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4Q 2019 Earnings Presentation – EOG Resources, Inc.

EOG Resources, Inc. · Feb 27, 2020 · 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. 4Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 1
    Sustainable Success 4Q 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) 5714884,…
  2. 4Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 2
    Our Goal: Be One of the Best Companies in the S&P 500 Roadmap to LongTerm Shareholder Value DoubleDigit Returns & DoubleDigit Organic Growth Through Commodity Cycles Lower Oil Price Required for 10% ROCE1 to < 50 Organic Growth…
  3. 4Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 3
    Delivering on Our Goal Premium Drilling Creates LongTerm Shareholder Value 2017 2018 2019 DoubleDigit Returns1 13% 16% 12% DoubleDigit Growth2 20% 18% 15% Free Cash Flow3 611MM 2.1Bn 1.9Bn Dividend Growth4 31% 31% Debt Reduction…
  4. 4Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 4
    Power of Premium Drilling Premium Drilling Drives Higher Returns and Free Cash Flow1,2 at Lower Oil Prices High Growth + High Oil Price: Cumulative 2012 2014 Premium Drilling: Cumulative 2017 2019 22.9 Bn 21.6 Bn 21.2 Bn Avg. WTI…
  5. 4Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 5
    Outstanding Operational and Financial Results in 2019 DoubleDigit Returns & Growth with Free Cash Flow at Lower Oil Prices Resilient ROCE Realized 12% ROCE1,2 in 2019, Despite Lower Commodity Prices Continued Lowering Oil Price Required…
  6. 4Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 6
    2020 Game Plan Continue Improving EOGs Business to Create LongTerm Shareholder Value ROCE Competitive with All Sectors Target DoubleDigit ROCE1,2 in 2020 Continue Lowering Oil Price Required for 10% ROCE Disciplined Growth &…
  7. 4Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 7
    Substantial 2020 Free Cash Flow1 with Higher Oil Prices Fund Capital Program and Dividend at < 50 WTI 0.8 Bn 55 WTI 2.4 Bn Additional Free Cash Flow 50 WTI 10 14% Opportunities: Oil Growth Retire Maturing Debt Premium Property…
  8. 4Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 8
    LongTerm Track Record of Return on Capital Employed1 Premium Drilling Generates Higher ROCE at Materially Lower Oil Prices WTI 62 80 95 94 98 93 49 43 51 65 57 30% 27% 26% Premium Results 25% DoubleDigit Return & Growth 20% 18%…
  9. 4Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 9
    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 Most Stringent Investment Hurdle Rate…
  10. 4Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 10
    Premium Inventory1 Growing in Quality & Size Premium Inventory Depth 13+ Years of Premium Inventory at Current Pace 5,000 Target Replacing Premium Locations Faster than Drilling Exploration Potential Convert NonPremium to…
  11. 4Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 11
    Large Inventory of HighReturn Premium Wells Direct AfterTax Rate of Return for Premium Inventory1 Direct AfterTax Rate of Return(%)1 100 100%+ 90 Premium1 Price Deck Current2 Prices 80 70 60 Median Rate of Return: 50 Premium…
  12. 4Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 12
    ReturnFocused Organic Growth Driven by Exploration Capturing 1St Mover Advantage of High Quality Rock at Low Cost Wolfcamp M & MBoed 3rd Bone Spring 900 PRB Niobrara PRB Mowry 800 Woodford 1st & 2nd Bone Spring 700 Austin Chalk…
  13. 4Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 13
    Premium Wells Lower Finding Cost1 & 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 12.56 9.64 8.86 7.95…
  14. 4Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 14
    Lower Operating Costs Support Resilient Margins and Returns Cash Operating Costs1 ( per Boe) 12.86 G&A 11.39 Transportation 9.96 9.90 9.37 LOE 8.76 8.60 Premium Drilling 2014 2015 2016 2017 2018 2019 2020E (1) Excludes…
  15. 4Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 15
    Strong Balance Sheet & Growing Dividend Through Commodity Price Cycles Bonds Maturities From 2018 2021 Sustainable, Growing Dividend Bn per Share 6.4 1.75 0.35 0.90 1.50 1.00 1.25 0.75 3.4 1.00 0.75 0.50 Total Debt1…
  16. 4Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 16
    Commitment to Sustainability: Performance and Disclosure Environmental Governance Highlights from Sustainability Report: Board 88% Independent, 25% Women GHG Intensity Rate1 Down 8% Sustainability Board Committee Methane Intensity…
  17. 4Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 17
    EOG Culture is Our Competitive Advantage RateofReturn MultiDisciplinary Every Employee is a Driven Teamwork Business Person First Decentralized / Innovative / Culture NonBureaucratic Entrepreneurial Safety, Environment, &…
  18. 4Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 18
    EOG Resources High Return Organic Growth Company ROCE Leader Disciplined LowCost Producer Commitment to Through Growth with Competitive in Sustainability Commodity Free Cash Flow Global Energy Price Cycles Market 4Q 2019 20
  19. 4Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 19
    Appendix 4Q 2019 21
  20. 4Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 20
    Trend in Improving Capital Efficiency Continues in 2020 2020 Plan Does Not Change with Higher Oil Price Improving Capital Efficiency5,6 on Total Capital Program Capital Program Funds Current and Future Potential Growth (M per Bopd Added)…
  21. 4Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 21
    Investing in Cost Reduction and Future Growth Potential 2020 vs 2019 Capital Budget Variance 50 6,500 Premium Drilling 60 Improved Capital Efficiency Supports 100 12%1 U.S. Oil Growth with LowerCapex 140 Infrastructure (Facilities +…
  22. 4Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 22
    EOG Continued Leading the Thousand Club in 2019 Number of Wells with 30Day Peak Rate 1,000 Boed Oil Focused 700 Gas Focused 600 500 400 300 200 100 0 EOG A B C D E F G H I J K L M N O P Q R S Source: Sanford C.…
  23. 4Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 23
    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 Companywide Leak Detection and Repair (LDAR)…
  24. 4Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 24
    Committed to Minimizing Emissions 2018 Greenhouse 60 Gas Intensity1 EOG 50 Peers2 40 30 20 10 0 A B C D E F G EOG H I (1) Metric tons of 2018 CO2e emissions per MBoe of 2018 gross U.S. production. (2) Peers include APA,…
  25. 4Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 25
    EOG Among Industry Leaders in Capturing Produced Gas Texas Flaring Intensity1 EOG 0.25 Industry 0.20 0.15 0.10 0.05 0.00 A B C D E F G H I J K L M N O P Q R S T EOG U V 1) Wellhead flared gas volumes (Mcf/d) per…
  26. 4Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 26
    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…
  27. 4Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 27
    EOGs Diversified Marketing Options Provide Pricing Advantage & Flow Assurance EOG Marketing Strategy 2020 EOG Estimated Sales Markets Control U.S. Oil U.S. Gas NGLs EOG Firm Capacity Provides Flow Assurance Permia Midwest & Other…
  28. 4Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 28
    Oil & Natural Gas Export Capacity Adds Access to New International Markets Retaining Control from Wellhead to EOG Uniquely Positioned in the U.S. Oil Market Dock Maximizes Margins High Quality Crude Oil 45 API Average Reliable &…
  29. 4Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 29
    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 3.20 2.86 3.56 per Bbl 2.09 1.81 EOG Average Advantage 4Q 2017 1Q 2018 2Q 2018 3Q 2018…
  30. 4Q 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 RealTime, ReturnsFocused Decision…
  31. 4Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 31
    Lower Costs Drive Higher Margins 2019 2014 2015 2016 2017 2018 1Q 2Q 3Q 4Q FY Composite Average Wellhead Revenue per Boe 58.01 30.66 26.82 35.58 45.51 39.56 40.36 37.18 38.21 38.79 Operating Costs per Boe Lease & Well 6.53 5.66 4.53…
  32. 4Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 32
    1Q & FY 2020 Guidance Estimated Ranges Estimated Ranges (Unaudited) (Unaudited) 1Q 2020 Full Year 2020 1Q 2020 Full Year 2020 Daily Sales Volumes Expenses (MM) Crude Oil and Condensate Volumes (MBbld) Exploration and Dry Hole 40 50…
  33. 4Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 33
    Play Details 4Q 2019 35
  34. 4Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 34
    Premium Drilling in All Major U.S. Oil Basins Rocky Mountain Mid-Continent Area 10 MBopd in 2019 62 MBopd in 2019 Woodford Oil Window Powder River Basin 20 Net Completions in 2020 60 Net Completions in 2020 Wyoming DJ Basin 25 Net…
  35. 4Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 35
    Deep Inventory of Crude Oil Assets Net Undrilled 2020 Average 2020 Average 2020 Play Premium Locations1 Drilling Rigs Completion Spreads Net Planned Completions Eagle Ford 1,900 7 5 300 Delaware Basin 6,500 18 7 350 Wolfcamp U Oil…
  36. 4Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 36
    Delaware Basin Brushy Canyon 2019 Highlights Produced 174 MBopd in 2019 7% Reduction in Wolfcamp Well Costs Delaware Basin Leonard Announced Wolfcamp M and Third Bone 389,000 Spring Premium Plays Net Acres 1,500 Net Premium Wells…
  37. 4Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 37
    Operating Results Improved in 2019 Wolfcamp U Oil Well Productivity and Operating Efficiencies 90 Day Cumulative Crude Oil Production (MBo)1 Completed Lateral Feet per Day +14% 100 50 1,179 1,030 2018 2019 0 0 10 20 30 40 50 60…
  38. 4Q 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 19.3 17.2 15.2 7.0 6.7 2017 2018 2019 (1) Average measured depths of 17,952, 18,430 and 19,245 feet…
  39. 4Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 39
    South Texas Eagle Ford Oil 2019 Highlights 187 MBopd in 2019 San Antonio Record Well Drilled in 2.4 Days to 17,288 11% Well Cost Reduction Gonzales Bexar Lavaca Bellwether Asset for EOG Wilson EOG Largest Oil Producer & Acreage…
  40. 4Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 40
    Relentless Focus on Well Cost Reductions Eagle Ford Well 8.50 Costs1 (MM) 6.40 5.70 5.50 4.60 2013 2018 2019 2020 Target Best To Date (1) Well Cost = Drilling, Completion, WellSite Facilities and Flowback. Normalized to 8,400…
  41. 4Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 41
    Powder River Basin Parkman Shannon Niobrara 4,800 of Stacked Pay Turner Mowry Muddy Dakota Core Area 400,000 Net Acres in Core Area Source Rock Reservoir Rock 4Q 2019 43
  42. 4Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 42
    Powder River Basin Plays Competitive in Premium Portfolio ( per lateral foot) 6.2 Revenue1 Well Cost2 4.9 4.6 Profitability Ratio3 4,722 4,135 3,624 1,029 663 737 Wolfcamp U Oil PRPBRBNMioobwraryra PPRRBBNMo i…
  43. 4Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 43
    Bakken/Three Forks Wyoming DJ Basin Canada Montana North Dakota Laramie Stanley, ND Wyoming Colorado Weld 20 Miles Core 220,000 Net Acres Bakken/Three Forks NonCore Bakken Oil Saturated 88,000 Net Acres HighReturn…
  44. 4Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 44
    Eastern Anadarko Basin Woodford Oil Window HighReturn, LowDecline Crude Oil Wet Gas Premium Play in Crude Oil Window Window Window Oklahoma Dry Gas Window Lowered Well Cost1 Target from 6.1MM to Oklahoma City Canadian 6.0MM…
  45. 4Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 45
    Trinidad Oil Fields Highlights Gas Fields 2019 Daily Production 260 MMcfd EOG Blocks 182,000 Net Acres Under Lease Gas Sold Into Domestic Market Exploration Benefitting from 20172018 Seismic Program TOBAGO Initiated Seven Well…
  46. 4Q 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. 4Q 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. 4Q 2019 Earnings Presentation – EOG Resources, Inc. – slide 48
    Initial 30Day Average Production Rates1 Gross Net Gross Gross Net Gross Lateral Lateral Wells Wells Bopd Boed Wells Wells Bopd Boed 4Q 2019 23 20 2,500 3,850 9,400 4Q 2019 7 6 900 1,650 8,900 3Q 2019 51 48 1,950 3,150 7,300 3Q 2019 7…

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