EOG Strikes $5.6B Deal To Expand Utica Footprint, Boosts Dividend

Energy company EOG Resources, Inc. EOG shares are trading lower premarket on Friday. The firm inked a deal to acquire Encino Acquisition Partners (EAP) for $5.6 billion, including EAP’s net debt.

EOG agreed to pay the sellers, Canada Pension Plan Investment Board (CPP) and Encino Energy, with cash and debt. The purchase price includes $3.5 billion in new debt and $2.1 billion in cash.

The company expects the transaction to close in the latter half of 2025, upon clearance under the Hart-Scott-Rodino Act.

EOG’s portfolio will grow by 675,000 net core acres, expanding its Utica position to 1.1 million net acres. In addition:

• EOG's undeveloped net resource gets a boost of over two billion barrels of oil equivalent
• Combined production will reach 275,000 BOE/day
• A continuous position of 485,000 net acres that averages 65% liquids production.
• In the natural gas window, the deal adds 330,000 net acres

Annually, the acquisition is expected to increase 2025 EBITDA by 10% and cash flow from operations and free cash flow by 9%.

EOG expects to achieve more than $150 million in synergies during the first year, primarily driven by reductions in capital, operating, and debt financing costs.

Dividend Boost: The board declared a dividend of $1.02 per share, up 5%, representing an indicated annual rate of $4.08.

This dividend is payable on Oct. 31 to shareholders of record as of Oct. 17.

As of March 31, EOG’s cash and cash equivalent stood at $6.6 billion.

Price Action: EOG shares are down 1.94% at $107.75 premarket at the last check on Friday.

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