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JP Morgan Energy Conference – EOG Resources, Inc.

EOG Resources, Inc. · Jun 20, 2018 · 36 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. JP Morgan Energy Conference – EOG Resources, Inc. – slide 1
    Ezra Yacob JPM _0618-1
  2. JP Morgan Energy Conference – EOG Resources, Inc. – slide 2
    Leader in ROCE Through Commodity Price Cycles Leader in Disciplined Growth Low-Cost Producer Competitive in Global Oil Market Commitment to Safety and the Environment JPM _0618-3
  3. JP Morgan Energy Conference – EOG Resources, Inc. – slide 3
    1Q 2018 Strong Operational Execution - Exceeded Midpoint of All Total Production Targets - Forecast Cash Operating Expenses1 7% Lower in 2018 - Per-Unit Transportation and DD&A Expenses Below Targets Earning 150% Direct ATROR2 on…
  4. JP Morgan Energy Conference – EOG Resources, Inc. – slide 4
    Premium Strategy is Permanent - All Investments Tested at 40 Oil and 2.50 Natural Gas - Premium Wells Generate 100% Direct ATROR1 at 60 Oil - Replace Premium Inventory 2x Faster Than Drilling Target 16-20% Oil Growth2 - Complete 690…
  5. JP Morgan Energy Conference – EOG Resources, Inc. – slide 5
    WTI Oil: 17 28 26 61 71 95 48 60 HHub Gas: 2.20 4.10 3.40 7.20 4.20 3.70 2.70 3.00 30% 27% 25% 26% 20% Reset to Return to 13% Shift Production Base 18% from Gas to Oil Premium Double-Digit Average 18% Strategy in 2018 1998-2017…
  6. JP Morgan Energy Conference – EOG Resources, Inc. – slide 6
    100% 16-20% 1.5 Billion Premium Well Direct Oil Free Cash Flow4 ATROR1 at 60 Oil Growth3 at 60 Oil Reduce Reduce Cash Low Finding Cost Well Costs2 Operating Expenses3 Reduces DD&A Rate3 5% 7% 14% Double-Digit ROCE in 2018 (1)…
  7. JP Morgan Energy Conference – EOG Resources, Inc. – slide 7
    Minimum Direct ATROR1 of Premium Wells Increases with Higher Prices 100%+ Industry-Leading Cash Returns Premium Well = 60% Minimum 30% Payback…
  8. JP Morgan Energy Conference – EOG Resources, Inc. – slide 8
    8,000 6,000 3,200 Feb 2016 Feb 2017 Feb 2018 Resource 2.0 BnBoe 5.1 BnBoe 7.3 BnBoe Potential2 Per Well 625 MBoe 850 MBoe 900 MBoe (1) Premium locations are shown on a net basis and are all undrilled. (2) Estimated…
  9. JP Morgan Energy Conference – EOG Resources, Inc. – slide 9
    Rocky Mountain Area 66 MBopd in 2017 DJ Basin Powder River Basin Bakken 35 Net Completions 45 Net Completions 20 Net Completions 2017 Oil Production 2018 Planned Completions EOG Division Offices Mid-Continent 2 MBopd in…
  10. JP Morgan Energy Conference – EOG Resources, Inc. – slide 10
    Direct ATROR1 EOG 143% Industry 115% 113% 65% 45% 41% 26% 12% Eagle Ford Permian Powder River Bakken EOG % 93% 82% 78% 65% Premium2 (1) ATROR calculated using 50 WTI and 3.00 NYMEX fixed for life of well. Assumes…
  11. JP Morgan Energy Conference – EOG Resources, Inc. – slide 11
    Optimize Well-Package Size to Maximize Asset NPV Optimum NPV & Resource Recovery Declining NPV Longer Cycle Times Costlier Facilities NPV Less Opportunity to Learn and Improve Rising NPV Minimize Parent/Child Productivity…
  12. JP Morgan Energy Conference – EOG Resources, Inc. – slide 12
    Self-Source 60% Water, Chemicals & Completion Services Completion Design of Spreads 33% Secured Completion Spreads 13% 80% of Tubulars Tubulars Self-Source Locked in at 10% Sand Low Prices 9% Facilities & Self-Source…
  13. JP Morgan Energy Conference – EOG Resources, Inc. – slide 13
    ( Millions) Eagle Ford 9.8 Wolfcamp Oil 8.5 7.7 7.2 7.4 6.2 6.1 5.7 4.7 4.5 4.3 2012 2013 2014 2015 2016 2017 Target (1) Well Costs = Drilling, Completion, Well-Site Facilities and Flowback. Eagle Ford normalized to 5,300…
  14. JP Morgan Energy Conference – EOG Resources, Inc. – slide 14
    G&A Transportation LOE 12.86 11.39 9.95 9.91 9.17 2014 2015 2016 2017 2018E (1) 2014 2017 excludes one-time expenses. See reconciliation schedules. 2018 based on midpoint of 2018 guidance, as of May 3, 2018. JPM…
  15. JP Morgan Energy Conference – EOG Resources, Inc. – slide 15
    EOG U.S. EOG U.S. Crude Oil Pricing Natural Gas Pricing 2018E 2018E Midcontinent Rockies Rockies Cushing Midland Permian Mid-Cush Hedges Midwest & East Coast Gulf Coast Gulf Coast West Coast 2019E 2019E Midcontinent…
  16. JP Morgan Energy Conference – EOG Resources, Inc. – slide 16
    U.S. Crude Oil & Condensate Price Realization vs. Peers1 (/Bbl) EOG Average 2.50 per Barrel Advantage 3.11 3.01 2.86 2.49 2.52 2.30 2.21 2.17 2.00 1Q 2016 2Q 2016 3Q 2016 4Q 2016 1Q 2017 2Q 2017 3Q 2017 4Q 2017 1Q 2018 EOG…
  17. JP Morgan Energy Conference – EOG Resources, Inc. – slide 17
    High-Return Organic Growth - Diverse and Deep Premium Drilling Inventory - Organic Exploration & Low-Cost Leasing for New High-Return Plays Balance Sheet Provides Flexibility through Commodity Price Cycles - Target 3 Billion Total…
  18. JP Morgan Energy Conference – EOG Resources, Inc. – slide 18
    Target 3 Billion Reduction in Total Debt1 Target Stronger Dividend Growth Retire Maturing Bonds 19% CAGR Over Next Four Years /Share 1999-2017 Billion 0.80 7 6.4 0.35 0.70 6 0.90 0.60 5 1.00 0.50 4 0.75 3.4 0.40 3 0.30…
  19. JP Morgan Energy Conference – EOG Resources, Inc. – slide 19
    Internal Prospect Generation First Mover Advantage Exploration Best Rock / Best Plays Low-Cost Acreage Most Prolific U.S. Horizontal Wells Culture Fastest U.S. Horizontal Driller Rate-of-Return Driven Industry Leading Completion…
  20. JP Morgan Energy Conference – EOG Resources, Inc. – slide 20
    JPM _0618-21
  21. JP Morgan Energy Conference – EOG Resources, Inc. – slide 21
    Align Volumes to Highest Value Markets EOG Permian Crude Oil Avoid Long-Term Commitments Cushing WTI Crude Oil Midland EOG Permian Oil Receiving Midland Pricing1 Mid-Cush - 25% in 2018 - 20% in 2019 Corpus 20% of EOG Permian…
  22. JP Morgan Energy Conference – EOG Resources, Inc. – slide 22
    MBopd 15%-25% CAGR 800 Disciplined Growth 700 60 600 Growth Remains a Result of Return- Focused Capital Allocation 16-20% 500 Growth3 50 at 50 19% Growth Priority on Sustainable Improvement 400 at 50 of Cost Structure and…
  23. JP Morgan Energy Conference – EOG Resources, Inc. – slide 23
    Generate Over 1.5 Billion of Free Cash Flow1 at 60 Oil CAPEX2 + Dividend3 6.0Bn Free Cash Flow1 Dividend3 CAPEX2 50 55 60 65 WTI Oil Price (1) Based on midpoint of 2018 guidance, as of May 3, 2018. See reconciliation…
  24. JP Morgan Energy Conference – EOG Resources, Inc. – slide 24
    300 250 200 150 100 50 0 EOG A B C D E F G H I J K L M N O P Q R S T Source: Sanford C. Bernstein & Co. Thousand Club includes wells with peak 30-day production over 1,000 Boed. Represents 4,000 out of…
  25. JP Morgan Energy Conference – EOG Resources, Inc. – slide 25
    Data Collection Data Management Data Science Data Delivery Real-Time 65+ Proprietary Applications - Scalable Frac Fleets Rigs - Integrated Models - Predictive Analytics Algorithms Proprietary - Proprietary Algorithms Data Marts…
  26. JP Morgan Energy Conference – EOG Resources, Inc. – slide 26
    Total Resource Undrilled Net Drilled & Undrilled Potential2 Premium Play Acres Locations1 (MMBoe) Locations3 Eagle Ford 520,000 7,200 3,200 2,425 Delaware Basin - Wolfcamp 346,000 2,660 2,900 1,700 - First Bone Spring 100,000 555…
  27. JP Morgan Energy Conference – EOG Resources, Inc. – slide 27
    Net Resource Potential 6.5 BnBoe1 Roosevelt - 4,800 of Stacked Potential - 6,885 Net Locations; 7,200 Laterals - Average 90% Working Interest and Northwest Shelf 72% Net Revenue Interest 163,000 Net Acres Average 19 Rigs and 7…
  28. JP Morgan Energy Conference – EOG Resources, Inc. – slide 28
    346,000 Net Acres Prospective with Multiple Target Zones - 2,660 Net Wells NGLs 20% - Complete 205 Net Wells in 2018 vs. 116 in 2017 Oil Gas 53% Estimated Resource Potential 2.9 BnBoe1, Net to EOG 27% Oil Play - 226,000 Net…
  29. JP Morgan Energy Conference – EOG Resources, Inc. – slide 29
    Second Bone Spring 289,000 Net Acres Prospective in Northern Delaware Basin NGLs - 1,870 Net Wells; 850 Spacing 16% - Complete 5 Net Wells in 2018 vs. 26 in 2017 Gas Oil Estimated Resource Potential 1.4 BnBoe1, Net to EOG 22%…
  30. JP Morgan Energy Conference – EOG Resources, Inc. – slide 30
    160,000 Net Acres Prospective - 1,800 Net Wells - 660 Spacing in A and B Zones NGLs Oil 28% 31% - Complete 15 Net Wells in 2018 vs. 20 in 2017 Gas Estimated Resource Potential 1.7 BnBoe1, Net to EOG 41% Typical Well - EUR 1,175…
  31. JP Morgan Energy Conference – EOG Resources, Inc. – slide 31
    Premium Drilling Across Entire Oil Window Flexibility to Grow Eagle Ford 10+ Years Average Per-Well 30-Day Rates White Unit Pop Unit Pinyon Pine 2/3 of Total Locations Remain Undrilled 5H-8H 7H-8H A-1H & B-2H Nov 2017 Feb 2018 Dec…
  32. JP Morgan Energy Conference – EOG Resources, Inc. – slide 32
    Largest Oil Producer and Acreage Holder in the Eagle Ford - Average 9 Rigs and 7 Completion Spreads in 2018 FAYETTE San Antonio - Complete 260 Net Wells in 2018 vs. 217 in 2017 GUADALUPE BEXAR GONZALES LAVACA Estimated Resource…
  33. JP Morgan Energy Conference – EOG Resources, Inc. – slide 33
    Average 4 Rigs and 2 Completion Spreads in 2018 Powder River Basin PRB Core MT Exploration Powder River Basin Sheridan Area WY Crook PRB Turner Sand Identified as Premium Play - Testing 4,800 Column of Stacked Pay Campbell Weston…
  34. JP Morgan Energy Conference – EOG Resources, Inc. – slide 34
    High-Return Premium Play in Crude Oil Window EOG Acreage Outline - Average 2 Rigs and 1 Completion Spread in 2018 - Complete 25 Net Wells in 2018 CANADIAN OKLAHOMA 50,000 Net Acres Prospective Oklahoma City - Accumulated for 750…
  35. JP Morgan Energy Conference – EOG Resources, Inc. – slide 35
    Canada High-Return Drilling Activity Since 2006 Stanley, ND - Average 1 Rig Operating in 2018 State Line Bakken - Complete 20 Net Wells in 2018 vs. 35 in 2017 Lite Elm Bakken Coulee Core Estimated Resource Potential 1.0…
  36. JP Morgan Energy Conference – EOG Resources, Inc. – slide 36
    Trinidad and Tobago Focused on Exploration in 2018 - Acquire Additional State-of-the-Art Seismic - Identify High-Quality Shallow-Water Prospects TOBAGO ATLANTIC OCEAN Banyan & Osprey TRINIDAD - Completed 5 Net Wells in 2017 4(a)…

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