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3Q 2019 Earnings Presentation – EOG Resources, Inc.

EOG Resources, Inc. · Nov 7, 2019 · 48 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. 3Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 1
    Premium Combination: High Return Organic Growth 3Q 2019 David Streit, Vice President IR/PR Kimberly Ehmer, Director IR/PR Neel Panchal, Director IR (713) 571-4902, dstreiteogresources.com (713) 571-4676, kehmereogresources.com (713)…
  2. 3Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 2
    Our Goal: Be One of the Best Companies Across All Sectors in the S&P 500 Double-Digit Return & Double-Digit Organic Growth Through Commodity Cycles Strong Free Cash Flow1 Generation Deliver Long-Term Shareholder Value (1)…
  3. 3Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 3
    Roadmap to Long-Term Shareholder Value Double-Digit Return & Double-Digit Organic Growth Through Commodity Cycles - Lower Oil Price Required for 10% ROCE1 to < 50 - Organic Growth Through Premium Drilling Strong Free Cash Flow2…
  4. 3Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 4
    Premium Drilling Strategy is Transforming the Company Drives Lower Costs & Higher ROCE Premium Drilling Minimum 30% Return1 40 Oil and 2.50 Natural Gas Lowering Oil Price Required for 10% ROCE3 - Ensures Strong Returns Through Cycles…
  5. 3Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 5
    Premium Wells Lower Finding Cost & DD&A, Increasing ROCE1 Finding & Development Cost2,1 Depreciation, Depletion & Amortization per Boe per Boe 17.87 18.43 17.34 15.86 15.34 14.58 12.51 13.09 12.65 3 9.64 8.86 Premium…
  6. 3Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 6
    Long-Term Track Record of ROCE Business Environment High Gas Price & Growth Shift to Oil High Oil Price & Growth Oil Downturn Avg. ROCE1 20% 4% 10% -4% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014…
  7. 3Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 7
    2019 Momentum Carrying Into 2020 Double-Digit Returns & Growth with Free Cash Flow at Lower Oil Prices ROCE Competitive with All Sectors - Target Double-Digit ROCE1,2 in 2019 - Continue Lowering Oil Price Required for 10% ROCE - Lower…
  8. 3Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 8
    3Q 2019 Organic Premium Inventory Expansion and Outstanding Execution Added 1,700 Premium Locations, 2X 2019 Drilling Pace - Announced Delaware Basin Wolfcamp M and Third Bone Spring Plays - Added 1,000 Locations to Undrilled Premium…
  9. 3Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 9
    Added Two New Premium Plays in Delaware Basin Wolfcamp M and Third Bone Spring 1,500 Net Premium Locations with 1.6 Billion Wolfcamp M BOE Estimated Net Resource Potential1 - 193,000 Prospective Net Acres - 855 Net Undrilled Premium…
  10. 3Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 10
    Significant Premium Inventory Growth Premium Inventory1 Growing in Quality & Size 14+ Years of Premium Inventory at Current Drilling Pace 5,000 Exploration Replacing Premium Locations 2x Faster than Drilling Potential…
  11. 3Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 11
    Significant Premium Inventory Upside Potential Convert Non-Premium to Premium Organic Exploration for New Premium Plays - Plays Currently Under Development - Active Exploration Program Across All Operating Areas Continuous Well Cost…
  12. 3Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 12
    Premium Capital Allocation Creates Value Through Price Cycles Cash Flow Priorities Disciplined, High-Return Organic Growth - Diverse & Deep Premium Drilling Inventory - Exploration & Low-Cost Leasing for New High-Return Plays - Strong…
  13. 3Q 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 0.35 0.90 Current Dividend Yield 1.6%2 0.90 1.00 0.75 3.4…
  14. 3Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 14
    Commitment to Sustainability: Performance and Disclosure Environmental Governance Since 2016 - Board 88% Independent, 25% Women - GHG Intensity Rate1 Down 8% - Sustainability Board Committee - Methane Intensity Rate2 Down 53% -…
  15. 3Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 15
    Applying Technology & Innovation to Reduce Greenhouse Gas (GHG) Intensity Rates GHG and Methane Intensity Rates1,2 GHG Reduction Initiatives by Source 19.3 17.7 Other (incl. Fugitives) 0.7 - Company-wide Leak Detection and Repair…
  16. 3Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 16
    EOG Culture is Our Competitive Advantage Rate-of-Return Multi-Disciplinary Every Employee is a Driven Teamwork Business Person First Decentralized / Innovative / Safety, Environment, Culture Non-Bureaucratic Entrepreneurial &…
  17. 3Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 17
    EOG Resources High Return Organic Growth Company ROCE Leader Disciplined Low-Cost Producer Commitment to Through Growth with Competitive in Sustainability Commodity Free Cash Flow Global Energy Price Cycles Market 3Q 2019 18
  18. 3Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 18
    Appendix 3Q 2019 19
  19. 3Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 19
    Diverse and Flexible Portfolio of Inventory and Acreage EOGs Non-Federal vs. Federal Position Premium Locations1 U.S Acreage2 10,500 4.3 MM Acres 7+ Years of Non-Federal Premium State or Inventory Private 11+ Years Permian Basin…
  20. 3Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 20
    Oil and Gas Regulatory Process Promotes Balanced Regulatory Framework Checks and Balances Stakeholder Interests Are Aligned Executive Order Revenues from Federal Lands Shared with the - Subject to Judicial Review States - Requires…
  21. 3Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 21
    Committed to Minimizing Emissions 60 2018 Greenhouse Gas Intensity1 EOG Peers2 30 EOG 0 0 200 400 600 800 1,000 Gross U.S. Production (MBoed) (1) Metric tons of 2018 CO2e emissions per MBoe of 2018 gross U.S. production.…
  22. 3Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 22
    EOG Industry Leader in Capturing Produced Gas Texas Permian Basin 100% Flared / Vented Wellhead Gas (% of Wellhead Production) EOG Peers 10% EOG 1% 0 100 200 300 400 500 600 Wellhead Gas Production (MMcfd) Source:…
  23. 3Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 23
    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…
  24. 3Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 24
    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 Mid-Cush Permian Conway EOG Firm Capacity Provides Flow Assurance…
  25. 3Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 25
    Oil & Natural Gas Export Capacity Adds Access to New International Markets EOG Uniquely Positioned in the U.S. Oil Market Gas Supply Agreements (GSA) for LNG Exports - High Quality Crude Oil - Expands EOGs Reach into Growing Global Market…
  26. 3Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 26
    EOG Realizes Higher Oil Prices than Peers 5.66 U.S. Crude Oil and Condensate 5.38 Price Realization vs. Peers1 ( per Bbl) 4.06 3.79 3.16 3.36 2.86 2.27 2.24 3.64 per Bbl EOG Average Advantage 3Q 2017 4Q 2017 1Q 2018 2Q 2018…
  27. 3Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 27
    Improving Capital Efficiency in 2019 2019 Plan Does Not Change with Higher Oil Price Improving Capital Efficiency in Premium Areas Delivers 15%1 U.S. Oil Growth Plus Higher Investment in Premium Exploration Assumes 31% Base Decline6 2018…
  28. 3Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 28
    EOG Continues Reducing Operating Costs Cash Operating Costs1 ( per Boe) 12.86 G&A 11.39 Transportation 9.95 9.91 9.36 LOE 8.872 2014 2015 2016 2017 2018 2019E (1) Excludes certain non-recurring expenses as applicable. See…
  29. 3Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 29
    EOG Continued Leading the Thousand Club in 2018 Number of Wells with 30-Day Peak Rate 1,000 Boed Oil Focused 600 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.…
  30. 3Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 30
    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 Real-Time, Returns-Focused Decision…
  31. 3Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 31
    Lower Costs Drive Higher Margins 2019 2014 2015 2016 2017 2018 1Q 2Q 3Q Composite Average Wellhead Revenue per Boe 58.01 30.66 26.82 35.58 45.51 39.56 40.36 37.18 Operating Costs per Boe Lease & Well 6.53 5.66 4.53 4.70 4.89 4.83…
  32. 3Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 32
    4Q & FY 2019 Guidance Estimated Ranges Estimated Ranges (Unaudited) (Unaudited) 4Q 2019 Full Year 2019 4Q 2019 Full Year 2019 Daily Sales Volumes Expenses (MM) Crude Oil and Condensate Volumes (MBbld) Exploration and Dry Hole 35 - 45…
  33. 3Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 33
    Play Details 3Q 2019 34
  34. 3Q 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. 3Q 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 1,900 9 6 300 Delaware Basin 6,500 18 6 270 Wolfcamp U Oil…
  36. 3Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 36
    Delaware Basin Brushy Canyon Northwest Shelf 163,000 Leonard Chaves Net Acres Lea 1st Bone Spring 4,800 of Stacked Pay Delaware Basin 416,000 2nd Bone Spring Net Acres 3rd Bone Spring New Eddy Mexico Texas Upper…
  37. 3Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 37
    Operating Results Continue to Improve in 2019 Wolfcamp U Oil Well Productivity and Operating Efficiencies 90 Day Cumulative Crude Oil Production (MBo)1 Completed Lateral Feet per Day +15% 100 50 1,030 1,110 2018 YTD 2019 0 0 10…
  38. 3Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 38
    Relentless Focus on Efficiencies Continues Delaware Basin Wolfcamp U Oil Well Cost2 (Gross Wells/Rig/Year1) (MM) 7.5 18.9 17.2 15.2 7.2 6.9 2017 2018 2019E (1) Average measured depths of 17,952, 18,430 and 19,245 feet…
  39. 3Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 39
    South Texas Eagle Ford Oil 2019 Highlights - Record Well Drilled in 2.4 Days to 17,288 San Antonio - Exceeded 5% Well Cost Reduction by 3Q19 Gonzales Lavaca Bellwether Asset for EOG Bexar - EOG Largest Oil Producer & Acreage…
  40. 3Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 40
    Relentless Focus on Well Cost Reductions Eagle Ford Well 8.50 Costs1 (MM) 5.60 4.60 2013 2019 Target Best To Date (1) Well Cost = Drilling, Completion, Well-Site Facilities and Flowback. Normalized to 8,400 lateral. 3Q 2019 41
  41. 3Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 41
    Powder River Basin Parkman Montana Montana Wyoming Wyoming Shannon Sheridan Sheridan Crook Crook 4,800 of Stacked Pay Campbell Campbell Johnson Weston Niobrara Johnson Weston Turner Mowry Muddy Natrona Converse…
  42. 3Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 42
    Powder River Basin Plays Competitive in Premium Portfolio ( per lateral foot) 6.2 7000 Revenue1 6.0 Well Cost2 4.9 6000 4.6 5.0 Profitability Ratio3 4.0 5000 4,722 4,135 3.0 4000 3,624 2.0 3000 1.0 0.0 2000 -1.0 1,029…
  43. 3Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 43
    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 220,000 Net Acres Bakken/Three…
  44. 3Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 44
    Eastern Anadarko Basin Woodford Oil Window High-Return, Low-Decline Crude Oil Wet Gas Premium Play in Crude Oil Window Window Window Oklahoma Dry Gas Window Lowered Well Cost1 Target from 6.5MM to Canadian Oklahoma City 6.1MM…
  45. 3Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 45
    Trinidad Oil Fields Drilling Program Resumed in 2019 Gas Fields - Exploration Benefitting from 2017-2018 EOG Blocks Seismic Program - Initiated 5-Well Drilling Campaign TOBAGO Entered Into New Gas Supply Contract Caribbean Sea…
  46. 3Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 46
    EOG Premium Play Details Delaware Basin Wolfcamp U First Bone Second Bone Third Bone Wolfcamp U Oil Wolfcamp M Leonard Combo Spring Spring Spring Net Prospective Acres 226,000 120,000 193,000 100,000 289,000 200,000 160,000…
  47. 3Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 47
    EOG Premium Play Details Powder River Basin Wyoming Bakken / Woodford Oil Eagle Ford Turner DJ Basin Mowry Shale Niobrara Shale Three Forks Window Sand/Parkman Codell/Niobrara Net Prospective Acres 516,000 141,000 89,000 154,000…
  48. 3Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 48
    Initial 30-Day Average Production Rates1 Gross Net Gross Gross Net Gross Lateral Lateral Wells Wells Bopd Boed Wells Wells Bopd Boed 3Q 2019 51 48 1,950 3,150 7,300 Powder River Basin 3Q 2019 1 1 1,250 2,200 10,200 2Q 2019 63 57…

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