Earnings call transcript Q2 2023

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Operator

Good day, everyone, and welcome to the EOG Resources Second Quarter 2023 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 Chief Financial Officer of EOG Resources, Mr. Tim Driggers. Please go ahead, sir.

Tim Driggers

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

reserve accordance this and conference the potential not with resource guidelines. estimated SEC’s necessarily may reporting include of Some in call estimates on calculated the reserve reserves estimated potential

Ezra are Boedeker, Yacob, and Participating Production; on Marketing; morning the Streit, Investor Chief Production; Ken call Helms, and Billy Officer; Jeff and VP, and VP, Relations EVP, Chairman President Terveen, Exploration this CEO; and Senior and Lance David Leitzell, Finance. Operating EVP, Exploration

Here is Ezra.

Ezra Yacob

Thanks, Tim. Good morning, everyone.

execution CapEx, cash free of Production exceptional the to and returned adjusted cash all billion multi-basin Our net of executed first excellent and year-to-date we've quarter DD&A $X.X and results throughout cash balance $XXX billion flow free billion, targets costs more performance. generated cash second the volumes, free year-to-date of than driving during another cash That financial billion. of flow, income beat of reflect portfolio. operating earn our We quarter generated repurchases including funded half million sheet of on year. cash $X.X shareholders share $X.X of the $X flow

$X.X year. regular our cash to currently about oil our of XX%. have majority return $XX this peer-leading return dividend $X.X to ahead XX% of committed committed XXXX billion assuming our of the we shareholders in the return Taking target dividend, account and shareholders XXXX, regular is of well of into or year full cash EOGs billion price to minimum a estimated flow

dividend sustainable nor have to which cash. return suspended remains Our cut the first priority regular never growing we

opportunistically quarters billion repurchase of to during what and more And to dividends proposition. ago, remains increased special $XXX consistent, than our commitment while our has leverage a over the repurchase two million first place through strategy shares is depending evolved and times conditions additional and to value cash to buybacks XXXX continue also get business. we've cash return half strength And of on market return to through in We deployed year authorization of execution fundamental EOGs relentless of the the $X putting we continue better since volatility. a

multi-basin We reserves, lower our which invest expands high our and across portfolio, breakeven in costs projects return reduces our margins. adding

premium We are our basins, five history. now actively time investing any in in than more

and outstanding in and Powder assets Ohio foundational Delaware deliver progress Eagle by pleased an consistently our the Our emerging across the plays. Texas continue Dorado Utica we're Basin Southern South to Combo, Ford Basin, River

continued cost across develop performance and meeting and our that each or as supports we innovation. pace consistent productivity are Well execution asset portfolio invest beating a at and expectations

to cost our company, investments costs sustainably continue We innovation unit to contribute operating finding technology and and infrastructure performance lowering future lower and reduce that utilizing our basis improves lowers reduction costs well and well to of costs, the emissions and efficiencies efforts. development current are our and

cash our deliver strengthened value through shareholder balance year, cash consistent further free which funding sheet have cycle. strategy, and Finally, to pristine transparent designed this generating return we the is significant flow while our

XXXX. the into second half heading And of

the and complemented an year continued through the remains through OPEC+ first ounce exiting on be upward Our continued similar pulled second has end. of of growth companies rates as levels start pace signs is the utilization of demonstrate pricing in performance appears five continue below inventories been And half demand on XXXX, year. the cuts. should inventory significantly refinery place gains drawers as fundamentals. is demand culmination resilient volatility since following half year will have the U.S. with oil of year, despite public discipline. inventory averages production the pressure by strong high. reduce through the showing to The and less Strong it year Oil in and growth of year these deliver further on actions the while Production to activity are

while constructive Regarding generation North up in from average, petrochemical term balanced supported by environment levels complex American story heading remain These late reflecting for should this and gas firmed XXXX. natural the exports. LNG on reduction an above Coast. both LNG gas, natural more recently, We Gulf the supply demand recent on project inventory gas drilling, and have longer the prices five-year and the and remain a growing a support in trends demand into power year increase U.S. and the approvals,

as a pleased especially gas one market, of profile. proposition with the place of of has an been for natural delivering cycles value play energy. business deliver results location Dorados and and we're never supplies of the leading is term cost with future the our the in industry emissions role the strength the long in and advantage in EOGs better U.S. shareholders through to lowest And value

to financial Now position. Tim our here's review

Tim Driggers

however, the improve four the by operating benefits see in Oil We're unit despite year-over-year in production total increased X% while year first operating excellent lower increased to operating the wide categories. declined all X%. Per our production all flat from the delivered prior per to cash and period beginning costs industry in financial margin. essentially lower and cash X% EOG inflation. of performance Ezra. remained unit areas were Thanks, Compared second operating costs quarter, quarter. cost

rate quarter DD&A Capital XX% our our the as $XXX and million XX% timing budget. lower costs the infrastructure $X billion below in difference the non-well came level. by Year-to-date above at driven billion due first of $X.X compared at reserves to was target related such of base. slightly of to The year year-over-year fell costs mostly expenditures full The addition by of production just CapEx the projects. is finding

in performance and the technology application We company. lower to is on big last XX% generated XX oil the and $X net capital adjusted of of $X.XX of innovation share earned price is employed our gas efficiency per making capital at Hub free of and income the execution, WTI of about with operational improving for along quarter, second a The assets, an cash consistent price costs of average months of $XX $X. Henry billion. financial the the on flow natural impact Return

Billy to Here's review operations.

Billy Helms

and Thanks, again Tim. for once would thank their first our our to and near delivered led to that execution. forecasted employees a I exceptional like another perfect of dedication quarter. EOG quarter meet targets commitment

on As cost. of the the per unit half year and on have a operating result, completed volumes, we ahead total cash first ahead

design. the infrastructure and several reduced the our flexibility to is analytics a as guidance, first transportation data below new control the of volumes performance wells The part costs also to less including factors. through real our Our which factors average year new the with different the due provided operating lower sales to needed in to our interruptions maintain several midpoint cash due of half cost. to the time volume outpacing to expenses, year combination half as is in due lease markets of along the performance redirect to downtime quarterly market well primarily X% of experiencing of in of forecast, is than investments Basin, We're completion Unit production. operating previously due first our Delaware planned,

the flexibility functional LOE, quarter favorable benefited low marketing operations from the to quarter. Credit throughout to expense who after remain sell compression and transportation related on Lower systems of our focused and costs into more cost markets while the production, goes information efforts quarter. reduced workover cross sustainable, teams,

full to these sight of reduced unit our the maintain line a cash have We as improvements total cost year, operating guidance cost. year for and result have throughout

Operationally, firing EOG all is cylinders. on

Delaware plays delivering are Our results. foundational Eagle Ford and Basin exceptional

portfolio. benefit across our from technology multi-basin While emerging and our plays transfer learnings

in supports them operating independent in multiple across basins one of and by and much taking area, functions. innovation Our compounds innovation ideas the structure each area and expanding decentralized and much that technology across multiple incubators, impact which like born

to in-house Across opportunity improves chain, cost certain That areas lower and structure performance. where those strategic every and find sand that work company. we our engineers the of look align with improve downhole like integrate services drilling our cost significantly to an geologists mud, We area, water. vertically the every better capabilities such drilling well services motors, includes operating goals. within Developing to opportunities frontline for the supply day technology and

River This highlighting we're quarter Mowry and south Powder Ohio Texas Basin performance the Utica drilling Combo plays. South Dorado, improvements in the

plays moving of emerging Our curve benefit due the the and to the are up faster advancements, the of decade. past technology over learning application drilling

year. proprietary of to of combined time our contributed decisions real data powered these and suite applications, and to frontline continue employees assist to benefit for by already The drilled faster. our make evolve lateral Ohio analytics high has collaborate efforts In days We frequency in in XX% we drilling increase and our an to play, up emerging X.X this feet wells a day and of plays Utica zone. recently per in XX,XXX-foot XXX% to our

half expenditures owned into running Capitalization noting been year. that economic the impact first infrastructure the has of for deferred second is our infrastructure. also span of light, in due half It primarily the worth to are a the investments EOG the

second $X.XX Hub. flat natural oil to essentially gas U.S. realized Our Henry was WTI. quarter price in was the above U.S. And

on drilling are we'd is year anticipated program for this of the year. The with completion right for CapEx consistent track. inflation and started rate what our change

of the of remains outlook just line in cost So year-over-year to limit ‘XX market The second sight the to additional year for too oil given any of the particularly XXXX. predict. has service see half in too simply to dynamic, potential impact It's early softening well we this cost in year. still inflation While XX% to the constructive

driven less quality see marginal edge and that long-term, declines sustainable we to performing generating price the leading cost the highest by remain reductions, are highest which teams, on more Furthermore, in utilizing equipment. focused we the exposed equipment

Natural year our we been volume capital the this deliver liquid volume $X our Thus, Dorado, year, X% five had about plant of completions play, gas and earlier we program X% or timing forecasted pushed accordingly. is reduced and Our billion South into focused to guidance Gas growth XXXX. growth. Texas wells full total -- early In is delayed

corresponding and to our in maintained drilling efficiencies. pace We Dorado capture operational build momentum the

improvement we're XX% times a our in Dorado. As drilling seeing a for result,

on XX shown our updated As of Presentation. slide Investor

We’re natural gas Dorado the term, cost U.S. believe will lowest on will scale. of a emission natural gas lowest in supplies of longer and one on and constructive be compete global and the

continue optimistic the very second also to out the positioned year, but started our I deliver half and the with and many challenges, to opportunities for am how future. year pleased of This improve to has teams many the continue the company company. about progress with remain the

progress I'll the turn lowering emissions. on to discuss our call to Now Ken over

Ken Boedeker

outstanding Thanks, Billy. We're progress continuing goals. to emissions on our make

be report As September, ahead published announce near XXXX of to to in goals that we've reached a excited three sustainability preview well are that our significant will we schedule. term

COXe of tons our rate GHG metric First, Mboe than XXXX intensity as goal of less XXXX per XX.X. XX.X of our

flaring Second, have And target, gas emissions our our is percentage is than attain which flaring our of our in well our third, methane significantly Bank of achieved routine XXXX of strives zero initiative, XXXX. XXXX ahead we routine X.XX% World goal by less XXXX the natural produced X.XX%. significantly of goal XXXX, zero and to ahead and

confirmed XX.X% wellhead We of that produced. the rate gas have was our XXXX capture for also gas

iSense We named finished in Delaware technology monitoring. continue covered by to expand our the production of with our Basin in-house XXXX XX% continuous iSense monitoring methane and

reminder, monitoring one on with our and methane of data is incorporating data control a power in As the our and a basis XX-hour facilities four monitoring iSense of continuous data centers. this production

in and potential the prioritize This ability that repairs enhances needed field leaks, to emissions. are minimize our identify fugitive to

a iSense and with operations. to of data anticipated continuous and will improvement EOG operations, of design collection integration As facilities lead it production and that in is number

expectations us made our our very the are and Their efficient. about more emissions and goals have our to dedicated excited exceed early. progress we who performance We're such proud driven innovative to in on continuing beat push making the employees solutions several years we've are that operations last have

We the goals are anticipate with goals currently those new operations assessing first publicizing groups and half in our XXXX. of

Now, to wrap Ezra, up. here's

Ezra Yacob

Thanks, Ken.

portfolio. again costs at reduce a is We We a pristine leverage and free significant well emissions. high high demonstrate by invest competitive and innovation advantage. cash to our culture backstopped sheet proposition is low that return technology proposition across flow results and value multi fund the cost of value sustainably generate our investments lower works. assets basin to value core deliver in These consistent Most ultimate cash diverse importantly, second low our return cost shareholder Our once to transparent EOGs the our balance cycle. through return quarter strategy

Thanks for go listening Q&A now we'll to

Operator

comes [Operator of Instructions] Paul Scotiabank. Our go first question Paul, from Cheng please ahead.

Paul Cheng

Can you. you me Thank okay? Good morning. hear

Ezra Yacob

please. go Paul, sir. ahead, Yes,

Paul Cheng

please. questions, Two you. Thank

you thank you free that First, on XXX%. paying cash on cash than the the return flow, are more

you're or how into the pay little position, more a is XXX%, and the And Just right going buyback view how the we want the a closer XXX% part should until the determine to in that as in change this time to future than your change. that buyback whether you of second given question. first think we the to consecutive see should now management that also to there's That's quarter cash of payout on reset is the net read management condition an already of that that return? ongoing perhaps cash that we market should more see the the toolbox maybe means bit

behind Dorado, you share quarter. of process the you in I it's related better thinking guidance us the delay? with bit that do that understand the to it But maybe us, has Thank this decision-making the that that, question on the to should this you. mentioned think bugging can you that And want with delay a in Can I has all you think Second in share and been five full I Street right? to delay what's guys year Billy know well then year. reduction, behind. -- Dorado, little the terms the you the I decision that,

Ezra Yacob

is This Paul. Sure, Ezra.

I first address Billy second question the Dorado. think question and I'll take then regarding that can

it's on the cash first kind one, a on yes, broad question return So strategy. of our

cash hit which XX% trying at. flow. all first, been that So free get to minimum let's on always points hopefully, I of the with you're our of the start guidance, has But

XX% reason never that to So The always and being it's easy XX% our minimum as cash target, dynamic, flow. pretty a and to honestly, is, that of it's simple been specific a like understand of guided free we've we communicate. guide it's

underpin highlight consider our true balance through over and price of also a of increased of I The message of be really and the is there's minimum the range talk commensurate that's the we do regular the return consideration the with company, scenarios, regular it of a especially about dividend underlying And much. strength of so Again, regular can sustainable lowering prices. dividend be can provide amount the when what strong with and can really, in cost want to XX% we growing cycle. that -- a meaningful it pullback And supported we a cash that business, the We emphasize, dividend with hallmark we improving in to like that still that and basis business, that the sends. strengthening sheet.

recognize kind as to do you've year, value that payouts strategy buybacks create More specifically that of seen to this a value. way of shareholder opportunistic we return is part of the cash

special paying means opportunistic is instead strategy that to I allocation dividend. a where of dividend really, addition, decision at cash with XX%, buy times, say So we and manner as a our consistent in shares that our that of you've beyond seen overall and capital in an would to regular back above return the minimum

like basically drilling oil it's infrastructure. is of long-term gas do other in wells high-return That's our whether focus we what to exploration how evaluate shareholder or investment primarily going create We any investing we or that investment buyback, on. decisions, value. that and It's just

in over paid Dorado positioned I And XX% all to the I'll hand the on where highlighted so is right -- fluctuate the are Billy. depending we minimum as a you it's committed we're have already strategy. and for very now. we paid -- our the and what And moment guided and XX%, can of we've will the specific and what percent cash XX% timing, it out But now or on script. bank around well to what return through time the year halfway We year, last circumstances highlighted

Billy Helms

the that had illustrating to and consistent the Yes. On place. color that drilling potential Good efficiencies decision maintain Dorado on that elected there indicated of we delay deck our earlier we've We evaluating play some times in our some drilling the the in operational morning, to Paul. the Dorado, in gaining given year improvements were new on we side. that there, in and in of benefits that strategy. our with we're through And we the seeing to operations we're investor are completions

the investment laying we'll to decided we're of That's fundamentals But investing a of improve, it be side prices. which the next until for to bit our completions don't year. levels So there certainly We go forget, premium prudently that when into gas very so this progress. pushes our strategy we delay gas saw just the a of watching gas inventory some price deck five pleased completions those into late as $X.XX. year, with we wells the price includes relates and just little were and on the

So that. that's simply the thinking on

Operator

of comes the question next Dingmann yours. is Neal Truist. Our from Neal, line

Neal Dingmann

Nice morning, quarter. Good guys.

I for looking of to was questions like at pies. an it specifically left but so oil. this it productivity, looks wells becoming looking notably Slide over those continued that As more improving, I'm the it It on D&C informational more your targeting? well I certainly on yours, asked by is efficiencies. bottom the Delaware through is XX focus at my what continue years, that not that just that, like appears Wolfcamp driven only corner wondering Or more improve, of looks just and wells the they're the

driving is So I'm very it positive. just does that, wondering what look

Ezra Yacob

step you, address to and Thank going let question. is in your This actually Jeff Neil. Ezra. Leitzell I'm

Jeff Leitzell

Delaware half wells we've year. performed happy is the Permian have in the Hi, Neil. with really This productivity, the first through been of Jeff. On how our the

with design, a and pay still stacked that they're to of Wolfcamp. our has right as And due design in this So say increase combination kind And better. or production to Wolfcamp be update, of for I'd in about, new completion both which targets, we the primarily co-development primary continued talked EUR really strategy now in our forecasted completion successful our the all quick performing in XX% just new year in oil just and observing a to regards targets. BOEs both we're is first

continuing total wells all twice XXXX. the on we in talked year with along XXXX, with and which for expand and on emerging in XX about, we're we're as other Wolfcamp our of multi-basin technique in the number targets areas it, test the also And with new completed Basin full about nearly Delaware portfolio. planning plays our So in across to we've the bringing this design, is

Neal Dingmann

sorry that. OFS you've second the just if My able right contracts, type us And In is very in see not then maybe you and all but wondering what -- little past, the now? details to a on I you of sort about time It's the how been just all been question past, best say helpful. I'm things. those only bit renegotiating I would on know costs. among just the at the stockpile of and market give have

Billy Helms

Yes, Neal. Billy. This is

kind 'XX across various start we're are I'd the These lower soften. into service products manifest well and add a lower falling in reflect certainly, the into these are certainly several prices cost service that varies there this XXXX. industry. product kind it seeing is. So depending But of services leading-edge until program area. costs won't of for where and prices certainly, factors year our the from capital the really to And later probably savings that on

through we As cost sustainable a operational focused there, our on mentioned you gains. efficiency company, reductions as

more in since back some our part through we increase on rigs, of the is count spot super-spec performing built our put that equipments equipment electric plan no than fleets, really numbers when As November, expecting XX% in relative really the year. headline year last costs to really et together seeing rig second a February, peaked service plan costs we're in the we anticipate less more this well market. we to moderate that out on and exposed seek these inflation that the frac would do and the marginal And result, cruise, cetera. of highest That's we would

we the So way out exactly things are playing really planned.

start us point in of our there from volatility we activity levels. secure exposed do to about lastly, that try inflationary given XX% impacts to how any business, really on costs our we any Another in given we are then helps year year. in less cost to And insulate service the manage the do based well is our of

about XX% you, remind would cost as kind I the that there, market. the year only our And we over last compared X% saw alluded to you of to really inflation in increased well

through it next yes, of for helps into year. certainly So confidence the really go position manage we we look as next see our level we'll activity to can And with year remained how flexible ourselves us kind as year. we

Operator

next question JPMorgan. of from Our Jayaram Arun the is comes Arun line yours.

Arun Jayaram

a the I sequential And help morning. updated good EOG. second the thoughts could in slight some think I us Yes, to production the you in guidance oil because fourth looks quarter mid-XXXs decline range production of there's get the to oil to profile like half just for about points hit if was if wondering guidance It in kind hitting your XQ. still wanted confidence oil of number imply upper on XXXs. midpoint would that to

movement us sequential volumes second help year? the the think half about in the So of in

Billy Helms

I each have Yes, play. more and is in Billy. thing in well mind plays, of than this is think sizes and do varying packages in the we multiple operate basin we keep to one Arun, Yes,

vary these across can within the quarter-to-quarter production the variance plays different timing even on -- in really come quarter-to-quarter basis of of drive the So a how the really is quarter, profile. how the volume quarter within by online. timing can varies And driven the month-to-month packages that

quarter the I ask to And change to the you from quarter, the look quarter. what quarter actually to the in than larger at it's you're from the I and and second seeing the third fourth would you, remind back just forecast first go

bringing would activity as ratable just timing these simply larger some year maintaining are a throughout we So on and the of we packages. of -- on matter

volume to of this met exceeded our either far meet so being So, able the or and confidence have year, guidance. in our we've forecast midpoint complete

Arun Jayaram

Great.

Ohio some get to wanted I follow-up, thoughts Utica. on a the Just

you they're backbone I'd how a did looks an We building But out, for anchor be the that year, like highlighted little you bit investment. call in some be providers Utica. be helpful. may TIL love the get may pulled midstream would on your it, E&P that down thoughts update just guidance a to but Utica the this the of One see

Lance Terveen

most morning. on getting is good the This Lance. place. would now Arun, right I focused just infrastructure all we're is what midstream Yes, say in

So we the that the ongoing We've do have as two projects on. in and north another X in got are then one South going well.

we're production on what So the available processing to focused linking is capacity. our really

And really, in what's strong happening a balance need going have both up with is working it's to going all the EOG-owned we've there. parties. along really are a Utica done consistent of that Combo We're and infrastructure strategy relationships to where we're plays, with third good

now, right setting the focused infrastructure. beyond XXXX with and so And up on just

Ken Boedeker

our Yes, want making give excellent weeks. be few X-well and frac starting program this bring up quick on this you progress a year. Arun, a just Ken. Utica. update a again month crew We're to online will I do on this that package plan is the in We to

wells and acreage to completed look additional our we So our deliver continue up do there. expected to add to in and and add position for also performance, the opportunities drilled continue low-cost we to XXXX, we

Operator

Bank question Doug next line Leggate Doug, of from America. the comes is of Our yours.

Doug Leggate

last decision quickly Saudi's you about five four, But the worry extended growing talk that with to it's issues everyone. U.S. support OPEC. morning, your years Good a the to too opening whole did since battle cuts. market long Ezra, we over share all the or about Thanks. price the remarks, we in time lived all and through had

in is So to you wondering boardroom is an oil cutting production the I'm and when arguably at support you price artificially price. what look sit because high Saudi

appropriate that the an I'm means subsidized basically because of how to again cash your that Saudi. what just curious level by you for -- price could definition? about you think How is right do allocation your spending business, not being So the windfall means flow cash think about one artificially flow supported it, by business of call your it's what it's

Ezra Yacob

they're the question. kind Ezra. to they're indications Doug, to that This of this kind release that they inventory come start morning, had for is down going started dynamic bring to start Yes, their to of the like going a support all a down. Good looks have now as And said, it's levels entering last increased large Plus, it We Thanks year. I faster those because significantly those year environment. going as are down, cuts SPR levels inventory OPEC to coming

is, point one, and do scenarios we interesting around. regularly, we it's your a So very one it's and different discuss obviously,

basically the in say is, at inventory on crude what half whether general, levels or So globally what we year, either domestically, a range. distillates, products, is look I'd it's gasoline, this are in lower of five-year

that's choppy the with artificially XXXX the of SPR. a said, of XXXX somewhat with with because of exceptionally then, five half like we Now course, low year years, being half being with and year COVID and then of higher the

supply, the and just bit last with weaker line gasoline expectations. not the with, inventory seen kind everybody I distillate Crude been demand to to only bit the really think, levels continued increase, month, with month, has demand, continue otherwise, grow. really products But upside. demand being our domestically. little in Outside the of And but surprised a last that year we've all a year we has entered the to high of has

it's barrels hit bit And Venezuela displaced the what barrels dominantly, the really market. a bit you pointed has Russian I'm not out, surprised or at growth the on have but And little it's necessarily, as barrels, online. about talking are back and new that U.S. historically is Iran, to we -- I a of little and think resiliency least been maybe everyone of

OPEC that's and Iran. effect. really that we I that highlighted one capacity think So the spare about And a now significant forecast is thing of as talk spare we having capacity the offsetting when some Venezuela previous is about capacity spare don't Plus longer-term those from offline we just with

we little significantly to a would year, what it years. bit at at which exit year, oil demand is prior the put exiting have see overall at is Ultimately, the increasing us high it XXX So from a least different point. this most estimates

down how everything by kind for on planning improved fundamentals, reasons. the of it evaluating to we actually that, that's all the activity demand respect question asset and and really off-line our internally, macro just levels than of does those, an metrics more look individually ultimate premium choice spare to of geopolitical But to we Now at deliver and talked with evaluate assets your that just evaluation our we capacity the about of correct environment begins level each year-over-year. spare come investment collectively, make will across true for then sure to both each offline Doug, including that's supply with capacity that

And optimized free long flow ultimately, Honestly, to corporate near and in that that's to the of growth create invest continue output up returns ability up near-term our to ends cash be flow the and value real being of lower and future the level, both set cost EOG free continue will cash and the at and will what generation and the shareholder driving basis to term. a generation. company provide

Doug Leggate

bit. XX% follow-up, elaborate it's but your The this early to one. about wanted comments is that. thank a quick asked earlier, I to just to a think dilemma. interesting An you little touch for on, was XXXX. hopefully, talk perspectives inflation this I year, limiting quick to on too wanted Ezra, A about I but

second -- quarter. are we're I'm in to believe XXXX. genuinely the this much has some you 'XX everybody to risk pointing conservative, do I been pretty see there's pretty upside call that deflation your from inflation, You're just else company you going to, have capital being still just yes, to last mean. in or to much earnings And

Billy Helms

year. you'll Doug, I think next see that don't we are into No, anticipating inflation

clarify peaked saw started inflation last of business. we of just I something. We coming in kind think year. comment year this let we into when deflation the in year the the me We what November would see the Rig going was market year. counts a last out anticipated in

And XXXX our our based on plan built more no in increase XXXX. cost than the to that would relative so XX% fact we well

comment comes XX% from. the where that's So

business cost going early we to next that go predict see too a we're that business. we Ezra in in As recognize deflation and into still went to do level think There's our say I'd I year. it's clearly, well through. dynamics of lot just deflation we 'XX, the to as seeing market what of our is

And program different develop our to so well as have choose across how to in. on we kind plays going that's early that predict year's have that plays capital we what next to invest the as it's to impact of

too that's for next just have year. the It's early comment So about early year. market with for we the next dynamics too

Operator

go question Next Leo Mariani ROTH comes from Partners. please Leo, ahead. Capital of

Leo Mariani

Yes, good morning.

undisclosed the plays Just kind touch out and on kind of emerging really about of also the some Utica there well. some of as base plays, of And PRB. exploratory thinking wanted to

being Just of any get EOG in generally I seen like sense bit the competition still it of mean during increased if a speaking, a XXXX. trying as plays there's seems to you've in maybe plays others these course the wolf can where aren't with out going more of help lone pursuing doing here. of much, you these guys but some a behind maybe on scenes kind that

Ezra Yacob

domestically the private picked a and companies, comments kind specialist have manufacturing really competition limited to that of you we kind or continue Yes, on Leo, honing can of are very kind Most is more this public, to see are exploration, the think, and mode. basin of that of Yes, I made. just down in any in operators, public see on drill whether Ezra.

low-cost, as those of to in we're We put still opportunities Ken to some continue high-quality on said, plays. bolt-on explore. And looking

side. Ken Utica we'll operations results With up. And Utica. get pleased there as respect completion what here we're in specific. to and year We're said, this some bit coming It's spread a little and get seeing the on in the a PRB with early on

PRB, in on year. and year and the Everything then in we are from a Austin of program And strong the Chalk continuous the PRB really in the more co-development a on Eagle is bit our and Dorado, Mowry focus benefiting most of again, Southern year. center little a the PRB of Ford fallen in operations PRB there. basically this the line really On in very this as had Dorado has focus we've the we

And to minute a the then shifting exploration for side. international on just

and I there's limited say on see. As would we for shallow in exploration explore what and water onshore you onshore, we guys know, side offshore both unconventionals still the internationally. competition

they international with to have need a course, bar compete high that portfolio. to really Of it's opportunities domestic -- do still our for we

shareholders. But think shallow even in focused and we've value the say We're that we're and the something exploration of in more more I the in then it in offshore there. And try that international the really about a got water bit needs probably shallow ultra-deepwater dominantly, same, the on. little for out exploring in internationally what you're hearing is and compete and not deep really bit exploration a to just internationally, a deliver water, to bit maybe

Leo Mariani

Appreciate Okay. that.

wanted Just turn here. to for minute CapEx to a

this comments, you XX% right kind where the in on but in the you a You little bit talked guys are of kind here. first expected at of your half about prepared budget of

quarter a bit third guidance, versus quarter. fair at second up is CapEx Looking

kind cadence year? we of half? expect in see commensurate Just trying drop XQ in the to do a to to of sense kind midpoint that a of kind of to kind of you capital get on back second full CapEx So get the

Billy Helms

this Lee, Billy. Yes, is

second quarter on we the completion our out. the moved all has CapEx, really drilling from pretty and the year. into has is it the with out. simply due what of and half of and capital, on with plan very up non-drilling on of is we're throughout been say the our completion The activity CapEx track So to our our else, and quarter drilling ratable second timing completion and reason year, third much is what Everything laid the pace laid I'd

about the for CapEx We've that we're wells for the spent we've half about the year. and year, half planning completed the

completion be a third. of non-drilling But and reflection So I'd will fourth gets the much that how spent quarter in on non-D&C is say CapEx track. pretty everything

Operator

Citigroup. Gruber Scott, yours. Our of comes Scott the line next is question from

Scott Gruber

I'll just if a kind portfolio. figure you And potentially broadly Thanks. curious but Is two guys if are new greatest up are, those are a back of the I'm and you're still crews overall terms how just well gains? go the seeing here plays, What the solid in the in efficiency and seeing front gains ahead since more potentially of rigs across year in good on related you without gains efficiency that plays. gains ask you they're gains of Obviously, continue And questions always emerging more the portfolio? efficiency the morning. to know frac low broadly mid-single-digit next year, count the adding the single-digit figure? much just next type grow could across curious

Billy Helms

period still the improvements, Yes, long because as Ford, emerging plays Eagle of I of Basin rapidly, a benefit and time. lesser noted, the more some like And transfer active you you there is pace foundational continued active a simply been than Scott, we've this existing for We're although plays seeing the of noted, at the Delaware than as our more technology that from Billy. guess, plays.

still and a our like a And We those our to, across tie on our we've across of technology systems with to back track especially experiment plays, lot little just That our plays a kind really, things. bit. applying put goes drilling performing. I'd drilling are the bringing in all our data tools, foundational gone motors, bit in quite true how our back efforts in-house -- how and to that things gives us data of insights to of to our of assets

drilling can supplemental back, and some the see So improved how we continue in some in times we you in the and that's deck drive Permian time, improvements say, see program, increase down. in to of of our over still our that

think the the back And the of so are same our Eagle those the in then an there. And spots I for effort deck. some that's of Ford,

to the seeing into translates plays that times How day, enables continue and still transfer we're very the the feet per and we're quickly reduce completed encouraged both with drilling technology to to lateral the enables our improvements that because emerging and go So in that cost. next year.

see on market are early on things to looks bit little what a still the play we're side, depending going say the how to macro like. I'd out Again,

it's the ways to seeing we're efficiency So but basis business find going sustainable continue lower our that that see, and I'm our to we'll improve gains with forward. early encouraged cost to

Operator

question of please comes Whitfield from Derrick, next Stifel. Our Derrick ahead. go

Derrick Whitfield

all. morning, Good

first I an the highlighting long my development been focus seen question, development, wanted over quarter. Ford For throughout XX,XXX-foot in lateral which on lateral this and you're Eagle with QX has to its

more are Ford that broadly to and laterals? XX,XXX-foot Eagle there would relates ability perhaps for pursue considerations portfolio, and your limit it legacy the more development to lease beyond As geometry your

Ken Boedeker

this Yes, capital Ken. increasing the are laterals we're longer a Derrick, way our efficiency Eagle in Ford. Really, is

last five-plus the drilled over XX at with wells look Eagle across we've these laterals the years, appropriate. it, long miles where Ford. utilized laterals you longer If we've And over X.X over

focused steer play developing windows longer laterals the some enable the these and longer our data-driven and These but and us the challenging, efficiency. lowering optimal years. efficiencies You multidisciplinary an in make the have completion it approach think about maximize to to on in target it, even are to laterals faulting apply cost within increasing capital does us across that narrow for laterals our Ford how an Eagle basis design XX our contributed teams been Eagle that example Ford where really we've of we're over

Billy Helms

longer our portfolio. this learning we're Derrick, laterals, lessons I add, our pushing Eagle from across all applying the just we're Yes, of might Ford, Billy. is we're the in

every so have. asset that across opportunities we those And we're seeing

Operator

please Goldman Neil, comes Our next from question of Sachs. Neil go ahead. Mehta

Neil Mehta

much. very Thanks

timing do the question How could about about versus target. how your is of just that's Dorado you first The wells? you those talk around tracking think Maybe Dorado. recompleting

Ken Boedeker

Ken. this Yes, Neil, is

the the wells we'd our in far wells As that and that five early performing would area completing are way as early in as play year. be still deferred, the we've And those that's we've the next tracking, core we really see anticipated. in it's

Neil Mehta

that here to be given strategy grow the Or consolidation? the do we've you to think best of perspective in [indiscernible] M&A throughout program pickup there going seen about a the And to consolidation been dynamic. in then Timing How shale. U.S. do bolt-on? We've is would exploration opportunities the you think to role to organically continue talking is love stepping talk are And future back EOG's your business? about market.

Ezra Yacob

Neal, this Yes, is Ezra.

the I of We decision, return. XX about higher strong decision company, value. entry exploration. to mover, I get long-term look organic And deals exploration that plays, it's every there. a lower -- new think an how as think and as that's returns-based create a is of is, been capture investment that -- to it's shareholder of M&A thing first the we way sweet can think going similar don't is I trying a how But offers these described to that at cost the XX years we've investment you is versus obviously, separated a and that spots looking years

So exploration the on think, itself. exploration, stands organic I

corporate back that specifically regards And With to is we Is to and be that's really to just to, is resources. to it the M&As, barrels we're already short we've better what the to captured that aware opportunities. of comes than the with challenge evaluate premium many equivalents -- the We up always opportunities. that going that we evaluate portfolio? billion add many, opportunity something going it additive with we're going be And to to drilling returns opportunities, come of XX kind of it's to add evaluation. as something is already continue really but

Operator

next Our Fargo. Roger of Wells ahead. question from Read comes Roger go please

Roger Read

a little specifically you bit. be more will you on to And what there. be what right that back inflation pressures way that little emissions question wondering I'd you Ezra, the a then discussed depth the might reversing come Dorado. be the morning. us? you was if curious have at I talked of is Good two if things XX, are And go right now, could my to low like track XX other look it, says than seeing inflation that's I'd just see advantage about a advantage the to the at been behind oil One, or carbon aren't here. side. we situation With on not rather in sitting right where deflation in

Ken Boedeker

both really returns markets. be the first of confident production gas the at because gas Gulf generates that proximity dry is that the small Yes, nature Coast and with efficient and the go to emissions the of answer Ken. our a significant ahead and and of that will development We're footprint Dorado have this really I'll gas operationally of Roger, Dorado. that part

Billy Helms

Yes, Billy. is Roger, this

On the on. inflation spot question, I think you're

we early we're why we but it's out. of the cost make play the and in And today, about certainly, because market to deflation we're think that before XXXX any watch the of kind dynamic in where develops I market that's how too think would see comments markets we're go and see about saying, XXXX. seeing patient it be

our as about in positioned on to improvements over premium through out really and premium barrel, cost capture strategy the the certainly of take and highest-performing presented contracting I of our sustainable price that any our that's drives term, seeking long trying focus are well advantage drive are that products. we're to really crews advantage company, the think all a opportunities what our for things

Operator

have the We on phone no further questions line.

So I'll Mr. back Yacob. to hand

Ezra Yacob

Thank give quarter. today Thank We shareholders delivering for you I on special phone to want call. you, a employees time the to and appreciate everyone's to for our thanks just their another everybody. exceptional our support,

Operator

Thank you for joining. This concludes today's call.

may You now disconnect lines. your

EOG Resources (EOG) 4 Aug 232023 Q2 Earnings call transcript