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Bernstein Strategic Decisions Conference – EOG Resources, Inc.

EOG Resources, Inc. · May 29, 2019 · 59 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. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 1
    Bernstein Strategic Decisions Conference Bill Thomas Chairman and Chief Executive Officer
  2. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 2
    Bernstein 2019 3
  3. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 3
    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 2015 2016 2017 2018 Reset to…
  4. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 4
    Strategy for Sustainable DoubleDigit ROCE Premium Drilling Continue Lowering Oil Price Required for 10% ROCE3 Minimum 30% Direct ATROR1 with Flat 40 Oil and 2.50 Natural Gas Ensures Strong Returns Through Cycles 83 81 Sustains…
  5. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 5
    Premium Inventory Additions Sustain 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…
  6. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 6
    Organic Exploration Fuels Sustainable 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…
  7. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 7
    The Largest U.S. Horizontal Oil Producer (MBopd) 555 295 265 255 250 230 220 210 205 155 145 EOG COP CXO MRO PXD APC XOM DVN CLR FANG CHK Source: IHS October 2018. Gross operated crude and condensate production in the…
  8. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 8
    Free Cash Flow in 2019 50 Oil Price No Change to 2019 Capital Budget Free Cash Flow1 Dividend2 Rate Increased 31% CAPEX3 CAPEX3 + Dividend2 6.9 Bn 6.3 Bn 6.3 Bn 6.3 Bn 50 60 70 WTI Oil Price (1) Discretionary Cash Flow…
  9. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 9
    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 Generate…
  10. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 10
    EOG Culture Drives Sustainable Competitive Advantage RateofReturn MultiDisciplinary Every Employee is a Driven Teamwork Business Person First Decentralized / Innovative / Safety, Environment, NonBureaucratic Entrepreneurial &…
  11. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 11
    Bernstein 2019 12
  12. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 12
    Bernstein 2019 13
  13. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 13
    Bernstein 2019 14
  14. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 14
    1Q 2019 David Streit, Vice President IR/PR Kimberly Ehmer, Director IR/PR Neel Panchal, Director IR John Wagner, Engineer IR (713) 5714902, dstreiteogresources.com (713) 5714676, kehmereogresources.com (713) 5714884,…
  15. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 15
    Bernstein 2019 17
  16. Bernstein Strategic Decisions Conference – 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 Bernstein 2019 18
  17. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 17
    1Q 2019 Results Outstanding Execution: More Oil for Less Capital Beat Production, Expense & Pricing Targets Exceeded HighEnd of Oil Production Target 20% Above 1Q 2018 Cash Operating Expenses1 Below Target 8% Below 1Q 2018 Oil…
  18. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 18
    No Change to 2019 Game Plan DoubleDigit Returns & Growth with Free Cash Flow at 50 Oil ROCE Competitive with All Sectors Target DoubleDigit ROCE1 in 2019 Continue Lowering Oil Price Required for 10% ROCE1 Lower Operating Costs & Lower…
  19. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 19
    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 2015 2016 2017 2018 Reset to…
  20. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 20
    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…
  21. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 21
    Strategy for Sustainable DoubleDigit ROCE Premium Drilling Continue Lowering Oil Price Required for 10% ROCE3 Minimum 30% Direct ATROR1 with Flat 40 Oil and 2.50 Natural Gas Ensures Strong Returns Through Cycles 83 81 Sustains…
  22. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 22
    Premium Inventory Additions Sustain 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…
  23. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 23
    Organic Exploration Fuels Sustainable 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…
  24. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 24
    The Largest U.S. Horizontal Oil Producer (MBopd) 555 295 265 255 250 230 220 210 205 155 145 EOG COP CXO MRO PXD APC XOM DVN CLR FANG CHK Source: IHS October 2018. Gross operated crude and condensate production in the…
  25. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 25
    U.S. Shale Owns Largest Share of Global Oil Growth U.S. Powered Global Oil Growth Past 10 Years U.S. Shale to Dominate Future Oil Growth Global Crude Oil1 Production 2008 2018 Share of 20152030 Average Annual Crude Oil Growth2…
  26. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 26
    Substantial 2019 Free Cash Flow with Higher Oil Prices No Change to 2019 Capital Budget Free Cash Flow1 Dividend2 Rate Increased 31% CAPEX3 CAPEX3 + Dividend2 6.9 Bn 6.3 Bn 6.3 Bn 6.3 Bn 50 60 70 WTI Oil Price (1)…
  27. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 27
    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 Generate…
  28. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 28
    EOG Culture Drives Sustainable Competitive Advantage RateofReturn MultiDisciplinary Every Employee is a Driven Teamwork Business Person First Decentralized / Innovative / Safety, Environment, NonBureaucratic Entrepreneurial &…
  29. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 29
    Bernstein 2019 31
  30. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 30
    EOGs Diversified Marketing Options Provide Pricing Advantage & Flow Assurance EOG Marketing Strategy 2019 EOG Estimated Sales Markets Control U.S. Oil U.S. Gas MidCush Permian < EOG Firm Capacity Provides Flow Assurance Hedges 10%…
  31. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 31
    Oil Export Capacity Enhances EOG Pricing Diversification EOG Uniquely Positioned in the U.S. Oil Market EOG Maximizes Margins by Retaining Control of Barrels High Quality Oil Supply from Wellhead to Loading Dock Export Average 45…
  32. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 32
    EOG Realizes Higher Oil Prices than Peers EOG Average 3.49 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 2.86 2.25 2.27 1.96 1Q 2017 2Q 2017 3Q 2017 4Q 2017 1Q…
  33. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 33
    2019 Plan Does Not Change with Higher Oil Price Improving Capital Efficiency in Premium Areas Delivers 14%1 Oil Growth Plus Higher Investment in Premium Exploration Assumes 31% Base Decline6 2018 2019 2018 2019 1 Premium Areas2 Premium…
  34. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 34
    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…
  35. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 35
    Secured 65% of Anticipated 2019 Well Costs at Competitive Pricing SelfSource 25% Completion Services 33% of Well Costs1 Water, Chemicals & Completion Completion Design Spreads 65% 13% of Spreads Secured Sand Sand Sourcing…
  36. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 36
    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…
  37. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 37
    EOG Continues Reducing Operating Costs Cash Operating Costs1 ( per Boe) 12.86 G&A 11.39 Transportation 9.95 9.91 9.36 9.242 LOE 2014 2015 2016 2017 2018 2019E (1) Excludes onetime expenses as applicable. See reconciliation…
  38. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 38
    EOG Continues 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.…
  39. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 39
    Owning Data from Creation to DeliverySM via 100+ Apps EOG Data Supply ChainSM INFRASTRUCTURE Data Sensors Networks Servers Data Storage Processing Nodes User Support Enabling EOGs Culture of RealTime, ReturnsFocused Decision…
  40. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 40
    Lower Costs Drive Higher Margins 2019 2014 2015 2016 2017 2018 1Q Composite Average Wellhead Revenue per Boe 58.01 30.66 26.82 35.58 45.51 39.56 Operating Costs per Boe Lease & Well 6.53 5.66 4.53 4.70 4.89 4.83 Transportation 4.48…
  41. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 41
    Strong Balance Sheet & Sustainable Dividend Through Commodity Price Cycles Retire Maturing Bonds From 2018 2021 Target Stronger Dividend Growth than 19992017 19% CAGR Bn per Share 6.4 1.20 72% Dividend Increase2 0.35 Since 2017…
  42. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 42
    2Q & FY 2019 Guidance Estimated Ranges Estimated Ranges (Unaudited) (Unaudited) 2Q 2019 Full Year 2019 2Q 2019 Full Year 2019 Daily Sales Volumes Expenses (MM) Crude Oil and Condensate Volumes (MBbld) Exploration and Dry Hole 30 40…
  43. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 43
    Focusing Our Energy on the Future Environmental Greenhouse Gas Intensity Rate1 Continue Lowering Leak Detection and Repair Program (LDAR) 19.3 Emissions2 in 2018 Reduces Emissions 9% Pipeline Infrastructure Reduces Road…
  44. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 44
    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…
  45. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 45
    Bernstein 2019 47
  46. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 46
    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…
  47. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 47
    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 10 7.5 300 Delaware Basin 4,815 20 6 270 Wolfcamp…
  48. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 48
    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…
  49. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 49
    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:…
  50. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 50
    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…
  51. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 51
    10+ Remaining Years of High Return Disciplined Growth Premium Reinvestment & Continuous Improvement Across the Eagle Ford Longer Laterals Enable Premium Drilling in West Eagle Ford Capital Efficiency Near Parity Between East & West…
  52. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 52
    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…
  53. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 53
    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…
  54. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 54
    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…
  55. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 55
    Eastern Anadarko Basin Woodford Oil Window HighReturn, LowDecline Crude Oil Wet Gas Window Oklahoma Premium Play in Crude Oil Window Window Dry Gas Window Oklahoma City Lowered Well Cost1 Target to 7.6 MM Canadian Cleveland…
  56. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 56
    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…
  57. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 57
    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…
  58. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 58
    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…
  59. Bernstein Strategic Decisions Conference – EOG Resources, Inc. – slide 59
    Initial 30Day Average Production Rates1 Gross Net Gross Gross Net Gross Lateral Lateral Wells Wells Bopd Boed Wells Wells Bopd Boed 1Q 2019 61 53 1,950 2,950 7,800 1Q 2019 93 89 1,350 1,650 8,300 4Q 2018 42 37 1,950 3,150 7,000 4Q…

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