EOG Resources, Inc. Q2 FY2025 earnings call

• EOG delivered outstanding results with volumes above guidance and costs below midpoints. • Strong free cash flow generation translated to significant shareholder returns. • Closed the accretive Encino acquisition, making the Utica a foundational asset. • Pursued international exploration in the UAE and Bahrain. • Dorado's high-intensity completions and efficiency gains were noted. • Utilized proprietary technology platforms for improved well performance and cost efficiency.

In the second quarter, oil, natural gas, and NGL volumes exceeded the midpoint of guidance. Capital expenditures, cash operating costs, and DD&A were driven below guidance midpoints. EOG generated nearly $1 billion of free cash flow during the quarter and returned over $1.1 billion to shareholders. The Encino acquisition added 1.1 million net acres with net resource potential of over 2-plus billion barrels of oil equivalent. Dorado's high-intensity completion designs delivered superior results, and EOG's multi-basin portfolio has over 12 billion barrels of oil equivalent net resource potential.

• Updated guidance reflects ownership of Encino for the remaining 5 months of 2025. • Expect to generate $4.3 billion in free cash flow in 2025, which is 10% higher than previous forecast due to the Encino acquisition, efficiency gains, and recent tax legislation. • There is $4.5 billion remaining on the share buyback authorization.

• Market supply and demand fluctuations can impact pricing. • Volatility in oil and gas prices poses risks. • Uncertainties in international exploration and development. • Risks associated with integrating new acquisitions.

Q: On the Utica, what about sustaining capital requirements?

A: Ezra Yacob stated it's early to determine specific sustaining capital details, but EOG has lower well costs than Encino and expects synergies. Legacy EOG's sustaining capital range was $4.3 billion to $4.9 billion, and the new Utica asset factors into this.

Q: Thoughts on the gas market and marketing strategy?

A: Ezra Yacob said EOG is well positioned with gas assets, focusing on premium pricing and good partners, and sees upside in LNG and power demand growth.

Q: Utica quick wins and timeline for fully engineered wells?

A: Jeff Leitzell mentioned well cost reduction, midstream optimization, and technology application as quick wins, with the timeline depending on the macro environment.

Q: Delaware Basin delineation and gas macro outlook?

A: Keith Trasko discussed unlocking 9 targets in the Delaware Basin and EOG's position in gas with growth potential but ongoing volatility