EOG Resources (EOG) 25 Feb 222021 Q4 Earnings call transcript

Company Profile

Participants

Tim Driggers	CFO
Ezra Yacob	CEO
Lloyd Helms	President
Kenneth Boedeker	Senior Key Executive
Lance Terveen	Senior VP, Marketing
Jeffrey Leitzell	Senior Key Executive
Paul Cheng	Scotiabank
Arun Jayaram	JPMorgan Securities
Doug Leggate	Bank of America
Scott Gruber	Citigroup
Neal Dingmann	Truist Securities
Scott Hanold	RBC Capital Markets
Leo Mariani	KeyBanc
Jeannie Wai	Barclays
Neil Mehta	Golman Sachs

Call transcript

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Operator

Good day, everyone, and welcome to the EOG Resources Fourth Quarter and Full Year 2021 Annual 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 Chief Financial Officer of EOG Resources, Mr. Tim Driggers. Please go ahead, sir.

Tim Driggers

for thanks and morning, joining us. Good call conference includes forward-looking statements. This the cause Factors statements to in EOG's our differ could filings. have release SEC materially outlined forward-looking results our actual that and in from been earnings those financial conference This measures. certain also contains call non-GAAP reconciliations those non-GAAP the website. be on measures schedules for and can EOG's Definitions found

reporting the the of reserves this accordance estimated this potential resource on the and Ezra calculated with may in on call Some conference estimates guidelines. SEC's are morning reserve not call reserve potential include Participating necessarily estimated Chief President VP, Yacob, Streit, and and Operating Officer; Senior Exploration Executive Leitzell, and Terveen, David Jeff and Investor Exploration EVP, & Chief VP, Officer; Billy Marketing; Lance Production; Public Helms, Ken Relations. Production; EVB, Boedeker,

Ezra. Here's

Ezra Yacob

low returns decisions, gas and share drive investment to our the our for capital XXXX We regular earning per hurdle share well. life X doubled for years everyone. The we natural cash averaged $XX. operations. free with price. return improvement X And record $X.X record-setting premium oil Thanks, of $X.XX while announced $X The of $X.X rate and Last of that fixed income earnings our funded that XX% $XX record shift to is billion Tim. earned earnings We per Premium XX% continuing $X.XX special net lower the the from of year shattered We generated calculate cash internal an in to was oil our rate EOG. are was our a prices uses was of that on commodity we time additional $X.XX billion, per record special XX% cash about dividend $X.X for allocation free billion morning, year a an a oil. which record $XX flow, catalyst Good shareholders. paid of with deliver higher that last dividend to priorities ago. we record set earned cash XXXX. this flow year, yesterday That's out paying share. with dividends,

the the strategy of observable development quick given enduring directly While on investment improving operating using ensures steadily benefit over has full-cycle significant year, is That our last costs. level our premium prices And bar our fixed well-level cash impact in low returns making and The of payouts double to durable financial the impact face margins to again premium. now we corporate raised decisions of commodity statements. the year, any high time. impact is and more and

XX% Our of XX% same return oil in years through fixed promises hurdle to to the prices direct cycles. value of $XX commodity after-tax our rate us what and is confidence great from ahead increased financial gives natural gas. to low in The of the switch $X.XX a shareholder further ability improve and delivering using performance minimum rate price continue

performance increase of that financial to We as hurdle step on XXXX EOG. year like on do our we we expect back return in change another made permanent a drove XXXX look to the the

costs inflationary volumes, operating We year. also of promised able we XXXX target line and well flaring performance. to existing with injury by XXXX successfully costs were We rates lower emissions percentage our We increased rates. eliminate XXXX ESG X%. our XXXX routine delivered goal greenhouse to as added and for reuse. net-zero water and year by beginning the at set year production big in We our our emissions reduced to and targets methane a for gas near-term offset also announced operationally the in during better methane and than ambition or emerging the to was CapEx pressures

oil energy produce our environmental creative also to the high-return on not net-zero to gas and only solution. progress have of have towards with part solution, make be will one footprints. existing in we we to that of the know recognition path our that have barrels, lowest play to to low-cost, to that We develop long-term technology role a do growing solutions, leveraging continue ambition. We it There's

XXXX, oil to a into look market we the As in year. the global during is rebalance position

flow. to Our the exploration free both also shareholder disciplined to improve and infrastructure the increase reinvestment capital near-term plan funds future value structure aims through of long-term and high-return long-term that projects optimizes plan business. cash cost The

combined the once a positioned in is commodity made to higher flow. we environment, improvements business year, EOG generate free price cash with the With again last significant

flow follow free to on our priorities. We through cash continue

quarter we We to fourth as have the structure, with cash further remain $X expect the them year sheet, can double premium, when unfolds. stellar Combined has a dividend smaller committed Higher free long-standing cash a of in more a than to with to per to yesterday. strengthened the our shift declared we $X balance footprint lower firmly the downturn cash company continue you cash the better to deliver flow, overcome and and culture a strengthen entered our regular shareholders environmental it. to much flow share by committed returns together. us priorities, return return special EOG exited shareholders challenges on free we we with the EOG cost performance Our dividend, XXXX. per already and to have billion cash $X.X allowed returning and are to share

the Our we EOG's all employees. leadership. matter the that technology culture value, resiliency number of from is one improvement our that and humble cycle success. value fundamentals our constant By of sustained and long-term consistently the Of them drives honest, the without intellectually execution commitment, of create remaining none driver

Tim financial review our position. here's to Now

Tim Driggers

earnings right results $X record forecast billion of fourth $X.X finished of $X.X cash target. in free production financial billion flow Thanks, generated and quarter Capital while Ezra. of in with the our expenditures with EOG billion. line adjusted above volumes were

is outperformance. prices oil $XX. as prices down when for year, per in what most price be to share. for years. up. at in while been the than The driving the the to adjusted using original XX%, Keep to the illustrated better XXXX, reflect XX% XXXX This the have $X $XX in record ROCE the premium highest success oil per EOG's introduced, made Perhaps impact billion important coming premium, mind line investment yielded grow will investment required of $X.XX year employed show our bottom of cost For industry. of premium a low But setting beginning records capital drove was over double like business threshold The switch averaged of back ROCE our or our will financial as in the improvements on were just it the standard that structure. of $XX our full return excess at the would benefits was earnings XX% barrel. barrel. or dramatic is oil per profitability

billion, an yield and goal regular cycle, of record broader to position than our less cash that at returns free company Our cycle to with priorities. $X.X is the market share and $XX at price. dividend We per represents XXXX doubled a the consistent $X now this economic was we cash stands share a Free the the which oil deployed generate annual and are X.X% a long-standing rate, the the on current earn flow flow at cash in than bottom returns better basis. full

the than We model cut been business that history. more dividend confident to has share. or support high-return finishing dividends were never able combined a address per effectively in cash a the a $X We We X year are paid also net in special cost position, return We this with financial for to debt. priorities. solidified sustainability dental X suspended our XX-year low of our

now authorization, $X buyback our We also billion. stands refreshed which at

look of and billion opportunistic in flow, of cash E&P discretionary leaders will cash for This flow XXXX. basis. this XX% cash to free returned to EOG cash XX% We of in EOG return total, shareholders on represents XXXX. utilize putting an among In industry $X.X

at plan capital $XX cash capital. XXXX, on reinvestment of and $X after-tax course, in $XX oil. At is to ahead last to XX%] capital expect year. to taxpayer $XX flow. funded basis, cash more were generate a full before resulting Looking about This, $X.X free we billion operations ratio, our plan from a as can billion in expect nearly The XXXX billion working than be about in we be an cash dividend we as of oil, regular flow represents disciplined

to $X.XX dividend regular We a to EOG deliver an highest dividend is our continue are every on The excellent position regular priority shareholders. free quarter. declared yesterday, cash our in of XXXX. to in which is evaluated the returning priorities cash flow for size

we structure dividend. EOG of cost improve, in to reflected that continues of performance the continued will the growth be expect As financial and

other billion balance further Turning countercyclical us priority. bolster and advantage to and our carry allows going prepare of $X buyback we forward. prices higher This support the high cash our to oil to take plan period of a to balance build sheet. authorization opportunities, To second renewed

value significant strong opportunities there will expect We shareholder right ample and by create in deploying future be a balance at the time. the liquidity sheet to

has return billion March. shareholders in the yesterday Finally, Along share dividend, an with announced we XXXX. additional paid to in shareholders with committed dividend a $X.X be $X to special to return already to also per regular of cash EOG cash

free continuing to to of all on We fully cash priorities. are our deliver committed flow

Here's Billy.

Lloyd Helms

Tim. Thanks,

First, their for accomplishments performance. their safety especially stellar I outstanding want proud I'm last execution employees of year. our of to thank all and

cost a find increase record efficiencies lowered In operations we and addition average we outstanding year. the well at to and improvements, the X%, by of start beating to the achieved the target and X% set financial low opportunities innovate

that faster are of achieving technical procedures the with lower on drive tools Our focusing by depths daily performance. and drilling reliability targeted teams cost

and have XX% play, such through by refine And operation organization generate since wells, since continue them teamwork decentralized for Wolfcamp rig teams play, and our fleet, example, to drilling a ideas drilling drilling our Basin drive resulting the improvement share performance across our several thousand our in for in innovative company. XXXX. areas, approach In the as improved areas and continue improved in teams throughout oil drill Ford to motor Eagle with Delaware collaborative we drilling For reduction the days our costs our design to XXXX. bit our to operational to performance after consistent XX%

water removing wells and the pipelines local a benefit with costs total Super line water the they And great expand level and side, a expand oilfield also higher about to Utilizing These and the benefited cash cost our in offset from includes added Completion management. to are integrated Zipper we water year. from our production, contributing to water of savings technique lower use to Cash The inflationary of of of were to infrastructure. a efforts operating On last completed of sand safer the cost pre-pandemic trucks sand completion operating through were while a our one-third delivering row simo-frac reuse made costs or emissions. starts with equivalent nearly forecast. self-sourcing reduced produced in pressure. improvements reducing focus XXXX. help efforts and result of XXXX expenses on in will workover in our additional

had also by metrics. year incident our our XX%. ESG calculations performance rate Preliminary about total great indicate another percentage that our XX% by and emissions improving we methane recordable We reduced

XX.X% achieved report final gas a resource increased from XX%. We as wellhead are results target metrics our Again, sustainability will year. to these be also our for and later reuse this preliminary capture water in published

these year's fleets fleet we needed Over and frac management XXXX, term for to across under chain of through existing agreements of that multiple to services, are innovation self-sourcing the seeing to and is program drilling contracting XX% with As of But advances, technical not enter XX% we inflationary providers. industry. have our and and offset supply our EOG this our immune line materials. execute over we're inflation sight covered pressures

completion drive prices EOG technical while secure ability vendors of ownership partnerships take to of eliminate source performance, and activity provide improvements at downtime. a run reliable providing the of favorable to various drilling longer-term business. the and high-performing EOG's vendor to aspects predictable Our the their and teams teams operations

As performance. a sustainably we -- result, our will see we improve opportunities to still

efficiency Some gains operations be in year. of the will this largest our completion

our enhancing efforts, of the utilize of example, XX% our inflation. also needed per not increasing local on We're which lateral for offset Zipper our technique expect Super secure the about but only For to amount self-sourced day. wells, to treated we the the effects expect year, material sand also we of

our to remain improved well keep that expense. lease expand will that capital in to offsetting to able We in and in be capabilities both least our flat We XXXX. at program continue assist inflation continues capital EOG's efficiency confident cost operating improve improve reuse as we'll innovation water operational a bring execution. of challenges our the continuous a XXXX further result to And through and of business I'm EOG's talented inflationary improvement. of and be year our excited to culture headwinds. opportunity looks employees about to

year-end an Ken update. the Here's provide review to reserves and inventory

Kenneth Boedeker

we XX%. Last produced and more than costs replaced by what year, Xx development reduced and Thanks, finding we our Billy.

Our continues innovation ease corporate and by and drilling costs our culture permanent why efficiencies to our driven shift focus to continue our improve, rate and unique DD&A to premium and on finding to capital efficiency decline.

year-over-year. represents of million of increase a XX%. XXXX over was price standard to and base per barrels $X.XX oil of barrel XX% equivalent, we oil due than for over implementation XXX% X.X grew to costs the our development premium With and finding last grading in double future we replacement XXXX, Our development reserves finding XXX the of excluding our total and downturn our development barrels more prior billion reserve equivalent. in of reduced Since changes. have equivalent schedule, of strategy, cost This reserves commodity booked reserve revisions of by a our oil just and premium by high XXXX the for

terms In basins double we replacing in over future locations added the year across well premium XXXX, our last to of locations, inventory net by XXX XXX%. XXX drilled multiple

inventory rock, to And drive don't on the with the we locations is are we than adding focus inventory. faster cost improvements quality combine more improving. efficiencies. improve premium of quality We continues and it, the double higher inventory median further that need the sustainable the we is and growing Innovation return our of developing portfolio. drill to operational when you Our

the our XX,XXX this focused in now double premium of are more pace. than improving at total drilling for inventory, our of quality. our representing accounts locations We X,XXX on mind, XX the years inventory With current premium inventory in

turn me let Now to the call Ezra. back

Ezra Yacob

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

on use commodity full demands a of the capital. decisions emphasis investment efficient puts of on low cost development based price First, cycle and

the and time. we results are larger year. last was benefits stellar have immediately, seed builds to set premium in stage the ago, performance X over The While in the of XXXX instituting strategy established premium by the the realized next change step such discipline for our impact years financial double

Second, inflationary innovative we this and are EOG's culture confident offset year. can pressures technology-driven

high focused in only to margins improving years Our XXXX disciplined continue well. future but is plan capital not in return our reinvestment as on

third rate cash we The EOG quarter's and cash to of Third, remain dividend we and best durability demonstrated in a to yet free our than special truly of will regular confidence dividend are growth return of returning to year. is priority. performance. increase the continue our shareholders. through dividend less XX% our regular efficiency We performance, nearly our method improved preferred is future committed the to flow to of Doubling a capital return this low-cost operations this year, cash the to last indicates believe are in dividend shareholders. We the through well And come. as of the regular

bring competitive listening. recognition value than society, we Thanks to company a a shareholder with better the profile Going the and has more never significant long-term market been broader positioned forward value. growing generate as and an for ever to financial of a industry with EOG

to we'll Now go Q&A.

Operator

comes from Scotiabank. [Operator first yours. today Cheng question from ahead. Please Instructions] The go line Our Paul is

Paul Cheng

question. that that asked or we get profile, your that, That's change with if what commodity revised? by hold plan that the price the production been first First, have current by your plan pan circumstances many mid-year, CapEx will the under may you and

you up is percent proxy question the more a the will will also Or resource to percentage is in new and processing, is and which second in the total you're capital way The and future? see about CapEx XX% trying future be that of your we drilling, this up the XXXX go the in reasonable domestic prove as area? gathering will allocation, new the your percentage year that how as facility those a

Ezra Yacob

the Yes. indicators. over not seeing. price is oil first Paul, approaching see hand fundamentals looking year, and to really to based that With question to regards are market about, this and question, I'll way plan price you. the is that then other Ezra. underlying Billy to oil talked answer we're broad supporting we've I'll second macroeconomic planning this on our for our and the We're answer that as here the we're the

capital expand plan, this with we a our really When starts increased 'XX at flow reserves very when cash company, those potential it look cost well flow as with balances years. and the cash of to we supports It's year level the basis the high-return So company's helps increase of it the the our program. returns drive wells. designed allows flow margins. we've free further cash And It in investing premium in think flow continues what high it and priorities. free free we our bring continue into future double company us low-cost the financials, as cash down delivering to corporate that the

is this not year improve at into us important assets. each but look a to program that that's to every and learnings allowed it capture as the pace future part we most to forward question. So year, that go to to of in And technical And the years incorporate thing the of turn second our XXXX, I'll only to to Billy the answer do over continue well.

Lloyd Helms

Paul. Yes,

The the and The want about been same plays then consistent many we'll has pace just get question, we Basin to the that excited infrastructure second fund mentioned. in infrastructure or new percent area. our always spend learn allocated continue given where with spend the more developing pace of too to really be drilling out we like same be of at about spending, in the the the we way. commensurate as potential fairly of beyond development Delaware better And we largest remain sure to potential but always will CapEx activity managed exploration continue front percentage our in a can to expect consistent our to development -- emerging forward. going at and a make our play. see plays amount we year, to dedicated I forward, done be going going in and the and in new it the plays. exploration get spend, On to a each been and infrastructure We far fairly with forward domestic that past the those Ezra have I will continue the part XXXX it's it's And expect

the be to continue will that expect I case. So

Operator

Arun comes ahead. Our next from Please question today from go Securities. Jayaram JPMorgan

Your open. now line is

Arun Jayaram

right clearly Yes. in focus Global gas now. is

thoughts provide wanted get linkage with your more agreement on the I to So revamped to which JKM. will you

you're today, to gas selling a think I and was the over wondering I how sense shared of give from shed could And you MMBtu, you about the XXX economic type LNG? that amongst increases timing XXX,XXX is some on light and realizations get rent marketing us of the if time. you to and

Lance Terveen

X new is in to Lance. got we've mean, very And have I morning. good just that this right. price can amendment right. the first-mover being you a just that or Arun, the moving that excited really thousands exactly realizations, XXXX. you that saying speaks think look right to we I are having that was prices near you I And about with you're We're capability, exactly started there at really is JKM see as now, $XX, first exposure quickly move because can get can spot see

very commitment. the mentioned in about think you a it's your We're in way we realizations. excited very question, price positive As our about as been impactful

You're right, up. ramps it

ramp go the XXX service. But Hub. we've you So started the into service. into there, linked for we the as estimated to Henry -- up. if we We that X XXX,XXX they That's Stage probably as that remember go will sell we with still MMBtu that's today to XXXX. ramp be to Stage today kind day got and in we $XXX will first And XXX of a extended we have the goes to into X maintain XXX the

They've we're on So their It's excited demonstrated brownfield projects. many about early it. facility. a of being

to grow the price realizations So standpoint from see and that expect see relationship well. materialize we're excited as to our

Arun Jayaram

to looks Ezra, on XXXX And a allocate program. net guided than it, bit XXX more Delaware a bit on versus Eagle your to be your want Eagle activity little more color the Ford Ford? call get the bone while the my follow-up decision we is second down, wells, like activity. XX% to up just It more, you will XX% capital including year-over-year, more to be Delaware more will

us was little a you I bit there. So wondering color of if could give

Lloyd Helms

Arun, Helms. is this Billy Yes.

play a to been this it's has allocating more And we're be. Delaware the returns money The active to the highly has and was yes, bit the the that its Ford generated really the at ago. function company year I would play economic Eagle certainly XX for guess, XX of So years the and than, Ford I best Basin. ever of play in more just for maturity years single a remind been Ford we've everybody continues an last little a since inception Eagle Eagle point.

of but maturity more lot horizons And the expand over has cycle grow development still its The new mature. capabilities and lot earlier and in so play, other hand is still time. a on is our it's and a test very to it valuable in a this Delaware Basin opportunity still life

it's lot younger its So a maturity phase. in just

activity will I more it think side. bit little So on that command a naturally

Operator

ahead. America. Our line from of comes is The Doug next question yours. Leggate from Please today Bank go

Doug Leggate

to spoke course impact I production profile mix sustaining about prices. double were the and the talking of the and capital the you you, wells on time breakeven oil Last in of premium

us if comes obviously The could given us So today through I breakeven a, walk see the I XX guess, you in of some that? you've growth capital. just wonder with element you how

see my capital? you that How question. first do That's you the sustaining see trending? do breakeven how So

Ezra Yacob

I reduction cost increasing And wells. lower is of with is back bringing additional reserves, what year this Thanks that double company's a combined on a X% into cost well for Yes. maintenance the Doug, improvement, the the mean percentage Yes, those question. the by then capital financials. of and last of our the well Ezra. premium

which decrease, for is to continues capital maintenance fantastic Our us.

double the today commensurate only CapEx really wells, rapid this very that But Not with we have the is -- year. a program for the is $XX premium on stress breakeven provided enough. that we right, the show with and actually impact it does our can't high out You're and really start we the payout by free those potential over show cash the does an generation to full company, company of in return, and base of the lower rate but decline the reserves a impact time, up flow bringing returns it into of lower-cost future. cycle the

Doug Leggate

where those So numbers today, and breakeven? sustaining you the think are the do X capital ex-growth

Ezra Yacob

Yes.

we we've into So didn't maintenance call the due Dorado to that the to started earnings this fact a release play. capital allocate capital some additional

one And big we've messy year for as we to so it. with continued way required full shows you slide a it starting to And results that with outlined it the and down well price drive capital improvements in to well year-over-year, the mix present price on starts cost see down to that the is deck oil breakeven. to think we've from we cycle change And get a what is BOE X% return to our a that made can you a last on as we employed. we a $XX. step Dorado reduction like for we are dedicate the as that XX% drove the capital have return, play going as the I Nevertheless, additional slight start little bit into we there the equivalent see phenomenal

Doug Leggate

the no the slide after out authorization. My could wipe a transparent. it's special your follow-up inventory $X return deck of is north cash Therefore, wondering justifiable. essentially so Tim. billion more still to it's and of more in why question, that really could capital your on, majority with buybacks the be for of just framework? level a breakeven need and offer flow -- you bit year showing some with becomes maybe of I'm kind Because The the capital a valuation your buyback of share allocation feel you're perhaps duration transparency little clearly, of free

to reluctant down So that just why there. curious it I'm you've go now leave route? I'll been

Ezra Yacob

Doug, is this Ezra Yes. again.

sustainable really of our flow dividend efficiency regular dividend. what regular indicative that begins And go-forward our that premium we're on flow, double it's reflects back about with ultimately just trying value first, 'XX, free regular take at cost and a investment the to we with commodity the we of continuing Just It the to what company, the through-the-cycle were in cash base trying dividend. the to company. to in of cash reiterate wells capital also from what In cycles priorities, our to the away focused And to and growth doubled lowering increase trying the Again, we're creating accomplish. price commitment dividend small the of the that's inevitable is and going us, free industry. do. least talking the of step

billion or return we then The opportunistic the we last form second talking in competitive And third, now which as cyclical balance a cash repurchases. repurchase for a then the pristine tremendous is we're million to flow share year, the we've free sheet, -- more of what about specials demonstrated general, our than And of are priority us additional cash In industry. cash use we $X.X talked the in also regular. going talked $X is with per early $XXX reserve opportunities obviously programmatic. our in form provides advantage year. return we're about, right about to in And what dividends the special commitment and that is opportunistic through the retired be bond

rising is, it times is as measure price, the an the that repurchase of measure we to prefer about think or expect oil in share our any investment way business. one in So share same dividends. us times really, that we And as do special we to the can to way across think you investments

stick environment on returns the sure an it we dividend as make for that And want like still prefer competes in that's a basis. cash return. the we So additional with to special this priority why to

Operator

comes ahead. Scott Please next Citigroup. from Our today question Gruber from go

line Your is open.

Scott Gruber

questioning, that start the the of build of on about is net Tim. think should year, following your given being No. at we over here negative that cash Just line largely debt This the is

-- we have are our net going position balance forward. in be all, of where are going have to we to a to a First balance excited cash cash

times said sheet to -- to the that come just in we in build specials meaningful oil cash So buybacks opening during cash that the and on a price opportunities deploy in continue, in countercyclical as opportunistic environment. the my for way along the we'll continue countercyclical or or will these in look of to balance high remarks, stock things I form scenarios more

again, sheet. will these more answer, balance we environment, is -- be in be on building high So the no, price cash will we the

Scott Gruber

on the the appreciate clarification. expanded agreement. I you. then congrats And Got export

round guys along like Just It thinking aggressive about kind another in there. of the the terms? advantaged to you agreements, the foresee traditional diversification at want of Do additional to entering industry sanctioning look expanded through lens? spread? and want likely capture on Hub project Or LNG there's Gulf you'd kind is seems thinking of position JKM spread similar you more How and you you broader do backdrop think Henry that capture? EOG that's Do sustainable Coast. an additional here, that to agreements

Lance Terveen

This Yes, Scott. your for is Lance. Thanks question.

capability transact close our of us: proximity; like think about but very point I what really that operating positions each you one, we're we is it areas and can in quickly. think you can transportation our we about you have puts the I that to we really two, think have,

I'd I new you in So And yes, we're interested would point then I to that. first, think secondly, say always opportunities.

we will And we plan. be as move go opportunities, our new as And be as heard going like commensurate at look you plans a it's we'll continuing So about Billy we be business that forward forward, from at from to will look definitely talk really looking development about you then volumes. our our to a like be on commensurate think with but you that at as standpoint. -- growth,

Operator

Our yours. The comes Please Neal next is line question from Dingmann Securities. go today Truist from ahead.

Neal Dingmann

ask Maybe more thinking out pay I you continuing look metrics popular all shareholder forward, higher exact how certain just is know paying And one up most you're you're that that XX% flow. that know your even go maybe going strong continue pay to a a at internally wondering cash or over XX% sort or a for out were of I something payout, or free amount. you the like you something now go your But cash targeting? flow? a given I'm some there question. I potentially there on of on out you're have to forward, XX% to Tim, to would is on But just return. guys that you have know always to not on free over something the want out

Ezra Yacob

Yes. This is Ezra.

the to year. to flexibility because another have in thing formula the time want Said over year have we've balance positive shareholders is continue protected to the we that, a on buybacks. reflects we and thrilled sheet is a the We've But And on shareholder a We our in evaluation, in these we amount, that support do. we've balance way be value dividend flow to last that regular top return of is with able we're dividends at of way, we that then strength that specials on quarter this that I great to strengthen don't offer are specific the this from right to return that a way taken to cycles. of again, to we last opportunity right evaluate to commodity in be think dividend I past our the the correct, base quarter. going year. price And that competitive out And through first position respect basically of to cash strength to the the priority return and cash our what significant the number cash We really demonstrated continued that, again, where I as announcement the And environment say sheet free maximize to the position are, can basis. providing $X.XX a essentially, target we through our with and stay the a were cash and would with the forward. in such doubled value to cycles. underlying do create both We where billion in that you're think, cash per position share it confidence cash the pay the business form offer returns. $X.X a offer of away a quarterly down excess -- the one experiencing continue in additional

Neal Dingmann

you the about up I can I notice or say, number would NGL area I've bump talk the you in could a plans nice Or you talk Is it in that could now Maybe what's driving of have sort the there? of seen Marcellus of area. wells a guide. on sort -- liquids obviously side growth about area, the

Ezra Yacob

dry know. of discussed a we Yes. Marcellus respect you exploration, really gas Pennsylvania. of to in of actually was the really in the that some part that's position acreage guys With a couple We opportunities ago haven't years of other publicly, as our there that divested Marcellus

and First and always improve quality organically mover inventory. exploration company. be to foremost, the of we're striving a We're first an our

progressing. of be some look year dominantly increasing delineation you oil expertise. all the or that the they're doing of continue just U.S., we on to provide we're horizontal of we'll higher across from completions exploration more cost so or drilling. will encouraged that. details has last we last color low-cost we've say though, with exploration been focused, said, don't I of they're general, about just And XX other and wells multiple year Domestically, the lower think bit We In finding a our that we've year, goal drilling quality oil-focused oil to finished our find XX find like we appraisal some this returns than our the to program past, year. with reservoirs we opportunities to last little the slightly the that for And of exploit to that across year reserves. to said explore about opportunities, can the forward to add program It's this inventory and a the our exploration So are we and and discuss talked perspective. that I had is results as entry, in as not really drilling the number

we them actually bring company opportunities these help a and cost takes the able contributor of discover going to that be to lower and it our going they're to really time evaluate can forward. significant base to so And the be portfolio into the where mix

Neal Dingmann

on follow-up just I that. a And guess

contracts than processing of year. mode of As reject that's those have much opportunity the going we several fact to several the and guide to NGL we're much make -- simply the our far up, how NGL this going as pricing, that of of more be forward function the or of mode as we in an rejection a strength recover on election with simply contracts recovery assuming we'll in

Operator

Markets. Hanold Our The line is from comes Capital Scott ahead. next today go Please question RBC from yours.

Scott Hanold

exploration Oman think Australia. think And maybe exploration there? you the some offshore of U.S. versus about international And you a you the international us update any talked work Can just give little since there know doing I in all were sense how or opportunities? in how about bit U.S. you onshore about opportunities? opportunities in Is do a you

Ezra Yacob

Scott, horizontal. to to what access with permitting it, talked need services next the Yes. opportunities -- that really initiate had a have Oman. international one, half phase you a drilling to recall, saying commitment. really drilling natural have discovery here. And hurdle It one to but our low of we as our prospect, need plan decided the have to we wells, exploratory contracts, Oman, to not a considered not included and But have existing which then superior did is quality in about, as there. the And general, because to we we've that X currently, was year. those in Australia, opportunity. geology We during into much We in inventory higher of ultimately, just in of to to just We we're competitive, entry we a with and there. horizontal, have find the X-well still completed we they 'XX, the announce, In made cost drilled going we of additive compete second short simply that portfolio. -- start plan we that a makes actually we're gas to of the be access one I we as was that early need to subsurface

we that general, there lands be rely feel there. So forward times, kind companies realize oil because moving we of with contracts drilled. really able And that we won't opportunities out In conventional encouraged we really that to get to on owners national prospects be with of type ministries, they term international of a those to out started unconventional have many see the competition traditional the can't or project. exploration see lack do some

gives the which And little side, negotiation so we're seeing flexibility encouragement. us a some on more bit

Scott Hanold

of But you And ways in countercyclical to balance very there returns was Ezra post your being a guys position. obviously, sheet I'm all the hit there. opportunistic given you things going too shareholder a because Tim, enviable then the I quarter, -- and fourth are about little and on during guess, talk disconnect a bit with

was buy back Can opportunities not us just so back than lower frame a think then Why the trying to take stock lot to you Your stock? buy today. you stock -- to like right for that when it is opportunity are.

Ezra Yacob

industry, of in opportunity. is dislocation challenging do. It's how cyclical that create significant it with the the same execute any talking in that's of value. Yes. I Scott, more recognize investment significant a does so that. said, we dislocation, there than The one to why long-term prefer about about looking it a a the most is to in challenge, position consider and In opportunities in during When general, do quarter. opportunistically the the shareholder we're repurchase see we fourth to that share we we we're that decision. as we And that didn't market the we for we're use talk thing Like way course, being something a

sheet the be of well with have, cost the see feel positioned and we However, that low we when our balance opportunity. operating we'll cash strength the we

Operator

Please Mariani ahead. The Our KeyBanc. is today from go from comes Leo next question yours. line

Leo Mariani

wells update Certainly there's PRB. if there to going the that a few 'XX I noticed terms of in you 'XX. versus what wanted little any in did is a activity on the in see deck down in bit be to less slide

you plays? described trended list So amongst your increase to Clearly, speak year. significant where activity perhaps and the how in costs on of that of different this opportunity kind Delaware you a is could kind well have

does how So PRB the rank?

Jeffrey Leitzell

going. Last team, really our In an continue exceeded and both wells premium year, this Jeff economic completed threshold. about Leo, record they from we're double a areas. performance those half The XXXX, XX and delineate really They about is excited we to standpoint. year, it's had well of our PRB, a core Leitzell. our where

encouraged year-over-year Niobrara the really cost we're So and in wells by record top while both multiple that. also our the on by Mowry doing of reducing formations, basin, we in that, the this all brought XX%. On about

So geologically to one it's our basins. Basin other the River with compared thing a Powder the look little more at complex is bit that really we

really outrun at important right don't the we it's our that learnings. we and operate pace, So

XXXX our we So our able on of activity be Powder looking to refines to and kind strategically expect and build in XXXX, really there plan to maintaining forward of high and beyond. really out grades well our amount acreage, infrastructure, activity as our the River increase a similar we team Basin spacing asset

Leo Mariani

at of crack And then just if exploration. another I can take kind the

think mean, a mean get kind 'XX? assurance a hear of or years anything out some get EOG a high-level there question clearly that talked progressing? $XXX it's U.S. more has we'd in hard I I been are the of at that's certainly I things know people for and about common 'XX, 'XX if maybe to I predict, here a that line. a about from new these the you wells. U.S. number these significant is kind you announced are I some kind plays spending do level from see of are million likely of to play of maybe had of time but strategy, since of and I guess I guess investors drilling guys I just So say noticed oil numbers you can right company. to high look around on in to more these by you kind

Ezra Yacob

the a with is drilling in a to a I'd really was I just commit we point the I it what of historically, gotten a it Basin, we point you there say in before River talk I'd wrong publicly And where it's and lot And program number did there to Leo, We that we some our know to talking what Dorado. something then hard to number about for Powder some exploration to we to Austin the you really Yes. we about of had done was pandemic. big before as even years. confident felt can to might Chalk maybe that long-term a until to way. bit started felt path. early little lead same years hate and predict, it had publicly. production we to we The during was see, the and of comfortable as want to get down just waited speculation of nature. more current than a and exploration as It more program slowed things we definitely difficult leasing anticipated down, a was little even

or pandemic the plays paces various move the about talked it had of started out of rates. kind coming we to As really various XXXX, in

wants what what we the has searching the what necessarily not wells industry of guys is that's oil. last low-cost difficult of more are you prospects, Some as more what the delineation, in we're find for. not repeatability, testing the again, is these already That's have most and like trying exploration to were that almost trying barrels wells, I initial discovered access barrels, the only In barrels, It's discovered, more appreciate, drilled some anymore. not additive really find we're really, appraisal. wells to what the just thing said, lower-cost plays. than program, can to to a little an we we're other that year really but Because world

it to able to going to that and the be bit to these sure make little appraisal get the additive, be of longer on And are really takes these really again, a quality inventory. our so opportunities

Operator

ahead. question go next Jeannie from Barclays. Wai today Please The from comes

Your line is open.

Jeannie Wai

back to just Our the first question is maybe premium. double

out spread locations You runway most for do XXXX. or your new added Or they one in plays? conversions? double of where the net concentrated And maybe premium additions you are were And see XXX two future in them? across these

Kenneth Boedeker

we the our is double drilled and while premium allows the year, in significant premium as an really to locations always through goal Eagle is for last And locations our to increasing of as example get many is we well and really our to and mainly really wells the increases with of continuing better, where just every We Yes. drill This line the premium And working least returns to costs convert premium premium on Jeanine, active where year. question. Ken. our to added focusing leads number Permian in plays, us replace lower time. in wells what thanks recovery at to culture is double this double we're over Ford. a

Jeannie Wai

just for I don't wanted looking Tim level? serves was per pay pay share Maybe still I And debt. really any time the this think I notes check or you've question, maybe second have past, the In you off special that to how after our a thinking? bit if for decided was a that if commented I more desire to further think the think XXXX for in just you correctly, $X Ezra. really optimal that the little down X around we're me color on you the that memory

Tim Driggers

evaluate No, a amount announced thing. way continue backward-looking as that have of bonds thing, that's This we become to paying more -- a this shareholders the We'll back that they of to cash we not And into but any off is period. the of forward-looking said, a not forward, dollar Tim. as figure giving due. go was meaningful intention in we did as we Yes. not

Operator

question final The line Sachs. from yours. Please is Mehta from go today comes Golman Our Neil ahead.

Neil Mehta

the constraints private thoughts your oil pressure valuable. curious entry you're forecasting to production States. U.S. as developed on And about shale would services U.S. talk How thinking it macro EOG such in ranging be competitors market growth? U.S. on seeing internal moving know your are I more what your exit growth United And from views from guys I'd about some capability. pumping, has the just be the pieces to in on you

Ezra Yacob

when on we And the the condensate Yes. North think And And growth think U.S. space maybe discussed, been details side. remain E&P But this some probably we're off in the American definitely the think the and reason for you of we Neil, is general, then out I'll publicly overview, I add going side. a on with on an it a and more in details for supply the are for about And a have that inflationary I bit face that on then some and year. more forecasts on pressures. more to growth couple end from you to commitment hand crude provide and headwinds that there seeing think bit some Billy you're general activity Billy the is of the I'll in chain lower it. bit disciplined. can to

Lloyd Helms

pieces the frac a both today. all There's this that business, from the sectors, market. is is of attracting Neil, and the equipment And The not labor are today. active side supply the the constraints many the chain the on can fleets, new equipment already on sure is there's across most the the drilling into our drilling same the heard then on lot I'm employment active of frac is Billy. to of come being of of the from true rigs challenged the peers comments are you've rig certainly same most side, and in new in the Yes. of standpoint industry about side on also is seeing market. bringing the of deployed super-spec -- side, under certainly good

and the to to of for this to a So to ramp try headwinds year. -- lot there's grow industry activity production try up

in So year this to on going hopefully, strengthen it is light. transition also will challenging year can But the go-forward basis. and be that a from better probably year side. And get viewed be as a maybe a a industry that

Neil Mehta

been pieces, natural and industry do lot then change market? you you as natural follow-up the But on the gas U.S. global global. structural see LNG a And evolving a view. mid U.S. gas, you a lower-for-longer comes in most gas, supply think market of standpoint. both especially A with until have this Do that around geopolitical in global decade? of light see announcement right linkage about Qatar the moving of more the we obviously, is now from your has If into of

Ezra Yacob

the very developing and say Yes. this has U.S. important so we not that's nations, for the is reasons a what some to of partner talked that and into continue would natural Ezra. Neil, is gas, vast reasons supply it's now, about the LNG. only of discovered out of we're just to geopolitical, some on you get glad that so offshore of where In but market that one I the global general, gas and And and our take forth. so

supply, so Coast. For we say prospect. the about for many going we're that the low-cost We way because Gulf think And the globally it's cost including to might about America well. it's close we cost that to we of as North basically supply. is very reason centers, gas but it competes natural producer, really that goes geographic about us, be gas to the of a of location, and excited Dorado in think is be dominantly, talking sound the And lowest especially we're oil one marketing like our want its

global think in the have I to U.S. a we're to very be, excited the So to very term, supply. going and continue in gas player is significant it. And long fortunate the

Operator

Thank you. session. Q&A This concludes today's

call So Yacob. I'll hand to now the Mr. back

Ezra Yacob

thank for morning, want everyone our for to thank shareholders their support. this participating call want Yes. We and on we to the

had said, great XXXX. down to employees. in And it we up comes EOG performance As XXXX, we're in outstanding and year an for our an really poised

that play why long-term you. energy. Our highest one of suppliers significant return employees of future convinced cost, lowest are role the and a to our Thank can success, in and lowest the I'm energy being keys are to it's the emissions

Operator

This concludes today's call.

You your disconnect may lines. now

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