EOG Resources (EOG) 6 May 222022 Q1 Earnings call transcript

Company Profile

Participants

Tim Driggers	Chief Financial Officer
Ezra Yacob	Chief Executive Officer
Billy Helms	President and Chief Operating Officer
Ken Boedeker	Executive Vice President-Exploration & Production
Jeff Leitzell	Executive Vice President-Exploration & Production
Lance Terveen	Senior Vice President-Marketing
Doug Leggate	Bank of America
Charles Meade	Johnson Rice
Arun Jayaram	J.P. Morgan
Jeanine Wai	Barclays
Leo Mariani	KeyBanc
Neal Dingmann	Truist Securities
Neil Mehta	Goldman Sachs
Paul Cheng	Scotiabank

Call transcript

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Operator

Good day, everyone. And welcome to the EOG Resources First Quarter 2022 Earnings Results Conference Call.

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

Tim Driggers

conference have EOG’s thanks the also Factors guidelines. us. potential found morning non-GAAP Exploration actual the VP, that from Investor & Definitions Streit, accordance filings. the schedules Production; forward-looking differ This and release reconciliations Operating Executive the includes include EOG’s necessarily and certain not and Terveen, Chief results Ken Marketing; conference Lance can resource and non-GAAP Public Production; this forward-looking David measures on materially and Chief Officer; call estimated SEC & SEC’s statements our in statements. Jeff also could conference Boedeker, Officer; those these outlined for morning, Leitzell, calculated in be President Exploration & VP, Senior Billy in This earnings Relations. website. call are call joining Participating EVP, with This Ezra call to been contains Yacob, Good reporting Helms, for cause measures. our reserve on financial EVP,

Here’s Ezra.

Ezra Yacob

is return. dividend. to everyone. of per sustainable in cash quarter’s per Good special morning, $X cash a regular per began annualized an in declared share. for sectors with rate is across last second regular commitment reflecting commitment annual we returning of It of the suspended XX-year XXXX. shareholders been we compound recently, value. dividend billion return XX%. we Yesterday, our has group. growth share EOG’s dividend even of our announced long-term at last Tim. return we than a our annual have EOG drilling strong dividend leads year. strategy to dividend cut the not and year regular our discipline premium has more growing peer-leading the doubling supplemented Today, XXXX, cash dividends, peer all More been capital have only delivered including our our to share growth Thanks or special following deliver never XXXX, E&P our and $X.XX demonstrates in shareholder Since competitive Combined independent shareholders. year-to-date, both higher It $X dividend of XX% has dividend compound transition Since its we rate trading in market. have a significant to our history cash regular $X.X company with as

return our formalized shareholders a While we To transparency and free cash are flow. announced we XX% our for both, acknowledge of commitment and desire cash yesterday of return recently cash annual track proud more we of of returning predictability. record, provide minimum

reflects forward, framework and every oil our and return gas the return is consider guidance quarter. options regular to in our driven additional is in our business. quantitative our market intention confidence pay evaluate The pandemic cash for The to cash stabilizing. of and addition volatility dividend Going the

other continues macro the However, evolve and environment the war events. Ukraine geopolitical in with to

in Credit to our requires is our including that to to which in investments through ago, our employees outperformed We a position for year inflationary to supply our quarter generate and who shareholders rates natural double commitment and and ability free shocks to company ongoing In chain XX% our employees and premium both of Last years our $X.XX in flow six we environment this our industry, the the a the $XX EOG’s years positioned over to doubled in have make the and tax minimum our cash minimum rate embrace issues gas any the to flat industry. flat return facing cash ability the goes now several on last for flow premium all resilient improvement hurdle are rate oil premium proven the that XXXX. volumes return the have have deliver cycle, unprecedented steady direct of resilience free the annual our of the XX%, capital business using ourselves return hurdle an price. year, after first outstanding to to plan. and spite during

value. We return of that that inventory low have expect shareholders financial our that consistent drives cost, have support decades high the performance and to come long-term

diversifying Our us gas natural and country, to inventory enables spans pursue dry backs multiple investment assets the sales which net market and throughout options. across by the oil, both basins our highest combo

on We net Tcf and ago, XX play, a In half gas premium where resource announced natural also moment, continue Ken the and well we’ve year natural we’ve emission is EOG. a potential onshore lowest U.S. to what on to lowest and cost we and of dry progress will captured costs believe explore, we Dorado of the made you a a performance source update well gas

grown premium program since introduced Our XXXX. has X.X inventory by the our organic was exploration in more premium metric than times

on focused isn’t program exploration more. our adding So

better We for looking are inventory.

in potential as pipeline to and future current done like double us New past. have continue the and gives will premium the see Dorado we our we improve inventory the we confidence our plays exploration in grow in

additional provides and flow a special and balance bolt-ons. performance committed and opportunity Sustaining pristine we XX% in our growing the through a to of advantage of highest shock regular growing stock arises company. strategic framework to are a counter opportunistic minimum priority unchanged, of and While a pristine and the longstanding low when dividends regular investments. our flexibility buybacks our to return of priorities shareholders the advantage take the A total to that other and cash flow, functioning cash cost balance confidence for as return free is buyback long-term cyclical a and sheet exercise dividend, remains reflects a earmarked dividend annual sheet, also the have free cash sustainable absorber property

long-term to value. through special complement with our and significant shareholder minimum returns other support our and create together cash our cash buybacks guidance priorities Additional dividends free return goal

Now, review here’s Tim financial our position. to

Tim Driggers

Ezra. Thanks,

providing quantitative generated flow. items We financial framework per of billion were refine total to and costs by targets. EOG’s ability Our is possible made $X.X operational Capital $X low cash EOG quarter, first In outstanding guidance or the billion our guidance longstanding end than cash performance. after cash return by earned the of $X.X of $X finished per the and better volumes near unit free production billion operating range, while expenditures share. adjusting

basis, per fluctuates or incredibly natural dividends amount of of $X.X collateral cash are is cash debt totaling reflecting portion bolstered top return in shareholders. so per the of $X.XX $X.XX share a March an cash gas annual timing regular short-term off timing of prices. billion declared capitalization Cash on debt was hand. EOG of we oil of our the billion. on decision the $X considered year excludes current for the flow not to with because March totaling hedges not flows $X further net XX and This influence dividend confidence yield’s $X.X and of Our a total $X.X on The held These the billion. of This of matures differences X.X%. special in we an balance by collateral quarter cash in intend with amount debt free this pay do of The on end, on finished billion, was our that on Total counterparties. in calculation To XX ratio to cash financial includes far debt share bond position. that billion. our XXXX, March billion has billion to strong for $X.X $X

XXXX price is it it yet easily communicated each objective large establishing a while to dynamic The $X.XX so least scenarios. cash product our now of yesterday, understood progress of of in with the was peers year that our of under is The size amount XX% special These of make Our priorities. buybacks dividend going and going largest through flow dividend commitment under special commodity guidance a dividend flow cash strength simple, our on return back stock ability to return our of forward. is of prices, remaining our flow the available amount commodity to demonstrate and shareholders. sheet free actual a suitable cash to not range return portion basis to and our declared to range cash cash along board’s quarterly toward or dividends $X.XX regular return changed. at to supports of cash free returning intention our scenarios. free our is a The quarterly regular our cash forward Subject the the of long shareholders free standing discretion, our balance of significant have E&P a

Here’s Billy.

Billy Helms

Tim. Thanks, year. the great to start a We’ve had

total Our exceeded operating and quarter unit forecasted volume, per expenditure cost targets. performance first our cash capital

progress offsetting to-date, inflation pleased managing also our well We’re with cost. and

minimizing as consistent generate of of to improve remain as focus drilling Use continue well losses downtime tools reduce and teams self-sourced drilling and Our to performance. performance areas downhole improvements. mud days

Eagle five our to Ford in in play improve, last decreasing average less is now years. times The drilled drilling well oil XX% days. than continue five example, in For the

completion the side, lateral as last further we deploy of technique. XX% the by day per super have amount the year, we On treated increased over the about zipper

year. more technique we use through are expect further to its in We wells on than as increase half the now this the completed the progress using and of company

types would pandemic account. a addition, year, maintain establish of sparked known constraints challenge. improvements the present last self-sourced the inflation into expect additional we is headwinds our that would year’s that we Taking the at our further tremendous the year. planet cost the from efficiency unique supply was advantage the flat knew with This year. In recovery by these plan to program When sand offset unusually pivot with a throughout initially economic providing beginning we well

in are can in our we fuel inflation a steel proactive. remain volume the While the than accept we original and confident Rather and plan. with targets CapEx directly on as given, war deliver have still we employees increased our associated prices seen Ukraine,

developing of a periods record and of efficiencies inflation. lowering expansion cost We through have drivers track other and of economic

our inflationary field unit year costs performance in ever decentralized driver Our guidance. that value our period EOGs creation in a enhancements the of new multi-basin advantage with to This of increase our Today’s our previous culture. through of is the per lower more challenges X% operating and are full are met versus cost. with their prices primary identify well innovation our will operating fuel areas in lies approach. quest diligent people and teams cash

workover a out assets. our and LOE commodity in weeks all, to performance enhance higher bring program, production. small increase our They time These of present which from inflation. also opportune we’re an our managing effect to offset expense. the reflected be cost in assets on will long-term low additional All However, within workovers prices pay thoughtfully

to flexibility XXXX, in all our as pandemic respond plan capital continue to have to or We asset individual marketing extreme each assets, people, believe assets long best company given the the is for optimal to support to our have and we headwinds any improve. mitigate the plan planned improve is such and we unique that operations in adjust any for plan year across to of to term. our pace the to continue While the thoughtfully conditions

to made we Dorado. Ken in the gas Here’s incredible play, discuss our improvements premium

Ken Boedeker

and Billy. natural pays new in potential half resource major net play a dry Texas. EOG a It’s the Austin Tcf in discovery XX Thanks, named ago, formations. Chalk Ford A we a and stacked of Dorado. announced year gas South We with Eagle gas across

during drill our completing activity. which wells. the acreage States. in quarter late break XXXX. wells Our XXXX, the of our the XXXX as year, in active recent during first most last and the After to we than XXX and nearly $X.XX XXXX, per Mcf, into back Since of United We premium downturn is out test development cubic pausing XXXX million XX and of in from doubled year, in feet mover net organic net the program. lowest last and anticipate we day in XX year natural we in supply the gas was moved XXXX position cost cost Dorado wells, began exploration in completed core producing of Dorado we rate This emerge have less first tripling the believe production XXXX. large of even double play Dorado work represents Dorado Dorado technical captured a a play on per

leveraging first was cost that down from target cost the built designs to well Since of of quarter curve have than well compared successfully first over the our wells and flat during are incorporate well our a us faster We last offsetting we move similar keeping We pace proprietary XXXX, year XX% first we well inflation. cost cost in prior to in anticipated. plays our seven learnings net our as knowledge the we and to increase quarter drilled approaching XXXX, reduced allows quickly at completed while savings. activity

combined projections In have initial techniques, This from per our a increased addition, Productivity completion productivity to we focus year, performance efficiency. targeting higher improving. cumulative also switch and a XX% lateral forecast, have is our production moved the two-year refined improvements our in performance our well on wells have beating is basis. that recent capital resulted compounding to significantly volume with longer an per foot XXXX foot on wells

Our initial Eagle on then the formation, that the development preliminary Chalk Ford. of was with for and to the plan follow focus play development Austin

So it the would Austin cost water from infrastructure gathering installed and as well as well reductions for Chalk. benefit gas

and our will Ford Chalk, now provide opportunities we additional formation operations. it expect through Eagle lower to With results, co-develop which simultaneous Austin the dramatic well with improvements costs to scale to the

U.S. gas Dorado’s other the dry will a a multiple close emissions onshore in we compared gas to have lower expect to in gas As play supplies footprint proximity markets,

In and emissions field. company-wide out addition, leverage expertise to operationally low continue to build we efficient an

As EOG’s South intensity contribute into to terminals, EOG’s operating export low low Combined a we with ideal markets major growth will is LNG emissions to Dorado to an several gas and located to Texas, emissions supply core costs long-term position low Mexico into including market cost, it sales natural in pipelines with hubs companywide and potential. position close Dorado development several to asset, of access expand rate. lowering advantaged in

for Now next Ezra remarks. up is concluding

Ezra Yacob

the Thanks important takeaways Ken. note I’d today. like the following to from call

value. offers First, that formalizing cash long-term high shareholder cash strategy return reinvestment flow discipline free with to commitment demonstrates significant our priorities return our along our

tremendous Second, another improvement. EOG year realizing of is

We are capital capital delivering announced deliver inflationary on set both discipline an environment, volumes XXXX. beginning the as returns outstanding demonstrating while within and to at of

over us of natural most low Third, Tcf our with access to positioned with has markets. cost announcement recent organic exploration Dorado multiple XX gas

of Dorado listening. Our cost pace this is supply. on America’s make Thanks to for lowest progress in North

go to Q&A. Now, we’ll

Operator

Doug today from line open. question you. line the first Thank [Operator from your Instructions] is comes of Doug, Our Bank of Leggate America.

Doug Leggate

ask morning, I’ll cash framework everybody. returns. for Well, the we’re that – thank talking do to everybody you Good a I around free for I saying in you. question this, just obviously and percentage speak introduced see flow. however, what’s move changed it in – And could think you And wonder curious cash delighted to I if as about you’ve I’m I have direction? is to in you’re

reinvestment you about how planning if could similar go So some around parameters the that I wonder around that. think frame assumptions you rates or

spending get kind what idea can point. to you flow of like some see versus free [ph] cash we looks So as ultimately the if level my of

Ezra Yacob

do. sure I Doug. Yes,

our So very consistent guidance. deliver dividend with is priorities. why the we time that free got right increase long-term let going the what we’re in forward. We’ve regular competitive can a It’s cash me return we position. that flow basically start stronger come balance market. business broad from with amount emerging be got out the sheets and of and this strong the confident our for And minimum We’ve the to downturn now, cash simply the this is with additional with now, the to – feel

a So really it’s change strategy. not in

in XX% of paid off In we we a bond. $XXX flow cash XXXX, returned million fact, free about and

when you that So XX%. about those was combine

so we’ve discussed the a really of it’s a And internally bit announcement just range and transparency. provides

and growth you on reason we of one are given on puts term in part off this flow basing with the free of is the can thinking free like position return about free as cash think minimum be the cycle. regards the guide the through it’s to thing, to second to cycle, your shareholder to do One we how of create about, overall a have cash through XX% guidance reinvestment flow? business how nature a Now and question best a we us because that we what value feel cash long how in consistent is flow, manage the guide the get

year. we’ve year. to improve there’s get of in year investing term. So ability not growth based prices, what cash invest as something because with business in high always you’re that to strategy. our reason changed said you’re chasing long doing – in free past, flow, returns after on high ability underlying the better no is, in means It’s nothing’s just not really the each and to the that’s reinvestment if you’re returns eroding first, generating the it and not an business And There’s if

take So And barrels? second market made Does efficiency. you increase erode can in high in is What’s and macro supply today investing prices, that’s going our talked we’ve environment the [ph] XXX then a and to you supporting gas. our as environment Ultimately, based the that decisions piece today, as for $XX activity the market we on inflationary example premium the on fundamentals? into the and global capital reinvestment basing as growth could oil double far these know, really about agnostic somewhat price need premium fundamentals. those natural demand and the has but

And investing so capital And and each year what our improve year the can better pace in returns discipline company comes get really of are profile? to we a do? ultimately can we overall down it’s the where after and assets

Doug Leggate

I answer, appreciate Ezra. the

I what As by done. welcome you’ve all we said,

that. So a for thank follow-up hopefully you one. is quick My

gas you guys also you some of off the took today. So has a pivoted of obviously changed. ago, obviously, exception light from gas, assets. lot a But The Dorado, your away legacy world natural years

there. effort the are legacy – wondering those So Thank to is to of or there longer-term. on LNG relates you. light guess, it that within assets going some what’s it I of as in gas back in some of pivot I’m legacies I your portfolio the any still initiative company, just leave to obviously expansion

Ezra Yacob

Yes, Doug.

a double and thing for premium us is a rates. lot company’s the the As of that reinvestment the changed you bit. world’s now biggest hurdle introduction premium quite and The said, changed

North being captured our and now of any that the our assets $X.XX, a all premier about that are excited of with We natural very what assets, multiple significant high American in and our we’re gas opportunities grades it’s focus U.S. think reinvestment in flat price in be natural we the we’ve that that Dorado Ultimately best think markets. now. gas. natural geographically really to the is onshore gas asset the of right for access So about talking have. as to very well, into gas we’re it’s with And resource we ones especially life see judged the really We on spot. to asset going able but

Doug Leggate

sure. Thank question. taking for Question, Thanks my for you.

Operator

Our with next question comes is line Charles, Johnson Charles Rice. Meade your from open.

Charles Meade

Good and morning, projects point the Ezra, the there. your so I But gas that kind best get curious XXX, best inside oil the and picking you and EOG maybe is is below Ezra, there at something projects and you I’m a that services on suboptimal you relative of and to far just evaluate the made. projects XX evaluating whole up all team or does concern that gas projects. EOG that across assets? ranking actually giving strip any discussion oil

Ezra Yacob

a it really When where $X.XX switched to natural price, the the on $XX the price, highest What to we still what company at way think premium, Yes, of upfront, and and that’s do longer commodity is a does through IRRs the based to a to look two in portfolio you a not cycles. about allowed rate is thinking but be what multi is immediate of build been unconventional together term can return, really been nearly put returns, ability mean exploration fortunate. really in gas reflection through XXXX create times premium long-term grown We’ve the exploration to only our it XXXX. help our here deepest successful really through half inventory Charles. have price a cycles. we’ve that value Ratcheting honestly, to premium since we at taking of that asset we look up The decades and it was was for quality really three a organic basin and American double the North us inventory.

way focus the think with us that on premium our I rate provides double actually an hurdle assets. and optimal to actually rank reinvestment drilling So

Charles Meade

the going of that is perhaps XX% two-year Okay, thank XXXX I you laterals. was that Dorado, caught I think and part And higher the during comments case I clear that that back the longer think for case to insight. kind the And X,XXX base is was than that foot XXXX cum the your lateral.

I productivity Dorado longer in the cum, am right year making, that looking that’s laterals, lateral versus I higher maybe the per in higher, XX% earlier two the foot if some to am is, case? or ballpark XX% thinking So play at so of we’re XX%

Ken Boedeker

Yes, is Charles. Ken. This

those productivity some foot X,XXX given If those on XXXX get. laterals higher we target we’re both X,XXX look and wells, we have really to cost range. to cost foot really that how a showing the finding driven the number original have improved the laterals haven’t much our that out were there. even we’d now range is. back And shorter that the We’ve X,XXX performance to down $X.XX thought We almost in they lower things XX past the Slide on extended

Charles Meade

offer any you lateral per you. I that’s foot, productivity fine. But that guess, Thank care Yes. don’t comments on and no, the

Ken Boedeker

I over have is low of curves say first type decline just is, our do – that and I a months type the several would fairly guess beating have are what those Charles, wells production. we our curves it

beating curves. we type drilled we’ve it, our of if seeing X,XXX place. wells our really in that them And So only XX look are you at

So we’re to continuing learn.

Charles Meade

you, Thank Ken.

Operator

Jayaram question Arun next Our from Morgan. J.P. with comes

line Your is open.

Arun Jayaram

guys are raised holding the of peers line just Yes. the Good A have CapEx. CapEx supply morning. on first you chain, on My number is question your expectations.

the of wondering supply comment budget, if – way things what’s seeing just and on given thoughts OCTG? billion labor OFS equipment to influence about your of chain unique you the give about does some challenges you could we’re the broader that delivering and headwinds confidence on shortages XXXX chain within CapEx managing the So industry. do you’re supply $X.X How like was these I just

Billy Helms

This Yes, Billy. Arun. is

add I’d Jeff of then circle to to I’ll overview managing like color back an year’s capital to how maybe providing XXXX. some program. by start Then me we’re and Let get the

the start way. by year at we first same look each saying me kind that of Let

As or innovation you also four areas. insulates source to in a do would a of lot would know, maybe – lot the in materials different supply lot chain we this three of self we tend this bucket efficiency we gains. I issues, from a One, that of

the the efficiencies The then of new company. may across these of multi-basin third bucket And be might flexibility adoption be the with finally our pace approach.

innovations. working technologies, basin in as activities this and we inflation just saw where Delaware rapid we that through that, pressure I of Ukraine such bit we But confident such across that say gains elaborate most at the our and well the recognizing year, additional a our we company of of and plant, certainly to anticipate from flat to maintain we would the we zipper war looking recovery inflation happening of the What efficiency offset the These the the but little So improvements the also than have the and that more, are the in inflation we still technology on beginning at new faster of new certainly cost. pace expected. as the Ford. constructed adoption could the we’re additional increased in steel, post-COVID. Eagle offset inflation didn’t efficiencies were in was and in adoption these happening, is fuel largely And saw areas and we super commodities

also of we advantage have being multiple the So basins. in

between shift activity to that of So flexibility lot areas. a gives us

laid maintain the within we very year. and can CapEx start out volumes comfortable goals, we our our we’re stated original our delivering that of plan, So the

I’ll over Jeff maybe So give with details. some you turn to that, to it more

Jeff Leitzell

Leitzell. good Arun. Yes, This Jeff morning, is

of about, really to team’s execution, So ability to as stated, their improve credit continuing efficiencies. chain culture inflationary operational really innovative supply and constraints a these Billy the talked just huge you counter our to it’s the and our some that pressures on

we day and with bit in-house design just So efficiencies our a color And Ford is both the examples, all drill just year. program we’ve around that which And teams increased of to some we each of cutter little operations, to off footage operations, kind in of years. drilling these this give that’s this primarily start Eagle continue of proprietary motor our a our example EOG’s increase our development, drilling per formations more and and in they’re XX mature plays. drilled with We’ve been bit this. of for can XX% you uniquely our over perfect plays the of one our their by

along EOG, can really job losses, company. then fluid how team, they’ve in examples they there just savings so We’ve our to couple far this topic be XX% barrel basic far in zipper by Eagle in overall drilling to this on that matter talked outstanding the always costs main and So just improvements XX% foot are in their And an field a see compared really implementation development, XXXX we of there’s per their Ford, continued to total made. day lateral with same in reducing and really no fluid done to then base past, to that’s drivers primary of diesel reduce fluid our per also, in the of operations. good the a super and continue prices have And each risen optimizing more of about XXXX. as increased even and there fluids. done they’ve the drilling additives in those really And in resulted by completed per those density the has about the try as which the area, the we’ve one is for improvements completions,

now. and super there we year third goal of right we to last activity a to a year, about were had about trying zipper of just with So our we XX%. this about get talked And we’re

per of because every to realize the we savings much pretty total is well really X% that super this about additional significant of equates zipper, or cost. So well to well that the we up $XXX,XXX

is new continuous of kind and process the testing called frac side something we’ve operations. innovation another been So pumping on that implementing

of have have us helped efficiencies. increase little hours some do maintenance a field that days. proactive, that So and started about in of four three maintenance operations, be some planning and teams you our typically of really – a to greatly periods bit our completion maintenance And order overall is any any rundown, scheduled every really just unplanned minimize three has this unplanned of to what in

quarter, in in Eagle we’ve by been increase per So per the testing able day we’ve foot Ford, lateral XX%. some really to the roughly the completed started Delaware our primarily past basin, in but

all continue is reduce our been really to things, in on our one that’s there. huge across we’re that we’ve years sand on side So barrel roll self costs And on more allowed in to XX% basin, sand in water a CapEx, our the because their here, on this doing company. reuse just but is our we their this And approximately just logistics the what we right And And we infrastructure things. each less have for also sourcing from reduction continue supply wanted the all and we’ll we all not the automation on And pretty I reuse increasing out finally of of it sourced of just now about doing cost overall XX then just material a of side every expense a to reuse, the reduce to Delaware through barrel water. of then cost now. those the which for the operating realized the EOG, couple optimizing over they’re to And cost we side, significant, to about the optimize dispose areas. savings really barrel, is of savings to is and XXXX. of reducing team lastly of. water operating by per continues which treatment In this for touch process, X% and water plan chain in business of costs time the process, sand the

abilities basin, QX the up sand example, to we’re needed. and to our really from the pound. advance year. out the some the of continue good open per wellhead to trucking of in second are, reduce pretty see half anticipate we Delaware plant the in For to through And going to ultimately plans amount year that get closer of of And a we the XX% next savings second about rest

a talk how inflationary be constraints of XXXX. examples that few of a just as able and our and lot many Billy we’ll us confidence just great of operations And are chain will XXXX. counter to these performing really here teams about supply pressures So through the these giving

Billy Helms

of Yes, inflation. very efforts but a Arun, fight we’re of our continue know to just proud of cost for maybe the employees detail rising to you the to obviously, that’s of summarize this lot I against period in well

into we move about. that into think a how it’s for of but going let really year, to talk maintain think overall approach to is kind gives inflation or to we lower we an history we our managing that about of is next have you cost about us is XXXX, reminder. me just year. through have our we confidence Certainly about specifics long of year early And to we any impression give example, a that well be One this fundamental goals. strategy things how meet two able and just contracting As

provide of that providers fleet. fleet this contracts. with contracts secured XX% those under of service drilling XX% with well frac service about at set contracts, of all to have are our end the Not locked expire of existing of about up our XX% our about year. And We cost

So would innovation improvements. that efficiency mentioned make stagger a sure those to And into there, and as continuity through year preceding to we going we we year. then the the as go be, some have try Jeff lastly

are confident. So already we

going can cost that push ideas and seeing to We’re to year. reduce explore next to we into and offset continue continue inflation

color, something lot sure it’s of things. employees it. a that chasing you very always efforts, fully to just want we’re of understand and kind their make proud of certainly those So know our that’s and but I we’re

Arun Jayaram

Tim, of to the at know points XX% Yes, committed are sheet flow what or cash and and free follow other Ezra a for your countercyclical the minimum is appreciate build Tim the priorities return cash message to up guys detail, bucket the bolt-ons. opportunities balance in last you quarter, thoughts cycle. of now Billy. the return the the framework. did cash XX% on intention on sheet kind to additional EOG’s have balance I maybe other wanted – My I get for between more

– some I So on if updated thoughts give wanted to could you us that?

Ezra Yacob

pardon right let This you me Arun. start I with off, that. is Ezra. left can me, where say there Yes,

that and cash remaining comes free that unique the right with XXXX. our sheet. $X.X be the to doing position back return shareholders here long-term the we’re on at committed to and thrilled ultimately, thing the fact include sheet does delivering in We’re maximize priorities to in billion time to flow just the balance And able right balance shareholder to XX%, it value. to be strengthen it half a But first of to the

for small the for past available in to have with just operations things the we’ve the the discussed cash acquisitions. to of sheet balance cash have some the business bolt-on for is, running And

commitment mentioned have said, And which programmatic. billion as an repurchase the cash rather last $X look stock the for something that repurchase opportunistic here regards to to at would we balance you As available then than on prefer in the hand more also authorization, to we’ve coming our with cash bond, our XXXX. sheet bond a of there and first $X.X billion retiring be quarter that’s a due thing to

the XX% flow, a of a is, by So cash returns, little our very strategy of really, more as we have just started a and who of any free transparency on shareholders remains it’s more provide It’s little and to in clarity off cash in asked change we’ve really returning guide a what means. heard more the a our the change with consistent. minimum that’s transparency a some of bit messaging but clarity, strategy really for not

Arun Jayaram

Ezra. Thanks, Great.

Operator

of Barclays. is the Jeanine from line question with next comes line Jeanine, Our your open. Wai

Jeanine Wai

everyone. Thanks our morning, good for taking Hi, questions.

can how Can sales we get about the talk maybe EOG line potential those what nice down you hit points? that. you much highlight Our to order export maybe midstream the update you back see currently or if just to Dorado has capacity gas slides, markets. first in question, to Dorado, In on

Lance Terveen

This Lance. is Yes. morning. good Jeanine, Yes.

you As as capacity, you that’s connected. room have that yes, especially XX. market. we think as can to markets you to the the about excited look What growth those plenty in then as like in on [indiscernible] capacity growth. the than to about we’re of that’s just XXX see new talk Bcf about next a too, have we’re see of Agua is the you think the Dorado and forward you proximity Channel forward proximity miles very even additional the running demand mean of the you see about Obviously, see can we think market. an demand there, Slide about less well Houston equally Ship over Dulce as connectivity to potential get sufficient we market. potential really a look have expected But the day to years, want to takeaway X highlight And important. we up that get five and you to potential there, I the to proximity, into the And

we we’re So you’ve have forward-looking obviously and we other as evidence to as always our the proximity, as we that capacity and plays, as our ongoing we about connectivity sure the have, about that very enough program. making seen think think capacity,

Jeanine Wai

be speaking, guess never up but with generally great. for would then on balance cash or And I that provided simple you. place a the or there. you And all is you. perfectly just details to like cash is point? suboptimal the we Thank Thank following-up build about and know business a Arun’s Okay, the just about maybe sheet Ezra, just fine you question. getting number, back it’s appreciate that solving to the cash net I the

Ezra Yacob

percent cyclical hand suboptimal industry that’s to Yes, in the us ours. especially even when you like proven our volatile industry at times Jeanine. an ours, on the And we places is of upper half in, cap, think be think a about S&P roughly market position to nature a XXX. a fantastic of like No, position, cyclical that’s the we don’t cash in be cash I’d obviously. current say, And believe that’s very place in a

Jeanine Wai

you. Thank

Operator

question is question. please your with ahead go KeyBanc. with Mariani Leo Our from Leo, next

Leo Mariani

going to wanted a that the talked do per about the as similar in something Do your very higher in oil on X% guys In the gas kind think follow-up longer-term giving bit to macro time you the you longer well. be world there obviously the it as has for target on really XX% U.S. days. point would kind I at past, growth changes be of here, gas to spoken topical the of markets that EOG this is And obviously, guys, gas about side just maybe just LNG know to appropriate little to these a Hi annum. down well. and accessibility feel of gas of kind you

on expanding that get international next working trying if to years to and activity So get perhaps over you just Dorado wanted a sense are guys the few markets. of actively gas

Ezra Yacob

Yes, Leo. Ezra. This is

on and and perspectives. know price then Lance repetitive, Let follow-up and In bit macro on as would sound a The premium me more some maybe little this decisions investment our I we LNG detailed based I a will few the on we make what oil, comments that’s on same from but general, perspective, do can deck. in investment gas. say, the

the supply improve year upon global have the that How question bringing, can and associated every continue So that company the an to going to and adding growth we still and reserves we of gas year-over-year, we got base the optimal to in for finding comes lower invest With quickly down it we’ve cost how lowering demand side. as second, oil company. to means the base cost development then in on asset really but expand margins first asset. returns basically say high of drop is is cost That’s because dry there’s same these what the regards still the gas, us, and an level the generate I comes plays. that obviously forward. and returns. And pure our wouldn’t

and do look think at price going we feel the thinking very global gas them going committed that be compelling $X.XX competitive on. bit globally energy to that. on, significant we out a to play Long-term, we we to long-term going in do investments about longer is be agnostically. the price solution, we reinvestment a So base the because feel, role the And how Lance? little to that’s that’s the able and to we’re why evaluate very a

Lance Terveen

mean but exciting bit Yes, pendulum of mover that the just you’re Maybe like the pendulum excellent exposure, saying JKM as you first Ezra. off-take, of exposure you’re pool. been we just more advantage and demand today, the and a have, morning. you in an I and – more about LNG the because too, LNG it’s you’re having it’s swinging, kind Leo, think time seeing especially good Yes, as some environment think seeing color – the our the add about little a

flexibility. one that we scale we we and that And as And we’re about customer it. we not us balance the them that off-take important components puts then about just really control so think you the about have that’s that, sheet think of And LNG investment a firm mean mean and you our we major of can way us when very I well-positioned. especially have firm I but that when pristine transportation, and have a from get And plays. about our Dorado, it’s with we the from lot absolutely then think think is it, off-take, think differentiates of standpoint, there’s supply a we as us. status mean of have also I about three from grade flexibility lot of each too, critical

anticipating we’ve we’ve of I you agreements since hopefully recently about that expanding about end of Obviously have early in for with LNG a deal increasing into that were just long our been kind line with our time. expected the that’s Cheniere, which that’s we the that it. there. and sale very XXXX. XXXX again. feel Stage done All excited We’ve been that And commercialize entered We and saw an That in maybe strategic. first XXXX, working so think XXXX, talking then we’re expanded what and by helped X,

supply we we and we yes, So because I about that advantage flexibility about feel well. just scale talked all as views. with have a earlier, and puts can think those We can very have because the LNG transact we constructive components quickly us definitely we move

Leo Mariani

that’s a sounds the efficiencies are guys inflation. guys point, Definitely to pre-Ukraine kind have you flat you working well targets helpful. Also put like deals. costs on think certainly year-over-year. That’s if at ask about I’m looking and this, hard but of that I at given realistic really had this aware Okay. wanted of out still earlier you just mean more you’re just that goal

say that about I you in I you think locked the of cost well XXXX. got up XX% heard

Billy Helms

is had, this the last bottom We to we line I but Yes. Helms. Leo, tried guess certainly Billy Yes. very in answer the we’re is that confident. address

it able We’re cost well our work year and hard do year. be keep going to to we’re next flat to to this going

continue to to early line many so can sight going make next it’s say our but of have on what fundamentally year’s So to be, we offset improvements just we business in inflation. to

confident this and So we’re volume CapEx year’s very targets. in

Leo Mariani

Thanks. Okay. Appreciate it.

Operator

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

Neal Dingmann

the like or you. broad Thank before about talking I’m rolling exploration, see maybe would a generally on as you initial My really on a we’re first just wondering opportunity what take question, for another it just and all Yes. you’ll best large out whatever plate or webcast position success what you to as question, maybe acreage publicly have. do such next announce what to

Ezra Yacob

we earlier, the too that inventory. our believe relatively is difficult. to and really as these that inventory it’s challenge to Yes, it’s talking is portfolio make about of American got in deepest not of companies for days as bringing Neal. trying Like to just go. oil bit multi-basin out like a sure we’ve North the to us become have before across and additive about said a We the us that to E&P not we’re what for gas and has days little means matter far The public what it and the talked a confidence – quality highest find quality these I or we’ve

significantly long so Basin of to and back is do mislead to challenging program to thing, trying to pretty is results, to had is before basins that, the public, that had we results captured those had Last to to make what add return the add capturing. Dorado longer-term going premium before sure really trying we long – we we some it And what we and wanted rates announced production we double production Powder anybody. takes the to anticipated River some

that are especially hybrid industry. things so these reservoirs, we’re new looking these to with new talking nature the plays at in relatively And the of some about

production to And plays to and really talking results before the these define comfortable so longer-term about extent appraisal gathering be wells important some we’d very and critical them. is

Neal Dingmann

One, – – pipe, drill you do like questions. sand, all when you number like then for and when just it follow-up sort the great or OFS on then you and I logistics, issues my think to now. term about two, assume just the of out most have about you’ll life Northern you are that. after things continue up job of – Wisconsin. and on great year wondering the they of sand you bring you if OFS And Billy, this would and whether those talk on And you persist, and Permian, all Got some inflation. Could of that if maybe locking you better in details. year – mitigating you have all just two about did pipe than heard continue go or look longer in like guess, are – you a I’m like be other – to inflation or even wondering, two I remainder do opportunities some now Ezra you in are maybe things opportunities continue in stay sort different it XXXX side. of ago We’ve would

Billy Helms

ways much situation through the overlying how this of We or seeing of confidence so control for I The especially back And in we is say in being example, Jeff today that kind to here, in are that of reason closer about certainly to And we’re cost. they Certainly, committed to to our reason especially for Neal, And Billy. to the you Permian. we the about industry talk continue confidence and the offset to went earlier. we ownership, past sand really able have is reduce XX lot ago. of Yes. set taking some lately, the in that with that achieving are look by years detail we’ve engagement took years been sand, wellhead. part out. is – that involvement very to and it’s dynamic dealing many learned ago. might getting this sand the much goes that we want the of employees the have ownership. inflation, big through took a inflation And many, it’s a so but goals

we As It’s reduce the on and so just logistics kind take good cost of All near the wellhead, to cost of and the to diminished. end transportation of many, sand supply, and itself, continue also but the trucks you move can our ways. we move many sources the close user both to wellhead. closer that different to locate see off the We are closer road.

the go material way right establish globe distributors We stay of meals with are the at time. those tubulars to really through and with work across se. really also We opportunities very engaged We the the on things. able and and side, directly per the We kind relationships capture directly. we work don’t that mills

in us engagement our allows business allows further of opportunity. that just it’s employees all to our aspects do that creativity that of So that that and us the

why confident. that’s remain So we so still

Neal Dingmann

you, Thank good. Very details. Billy, the for

Operator

go ahead, line Our Neil Please Neil. next Goldman the from of comes Sachs. Mehta question with

Neil Mehta

capital The one the them question. micro you Thank and Delaware, about you. Team, how allocation one do and Dorado. macro prioritize you assets think and question then relative returns question would the and PRB, you of I as on How have about micro based think supply? the cost your growth is,

Ezra Yacob

way and inventory with exciting. they’re and to The at makes of It’s portfolio such It multiple is looking we at have great the Neil, each cycle approach capital quality Ezra. job returns. allocation this high is, Yes, individually where play on basins. across them our off basing in life management, I’m

that in turned not even year, in entire of by a industry Last you the this anymore. When of of in return program better or Eagle Ford play these that’s of asset plays, drilling growth in type though, drilling for there, the Eagle the so last think resource highlighted rate after we years But make even resource continue really right like we to that long sizing And ever play. trailblazing to after XX highest program had certainly XX how I life we year, one see think it. a plays year asset Ford, year a to the about February.

Powder of spot, at our level, we think Powder the drilling say the Delaware the the when knowledge as the and we And little basin we Ken base, definitely the about high that. as River River basin, just down, paused the a slowed in sweet Dorado in are infrastructure. basin, during and So kind did Delaware PRB XXXX, far is Dorado mentioned, would the in as behind bit we basin. had same and We Dorado drilling activity,

And early continue build those and can pace so of better. life really our make those progresses of with so learnings plays in we’re to which capital incorporate out the infrastructure the the the wells on at of allocation and two and the we

Neil Mehta

lot sense. That a makes of

work to of with second oil are a be questions of associated oil environment. the is, is constraints what the production producers. two dynamic you picture it. But very Russian will So year? talked about this thinking big been some structurally the And and on oil the call? producers about a think are how you production you Given U.S. guys have lot that a of do exit it’s for for question, the lower capacity earlier you the is, global second One exit U.S. macro, the obviously there on long-term potentially implications doing and

Ezra Yacob

position I’ll U.S. Neil. hasn’t out start of kind second Yes, range exit look on that to at of since forecasts are changed exit really when there. and oil February, the the reiterate our with one you

end structural we what and E&P that exit global think on and for going and the sector, that’s of capacity would Longer the lower North Russian the American implications growth to the the with is the seeing to oil plays end forecasts. how lower that February on we way the for exit the think that chain and today. issues, we supply to stick U.S. in discipline most of in term constraints U.S. that inflationary We’re production is be in. it you’re We set the

We’re as watching else. everyone that the same

that, going cost companies for barrels the that the lower in only the top assets. especially, a cost, companies where speak, in – continuing as say future, handful to to leader are that the we global That’s There compete to a of discussed. of higher think for we that we and those – barrels. group take those and supply, what are lower in and Neil, for are getting we’ve – of in have back this exploration including have how lower feel North results past, the really Ultimately, really that the going barrels showing that continue the asset the last said in how flow supply. industry under being EOG bigger American they just footprint. of there’s we And and that explore E&Ps. return generally quality, a scale years, and the term. And to lead our things that and of the I we that sanctions step underinvestment our additional world’s to with they up is And volatile on that fill are few the North Russian been and on we’ve are consistent to E&P know the And deliver actually is We size, continue it’s we developing discounted is supply think, scale why situation. environmental to our demand pretty first a doing? we chronic global And are with quarter, market operational with to supplied a model American with explore as longer want

Neil Mehta

it, is appreciate Ezra. point We investment playing definitely out. under The

Ezra Yacob

Thank you, Neil.

Operator

from your comes And Paul more our for We question have with open. next is question line time Cheng one Scotiabank. today. Paul,

Paul Cheng

question. Good Thank of Neil’s you Two quick follow-up to sort morning. One, think question. you. I

[indiscernible] the XX% does growing And kind you you’ve market. will guys that’s of the your on Russian from think how a maximum. you maybe be in X% plan be or will for been future the way that global that the So ready growth the invasion I development at grow change think the saying at perhaps rate need if market production to annual you outlook the look and you to company?

events. So has any shape of recent because or the if yield wondering kind of in those been changed form

Powder question basin. The that River you about second talk

what So will it take for development pace accelerate. that to

Ezra Yacob

Ezra. is this Paul, Yes.

with in dynamic, see, out to answer things continue our XX% think almost do I at both that long-term the that questions reflective manner. at was the was to maybe what When as and we could current close us. I same XX% better free can can to it’s change was base. we months time the time, ago the And of and X% we that you knowledge came X% model near-term current for optimize with – to inventory now. those cash of for and flow That think I growth, which said to XX

continue We drive down costs. to

We our, of and to emerging call basin them, drive let’s place Powder forward continue with each Dorado. the River

company. base we started shareholder about that with create can with so returns, I first when good comes we where at that long-term a the call to to our do Doug And a adding through And back the you optimizing reserves talk lower investing off of really pace the forward, two what’s his the value. cost it things those growth going rate

cost over can turn your cash So quickly. also so driving company, the of reinvesting that base you while down the

year, months pay strip $XX to to base Our two wells average translates it the in a right that on it’s on three really price price. this investment. wells now we out What strip on that since

So to that that, go to continue over well more as tremendous like was cost company basin. our able build feel we we it’s the type well progress allocate which really to to our of and costs. the see basin and drive the to the down that same and the learnings out the incorporate had a highlighted, Niobrara portfolio quarter, forward. and to place to we dropped it it’s confident Last infrastructure to moving just be, I depends year And be going strengthening that fantastic we under XXXX, we falls think on line. more pace the how base the PRB, in to It regards pretty With of past out capital significantly results. all of business – ahead

Paul Cheng

Thank you.

Operator

the all questions time have we is for today. That

the I’ll to conclude. have now Mr. call So back to Yacob

Ezra Yacob

We to delivering Yes. excellence start commitment and everyone participating your on this each thank to morning. our the such support. want to their the of for an like for our on outstanding We’d to for recognize year thanks employees And for call especially EOG. shareholders to

Operator

our This everyone for our concludes you today. Thank joining call call.

your You lines. now may disconnect

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