Company Reports

EOG Resources' capital allocation strategy stands somewhat apart from other US exploration and production players. Like its peers, EOG emphasizes returning cash to shareholders, but it is still willing to invest in modest production growth. In an industry that overextended itself during the shale revolution, EOG pivoted sooner than most in becoming a low-cost provider. Its enviable asset mix, including its leading position in the Delaware Basin, positions the firm as a premier shale player with best-in-class returns on capital.

EOG's total daily production rose to 1,410 mboe/d, up 2% sequentially and ahead of guidance and our expectations, though cash operating costs were a bit ahead of our forecast due to higher general and administrative costs. Still, capex of $1.6 billion was lower than both expected and guidance.

We have published an outlook on 2035 North American natural gas demand, which we see growing to 169 billion cubic feet per day (Bcf/d).

EOG's capital allocation strategy stands somewhat apart from other US exploration and production players. Like other US E&P peers, EOG emphasizes returning cash to shareholders, but it is still willing to invest in modest production growth. In an industry that overextended itself during the shale revolution, EOG pivoted sooner than most in becoming a low-cost provider. Its enviable asset mix, including its leading position in the Delaware Basin, positions the firm as a premier shale player with industry-leading returns on capital.

EOG Resources posted total production of 1,383.8 mboe/d, a decrease of 1% sequentially, but exceeded the midpoint of guidance. GAAP cash operating costs (USD/boe) of $10.45 crept up 2%, while EOG held capital expenditures flat at $1.64 billion. The stock declined over 3% on the trading day May 6.

EOG's capital allocation strategy stands somewhat apart relative to other US exploration and production players. And, like other US E&P peers, EOG has embraced a capital allocation policy that emphasizes returning cash to shareholders, yet is still willing to invest in modest production growth. Finally, in an industry that overextended itself during the shale revolution, EOG pivoted sooner than most in becoming a low-cost provider. EOG's enviable asset mix, including its leading position in the Delaware Basin, position the firm as a premier shale player with industry-leading returns on capital.

The United Arab Emirates announced it will leave The Organization of the Petroleum Exporting Countries after six decades of membership effective May 1.

EOG's capital allocation strategy stands somewhat apart relative to other US exploration and production players. And, like other US E&P peers, EOG has embraced a capital allocation policy that emphasizes returning cash to shareholders, yet is still willing to invest in modest production growth. Finally, in an industry that overextended itself during the shale revolution, EOG pivoted sooner than most in becoming a low-cost provider. EOG's enviable asset mix, including its leading position in the Delaware Basin, position the firm as a premier shale player with industry-leading returns on capital.

Over the March 14-15 weekend, the US conducted large-scale strikes on Kharg Island, according to NBC News. The island houses Iran's critical crude export terminal, which ships over 90% of Iran's crude exports. We understand that the strikes focused on military targets and avoided oil infrastructure.

On March 10, a CNN source report said Iran has begun laying mines in the Strait of Hormuz. The strait is the world's most important maritime route, as about 20% of global crude volumes pass through it. While not extensive, nearly 15 million barrels per day of crude production are stranded there now.

The US has agreed to provide insurance backstops and naval escorts for commercial vessels transiting the Strait of Hormuz amid Iran's sustained attacks on ships in response to US-Israeli strikes launched over the weekend. In response, Brent prices declined a bit to the upper-70s.

On Feb. 28, the US and Israel launched strikes on Iran with the goal of regime change. Brent benchmark oil prices had risen over 7% by March 2 morning trading.

EOG's total production of 1,399 mboe/d rose nearly 8% sequentially, better than guidance and our expectations. While non-GAAP cash unit costs of $10.22 and capex of $1,639, these costs were marginally higher than we earmarked, net-net, EOG outperformed our expectations.

The US has assembled a massive force of jet fighters and aircraft support to the Middle East. Negotiations over Iran's enrichment of uranium haven't yielded a resolution between the two nations. President Donald Trump indicated he will decide in 10 days whether to begin kinetic strikes against Iran.

Third-quarter total production of 1,301 mboe/d represented a strong 15% sequential increase from the Encino acquisition. Cash operating costs grew 4% sequentially to $10.50, while non-GAAP capital expenditures grew 8% to $1.65 billion.

EOG's capital allocation strategy sits somewhat alone relative to other US exploration and production players. And, like other US E&P peers, EOG has embraced a capital allocation policy that emphasizes returning cash to shareholders, yet retains a willingness to invest in modest production growth. Finally, in an industry that overextended itself during the shale revolution, EOG pivoted sooner than most in becoming a low-cost provider. EOG's enviable asset mix, including its leading position in the Delaware Basin, position the firm as a premier shale player with industry-leading returns on capital.

EOG's capital allocation strategy sits somewhat alone relative to other US exploration and production players. And, like other US E&P peers, EOG has embraced a capital allocation policy that emphasizes returning cash to shareholders, yet retains a willingness to invest in modest production growth. Finally, in an industry that overextended itself during the shale revolution, EOG pivoted sooner than most in becoming a low-cost provider. EOG's enviable asset mix, including its leading position in the Delaware Basin, position the firm as a premier shale player with industry-leading returns on capital.

We've updated our midcycle oil price assumption. Our 10-year forecast marries our bullish in-house oil demand view with Rystad's supply projections, which align with our revised, long-term take.

EOG's total daily production came in at 1,134.1 mboe/d, just above the midpoint of guidance, and good for a 4% sequential increase. Encouragingly, cash operating costs of $10.05 came in $0.35 lower than the midpoint of guidance, and management returned $1.1 billion of cash to shareholders.

EOG's capital allocation strategy sits somewhat alone relative to other US exploration and production players. And, like other US E&P peers, EOG has embraced a capital allocation policy that emphasizes returning cash to shareholders, yet retains a willingness to invest in modest production growth. Finally, in an industry that overextended itself during the shale revolution, EOG pivoted sooner than most in becoming a low-cost provider. EOG's enviable asset mix, including its leading position in the Delaware Basin, position the firm as a premier shale player with industry-leading returns on capital.