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2Q 2019 Earnings Presentation – EOG Resources, Inc.

EOG Resources, Inc. · Aug 2, 2019 · 46 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. 2Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 1
    Premium Combination: High Return Organic Growth 2Q 2019 David Streit, Vice President IR/PR Kimberly Ehmer, Director IR/PR Neel Panchal, Director IR (713) 5714902, dstreiteogresources.com (713) 5714676, kehmereogresources.com (713)…
  2. 2Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 2
    EOG Resources Our Goal: Be One of the Best Companies Across All Sectors in the S&P 500 DoubleDigit Return & DoubleDigit Organic Growth Through Commodity Cycles Strong Free Cash Flow1 Generation Deliver LongTerm Shareholder…
  3. 2Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 3
    Roadmap to LongTerm Shareholder Value Creation DoubleDigit Return & DoubleDigit Organic Growth Through Commodity Cycles Lower Oil Price Required for 10% ROCE1 to < 50 Organic Growth Through Premium Drilling Strong Free Cash…
  4. 2Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 4
    EOG Assets & Strategy Poised to Further Improve Profitability Disciplined Reinvestment in Premium Drilling Drives Lower Costs & Higher ROCE Premium Drilling Positioned to Lower Oil Price Required for 10% ROCE3,4 Minimum 30% Direct…
  5. 2Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 5
    2Q 2019 Results Outstanding Execution: More Oil for Less Capital Oil Production & Oil Price Above Target Exceeded HighEnd of Oil Production Target 18% Above 2Q 2018 Realized 1.18 Premium to WTI for U.S. Oil Production Capital…
  6. 2Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 6
    No Change to 2019 Game Plan DoubleDigit Returns & Growth with Free Cash Flow at Lower Oil Prices ROCE Competitive with All Sectors Target DoubleDigit ROCE1 in 2019 Continue Lowering Oil Price Required for 10% ROCE Lower Operating Costs…
  7. 2Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 7
    LongTerm Track Record of ROCE Business High Gas Price & Growth Shift to Oil High Oil Price & Growth Oil Downturn Environment Avg. ROCE1 20% 4% 10% 4% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014…
  8. 2Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 8
    EOG Earns PeerLeading Returns Strong Reinvestment Returns Drive ROCE 2018 Return on Capital Employed1 2018 U.S. Lower 48 Allin Rate of Return2 28% 15% 15% 14% 9% 13% 7% 10% 10% 6% 6% 5% 7% 4% 2% 1% 0% 0% 0% 0% EOG A B…
  9. 2Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 9
    Premium Inventory Additions Power High Return Growth 9,500 Inventory1 Growing in Quality & Size 8,000 13 Years of Premium Inventory 6,000 at Current Drilling Pace 3,200 Replacing Premium Locations 2x Faster than Drilling Feb…
  10. 2Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 10
    Organic Exploration Fuels High Return Growth EOG Operates Plays in Each Phase Life Cycle of a Typical Emerging Growth Mature Oil & Gas Asset Phase Phase Phase Production Eagle Ford DJ Basin Delaware Basin New Organic Woodford…
  11. 2Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 11
    Substantial 2019 Free Cash Flow with Higher Oil Prices No Change to 2019 Capital Budget Free Cash Flow1 Dividend2 CAPEX3 CAPEX + Dividend 6.9 Bn 6.3 Bn 6.3 Bn 6.3 Bn 50 60 70 WTI Oil Price (1) Discretionary Cash Flow…
  12. 2Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 12
    Premium Capital Allocation Creates Value Through Price Cycles Cash Flow Priorities Disciplined, HighReturn Organic Growth Diverse & Deep Premium Drilling Inventory Exploration & LowCost Leasing for New HighReturn Plays Strong Free…
  13. 2Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 13
    Strong Balance Sheet & Growing Dividend Through Commodity Price Cycles Retire Maturing Bonds From 2018 2021 Target Dividend Growth to Yield 2% Bn per Share 6.4 1.20 Current Dividend Yield 0.35 of 1.3%2 0.90 0.90 1.00 0.75…
  14. 2Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 14
    EOG Culture is Our Competitive Advantage RateofReturn MultiDisciplinary Every Employee is a Driven Teamwork Business Person First Decentralized / Innovative / Safety, Environment, Culture NonBureaucratic Entrepreneurial &…
  15. 2Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 15
    Focusing Our Energy on the Future Environmental GHG and Methane Intensity Rates Continued Lowering Methane Emissions Leak Detection and Repair Program (LDAR) in 2018 Reduces Emissions Methane Pipeline Infrastructure Reduces Road…
  16. 2Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 16
    EOG Resources High Return Organic Growth Company ROCE Leader Leader in LowCost Producer Commitment to Through Disciplined Competitive in Sustainability Commodity Growth Global Energy Price Cycles Market 2Q 2019 17
  17. 2Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 17
    Appendix 2Q 2019 18
  18. 2Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 18
    EOGs Diversified Marketing Options Provide Pricing Advantage & Flow Assurance EOG Marketing Strategy 2019 EOG Estimated Sales Markets Control U.S. Oil U.S. Gas NGLs MidCush Permian Conway EOG Firm Capacity Provides Flow Assurance…
  19. 2Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 19
    Export Capacity Adds Access to New International Markets Maximize Margins by Retaining Control of Barrels from Wellhead to Dock EOG Uniquely Positioned in the U.S. Oil Market High Quality Oil Supply Maintain Diversified Sales to Domestic…
  20. 2Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 20
    EOG Realizes Higher Oil Prices than Peers EOG Average 3.64 per Bbl Advantage 5.66 U.S. Crude Oil and Condensate 5.38 Price Realization vs. Peers ( per Bbl) 4.06 3.79 3.16 3.36 2.86 2.25 2.27 2Q 2017 3Q 2017 4Q 2017 1Q 2018 2Q…
  21. 2Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 21
    Improving Capital Efficiency in 2019 2019 Plan Does Not Change with Higher Oil Price Improving Capital Efficiency in Premium Areas Delivers 14%+1 U.S. Oil Growth Plus Higher Investment in Premium Exploration Assumes 31% Base Decline6…
  22. 2Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 22
    Continued Improvement in 1H19 Operating Results Wolfcamp Well Productivity and Operating Efficiencies 90 Day Cumulative Crude Oil Production (MBo)1 Completed Lateral Feet per Day +12% 100 50 1,030 1,110 2018 1H 2019 0 0 10 20 30…
  23. 2Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 23
    Relentless Focus on Well Cost Reductions Strong Track Record of Cost Reduction in All Price Environments Reducing Well Costs in 2019 Eagle Ford Well Cost1 (MM) Wolfcamp Oil Well Cost1 (MM) 7.2 7.5 6.2 6.1 5.7 7.2 4.7 4.6 4.5 4.5…
  24. 2Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 24
    Low Finding Cost Reduces DD&A and Increases ROCE1 Finding & Development Cost2 Depreciation, Depletion & Amortization per Boe per Boe 17.87 18.43 17.34 15.86 15.34 14.58 12.51 13.09 12.753 9.64 8.86 Premium Drilling…
  25. 2Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 25
    EOG Continues Reducing Operating Costs Cash Operating Costs1 ( per Boe) 12.86 G&A 11.39 Transportation 9.95 9.91 9.36 LOE 8.892 2014 2015 2016 2017 2018 2019E (1) Excludes certain nonrecurring expenses as applicable. See…
  26. 2Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 26
    The Largest U.S. Horizontal Oil Producer (MBopd) 600 285 270 260 250 250 245 230 200 180 180 85 EOG CXO XOM COP PXD APC MRO DVN CLR CHK FANG APA Source: IHS March 2019. Gross operated crude and condensate production in…
  27. 2Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 27
    EOG Continued Leading the Thousand Club in 2018 Number of Wells with 30Day Peak Rate 1,000 Boed 600 Oil Focused Gas Focused 500 400 300 200 100 0 EOG A B C D E F G H I J K L M N O P Q R S Source: Sanford C.…
  28. 2Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 28
    Owning Data from Creation to DeliverySM via 100+ Apps EOG Data Supply Chain INFRASTRUCTURE Data Sensors Networks Servers Data Storage Processing Nodes User Support Enabling EOGs Culture of RealTime, ReturnsFocused Decision…
  29. 2Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 29
    Lower Costs Drive Higher Margins 2019 2014 2015 2016 2017 2018 1Q 2Q Composite Average Wellhead Revenue per Boe 58.01 30.66 26.82 35.58 45.51 39.56 40.36 Operating Costs per Boe Lease & Well 6.53 5.66 4.53 4.70 4.89 4.83 4.70…
  30. 2Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 30
    3Q & FY 2019 Guidance Estimated Ranges Estimated Ranges (Unaudited) (Unaudited) 3Q 2019 Full Year 2019 3Q 2019 Full Year 2019 Daily Sales Volumes Expenses (MM) Crude Oil and Condensate Volumes (MBbld) Exploration and Dry Hole 45 55…
  31. 2Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 31
    Committed to Minimizing Emissions 60 Greenhouse Gas Intensity1 (Metric Tons CO2e per MBoe) Gassy Oily Peers3 Peers3 EOG Peers2 30 EOG EOG 0 0 200 400 600 800 Gross U.S. Production (MBoed) (1) Metric tons of 2017 CO2e…
  32. 2Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 32
    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:…
  33. 2Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 33
    Play Details 2Q 2019 34
  34. 2Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 34
    Premium Drilling in All Major U.S. Oil Basins Rocky Mountain Mid-Continent Area 6 MBopd in 2018 62 MBopd in 2018 Woodford Oil Window Powder River Basin 30 Net Completions in 2019 40 Net Completions in 2019 Wyoming DJ Basin 35 Net…
  35. 2Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 35
    Deep Inventory of Crude Oil Assets Net Undrilled 2019 Average 2019 Average 2019 Play Premium Locations1 Drilling Rigs Completion Spreads Net Planned Completions Eagle Ford 2,300 9 6 300 Delaware Basin 4,815 18 6 270 Wolfcamp 1,700…
  36. 2Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 36
    Delaware Basin Northwest Shelf 163,000 Brushy Canyon Chaves Net Acres Lea Leonard Delaware Basin 1st Bone Spring 4,800 of Stacked Pay 416,000 Net Acres 2nd Bone Spring New Eddy Mexico 3rd Bone Spring Texas Winkler…
  37. 2Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 37
    IndustryLeading Well Productivity with Tighter Spacing in 2018 Delaware Basin 20 6Month Cumulative Oil Production EOG (Bo per ft) EOG Peers1 15 10 5 0 500 1,000 1,500 2,000 Average Spacing to Closest Well (Ft) Source:…
  38. 2Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 38
    South Texas Eagle Ford Oil Bellwether Asset for EOG San Antonio EOG Largest Oil Producer & Acreage Holder Organically Leased Position for 450 per Acre Bexar Gonzales Lavaca Capable of Growth for 10+ Years Wilson De Witt…
  39. 2Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 39
    Powder River Basin Montana Montana Parkman Wyoming Wyoming Sheridan Sheridan Shannon Crook Crook 4,800 of Stacked Pay Campbell Campbell Johnson Weston Niobrara Johnson Weston Turner Mowry Muddy Natrona Converse…
  40. 2Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 40
    Powder River Basin Plays Competitive in Premium Portfolio (M per 1,000 Lateral) 7000 6.0 5.1 5.3 Revenue1 5.0 Well Cost2 6000 4.1 3.4 3.4 4.0 Profitability Ratio3 5000 3.0 4,240 4000 2.0 3,240 3,270 3000 2,735 2,780 1.0…
  41. 2Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 41
    Bakken/Three Forks Wyoming DJ Basin Canada Montana North Dakota Bakken Lite Laramie State Line Stanley, ND Elm Coulee Bakken Core Wyoming Antelope Extension Colorado Weld 20 Miles Core EOG Acreage Bakken/Three…
  42. 2Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 42
    Eastern Anadarko Basin Woodford Oil Window HighReturn, LowDecline Crude Oil Premium Play in Crude Oil Window Wet Gas Window Oklahoma Window Dry Gas Window Lowered Well Cost1 Target from 7.6MM Oklahoma City Canadian to 6.5MM…
  43. 2Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 43
    Trinidad Oil Fields Drilling Program Resumes in 2019 Gas Fields EOG Blocks Entered Into New Gas Supply Contract TOBAGO Enables Additional Development Sold into Trinidad Domestic Gas Market Caribbean Sea VENEZUELA TRINIDAD 10…
  44. 2Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 44
    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…
  45. 2Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 45
    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 516,000 141,000 89,000 154,000 220,000 88,000 47,000…
  46. 2Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 46
    Initial 30Day Average Production Rates1 Gross Net Gross Gross Net Gross Lateral Lateral Wells Wells Bopd Boed Wells Wells Bopd Boed 2Q 2019 63 57 1,950 2,900 6,500 Powder River Basin 2Q 2019 5 3 1,000 1,450 9,800 1Q 2019 61 53 1,950…

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