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JP Morgan Energy Conference – EOG Resources, Inc.

EOG Resources, Inc. · Jun 17, 2020 · 50 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. JP Morgan Energy Conference – EOG Resources, Inc. – slide 1
    Sustainable Success J.P. Morgan Energy Conference Billy Helms Chief Operating Officer
  2. JP Morgan Energy Conference – EOG Resources, Inc. – slide 2
    Unprecedented Commodity Price Environment COVID-19 Drives Historic Demand Reduction Demand Global Oil Demand1 and Price Outlook - COVID-19: 4 Billion People Globally Locked Down 105 70 - Global Oil Demand Forecasts Down Materially in…
  3. JP Morgan Energy Conference – EOG Resources, Inc. – slide 3
    EOGs Strategic 2020 Focus Points Position Company to Emerge from Downturn Stronger 1. Capital Investment Must Generate Premium Rate of Return All New Wells Must Earn 30% Direct ATROR1 2. Exercise Operational Flexibility to Cut Costs…
  4. JP Morgan Energy Conference – EOG Resources, Inc. – slide 4
    Updated Game Plan Quarterly Production and Capital Outlook U.S. Oil Production (MBbld) 483 Manage Lower Oil Prices 469 - Defer 150 Net Wells 20 and Shut-in Production at Low Oil Prices 400 - 440 - Step up Production as Prices…
  5. JP Morgan Energy Conference – EOG Resources, Inc. – slide 5
    Premium Proves Resilient Financial Strength and Low-Cost Position Insulate Business Strong Financial Profile - Premium Drilling Accelerated Net Debt Reduction Since Last Oil Price Downturn - Strong Liquidity With Cash on Hand and…
  6. JP Morgan Energy Conference – EOG Resources, Inc. – slide 6
    EOGs Shift To Premium Drove Record Performance Last Three Years at Modest 58 Oil1 14% 124% 4.6 4.0 55% Dividend Increase in Return on Capital Free Cash Reduction in Increase to Proved Employed2,3 Flow2,5 (Bn) Net Debt2,6 (Bn)…
  7. JP Morgan Energy Conference – EOG Resources, Inc. – slide 7
    Power of Premium Drilling Premium Drilling Drives Higher Returns on Capital and Higher Return of Capital High Growth + High Oil Price: Cumulative 2012 - 2014 Premium Drilling: Cumulative 2017 - 2019 22.9 Bn 21.6 Bn 21.2 Bn Avg. WTI…
  8. JP Morgan Energy Conference – EOG Resources, Inc. – slide 8
    Premium Proves Resilient Large Inventory of High-Return Premium Wells Direct After-Tax Rate of Return(%)1 110 4,500+ Premium Wells Earn 30%+ Return at 30 WTI 100%+ 100 90 80 9+ Years2 of 70 58% Median Rate of Premium Return at…
  9. JP Morgan Energy Conference – EOG Resources, Inc. – slide 9
    EOGs Record of Disciplined Reinvestment 2017-2019 Capex / 129% Discretionary Cash 114% Flow1 108% 103% 101% 90% 86% EOG 80% 77% Peers2 59% A B C D E F G EOG H I (1) Source: FactSet. See accompanying schedules for…
  10. JP Morgan Energy Conference – EOG Resources, Inc. – slide 10
    11 Strong Balance Sheet & Growing Dividend Through Commodity Price Cycles Bond Maturities From 2017 2021 Sustainable, Growing Dividend Bn per Share 7.0 1.75 0.60 0.35 1.50 0.90 0.50 0.75 4.9 1.25 1.00 1.00 0.75 Total…
  11. JP Morgan Energy Conference – EOG Resources, Inc. – slide 11
    Long-Term Value Creation Through High-Return Reinvestment and Capital Discipline Double-Digit Returns & Disciplined Organic Growth Through Commodity Cycles - Growth Dependent on Oil Market Fundamentals - Organic Growth Through…
  12. JP Morgan Energy Conference – EOG Resources, Inc. – slide 12
    Thank You J.P. Morgan Energy Conf 13
  13. JP Morgan Energy Conference – EOG Resources, Inc. – slide 13
    Strong Financial Profile Financial Resiliency Through Low Net-Debt1 and Strong Liquidity Net-Debt-to-Total Capitalization Ratio1 Strong Balance Sheet 35% - Net Debt to Capitalization of 10%1,2 30% - Reduced Net Debt by 4.0 Bn Since…
  14. JP Morgan Energy Conference – EOG Resources, Inc. – slide 14
    Low Cost Structure Capital Efficiency Supported by Lower F&D Costs Improving Capital Efficiency1,2 on Total Capital Program Finding & Development Cost3,4 M per Bopd Added per Boe 41 17.87 35 14.58 32 12.51 9.64 8.86 Includes…
  15. JP Morgan Energy Conference – EOG Resources, Inc. – slide 15
    Updated Game Plan Stay Flexible and Disciplined Through Low Commodity Price Environment Focused on Returns and Cash Flow - Drill and Complete Wells That Earn 30% DATROR1,2 - Defer and Shut-in Production at Lower Oil Prices - Hedge…
  16. JP Morgan Energy Conference – EOG Resources, Inc. – slide 16
    Long-Term 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% Double-Digit Return & Growth 20% 18%…
  17. JP Morgan Energy Conference – EOG Resources, Inc. – slide 17
    Premium Inventory1 Growing in Quality & Size Premium Inventory Depth - 4,500+ Wells Earn 30%+ Return at 30 WTI - Target Replacing Premium Locations Faster than 5,000 Drilling Exploration Potential Convert Non-Premium to Premium…
  18. JP Morgan Energy Conference – EOG Resources, Inc. – slide 18
    Return-Focused Organic Growth Driven by Exploration Capturing First 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…
  19. JP Morgan Energy Conference – EOG Resources, Inc. – slide 19
    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 J.P. Morgan…
  20. JP Morgan Energy Conference – EOG Resources, Inc. – slide 20
    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 &…
  21. JP Morgan Energy Conference – EOG Resources, Inc. – slide 21
    3.0 Bn Reduction in Revised 2020 Capital Budget 2020 Plan Does Not Change with Higher Oil Price Improving Capital Efficiency6,7 on Total Capital Program Capital Program Funds Current and Future Potential Growth M per Bopd Added Feb. 2020…
  22. JP Morgan Energy Conference – EOG Resources, Inc. – slide 22
    Lower Capital Investment Across All Operations May 2020 vs February 2020 Capital Budget Variance 6,5003 - 2,060 Premium Drilling - Drill and Complete Wells That Earn 30% DATROR1,2 Infrastructure (Facilities + G&P) - Infrastructure…
  23. JP Morgan Energy Conference – EOG Resources, Inc. – slide 23
    Tight Reservoirs Undamaged by Production Shut-Ins Example of Shut-in Delaware Basin Wolfcamp and Bone Spring Wells Oil Production Rate Before and After Well Shut-In1 BOPD 800 Wells Producing 100 BOPD Wells Producing < 100 BOPD 700…
  24. JP Morgan Energy Conference – EOG Resources, Inc. – slide 24
    EOG Continued Leading the Thousand Club in 2019 Number of Wells with 30-Day 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.…
  25. JP Morgan Energy Conference – EOG Resources, Inc. – slide 25
    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…
  26. JP Morgan Energy Conference – EOG Resources, Inc. – slide 26
    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…
  27. JP Morgan Energy Conference – EOG Resources, Inc. – slide 27
    Committed to Minimizing Emissions 2018 Greenhouse 60 Gas Intensity1 EOG 50 Peers2 40 30 20 10 0 A B C D E F G H EOG I J (1) Metric tons of 2018 CO2e emissions per MBoe of 2018 gross U.S. production. (2) Peers include APA,…
  28. JP Morgan Energy Conference – EOG Resources, Inc. – slide 28
    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…
  29. JP Morgan Energy Conference – EOG Resources, Inc. – slide 29
    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…
  30. JP Morgan Energy Conference – EOG Resources, Inc. – slide 30
    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 Fixed Price1 Rockies Permian…
  31. JP Morgan Energy Conference – EOG Resources, Inc. – slide 31
    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 &…
  32. JP Morgan Energy Conference – EOG Resources, Inc. – slide 32
    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 3.20 2.86 2.09 2.22 3.44 per Bbl 1.74 EOG Average Advantage 1Q 2018 2Q 2018 3Q 2018 4Q 2018…
  33. JP Morgan Energy Conference – EOG Resources, Inc. – slide 33
    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…
  34. JP Morgan Energy Conference – EOG Resources, Inc. – slide 34
    Lower Costs Drive Higher Margins 2020 2014 2015 2016 2017 2018 2019 1Q Composite Average Wellhead Revenue per Boe 58.01 30.66 26.82 35.58 45.51 38.79 30.62 Operating Costs per Boe Lease & Well 6.53 5.66 4.53 4.70 4.89 4.58 4.14…
  35. JP Morgan Energy Conference – EOG Resources, Inc. – slide 35
    2Q & FY 2020 Guidance Estimated Ranges Estimated Ranges (Unaudited) (Unaudited) 2Q 2020 Full Year 2020 2Q 2020 Full Year 2020 Daily Sales Volumes Expenses (MM) Crude Oil and Condensate Volumes (MBbld) Exploration and Dry Hole 32 - 42…
  36. JP Morgan Energy Conference – EOG Resources, Inc. – slide 36
    Play Details J.P. Morgan Energy Conf 37
  37. JP Morgan Energy Conference – EOG Resources, Inc. – slide 37
    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 10 Net Wells Online in 2020 30 Net Wells Online in 2020 Wyoming DJ Basin 15 Net…
  38. JP Morgan Energy Conference – EOG Resources, Inc. – slide 38
    Deep Inventory of Crude Oil Assets Net Undrilled 2020 Average 2020 Average 1Q 2020 Net 2020 Net Planned Play Premium Locations1 Drilling Rigs Completion Spreads Wells Online Wells Online Eagle Ford 1,900 3 3 82 200 Delaware Basin…
  39. JP Morgan Energy Conference – EOG Resources, Inc. – slide 39
    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…
  40. JP Morgan Energy Conference – EOG Resources, Inc. – slide 40
    Amplified Focus on Efficiencies Additional Wolfcamp U Oil Well Cost Reductions Support Returns Days to Drill1 Wolfcamp U Oil Well Cost2 (MM) 7.5 18.0 13.4 12.2 7.0 2018 2019 YTD 2020 6.7 Completed Lateral Feet per Day 6.4…
  41. JP Morgan Energy Conference – EOG Resources, Inc. – slide 41
    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 &…
  42. JP Morgan Energy Conference – EOG Resources, Inc. – slide 42
    Relentless Focus on Well Cost Reductions Eagle Ford Well 8.50 Costs1 (MM) 6.40 5.70 5.50 5.30 4.60 2013 2018 2019 Feb. 2020 May 2020 Best To Target Target Date (1) Well Costs = Drilling, Completion, Well-Site Facilities and…
  43. JP Morgan Energy Conference – EOG Resources, Inc. – slide 43
    Powder River Basin Parkman New Completion Technology Improving Well Results Shannon 2020 Plan - 30 Net Planned Wells Online - 1Q 2020 11 Net Wells Online - Continue Infrastructure Development Niobrara 4,800 of Stacked Pay…
  44. JP Morgan Energy Conference – EOG Resources, Inc. – slide 44
    Innovation and Lower Cost Improve PRB Well Returns Powder River Basin Well Costs and Well Performance PRB Niobrara Cumulative Oil Production (Mbo)1 PRB Niobrara Well Cost2 (MM) 150 +45% 100 8.0 50 New Completion Design 7.6 Prior…
  45. JP Morgan Energy Conference – EOG Resources, Inc. – slide 45
    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…
  46. JP Morgan Energy Conference – EOG Resources, Inc. – slide 46
    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…
  47. JP Morgan Energy Conference – EOG Resources, Inc. – slide 47
    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 6.0MM to Canadian Oklahoma City 5.7MM…
  48. JP Morgan Energy Conference – EOG Resources, Inc. – slide 48
    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 2017-2018 Seismic Program TOBAGO 2020 Plan…
  49. JP Morgan Energy Conference – EOG Resources, Inc. – slide 49
    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…
  50. JP Morgan Energy Conference – EOG Resources, Inc. – slide 50
    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…

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