacing patterns than $XX confident oil and has potential less number regularly drilling is of to world-class Wolfcamp average currently over a line identified development State months. XH basin. upside that seven XXX-foot cost

the addition Basin performance of goal plays. the also the for XXXX continues to of $X.X outstanding expenses in Wolfcamp EOG's while already half in to during moving our first reached year-to-date Delaware Well play X% XXXX. full notching In has the oil improve third various continued cost down the a to updated operating improvement Delaware Basin across has well year inventory, are through productivity the Basin. operational Total Delaware compared the in million, the also quarter

and XX of unit oil the D cubic rate XX day XH, Second feet online XX% McGregor XX% Average XX,XXX standout quarter million number per initial came barrels the first for Spring. play cumulative up day of for which was rich of XX-hour in oil the Bone nearly XXXX to is production gas. days compared per an the Wolfcamp and natural in The up the oil

For first averaged barrels the day. its of XX days, X,XXX well oil per

as of gas drilled days development. natural approach staggering X.X package in of EOG's of package was highly part target. spacing XXX,XXX three-well the integrated McGregor multidisciplinary produced oil in entire XX benefited the production. upper of The and from to a a on Bcf Wolfcamp The These XXX-foot wells barrels technical first

all EOG's upside well the our unlock and a applying with hallmark and analysis plays additional performance of as real-time improve assets our collection Data announcement of highlighted is to Delaware to premium of approach potential across in Basin.

to I'll financials now turn it and over to Tim structure. our discuss Driggers capital

Tim Driggers

EOG's to financial balanced Ezra. quarter. third Thanks, of through the continued benefits high-return growth in the shine in The strategy results

quarter, billion million cash discretionary acquisitions billion, toward million This our guidance before $XXX capital the generated brought in $X.X dividends. invested flow the cash of of paid expenditures and low-end company in in flow. During free $X $XXX the

balance was ratio A imperative for $X.X is strong sheet at September total $X.X XX%. on total debt to a strategic net debt Cash capitalization EOG. sheet the balance and billion XX of billion was for a

will XXXX. in investing and scheduled capital in billion drilling mentioned, bonds first Bill allocation are for As $X be Two growth. XXXX supporting priorities high-return dividend mature to totaling in our

get decide As closer, to cash the to one whether those or to will both use or on dates redeem hand of refinance bonds them. we

turn it now for closing remarks. over Bill I'll to back

Bill Thomas

from Thanks, are Tim. several call. this important conclusion, takeaways there In

the EOG's best history. First, company is operating performance in XXXX

same strong producing in company. is returns, we the strong get substantial At to disciplined free high-return strategy every growth time, and Our flow. area cash better the of growth continue

drill faster Second, than it. continues grow to in much and our premium size quality both inventory we

lower water we efforts reduce reuse continue the GHG to opportunities mindset, costs innovative endless demonstrate environmental leading, and to stewardship Fourth, approach with see the returns-focused and and our our in sustainability. cost to reduction future. our to company and Third, continues pleased-but-not-satisfied

EOG is And fifth, company. a resilient

Our culture produces sustainable success.

create As we ability the significant with and the listening. companies value we're to performance confident shareholder company's about competes for look that the XXX. excited S&P ahead, with Thanks long-term to continue best in

Q&A. to go we'll Now

Operator

And from Instructions] we Singer ahead. Sachs. with Goldman Thank will the you, have sir. go first [Operator Please question Brian come

Brian Singer

morning. Thank you. Good

Bill Thomas

Brian. morning, Good

Brian Singer

evaluation? drilling zones Can are into growth we mentioned And And in gas NGLs greater Basin? the driven in company. exploratory how three under mix, you for two Spring start your prepared comments, by wet mitigate projects gas been of decline these needs? given second, you the on integrated past? Bone Can the the in on reasons? are and color that add profile the new helps And implications the decline you've is First, the type be program? being would of the what improvement more Permian infrastructure referring the the to this Or other rate the

Bill Thomas

new comment Ezra zones. going to two Brian, I'm ask on the for to

Ezra Yacob

the Brian. lot for there. This of question. Thanks Yes, a is There's kind Ezra.

So integrated the how first, position. Wolfcamp much tear deeper it me be I'll by Wolfcamp Middle and the -- M. apart piece development, of maybe will into a to let the piece into our across start core it our regards With with that's acreage zone

great pre-existing to that one gathering. thing for being oil, bench seismic well the is it So both benefit turn premium having control and has this of new about able water infrastructure gas

And in of mix oil think Delaware in similar also have we the to well the slide play greater Wolfcamp that is a where our make there. matrix. I in similar wet per reserves one slide and combo And Basin in It's gas, very way combo look NGL the gas very cost. about it's percentage the deck to XX kind it's up on

over and gives the and for XXX% a the of great rate $X XX the per well. be about time. turned million play past sales return we've in that play that they're two high-return In Wolfcamp confidence combo, having years wells approximately in to there so going generating us to fact And NPV a and it's premium of long a

excited very that about play. we're So

that. gears Third Bone the to Spring On sand shifting

of First permeability the target, two got about the is porosity very a in We've Spring the traditional would say Second tale talked plays. on our decline quality better more type because to exploration and similar of a bar side we that's the looking Spring. rates the that of better reservoir are kind which those the definitely Bone for Bone the that in of As that and yes, I And we're sand program.

new emerging Third carbonate Industry second has of shale delineating on Third little and integrate a it Bone Bone the of XX step targets there targets outside about move there. drilled to of about in that our and excited and it's part probably areas. targets then because the again bit very the that Spring, we're area positions core it, we the And Spring as really those new these are as you acreage slower in we're talked the potential I wells those about into some

Brian Singer

then is could you production. your about is you. Thank follow-up if Great. little base task operational It a oil And a my daunting grow into momentum the XX% bit to XXXX. from of large talk

are year loaded? in expect you late you activity? how setting growth through do XXXX of So and or up And bit terms a more back-end ratable XXXX early the

Bill Thomas

said having Brian year carry into in this remarks, Yes, the we've over the our fantastic momentum a as we're operation and that XXXX. early that operational -- is in the company we to really got going going

So I'm to that. specifics the ask bit a about on little Billy comment more going to

Billy Helms

into are. Yes, XXXX. to We XXXX where we rig all, kind reduce we bit a any further thanks Bill. little too it's be in Yes, give don't much able to of expect go guidance you on Brian, detailed our to first early as count of

growth on expect to bottom certainly so activity if the XXXX prices is The go deliver look of like, set prices we we into have the increasing going we'll fully quarter-over-quarter rig activity to enter XXXX. depending warrant. is capability as we like, our oil but line we what what look into production As

what look dependent the of -- amount would prices be of growth the which So like. the oil on

Operator

we Subash Partners. of have Next Chandra Guggenheim

Subash Chandra

morning. Yeah. Good

budget First of year seeing slowing are curious, are question you're it. they some is other your least deflation. I aren't slowing you're as any down, the guess, on for dependent if on, capital down. operators and say that Understanding at or next evidence efficiencies I'm

Bill Thomas

is Subhash, in year-over-year That's think, U.S. certainly think, not slowing. case just general, the industry, the for production EOG. yes, growth I shale I

to differentiate strong continue by robust. to continuing and well improve our we very think, remains ourselves very, I and productivity

We continue wells. pointed out, continue to Ezra drill as record -- we to

setting really on times drilling we to have literally costs. And continue records we're almost well and new every play record

any So EOG up sets your is the I And maintaining very production business better apart. culture success very, and strong time performance. and your and business in key the the unique in think a getting really cost getting all the lowering is to quite EOG it and

Subhash Chandra

Yes. you was, guess, I do question see deflation occurring? actually cost the

Bill Thomas

that. ask Well, to on I'll Billy specifically comment

Billy Helms

Yes. Billy service further to expect side, low. see guess, is service on Helms. What I on is the service This much much industry reductions we the wouldn't pretty is at cost see the a I side.

services any service And much I point them for a price there's I at industry, room be healthy, stay think time. to this lower. to are think to able to low our pretty at go not present

the service important is think Bill really on thing cost. not dependent I So EOG for we're to differentiate, -- said, reduce well as our to continue cost that, on to

important an that's think I make. to point

Our continue what's find wells efficient out that's the our operating to overall gains. faster, driving drive efficiency operating And ways completion economics. lease to figure down EOG's our more really costs drill improve continued techniques to teams

Subhash Chandra

Right.

a history, ruled it's at A&D you historical a so out least moot But find the follow-up acquisitions, you. point, seems I inventory is in market it of, at that question. lows. And recent my is, organically. much you've Okay. Got maybe And corporate. just philosophical can you have guess, And then, sort that because

in that market? of what And is BOE And $XX,XXX, the less than your Do the there there's see flowing an to exploit $XX,XXX slide you cost growth, acquisitions a temporary to day. number. think, equal I for your hopefully divergence suggests opportunity per or

Bill Thomas

I envision just -- in want any game do expensive not doing We are that. clear really M&As expenses. M&A not plan. large large M&A, be really to on our is especially So, we think, M&A,

much, at quality do inventory confidence even M&A tremendous in even lower much to could than compared We have we And might organically strong, we a think have. organic ability better what that our cost, you can very produce. to currently generate

to inventory have be quality really on the continuing game be our And we at would plan So will that to low-cost organic we growth, believe large we can adding growth, active cost. think, six different that additive and that focus low adding much that if add right a we're we're way now. -- we and -- in basins inventory amount very have XX prospects different commented we in basins that we I looking of operating ongoing

So the I've been it's most years, the company. company in I've the robust effort, seen exploration with XX that

So of and we've got confidence in very, low lot a our our replace ability very improve to more forward to going cost. at than inventory

Operator

Next Rice. with we have Johnson Charles Meade

Charles Meade

Yes. try the whole the maybe, you to Good want bit points commenting to little team a were morning, Bill, and and you differently. just up, just there. I pick them on on

Going in -- to on you then three and grow you I in grow grow differentiate, back to -- rate points cash oil for your it or, also you mid-XXs dividend I your grew oil, point said, you prepared think, that it comparable to free me, expect was grow believe XXXX, to flow. the mid-XX you -- comments, WTI the excuse was

increment whole than And have in we what kind did capital looking get guys it you sense have in an can would idea correct? that And setup for? is efficiency be that give But that makes better XXXX should me you XXXX. you of I that

Bill Thomas

$XX. growth. mid-teens about free with at right, flow exactly -- What we We dividend is oil generate can we you're then substantial Now, what we grow cash the that, believe, we can and said, deliver say can is Charles. we --

to So to operate. continue we want

the now, we've grown Obviously, if really, years, in continual And look We're flow. generating growth. very producing dividend we're if strong XX%. an over high lot level, free the you you -- at cash a we're the a level. right really two a optimum over And company operating look last of

what that's want to future. to the continue we So in do

returns. that, want make of we're We that sure to our to maximizing all, first continue

Our is returns an and volume of And been returns first. just come high expression has reinvesting at company's always returns. focus on growth

every So continue level to better operate where we a want level, get growth at at point, at a year. to we a

And so see going have because year. momentum, continuing cost next the the of we and next this year, operational we year reductions, ongoing that into

make us very year. free us so, better to help cash to to grow returns get a focus And substantial our better at and that help it and next flow. is very rate will generate healthy to also And

-- so, we're forward. We the want of indication of we've And a very dividend latter years, we of have the in that -- want to on And with also focused over I as dividend. to the last the past, going talked XX% per better good think, kind increases two year. we've or do

We're level we're to want have in increase going we specifically, not dividend to to but going future. commit dividend to strong the the to growth continue the

we'll And the so, yield quarter, that as of And level yield as get those Board the oil dividend decisions quick on X% is our up course, a make that to possible. evaluate to basis. and macro is environment the goal does. what price all depends on we our every quarterly But our

Charles Meade

talking Thank about the I response Middle a of bit in had shale. follow-up how a do little Bone if But many Wolfcamp you're That's how targeted the perhaps industry a -- to Ezra, Ezra. wells And Third the in have have industry Spring's other talked could in you about other wells the you. you then, the and the targeted ask this M? elaboration. helpful on when similar section carbonate an question, for earlier many the sense Wolfcamp

Ezra Yacob

other you glad it M, asked of figure or The out actually or Middle, some operators. I'm question. here mentioned Ezra. not. if and call I the known is correlates by This to we was it, that trying Wolfcamp that the roughly as Charles. B to part sitting Yes, I Wolfcamp as had just C

Basin, target across in Delaware hundred a drilled really the similar a wells And have there been so, few there.

at premium this that's that one data And so they're we've of landing data, announce we've to ahead play. with go zones, and got incorporated all that the our own looked we've -- reasons

Charles Meade

Ezra. it. Got was That's after. I Thanks what

Operator

have ahead. Campbell Jeffrey Brothers Please go of Next Investment Research. we Tuohy

Jeffrey Campbell

morning Good agreement and Cheniere and up the brought innovative interesting with quarter. two congratulations both on was I questions. and the thought it supply

expect you you're maybe price sort in Hub another first one that Cheniere And or of long-term JKM is a Marker? what repeating kind the So LNG future, to of your from deal second, the supply with that uplift at maybe indexed that's this is, again do versus portion of the Henry exporter? looking

Bill Thomas

I'm going one. Lance comment to ask that on to

Lance Terveen

Yes question. for Thanks Jeff. morning. good Hey, the

points it about. diversify start and what new off, in done our we're marketing I of with and sales Billy talked really our Cheniere, this follows we've to strategy gas kind the mean, agreements how sales it's to options. transaction with trying with up First, mean, having consistent that I multiple

process look we industry when really LNG, Bcf X.X. Cheniere, are the the mean look represent I mean really day at if leader. this you on that's exported being they when X.X at they undertook today And a you I

business that So expanding XXX,XXX. reminder to at January the about. year with in of And and a up our excited the day ramps starting that XXX,XXX just next starts MMBtus very a them, we're

But on your question we'll guidance. price next up as into that starts that realizations year, be just our contract incorporating on the

going definitely like of Asia the got it look not region. you growth coming at about give to on is LNG any when that. that's you next excited can just tell to why be the demand I'm the So it going XX all over color in years, on it's especially Pacific what amount specific But us I that's

weather And look can to it so with historically those significant areas -- as upside. that and significant to see you for especially tying it in events it's provide

that. got what about excited us So that's

mean, and just then to first we're last excited very going And deals. new and stay poised. I about about question there new we're structures this your

opportunities market. to going diversifying think, always to for the new continue our I We're watch portfolio. in we're looking

in structures So the as of we'll new be future staying in look that come we us. definitely active front may at

Jeffrey Campbell

call shorter this earlier than color, laterals, play. was laterals a some decline. that that's the shallower and comparison in corporate the declines And I I Lance. plays a whole some attracting XX a it. And exhibit assume exhibit was shallower slide My for portfolio notes there within as the help given others. discussion longer question capital? than influence of Thanks wondered of if other appreciate that I declines does

Bill Thomas

company. Yeah, Jeffrey. the in that very something That on decline rate much we're focused is

process. the do And and to consider continue so our capital, part that as as we grade of our focus we high capital

looking lower particularly decline we're low decline, efforts. at our in so plays And exploration

decline the last also focused Some newer lower costs. years we're several lower of plays. historical the our in and we've some finding then announced of And on than looking have plays

finding our really effort. of of to in a of decline completion us a help low And rock together regard. the low is that in that's plays So certainly it are the function quality they and work and focus the for exploration technology with costs, preferred combination

in the the We've of couple So the years; this on that years. part year we're future. will that going continue That's certainly of think get us on several and get process. and we helps the last last better. help the helped us It's that better been company focused in to

Operator

Dingmann SunTrust. next And have we Neal of

Neal Dingmann

little Ford but Bakken details. contributed done to also just what changes all was you and the XX slide X on I to talked I bit Eagle And that you think those. is parameters. add a out able through a wondering sort you Just were your on always get to down you Woodford, my want little question and I'm break slide around that? to the caused just what bit premium of as see the -- more I what both the in guess

Bill Thomas

you comment would on Billy that?

Billy Helms

away, point that think the Neal talked estimate I our each important account then relative is an Ford remaining. as we it's and update take going number an play. best into this on to wells of we have -- taking forward The drilled what Eagle Yeah, we've represents about

time have Eagle that premium The move to remaining to X,XXX convert is work we on locations developed. are less we recognize point discussed, can on into important the to that to over as continue areas Ford to we Ken as continue

at The that's of plays represents replacing mentioned Ford. it for it's as we just see in drill I -- keeping what of point And of what one that the the remaining the time Eagle kind on So more we rest think than are upside inventory this plays overall each these year. the with here. in every replacing

Neal Dingmann

when I'm wondering all flow then you to the I'm wondering to there you sort return? Or free kind that. your how about just about achieve? cash what what out go put is XX% what's of, one versus maybe just at growth mentioned shareholder you question. just thinking primary delta, today growth free Very look shareholder I'm versus $XX want cash when the you the been wondering return, about good. Bill And just of broad

Bill Thomas

is it. Yeah. component Certainly free flow of an important the cash

of It our strong allocating very a a year. can focused balance can cash dividend certainly right it's on the get and increase is at flow capital increase the every we that So better free manner returns substantial generating continuing in too. and to

on all those. of we So three to work want

our know in debt. remarks. opening as have And we Tim about reducing And that been then the talked you

bonds pay want And to mature. continue to we those so as they off

focusing primarily So and it's really that look capital on on dividend. but, working generating really strong returns we certainly the all at the

Neal Dingmann

Thanks Very helpful. guys.

Operator

we KeyBanc. have Leo Next Mariani of

Leo Mariani

you that fully XXXX guidance Hey out don't guys, have I guys there. appreciate

you'd about of do rate great. a that? $XX you talked CapEx you similar of mid-teens have a WTI, guys achieve do that sounds increase at in a level that think you certainly think maybe and that, which growth with high I type philosophical to oil all? perspective, Or bit kind do do just Or guess to from You at the activity are activity? little such to efficiencies the could order

Bill Thomas

Billy ask on to comment I'll that.

Billy Helms

Yeah is Leo. Billy This Helms.

guidance do. I going that's targeting We're be we deploy. improve, to capital takeaway continue any to we as you be to would do what said how give going not think we're how specific on the much to going Bill

point of in of stay with doing each time into our we're one at this capability But go the as to programs. have next to discipline the supports commodity we We we're make outlook in want if so extremely that we increasing the sure that. to year, flexible activity the maintain that going

we programs So prudent whatever have of programs. to that our execute And have those certainly market of do. it. is will doing capability the support the shows the any I to And we guess teams us

leave it of, kind just, we'll So there now. right for

Leo Mariani

Okay. certainly in some in you to a that here exploration aren't some of new if number a but bit announce high-level of getting plays to comments foresee any ready think these where you get wells early of of drilling plays. we drilled some new I guys whether more Really I you've you a update even the little stages not inventory? can the sense guess to Any just wanted point kind get premium on realize wanted to I maybe of of drilled a see can know you've XXXX. the economics the or wells competitive on you're just that? on

Bill Thomas

on I'm ask Ezra going to comment that. to

Ezra Yacob

you Thank This the is Leo. Yeah, for Ezra. question.

models previously, our XX testing all our oilier with searching quality currently different we're our And higher plays primarily basins in we've focus rock reservoir that we're about that exploration our approach. very We're As prospecting these and multi-basin applied. and we've mentioned core of in Bill discussed plays leasing plays. on that data divisions, We're over our we've across developed from applied program. for had for excited log

add inventory declines. leveraging just Eagle drilling deliver Powder oil really efforts quality perform in of our rock Basin, well technology off Ford we hopefully hopefully current our and with window really to increase and be will the and quality completions Again of the to back Delaware Woodford inventory. So our in Basin, slightly not our with to very And competitive shallower identify end. we'll the want the River the combination horizontal that very

hopefully that, you to in we'll our as on able be future models. And far reservoir we're confident a update call. As

Operator

RBC Hanold And of Markets. next have Capital Scott we

Scott Hanold

thanks. Yeah,

you're anything happening can maybe talked outside place. all from Is targets specific and of, we're improved this point You faster the technological and sounds some even about specifically the that's it -- you've like causing what's some reduction side in drilling you that ground on hey like cost year got a your hitting but there seeing of to out new uplift? efficiencies

Bill Thomas

that. Yes, Billy will on comment

Billy Helms

specific It's of those us made. have improved of of achieve the every culture It's prouder be It's It talked our And operating drive company. one in any helps one back teams thing about comments. what Bill execution couldn't Scott. the continue I the these of get Yes, not efficiencies. better. to that goes the to to his opening guys

the One in at as innovations ground wells keep on we enable us increase the example them the side that one we've those prepared is designing mentioned the drilling the the get do which the just reliability motors us faster drilled to drilling to to of in example. made I tools speed on remarks help and

There's seeing at deliver that to several that us the we're per from cost day the the examples to of more year we a complete still deliver a feet allow that and on with lower same as completion we productivity go wells. used side along much than the lateral to production ago our improvements

division of hard continue things. like to this, all us to just one day. working number it's improve hard call And to that is every capture everybody in each a try just different for in say, to to them it's but So

Scott Hanold

got activity Okay, understood. of improvements. budget on And $XXX million seems development high a just question technological year then if a year's around kind I next level. research mean of mistaken billion try this I like if could allocated it I'm to at not that you've $X.X and

if Or similar not mistaken XXXX does As going you thought we like? XXXX I I'm very XXXX look to look was expect What a heavier. into -- amount? be should and

Billy Helms

this details. so up. program keep that. a certainly specific at number ongoing We're and do we point we that. and ready think have give I working not those we're that leasing you we'll Scott, an all won't continue But through still to on specific to But you a number exploration on give

Operator

Joseph have we Baird. next And Allman of

Joseph Allman

for political Good political you Colorado. has very take in steps reduce Thank question Bill, federal that on might My is risk in you. not risk. at the morning. good your operating What slides reducing been to to example, related risk, addressed EOG acreage? political you

Bill Thomas

I process think, Well, I have talked permitting on. in going remarks a we've we as about opening do active very the think

ahead well that. we're of So

a our areas of And have and four with hand. and here two modify the we there. have We rigs operating different and flexibility ability shifting years in the we permits operations have lot to of to

our And actively acreage position we so we continue will have federal to develop will we been -- strongly. very and

think working ever problem really of I changes. with So we'll we've any had a -- regulatory not the

governments and relationship great We a the with great state with are a active BLM that relationship we in. have

be works a So really a We good has try together. citizen, in it operator. us out for worked to And it the all well good past.

Joseph Allman

list many couple a it dozen side? to the on second Do the have of Or You And Chalk. preventing is Chalk to really it my then a question have cost enough wells year. call play? is not premier the great premier Austin it from making on drilling plays? clearly wells. What And Bill. just a the is you're Austin you Thanks,

So it's a play. play a not if would it at seem be great premier to -- least

Bill Thomas

acreage of think the you we great a Austin ways. got play successful our Eagle an exploration in us. that a target in aspects to certainly it's in when Chalk, we've really It testing. and different we have play. we're places Yes. results Well And And multiple -- first it's the our thing I very kinds long have goes Ford it. Chalk. the looking And under think for And all Austin been about the is it's big

they the keep acreage so spot. on get advantage And our right sure the competitive in making we

haven't give about specific. at the we'll you our will progress some But We talked updates and Chalk. point some in on anything we

Operator

Next we have Arun Jayaram of JPMorgan.

Arun Jayaram

prices. to to Hey, your you XXXX Bill, talk or to to I sensitivity program about the wanted lower you potential oil ask

a growth average number? outlined to rate If discuss $XX prices per at And you at growth sensitivity could adjust you the broadly $XX. a think to you I closer your oil oil mid-teens oil barrel accordingly? would activity $XX

Bill Thomas

We give we capital. But oil you we Again, adjust growth. want our free returns. certainly specifics have there we can't That's numbers substantial want great to flow. to would strong want one. Arun. cash to Well, have any We have

the dividend. we to on So work continue

guidelines balance whether efforts view And We're appropriately see just to trying you our based higher lower. kind would XXXX. we of oil going speculate, really on of set our those. all where we we be don't year. macro So we at it's in give some to point, next to or And it of this want

Arun Jayaram

know sounds in garnered driven great it second reduction has But by rig count attention. was the this decline a lot rig the just follow-up, in like Great, of a half your efficiencies. I and

in seeing net were we If for I Bill, delivering wells billion, question is, in guess capital. XXXX $X.X my rig call OFS to do the deflation it we XX% year? cost see your you Could bake in CapEx you're XXXX? on well it today going any XXX efficiencies, call X% in improvement incremental to could another next do thoughts dollar what to have you're

Bill Thomas

Again specific numbers. Arun, we're not going to any you give

over We this believe believe -- year to we that, well next improve continue our certainly decrease will do our too. capital year. efficiency So but definitely next will costs that year

So will hopeful continue and go operating certainly to costs we're down.

our better that. our in culture, and just just And the job doing doing every So is people, our divisions and tremendous company incrementally quarter. getting are a

so, that what And will we with really be. our and all determine along prices, will oil bake that plan in

Operator

we Scialla have Michael Next of Stifel.

Michael Scialla

Yeah. Good morning, everybody.

your successful are premium to the you out top the quickly how to could plays, inventory. they even generate to If better with move turn new just returns of exploration drilling inventory. than these I see they want

inventory that's And maybe where to of end some you if they're not some look at monetizing replace just allow additive, actually could to you at would the inventory spectrum? that of the the

Bill Thomas

most the activity we're we each incrementally plays, them these could in we fast areas, And of increase could question, add at are rigs think in one I develop plays infrastructure. But with basins, thank jump XX year. Michael you yeah in these and where the your ones rigs reasonably the to XX for different Yeah. one looking not of

most are that couldn't They're not in where -- of you not in places do fairly quickly. them

returns, as we to as incremental would one our move certainly way on they them So, that of were each if quickly possible.

continue years. XX look monetizing, about And company. think of value sold, we And over inventory of $X don't premium have possibly we the ever have category. a to over properties a billion obviously I they'll lot that. think last And But get to get of in billion through any -- we $X to we'll the

avenue another company. value to the would add that to certainly So, be

Michael Scialla

Bill And then, this like you Powder. wells those you were the And quarter then in you quarter. added another first with three last Thanks. mentioned it Niobrara one pleased looks Okay.

how One Powder want Basin. to just say other quarter. had you're zone Niobrara of about some the your the I favorable the to relative nearby see, competitors this River that targets in things to viewing

Bill Thomas

to going that. on ask to Billy I'm comment

Billy Helms

Yeah.

oil be an rest inventory. in of River volumes. early something -- with think our play. be going had to very more results with be seeing for. the It's that competitive of that we Basin Powder from grow that It's we Niobrara to the I the hoped looks can pleased it we're we're oily play And

And by but earlier the to of the that's as now, we've taking our we're learning's activity also the dictated of we're that And play. pace will in be have going account, into at that spending really married with pace now. level calls, mentioned we infrastructure a grow really up there infrastructure on

have that leg But play it a we'll see in can that growing future. of we another the looks to us be growth

Operator

like his call I over this Ladies and conference will for remarks, to closing now Thomas session. Sir? the back conclude would Mr. our to, gentlemen, turn question-and-answer

Bill Thomas

Yeah.

like to They're performance in want another a that just So in say for by doing with everyone we job. so to quarter. happen. again, EOG I'd many we're to say just the outstanding thanks pleased fantastic making it third company the And

continues to improve company area. every The in

Our costs grow. efficiency to to results improve. to Capital Oil fall. are continue strong. continues And well our very inventory continues premium

history. So high-return performing our about the running level XXXX. is machine most importantly, higher excited growth organic an at most we're And at optimum in in the very level company's even

thank And again, listening. you thank for for So you your support.

Operator

rest we the today's now for your thank of the today. concluded. the call And is and conference Again, you all Again, presentation. you attending also sir thank we management time for to team

your disconnect lines. may Thank you time, you. this At

Just take And have great care. everyone. a day,

EOG Resources (EOG) 7 Nov 192019 Q3 Earnings call transcript