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BAML Global Energy Conference – EOG Resources, Inc.

EOG Resources, Inc. · Nov 15, 2018 · 37 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. BAML Global Energy Conference – EOG Resources, Inc. – slide 1
    Bank of America Merrill Lynch Global Energy Conference Billy Helms, Chief Operating Officer
  2. BAML Global Energy Conference – EOG Resources, Inc. – slide 2
    High Return Organic Growth Company Leader in ROCE Leader in Low-Cost Producer Commitment to Through Disciplined Competitive in Safety and the Commodity Growth Global Oil Market Environment Price Cycles Delivering Long-Term…
  3. BAML Global Energy Conference – EOG Resources, Inc. – slide 3
    3Q 2018 Highlights High-Return Growth and Free Cash Flow Earning Record Rates of Return in 2018 - Exceeded High-End of Oil and NGL Production Targets - Year-to-Date Wells Delivering Triple-Digit Returns3 - Target 19%1 Oil Production…
  4. BAML Global Energy Conference – EOG Resources, Inc. – slide 4
    Compelling Combination: High Returns, Disciplined Peer-Leading Growth and Free Cash Flow Target ROCE Competitive with All Sectors - On Track for Double-Digit ROCE in 2018 Disciplined Growth Powered by Organic Premium Drilling -…
  5. BAML Global Energy Conference – EOG Resources, Inc. – slide 5
    Focused on Return on Capital Employed1 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% 26% Return to 25% 13% Reset to Average Premium 10%+ 20% 1998-2017 Strategy in 2018 18% 18% 15% 16%…
  6. BAML Global Energy Conference – EOG Resources, Inc. – slide 6
    EOGs Disciplined Growth Outpaces Large-Cap Peers Production Growth Per Share1 (Boe), 2018 2020 CAGR 25% 20% 15% 10% 5% 0% EOG A B C D E F G H I Source: FactSet consensus. (1) Debt-adjusted to remove effect of leverage.…
  7. BAML Global Energy Conference – EOG Resources, Inc. – slide 7
    Premium Drilling Ensures Strong Returns Through the Cycle Minimum 30% Direct ATROR1 with Flat 40 Oil and 2.50 Natural Gas Minimum Direct ATROR1 of Premium Wells Direct Finding Cost2 of Premium Wells Increases with Oil Price Does Not…
  8. BAML Global Energy Conference – EOG Resources, Inc. – slide 8
    Premium Inventory1 Additions Sustain High-Return Growth Inventory Growing in Quality and Size 9,500 13+ Years of Premium Inventory 8,000 at Current Drilling Pace 6,000 Replacing Premium Locations 2x Faster than Drilling 3,200…
  9. BAML Global Energy Conference – EOG Resources, Inc. – slide 9
    Strong Track Record of Cost Reduction in All Price Environments Well Costs1 9.8 9.7 (MM) 8.8 Eagle Ford2 7.2 7.2 Bakken3 6.2 6.1 5.7 5.1 4.7 4.8 4.6 4.6 4.5 4.4 4.3 2012 2013 2014 2015 2016 2017 Current Year-End 2018…
  10. BAML Global Energy Conference – EOG Resources, Inc. – slide 10
    Line of Sight to Well Cost1 Reductions Wolfcamp Oil 7.7 Well Costs1 (MM) 7.5 7.4 2017 Drilling Drilling Other Completion Sand Water Completion Service Year-End Current Efficiencies Tools Drilling Efficiencies Spread Increases…
  11. BAML Global Energy Conference – EOG Resources, Inc. – slide 11
    Secured 65% of Anticipated 2019 Well Costs1 at Competitive Pricing Completion Services Self-Source 25% 33% of Well Costs1 Self-Source Water, Chemicals & Completion Design Completion Spreads 13% Sand 65% 9% Self-Source of…
  12. BAML Global Energy Conference – EOG Resources, Inc. – slide 12
    EOG Continues Reducing Cash Operating Costs ( Per BOE) 12.861 11.391 9.951 9.911 9.252 G&A Transportation LOE 2014 2015 2016 2017 2018E 2018E** (1) Excludes one-time expenses. See reconciliation schedules. BAML 2018 13…
  13. BAML Global Energy Conference – EOG Resources, Inc. – slide 13
    EOG Realizes Higher Oil Prices than Peers EOG Average 2.80 per Bbl Advantage 5.00 U.S. Crude Oil and 4.41 Condensate Price Realization vs. Peers1 4.00 3.71 ( per Bbl) 3.11 3.01 2.86 3.00 2.49 2.52 2.30 2.21 2.17 2.00 2.00…
  14. BAML Global Energy Conference – EOG Resources, Inc. – slide 14
    EOG Well Returns Outpaced the Industry in 2017 Direct 143% ATROR1 115% 113% EOG Industry 65% 41% 45% 26% 12% Eagle Ford Permian Powder River Bakken EOG % Premium2 93% 82% 78% 65% (1) Direct ATROR calculated using 50 WTI…
  15. BAML Global Energy Conference – EOG Resources, Inc. – slide 15
    Substantial 2018 Free Cash Flow1 with Higher Oil Prices Generated Over 1 Billion of Free Cash Flow through 3Q 2018 CAPEX2 + Free Cash Flow1 Dividend3 CAPEX2 Dividend3 6.3 Bn 50 60 65 70 WTI Oil Price (1) Discretionary Cash Flow…
  16. BAML Global Energy Conference – EOG Resources, Inc. – slide 16
    Disciplined Return-Driven Capital Allocation High-Return No Change in Strict Organic Growth Investment Criteria Diverse and Deep No Expensive Corporate M&A Premium Drilling Inventory All Expenditures Must Compete Exploration &…
  17. BAML Global Energy Conference – EOG Resources, Inc. – slide 17
    EOG Culture Drives Sustainable Competitive Advantage Rate-of-Return Multi-Disciplinary Every Employee is a Driven Teams Business Person First Decentralized / Innovative / Non-Bureaucratic Entrepreneurial Information Exploration…
  18. BAML Global Energy Conference – EOG Resources, Inc. – slide 18
    BAML 2018 19
  19. BAML Global Energy Conference – EOG Resources, Inc. – slide 19
    EOGs Diversified Marketing Options Provide Pricing Advantage & Flow Assurance 2018E Rockies 2019E Rockies Cushing Midland Midland EOG U.S. Mid-Cush Hedges Cushing Mid-Cush Hedges Crude Oil Pricing Gulf Coast Gulf Coast…
  20. BAML Global Energy Conference – EOG Resources, Inc. – slide 20
    Permian Basin Takeaway Positioned to Support Growth Align Volumes to Highest Value Markets EOG Permian Avoid Long-Term Commitments Cushing Crude Oil WTI Midland Crude Oil Mid-Cush - EOG Permian Oil Receiving Midland Pricing1…
  21. BAML Global Energy Conference – EOG Resources, Inc. – slide 21
    Lower Costs Drive Higher Margins 2018 2014 2015 2016 2017 1Q 2Q 3Q YTD Composite Average Wellhead Revenue per Boe 58.01 30.66 26.82 35.58 44.15 46.40 48.20 46.35 Operating Costs per Boe Lease & Well 6.53 5.66 4.53 4.70 5.05 4.92 4.67…
  22. BAML Global Energy Conference – EOG Resources, Inc. – slide 22
    Strong Balance Sheet & Sustainable Dividend Through Commodity Price Cycles Retire Maturing Bonds Over Next Four Years 31% Dividend Increase in 20182 Billion per Share 7.0 0.90 6.4 0.35 0.80 6.0 0.90 0.70 5.0 1.00 0.60 4.0 0.50 0.75…
  23. BAML Global Energy Conference – EOG Resources, Inc. – slide 23
    Premium Drilling in All Major U.S. Oil Basins Rocky Mountain Mid-Continent Area 2 MBopd in 2017 66 MBopd in 2017 Woodford Oil Window Powder River Basin 25 Net Completions in 2018 45 Net Completions in 2018 Wyoming DJ Basin 35 Net…
  24. BAML Global Energy Conference – EOG Resources, Inc. – slide 24
    Deep Inventory of Crude Oil Assets Net Undrilled 2018 Average 2018 Average 2018 Play Premium Locations1 Drilling Rigs Completion Spreads Net Planned Completions Eagle Ford 2,300 11 8 290 Delaware Basin 4,815 19 7 245 Wolfcamp 1,700…
  25. BAML Global Energy Conference – EOG Resources, Inc. – slide 25
    Delaware Basin Northwest Shelf 163,000 Brushy Canyon Chaves Net Acres Lea Leonard Delaware Basin 1st Bone Spring 416,000 4,800 of Stacked Pay Net Acres 2nd Bone Spring Eddy 3rd Bone Spring Loving Winkler Upper…
  26. BAML Global Energy Conference – EOG Resources, Inc. – slide 26
    South Texas Eagle Ford Oil FAYETTE Bellwether Asset for EOG - EOG Largest Oil Producer & Acreage Holder San Antonio GUADALUPE GONZALES - Organically Leased Position for 450 per Acre KINNEY UVALDE MEDINA BEXAR LAVACA - Capable…
  27. BAML Global Energy Conference – EOG Resources, Inc. – slide 27
    Powder River Basin MT Parkman WY Sheridan Powder River Shannon Basin Core Area Crook 4,800 of Stacked Pay Campbell Weston Niobrara Turner Johnson Mowry Niobrara Muddy Natrona Converse Dakota EOG 400,000 Net…
  28. BAML Global Energy Conference – EOG Resources, Inc. – slide 28
    Bakken/Three Forks Wyoming DJ Basin Laramie Stanley, ND State Line Bakken Lite Elm Coulee Bakken Core Antelope Extension Wyoming Colorado Weld 20 Miles Core EOG Acreage Bakken/Three Forks EOG 88,000 Net Acres Non-Core…
  29. BAML Global Energy Conference – EOG Resources, Inc. – slide 29
    Eastern Anadarko Basin Woodford Oil Window High-Return, Low-Decline Executing Spacing Tests in 2018 Premium Play in Crude Oil Window - Focused on Optimizing NPV CANADIAN OKLAHOMA - Two Four-Well Spacing Tests Currently Producing…
  30. BAML Global Energy Conference – EOG Resources, Inc. – slide 30
    Trinidad Oil Fields Focused on Exploration in 2018 Gas Fields - Acquire Additional State-of-the-Art Seismic EOG Blocks - Identify High-Quality Shallow-Water Prospects TOBAGO Caribbean Sea Entered Into New Gas Supply Contract…
  31. BAML Global Energy Conference – EOG Resources, Inc. – slide 31
    EOG Premium Play Details Delaware Basin Wolfcamp Oil Wolfcamp Combo First Bone Spring Second Bone Spring Leonard Net Prospective Acres 226,000 120,000 100,000 289,000 160,000 Estimated Resource Potential1 2.9 BnBoe 540 MMBoe 1.4 BnBoe…
  32. BAML Global Energy Conference – EOG Resources, Inc. – slide 32
    EOG Premium Play Details Powder River Basin Bakken / Wyoming Woodford Oil Eagle Ford Mowry Shale Niobrara Shale Turner Sand Three Forks DJ Basin Window Net Prospective Acres 520,000 141,000 89,000 169,000 220,000 88,000 50,000…
  33. BAML Global Energy Conference – EOG Resources, Inc. – slide 33
    Initial 30-Day Average Production Rates Gross Net Gross Gross Net Gross Lateral Lateral Wells Wells Bopd Boed Wells Wells Bopd Boed 3Q 2018 61 58 1,655 2,640 7,100 3Q 2018 14 10 1,815 2,485 5,000 2Q 2018 62 58 1,255 1,960 6,400 2Q…
  34. BAML Global Energy Conference – EOG Resources, Inc. – slide 34
    4Q & FY 2018 Guidance Estimated Ranges Estimated Ranges (Unaudited) (Unaudited) 4Q 2018 Full Year 2018 4Q 2018 Full Year 2018 Daily Sales Volumes Taxes Other Than Income (% of Wellhead Revenue) 6.5% - 6.8% 6.5% - 6.7% Crude Oil and…
  35. BAML Global Energy Conference – EOG Resources, Inc. – slide 35
    Focusing Our Energy on the Future Environmental Social - Expanding Water Reuse and Recycling Efforts - Commitment to Safety - Leak Detection and Repair Program (LDAR) - Support the Communities Where We Work Reduces Emissions - Inclusive…
  36. BAML Global Energy Conference – EOG Resources, Inc. – slide 36
    Committed to Minimizing Emissions 60 Greenhouse Gas Intensity1 (Metric Tons CO2e per MBoe) Gassy Oily EOG Peers2 Peers3 Peers3 30 EOG EOG 0 0 100 200 300 400 500 600 700 800 Gross U.S. Production (MBoed) (1) Metric tons…
  37. BAML Global Energy Conference – EOG Resources, Inc. – slide 37
    EOG Industry Leader in Capturing Produced Gas 100% Texas Permian Basin Flared / Vented Wellhead Gas (% of Wellhead Production) EOG Peers 10% EOG 1% 0 100 200 300 400 500 600 Wellhead Gas Production (MMcfd) Source:…

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