EOG Resources (EOG) 5 Aug 212021 Q2 Earnings call transcript

Company Profile

Participants

Tim Driggers	Chief Financial Officer
Bill Thomas	Chairman, and CEO
Billy Helms	Chief Operating Officer
Ezra Yacob	President
Ken Boedeker	EVP Exploration and Production
Jeff Leitzell	EVP Exploration and Production
Lance Terveen	Senior VP Marketing
David Strait	VP Investor and Public Relations
Leo Mariani	KeyBanc
Neal Dingmann	Truist Securities
Doug Leggate	Bank of America
Unidentified Analyst 1	Call Participant
Arun Jayaram	JPMorgan
Michael Scialla	Stifel
Unidentified Analyst 2	Call Participant
Scott Hanold	RBC Capital Markets
Neil Mehta	Goldman Sachs and Company

Call transcript

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Operator

Good day, everyone and welcome to EOG Resources Second Quarter 2021 Earnings Results Conference Call.

As a reminder, this call is being recorded. And it's time for opening remarks and introduction. I would like to turn the call over to 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 second announcing release press Earnings the We and results. Operational call conference includes statements. This forward-looking in EOG The earnings reference we for associated with statements by been risks call. forward-looking incorporate those release SEC 's outlined and this filings, and have the non-GAAP also measures. conference call financial This contains certain www.eogresources.com. GAAP be found on Definitions, as for schedules can reconciliation these non-GAAP website measures, at well as measures to comparable our

presentation on Production slides this Thomas, call - Some necessarily reserve issued investor in Leitzell on our the and earnings and conference Strait reserves Yacob, this investors calculated morning Helms, with the Operating not (ph), or include Participating of SEC's guidelines. call Public may and release VP estimated and of the Investor Exploration Chairman, reference Production. VP reserve that to Ken Terveen the Officer. yesterday. estimates cautionary Exploration Jeff by David Bill accordance potential, President. - Chief (ph), and U.S. potential at estimated Ezra Billy Relations. appears Senior reporting bottom CEO. accompanying Lance resource Marketing, incorporate note We EVP and EVP are Boedeker, the in the

Here's Bill Thomas (ph).

Bill Thomas

flow to free EOG double We (ph). the the flow shift improving first we power cash in quarter. and a the premium Tim delivered year the results again, is half level X.X per outstanding second record investment Once Quarter. are last of repeating nearly good cash Thanks, Earnings posted of adjusted our share morning, returns. And we generated $X.XX EOG the billion everyone. free of of of on standard. focused Results from already reflecting

beat of that costs below production expectations. delivering end performance exceptional operational improve. capital expenditures our the We're the continues oil high operating and were outstanding per-unit to well total Our productivity included guidance, while of another

ability Company's to to EOG industry addition, in In sustainably environment, the even an costs. is demonstrate inflationary unique continues though the lower

earn of clearly our Double the direct $XX confident minimum the commodity rate a hurdle XXX flow. after-tax our key catalyst of capital a cash the hurdle future return natural gas. of investments powerful and power proves drive flat to financial performance in most doubling industry reinvestment XX% process rate. employed across and oil using Our a and to stringent premium requires outperformance metrics, reinvestment is of I'm including one on free return

we s, In special maximize acquisitions The As cash our flow, and remain the and double-premium buyback first that free in value. improves to shareholders to dividends, high our XXX dividends. regular special long-term priorities. million we to with shareholder by of demonstrated opportunistic year, half X.X small return this returning potential cash, reduction, significant debt debt to and dividends, to generate using our commitment our bolt-on cash committed priority regular billion cash are reduced a of

billion on closed in months. slightly X.X of to the flow also bolt-on free several over we low-cost, billion Year-to-date, acquisitions, dividends, We have X.X debt high more than last generated. XX Delaware and reduction is we committed the which cash basin a potential

of the changed. not our the framework and to year ahead priorities Looking have beyond, half flow cash second free and

meaningful we free remain way. to As to returning committed in shareholders cash, additional cash we generate a

We maximize shareholder are focused right order time returns. on the to doing in thing at the right

announced we emission long-term provide rates, lowest our the future project, increasing in is storage and role the step and emissions towards huge be more of our our projects emission and of reduction on ambition. operations. reducing routine the capture progress, reducing Quarter, last nearly a will be net methane believe in flaring the our culture, highest GHG our water the carbon progress Over X to made lowest EOG's intensity We're continued use Driven innovative GHG and This in Ken of recycled which goal of pilot significant eliminating other line by playing ambitions. our reaching with targets in focused and energy. forward X in years, and will we a cost, moments. one return, few this process the next color our on we producers,

Now, Ezra to how to here's more about continue talk our improve. returns

Ezra Yacob

Bill. Thanks,

at years premium the ROCE of underway of be double life the return in XX% a in nearly drilling in Slide we investor our reviewed minimum premium In shift to the announced period environment, using price since an X-year earnings direct XX% has premium. presentation. can first of compared performance increase The XX% drove of lower program after-tax deck share, been to This gas conservative XXXX $XX X $X.XX XX% oil Natural our start prior our on increase premium Oil Well. of and While comparative when that the to our for the of followed, financial shift XX investments the standard per investment year. this we rate a price standard established

of is of equivalent when billion well just continuing of is operating enabled cost. projects rate free Double flow to year, This development of our In from these months this XX% Adding to while X increase significant cash and our oil generate The we're impact step-change flow. Capital The flow. returns, resulting 's less investment similar down cost reserves premium strip and for higher-return and efficiency to positioning current EOG in cash our shallower per is XX% to potential of financial than and lower-cost in these finding flow. higher lower doubling production resulting our boosting same cumulative approximately addition, premium EOG free offer now using with payouts deck, combined well from wells on the productivity finding resulting capital increasing $X our remarkable conservative average, cost full-cycle Company, from declines barrel prices. driving averaging basis reductions, cash and XX% discretionary costs, drive cash significantly performance costs the Premium at is efficiency, price a returns. in reinvesting hurdle in step-change reinvesting in the $X.X

XX% X last EOG has capital Quarters, the averaging over with back oil return employed earned a Looking $XX. on

We $XX premium on are oil, than double-digit with reinvestment, return begins double discipline, ROCE drilling. earning and it to way at our higher well and less

bolt-on premium deals, EOG approximate per X,XXX While and pursue for asset a core in of cost EOG. M&A double the turning bolt-on XX% do threshold XX,XXX new acres high-quality, across through with in low-cost acre. some of to inventory by hurdle. just EOG organic well record higher quality Premium and into we premium now large are are XXXX grow confident the In locations, are positions, years. low-cost rate exploration, inventory. well have improving cases and the bolt-on excess we at need existing infrastructure. premium of to acquisitions, of not through our year and our continue exploration, receive added improving returns did the acquisitions focused through opportunities XX X over double established an targeting core which has in after-tax acquisitions Exploration XX,XXX return benefit These productivity, premium immediate from an We're small we is inventory, costs organic 's like adding approximately $XXXX for inventory our months, through last the Delaware why assets. predominantly our outstanding expensive Basin Wells of X opportunistic double is premium on located we over can the past within the each deals. for adding

value long-term continue Our shareholder position our And exceptional creation. returns double-digit employees translating well-level EOG to into are for corporate returns.

Billy Here's operational on with an update our performance.

Billy Helms

Ezra. Thanks

oil our end Our well deliver we target, more of operating slightly the strong driven teams continue Once exceeded than to guidance, by production strong again, producing our results. high results.

result guidance sustainable of well the cost reductions. low addition, a In in of came as capital below end our

X% be We reduction half have targeted the of expect year. well XXXX. than more than cost lower last in our well now already X% first exceeded will our that average We cost

a in XXXX. this addition As to achieved XX% cost the well in reminder, savings is

Average day and continue than increased the service pressure lateral down the days more of completed improvements state are XX%. in inflationary in We see to drilling single a operational sector. outpaced the XX%,

and are utilizing discussed next on year. of increase recently packages our to well We a expect percentage this completions I about third year, Super-Zippers our that

are year-to-date. In costs flat down addition, to slightly sand our

line Water expand re-use XXXX. a and reduce in processing to expect cost source savings the and sand another start and XXXX, development sight sourcing to of significant have throughout into realizing continue of is infrastructure and savings, to of the we We our of areas. second half and re-use

expect higher-price for next. contracts several we and remainder rigs, the see drilling year have and of Finally, additional to this savings the of expiring renegotiated

to the of We reduce of also advantage balance take use areas. future sheet to our opportunities costs in several strength

lowest their EOG the anticipated increases. we're tubulars the across But drilling last immune were As our XXXX needed point. not at forward-looking process it mitigate for an prepurchase inflationary program our EOG helps approach example, when this to summer seeing pressures, industry. cost is we

As a working in our the efficiencies. reminder, the we're Well through of cost are actively XX% year down for cost, remaining and operational locked

handling mainly our of new XXXX. down begun that our ahead showing The operating focused cost being our As activity reducing results the our from placed in can goal always same and cost push to teams, usual, LOE, products on with well we artificial is reduced internally with lift. technology reduced developed water operational maintenance keeping services flat realized of at by per-unit are expense, next Savings being and assured to workover year's secure ultimate talented and expenses. lower a also driven is have year. each to you expense, effort lower rest with of But amount cost least our goal in as up being optimize well

the continual optimizing new only culture. volumes us great produce not the to but the greenhouse pleased, reduce ultimately reduce amount compression but are reduces of wells production as our gas-lift to several overall that also which rate. our costs, needed, other reducing not and satisfied, tools without gas have improvements These of well. help horsepower We help These reduce footprint required tools amount testament

routine year performance Nearly first in performance Water We year GHG last flaring. goal to reduced is investments used our performance net-zero operations our in our these pay gas ahead eliminate pace off. infrastructure was This can our us indicates reductions River to emissions continue on update Achieving of targets promise this reuse. from XXXX, results the of year. first XXXX. half XXXX, by meet in and our of sourced X% towards driven Powder last to putting the ambition and for quarter, step Basin water a improvements by XXXX also intensity emission's to ESG all path intensity. our greenhouse our methane, targets intensity you sustainable future to we from our in comfortably on further Operational flaring also final for rate

freshwater reducing of the For will be ongoing efforts by in supplied These the report in improve published insight detailed by U.S., and to water with used. achievements XXXX. water Company-wide XX%, October. total last on to less the in future sources to year roadmap than in along reused to X/X to be to net-zero to fill We're operations increased the pieces into get starting the performance, sustainability our

Here's the with Ken details.

Ken Boedeker

this for Thanks, emissions scope year, and Billy. GHG our we by net-zero XXXX. X our ambition announced scope Earlier X

gas. be determine Our will iterative oil approach efficiencies how it to and to ambition maximizing gas develop an aggressive, new is error. mirrors natural This and of requiring pilot minimizing of existing technologies but by We costs recoveries most we solutions achievable asset. and and creative process trial optimize applications effective we oil expect and the and an

Here, we technologies operations are then where to and reductions. feasible. successful apply maximize across aiming solutions our emissions We the

and operations, to strategy on generally from offset. three into sources and emissions are falls categories, for any emissions. remaining that capturing directly be reducing or capture, intensity we X focused path generally net from footprint. a operations concentrated reducing direct carbon is emissions fall That Reducing is, our emission's our from -- our storage, offsetting Our can reduce, immediate

leverage the redesign made Our initiatives returns to emissions in to equipment and using with scalable last in data four extensive approach through progress our and to results. in invest processes existing field, and to automate is and and invest achievable technologies, platform big upgrade years seek pilots efficiencies. new excellent mind We in the improve

downstream a XX%, the to As more Gas GHG pilot designed reduced flaring since an the rate event flared flaring our resource recently rate result, a that expand our natural closed-loop by capture system to future use. back Capture obtained have otherwise by further XX%, prevents XX%. intensity and intensity We a XXXX, back Gas is requires Gas in emissions that We stores The than percentage and that successful double-premium or into of which our and permits automated our Project, infrastructure inject a emissions. to reduces investment we of methane and our flaring result into redirects Wells. return existing a it investment modest The for have temporarily system been would project production beneficial the for interruption.

Our remaining X.X%. rollout of rate XX.X% capture in XXXX the gas more well-head capture additional of gas will hope systems was and closed-loop capture

Turning design is EOG's of a advantages capture emissions. launching store concentrated to can designed source our our leveraging generate project efforts design and project capture that we're for capturing operations. a returns field in from to COX we our from and believe and carbon direct by COX, emissions geology, This solutions carbon We facility to long-term capture storage. operations to competitive storage will

line of and currently are we efforts are to not those another efforts expand our CCS from emissions into business. looking Our directed operations, at

solutions it progresses. is GHG reductions. emissions also innovative on provide as other will EOG We our exploring Project CCS for pilot updates

deployed XX power lift. the and the used replacing carbon reduce liquids the field financial as natural stationary and fuel COX the of the gas Compressors substitution compressors full fuel, lowers to using are of gas with residue gas also efficiency. months, gas Over into past emissions source Using gas. for earns a of we pipeline projects lean emissions. NGL-rich value the By gas engine capital EOG lean natural intensity favorable recovering components versus several 's combustion largest improves operations EOG residue very can by those have fuel. natural return artificial which

blending Another fuel hydrogen gas. natural conducted we recently was substitution with test

returns. part early technology on solve net-zero quickly embraced business, EOG are XXXX we this innovative analyzing is improve just emissions evaluate or possible employees we be from to are our the that the of this problems, and test in ambition This an efforts bottom-up-driven scale. to stages, and about at possible. as We're very like blended carbon while industry-leading footprint the still initiative. The this We would is reductions, thrive applied fuel optimize culture cost of to challenge. efficiencies exploration economic success. has it data solutions While processes, create EOG type and and reductions a generating the our well focusing our minimize operational excited improvements, as

wrap to up. Now, here's Bill

Bill Thomas

Thanks, to takeaways. the Ken. like important I'd In conclusion, note following

by the Results and standard, year another future our demonstrate of first flow best they've the of earnings step change ever half power been. performance First, double-premium are of the potential performance. doubling our this reinvestment and the from and cash beginning of the

free committed improving Second, EOG performance is is better. improving not environmental getting commitment not has are satisfied. We're to performance the returns is to well changed. the returning to cash Sustainable and and that Cost higher culture to our innovative At also another shareholders driving flow time, same our potential returns driving cash Third, level. reduction same

The the history, strong talented and by that The has continues on team role, of finally, quality demonstrated, future already As about the I CEO transitions best quality we culture 's have leadership a as employees, priority. our supported to could hands. stronger shareholders for are and Company. the ability the this in be Company cylinders. all meaningful and to of The is of the excited into assets, future more listening. returning cash EOG all better. And never remains not Ezra our EOG fire been of Thanks unique great in to is incredibly get Company

to Now we'll Q&A go

Operator

Instructions]. question-and-answer questions Questions follow-up and Thank are conducted limited will you. The question. electronically. one one session be [Operator to

as as will time We permits. [Operator take many Instructions]. questions

question Mariani comes KeyBanc. Leo from go with ahead. first The Please

Leo Mariani

costs those just the around which these these economic, can a here. is on cheap get for highlighted guys and the you of of a -- you some were just bolt-on competition. guess natural captive to acre. my without per just to be lot the small infrastructure, ability obviously from you type of in sense are existing forward. seemed deals wanted going very repeatable buy at And function to bolt-on EOG deals very perspective, It per I And XXXX I very lot. you things like just a small just gives It's how guys, acreage acre success and fact it Hey that a of

Bill Thomas

I'm Yes, comment (ph) thanks, to on to Ezra Leo. ask going that.

Ezra Yacob

smaller in close XX highlighted. acreage position. low-cost to are Basin. things described and deals I over you within very, And or opportunities we've very our that these as core very together that across the are It's (ph) the positions deals, months. Delaware X XX,XXX Leo, different captured that pre-existing well. contiguous put And these acres These are position are either typically, our acreage our with past

highlighted the and lot sense oftentimes because And we're information our give a A type And our into seismic. right of And makes the the of but I ahead the the existing lot that have deals can to regards, throughout competition. outside that continuous are all these months on like we're not last them. all immediately so can infrastructure. XX of the to go opportunities these scale focused times, have We impact partner and surrounding these we wanted there's when deals pretty we year. deals by said, low-cost of these and a of plays some get throughout of wells sense go

Leo Mariani

factors getting wanted coming also year-to-date. $X mean, And little other as more to just Delaware in where that per I maybe perhaps F&B this double-premium. your concentration and more just any maybe helpful. out shift to a I part drilling under to That's South to BOE key down around how guys also talked I very know year, some higher color, provide be $X there's around like certain your a well key your helping, the a mix costs number can might some of about a are less than gas Okay. the Clearly, guess wells plays seems X? ask you some Texas move and for of the But (ph) I than there any are there that it, of attributed you bit just zones comment you seeing in of where about factors less Are drivers of certain color guess the you low there. I where it also

Bill Thomas

on Helms Billy comment Leo, that. will Hi

Billy Helms

compounding ago that It's back Leo. a We remember you and our Good Yeah. shifted function effect noted, to we're and improves. years premium a of premium. seeing moving premium a saw effort we morning, of you cost in strategy. on strictly of The similar continued if as few change lowering to we as we to have well double to history areas. when shift quality wells And same our double continuing just focus those a our

So there'll of costs. of might basin double-premium shifting And it's compete double-premium inventory as our impact the function wells, attributable on across not to to in category same it's the that I add and be add, of one look able other, both portfolio. to the we returns really or a just to wells to finding

Leo Mariani

guys. Thanks,

Operator

The go from next ahead. please question Securities, Neal Truist is Dingmann

Neal Dingmann

on to flow cash more how but any obviously, to first been a the you put when I in, be this, of you color that my that you guys. would Nice amount, really return, or just guaranteed there's more topic the if but guys of hot you talked would like seem love forward. My to coming to wondering return, free amount is guys others question around Billy, out ever not obviously of say sort going thoughts of just quarter. there about on -- shareholder the morning, that's issue, you have something amount you type about I'm if have or glad Good hear do flexible, that just guarantees type want much guys about these you don't think I'm seemed days.

Bill Thomas

we've a Yeah, Neal. clear consistently our delivered and We've on priorities. outlined framework very

best And what give the ask about want to look done so is past. on to more that. to I think And maybe Ezra we've in way the future at color the to

Ezra Yacob

We've in This on X, & which cash our on regular all X executing flow been we've our year (ph). that the XX%, framework been out. dividend laid successful we the our that. by we've presentation capital In able to Neal investor we priorities return. slide can there is reference of I increase Yes, feel primary of motive very think

year, debt last million we on year a our a XXth July $XXX reduce this by we to announced And able paid $XXX the million earlier which call. bond. third, during dividend by of we're then had special earnings just Secondly, retiring this

free our billion, is year-to-date our have $X.X which priorities generated. X.X cash flow framework is than the So slightly and we not changed. billion forward, commitment more going And

quality value little shift entire really and our small business. we these one Lastly, to the does, of Leo, the the opening shareholder inventory, cash remarks, we we've and a highlighted to the really our cash the the of done, avenues is continue a inventory executing which as continually well-positioned creating begins, is Company improve the free most bolt-on to and our we're also cash, acquisitions of And and of double-premium is where it the about some on as to with to potential, bit expand just strategy -- wells, the reflection our with in spoke that's the continues realize having return the that. drilling depth growing priorities. flow process We're to we committed as in

potential. Company continues improve, about excited we're that So, to as the

Neal Dingmann

continue stick then I a strategy there. out and Agree, return one really like -- you guys. opportunities the is cash guys just Exploration, really your follow-up. to

upside. it the the tell or Was U.S. going potential upside the business you the obviously into to see remind XXXX was was think for that you the a about number maybe you or Mentioned for again, have XX? Bill, it. here in things of I us leaders. last talk You unique us this continue just I just Could exploration you year, that forget be XX Could maybe projects it excited.

Bill Thomas

built XX into U.S. think is about we've outlined And the year exploration Neal I in this Capex what got the we've wells

some am Ezra give us more I ask So to to color on going that.

Ezra Yacob

all Yes, Neal. The prospects forward. exploration moving are

some XXXX. result COVID phases, of down call, during really last have started the to the a on move the of discussed during we as different prospect As slow all

we're on publicly planning wells As drilling mentioned, assets. XX outside the of discussed Bill just

of in these, of Some prospects, our initial some exploration the wells.

many them an call a We're the outgrowth the evaluating quality typically higher of repeatability Some still discussed, leasing of more of That's we'd and what across what's opportunities are rock of well. as we've appraisal wells, And as targeting done technical to are drilled a really an plays and basins been these completions we plays. been the lot drilling multiple progress with really, very work have happy And combine sharing modern apply across reservoirs we've of date look and that to technologies, overlooked. to to time. traditionally forward appropriate and we're those our at additional information horizontally

Neal Dingmann

Thank details. all. Great you,

Operator

The of with Please Doug next question ahead. Leggate go comes from Bank America.

Doug Leggate

Thank you, guys.

so to I think what retirement. to this on time -- move wonder, I Bill in had And see chance is transitioning maybe Congratulations excited little the first you I modal, you I've of a but of how to business changes with flow, Bill. free you a you has door, Ezra a lot business, forward growth the if There here is bit as the ask retrospective been speak. the to and your just a to could see on. walk out so cash

wondering thoughts can sector this going you EOG forward, any to offer So and that should level. the level I'm both business just how look at if as

As changes and take you look your that lot on place about back tenure time. the a

Bill Thomas

we've it's in returns, the moving positive mean, And over on right the incredibly much. since really great the an that it's right. thank Well, that obviously focus Doug. I always business been. year the started. you evolved last now Yeah, you're [Indiscernible] And has direction very business

we're I certainly to think that. and in of amount high think discipline, cashback a on I below positive. spending and well a and all leader The super significant excited generating capital flow focus shareholders, returns, cash is about returns very giving

entering era. we're new think more I been really it's positive think And before. super ever I than it's so And a

than as shareholders. going really macro-environment we, generate we're think back and I business going a an to give I And the we've been industry more in the to since more think returns in started. to are better positive

+ I solid. think OPEC is

disciplined. will the think I U.S. remain

really run in think for And good results. of is so industry the a long I

Doug Leggate

been today. argue, feature years you is you. so that backyard Bill, shell a obviously heads I organic exploration for you very you. many, touched Ezra, you've has at and We've asset could your was out guess, that been I good the position with acquisitions on as you bumping portfolio step-out sale today, why for and years, in so many package. of one and congratulations of look the again over did potentially follow-up an not rule a would for again, my luck. maybe position of high-quality the, would you a story you interested EOG if but far Yates say point, being at in M&A go business yourself large right the and There's acreage be clearly maybe to Thank your some and

Ezra Yacob

expense to costs, as not additive discussed inventory of program. organic to evaluating with through we that our profile high existing to or not opportunity of we're always PDP the small have to struggled Yes, the We're the deals, we've having packages the being success Company we're might larger inventory, deep large confident opening time. the No, to our acquisitions. the bolt-on the be working costs, but our of as the And quality. these Oftentimes Doug. the great due improve our the assets. any our of quality marketed We're this ability acquisition with quantity the with increase acreage to bolt-on return feeling additive very quality remarks, high And M&A acquisitions. discussed on compete in at both. We're focused either within small acreage high-return exploration

we're there. about our And prospects so excited

Doug Leggate

Very clear. Thanks, Ezra.

Operator

comes The from ahead. [Indiscernible] next go question please

Unidentified Analyst 1

Thank right. you. please. All Good morning, gentlemen. Two questions,

look And announced also, special near-term, you last of So, it being for we the us to at cash much is to such Bill talk in conditions But cash just question. are the the or better. in point substantial understand between in First can that cycle, at trying If to that is you differences? you conditions to January, debt variable key already you flow, is and of decide in and have special all consideration Quarter frame about we this to So, Quarter, being a the your that's that's do additional all if and not still reasonable If pay decision. we're more of you they're look can look how excess number as the you buyback those you don't that making what than level is dividend? you one, of decision met. met finite. is free what that which help maturity basically a the which specialty maybe the set first that's in think -- at the when maybe peak dividend this understand you

question, think question I interested is a guys your of it relate large-scale peers together many But pull yes, with the really second the large form are however, M&A to in which to of not asset work joint to basins, you that that sense, makes The you some venture. to, understandable.

ownership. own has So their still everyone equity

your it efficiency You don't know-how think any structure? premium, able even even technical you will of kind but makes you allow to pay asset use to sense that to EOG be drive and Do that you. larger for scale better to gains. apply for a Thank

Ezra Yacob

(ph). Paul Yeah,

we've think I shared think the and this. already it's I super question, On first important

back out we've pointed you our not money a framework on clear are and at And given of priorities -- all. Our delivered, consistently got a framework, and forward, changed shareholders. lot we've framework significantly that and very as to going

way. cash committed It's the very free flow, a all the really to at cash meaningful additional right time. right about shareholders in generate we're we thing returning to doing as So,

buybacks return. as our we're continues in so the along to to the we do total look about shareholder opportunistic long opportunistic -- at improve, the as option with As buybacks potential special we dividends, for excited have as framework, And Company and increase

Bill Thomas

now, being and our market consider good to environments have is would be to way executing in shares well the to back and undervalued. where process In opportunity opportunity the buybacks. buying execute able we on what significantly think is future. to consider to continue and dividend the not that's counter-cyclic go to Well, the times and special sought is an we're hoping that what the we're that's

that through I'm Billy of his that. On second ask and the on going to ceiling question give the M&A, from part Bill. question, think Thanks, your to large-scale

not same Ezra about more maybe quality On a JV, needs we're about have. we And talked it's we ago, the adding that approach our to a potential to as quantity the the as large-scale in forming assets but certainly minute inventory, apply. larger of interested about think M&A, just

are our unit lower apply improve efforts. across returns, make efforts we out volume As outside our assets -- that meet developing in and you know acreage the taken, the dilute of continue fence, to to our -- you build adding position not acreage if acreage. a have add as the We've ring-fence would cost also taken consider look lot infrastructure we of may build in our we that. in, of that or our the outside play, what to to to that That out as in may acreage and infrastructure for our we additional expectations core

forming capital Company they JVs each as Operator to acreage how can, think metrics. necessarily doesn't and of and their looks overall at I most use the the improve make efficient

think So at way I JV as shore Continuing not a doesn't about your the expansions. to dilute our quality, lot basin I to just up that. is thinking assets, base same part in we've your areas but very adds it expanding looked may a or while core that quality where do a up area come the of in applicable acreage, of of bolt-on think maybe a may

Unidentified Analyst 1

Thank you.

Operator

next go Your Arun with JPMorgan. comes Please question from ahead. Jayaram

Arun Jayaram

of with billion around minimum bond order EOG operations $X.XX $X keep that maybe maturity. the to Yeah. dividend. Good likes potential billion mentioned you just morning. beyond quarter, a incremental plus fund, starting to Last the some you. Tim, cash get the cash balance a I maybe wanted of return

to for that get like anything So and X.XX to return cash suggests of the dividend? beyond available is that billion cash you'd that beyond

Tim Driggers

Certainly, you can do more that us. but than it's that math, with

acquisitions. the the about All billion not is tremendously at things of cash the month. a vary Ezra the share the it's point are As those of Bill have the in and month, to is or look cycles, the during we all when bolt-on during there can not of priorities a X during times. necessarily end number, dividend, And the month. end The month low billion is so of it's play further, X those repurchases, our priorities determine all special if timing or at and and to talked another

all mind to do you that's So have that not that you yes, But keep math. to in is as can there but it. well

we're And been the to in it all half where look cycle. we than we've the X, priorities the We of have and has first brought as year. at on Slide our of at in pointed more out already in, distributed cash

way on that. well we're to our achieving So

the that to cash evaluate look of and generated move how that the year, we'll what second we'll half at at cash other As is through use we time.

Arun Jayaram

to us of maybe pros thoughts Could formulaic and return in the just cash maybe to on gotten question. a you've buyback? of approach especially feedback of shareholders some on a follow-up from of the and some cons moving around special and And type your Paul's dividend the even you Great. give terms

Bill Thomas

our where gotten on a as framework This dividend the they complicated through time. a Arun able do And we maximize from want be (ph). really right positive think to the is shareholder be returns. enormously It's framework. not special total it, the to was that framework, And said, at position in shareholder I've Yeah, right responses Bill. and thing a really super like We've to every it's a hit. when you

look by you really what history at If doing the years, dividend we've the we're dividends. several been now regular special on the working and over of increased we've last XXX%,

continue meaningful to forward, to it return back the to goal our the go through shareholders certainly we process. is As cash

have the process the pretty straightforward and to ability the pretty giving is framework the simple. think a total options thing right do shareholder to it's And if it's you us of a return. really, to it matter So, just maximize through

Arun Jayaram

Great. Bill, a thanks lot.

Operator

Scialla, ahead. Michael Stifel, is with from The please next go question

Michael Scialla

Bill, I a to Hey, know see next lower on flat outlook speak I'd everybody level great year. to costs well could good you a morning, career high on my well. for at want details and if as least to your early offer congratulations to but at XXXX, given give to like too it's

barrels see held still spent you you equal and flattish, than you If year. to hold off production would that just you the to +, could with this market lower look by do capital OPEC

Bill Thomas

team your got work able a early lot the management pace everybody. effort what, of it's been and we a a it's to effort too the team be capacity down. really Well, you demand great an we've team. It's talk to thank about About to with tell to on very honor XXXX, growth. of spare need drawn in It's recovery and watch EOG. super a appreciate comments. much employees you again I'd and We

speculate for really to want on that. some ask anything but make specific XXXX, don't we to So want on I additional color to Ezra

Ezra Yacob

Yes, Michael (ph).

the our we're conditions. that's flexible continuing on -- modify As needs what on efficiency growth. return the we've plans five-year said, Company. levels, lower pretty strengthening the And type determine base below discuss of forward, until factors Bill we the the progress great clearly we're not And and Every we still currently, early we to this year. to capital staying plan and of cost to grow to We're are going (ph) it's XXXX. EOG pre-COVID Company outlined That year, market our inventory see remain want to It's low to the we're reduction. cost any the to said, committed. to total We're barrels, is disciplined. made pretty early underlying market see that the committed for. want spare capacity, and the of have And fit be going going looking to to going market data well average. year demand and for

move regardless And potential to Company generation with expand flow any so this rates, forward, of we've set of EOG. cash growth type up to continue as free double-premium the investment the of we plan

Michael Scialla

flat, capital up, I you the XX next not is say? do is production that to And question just now, XX as the going see at my to guess, to the the over world you there fair it required really Okay. least if months hold that was, to were looks like

Ezra Yacob

certainly Yes, all well reducing mean, we're improving the costs fair Mike. That's time to productivity. I say. and

we're be maintenance to we've the future. directionally is So, we're today. past, our And future lower what in will hopeful done the that's it the in costs what in going do hopefully that and that's than certainly

Michael Scialla

just you're you at you are? this mentioned Ken source focused at Okay, your give least Can great. Where just want in -- there? COX you in fields CCS sounds up tilling about terms Is you pilot at of there. more detail I detail talk footprint. a on depleted offer -- it within more any storing emissions or any you partners looking specific, And can it's like you the with to EOG Ken of are have us then follow the what out point? can And there

Ken Boedeker

of time, offset. question. is capturing expertise, geologic but our that on we our it's point in for part This on we'll Thanks pilot a and on partnering any project, anticipate partners Sure. don't this on for And of with permanent thousands broader tax return operational pretty and evaluate and COX At And projects really surface. injection COX and case-by-case project stream really out feet much an future strategy that's giving time. to our have generate well concentrated emissions capture of reduced our basis. what a incentives, we an of can an this we're below of area a secured aggregated be via interval the storage, that at in can where in some geologic focused

Michael Scialla

you. Very good. Thank

Operator

go [Indiscernible] Please comes ahead. The from next question

Unidentified Analyst 2

Good morning. little spot To the bit. on put a you

various tubular to highlighted out You exposed as sticks and well the inflation. both cost being categories, significant also

pre-purchasing. the throw problem last with attack organization you some has that category? You year up that come out the cost with tackled to Can ideas

Ezra Yacob

comment Billy, do that? on want you to

Billy Helms

Yeah, needed steel we from to that. this tubular were take advantage greatly Bob. yes, year, year's going for program Obviously, benefited costs. good last fortunate pre-purchasing which of the we are is costs up, This tubular and morning, affecting very

approach future, the and look at to costs tubular try we go the coming same an program. use secure opportunistic in for drilling take to up As the next when

the next it's they the we're technology to completion operation on seeing our for our higher at lower some that down so, in to this Super-Zippers well is you times than drilling Undoubtedly, implementation we will rates side of other to come next year, and are slide the cost to give continue number tubular On have. newer that from tried be that. some to into of likely the those contracts we year across services to keep ways, year the look XX, color. efficiencies the going at trying why for flat from we're we'll And costs which

things to of that we of our offset those inflationary the mixture a business. in pressures see it's different use parts So we

Unidentified Analyst 2

dual quick just them clear. versus Super-Zippers that's And zipper think way a as even you contrast think frac frac? we of about follow-up, a a traditional the might could that where Okay, you say,

Billy Helms

Sure.

be Super-Zipper wells We in is differences of very calls over to similar close operation. individual actually pressures we keep industry our how rates So technique within [Indiscernible]. injection basis. Super-Zipper would the the The a very control on the and what it well-to-well implement

advancing a the it's procedure into the time. year, a very think and wells. fleet. very probably attacking expect the percentage rates the did us bit. pressures, we're going being conventional third a in advantages to And we to the next year wells, able We to we and is other detailed two closer give that less But this doing it's that scripted amount cost probably year, advantage go benefited double going into And quite to Last Company control year. you to like the XX% us tremendous it's get we with than allows technology So of of we of directionally are program. by across increase the Super-Zipper, from next stages really a our of a any just at a frac particular as day locations course that

Unidentified Analyst 2

Great, that. thanks for

Operator

with question Hanold next The go Markets, Capital please comes RBC from Scott ahead.

Scott Hanold

of again. also the fairly years tenure. successfully. lot downs And Bill past you I you ups congratulations all few Thanks. navigated your and to a over on give want Obviously,

certainly, maintain you flattish production So you're your where about general not wells, have get thoughts, the all seem oil I you than going can outperformance this to to If you know in think just you're to just running as of all especially that. the XXXX based XXXX your a it I congrats I position think doing how to talk range. be about end seems you of mean, bit growth? expected give better question, on would us production, production kind And expected. some you one the a just on a tapering into and little little you upper year? like and bit you for ahead are of

Ezra Yacob

thank on Scott, this Billy year for Yeah, and remainder comment the so you your going of much I'm to Fourth to ask the particularly again, Quarter. comments.

Billy Helms

Yeah. Scott. Good morning,

to seeing very wells to progress we've we're testament shifting the strategy both the the a performance are the we're double-premium reducing of the this certainly, bringing pleased So, our we and from made with It's on standard cost production well year. again. to

think So, with continue it's by then next of running as market the I but year you the higher we'll elaborated, bit count out the go continue of started tapered we need off start a into will at next this that hard the to Bill this year that expect year, bit rate year, anticipate activity of into as the year, certainly. And pretty pace we're performance will conditions. see this year through end in what be of activity dictated the the level, rig and the to seeing little the what And rest little year. higher year we're we and we and had a now a consistent

the I will flat that's performance our So at improve. or you. to give color stay But could continue least

Scott Hanold

for Thank that. Understood. you

Operator

Mehta Company. The with next Neil Sachs and question Goldman comes from

Neil Mehta

love are how analytics the them? Congratulations, talked you here each evolving these would macro. evaluating latest lot morning, And parameters moving building as here. are about U.S. pieces of a congratulations, Good I are little you oil OPEC, a barrels, of thoughts, team. Ezra. supply, guys Bill. last your monitoring the around real-time demand bit uncertainty, Bill, Quarter, you that

Bill Thomas

expect Neil, already is pre-COVID seen, the by with that, world. demand X-year it's but virus really are average, bit obviously -- all due in a we've a and 'XX. few U.S. where areas, on lumpy, the expect reached early in definitely strong to be in Yeah, even as below we to resurgent a the the recovery, we Inventories demand

we've be I be U.S. that solid. there'll disciplined as not look And And checked. seen next U.S. we but growth. been already that year, the they will before, has side, and that on the much stay the very in to +, said supply So believe small OPEC growth

will needed So Quarter fair see bring spare or since the gradually. very see If We'll capacity to we recovery be have we the it goes as low a continue the positive like very their to shut-in continues, macro-environment. they to on capacity year. of by but volumes just the we back overall, Second and by how middle next expect, see watch

Neil Mehta

Bakken. But about out Has profile, little being And it how of of you you're of by bit is, asked to about are Where as granular then we What we efficiencies of by you production Permian, terms in driven the is maybe those being the terms in resource just, U.S. we seeing and you where shales? best plays? those efficiencies? the can in the a And The the the you get terms think slowdown capital question follow-up thinking discipline? more maybe is are or volumes. each about are of talk been continue in Eagle U.S. the driven driven in Ford, resource the of maturity production is get maturity? really

Bill Thomas

different see we the Yeah. see groups definitely the not general, private, majors, the to well we in the on the private's and productivity particularly the run down, all is public's to from in going numbers up. We

specifically production improving well maturity. for of EOG, -- but not other that then And over growing about to function a flat think -- even And is in to takes overall, be resource more think that a time. or see groups, generally I it well wells the productive to so production So, group not lot maintain it. we

when and think all I that, the timing get think you productivity. in in subdue to and that spacing, I down-spacing, going and it's

in factor, flow And so we've spending cash discipline course, been the in where previous the in spending the year. biggest than you're less tremendous capital of amount of is literally,

all -- significantly see we route. we year. together, put that not did think and not a not you We see will the with did we next discipline remain when So growing that U.S.

very the positive, and a positive think, that's for So I shareholders for macro.

Neil Mehta

Thanks, Bill.

Operator

Thomas our remarks. back conference for concludes turn I over would the This closing any to to session. Mr. question-and-answer like

Bill Thomas

to the all like EOG truly a on make and to an with continue successful. to the who be honor employees same one to privilege so In each you. say you thank team EOG I'd of It's closing,

As Chief President team, I of Ezra could Billy excited Operating up the the rest CEO and not more steps management transitions Officer, senior into about Company. future the be to role and the along with the of

So much and certainly and to thanks you to for future thank shareholders, shareholders you your listening all for we support. tell very want

Operator

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

disconnect. now may You

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