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EOG Resources Inc EOG

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Morningstar’s Analysis

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EOG Enjoys Uri-Related Price Bump in First Quarter

Analyst Note

| Dave Meats, CFA |

EOG delivered production of 779 thousand barrels of oil equivalent per day (mboe/d) in the first quarter, which was 3% lower sequentially and 11% lower year over year. This was consistent with previous guidance of 762.9-800.6 mboe/d, albeit slightly below the midpoint. Oil volumes, however, were slightly above the top end of guidance at 431 thousand barrels of oil per day (mbbls/d). The firm’s 2021 outlook was lowered to 803 mboe/d at the midpoint, compared with 818 mboe/d previously (a decrease of 2%). This mainly affects expectations for U.S. natural gas liquids (NGLs) and natural gas, rather than oil. NGL volume guidance was lowered and natural gas volume guidance was slightly increased, perhaps signaling more ethane rejection than originally planned. Meanwhile, realized prices were generally stronger than expected, particularly on the natural gas side (due to the impact of winter storm Uri). As a result, the firm’s financial results were ahead of Street estimates, with adjusted EBITDA and adjusted earnings per share coming in at $2.23 billion and $1.62, respectively (FactSet consensus estimates were $2.18 billion and $1.55). After incorporating these results, we have ratcheted our fair value estimate to $96 from $94 per share.

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Company Profile

Business Description

EOG Resources is an oil and gas producer with acreage in several U.S. shale plays, including the Permian Basin, the Eagle Ford, and the Bakken. At the end of 2020, it reported net proved reserves of 3.2 billion barrels of oil equivalent. Net production averaged 754 thousand barrels of oil equivalent per day in 2020 at a ratio of 72% oil and natural gas liquids and 28% natural gas.

Contact
1111 Bagby, Sky Lobby 2
Houston, TX, 77002
T +1 713 651-7000
Sector Energy
Industry Oil & Gas E&P
Most Recent Earnings Dec 31, 2020
Fiscal Year End Dec 31, 2021
Stock Type Hard Assets
Employees 2,900

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