EOG Resources Announces Outstanding Third Quarter 2018 Results

EOG Resources Announces Outstanding Third Quarter 2018 Results

PR Newswire

HOUSTON, Nov. 1, 2018 /PRNewswire/ -- 

  • Exceeds High End of Oil and NGL Production Targets
  • Generates Significant Free Cash Flow
  • Achieves Improved Well Performance and Lower Costs in Delaware Basin
  • Secures 2019 Services at Competitive Prices and Raises 2018 Capex Guidance Range to $5.8-$6.0 Billion
  • Targets Further Well Cost Reductions in 2019

EOG Resources, Inc. (EOG) today reported third quarter 2018 net income of $1.2 billion, or $2.05 per share. This compares to third quarter 2017 net income of $101 million, or $0.17 per share. Net cash from operating activities in the third quarter 2018 was $2.2 billion.

Adjusted non-GAAP net income for the third quarter 2018 was $1.0 billion, or $1.75 per share, compared to adjusted non-GAAP net income of $111 million, or $0.19 per share, for the same prior year period. Please refer to the attached tables for the reconciliation of non-GAAP measures to GAAP measures.

Third Quarter Review

EOG set a company record and exceeded the high end of its target range for crude oil volumes in the third quarter 2018 by producing 415,000 barrels of oil per day (Bopd), an increase of 27 percent compared to the same prior year period. Natural gas liquids (NGL) production increased 46 percent while natural gas volumes grew 13 percent, contributing to total company production growth of 25 percent.

Per-unit operating expenses declined during the third quarter 2018 compared to the same prior year period. General and administrative expenses fell 20 percent, transportation costs declined 15 percent and depreciation, depletion and amortization expenses fell 13 percent, all on a per-unit basis.

EOG generated $2.3 billion of discretionary cash flow in the third quarter 2018. After considering exploration and development expenditures of $1.7 billion and dividend payments of $107 million, EOG produced free cash flow during the third quarter of $503 million. Please refer to the attached tables for the reconciliation of non-GAAP measures to GAAP measures.

"EOG delivered a compelling combination of production growth, high returns and free cash flow in the third quarter 2018 due to disciplined capital allocation. These results demonstrate the value of EOG's sustainable business model," said William R. "Bill" Thomas, Chairman and Chief Executive Officer. "EOG is making significant progress lowering costs and improving well performance. Our culture of innovation, experimentation and entrepreneurship combined with our ability to capture and quickly analyze real-time data and make rapid changes in the field are resulting in significant performance improvements company-wide."

Updated 2018 Outlook

EOG has raised its target for full-year 2018 crude oil production growth to 19 percent. To maintain operational continuity into 2019, the company elected to retain high performing service providers for the remainder of 2018. Approximately 65 percent of its anticipated 2019 services have been secured at competitive pricing. As a result, EOG increased its 2018 exploration and development expenditure forecast to $5.8 to $6.0 billion, excluding acquisitions and non-cash transactions. The company is on track to reduce total well costs by five percent in 2018, and targets further well cost reductions in 2019. EOG now expects to complete approximately 720 net wells in 2018, an increase of 20 net wells from its prior forecast.

"We are positioning EOG to carry the operating efficiencies gained this year into 2019. We secured a significant proportion of our service costs, which along with disciplined execution will help further reduce well costs and improve returns," Thomas continued. "With a deep inventory of premium drilling locations across multiple plays, EOG will continue to allocate capital to the highest return areas while maintaining a disciplined operating pace. EOG is well positioned to continue delivering its unique combination of high returns, disciplined growth and strong free cash flow for years to come."

Operating Highlights

EOG's South Texas Eagle Ford remained the most active area of the company in the third quarter 2018. EOG now expects to complete 290 net wells in 2018, an addition of 20 net wells from the prior forecast. EOG also continued to delineate the South Texas Austin Chalk, completing 14 wells in the third quarter.

In the Delaware Basin, EOG made significant progress on well cost reductions and optimizing targeting and development patterns. The company increased the number of wells developed in a single package and drilled longer laterals. Packages of four wells or more accounted for 87 percent of the wells brought on line in the third quarter. EOG also made additional progress towards its cost reduction goals. Drilling speeds and the pace of completion operations increased markedly during the quarter. In addition, the company now supplies nearly all of its Delaware Basin sand from local sources and has further increased its use of low-cost recycled water.

EOG continued development of its premium play in the Eastern Anadarko Basin Woodford Oil Window. EOG is testing spacing patterns and various targets across the play. The company completed 11 wells in the third quarter. EOG completed a package of four wells spaced 660 feet apart late in the second quarter. The Ted 2326 #1H-#4H were completed with an average treated lateral length of 10,000 feet per well and average 30-day initial production rates per well of 800 barrels of oil equivalent per day, or 660 Bopd, 90 barrels per day of NGLs and 0.3 million cubic feet per day of natural gas. These low-decline wells support our initial spacing assessment of 660 feet. EOG is also making significant progress reducing well costs in this new play. Recent wells have been brought to production at costs at or below the company's $7.8 million target.

EOG continued development of its premium plays across the Rocky Mountain region. The company brought 20 wells on line in the Powder River Basin during the third quarter 2018, including 13 wells from the Turner formation. In the Wyoming DJ Basin, EOG began production from 25 wells in the third quarter 2018. EOG completed 19 wells in the Williston Basin during the third quarter as part of its seasonal development program.

Financial Review

At September 30, 2018, EOG's total debt outstanding was $6.4 billion for a debt-to-total capitalization ratio of 26 percent. Considering cash on the balance sheet at the end of the third quarter, EOG's net debt was $5.2 billion for a net debt-to-total capitalization ratio of 22 percent. For a reconciliation of non-GAAP measures to GAAP measures, please refer to the attached tables.

EOG reached an agreement to divest all of its U.K. operations. Closing is anticipated in the fourth quarter 2018.

During the third quarter ended September 30, 2018, EOG entered into additional crude oil derivative contracts. A comprehensive summary of EOG's crude oil and natural gas derivative contracts is provided in the attached tables.  

Third Quarter 2018 Results Webcast

Friday, November 2, 2018, 9:00 a.m. Central time (10:00 a.m. Eastern time)

Webcast will be available on EOG website for one year.

http://investors.eogresources.com/Investors

About EOG

EOG Resources, Inc. EOG is one of the largest crude oil and natural gas exploration and production companies in the United States with proved reserves in the United States, Trinidad, the United Kingdom and China. To learn more visit www.eogresources.com.

Investor Contacts

David Streit  713-571-4902

Neel Panchal  713-571-4884

John Wagner  713-571-4404

Media and Investor Contact

Kimberly Ehmer  713-571-4676

This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  All statements, other than statements of historical facts, including, among others, statements and projections regarding EOG's future financial position, operations, performance, business strategy, returns, budgets, reserves, levels of production, costs and asset sales, statements regarding future commodity prices and statements regarding the plans and objectives of EOG's management for future operations, are forward-looking statements.  EOG typically uses words such as "expect," "anticipate," "estimate," "project," "strategy," "intend," "plan," "target," "aims," "goal," "may," "will," "should" and "believe" or the negative of those terms or other variations or comparable terminology to identify its forward-looking statements.  In particular, statements, express or implied, concerning EOG's future operating results and returns or EOG's ability to replace or increase reserves, increase production, reduce or otherwise control operating and capital costs, generate income or cash flows, pay down indebtedness or pay and/or increase dividends are forward-looking statements.  Forward-looking statements are not guarantees of performance.  Although EOG believes the expectations reflected in its forward-looking statements are reasonable and are based on reasonable assumptions, no assurance can be given that these assumptions are accurate or that any of these expectations will be achieved (in full or at all) or will prove to have been correct.  Moreover, EOG's forward-looking statements may be affected by known, unknown or currently unforeseen risks, events or circumstances that may be outside EOG's control.  Furthermore, EOG has presented or referenced herein or in its accompanying disclosures certain forward-looking, non-GAAP financial measures, such as free cash flow and discretionary cash flow, and certain related estimates regarding future performance, results and financial position.  These forward-looking measures and estimates are intended to be illustrative only and are not intended to reflect the results that EOG will necessarily achieve for the period(s) presented.  EOG's actual results may differ materially from the measure and estimates presented or referenced herein.  Important factors that could cause EOG's actual results to differ materially from the expectations reflected in EOG's forward-looking statements include, among others:

  • the timing, extent and duration of changes in prices for, supplies of, and demand for, crude oil and condensate, natural gas liquids, natural gas and related commodities;
  • the extent to which EOG is successful in its efforts to acquire or discover additional reserves;
  • ­the extent to which EOG is successful in its efforts to economically develop its acreage in, produce reserves and achieve anticipated production levels from, and maximize reserve recovery from, its existing and future crude oil and natural gas exploration and development projects;
  • the extent to which EOG is successful in its efforts to market its crude oil and condensate, natural gas liquids, natural gas and related commodity production;
  • the availability, proximity and capacity of, and costs associated with, appropriate gathering, processing, compression, transportation and refining facilities;
  • the availability, cost, terms and timing of issuance or execution of, and competition for, mineral licenses and leases and governmental and other permits and rights-of-way, and EOG's ability to retain mineral licenses and leases;
  • the impact of, and changes in, government policies, laws and regulations, including tax laws and regulations; environmental, health and safety laws and regulations relating to air emissions, disposal of produced water, drilling fluids and other wastes, hydraulic fracturing and access to and use of water; laws and regulations imposing conditions or restrictions on drilling and completion operations and on the transportation of crude oil and natural gas; laws and regulations with respect to derivatives and hedging activities; and laws and regulations with respect to the import and export of crude oil, natural gas and related commodities;
  • EOG's ability to effectively integrate acquired crude oil and natural gas properties into its operations, fully identify existing and potential problems with respect to such properties and accurately estimate reserves, production and costs with respect to such properties;
  • the extent to which EOG's third-party-operated crude oil and natural gas properties are operated successfully and economically;
  • competition in the oil and gas exploration and production industry for the acquisition of licenses, leases and properties, employees and other personnel, facilities, equipment, materials and services;
  • the availability and cost of employees and other personnel, facilities, equipment, materials (such as water) and services;
  • the accuracy of reserve estimates, which by their nature involve the exercise of professional judgment and may therefore be imprecise;
  • weather, including its impact on crude oil and natural gas demand, and weather-related delays in drilling and in the installation and operation (by EOG or third parties) of production, gathering, processing, refining, compression and transportation facilities;
  • the ability of EOG's customers and other contractual counterparties to satisfy their obligations to EOG and, related thereto, to access the credit and capital markets to obtain financing needed to satisfy their obligations to EOG;
  • EOG's ability to access the commercial paper market and other credit and capital markets to obtain financing on terms it deems acceptable, if at all, and to otherwise satisfy its capital expenditure requirements;
  • the extent to which EOG is successful in its completion of planned asset dispositions;
  • the extent and effect of any hedging activities engaged in by EOG;
  • the timing and extent of changes in foreign currency exchange rates, interest rates, inflation rates, global and domestic financial market conditions and global and domestic general economic conditions;
  • political conditions and developments around the world (such as political instability and armed conflict), including in the areas in which EOG operates;
  • the use of competing energy sources and the development of alternative energy sources;
  • the extent to which EOG incurs uninsured losses and liabilities or losses and liabilities in excess of its insurance coverage;
  • acts of war and terrorism and responses to these acts;
  • physical, electronic and cyber security breaches; and
  • the other factors described under ITEM 1A, Risk Factors, on pages 14 through 23 of EOG's Annual Report on Form 10-K for the fiscal year ended December 31, 2017, and any updates to those factors set forth in EOG's subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K.

In light of these risks, uncertainties and assumptions, the events anticipated by EOG's forward-looking statements may not occur, and, if any of such events do, we may not have anticipated the timing of their occurrence or the duration and extent of their impact on our actual results.  Accordingly, you should not place any undue reliance on any of EOG's forward-looking statements. EOG's forward-looking statements speak only as of the date made, and EOG undertakes no obligation, other than as required by applicable law, to update or revise its forward-looking statements, whether as a result of new information, subsequent events, anticipated or unanticipated circumstances or otherwise.

The United States Securities and Exchange Commission (SEC) permits oil and gas companies, in their filings with the SEC, to disclose not only "proved" reserves (i.e., quantities of oil and gas that are estimated to be recoverable with a high degree of confidence), but also "probable" reserves (i.e., quantities of oil and gas that are as likely as not to be recovered) as well as "possible" reserves (i.e., additional quantities of oil and gas that might be recovered, but with a lower probability than probable reserves).  Statements of reserves are only estimates and may not correspond to the ultimate quantities of oil and gas recovered. Any reserve estimates provided in this press release that are not specifically designated as being estimates of proved reserves may include "potential" reserves and/or other estimated reserves not necessarily calculated in accordance with, or contemplated by, the SEC's latest reserve reporting guidelines.  Investors are urged to consider closely the disclosure in EOG's Annual Report on Form 10-K for the fiscal year ended December 31, 2017, available from EOG at P.O. Box 4362, Houston, Texas 77210-4362 (Attn: Investor Relations). You can also obtain this report from the SEC by calling 1-800-SEC-0330 or from the SEC's website at www.sec.gov.  In addition, reconciliation and calculation schedules for non-GAAP financial measures can be found on the EOG website at www.eogresources.com.

 

EOG RESOURCES, INC.

Financial Report

(Unaudited; in millions, except per share data)



























Three Months Ended



Nine Months Ended



September 30,



September 30,



2018



2017



2018



2017

























Operating Revenues and Other

$

4,781.6



$

2,644.8



$

12,700.9



$

7,867.9

Net Income 

$

1,191.0



$

100.5



$

2,526.3



$

152.1

Net Income Per Share 























        Basic

$

2.06



$

0.17



$

4.38



$

0.26

        Diluted

$

2.05



$

0.17



$

4.35



$

0.26

Average Number of Common Shares























        Basic



577.3





574.8





576.4





574.4

        Diluted



581.6





578.7





580.4





578.5

















































Summary Income Statements

(Unaudited; in thousands, except per share data)



























Three Months Ended



Nine Months Ended



September 30,



September 30,



2018



2017



2018



2017

Operating Revenues and Other















        Crude Oil and Condensate

$

2,655,278



$

1,451,410



$

7,134,114



$

4,326,925

        Natural Gas Liquids



353,704





180,038





861,473





480,389

        Natural Gas



311,713





220,402





912,324





675,012

        Gains (Losses) on Mark-to-Market Commodity

           Derivative Contracts



(52,081)





(6,606)





(297,735)





64,860

        Gathering, Processing and Marketing



1,360,992





784,368





3,899,250





2,289,702

        Gains (Losses) on Asset Dispositions, Net



115,944





(8,202)





94,658





(33,876)

        Other, Net



36,074





23,434





96,779





64,869

               Total



4,781,624





2,644,844





12,700,863





7,867,881

Operating Expenses























        Lease and Well



321,568





251,943





936,236





762,906

        Transportation Costs



196,027





183,565





550,781





548,635

        Gathering and Processing Costs



114,063





32,590





324,577





105,480

        Exploration Costs



32,823





30,796





115,137





122,401

        Dry Hole Costs



358





50





5,260





77

        Impairments 



44,617





53,677





160,934





325,798

        Marketing Costs



1,326,974





793,536





3,853,827





2,320,671

        Depreciation, Depletion and Amortization



918,180





846,222





2,515,445





2,527,642

        General and Administrative



111,284





111,717





310,065





317,462

        Taxes Other Than Income



209,043





125,912





582,395





386,319

               Total



3,274,937





2,430,008





9,354,657





7,417,391

























Operating Income 



1,506,687





214,836





3,346,206





450,490

























Other Income (Expense), Net



3,308





226





(4,516)





8,349

























Income Before Interest Expense and Income Taxes



1,509,995





215,062





3,341,690





458,839

























Interest Expense, Net



63,632





69,082





189,032





211,010

























Income Before Income Taxes



1,446,363





145,980





3,152,658





247,829

























Income Tax Provision



255,411





45,439





626,386





95,718

























Net Income 

$

1,190,952



$

100,541



$

2,526,272



$

152,111

























Dividends Declared per Common Share

$

0.2200



$

0.1675



$

0.5900



$

0.5025

























EOG RESOURCES, INC.

Operating Highlights

(Unaudited)



























Three Months Ended



Nine Months Ended



September 30,



September 30,



2018



2017



2018



2017

Wellhead Volumes and Prices







Crude Oil and Condensate Volumes (MBbld) (A)







      United States



409.2





327.1





382.9





324.3

      Trinidad



0.8





0.8





0.8





0.8

      Other International (B)



5.0





-





4.1





1.0

            Total



415.0





327.9





387.8





326.1

























Average Crude Oil and Condensate Prices ($/Bbl) (C)























      United States

$

69.53



$

48.06



$

67.35



$

48.61

      Trinidad



61.71





39.42





58.91





40.24

      Other International (B)



72.81





-





71.83





51.55

            Composite



69.55





48.11





67.38





48.60

























Natural Gas Liquids Volumes (MBbld) (A)























      United States



127.8





87.4





113.9





84.3

      Other International (B)



-





-





-





-

            Total



127.8





87.4





113.9





84.3

























Average Natural Gas Liquids Prices ($/Bbl) (C)























      United States

$

30.09



$

22.38



$

27.71



$

20.87

      Other International (B)



-





-





-





-

            Composite



30.09





22.38





27.71





20.87

























Natural Gas Volumes (MMcfd) (A)























      United States



948





748





905





744

      Trinidad



260





323





278





317

      Other International (B)



28





25





31





22

            Total



1,236





1,096





1,214





1,083

























Average Natural Gas Prices ($/Mcf) (C)























      United States

$

2.67



$

2.20



$

2.66



$

2.22

      Trinidad



2.88





2.04





2.91





2.33

      Other International (B)



3.83





3.74





4.10





3.72

            Composite



2.74

(D)



2.19





2.75

(D)



2.28

























Crude Oil Equivalent Volumes (MBoed) (E)























      United States 



695.0





539.2





647.6





532.6

      Trinidad



44.1





54.6





47.2





53.6

      Other International (B)



9.7





4.3





9.2





4.8

            Total



748.8





598.1





704.0





591.0

























Total MMBoe (E)



68.9





55.0





192.2





161.3



(A) Thousand barrels per day or million cubic feet per day, as applicable.

(B) Other International includes EOG's United Kingdom, China and Canada operations.

(C) Dollars per barrel or per thousand cubic feet, as applicable.  Excludes the impact of financial commodity derivative instruments (see Note 12 to the Condensed Consolidated Financial Statements in EOG's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2018).

(D) Includes positive revenue adjustments of $0.49 per Mcf and $0.43 per Mcf for the three and nine months ended September 30, 2018, respectively, related to the adoption of ASU 2014-09, "Revenue From Contracts with Customers" (ASU 2014-09). (see Note 1 to the Condensed Consolidated Financial Statements in EOG's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2018).  In connection with the adoption of ASU 2014-09, EOG presents natural gas processing fees for certain processing and marketing agreements as Gathering and Processing Costs, instead of as a deduction to Revenues.

(E) Thousand barrels of oil equivalent per day or million barrels of oil equivalent, as applicable; includes crude oil and condensate, NGLs and natural gas.  Crude oil equivalent volumes are determined using a ratio of 1.0 barrel of crude oil and condensate or NGLs to 6.0 thousand cubic feet of natural gas.  MMBoe is calculated by multiplying the MBoed amount by the number of days in the period and then dividing that amount by one thousand.

 

EOG RESOURCES, INC.

Summary Balance Sheets

(Unaudited; in thousands, except share data)















September 30,



December 31,



2018



2017

ASSETS

Current Assets











     Cash and Cash Equivalents

$

1,274,132



$

834,228

     Accounts Receivable, Net



2,151,247





1,597,494

     Inventories



766,964





483,865

     Assets from Price Risk Management Activities



1,569





7,699

     Income Taxes Receivable



320,938





113,357

     Other



302,242





242,465

            Total



4,817,092





3,279,108













Property, Plant and Equipment











     Oil and Gas Properties (Successful Efforts Method)



56,799,237





52,555,741

     Other Property, Plant and Equipment



4,191,958





3,960,759

            Total Property, Plant and Equipment



60,991,195





56,516,500

     Less:  Accumulated Depreciation, Depletion and Amortization



(33,043,454)





(30,851,463)

            Total Property, Plant and Equipment, Net



27,947,741





25,665,037

Deferred Income Taxes



16,880





17,506

Other Assets



856,023





871,427

Total Assets

$

33,637,736



$

29,833,078













LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities











     Accounts Payable

$

2,435,773



$

1,847,131

     Accrued Taxes Payable



249,234





148,874

     Dividends Payable



126,829





96,410

     Liabilities from Price Risk Management Activities



132,618





50,429

     Current Portion of Long-Term Debt



1,262,874





356,235

     Other



217,819





226,463

            Total



4,425,147





2,725,542

























Long-Term Debt



5,171,949





6,030,836

Other Liabilities



1,302,249





1,275,213

Deferred Income Taxes



4,199,921





3,518,214

Commitments and Contingencies























Stockholders' Equity











     Common Stock, $0.01 Par, 1,280,000,000 Shares Authorized and

        580,308,937 Shares Issued at September 30, 2018 and 578,827,768

        Shares Issued at December 31, 2017  



205,803





205,788

     Additional Paid in Capital



5,626,259





5,536,547

     Accumulated Other Comprehensive Loss



(19,458)





(19,297)

     Retained Earnings



12,778,104





10,593,533

     Common Stock Held in Treasury, 478,042 Shares at September 30, 2018

        and 350,961 Shares at December 31, 2017



(52,238)





(33,298)

            Total Stockholders' Equity



18,538,470





16,283,273

Total Liabilities and Stockholders' Equity

$

33,637,736



$

29,833,078

 

EOG RESOURCES, INC.

Summary Statements of Cash Flows

(Unaudited; in thousands)















Nine Months Ended



September 30,



2018



2017

Cash Flows from Operating Activities











Reconciliation of Net Income to Net Cash Provided by Operating Activities:











     Net Income

$

2,526,272



$

152,111

     Items Not Requiring (Providing) Cash











            Depreciation, Depletion and Amortization



2,515,445





2,527,642

            Impairments 



160,934





325,798

            Stock-Based Compensation Expenses



116,290





101,537

            Deferred Income Taxes



681,702





114,850

            (Gains) Losses on Asset Dispositions, Net



(94,658)





33,876

            Other, Net



15,314





(4,514)

     Dry Hole Costs



5,260





77

     Mark-to-Market Commodity Derivative Contracts











            Total (Gains) Losses



297,735





(64,860)

            Net Cash Received from (Payments for) Settlements of Commodity Derivative Contracts 



(180,228)





4,730

     Other, Net



1,652





270

     Changes in Components of Working Capital and Other Assets and Liabilities











            Accounts Receivable



(553,529)





(25,445)

            Inventories



(286,817)





(17,674)

            Accounts Payable



537,525





112,894

            Accrued Taxes Payable



(36,891)





(49,967)

            Other Assets



(103,334)





(83,940)

            Other Liabilities



(14,776)





(69,224)

     Changes in Components of Working Capital Associated with Investing and Financing

        Activities



95,484





(120,373)

Net Cash Provided by Operating Activities



5,683,380





2,937,788













Investing Cash Flows











     Additions to Oil and Gas Properties



(4,571,932)





(2,927,988)

     Additions to Other Property, Plant and Equipment



(202,384)





(139,558)

     Proceeds from Sales of Assets



11,582





191,593

     Other Investing Activities



(19,993)





-

     Changes in Components of Working Capital Associated with Investing Activities



(95,541)





120,469

Net Cash Used in Investing Activities



(4,878,268)





(2,755,484)













Financing Cash Flows











     Long-Term Debt Repayments



-





(600,000)

     Dividends Paid



(311,075)





(289,261)

     Treasury Stock Purchased



(58,558)





(50,374)

     Proceeds from Stock Options Exercised and Employee Stock Purchase Plan 



12,098





11,174

     Repayment of Capital Lease Obligation



(5,052)





(4,897)

     Changes in Components of Working Capital Associated with Financing Activities



57





(96)

Net Cash Used in Financing Activities



(362,530)





(933,454)













Effect of Exchange Rate Changes on Cash



(2,678)





(2,607)













Increase (Decrease) in Cash and Cash Equivalents



439,904





(753,757)

Cash and Cash Equivalents at Beginning of Period



834,228





1,599,895

Cash and Cash Equivalents at End of Period

$

1,274,132



$

846,138

 

EOG RESOURCES, INC.

Third Quarter 2018 Well Results by Play

(Unaudited)



































Wells Online







Initial Gross 30-Day Average Production Rate





Gross



Net



Lateral

Length

(ft)



Crude Oil and

Condensate

(Bbld) (A)



Natural Gas

Liquids

(Bbld) (A)



 Natural Gas

(MMcfd) (A)



Crude Oil

Equivalent

(Boed) (B)

Delaware Basin





























Wolfcamp



61



58



7,100



1,655



505



2.9



2,640

Bone Spring



4



4



5,200



1,135



270



1.6



1,675

Leonard



6



5



4,500



995



325



1.9



1,645































South Texas Eagle Ford



90



83



7,300



1,235



155



0.9



1,540































South Texas Austin Chalk



14



10



5,000



1,815



340



2.0



2,485































Powder River Basin Turner



13



11



7,500



795



320



3.7



1,730































DJ Basin Codell



25



19



10,100



915



105



0.4



1,090































Williston Basin Bakken/Three Forks



19



12



9,400



1,135



130



0.6



1,370































Anadarko Basin Woodford Oil Window



11



9



8,500



720



120



0.4



915



(A)  Barrels per day or million cubic feet per day, as applicable.

(B)  Barrels of oil equivalent per day; includes crude oil and condensate, natural gas liquids and natural gas.  Crude oil equivalent volumes are determined using a ratio of 1.0 barrel of crude oil and condensate or natural gas liquids to 6.0 thousand cubic feet of natural gas.

 

EOG RESOURCES, INC.

Quantitative Reconciliation of Adjusted Net Income (Non-GAAP)

To Net Income (GAAP)

(Unaudited; in thousands, except per share data)

































































The following chart adjusts the three-month and nine-month periods ended September 30, 2018 and 2017 reported Net Income (GAAP) to reflect actual net cash received from (payments for) settlements of commodity derivative contracts by eliminating the unrealized mark-to-market (gains) losses from these transactions, to eliminate the net (gains) losses on asset dispositions in 2018 and 2017, to add back impairment charges related to certain of EOG's assets in 2018 and 2017, to add back an early lease termination payment as the result of a legal settlement in 2017, to add back the transaction costs for the formation of a joint venture in 2017 and to eliminate certain adjustments in 2018 related to the 2017 U.S. tax reform.  EOG believes this presentation may be useful to investors who follow the practice of some industry analysts who adjust reported company earnings to match hedge realizations to production settlement months and make certain other adjustments to exclude non-recurring and certain other items.  EOG management uses this information for purposes of comparing its financial performance with the financial performance of other companies in the industry.



































Three Months Ended 



Three Months Ended 



September 30, 2018



September 30, 2017







































Income







Diluted







Income







Diluted



Before



Tax



After



Earnings



Before



Tax



After



Earnings



Tax



Impact



Tax



per Share



Tax



Impact



Tax



per Share

Reported Net Income (GAAP)

$1,446,363



$(255,411)



$1,190,952



$      2.05



$145,980



$  (45,439)



$100,541



$      0.17

Adjustments:































Losses on Mark-to-Market Commodity

   Derivative Contracts

52,081



(11,472)



40,609



0.07



6,606



(2,368)



4,238



0.01

Net Cash Received from (Payments for)

   Settlements of Commodity

   Derivative Contracts

(91,894)



20,241



(71,653)



(0.12)



2,139



(767)



1,372



-

Add:  Net (Gains) Losses on Asset Dispositions

(115,944)



28,934



(87,010)



(0.15)



8,202



(3,068)



5,134



0.01

Less:  Tax Reform Impact

-



(57,127)



(57,127)



(0.10)



-



-



-



-

Adjustments to Net Income 

(155,757)



(19,424)



(175,181)



(0.30)



16,947



(6,203)



10,744



0.02

































Adjusted Net Income (Non-GAAP)

$1,290,606



$(274,835)



$1,015,771



$      1.75



$162,927



$  (51,642)



$111,285



$      0.19

































Average Number of Common Shares (GAAP)































       Basic













577,254















574,783

       Diluted













581,559















578,736



































































































Nine Months Ended 



Nine Months Ended 



September 30, 2018



September 30, 2017







































Income







Diluted







Income







Diluted



Before



Tax



After



Earnings



Before



Tax



After



Earnings



Tax



Impact



Tax



per Share



Tax



Impact



Tax



per Share

Reported Net Income (GAAP)

$3,152,658



$(626,386)



$2,526,272



$      4.35



$247,829



$  (95,718)



$152,111



$      0.26

Adjustments:































(Gains) Losses on Mark-to-Market Commodity

   Derivative Contracts

297,735



(65,582)



232,153



0.40



(64,860)



23,249



(41,611)



(0.07)

Net Cash Received from (Payments for) 

   Settlements of Commodity Derivative

   Contracts

(180,228)



39,699



(140,529)



(0.24)



4,730



(1,695)



3,035



0.01

Add:  Net (Gains) Losses on Asset Dispositions

(94,658)



24,235



(70,423)



(0.12)



33,876



(11,955)



21,921



0.04

Add:  Impairments

20,876



(4,598)



16,278



0.03



161,148



(57,764)



103,384



0.18

Add:  Legal Settlement - Early Lease Termination

-



-



-



-



10,202



(3,657)



6,545



0.01

Add:  Joint Venture Transaction Costs

-



-



-



-



3,056



(1,095)



1,961



-

Less:  Tax Reform Impact

-



(63,651)



(63,651)



(0.11)



-



-



-



-

Adjustments to Net Income

43,725



(69,897)



(26,172)



(0.04)



148,152



(52,917)



95,235



0.17

































Adjusted Net Income (Non-GAAP)

$3,196,383



$(696,283)



$2,500,100



$      4.31



$395,981



$(148,635)



$247,346



$      0.43

































Average Number of Common Shares (GAAP)































       Basic













576,431















574,370

       Diluted













580,442















578,453

































 

EOG RESOURCES, INC.

Quantitative Reconciliation of Discretionary Cash Flow (Non-GAAP)

To Net Cash Provided By Operating Activities (GAAP)

(Unaudited; in thousands)



























Calculation of Free Cash Flow (Non-GAAP)

(Unaudited; in thousands)















The following chart reconciles the three-month and nine-month periods ended September 30, 2018 and 2017 Net Cash Provided by Operating Activities (GAAP) to Discretionary Cash Flow (Non-GAAP).  EOG believes this presentation may be useful to investors who follow the practice of some industry analysts who adjust Net Cash Provided by Operating Activities for Exploration Costs (excluding Stock-Based Compensation Expenses), Other Non-Current Income Taxes - Net Receivable (Payable), Changes in Components of Working Capital and Other Assets and Liabilities, and Changes in Components of Working Capital Associated with Investing and Financing Activities.  EOG defines Free Cash Flow (Non-GAAP) for a given period as Discretionary Cash Flow (Non-GAAP) (see below reconciliation) for such period less the total cash capital expenditures excluding acquisitions incurred (Non-GAAP) during such period and dividends paid (GAAP) during such period, as is illustrated below for the three months and nine months ended September 30, 2018.  EOG management uses this information for comparative purposes within the industry.































Three Months Ended



Nine Months Ended





September 30,



September 30,





2018



2017



2018



2017



























Net Cash Provided by Operating Activities (GAAP)

$

2,189,597



$

961,363



$

5,683,380



$

2,937,788



























Adjustments:

























Exploration Costs (excluding Stock-Based Compensation Expenses) 





27,032





26,132





96,716





106,268

Other Non-Current Income Taxes - Net Receivable (Payable)





(129,941)





-





62,421





-

Changes in Components of Working Capital and Other Assets

























and Liabilities

























Accounts Receivable





243,778





129,231





553,529





25,445

Inventories





94,598





11,545





286,817





17,674

Accounts Payable





(81,548)





(36,190)





(537,525)





(112,894)

Accrued Taxes Payable





59,426





10,843





36,891





49,967

Other Assets





40,491





22,851





103,334





83,940

Other Liabilities





(38,392)





2,355





14,776





69,224

Changes in Components of Working Capital Associated with 

























Investing and Financing Activities





(122,763)





41,235





(95,484)





120,373















Discretionary Cash Flow (Non-GAAP)



$

2,282,278



$

1,169,365



$

6,204,855



$

3,297,785



























Discretionary Cash Flow (Non-GAAP) - Percentage Increase





95%











88%



























































Discretionary Cash Flow (Non-GAAP)



$

2,282,278









$

6,204,855







Less:  

























Total Cash Expenditures Excluding Acquisitions (Non-GAAP)(a)





(1,671,922)











(4,869,951)







Dividends Paid (GAAP) 





(107,465)











(311,075)







Free Cash Flow (Non-GAAP)



$

502,891









$

1,023,829



























































(a) See below reconciliation of Total Expenditures (GAAP) to Total Cash Expenditures Excluding Acquisitions (Non-GAAP) for the three months and nine months ended September 30, 2018:



























Total Expenditures (GAAP)



$

1,828,348









$

5,201,921







Less:  

























          Asset Retirement Costs





(10,834)











(41,789)







          Non-Cash Expenditures of Other Property, Plant and Equipment





(1,257)











(48,937)







          Non-Cash Acquisition Costs of Unproved Properties





(101,821)











(161,823)







          Acquisition Costs of Proved Properties





(42,514)











(79,421)







Total Cash Expenditures Excluding Acquisitions (Non-GAAP) 



$

1,671,922









$

4,869,951









 

EOG RESOURCES, INC.

Quantitative Reconciliation of Adjusted Earnings Before Interest Expense, Net,

Income Taxes, Depreciation, Depletion and Amortization, Exploration Costs, 

Dry Hole Costs, Impairments and Additional Items (Adjusted EBITDAX)

 (Non-GAAP) to Net Income (GAAP)

(Unaudited; in thousands)

























The following chart adjusts the three-month and nine-month periods ended September 30, 2018 and 2017 reported Net Income (GAAP) to Earnings Before Interest Expense (Net), Income Taxes (Income Tax Provision), Depreciation, Depletion and Amortization, Exploration Costs, Dry Hole Costs and Impairments (EBITDAX) (Non-GAAP) and further adjusts such amount to reflect actual net cash received from (payments for) settlements of commodity derivative contracts by eliminating the unrealized mark-to-market (MTM) (gains) losses from these transactions and to eliminate the (gains) losses on asset dispositions (Net).  EOG believes this presentation may be useful to investors who follow the practice of some industry analysts who adjust reported Net Income (GAAP) to add back Interest Expense (Net), Income Taxes (Income Tax Provision), Depreciation, Depletion and Amortization, Exploration Costs, Dry Hole Costs and Impairments and further adjust such amount to match realizations to production settlement months and make certain other adjustments to exclude non-recurring and certain other items.  EOG management uses this information for purposes of comparing its financial performance with the financial performance of other companies in the industry.



























Three Months Ended



Nine Months Ended



September 30,



September 30,



2018



2017



2018



2017

























Net Income (GAAP)

$

1,190,952



$

100,541



$

2,526,272



$

152,111

























Adjustments:























     Interest Expense, Net



63,632





69,082





189,032





211,010

     Income Tax Provision 



255,411





45,439





626,386





95,718

     Depreciation, Depletion and Amortization



918,180





846,222





2,515,445





2,527,642

     Exploration Costs



32,823





30,796





115,137





122,401

     Dry Hole Costs



358





50





5,260





77

     Impairments 



44,617





53,677





160,934





325,798

           EBITDAX (Non-GAAP)



2,505,973





1,145,807





6,138,466





3,434,757

     Total (Gains) Losses on MTM Commodity Derivative Contracts  



52,081





6,606





297,735





(64,860)

     Net Cash Received from (Payments for) Settlements of Commodity

        Derivative Contracts



(91,894)





2,139





(180,228)





4,730

     (Gains) Losses on Asset Dispositions, Net



(115,944)





8,202





(94,658)





33,876

























Adjusted EBITDAX (Non-GAAP)

$

2,350,216



$

1,162,754



$

6,161,315



$

3,408,503

























Adjusted EBITDAX (Non-GAAP) - Percentage Increase



102%











81%









 

EOG RESOURCES, INC.

Quantitative Reconciliation of Net Debt (Non-GAAP) and Total

Capitalization (Non-GAAP) as Used in the Calculation of

The Net Debt-to-Total Capitalization Ratio (Non-GAAP) to

Current and Long-Term Debt (GAAP) and Total Capitalization (GAAP)

(Unaudited; in millions, except ratio data)













The following chart reconciles Current and Long-Term Debt (GAAP) to Net Debt (Non-GAAP) and Total Capitalization (GAAP) to Total Capitalization (Non-GAAP), as used in the Net Debt-to-Total Capitalization ratio calculation.  A portion of the cash is associated with international subsidiaries; tax considerations may impact debt paydown.  EOG believes this presentation may be useful to investors who follow the practice of some industry analysts who utilize Net Debt and Total Capitalization (Non-GAAP) in their Net Debt-to-Total Capitalization ratio calculation.  EOG management uses this information for comparative purposes within the industry.















At



At



September 30,



December 31,



2018



2017













Total Stockholders' Equity - (a)

$

18,538



$

16,283













Current and Long-Term Debt (GAAP) - (b)



6,435





6,387

Less: Cash 



(1,274)





(834)

Net Debt (Non-GAAP) - (c)



5,161





5,553













Total Capitalization (GAAP) - (a) + (b)

$

24,973



$

22,670













Total Capitalization (Non-GAAP) - (a) + (c)

$

23,699



$

21,836













Debt-to-Total Capitalization (GAAP) - (b) / [(a) + (b)]



26%





28%













Net Debt-to-Total Capitalization (Non-GAAP) - (c) / [(a) + (c)]



22%





25%



 

EOG RESOURCES, INC.

Crude Oil and Natural Gas Financial Commodity

Derivative Contracts

























EOG accounts for financial commodity derivative contracts using the mark-to-market accounting method.  Prices received by EOG for its crude oil production generally vary from NYMEX West Texas Intermediate prices due to adjustments for delivery location (basis) and other factors.  EOG has entered into crude oil basis swap contracts in order to fix the differential between pricing in Midland, Texas, and Cushing, Oklahoma (Midland Differential).  Presented below is a comprehensive summary of EOG's Midland Differential basis swap contracts through October 26, 2018.  The weighted average price differential expressed in $/Bbl represents the amount of reduction to Cushing, Oklahoma, prices for the notional volumes expressed in Bbld covered by the basis swap contracts.

















































Midland Differential Basis Swap Contracts



















Weighted























Average Price



















Volume



Differential



















(Bbld) 



($/Bbl) 

2018





















January 1, 2018 through November 30, 2018 (closed)







15,000



$           1.063

December 2018 













15,000



1.063

























2019





















January 1, 2019 through December 31, 2019 







20,000



$           1.075

















































EOG has also entered into crude oil basis swap contracts in order to fix the differential between pricing in the U.S. Gulf Coast and Cushing, Oklahoma (Gulf Coast Differential).  Presented below is a comprehensive summary of EOG's Gulf Coast Differential basis swap contracts through October 26, 2018.  The weighted average price differential expressed in $/Bbl represents the amount of addition to Cushing, Oklahoma, prices for the notional volumes expressed in Bbld covered by the basis swap contracts.

















































Gulf Coast Differential Basis Swap Contracts



















Weighted























Average Price



















Volume



Differential



















(Bbld) 



($/Bbl) 

2018





















January 1, 2018 through September 30, 2018 (closed)







37,000



$           3.818

October 1, 2018 through November 30, 2018 (closed)







52,000



3.911

December 2018 













52,000



3.911

























2019





















January 1, 2019 through December 31, 2019 







13,000



$           5.572

















































Presented below is a comprehensive summary of EOG's crude oil price swap contracts through October 26, 2018, with notional volumes expressed in Bbld and prices expressed in $/Bbl.  

















































Crude Oil Price Swap Contracts



















Weighted



















Volume



Average Price



















(Bbld) 



($/Bbl) 

2018





















January 1, 2018 through September 30, 2018 (closed)







134,000



$           60.04

October 1, 2018 through December 31, 2018







134,000



60.04

















































Presented below is a comprehensive summary of EOG's natural gas price swap contracts through October 26, 2018, with notional volumes expressed in MMBtud and prices expressed in $/MMBtu.

















































Natural Gas Price Swap Contracts























Weighted



















Volume



Average Price



















(MMBtud)



($/MMBtu)

2018





















March 1, 2018 through October 31, 2018 (closed)







35,000



$             3.00

November 2018













35,000



3.00

















































EOG has sold call options which establish a ceiling price for the sale of notional volumes of natural gas as specified in the call option contracts.  The call options require that EOG pay the difference between the call option strike price and either the average or last business day NYMEX Henry Hub natural gas price for the contract month (Henry Hub Index Price) in the event the Henry Hub Index Price is above the call option strike price. 

























In addition, EOG has purchased put options which establish a floor price for the sale of notional volumes of natural gas as specified in the put option contracts.  The put options grant EOG the right to receive the difference between the put option strike price and the Henry Hub Index Price in the event the Henry Hub Index Price is below the put option strike price.  Presented below is a comprehensive summary of EOG's natural gas call and put option contracts through October 26, 2018, with notional volumes expressed in MMBtud and prices expressed in $/MMBtu.

















































Natural Gas Option Contracts











Call Options Sold



Put Options Purchased















Weighted







Weighted











Volume



Average Price



Volume



Average Price











(MMBtud) 



($/MMBtu) 



(MMBtud)



($/MMBtu)

2018





















March 1, 2018 through October 31, 2018 (closed)





120,000



$             3.38



96,000



$             2.94

November 2018 





120,000



3.38



96,000



2.94

















































Definitions





















Bbld

Barrels per day



















$/Bbl

Dollars per barrel



















MMBtud      

Million British thermal units per day



















$/MMBtu

Dollars per million British thermal units



















NYMEX

U.S. New York Mercantile Exchange





















 

EOG RESOURCES, INC.

Direct After-Tax Rate of Return (ATROR)



The calculation of our direct after-tax rate of return (ATROR) with respect to our capital expenditure program for a particular play or well is based on the estimated recoverable reserves ("net" to EOG's interest) for all wells in such play or such well (as the case may be), the estimated net present value (NPV) of the future net cash flows from such reserves (for which we utilize certain assumptions regarding future commodity prices and operating costs) and our direct net costs incurred in drilling or acquiring (as the case may be) such wells or well (as the case may be).  As such, our direct ATROR with respect to our capital expenditures for a particular play or well cannot be calculated from our consolidated financial statements. 





Direct ATROR

Based on Cash Flow and Time Value of Money

  - Estimated future commodity prices and operating costs

  - Costs incurred to drill, complete and equip a well, including facilities

Excludes Indirect Capital

  - Gathering and Processing and other Midstream

  - Land, Seismic, Geological and Geophysical



Payback ~12 Months on 100% Direct ATROR Wells

First Five Years ~1/2 Estimated Ultimate Recovery Produced but ~3/4 of NPV Captured





Return on Equity / Return on Capital Employed 

Based on GAAP Accrual Accounting

Includes All Indirect Capital and Growth Capital for Infrastructure

  - Eagle Ford, Bakken, Permian Facilities

  - Gathering and Processing

Includes Legacy Gas Capital and Capital from Mature Wells

 

EOG RESOURCES, INC.

Quantitative Reconciliation of After-Tax Net Interest Expense (Non-GAAP), Adjusted Net Income (Loss)

(Non-GAAP), Net Debt (Non-GAAP) and Total Capitalization (Non-GAAP) as used in the Calculations of

Return on Capital Employed (Non-GAAP) and Return on Equity (Non-GAAP) to Net Interest Expense (GAAP),

Net Income (Loss) (GAAP), Current and Long-Term Debt (GAAP) and Total Capitalization (GAAP), Respectively

(Unaudited; in millions, except ratio data)































The following chart reconciles Net Interest Expense (GAAP), Net Income (Loss) (GAAP), Current and Long-Term Debt (GAAP) and Total Capitalization (GAAP) to After-Tax Net Interest Expense (Non-GAAP), Adjusted Net Income (Loss) (Non-GAAP), Net Debt (Non-GAAP) and Total Capitalization (Non-GAAP), respectively, as used in the Return on Capital Employed (ROCE) and Return on Equity (ROE) calculations.  EOG believes this presentation may be useful to investors who follow the practice of some industry analysts who utilize After-Tax Net Interest Expense, Adjusted Net Income (Loss), Net Debt and Total Capitalization (Non-GAAP) in their ROCE and ROE calculations.  EOG management uses this information for purposes of comparing its financial performance with the financial performance of other companies in the industry.



































2017





2016





2015





2014





2013

Return on Capital Employed (ROCE) (Non-GAAP)



























































Net Interest Expense (GAAP)

$

274



$

282



$

237



$

201







Tax Benefit Imputed (based on 35%) 



(96)





(99)





(83)





(70)







After-Tax Net Interest Expense (Non-GAAP) - (a) 

$

178



$

183



$

154



$

131





































Net Income (Loss) (GAAP) - (b)                                                   

$

2,583



$

(1,097)



$

(4,525)



$

2,915







Adjustments to Net Income (Loss), Net of Tax (See Accompanying Schedules)



(1,934)

 (a) 



204

 (b) 



4,559

 (c) 



(199)

 (d) 





Adjusted Net Income (Loss) (Non-GAAP) - (c)   

$

649



$

(893)



$

34



$

2,716





































Total Stockholders' Equity Before Retained Earnings Adjustment (GAAP) - (d)   

$

16,283



$

13,982



$

12,943



$

17,713



$

15,418

Less: Tax Reform Impact



(2,169)





-





-





-





-

Total Stockholders' Equity (Non-GAAP) - (e)   

$

14,114



$

13,982



$

12,943



$

17,713



$

15,418































Average Total Stockholders' Equity (GAAP) * - (f)   

$

15,133



$

13,463



$

15,328



$

16,566





































Average Total Stockholders' Equity (Non-GAAP) * - (g)   

$

14,048



$

13,463



$

15,328



$

16,566





































Current and Long-Term Debt (GAAP) - (h) 

$

6,387



$

6,986



$

6,655



$

5,906



$

5,909

Less: Cash                                                       



(834)





(1,600)





(719)





(2,087)





(1,318)

Net Debt (Non-GAAP) - (i) 

$

5,553



$

5,386



$

5,936



$

3,819



$

4,591































Total Capitalization (GAAP) - (d) + (h)  

$

22,670



$

20,968



$

19,598



$

23,619



$

21,327































Total Capitalization (Non-GAAP) - (e) + (i) 

$

19,667



$

19,368



$

18,879



$

21,532



$

20,009































Average Total Capitalization (Non-GAAP) * - (j)   

$

19,518



$

19,124



$

20,206



$

20,771





































ROCE (GAAP Net Income) - [(a) + (b)] / (j)       



14.1%





-4.8%





-21.6%





14.7%





































ROCE (Non-GAAP Adjusted Net Income) - [(a) + (c)] / (j)       



4.2%





-3.7%





0.9%





13.7%





































Return on Equity (ROE)



























































ROE (GAAP) (GAAP Net Income) - (b) / (f)



17.1%





-8.1%





-29.5%





17.6%





































ROE (Non-GAAP) (Non-GAAP Adjusted Net Income) - (c) / (g)



4.6%





-6.6%





0.2%





16.4%









* Average for the current and immediately preceding year























































































































































Adjustments to Net Income (Loss) (GAAP)





























































(a) See below schedule for detail of adjustments to Net Income (Loss) (GAAP) in 2017:





Year Ended December 31, 2017

















 Before 





 Income Tax  





 After 

















 Tax 





 Impact 





 Tax 













Adjustments:





























    Add:   Mark-to-Market Commodity Derivative Contracts Impact

$

(12)



$

4



$

(8)













    Add:   Impairments of Certain Assets



261





(93)





168













    Add:   Net Losses on Asset Dispositions



99





(35)





64













    Add:   Legal Settlement - Early Lease Termination



10





(4)





6













    Add:   Joint Venture Transaction Costs



3





(1)





2













    Add:   Joint Interest Billings Deemed Uncollectible



5





(2)





3













    Less:  Tax Reform Impact



-





(2,169)





(2,169)













Total

$

366



$

(2,300)



$

(1,934)











































(b) See below schedule for detail of adjustments to Net Income (Loss) (GAAP) in 2016:





Year Ended December 31, 2016

















 Before 





 Income Tax  





 After 

















 Tax 





 Impact 





 Tax 













Adjustments:





























    Add:   Mark-to-Market Commodity Derivative Contracts Impact

$

77



$

(28)



$

49













    Add:   Impairments of Certain Assets



321





(113)





208













    Less:  Net Gains on Asset Dispositions



(206)





62





(144)













    Add:   Trinidad Tax Settlement



-





43





43













    Add:   Voluntary Retirement Expense



42





(15)





27













    Add:   Acquisition - State Apportionment Change



-





16





16













    Add:   Acquisition Costs



5





-





5













Total

$

239



$

(35)



$

204











































(c) See below schedule for detail of adjustments to Net Income (Loss) (GAAP) in 2015:





Year Ended December 31, 2015

















 Before 





 Income Tax  





 After 

















 Tax 





 Impact 





 Tax 













Adjustments:





























    Add:   Mark-to-Market Commodity Derivative Contracts Impact

$

668



$

(238)



$

430













    Add:   Impairments of Certain Assets



6,308





(2,183)





4,125













    Less:  Texas Margin Tax Rate Reduction



-





(20)





(20)













    Add:   Legal Settlement - Early Leasehold Termination



19





(6)





13













    Add:   Severance Costs



9





(3)





6













    Add:   Net Losses on Asset Dispositions



9





(4)





5













Total

$

7,013



$

(2,454)



$

4,559











































(d) See below schedule for detail of adjustments to Net Income (Loss) (GAAP) in 2014:





Year Ended December 31, 2014

















 Before 





 Income Tax  





 After 

















 Tax 





 Impact 





 Tax 













Adjustments:





























    Less:  Mark-to-Market Commodity Derivative Contracts Impact

$

(800)



$

285



$

(515)













    Add:   Impairments of Certain Assets



824





(271)





553













    Less:  Net Gains on Asset Dispositions



(508)





21





(487)













    Add:   Tax Expense Related to the Repatriation of Accumulated

                 Foreign Earnings in Future Years



-





250





250













Total

$

(484)



$

285



$

(199)













 

EOG RESOURCES, INC.

Quantitative Reconciliation of After-Tax Net Interest Expense (Non-GAAP), Net Debt (Non-GAAP) and Total

Capitalization (Non-GAAP) as used in the Calculation of Return on Capital Employed (Non-GAAP) to Net Interest

Expense (GAAP), Current and Long-Term Debt (GAAP) and Total Capitalization (GAAP), Respectively

(Unaudited; in millions, except ratio data)





































The following chart reconciles Net Interest Expense (GAAP), Current and Long-Term Debt (GAAP) and Total Capitalization (GAAP) to After-Tax Net Interest Expense (Non-GAAP), Net Debt (Non-GAAP) and Total Capitalization (Non-GAAP), respectively, as used in the Return on Capital Employed (ROCE) (Non-GAAP) calculation.  EOG believes this presentation may be useful to investors who follow the practice of some industry analysts who utilize After-Tax Net Interest Expense, Net Debt and Total Capitalization (Non-GAAP) in their ROCE calculation.  EOG management uses this information for purposes of comparing its financial performance with the financial performance of other companies in the industry.









































2013





2012





2011





2010





2009





2008

Return on Capital Employed (ROCE) (Non-GAAP)



































(Calculated Using GAAP Net Income)







































































Net Interest Expense (GAAP)

$

235



$

214



$

210



$

130



$

101



$

52

Tax Benefit Imputed (based on 35%) 



(82)





(75)





(74)





(46)





(35)





(18)

After-Tax Net Interest Expense (Non-GAAP) - (a) 

$

153



$

139



$

136



$

84



$

66



$

34





































Net Income (Loss) (GAAP) - (b)                                                   

$

2,197



$

570



$

1,091



$

161



$

547



$

2,437





































Total Stockholders' Equity (GAAP) - (d)   

$

15,418



$

13,285



$

12,641



$

10,232



$

9,998



$

9,015





































Average Total Stockholders' Equity (GAAP) * - (f)   

$

14,352



$

12,963



$

11,437



$

10,115



$

9,507



$

8,003





































Current and Long-Term Debt (GAAP) - (h) 

$

5,909



$

6,312



$

5,009



$

5,223



$

2,797



$

1,897

Less: Cash                                                       



(1,318)





(876)





(616)





(789)





(686)





(331)

Net Debt (Non-GAAP) - (i) 

$

4,591



$

5,436



$

4,393



$

4,434



$

2,111



$

1,566





































Total Capitalization (GAAP) - (d) + (h)  

$

21,327



$

19,597



$

17,650



$

15,455



$

12,795



$

10,912





































Total Capitalization (Non-GAAP) - (d) + (i) 

$

20,009



$

18,721



$

17,034



$

14,666



$

12,109



$

10,581





































Average Total Capitalization (Non-GAAP) * - (j)   

$

19,365



$

17,878



$

15,850



$

13,388



$

11,345



$

9,351





































ROCE (GAAP Net Income) - [(a) + (b)] / (j)       



12.1%





4.0%





7.7%





1.8%





5.4%





26.4%









































































Return on Equity (ROE) (GAAP)







































































ROE (GAAP Net Income) - (b) / (f)



15.3%





4.4%





9.5%





1.6%





5.8%





30.5%









































































* Average for the current and immediately preceding year









































































EOG RESOURCES, INC.

Quantitative Reconciliation of After-Tax Net Interest Expense (Non-GAAP), Net Debt (Non-GAAP) and Total

Capitalization (Non-GAAP) as used in the Calculation of Return on Capital Employed (Non-GAAP) to Net Interest

Expense (GAAP), Current and Long-Term Debt (GAAP) and Total Capitalization (GAAP), Respectively

(Unaudited; in millions, except ratio data)





































The following chart reconciles Net Interest Expense (GAAP), Current and Long-Term Debt (GAAP) and Total Capitalization (GAAP) to After-Tax Net Interest Expense (Non-GAAP), Net Debt (Non-GAAP) and Total Capitalization (Non-GAAP), respectively, as used in the Return on Capital Employed (ROCE) (Non-GAAP) calculation.  EOG believes this presentation may be useful to investors who follow the practice of some industry analysts who utilize After-Tax Net Interest Expense, Net Debt and Total Capitalization (Non-GAAP) in their ROCE calculation.  EOG management uses this information for purposes of comparing its financial performance with the financial performance of other companies in the industry.









































2007





2006





2005





2004





2003





2002

Return on Capital Employed (ROCE) (Non-GAAP)



































(Calculated Using GAAP Net Income)







































































Net Interest Expense (GAAP)

$

47



$

43



$

63



$

63



$

59



$

60

Tax Benefit Imputed (based on 35%) 



(16)





(15)





(22)





(22)





(21)





(21)

After-Tax Net Interest Expense (Non-GAAP) - (a) 

$

31



$

28



$

41



$

41



$

38



$

39





































Net Income (Loss) (GAAP) - (b)                                                   

$

1,090



$

1,300



$

1,260



$

625



$

430



$

87





































Total Stockholders' Equity (GAAP)- (d)   

$

6,990



$

5,600



$

4,316



$

2,945



$

2,223



$

1,672





































Average Total Stockholders' Equity (GAAP) * - (f)   

$

6,295



$

4,958



$

3,631



$

2,584



$

1,948



$

1,658





































Current and Long-Term Debt (GAAP) - (h) 

$

1,185



$

733



$

985



$

1,078



$

1,109



$

1,145

Less: Cash                                                       



(54)





(218)





(644)





(21)





(4)





(10)

Net Debt (Non-GAAP) - (i) 

$

1,131



$

515



$

341



$

1,057



$

1,105



$

1,135





































Total Capitalization (GAAP) - (d) + (h)  

$

8,175



$

6,333



$

5,301



$

4,023



$

3,332



$

2,817





































Total Capitalization (Non-GAAP) - (d) + (i) 

$

8,121



$

6,115



$

4,657



$

4,002



$

3,328



$

2,807





































Average Total Capitalization (Non-GAAP) * - (j)   

$

7,118



$

5,386



$

4,330



$

3,665



$

3,068



$

2,652





































ROCE (GAAP Net Income) - [(a) + (b)] / (j)       



15.7%





24.7%





30.0%





18.2%





15.3%





4.8%









































































Return on Equity (ROE) (GAAP)







































































ROE (GAAP Net Income) - (b) / (f)



17.3%





26.2%





34.7%





24.2%





22.1%





5.2%









































































* Average for the current and immediately preceding year









































































EOG RESOURCES, INC.

Quantitative Reconciliation of After-Tax Net Interest Expense (Non-GAAP), Net Debt (Non-GAAP) and Total

Capitalization (Non-GAAP) as used in the Calculation of Return on Capital Employed (Non-GAAP) to Net Interest

Expense (GAAP), Current and Long-Term Debt (GAAP) and Total Capitalization (GAAP), Respectively

(Unaudited; in millions, except ratio data)





































The following chart reconciles Net Interest Expense (GAAP), Current and Long-Term Debt (GAAP) and Total Capitalization (GAAP) to After-Tax Net Interest Expense (Non-GAAP), Net Debt (Non-GAAP) and Total Capitalization (Non-GAAP), respectively, as used in the Return on Capital Employed (ROCE) (Non-GAAP) calculation.  EOG believes this presentation may be useful to investors who follow the practice of some industry analysts who utilize After-Tax Net Interest Expense, Net Debt and Total Capitalization (Non-GAAP) in their ROCE calculation.  EOG management uses this information for purposes of comparing its financial performance with the financial performance of other companies in the industry.









































2001





2000





1999





1998





1997







Return on Capital Employed (ROCE) (Non-GAAP)



































(Calculated Using GAAP Net Income)







































































Net Interest Expense (GAAP)

$

45



$

61



$

62



$

49













Tax Benefit Imputed (based on 35%) 



(16)





(21)





(22)





(17)













After-Tax Net Interest Expense (Non-GAAP) - (a) 

$

29



$

40



$

40



$

32

















































Net Income (Loss) (GAAP) - (b)                                                   

$

399



$

397



$

569



$

56

















































Total Stockholders' Equity (GAAP)- (d)   

$

1,643



$

1,381



$

1,130



$

1,280



$

1,281











































Average Total Stockholders' Equity (GAAP) * - (f)   

$

1,512



$

1,256



$

1,205



$

1,281

















































Current and Long-Term Debt (GAAP) - (h) 

$

856



$

859



$

990



$

1,143



$

745







Less: Cash                                                       



(3)





(20)





(25)





(6)





(9)







Net Debt (Non-GAAP) - (i) 

$

853



$

839



$

965



$

1,137



$

736











































Total Capitalization (GAAP) - (d) + (h)  

$

2,499



$

2,240



$

2,120



$

2,423



$

2,026











































Total Capitalization (Non-GAAP) - (d) + (i) 

$

2,496



$

2,220



$

2,095



$

2,417



$

2,017











































Average Total Capitalization (Non-GAAP) * - (j)   

$

2,358



$

2,158



$

2,256



$

2,217

















































ROCE (GAAP Net Income) - [(a) + (b)] / (j)       



18.2%





20.2%





27.0%





4.0%





















































































Return on Equity (ROE) (GAAP)







































































ROE (GAAP Net Income) - (b) / (f)



26.4%





31.6%





47.2%





4.4%





















































































* Average for the current and immediately preceding year

 

EOG RESOURCES, INC.

Cash Operating Expenses per Barrel of Oil Equivalent (Boe)

(Unaudited; in thousands, except per Boe amounts)





















































Year-To-Date (YTD)



Year Ended 







September 30,



December 31,







2018



2017



2016



2015



2014



























Cash Operating Expenses (GAAP)*























Lease and Well



$               936,236



$  1,044,847



$    927,452



$  1,182,282



$  1,416,413



Transportation Costs



550,781



740,352



764,106



849,319



972,176



General and Administrative



310,065



434,467



394,815



366,594



402,010



     Cash Operating Expenses



1,797,082



2,219,666



2,086,373



2,398,195



2,790,599



Less:  Legal Settlement - Early Leasehold Termination



-



(10,202)



-



(19,355)



-



Less:  Voluntary Retirement Expense



-



-



(42,054)



-



-



Less:  Acquisition Costs - Yates Transaction



-



-



(5,100)



-



-



Less:  Joint Venture Transaction Costs



-



(3,056)



-



-



-



Less:  Joint Interest Billings Deemed Uncollectible



-



(4,528)



-



-



-



     Adjusted Cash Operating Expenses (Non-GAAP) - (a)



$            1,797,082



$  2,201,880



$  2,039,219



$  2,378,840



$  2,790,599



























Volume - Thousand Barrels of Oil Equivalent - (b)



192,182



222,251



204,929



208,862



217,073



























Adjusted Cash Operating Expenses Per Boe (Non-GAAP) - (a) / (b)



$                    9.35



$          9.91

(c)

$          9.95

(d)

$        11.39

(e)

$        12.86

(f)

























Adjusted Cash Operating Expenses Per Boe (Non-GAAP) -

   Percentage Decrease























YTD 2017 compared to YTD 2016 - [(c) - (d)] / (d)       



0%



















YTD 2017 compared to YTD 2015 - [(c) - (e)] / (e)       



-13%



















YTD 2017 compared to YTD 2014 - [(c) - (f)] / (f)       



-23%











































* Includes stock compensation expense and other non-cash items.

 

EOG RESOURCES, INC.

Cost per Barrel of Oil Equivalent (Boe)

(Unaudited; in thousands, except per Boe amounts)









































Year Ended





December 31,





2014



2015



2016



2017



















Volume - Thousand Barrels of Oil Equivalent 



217,073



208,862



204,929



222,251



















Total Wellhead Revenues



$  12,592,917



$  6,403,258



$     5,496,743



$     7,907,891



















Composite Average Wellhead Revenue per Boe



$          58.01



$        30.66



$            26.82



$            35.58



















Operating Costs

















     Lease and Well



$    1,416,413



$  1,182,282



$        927,452



$     1,044,847

     Transportation Costs



972,176



849,319



764,106



740,352

     Gathering and Processing Costs



145,800



146,156



122,901



148,775



















     General and Administrative



402,010



366,594



394,815



434,467

          Less:  Voluntary Retirement Expense



-



-



(42,054)



-

          Less:  Acquisition Costs



-



-



(5,100)



-

          Less:  Legal Settlement - Early Leasehold Termination



-



(19,355)



-



(10,202)

          Less:  Joint Venture Transaction Costs



-



-



-



(3,056)

          Less:  Joint Interest Billings Deemed Uncollectible



-



-



-



(4,528)

     General and Administrative (Non-GAAP)



402,010



347,239



347,661



416,681



















     Taxes Other Than Income



757,564



421,744



349,710



544,662

     Interest Expense, Net



201,458



237,393



281,681



274,372

Total Cash Operating Cost (Non-GAAP) (excluding

   DD&A and Exploration Costs)



$    3,895,421



$  3,184,133



$     2,793,511



$     3,169,689



















Total Cash Operating Cost per Boe (Non-GAAP)

   (excluding DD&A and Exploration Costs)



$          17.95



$        15.25



$            13.64



$            14.25



















Composite Average Margin per Boe (Non-

   GAAP) (excluding DD&A and Exploration Costs)



$          40.06



$        15.41



$            13.18



$            21.33



















     Depreciation, Depletion and Amortization (DD&A)



3,997,041



3,313,644



3,553,417



3,409,387

Total Operating Cost (Non-GAAP) (excluding Exploration

   Costs)



$    7,892,462



$  6,497,777



$     6,346,928



$     6,579,076



















Total Operating Cost per Boe (Non-GAAP) (excluding

   Exploration Costs)



$          36.38



$        31.11



$            30.98



$            29.59



















Composite Average Margin per Boe (Non-GAAP)

   (excluding Exploration Costs)



$          21.63



$         (0.45)



$            (4.16)



$             5.99



















     Total Exploration Costs



976,453



6,777,786



755,877



629,191

          Less:  Impairments



(824,312)



(6,307,593)



(320,617)



(261,452)

     Total Exploration Costs (Non-GAAP)



152,141



470,193



435,260



367,739



















Total Operating Cost (Non-GAAP) (including Exploration

   Costs) 



$    8,044,603



$  6,967,970



$     6,782,188



$     6,946,815



















Total Operating Cost per Boe (Non-GAAP) (including

   Exploration Costs) 



$          37.08



$        33.36



$            33.10



$            31.24



















Composite Average Margin per Boe (Non-GAAP)

   (including Exploration Costs) 



$          20.93



$         (2.70)



$            (6.28)



$             4.34





































EOG RESOURCES, INC.

Cost per Barrel of Oil Equivalent (Boe)

(Unaudited; in thousands, except per Boe amounts)









































Three Months Ended



Year-To-Date





March 31,



June 30,



September 30,



September 30,





2018



2018



2018



2018



















Volume - Thousand Barrels of Oil Equivalent 



59,394



63,898



68,890



192,182



















Total Wellhead Revenues



$    2,622,489



$  2,964,727



$     3,320,695



$     8,907,911



















Composite Average Wellhead Revenue per Boe



$          44.15



$        46.40



$            48.20



$            46.35



















Operating Costs

















     Lease and Well



$      300,064



$    314,604



$        321,568



$        936,236

     Transportation Costs



176,957



177,797



196,027



550,781

     Gathering and Processing Costs



101,345



109,169



114,063



324,577

     General and Administrative



94,698



104,083



111,284



310,065

     Taxes Other Than Income



179,084



194,268



209,043



582,395

     Interest Expense, Net



61,956



63,444



63,632



189,032

Total Cash Operating Cost (excluding

   DD&A and Exploration Costs)



$      914,104



$    963,365



$     1,015,617



$     2,893,086



















Total Cash Operating Cost per Boe

   (excluding DD&A and Exploration Costs)



$          15.39



$        15.07



$            14.75



$            15.05



















Composite Average Margin per Boe

   (excluding DD&A and Exploration Costs)



$          28.76



$        31.33



$            33.45



$            31.30



















     Depreciation, Depletion and Amortization (DD&A)



748,591



848,674



918,180



2,515,445

Total Operating Cost (excluding Exploration

   Costs)



$    1,662,695



$  1,812,039



$     1,933,797



$     5,408,531



















Total Operating Cost per Boe (excluding

   Exploration Costs)



$          27.99



$        28.35



$            28.08



$            28.14



















Composite Average Margin per Boe

   (excluding Exploration Costs)



$          16.16



$        18.05



$            20.12



$            18.21



















     Total Exploration Costs



99,445



104,088



77,798



281,331

          Less:  Impairments



(20,876)



-



-



(20,876)

     Total Exploration Costs (Non-GAAP)



78,569



104,088



77,798



260,455



















Total Operating Cost (Non-GAAP) (including Exploration

   Costs) 



$    1,741,264



$  1,916,127



$     2,011,595



$     5,668,986



















Total Operating Cost per Boe (Non-GAAP) (including

   Exploration Costs) 



$          29.31



$        29.98



$            29.21



$            29.50



















Composite Average Margin per Boe (Non-GAAP)

   (including Exploration Costs) 



$          14.84



$        16.42



$            18.99



$            16.85

 

EOG RESOURCES, INC.

Fourth Quarter and Full Year 2018 Forecast and Benchmark Commodity Pricing

























     (a)  Fourth Quarter and Full Year 2018 Forecast

























The forecast items for the fourth quarter and full year 2018 set forth below for EOG Resources, Inc. (EOG) are based on current available information and expectations as of the date of the accompanying press release.  EOG undertakes no obligation, other than as required by applicable law, to update or revise this forecast, whether as a result of new information, subsequent events, anticipated or unanticipated circumstances or otherwise.  This forecast, which should be read in conjunction with the accompanying press release and EOG's related Current Report on Form 8-K filing, replaces and supersedes any previously issued guidance or forecast.

























     (b)  Benchmark Commodity Pricing

























EOG bases United States and Trinidad crude oil and condensate price differentials upon the West Texas Intermediate crude oil price at Cushing, Oklahoma, using the simple average of the NYMEX settlement prices for each trading day within the applicable calendar month.

























EOG bases United States natural gas price differentials upon the natural gas price at Henry Hub, Louisiana, using the simple average of the NYMEX settlement prices for the last three trading days of the applicable month.





































Estimated Ranges























(Unaudited)















4Q 2018





Full Year 2018

Daily Sales Volumes























     Crude Oil and Condensate Volumes (MBbld)























          United States



425.0

-



430.0





393.5

-



394.8

          Trinidad



0.5

-



0.7





0.7

-



0.9

          Other International



3.0

-



5.0





3.8

-



4.3

               Total



428.5

-



435.7





398.0

-



400.0

























     Natural Gas Liquids Volumes (MBbld)























               Total



115.0

-



125.0





114.1

-



116.7

























     Natural Gas Volumes (MMcfd)























          United States



975

-



1,025





923

-



935

          Trinidad



220

-



250





264

-



271

          Other International



30

-



40





30

-



33

               Total



1,225

-



1,315





1,217

-



1,239

























     Crude Oil Equivalent Volumes (MBoed)  























          United States



702.5

-



725.8





661.5

-



667.3

          Trinidad



37.2

-



42.4





44.6

-



46.1

          Other International



8.0

-



11.7





8.8

-



9.8

               Total



747.7

-



779.9





714.9

-



723.2





































Estimated Ranges























(Unaudited)













4Q 2018





Full Year 2018

Operating Costs























     Unit Costs ($/Boe)























          Lease and Well

$

4.45

-

$

4.85



$

4.80

-

$

4.90

          Transportation Costs

$

2.45

-

$

2.85



$

2.75

-

$

2.85

          Depreciation, Depletion and Amortization

$

13.60

-

$

13.95



$

13.23

-

$

13.32

























Expenses ($MM)























     Exploration, Dry Hole and Impairment

$

105

-

$

125



$

365

-

$

385

     General and Administrative

$

105

-

$

115



$

415

-

$

425

     Gathering and Processing 

$

110

-

$

130



$

435

-

$

455

     Capitalized Interest

$

5

-

$

7



$

23

-

$

25

     Net Interest

$

55

-

$

58



$

244

-

$

247

























Taxes Other Than Income (% of Wellhead Revenue)



6.5%

-



6.8%





6.5%

-



6.7%

























Income Taxes























     Effective Rate 



20%

-



25%





19%

-



24%

     Current Tax (Benefit) / Expense ($MM)

$

(70)

-

$

(30)



$

(190)

-

$

(150)

























Capital Expenditures (Excluding Acquisitions, $MM)























     Exploration and Development, Excluding Facilities













$

4,900

-

$

5,000

     Exploration and Development Facilities













$

600

-

$

650

     Gathering, Processing and Other













$

300

-

$

350

























Pricing - (Refer to Benchmark Commodity Pricing in text)























     Crude Oil and Condensate ($/Bbl)























          Differentials























               United States - above (below) WTI

$

0.00

-

$

2.00



$

0.50

-

$

1.05

               Trinidad - above (below) WTI

$

(11.00)

-

$

(9.00)



$

(9.00)

-

$

(8.00)

               Other International - above (below) WTI

$

0.00

-

$

7.00



$

3.80

-

$

5.60

























     Natural Gas Liquids























          Realizations as % of WTI



38%

-



46%





41%

-



43%

























     Natural Gas ($/Mcf)























          Differentials























               United States - above (below) NYMEX Henry Hub

$

(0.40)

-

$

0.00



$

(0.25)

-

$

(0.15)

























          Realizations























               Trinidad

$

2.40

-

$

2.80



$

2.80

-

$

2.90

               Other International

$

4.15

-

$

4.65



$

4.10

-

$

4.25

























Definitions























$/Bbl         U.S. Dollars per barrel























$/Boe        U.S. Dollars per barrel of oil equivalent























$/Mcf         U.S. Dollars per thousand cubic feet























$MM          U.S. Dollars in millions























MBbld       Thousand barrels per day























MBoed      Thousand barrels of oil equivalent per day























MMcfd       Million cubic feet per day























NYMEX     U.S. New York Mercantile Exchange























WTI           West Texas Intermediate























 

Cision View original content:http://www.prnewswire.com/news-releases/eog-resources-announces-outstanding-third-quarter-2018-results-300742708.html

SOURCE EOG Resources, Inc.

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