EOG Resources at J.P. Morgan Conference: Strategic Moves in Energy Sector

On Tuesday, 24 June 2025, EOG Resources (NYSE:EOG) presented its strategic vision and operational updates at the J.P. Morgan 2025 Energy, Power, Renewables & Mining Conference. The company revealed its plans to optimize capital expenditure and focus on strategic acquisitions while addressing challenges in the U.S. shale oil sector. EOG’s Executive Vice President and COO, Jeff Leitzel, provided insights into the company’s growth prospects and operational efficiencies.

Key Takeaways

• EOG Resources reduced its capital expenditure for 2025 by $200 million to optimize financials and free cash flow.
• The company is excited about its Dorado asset in South Texas, emphasizing its proximity to market centers.
• EOG announced significant acquisitions: a $5.6 billion purchase of nCino in the Utica and a $275 million bolt-on in the Eagle Ford.
• The company is expanding its international presence with a 900,000-acre concession in the UAE.
• EOG anticipates a 4-6% compounded annual growth rate for natural gas demand through the decade.

Financial Results

• EOG pulled back its capital expenditure from $6.2 billion to $6 billion, aiming to optimize overall financials and enhance free cash flow amidst market uncertainties.
• The company expects long-term natural gas prices to hover around $4.50, driven by increased LNG capacity and power generation demand.
• EOG has successfully added over $1.3 billion in revenue from LNG production between 2020 and 2024.

Operational Updates

• EOG’s operations are described as "firing on all cylinders," with a focus on reducing drilling and completion costs.
• The company is executing a four-net-well completion program in Trinidad, with positive results.
• In the Utica, well performance is exceeding expectations, with a significant portion of production comprising liquids.
• EOG’s Eagle Ford operations continue to show remarkable consistency after 15 years.

Future Outlook

• EOG plans to advance its Dorado asset at a measured pace, leveraging its 1 BCF pipeline.
• The company aims to apply successful U.S. operational techniques to its international ventures.
• Plans are in place to drill initial wells in Bahrain and the UAE by the end of the year.
• EOG’s capacity with Cheniere is set to increase from 140,000 to 420,000 next year, enhancing revenue potential.

Acquisitions and Divestitures

• EOG announced a $5.6 billion all-cash acquisition of nCino, increasing its working interest in the Utica and doubling its acreage in the volatile oil window.
• A $275 million bolt-on acquisition in the Eagle Ford includes 30,000 acres, meeting EOG’s return hurdles at $45 oil and $2.5 gas.

Q&A Highlights

• EOG focuses on optimizing returns and productivity while managing costs and payout periods.
• The company intends to drill its first wells in Bahrain by year-end, targeting unconventional gas development.
• ADNOC is currently drilling horizontally on EOG’s UAE acreage, with plans for further exploration.

Readers are invited to refer to the full transcript for a more detailed understanding of EOG Resources’ strategic direction and operational updates.

Full transcript - J.P. Morgan 2025 Energy, Power, Renewables & Mining Conference:

Arun: Okay. We’re going to keep things moving. Delighted to have our next presenter EOG Resources, which has been one of the most influential and important companies in The U. S. Shale revolution.

Joining me on stage is EOG’s EVP and COO, Jeff Leitzel. Jeff, how are you?

Jeff Leitzel, EVP and COO, EOG Resources: I’m good. Arun, how are doing?

Arun: I’m doing well. We’re just commenting that EOG has had a lot of noteworthy announcements in over the last several weeks. And so really excited to dig in more on the EOG story. Jeff any talk about an oil and gas levered company starts with kind of the macro. Could you talk about EOG’s latest thoughts on the macro environment?

I know you and Ezra and the team keep a really detailed group that monitors kind of the oil macro.

Jeff Leitzel, EVP and COO, EOG Resources: Yeah. We try to and they’ve been running around in circles lately to say the least. But obviously there’s been a lot of geopolitical volatility out there. So you kind of got to set that aside because things have been changing by the day. But really if you look at supply and demand fundamentals, I think the way we look at it is from the demand side, we think that demand looks pretty good, looks pretty strong around the world right now.

The big question with that is obviously going to be how did the tariffs flow through and how does that really ultimately affect when we work through all of this trade negotiations. So I think that’s really one of the big overhangs that we’ll just kind of have to watch and see what happens from a demand side. And then really I think the story is more on the supply side where first off you look at OPEC plus obviously they’re going to be bringing their barrels back on accelerated, which I think obviously will probably cause some near term softness in pricing. But the way we look at it is, I mean, world inventories are pretty low and we need the barrels back online. So ultimately we think a large majority of those barrels will go into inventory.

And what we’ll really end up doing as an industry understanding where OPEC plus is from a spare capacity standpoint sometime in the middle of next year. And at that point, I think it will become apparent that the spare capacity that is there in the world with the demand that we have that I think will start to see an elevation in pricing and we’ll have a really good macro for oil moving forward in the future. And the last thing to really tie into that is also looking at The U. S. I mean, obviously, The U.

S. Has been pretty disciplined. You can see that their production is kind of flattened off. So I don’t really think that they’re going to be a big lever to really change any of that from the supply standpoint.

Arun: Yes. Want to maybe go back to your 1Q call. EOG decided to make a refinement to program for 2025. Can you highlight what exactly you did?

Jeff Leitzel, EVP and COO, EOG Resources: Yes. Sure. So obviously there was announcement back in May obviously with the tariffs Liberation Day and there was just a lot of uncertainty that kind of went into the market And it seemed like it was going to be headwind uncertainty. And so we really looked at the portfolio and looked at our plan, which obviously we’ve got extremely low breakevens.

The company is wonderfully positioned to go ahead and operate right through these prices. But it felt prudent and to be capital disciplined to go ahead and take a look at the plan and see if we couldn’t optimize it with that uncertainty because there was a good chance that you were going to probably see oil for extended period of time if the tariff stock in the 50s or lower. So what we did was we went ahead and we pulled back our CapEx from 6,200,000,000.0 to $6,000,000,000 So it’s a $200,000,000 pullback for pretty minimal volumes associated with that. And what it really optimized the overall financials and the free cash flow on the year for the company. So where we sit right now with that optimized plan, we feel great about it.

We feel really good on executing it through the remainder of the year. And with the volatility that’s out there, I know there’s a lot of questions that hey are you going to change your plan again? Will you move around? And I think with the volatility we feel pretty comfortable with this plan to go ahead and execute through the rest of the year.

Arun: Yes. One of the key talking points from 1Q earnings is this notion that U. S. Shale production for oil may have peaked. And I was wondering if you could talk about your thoughts on that topic and what are the implications for the oil macro for EOG for U.

S. Shale industry if this is the case?

Jeff Leitzel, EVP and COO, EOG Resources: So I do agree. I think U. S. Shale oil has definitely slowed. There’s no doubt about it.

And I think it’s for a multitude of reasons across the board. The first thing is obviously with all the unconventional production that’s coming online in The U. S. There’s obviously very steep decline with that. So every single year we have more and more decline that we have to backfill before you ever see any growth out of The U.

S. So I think that’s one thing. The second thing is capital discipline across the industry. And what I mean by that is I think a lot of companies are protecting their returns and their free cash flow. And also they’re not wanting to probably step out in lesser quality of acreage or productive acreage that will actually not be added to their portfolio and obviously will affect their returns.

So I think that’s some of it that you’re seeing right there. Ultimately, I think looking at full industry because they’ve always shocked us. I mean they always rear their head when you don’t expect it. I think they could grow if they wanted to. But it would take drilling wells like I said would be degrading capital efficiency and I don’t think companies are going to do that at that point.

So I do think that we are going to over the next handful of years probably peak and plateau off a little bit. Now from EOG standpoint, we really separate the two. We’re in great shape. Even if industry can’t grow, our portfolio has never been stronger. Our inventory has never been stronger.

Recently with our acquisition we hope to close in the third quarter of nCino, we have over 12 plus billion barrels of resource potential within the company. And we have adequate potentials to be able to grow for many years to come. So that’s one thing that we want to do in the company is no matter what the rest of the industry does, we want to make sure we’re positioning ourselves getting better every day and we have the ability to improve the company day in and day out.

Arun: The company has made some countercyclical investments on the natural gas side. Think about Dorado, some of the marketing agreements you’ve done with Lexus Cheniere. But could you give us your latest thoughts on the natural gas supply demand dynamics how this could play in 2025 and 2026 in longer term?

Jeff Leitzel, EVP and COO, EOG Resources: Sure. We’re extremely constructive like a lot of people obviously on natural gas. So with the LNG capacity that’s going be coming on continuing to come on over the next couple of years along with the power generation demand that’s going to be out there, we see somewhere between kind of a 46% compounded annual growth rate for natural gas demand through the rest of the decade. So very robust there. I think whenever you roll all that up, we kind of see a long term natural gas price as you can see in the strip somewhere around $450 plus which is extremely attractive for industry.

And then when you look at EOG just as a whole, I think that’s what excites us even more about that future out in front of us is we’ve got our Dorado asset down there in South Texas, which is extremely proximal to the market center. It’s an extremely prolific resource. It’s 20 Tcf. And we’ve obviously got a lot of premium marketing capacity with our LNG agreements and our offtake there on the coast to really take advantage of those kind of prices throughout time. And then obviously I think the main goal there is in the natural gas to be able to move that play at a very measured pace and make sure we’re improving it, but it’s so prolific.

We’ve got a BCF pipeline that we can go ahead and grow into and probably grow into pretty quick.

Arun: Jeff, I’m wondering if you could provide just a brief operating update. How are you tracking relative to your key operational financial targets for 2Q and maybe the full year?

Jeff Leitzel, EVP and COO, EOG Resources: Not giving too much color on Q2, but really it goes back to talking about that optimized plan that we walked through. So I think we feel really good about where everything is at. The company, I mean, standpoint is firing on all cylinders, continuing to lower the cost basis. We’re on track this year to reduce well cost again another low single digits. And there may be some upside with that obviously with what’s going to happen with industry and pricing and potentially service costs.

So everything is in line right now so far for the year and true to EOG’s nature we feel really comfortable on executing on that plan.

Arun: All right. Let’s shift gears talk a little bit about some of the headlines I mentioned. You announced a $5,600,000,000 all cash acquisition of nCino. Those who have studied DOG knows that you guys do not do much if any M and A. Don’t think I remember anything since of scale since the Yates transaction probably in 2016 right?

Yes. That’s it. It’s been almost ten years. So could you talk a little bit about the industrial logic of this transaction that you just announced?

Jeff Leitzel, EVP and COO, EOG Resources: Sure. So really what I’d say it is, is it’s just a continuation of kind of our organic exploration progress we’ve had up there in the Utica. So obviously we’ve been drilling up there for a handful of years. We’ve had a ton of success and it really just made sense. We obviously had paid attention.

We knew that Encino was a large player up there. They were the largest producer and the largest acreage holder. And it really gotten to the point with the success we’ve seen in the play, the productivity and really the overall economics that we can get in the Utica. Extremely low cost basis, It’s one of lowest cost basins I would say and easiest operating basins in The U. S.

With that, it just made a lot of sense to go ahead and increase our footprint there. So really what we ended up doing with the deal is we increased our working interest underneath our northern acreage in the Utica over 20% because Encino had working interest underneath that. We over doubled our acreage in the volatile oil window to 485,000 acres and the volatile oil window really is at this point as far as tested the most prolific part of the play. And then the last thing which I know it’s the Northeast and if you’re talking about gas it can be a tough market, but we were actually really excited that Encino had a lot of obviously very premium gas acreage, but along with that acreage they also had very good marketing and transportation agreements. They did a really good job of locking in at the right time and the right duration a large amount of capacity and which obviously had really attractive price realization.

So all in all, we’re just excited to go ahead and hopefully get this thing closed in the third quarter and we’ll get it over into our operational engineers and our geoscientists’ hands. And I think there’s a lot of extra value we can really extract out of the acreage.

Arun: Okay. We’ll come back to the acquisition in just a few minutes. You also announced a bolt on in the Eagle Ford in Atascosa County for $275,000,000 Views on the strategic nature of this deal? And does this signify a more muscular approach to A and D for MEOG?

Jeff Leitzel, EVP and COO, EOG Resources: Yes. Think this is right in the ballpark of what we talked about that we want to be opportunistic with and with bolt on acquisitions in existing plays. So what it is, is it’s 30,000 acres as you stated. It’s right in the center of the Eagle Ford. And it’s been there pretty much undeveloped throughout time and we’ve looked at it.

We’ve tried to take stabs and opportunities to get it and the stars just didn’t align. But the opportunity finally everything lined up. There’s a handful of wells on it, but it’s fairly open. And what we’re able to do with this acreage is we’re able to obviously leverage all of our geologic and reservoir knowledge around that area, marketing agreements, the infrastructure that we have. But we’re also able to take our technology and our cost basis into that acreage, which is really going to obviously improve the overall economics from what we’ve seen previously drilled on it.

And we’ve got data all the way around the whole 30,000 acres and it all is in our portfolio and it meets our very robust hurdle rate of direct after tax rate of return of 30% at bottom cycle pricing $45 oil and $2.5 gas. And the last thing that I would really say about that bolt on acquisition is it commands capital immediately. It competes in our portfolio. So we are actually out there drilling on it probably today and definitely the second half of this year because the economics on it are so good. So it’s just a perfect example of exactly what we’re trying to do in the company.

Arun: Just maybe a follow-up there. You did buy some virgin acreage here which is good, but some of the legacy well performance doesn’t match up to EOG’s on a per foot basis. Do you see some opportunities for

Jeff Leitzel, EVP and COO, EOG Resources: self help here? Absolutely. In the Eagle Ford that’s one of those things we use as an example that we were drilling the best rock 15 ago out in the East. And as we’ve kind of moved forward with it and we’ve moved over to the West, it’s not quite as good of rock, but really what we’ve done is advance our technology, extending laterals out, refining our targeting and really our completion designs there have unlocked a lot of new opportunity and it’s brought a lot of acreage that we never thought would be in our inventory up into our inventory and we continue to do that. And I think a lot of the acreage, the 30,000 already meets our hurdle rate.

And there may be a little bit in the North which we think with our technology will easily hit our hurdle rate. So yes, definitely see a lot of upside with it.

Arun: Two parter on efficiency gains in the OFS environment that you touched on a little bit. We still are amazed that this far end of the shale development life cycle that we’re still seeing some eye popping efficiency gains on the drilling and completion side. Could you I mean how much or what have you been able to achieve as we think about 2025 on a year over year basis? And what more can you do as a company?

Jeff Leitzel, EVP and COO, EOG Resources: I don’t think there’s an end in sight. We’ve been asking the question for I think I get it asked every single year. But if you ask me five years ago, would have said the same thing I’ll say today. Running room is immense. And the way I explain it is as an industry, I think we’re pretty poor at what we do if you look at the recovery factors.

Because when you’re talking about high single digit or low double digit recovery factors, we’ve got a long way that we can go from a technology innovation and operational efficiency standpoint. So there’s new technologies that are being worked on out there. I know we’re one of the groups that continues to look at new innovative ways to push that forward. And no, I think there’s still quite a long runway to be able to continue to reduce the cost basis on these and improve the overall performance of unconventional wells in The U. S.

Arun: Okay. You mentioned that your outlook or your guidance baked in low single digit year over year declines in well costs, but there could be more tailwinds on the cost side. Can you maybe elaborate a little bit on that?

Jeff Leitzel, EVP and COO, EOG Resources: Yes. Where that is, is the majority of our costs that we see or cost reductions year over year usually come from efficiencies. I mean on the service side, we primarily use all high spec rigs and frac fleets. Those have been fairly highly utilized even with the pullback in overall activity. So we haven’t seen a huge reduction in overall service costs.

But I will say ever since the announcement in May with the tariffs a lot of companies came out with reduced activity plans, We have seen a few more companies coming to the table kind of talking about pricing being willing to come off a little bit. So I think we are seeing a little bit of softness in the market, but it’s cautious softness because they do know there’s volatility and things could change very quickly. So I think there could be some upside to service costs this year.

Arun: Okay. EOG has now labeled the Utica as its third foundational asset or play in the company joining the Delaware and obviously the Eagle Ford. Can you talk to us about how things are trending in the field? And how do returns now in the Utica compare to what you’re seeing in the Delaware and the Eagle Ford?

Jeff Leitzel, EVP and COO, EOG Resources: Yes. The great thing about the Utica is, I mean, I think through this time period right now we’ve only drilled about 50 wells and we really haven’t had a miss up there. It’s been absolutely outstanding. And what I’d say about the Utica is, first off it is the easiest operational environment that I’ve seen at least within our portfolio. It’s very easy drilling.

We’ve had laterals that we’ve been able to record do 13,000 foot in one day and one trip. I mean that’s how quick this stuff drills. And then the actual depth of it is kind of perfectly situated in that volatile oil window to where you’ve got enough pressure for lift and good productivity, but then also you’ve got fairly decent and lower frac pressures. So that definitely helps out a lot too. So, yes, right now we’re kind of in the very early innings is what I’d say in the Utica and we’re seeing huge strides both on well cost and well performance.

And ultimately what we’ve been trying to do is get up to a consistent amount of activity and that’s what we’ve done here in this last year where we’re at least running one rig and one frac fleet. And when you do that you can really build a lot of sustainable efficiency gains and we’ve seen that and it’s really paid dividends this year. So we’ve got to play to where we’ve got the finding cost somewhere between $6 and $8 a BOE depending on where you’re at in the acreage. And we’ve got our drilling cost sub-six $50 So really, really making a lot of headway. And then when you look at the productivity, it’s met all of our expectations if not surprised us to the upside on these wells.

They truly are liquid wells. The EURs on them, they full life are right in line with our expectations where they range anywhere from 60% to 70% liquids. And it continues to improve as we get a chance to get in there and really hone our completions technology. So obviously with the Encino acquisition you can see how excited we’re about it and we’re really excited to continue to push forward that asset and really extract the value out of it.

Arun: Yes. Maybe just a question a broader question on the well productivity trends across your foundational assets. We did an update when we did our preview just a couple of days ago. Looked like Delaware well productivity was doing well doing fine this year. But how do you talk about productivity in three of these assets?

Jeff Leitzel, EVP and COO, EOG Resources: Yes. So productivity wise if I look kind of even if you look at the foundational plays, I outstanding. It’s been right on our expectations and on our forecast. And as you know, it can vary. As you move around region to region, area to area based off your well mix it can vary.

But what we really have kind of seen and we’ve learned taking the Permian for example is productivity is really just one variable that you need to look at. And ultimately what we’ve gotten to a point is we’ve got that stringent return hurdle rate once it makes that at that point we’re really trying to optimize all the metrics. So we’re trying to optimize the returns, the productivity, the finding cost, the margins, the payout period to make sure we’re extracting as much value as we possibly can out of that asset and maximizing the net present value per acre and per section. And that’s really the next thing that we’ve moved to. So what we really see from that aspect on our productivity side, it’s interesting that maximum productivity always doesn’t equal maximum because there’s a balance in there of how you actually optimize and develop it.

And that’s really what we’re focused out there in the Delaware. In the Eagle Ford, little bit more mature of an asset. I mean as I said there, it’s more about driving technology and continuing to innovate because we’re continuing to pull forward resource that we knew was there, but we never knew it would be economic or we could get it economic from a technology standpoint. So that’s how we’re looking to extract the value. And then when you move to the Utica, I mean that’s just really as I said it’s in the first couple innings.

So it’s just making sure we continue to move that forward at the right measured pace to where we don’t get going too fast to where we actually destroy value. So I think that’s how we look at it across the portfolio. But in the Utica the performance continues to be on pace with what we see and I think there’s levels of improvement. And then even down in the Eagle Ford, I mean the consistency after fifteen years of the productivity is just outstanding.

Arun: Okay. Let’s shift gears a little bit about and talk about international. Your passport has a few extra punches in it recently. Few. Let’s start with Trinidad, has obviously been a core asset for the company for multiple decades I think right?

What are some of the latest happenings in Trinidad because there are some growth projects you’re investing in today?

Jeff Leitzel, EVP and COO, EOG Resources: Yes. Trinidad is just a great piece of business for the company. We’ve been in it over thirty years. And really we’re getting to a point there to where we have pretty consistent activity. It used to be it was fairly intermittent, but we’re finding enough exploration or prospects that really kind of fill a full rig line and really have a lot of value to pull forward.

So this year what we’re doing is we’re executing on a four net well completions Mento program, full natural gas development and everything is going outstanding with that so far. And then also we’re building out our next platform which is for project. So we’ll be building that out to prepare for next year. And another exciting thing we actually just announced on our last call is on one of our exploration wells, the Barrow Well, we actually had an oil discovery. And we knew there was a good potential for oil to be in the reservoir.

We just weren’t sure if it was going to be commercially viable. But once we actually penetrated the zone and cut it, there was about 125 foot of very, very good oil bearing sands there. So we’re currently in the process of really refining exactly the size of that prospect and then we’re also working with our partners there BP as you said to get that to FID. So everything is looking great in Trinidad and continuing to kind of push forward a lot of great projects down there.

Arun: I believe as on the fourth quarter call you updated the market on Bahrain?

Jeff Leitzel, EVP and COO, EOG Resources: Yes. So Bahrain would be the next one and that’s one we’re really excited about. That was an opportunity where that is onshore unconventional gas. And if you ever seen on the map Bahrain is not a very big island. It’s pretty small.

But what it is, is it’s actually an anticline geologic structure and there’s a big fault that runs right along the crest of the island. So and it is extremely gas bearing intervals down through it. And they have penetration points. They’ve got pretty good data all the way around. They’ve got some seismic.

They’ve got services and infrastructure. So it kind of marks all the boxes. And when you look at the overall productivity of even just some of the vertical wells and you do an uplift on it, it looks like it will be extremely competitive with our domestic portfolio. And then on top of that, very much like Trinidad, we’re able to sell those gas molecules directly there to the local government because Bahrain right now is short gas and they’re definitely looking from it. I believe they’re actually importing right now from Saudi and they obviously have aspirations to be independent on that front.

So extremely excited about that. We’ll drill the first couple of wells here starting at the back end of the year. We’ll have an exploration phase and then we’ll be able to go ahead and either declare commerciality or move on or look at other opportunities.

Arun: Will this be developed if you’re successful similar to the short cycle shale in The U. S?

Jeff Leitzel, EVP and COO, EOG Resources: Yes. Yes, absolutely. That’s the goal. And obviously with any entries in the international, we want to make sure we’ve got ultimate flexibility to do what EOG does. And that’s exactly what the goal is.

Now through the exploration phase, the goal is to prove the reservoir. But ultimately what we want to do is be able to implement a lot of the same processes, procedures, equipment, service companies and techniques that we use in unconventional in The U. S. The

Arun: one recent international entry that has caused a lot of market questions and intrigue is you announced an entry into The UAE. And maybe provide a little bit of details because we are getting a lot of questions on that.

Jeff Leitzel, EVP and COO, EOG Resources: Yes. Sure. It’s a pretty high level we announced it, but it was we were awarded a 900,000 acre concession in UAE. It’s in the southern part of the country. It is all unconventional oil.

And this is very similar to Bahrain in that we have penetration points. We’ve got data. ADNOC is currently drilling on the acreage as we speak right now horizontally. So that’s what’s a little bit different. We had an entry into Oman.

It was a little bit of a wildcat. Here we’ve got good productivity and we really understand from the get go what the geologic and the reservoir model looks like. So extremely excited about that opportunity. There the goal is our exploration phase will be a little longer since it’s 900,000 acres. But ultimately we’ll go and start drilling the end of this year exploration to kind of delineate out the acreage.

And then once we get to the end of the exploration term the same thing we can go ahead and we can declare commerciality on it. And at that point everything in the block will convey to EOG.

Arun: And how do you gauge the PSC terms in The UAE?

Jeff Leitzel, EVP and COO, EOG Resources: Good. Very, very good. It’s something that we’ve worked on for years. We’ve obviously had a relationship with ADNOC, think very highly of them. And we’ve been working with them kind of behind the scenes to hopefully do some kind of deal.

And we finally got to the point where the fiscal terms really made sense and was competitive domestically. But then also we have the flexibility to kind of do what we do also. I mean it’s very tough for us to go into a country and have our hands tied and not be able to utilize the people and the equipment and the services that we want. And we’ve got an outstanding relationship with ADNOC. We’ve actually got a full staff that stood up over there right now in Abu Dhabi and they’re working directly with ADNOC on a day to day basis and they’ve been an outstanding partner.

So I think it’s going to be a great relationship and it’s really going to work out for all parties.

Arun: One of the questions we get from investors is what is the motivation or what is the benefit to ADNOC to bring in a partner like EOG? What’s the opportunity set for them? It’s a win win kind of relationship.

Jeff Leitzel, EVP and COO, EOG Resources: Yes. I think the one thing is when you look at The UAE there’s so much resource there. So much resource. And I think they really want to pull the value forward and they want to exploit that resource. And they’ve done a really good job of trying to get up the learning curve with unconventional, but practice makes perfect.

That’s what I would say. So I think that’s really what we’ll be able to bring to the table as a partner with them is we’ll be able to kind of work side by side and bring them up to speed on true unconventional methods right now. And it’s tough. When you start looking at the way things are done unconventional, it can be uncomfortable. It will take you a little while.

I say you got to kind of walk people to water numerous times before they drink and that’s how unconventional works. And I think that’s how the relationship will work, but it will ultimately benefit both of us because they’ll be able to walk away with the knowledge and the technology and then we’ll be able to walk away with obviously the resource.

Arun: On a scale of maybe one to 10, what is your excitement about this opportunity in The U. S? Could this be a real needle mover for the because you’re very big company?

Jeff Leitzel, EVP and COO, EOG Resources: Yes. I don’t know on a one to 10. I mean, it’s in the higher range I would say for sure because it’s an oil play. Okay. And to have an oil play of this magnitude with this much acreage and as much data as we actually have and actual production tests that’s half the battle.

If you have that it’s very easy to refine your models unconventionally and really understand whether or prospect or not.

Arun: Okay. Two quick two final questions.

Jeff Leitzel, EVP and COO, EOG Resources: What’s the status of Beehive in Australia? So Beehive right now the plan is still it’s deferred. Honestly, we kind of knew in the background we had some of these other international opportunities were coming to the forefront that were very exciting. But even more so with that opportunity, it’s still an exciting opportunity, but it is a little bit more greenfield exploration. And also we saw the cost structure down there in Australia.

It really kind of got away from industry. Mean rates on a lot of things have went up almost double. And with it being kind of true exploration and the permits still good till the end of next year and we’ve got some optionality, I think we felt better focusing in more of The Middle East Bahrain and UAE and just deferring that project to a later day.

Arun: Yes. Maybe last question is investors are really excited about companies that are playing in the infrastructure LNG gas kind of space today. Could you maybe elaborate on your unique marketing agreement that you have with Cheniere to

Jeff Leitzel, EVP and COO, EOG Resources: Yes, absolutely. So it’s kind of coming in, in tiers right now. So currently we’re producing 140,000 to LNG and going offshore and that is linked on a monthly basis to either JKM or Henry Hub, very unique agreement. And that capacity actually goes from 140,000 up to 420,000 next year. And if you just looking at that in from 2020 to 2024 just that 140,000 MMBtu has cumulatively added over $1,300,000,000 in revenue.

It’s an outstanding agreement. So you can just imagine once it goes up to 420,000 that’s going to be Then in addition to that, we also have another 300,000 MMBtu that’s going to be directly linked to Henry Hub that’s also tied to the agreement. And actually with Cheniere’s outstanding performance, they’ve accelerated that into this year. So we’re going to actually start seeing some of that 300,000 a day come in then. So extremely excited.

I call it our sweetheart agreement. I don’t know if we’re going get another one like that out there, but we continue to look for ones that are advantaged as that and couldn’t be any more excited about the relationship there with Cheniere.

Arun: Jeff, thank you so much.

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