- Earnings call transcript Q3 2022

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Operator

Good day, everyone, and welcome to EOG Resources' Third 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. 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 these financial conference This measures. certain also contains call non-GAAP reconciliation these non-GAAP EOG's be on measures schedules for and can website. Definitions found also estimated with resource call reserve reporting SEC's the guidelines. not necessarily conference This potential may include accordance calculated in are Chief Participating Billy Ezra Officer; call on morning Yacob, Officer; Exploration and this Chief Production; Lance EVP, Leitzell, Helms, and Boedeker, Marketing; Terveen, President Jeff Senior Investor VP, EVP, Operating Relations. Streit, and Chairman Ken Executive Production; VP, the and David and Exploration

Here's Ezra.

Ezra Yacob

and we yet again of Utica diverse The delivers Thanks, Tim. demonstrates of everyone. captured Combo Good of play robust EOG's multi-basin EOG's results. morning, the large Yesterday's in improve. announcement to the position high-return pipeline exploration quality grow that portfolio assets continues

two our now Powder The be have oil our years, Utica emerging of efforts Northern in our River exploration natural Over in play Combo can't South emerging the multi-basin value in and Wyoming dry overstated. the play play premium portfolio last Texas, organic Dorado, the Basin forth Ohio. brought gas

to the we Utica the reinforces With of addition premium are operate now resource of competitive Combo, advantages. positioned EOG's X several which basins,

and First, our learnings company. compound across efficiencies decentralized of cross-functional operating impact the teams innovate to independently, but the collaborate

around enabling maximize product basin-level each plan us Second, our returns. develop portfolio, and the our flexibility pace to third, geographic us dynamics. diversity ability to our optimizes allocate at across And the capital market asset gives reinvestment to right to

of higher inventory. to expand and quality our by portfolio identifying is return Our improve the goal overall

the continuous through exploration, capital cost is to efficiency. basis premium the lowers assets is The adds at and company. improvement of and development low-cost portfolio company-wide to of reserves approach result build diverse finding lower end Our overall organic costs which a predominantly EOG's

industry EOG how regular improving execution, create time cycles. demonstrated improve XX%. coupled cost in has of company We over with successful the through is track by strong and exploration, record confidence position value increasing dividend continued our Our to operational yesterday the to structure shareholder EOG's

dividend annualized now share, broad peer-leading is competitive $X.XX market. the with Our per

shareholders, Combined return annual flow per with we the on commitment with cash dividend, of XX% delivered $X.X return the share our our return free fourth XX% least or By will $X.XX at cash will special current of share dividends. our to using to have commitment also special $X.XX to year. shareholders year-end, we returned which We regular of dividend billion in per exceeds cash forecasts.

we forward, dynamic macro with Looking expect gas prices and global XXXX supply will respect and oil other remain the to chain, drivers.

lower capitalize diverse efficiencies to EOG base and portfolio improve cost execute, in capital to puts efficiency the grow us and Our asset our on to an low-cost innovation consistently free position potential. opportunities no environment. continues cash quality flow through structure the matter excellent our and of

value deliver a Our is to an transparent a our in dividend better sheet. anchored cycles sustainable, EOG by the regular through leading is and and energy. backstopped shareholders industry of a position for than to return impeccable role long-term growing play in cash future strategy balance ever

on our our with provide Billy financial followed at Tim, is up look will Utica who Ken the XXXX Combo details and plan, early background by Next an then review will performance. play.

Billy. Here's

Billy Helms

benchmarks midpoint beat expenditures in quarter. expectations. execution results thank their capital to our guidance, third outstanding their in of delivered We beat while natural like third the and EOG again, Once exceeded employees perseverance production the targets. beat to I'd forecasted oil also the and gas Realized quarter. for Ezra. prices Thanks, target

bottlenecks, the We job excellent transporting company sales natural is basin. multiple WAHA to hold exposed than of strategy total, points. the a up a out Bcf Permian. This diversifying outlets and the X% the less to day transportation pricing the significant are in doing our out enabling strategy the is recent Permian. of transport gas a In teams to long-term an production gas marketing position ability also Our of executing move to of across with navigate our domestic

we fact, quarter strong prices realized to gas natural In remain fourth and sales overall. for crude oil anticipate both

Brent natural Our day barrels gross well nearly to we and domestic MMBtu and over XXX,XXX crude length regard. serving a revenue of gas basis. export added of day oil fourth pricing capacity us $XXX crude compared sell Year-to-date crude this September, has million JKM-linked of the alternative on gas quarter, oil both oil per and XXX,XXX to natural is natural uplift gas of expect sales. prices, in through per at export-based In at prices the

of be One steel, of be topics the major pressure year the and on continues inflation to persistent. to The price seeing labor we story. the continues fuel are

our employees Our our compared now expect innovation cost to are average a X% on efforts, ways modest their efficiencies maintaining and in operations. through as Through last year. to increase focus finding mitigate their we to well inflation

narrowed year result, billion to to a $X.X capital $X.X As full guidance have our we billion.

plan. inflation this majority year, of Given mitigate I proud to we employees' our the have this elevated our to am a impact experienced of and efforts capital pressures persistent

infrastructure by XXXX. We and and capital for continue shape discipline. evaluate to will Production growth investments guided our remain plans

this to including services to pressures. largely in year, oil activity We growth, again, leverage multiple activity productive similar driven by currently liquids, we equivalent secure and Once and plan dry than across cost growth low low gas single-digit year. manage basins forecast this our highly somewhat rate, increased double-digit play. oil to at gas higher We expect our a

drilling X on represent plan This of increase a X Trinidad. rigs to utilizing including X activity one a X rig order offshore by XXXX would modest X fleets. increase in XX and of XX fleets the rigs, in to be slight initial activity, XX would accompanied includes frac frac to This Our to over levels.

expect XX% in lock and basins to the start services of XXXX. the to year. factors. typical all, by and different All incurred in for of the range of XX% in key at of cost in within This our well is secure opportunities driven favorable with expect seeing next our higher year to four we XXXX, XX% rates compares CapEx by are We currently start costs for

pressure are persistent assuming we that continues. inflation First,

services we of cost increasing, initial cost reflect top materials is the of well this With budget on XXXX and increase, increase year. XX% our likely the to X% another expect

savings inflation, efficiency will to as work of to offset impact year. identify to the We additional and did just we this continue improvements

increase are emerging the plays several severe pressures. Combo see examples. Powder are Basin assets particular and exposed activity like to we in areas the portfolio of to inflation in most River opportunities in Second, Dorado, in development supply chain that The less the advance our Utica and

opportunities. to point value Fourth, to focus progress Christi, plan expect XX-inch This of In capture to we've investments will of projects. Dolce projects, from storage and our we low-cost we near the take CCS fully expansion to a new Texas. ensure or of on Dorado, including aligns to a advantage projects capture continue environmental wellhead the chain our and infrastructure to pipeline Third, operator. market begun Corpus long-term the gas Agua from being takeaway, market sales the construction accelerate carbon center with some our the field in

capture and report target our latest released progress. levels. to gas. we target. lost step of achieved XXXX from oil continuous reduction the of percentage injecting initiative an methane which rates, gas is rate highlights goal and project recordable recently XXXX lowest-cost, COX we wellhead, We natural being to discussed XXXX, natural XXXX We our We XX% last X.XX% our and sustainability named system latest our our highest-return the lower We We year, produced incident our methane freshwater near-term for by further emissions through reduce of our detection performance XX% captured producers year. iSense. with at progressing, XXXX. time is gas lowest-emission among our yet emissions next early begin XX.X% of since meeting leak This expect and Our CCS safety intensity toward our first improved another reduced total and

improvements. still the of to environmental end This infrastructure employees' to that typically opportunities that our XX% goals, we year, are of Altogether, the proud whereas our expect right range; about including we spending, is We be of towards XX% but next higher tremendous budget. projects, CapEx our on for running it progress see range. of midpoint continued year sustainability to amounts

year We continue the provide a to February. new detailed develop and more approach complete outlook in our XXXX as plans we

Now Tim here's to discuss financials. our

Tim Driggers

Thanks, Billy.

increase regular We pleased This dividend are reflects the share rate. annual by increase per very things. two $X.XX to to XX%

and the to lower cost advantages improvements dividend. drive continue made and multiple returns price technology improve Efficiencies to EOG's the the structure. year operating oil improvements the expect the lower the of Furthermore, efficiency. additional and to structure fund cost supply will in basins we in we've capital ahead, to the cost of breakeven EOG's First, sustainably

company's our reflects income and in Second, increase of this grow premium EOG's cash portfolio plays the confidence future expanding flow dividend potential. free to

Over several down the cycles. industry exploration low-cost success enabling consistently in DD&A years, last continues drive to value our through our and to add EOG reserves create organic rate,

returning to shareholders We also flow XX% each to committed cash of remain at least year. free

dividend we at quarter-to-quarter. the we special not XXXX. reminder, declared this to a yesterday bring As shareholders current flow about return on commodity $X.XX to on will for cash look estimate free Based prices, XX% basis, an annual

of We balance inflows from $X.X an primarily ended strong We with will quarter with along the XXXX of financial on of working of capital, billion cash position. from $X.X of quarter, debt. sheet in drawdown $X.X flow cash $X.X another generated billion free during the We exceptionally billion against third collateral. start the of billion the hedge cash

here's Ken. Now

Ken Boedeker

announce this our XXX-mile north volatile position across Utica window in Thanks, predominantly natural new south. oil in the XXX,XXX gas combo Tim. and accumulated in oil acres to excited running Shale. trend We're to Ohio's a We've play, acreage

Our lower could east cost, The resource was efforts the cost ago, Capturing team of there operating for advantages. acre exploration, took system We productive legacy with company-wide we inventory precision our proprietary competitive our workflows that demonstrating of way rim of gas improving and benefit XX it and anticipated organic prolific drilling double-premium rock our When Through of technology, fresh that with with reservoir this Oklahoma a and a considered oil years net at the our our geologic which tools, entry knew compete and organic to with exploration Using data, gas exploration most and of our to inventory. and acreage. supported our basin potential advancements in acquisitions, the our is quality the $XXX would an simulation assessment look modeling City a low we perspective. the Utica basis. experience at is cost that out petroleum became low-cost primary acquired our company. Several we than oil leasehold, area well-known office from of engineering of ratios which the premium had leads the through additive per basins our to to completion operations, across the area the in wells premium varying a highly our clear to of along other targeting leasing and this distinct an technical was our be one plays varying less be production and present. and leasing area.

the Over acreage first and returns development in delineation viability South. to part laterals. premium model when normalized earned the last already X our double-premium northern drilling which and and XX plan, of assumes X by this in These X-mile months, of wells our prospect we've wells our the confirmed X the economic

and rate assumes the primarily $X.XX amount are volatile and product mix hurdle from our oil, high the $XX the in As NGLs productivity oil natural interval gas. of the premium window. results due of These large $XX the liquids a to exceptional reminder,

want the acreage. development where also per addition $XXX adding for X,XXX highlight reserve about In barrels strain cost mineral per expense. interest prolific of interest acre This leases. addition the equivalent our leasehold produced XX% this per mineral barrels to the southern the for interest net to of is is over pace of play day of well operating significantly our production acre, of XXX% enhances or in in of most portion mineral this day and the per a as $X,XXX also which rights from oil value XXX,XXX mineral to XX,XXX-foot significant, drilled initially acquired by This the our acres the embedded well, our we operator. of to across our we've oil southern well performance, of which development and We've has area X,XXX will The no dictate additional is from lateral. area since across EOG especially total value the

experience to to on targeting, and northern drill and apply the and in techniques our that utilize the completion Next learning the leaning year, approximately faster climb we this area. XX plan by southern wells drilling to best multi-basin areas curve

goals: deliver to resource plan double Utica second, accomplish We while premium first, X expect our returns; help play delineating will Combo inventory. assess XXXX the further to and

unlock overlooked play to what a in developing decade successful double-premium will infrastructure We of in infrastructure inventory. efficiency basin. this why timing a for learned is multiple our successfully development invest in is portfolio of of in foreseeable We upper our incremental the organization processing an to operates anticipate of itself of with gathering for Combo economic the wide-ranging the Utica This prepare being example decentralized into larger existing to our existing and textbook the basins and resource. the potential advantage past to take additions applied and geology future. to EOG's able program the unlocking over in and entry the that lends advantage end area we identify premium

Now here's to things up. wrap Ezra

Ezra Yacob

takeaway Thanks, proposition. are on Ken. call value centered The today's fundamental from EOG's

First, exploration pace geographic inventory, EOG's capital asset diversity the correct returns. of across diversity, the optimize improve Capturing product to to multi-basin and the continues organic quality X focus each to opportunities high-return allocate provides across our multiple flexibility at acreage Tier

is capture thereby capital both chain to Second, increase free value We a keep operating low, to helping low-cost pieces potential. our cash our costs the and operator. of efficiency income-generating use and technology breakevens EOG operational reduce increase flow and to and select

unique a in commitment discipline our return to greenhouse a illustrates progress footprint. commitment CCS additional goals technologies listening. as EOG's new best-in-class continues commitment special Third, new emissions environmental to dividends methane sheet. peer-leading to is balance our dividend, with to it financial published and that our and employees our And to to reduce recently announced report go our to cash highlighted our We'll regular help to project, fifth, that Tim intensity our now success. culture and Fourth, gas a increase and projects, our reach pilot and XX% develop performance for Q&A. results drive near-term and Thanks financial our sustainability such

Operator

first Instructions] from Neal question the Dingmann. The line [Operator comes of

You may proceed.

Neal Dingmann

first nice it, play. right some for the results. jump Utica is to question to Congratulations My Combo on,

Slide oil talked it's XX guys that at already, it looking you of or years, the -- window. looks like Specifically, on this of you that folks and about about talked this some volatile section that appears, primary

in here? sort takeaway there. you And how have wondering, Just of is and talk about window identified sort this just secondly, focus of look situation the maybe why economics this all the for you

Ezra Yacob

make in is knew and a a Neal, maybe we on and think a liquids when this Ezra. comments this a Everyone shed revisited it's about commentary takeaway. of of a basin, bit then But been been there, sleepy basin. obviously, hasn't really on and window of that Yes, a to question. Thanks then light it will years. the there's number little little economics more couple the the hand Lance provide a to for I'll Ken more it

applied, data a across from to We that past had some the our of we've the the Ken brought do us basin what And in kind manifests of bit better you here. where exploration little some play. talk went lot the of operational a ago our things and It and this between sleepy with other the looking talked knowledge the decade And want with really the about made basins, rock. from really overpressure combine a things the at with Ken, And way efforts, lot the progress modeling the mechanical interact in show wells. you of GOR stratigraphy really really from of reminiscent outside better then the some years. EOG make level, of really, on from process gets north how about excited and the recent and that, nearly opportunity that a the about Basin, completions really obviously, happening that's itself said, almost we before, We As few the the back of to geologic when we've south, wells? that define a we work. so phase what it's to side, required it's the technology we in, area. more data as technology industry across evaluated in learned saw Delaware part the outside a our a it of

Ken Boedeker

Sure.

north As XX% Ezra oilier. some there south, basis, vary which in the that expect And and liquids for to we similar NGL that gas from production and a have expect window oil, west, to will are XX% more volatile both window. cut ultimate gas from so will natural mentioned, oil gas. we but recovery do to an and On across be residue gas which is oil percentages we will higher east,

when is XX% as think play it double-premium this the on $XX focused So That's us liquids NGL from that, XX% about to $XX and and that, gas. the really you gives far And oil, development. numbers. premium $X.XX economics go, as

thing wells but the to we're EUR we equivalent an with million note depending in for X are X at other a lateral. on play, it's to million barrels where these of The early, is X-mile on expecting, oil

So to basis. finding leads our of will that a be really additive cost low cost and performance to us definitely type it

Lance Terveen

too, think of And I we've upfront follow marketing when one, the all and always going little aligned same is all I'll this a But infrastructure plays. our done kind our also of about is integrated in mean, for about to at strategy think exploration really, it's high start our that we as plan, drill efforts. of in kind comment you you Lance. just Neal, and and of bit away. level, down you. I'll take maybe a for

evacuating got market. want nat firm is in liquids-rich highlighted, you It's just offtake, critical. be matter wells a with window. us oil in disciplined is to connections heard XX% remember very that And the to like we're have and Ken have going to We the less control Ken plans. multiple will then about highlighted, gas But you the like XX% always You've to about Utica when our nat volumes think gas, commensurate times many gas play, talk especially the like liquids. just to that

for Much available last So the it's in like upfront, our adjacent I a is look to been if say, significant long overbuilt, here, you also, built time. play. XX just that's years. there remember, look we has out when out we capacity would And of it been

also this So allows for opportunities.

aligned in really are the we've current strong. So operators ourselves that with midstream area, the very

We tell than great those. relationships We've with strong. relationships liquidity the you tail at I get too, strategic It's into much can this you is very plant very when different gates. developed look into have the the this liquidity interstate But into Marcellus. you area. in the can strong is pipelines, And area,

time And with go-forward so see any a on we sales this at don't basis. issues

Neal Dingmann

details, bit bit I'm all prices second keep today just little 'XX a off guys. talked wondering maybe is you coming as bit you you fantastic That's won't have just a activity have if if continue I'm next to considering bit? guide maybe I Or talked plan if would great more production allocation, next just strong you are think, a more wondering My back just bit few maintenance more and would kind detailed back I that still to on costs the I'm plan a consider realize you of there. for a be growth And stable? to year? It's months. maybe year. -- question, wondering, people capital on a specifically, a about

Billy Helms

the XXXX activity. the oil be said to have equivalent to similar will on Yes, Neal, remarks will I the early comments, do be. we in actual the prepared that still we somewhere digits. we But this what it anticipate We And year, production Helms. our low growth, in the there, Billy double talk single Like in about specifics growing also probably will somewhere had digits. more it's this -- the is in mentioned low the in think fact prepared

-- we that today. would So macro X level That see with above probably shaping that's would today X up as -- activity over rigs we see and fleets. to plan adding kind with in of company entail to general how as X the this another frac the X we environment year's probably

what So it you an might of of look outlook kind that gives like.

we scale what think I up cost next if to we bit you to normalize you kind little maybe that our we're And more So just of year will the burn quarter directionally costs and kind kind activity the guess guidance of give rate add it this side, CapEx on thinking. some CapEx for of of where through you a get and infrastructure some then be.

Operator

comes The question next from Mariani. Leo

proceed. You may

Leo Mariani

into to dig more a I little the Utica. wanted bit

X-mile a I basin would of wells. there XX-day perhaps well You little X of eventual an color that in guess help other to of cost the all think million I it with rate? equivalent that about on provide lateral. the that is a rate. basis X-mile the X,XXX there, to that a X BOEs to also you well had bit lateral? talked be a a just And X X,XXX talked like on day of the you kind wanted Can about you recoverable out maybe Can the rate? well? XX-hour targeted a more also, you that's us barrel Is X was I clarify, guess what then as south. a And three million around

Ken Boedeker

this Ken. Yes, is Leo,

a As weeks. of that we barrel a for far that X,XXX there, highlighted couple as that produced rate we day

So with we're rate. very comfortable that

that's to the far That drilled the we've those longest lateral barrel other lateral lateral to move got X those is X-mile lengths. X-mile to they plan, they're XX,XXX-foot double-premium-type economics. We the date. development As move a a day when as a -- had go, varying X,XXX well wells definitely can we

X-foot thing a drilled in I feet team stayed XX,XXX-foot a is they little lateral days operations we've and do drilled the we that once have got drilled. into well XX,XXX longest others really highlight the target. over them. Coloma The in to on an City. wanted the at we shorter XX% as well that that was that lateral, lateral One And It X they have

there. So operational just performance outstanding

go, As highlighted a less just than far cost. as we've F&D $X anticipate really well on being barrel the costs that we

Leo Mariani

I follow little on a wanted bit Dorado. to up

So a pipe. obviously you a constructing you're pretty all mentioned That's XX-inch that good-sized pipe.

sounds got it it's plans So sounds some growth you've pretty XXXX. driving that of like in it lot like a for grand and play,

Just to think ambitions even curious to is and we to that as when get larger you kind that. wave constructed, perhaps an going pipe going growth some a take I'm it's and while of LNG-type of maybe assuming imagine that there's ready as associated get little to towards there's And be with out of Dorado mid-decade.

would color any So be great.

Billy Helms

Yes, is Billy Leo, this Helms.

some Let maybe Lance can maybe color it. the on me answer, and start more with then give

pipeline, sure XX-inch yes, focus also gas we our cost make effort not to low. to but the an continued keeping to as get only that an try operator So market, our it's on

part basis the of infrastructure long-term the recognized installing that's is So our cost helping longer-term that of really We've company. value plan. lower of the

having demand from so where year. center constructed will is taking it's step pipe this a couple being And in gas value important the in be that so recognize another market area. LNG is, just The It's And South to single the advantage in it's all vein. Texas, the all X the so that LNG over are. to not this be done it we certainly that It's we standpoint. years, the then in XX-inch of of where

this kind of dynamics the kind into play. overall works this how market that's of So with

on bit the color the add Lance let pipeline I'll a itself little So market. more maybe and

Lance Terveen

Yes, sure. Leo, it's Lance.

it's like what my answers it just to on Billy very is in add talked integration ride the of one and earlier, as think you heard market of well. our important. about controllable operations. an complementary is very I But again, It's

gen, I Texas out as have know a demand infrastructure There little that's of you a when into Corpus downstream You've we're anticipated the service. LNG, of we bit demand region FID, kind but today. really think also kind that's very about under up market which Christi will asked kind -- sale day that's point But connections. a South you that's anticipating Dulce about also XXX,XXX so power is Texas. once Stage this about Golden excellent. build South is pool in the right? of We're load just Agua to other I in getting Mexico. very, real, XXX,XXX, And we that the the from market, have construction X. day and be you bigger us to and out And is And X We the to are pool Pass think could MMBtu going Bcf just talk the industrial of got facilities close several have X heard

have to XX-inch. that And contracted the position us off so add South expansion, along on LNG pipeline an a will maybe of demand one essentially other our the allowing Gulf connection is thing Coast also a we've that for pool direct to large reach interstate transport to from all Texas Louisiana, and

So Dorado term. the and setting up for tactically, strategically we're very thinking long

Operator

line from question Leggate. Doug the next The comes of

proceed. may You

Doug Leggate

on jump to of you because about, a characterized of east little know I a background the noncore. back I'm And players, have bailiwick how I some to little lot acreage as you story I establish I to just follow-up is curious clearly which I've M&A their wonder might that, as position typically, a a continue expand if of could whether I guess, as guess, not this on but as how looking the your this well. Utica got you'd please. to position be guys, you accumulate there's it. and

Ezra Yacob

we acreage of that transaction. countercyclically, the X and the acres noticeable capture minerals that we is But trying in for only line be our the there -- Thanks in if one we the of about it geologic we variety ways. Ezra. in identifying low is interested minerals with general, continue highlighted purchased can to the to will, most not XXX,XXX really you obviously, the purchase you to model that critical full south I'd say to of so Like economics a in entry to in delineate want kind allowed of our were where is you about and strategy Tier X we a anything, and have It's resource put as part the different cycle it is earlier. where question. this of Probably as fell also able get basin, right Doug, were Tier of to together are course, which, as able get but in out of drive we to these cost Yes, plays, Ken in down acquiring think We acreage. plays.

Doug Leggate

have typically is know things. -- my Dorado, been really follow-up about I allocation. Leo's And in building. you're follow-up report I pipeline these guys you it's guess about organic But question the you a capital the way to the

you've guess, another obviously is step know pivot a, you you here. we're think with back of back is gas how on seeing -- could that. if back What allocation? a in gas of typically you're terms to this your in agnostic to a Now taken terms of thinking about just I'm curious Utica. bit I I should pivot a see capital

Ezra Yacob

oil broad on have say We Dorado increased LNG we to years, economy, the I'd a also, in there to combo heating not two span rubber we're those that demand exposure is obviously, on premium gen, we've NGLs, outpacing price of the from that's And have, And bullish that continue spectrum and Coast. the we'll disciplined supply at and seen of power obviously seeing The won't some likewise, continued these the gas. short upcoming And and that in to some measure But fuel and to to natural to the to demand -- outpacing deck, our could along international on. we're say we the going times this Gulf But see specific our plays, experience demand. based But switching with where so as gas $X.XX to natural NGLs do from markets coal and Doug. natural gas answer the a development is plastics it's volatility of well. think to use entire potentially $XX comes year. blending approach be long that our term back general, on operator. as supply. Yes, agnostic is view pricing investments.

on investing the and that that based deck first about, premium on based foremost. talked just we're that means we use price like evaluate, we we returns internally, First, and

are supply in evaluate of And one and enter the positions, by about held of dominantly production. long-term acres say that owning minerals, we play can Utica, way by leasehold the I'd control remaining especially we and these medium- the Second, demand the pace for with XXX,XXX the And fundamentals some we short-, macro it's is development. that reason excited the we signals.

optimize And development again, to us lever investment. our another that so pace that, allows and really is of

Doug Leggate

month. news the look at of We'll for end the

Operator

Gruber. Scott The next the of line question comes from

may You proceed.

Scott Gruber

for acreage? play organic split the Generally, on Utica the what's across assumption premium versus guys you resource generally, Congrats premium? acreage the that's double spacing rough are the using prospective And what of addition. single

Ken Boedeker

is Scott, Yes, Ken. this

the As split, far Utica. the early as it's of really the development in

estimate. We kind wells to a have with we want drilling in resource well or some the a or well additional it. We across do X count some and before acreage of really up spacing testing a come

actually think premium across we as premium the double versus potential position. premium, acreage that have As we far entire double

So play we're look developing about and excited next really just year. forward the it to

Scott Gruber

term, allocation have your optionality It's up, obviously, younger longer do that And bit just Dorado fits over the the you which you'll question, to you curve. think Utica be ramping development down thinking little the medium ask relative the just just PRB, are further and how And on the in? kind to plays how Utica? about on in capital ramping of you a

Billy Helms

Billy. Well, as Ken is -- this

play double be very As potential the Utica, Ken about to just mentioned, excited the premium. the we're of

on it in we early a so the competes capital definitely standpoint. play. are But And allocation

plan of year XX like. the go-forward what and plan see the we how then determine wells things today, order in that next from we'll as looks drilling on somewhere on So

capital between early our seeing as We all us as particular, the exist a today, developing still the gives supply activity of seeing to constraints Basin move year, and and have it try inflation we're keep mostly far different increases from basins. flexibility But is of activity that we're for chain next most lot in of we allocation we're today. going in the still the to leverage basin. our Permian of in plans. lot one where basins having areas a As to In these multiple see things don't benefit capital to

can move to as we levers pretty we expect levels pull other would doing our forth We activity I plays in of remain with today. what towards there consistent we're the whatever the So set meet objectives end the year. to

Operator

line comes next of the question from Meade. Your Charles

You proceed. may

Charles Meade

X you your it's concepts from you also whether previous design? And of ask to perhaps, that test zone you talk these about did a across Utica. completion like targeting wells or perhaps, I'd about Can drilled in wells? X those the different you operators, differently, what did

Ken Boedeker

is this Ken. Charles, Yes,

in other in what can number as a bear has our having experience differently bring do all it to in really with that here far of As we've of this years the Utica. to of done area, basins we

think X about it to it, you things. down main If boils

being to across acreage targeting, is identify position. the target able the them of One

one oil and far other looking window. into phase, the not the phase, getting getting not too gas is understanding window that The into black at the

And other is and completion's The drilling finding I would And and all That's both area with That that and double-premium we varies see. can together, is the pressure what confidence that across in able roll the the pressure low third that develop position. the then when rolls you we'll we how our really to that that execution design one acreage that operational then that the basis. that cost into geomechanics. all gives returns us call be it bring.

Charles Meade

with setting? X-mile be overpressure take year, these -- And maybe it's to we about -- it drill that since X looks rigs in wells laterals while might like a XX next thinking an should

Ken Boedeker

point for now, not up some but done point if rig at may next with end Charles. this right really program and X Really, would be aren't time. these in they're rig Yes, having X taking the We . then be time, another The wells average at available X would long. rigs at that XX-well year.

Operator

The next the question of You may proceed. line from comes Brackett Bob

Bob Brackett

question, all, the or this Had keeping your to peers, on exploration and call for it, $XXX higher-level thoughts get given of it's a your run XXXX beyond scale question nitty-gritty fairly yielding have versus at budget million year, that aggressive budget The then results? the I'll you is Utica. a exploration that and higher-level so. What are

Ezra Yacob

we've evaluation. a a number at of we This you're in we drilling Bob, this year, had Yes, talked this different of of some the as year, beginning right, -- initial is kind year, number cats wells, wild exploration plays this Ezra. different and at places we're of the play.

we're to holes. of Some here another of in XX prospects we're or if the really inventory. we're it of XX type delineate here. Point -- additive next program, the most type about those about are wells exploration is Outside there. it really thing. dry delineation important be that that our XXX,XXX-acre for Depending along together. for position further kind I'd will the will across us producers of program, wells, on what That's plays bucketize probably about be these exploration are and the you part of Pleasant delineation It's of our basically quality year's talking the a and to we've trying how biggest year remember, It's be of looking going the put put if because it's to not bit existing how really

past. in prospects have some the in we've about that other We areas talked ongoing

types said, a February. that with areas, seen premium premium in been bit as known places and would of To we're right completions of but oil out places again, understanding now, in plays, Billy those it's number and into the extend a combining it double and just and the to you other if we'll us. trying natural be sleepy places though, drilling of areas, just And types in go. similar they that we geologic and advancement technologies give have technology, additive break our ones, continue as modern past, hard environment bring where horizontal to to our can Some are gas early, of turn that the them little rock, producing evaluate those we'll of

Bob Brackett

Very bit clear. kind And nitty-gritty. then a of

importance You of mentioned the targeting.

You Is stretch a here secret the X-foot is zone. in it Pleasant? mentioned staying staying in sauce to an Point the say

Ken Boedeker

Ken. Pleasant. I No, is stay in We do the mean, Bob, this Point

we've I on sauce that. of really think and of then everything. other It's our combination a in here perform a secret able the learned is what being operationally combination to plays

and to about It attempt model better work to goes to petrophysical getting ability next the to our the better, the and it then kept to people, well at just always that right understand try really able area, the and This last. we've that in perform. to it's get understand window culture. X-foot targeting being and make really than is back our on to about speaks varies looking getting So really to targeting how the the better across that

that entire effort. exploration the secret our company, you that put for all is really So together, and sauce our alone let

Bob Brackett

sneak in I and It's one, a just apologize. I'll clear. And third

that a And reservoir of You a have challenge. producing? mentioned artificial the How the there different In Utica importance old always energy pressure. that? in out days, tail was maybe that you something the to keep strategy is was there overcome lift

Ken Boedeker

in I the oil volatile window. think why Yes, that's Bob, we're

don't gas phase volatile our time, right wells. on right lift in that us that see point this being have At the to the through of life the help We window much these in of window. we oil enough lift that artificial wells. we'll It's portion need

Operator

comes question next from the Wai. Jeanine The line of

may You proceed.

Jeanine Wai

Bob's maybe question, following first just here. up Our question on

worked basins, far. basins too has which premium still many how you're model is EOG operating disclosed perspective, an But decentralized organizational The You've fantastic. considered basins so for opportunities? evaluating from many would because clearly well other X very be

Ezra Yacob

really employees the decision-making is go ideas teams is down plays. this talking touching about allows our people, to strategy, we window decentralized team functioning to asset industry, actually a basins. forth. the expertise That's the Each oil basins what the fact, divisions. core really fantastic Yes, adds a question number Point you company geologists, interact so you Ken individual X Oklahoma to our leverage Jeanine, of mens, that as wells fully advantages, key who running a is operating lot It fact a of by each Woodford a we we a of full here. of different way that play. type play and different the to have this, really that's in is rocks the being of They really of on us you benefits success level and accountants, it and back of what lended was are the completion run type who our think -- see a actually of on of can with competitive play of one And that a some the will. our I'll Pleasant at City closest oil started by accountability Utica and handle ways, in any the land of that looked in way, of of their able to is or Woodford, understanding. it with kind to to across That's what push reference to have familiar marketing currently that these how stratigraphy. corporate in cross-pollinate the of of the break complement and creation of so have think mechanical has Again, same and unlock at characteristics teams, decentralized break scale, members and operates When organization if In that's exploring kind you and see engineers, how every Ken unconventional the day. kind to single kind working overpressured being our helped lot we multiple up and And that of quite value Ezra. those are that organization. to speaks a the between in the understanding about

Jeanine Wai

in looks And it midpoint like color year-end to quarter-over-quarter. CapEx on is sounds then the is 'XX? us activity early that could up, question, our what and We but noticed momentum, flat are second at be able heading to oil for XQ of you operational provide timing-related. terms guidance like any that into

Billy Helms

Helms. Billy is this Jeanine, Yes,

to it's You're looking And exactly currently we'll just year. we right, next adding different into rigs the start plays. all carry factor. a at We're rigs plan timing running that in

year, play to that As go is will roll that of different a that's get quarter-over-quarter will to volume our quarter late happen outlook based in that's closer the and Permian, really in and a next the on wells The going budget, flat, Ford pretty bit which we several probably up the as in plays, just the 'XX firm Eagle time. into into completing the we growth for well. function as next Dorado little year. And

of function of a just those that's timing completions. So

Operator

from question line next comes [Kevin The the MacCurdy]. of

You may proceed.

Unidentified Analyst

just And Utica. $XX back-of-the-envelope if in lateral some a getting on around do to Trying cost ballpark spending there next to of the back guess And the Would X-mile math you year. million? I million $XXX rig of assumption that the kind right did at rate add kind for a And put is spend would XX of wells, year. around in Utica that next you the year? next

Ken Boedeker

drill is is far Yes, because to additional What wells those talked and packages our about a talking X million-barrel what some Kevin, now this about this what to some development we we're -- haven't we cost number wells to be testing, do out on of Ken. see given ultimate that are X We them really really cost. be. will want than and and that as million drill $X development we've in as costs less a will our pads F&D have

reasonable get So well estimate a to can X cost. to the the million you F&D X $X use million barrels for in

Unidentified Analyst

guys your grows, effect knock-on And But that in Utica, you marketing gas the in kind concern do a have the basin? you And of of that PA plenty of plan have had about that you if little mean, a out the for basis? Just digging to gas of takeaway impact that bit returns? Southwest might locally. Utica get is strategy I an thinking mentioned to the

Lance Terveen

Yes, like the integrated I is very Thanks talked question. is marketing Terveen. for like earlier, even it of component I'd say your Kevin, about Lance early on. this

very we Combo gas overall nat portfolio look realizations then like competitive. mean but still the I Utica recognize how we weaker, are So it's at and the when our competes,

anticipation. downstream we liquids And so your in think it comes in relates it just about just that focus as of when earlier question Again, to the have kind just that. was takeaway you

gas going dry lower development. we're going that competitors of the come very gas east see going think and I on some rates the kind those there's are when to are that rates other look similar in that to of like to our region gas the to misconception are the wells out to

gas at not And and on forward that the side, we on we takeaway, with we have now. an and relationships the capacity issue sales the so the the when we're that with right a see foreseeing look go processing that

Operator

The comes next Naryanin. question from Anan of the line

Neil Mehta

you This me is Neil Mehta. Can hear okay?

Ezra Yacob

we've got Neil, Yes, you.

Neil Mehta

Okay. Goldman I'm that. Sachs. Mehta Neil from Yes, it's about sorry here

deck, Slide time relative like some showing into plays Are plus/minus pickup of the of a maturity of in And the have to which your of States in U.S. the XX a macro surprised foreseeable this is the April oil question want we here, even had and XXXX. haven't haven't production in peak more Bakken range. anticipating? which the and move at increasingly weekly, the that the seen hanging and about oil They've seen Ford I you is be as we growing kind we X people point are that day is to the where United future? I we Eagle shale around since that least lot going thinking been production, to in tie So million-barrel And should a of shale of Delaware. U.S. of production the were tougher getting a

Ezra Yacob

Yes, Neil, that's a good question.

a based rig this in talking year than of inventory But counts, there's were growth into forecasting. bit out was The people left coming is the consolidation industry, kind the the we've we about and pandemic, a been year. a across These from quite we discipline we've you've were a me throughout have And of It's side talked people a companies of here. are for things clearly, There's pandemic. we prior that inflationary year. And drilled had the in here, North continued the with less little was majority companies thing really balance a what nature have continue bit, many spreads drill Let to American frac how size, on models you've way E&P chain little year also pressures one I of about in left. those with the been what were time companies that's the less do it something been anticipating U.S. too, operate. felt seeing favor number is more but is the this it. scale, turned biggest the to definitely for our year the what's basins sector think the be to the years. and this really what again, this and than throughout year, those there earlier on. take piece sheet, of investing have exhaustion to Since supply entire of be bit been able that drilling that a a that constraints and the out at going we've of to the disciplined reason what

to are it's U.S. kind transitory X necessarily think nature. really or And in together of a of that things about X talked I different those limit frankly, lot have come that growth. So quite not things I've

as Some of things into will well. XXXX these really continue

on suspect our side the forecast I again, XXXX, probably entering many of of say be numbers end the I'd to bit seeing you're there. will little oil why that's the so And that out a low

Neil Mehta

helpful. just the balance sheet. Yes, that's follow-up And on then a

now. in are a guys fortress net have You sheet clearly balance position cash a position

Pareto about talk how remind about you're cash your leverage you And again think optimal is minimum thinking Just us balances? -- structure capital what the as profile?

Ezra Yacob

create value. We're it committed and And free that's cash of. we're sheet for billion, piece balance of to us, run a do flow. priorities, talked XX% optionality stay balance balance to also the regular as our long same year, carry a in is you for in dividend, that couple never strategy commitment have we've But go and minimum flow just it's free sustainable historically. not been a counter-cyclic have than paper. balance compelling just real buyback on we're the opportunistically. as cyclical strong company but industry ultimate the strategic be, of of in growing in think -- not founded a a one position maximize we in about really, contemplates for those value to a the of more the to what best bringing delivering is pristine end things. and investments we We've said always to that. But and up. very general, a at We've when cash We've far billion a shareholder thrilled time sheet billion right but sheet thank the that overall a the operational That's are by able to We've a aimed the of the where strategy in but little proud Neil, at you is thing as provides kind strong such of the day, strengthen having as to There's creating a -- We $X both $X.X lot to just you of really industry, and focused managing at big cash on the unique that sheet. a the make there's reserve returns. cash authorization. I out done sheet commercial balance balance cash ours, just target said, have now. doing being balance time, supported that right sheet can to shareholders. a We're return the It's exceptionally over $X like it Yes, of long-term something thing on this ahead using the at about a talked our of having about the cyclical and, said, sheet,

Operator

now That Mr. back will to I concludes the over for the session. remarks. pass question-and-answer Yacob final call

Ezra Yacob

all Thank for this EOG's listening. we our to participating the especially for Thank in you. And delivered you thank morning. quarter to outstanding want thank want shareholders. call of We employees. They've for another everyone

Operator

conference for Thank participation. That concludes your call. the you

You may now disconnect your lines.

Tim Driggers	CFO
Ezra Yacob	Chairman of the Board
Billy Helms	President and Chief Operating Officer
Ken Boedeker	EVP, Exploration and Production
Lance Terveen,	Senior VP, Marketing
Neal Dingmann	Truist Securities
Leo Mariani	MKM Partners
Doug Leggate	BofA Securities
Scott Gruber	Citigroup
Charles Meade	Johnson Rice & Company
Bob Brackett	Sanford C. Bernstein
Jeanine Wai	Barclays Bank
Neil Mehta	Goldman Sachs

EOG Resources (EOG) 4 Nov 222022 Q3 Earnings call transcript