EOG Resources at EnerCom Denver: Strategic Insights on Sustainable Growth

On Monday, 18 August 2025, EOG Resources (NYSE:EOG) presented at the EnerCom Denver – The Energy Investment Conference, offering a strategic overview of its operations. The company emphasized its commitment to sustainable value creation amid industry cycles, highlighting strong financial performance and strategic acquisitions. However, increased capital expenditure and the challenges of maintaining low debt levels were also noted.

Key Takeaways

• EOG reported outstanding second-quarter results, with a net income of $1.3 billion and free cash flow of $1 billion.
• The company increased its regular dividend by 5% and returned $1.1 billion to shareholders.
• EOG’s acquisition of Encino Energy expanded its Utica position significantly, enhancing its multi-basin portfolio.
• The company set ambitious targets for reducing greenhouse gas emissions by 2030.
• EOG aims to return a minimum of 70% of annual free cash flow to investors.

Financial Results

• Second Quarter adjusted net income: $1.3 billion
• Free cash flow generated in the Second Quarter: $1 billion
• Regular dividend rate increased by 5%
• $1.1 billion returned to shareholders, including $500 million in dividends and $600 million in share repurchases
• Full-year CapEx: $6.3 billion, a 5% increase from previous guidance
• Full-year production: 521,000 barrels of oil equivalent (BOE) per day (oil), 1,224,000 BOE per day (equivalents), a 9% increase year-over-year
• Projected free cash flow: $4.3 billion, assuming $65 WTI and $3.5 Henry Hub
• Year-to-date cash return to shareholders: $3.5 billion
• Total cash return to investors from 2021 to 2025: $21 billion

Operational Updates

• Encino Acquisition: Expanded Utica position to 1.1 million net acres with an estimated $150 million in synergies
• Utica Plan: Five rigs and three completion crews, expecting 65 net completions for the year
• Delaware Basin: Increased average lateral length by over 20%
• Eagle Ford: Drilled the longest lateral in Texas history, added 30,000 acres
• Dorado: Expected 750 million cubic feet per day gross production by year-end
• UAE: 900,000-acre unconventional oil prospect with drilling planned in 2025

Future Outlook

• Focus on continuous asset improvement and investments generating free cash flow
• Aiming for total debt to EBITDA of less than one times at bottom cycle prices
• Planned drilling activity in Bahrain and UAE in 2025
• Expanding LNG feed gas contracts to 900 million cubic feet per day by 2027

For further details, readers are encouraged to refer to the full transcript below.

Full transcript - EnerCom Denver – The Energy Investment Conference:

Operator: Our next presenting company is EOG Resources. They’re based in Houston, one of the largest exploration and production companies in The United States, span most basins, international as well, and certainly been active recently with acquisitions. Here to talk about EOG is Pierce Hammond, their VP of Investor Relations.

Pierce Hammond, VP of Investor Relations, EOG Resources: Well, you and good morning. And I wanna thank the, Intercom team for inviting EOG to participate here today. We really appreciate the opportunity to tell you a little bit about the company and why we think EOG is a compelling investment. I’m gonna start by highlighting EOG’s value proposition, which is sustainable value creation through industry cycles. And our mission statement is to be among the highest return and lowest cost producers committed to strong environmental performance and playing a significant role in the long term future of energy.

And it’s underpinned by four pillars. The first is capital discipline. The second is operational excellence. The third is sustainability. And the fourth is culture.

So to address capital discipline, EOG is very focused on returns focused investments at bottom cycle prices. So for us, bottom cycle prices is assuming $45 WTI and $2.5 Henry Hub and holding that forever, even though that’s unlikely to happen, but holding that forever to justify the economics of a project. The second thing is we want to maintain a pristine balance sheet, which we’re very proud of and generate significant free cash flow. Thirdly, we want to deliver a sustainable growing regular dividend. We’ve been paying a dividend for twenty seven years and we’ve never cut or suspended it.

And that’s very different than some of our peers when times got tough in 2016 or in 2020, did just that. And then we want to return to investors a minimum of 70% of our annual free cash flow and we’ve been returning a higher percentage than that the last couple of years. And then very importantly, we want to reinvest in the business at a pace that supports continuous improvement. So basically, we want our assets to continue to get better. We don’t wanna over capitalize them, give them too much capital where they’re not getting better, that means they need to slow down.

And tends to be when they slow down, they improve. And we’ll show slides here today that illustrate that. Under the operational excellence pillar, we’re focused on our organic exploration. And that allows us to maintain a low cost, high quality multi basin inventory. And having that low cost inventory helps us deliver, pure leading return on capital employed, within the industry.

We also utilize superior in house technical expertise, proprietary information technology and self sourced materials to support well performance and cost control. We’re very focused on cost. And then lastly, we are multi basin portfolio. It gives us a lot of geographic product and pricing diversification, which enhances margins. On the sustainability side, we were focused on sustainability before it became popular or something that everyone needed to focus on.

But first we wanna focus on safe operations, leading environmental performance, and community engagement. And we’re ahead of our path and we recently set new emissions targets. And then finally, culture underpins the whole thing. And our culture’s very different than some other companies. The headquarters in Houston that’s led by CEO Ezra Yacob, he’s not sitting there telling the Permian, here’s how here’s how you’d need to drill, here’s where you need to drill, here’s the completion design.

Everything’s pushed down to the local level And that really makes a difference. So it’s out in the field where the value creation really occurs. And so this decentralized approach is a real difference maker for EOG. We also have collaborative teams that work across the multi basins and we share information, then maybe something that works well in the Permian is gonna work well up in the Utica. And then lastly, very strong technology leadership that allows us to communicate with each other as well as share best practices.

So how did the second quarter, how did we shake out there? It was an outstanding quarter. We had volumes, capital expenditures and per unit operating costs all better than targets. We updated our full year guidance following the Encino acquisition, which we announced on May 30 and closed on August 1. And then we had peer leading U.

S. Price realizations. Importantly, we continue to bolster our multi basin portfolio. We acquired Encino and that’s created a premier Utica position, totaling 1,100,000 net acres. We were also awarded an onshore concession in The UAE to explore and appraise 900,000 acre unconventional oil prospect, which we’re very excited about.

We delivered very strong financial results off of that operational performance in the second quarter as we had $1,300,000,000 of adjusted net income. Our earnings per share and cash flow per share beat consensus estimates and we generated $1,000,000,000 of free cash flow. And then we continue to return cash to investors and our commitment to them as we increased our regular dividend rate by 5%. We announced that in connection with the nCino acquisition. And then we returned 1,100,000,000 to shareholders, 500,000,000 in the form of regular dividends and $600,000,000 of share repurchases.

So how did we look for this year’s plan? Our CapEx is $6,300,000,000 that’s up 5% from what we had outlined at the end of the first quarter earnings, which was $6,000,000,000 That increase is primarily related to the Encino acquisition and having the Encino assets for five months. And as you can see, our full year production, black oil 521,000 BOE per day average production and 1,224,000 per day of equivalents production, and that’s up 9% year over year. This overall plan delivers 4,300,000,000.0 in free cash flow assuming $65 WTI and $3.5 Henry Hub for the year. And then we’ve committed 3 and a half billion of cash return year to date to our shareholders, assuming the full regular dividend and then the share repurchases we did through the first half of the year.

As we look at our cash flow priorities, again the first one is that regular dividend, which we’ve never cut or suspended in twenty seven years. So it’s something we’re very proud of and it’s very important to our shareholders and we continue to focus on growing that dividend over time. This year the increase in the regular dividend over last year is about 8%. If we’re not returning cash to shareholders, we wanna invest in our business and our multi basin portfolio and we wanna invest at the right pace for each asset. And then we also wanna align the investment both for to generate short term free cash flow as well as long term free cash flow.

This is all underpinned by our pristine balance sheet, and industry leading balance sheet which is our target is a total debt to EBITDA. So not net debt, but total debt to EBITDA of less than one times at bottom cycle prices of $45 WTI and $2.50 natural gas. And then lastly that cash return to shareholders that I continue to speak of, which is that regular dividend and then here recently has been supplemented by share repurchases and we’ve been buying back roughly about 1% of our float each quarter over the course of the last couple of years. Now we have a deep inventory to invest in with over 12 plus billion BOE of resource that on an average direct after tax rate of return basis at bottom cycle prices, so using that 45 and $2.50 generates a greater than 55% return, which rolled up to the corporate level is going to equate to a double digit return on capital employed. So we’re very proud of our inventory and the opportunities we have to invest in the company.

I’ve already talked about the Encino acquisition, it’s something that we’re very excited about. We already had a position in the Utica that we came about through our organic exploration and we supplemented that organic exploration with this acquisition of Encino. Our assets were already on the path to becoming a foundational asset, but buying Encino really accelerated that process. And so now we we say with the Utica, it’s a foundational asset for EOG alongside our Delaware Basin and our Eagle Ford position. As you can see on the map here, it really fits hand in glove their acreage with ours.

And so what we’ve expanded to with the acquisition is 1,100,000 net acres and two plus billion BOE of undeveloped net resource. It really enhances our liquids acreage footprint with the addition of 235,000 net acres in the volatile oil window. And it adds premium gas exposure with the addition of 330,000 net acres across the wet and dry gas windows. And importantly, it increases our average working interest in our northern acreage. It was immediately accretive across multiple financial metrics.

And we estimate $150,000,000 of synergies within the first year of the closing of the transaction. And then we believe our technical expertise is really gonna enhance returns. As far as the plan for this year, we have simply layered their activity on top of our own. So we’re running five rigs and three completion crews in the Utica through year end. And we expect for the full year to deliver 65 net completions.

So if we look at this asset relative to our other foundational assets, so we have three foundational assets at EOG, the Eagle Ford, the Delaware and the Utica. And it just shows you how well, first of all, all three assets stack up. If you look at the payback period in the lower left hand side, and this is assuming $65 WTI and three fifty natural gas. In the Utica you have nine point three month payback period, which compares very favorably with the Delaware at 9.3, and you see the Eagle Ford at seven and a half. If you look at the well cost in the Utica, less than $650 a foot, and that’s with us having done just completed a little over 50 wells.

Compare that to the Delaware at less than $7.50 and the Eagle Ford less than 550. And you see very compelling finding cost in all three plays. So this again, the Utica is now a foundational asset alongside our existing assets. What about our other foundational assets? We’re really proud of what we’ve accomplished and continue to accomplish in the Delaware Basin.

One new bit of information that we put in the investor presentation with the second quarter earnings from two weeks ago was that our subsurface expertise and knowledge combined with our lower cost has allowed us to unlock nine distinct targets that we’ve added to our development program over the last five years. And then this year we’re increasing our average lateral length by 20 plus percent and that really makes a big difference on cost. And then lastly, we’re really on the right hand side as you can see here on this slide, leading economics as we believe we have the peer leading breakeven price in the basin. If you look at the Eagle Ford, is our other foundational asset, we’ve pushed lateral lengths out. In fact on this slide here, if you look we’re highlighting the Whistler E five h well, which is the longest lateral in Texas history at over 24,000 feet, over four and a half miles in length.

We did a bolt on acquisition we announced last quarter of about 30,000 acres in the middle of our position. In fact we’re already drilling on that right now with an eight well package. And we just continue to lower the cost here in the Eagle Ford and improve this core foundational asset for EOG. If we switch gears now and look at Dorado, which is in our dry gas asset in South Texas, And this asset’s really nipping on the heels of the other foundational assets, kinda ready to move into a foundational status itself. This asset, again dry gas asset, we believe is the lowest cost dry gas play in North America with a breakeven price of 1.4 an m.

That’s underneath the Haynesville and underneath the Marcellus. One huge advantage it has, it’s only about a 100 miles from the Gulf Coast. And as you can see here on the slide, the Verde Pipeline is a pipeline that EOG built and owns and that moves our gas down to Acqua Dulce. From Acqua Dulce we have a lot of different options to move the gas. We can move it on to Corpus Christi where it can go into the LNG market.

We can move it further South Mexico and we can get on the Williams Transco line and go further north to serve industrial demand, LNG demand, or power generation demand. But we’re running a one rig program here and have for the last two years. And as we stated on our earnings conference call recently, we expect to be at seven fifty million cubic feet a day gross production in this play at the end of this year, which is really amazing. So as we switch gears to discuss what I mentioned earlier on The UAE and our international assets. Internationally, we’ve been in Trinidad for over thirty years.

It’s a fantastic asset for us. It’s primarily a gas asset in the Columbus Basin and shallow water off of Trinidad. And then this year we’ve announced two new ones. One earlier in the year which was a JV in Bahrain with BAPCO, which is a state oil company. It’s targeting an unconventional onshore gas prospect with planned drilling activity here in 2025.

And then as I mentioned earlier, The UAE, which is massive, 900,000 acre position, planned drilling activity in 2025. And that’s an oil target. And we have a partnership with ADNOC there. And I think what’s most compelling is that both of these countries want to develop their unconventional resources. And developing unconventional resources, as everyone in this room knows, can be very challenging, especially on lowering your costs, finding the right targets, etcetera.

And while both of these state oil companies have been very successful, I think what they see in EOG is a company that’s drilled thousands of wells, has a lot of expertise, a lot of data, a lot of technical expertise to help them really unlock their resource potential. Now one thing we’re very proud of at ERG is our marketing strategy and we’ll look at just a second how our realizations compare to peers. But in this graphic here, there’s a few things I wanted to point out. First of all, we will build strategic infrastructure from time to time where it makes sense. And we built a gas processing plant called the Janus Gas Processing Plant in the Delaware Basin, 300,000,000 cubic feet per day, that’s already online.

And we built the Verde gas pipeline, which I mentioned earlier, that moves our gas from Dorado down to Aqua Dulce. What’s interesting about Verde is we bought the pipe, the line pipe that went into that from a failed pipeline project, gas pipeline project in The US. So we’re able to get that cheaply back when industry was in a weaker spot a few years ago, and that was very advantageous for us. But as you can see here on this graphic, if you get down to Aqua Dulce, would like to highlight the Williams Transco line. Williams is a terrific partner for us.

We have a great relationship with them, and they had decided some time ago to put in compression between Aqua Dulce and an area called Zone 3 Station 65 Pool, as you can see up there on the map over there right on the Louisiana Mississippi State Line. It was a little bit over 360,000,000 a day of capacity. We took it all down. So it allows us to move gas out of Texas and get to more premium markets, especially tapping into the Southeast power generation market that really bolsters our realizations. If you look at Waha, our exposure at Waha of our total gas production is less than 7%.

And that’s also really aided our realizations relative to peers. The other thing we’ve been a first mover on is signing up LNG feed gas contracts as well as other contracts that give us exposure to prices like JKM, the Japan Korea marker or Brent. And so we have contracts with Cheniere at Corpus Christi Stage three that allows us to either on a monthly basis take JKM or take Henry Hub pricing. And then we have a contract with Vitol that allows us to get either Brent pricing or Gulf Coast Index pricing. As you can see from the graphic, the numbers jump up as far as the volumes associated with these contracts to about 900,000,000 cubic feet per day by 2027.

And so this really makes a difference. And all of this translates into leading price realizations. And if you look at the middle panel here, you see our gas price realizations relative to peers in the second quarter were almost double peers. So we were $2.87 in MMBtu, whereas peers were about a dollar 48. And you see we had premium realizations on oil and on natural gas liquids.

So the dividend as I said is something we’re very proud of, and you can see it here, the growth in that dividend, twenty seven years and the commitment this year is about a $2,100,000,000 cash commitment to investors. The dividend for the full year $3.95 but if you look at it on the leading edge, just take the most recent declared quarter and multiply it times four, it’s $4.08 So we’ve got a very strong dividend growth for investors and again something we’re very proud of. And this has translated into strong cash return for investors. If you go back to 2021, so 2021, 2022, ’3, ’4, and ’5, and for what we’ve done 2025 year to date, you add up the total cash return over that time period, it’s $21,000,000,000 And again, the 2025 is reflective of just what we’ve done year to date, both the full year dividend as well as six months’ worth of stock buybacks that in total were about $1,400,000,000 So the high quality investments, the excellent operations are all translating into a lot of cash that we can deliver to investors. And then from an environmental standpoint, we’re very proud of what we’ve accomplished there.

We recently set near term emission targets to reduce greenhouse gas emissions intensity rate by 25% from 2019 levels by 02/1930, and then to maintain near zero methane emissions and maintain zero routine flaring. And so in wrapping up, I’d say EOG is a compelling investment for investors because we deliver sustainable value creation through industry cycles underpinned by our capital discipline, operational excellence and sustainability. But really all that underpinned by our very unique culture which is decentralized and pushes decision making out to the field to allow people out in the field to really make a difference. And so thank you for your time this morning. I know I’ll be going to a breakout session, but I appreciate intercoms allowing EOG to present today.

So thank you.

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