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Q3 2020 Earnings Presentation – EOG Resources, Inc.

EOG Resources, Inc. · Nov 6, 2020 · 49 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. Q3 2020 Earnings Presentation – EOG Resources, Inc. – slide 1
    Sustainable Success 3Q 2020 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. Q3 2020 Earnings Presentation – EOG Resources, Inc. – slide 2
    Sustainable Value Creation Through Industry Cycles Consistent Strategy to Maximize LongTerm Shareholder Value ReturnsFocused Disciplined Growth Significant Free Cash Flow1,2 Sustainability Leader (1) Discretionary Cash Flow…
  3. Q3 2020 Earnings Presentation – EOG Resources, Inc. – slide 3
    Strong Results and Constructive Outlook Outstanding Execution and Organic Premium Inventory Expansion 3Q 2020 Results Generated 760 MM Free Cash Flow1,2 Crude Oil Production 2% Above Target3 with Capex 23% Below Target3,2 Cash…
  4. Q3 2020 Earnings Presentation – EOG Resources, Inc. – slide 4
    EOG Culture Compounds the Impact of Innovation Embrace Change and Challenge Everything New Premium Plays Get Better Faster Pleased But Not Satisfied 2,200 2,000 Decentralized Structure Leverage Innovation and Efficiencies…
  5. Q3 2020 Earnings Presentation – EOG Resources, Inc. – slide 5
    Low Cost Structure Relentless Focus on Sustainable Operating and Well Cost Reductions Cash Operating Costs1 Eagle Ford Well Costs4 per Boe MM Accounting Standards Update2 11.68 8.50 10.43 2 9.40 8.86 8.70 8.722 8.392,3 6.40…
  6. Q3 2020 Earnings Presentation – EOG Resources, Inc. – slide 6
    Low Cost Structure Premium Wells Lower F&D Costs and Drive Down DD&A Finding & Development Cost1,2 Depreciation, Depletion and Amortization per Boe per Boe 17.87 18.43 17.34 14.58 15.86 15.34 12.51 13.09 12.56 12.48 3 9.64…
  7. Q3 2020 Earnings Presentation – EOG Resources, Inc. – slide 7
    2021 Outlook Maintain Production in Oversupplied Market 36 WTI Funds Maintenance Capital and Dividend Payments U.S. Oil Production (MBbld) 456 435 4451 435 445 Flexibility to Adjust Capex Depending on Oil 26 Prices: 3.4 BN to…
  8. Q3 2020 Earnings Presentation – EOG Resources, Inc. – slide 8
    Outlook to 2022 2023 Disciplined Growth Optimizes Returns and Free Cash Flow Potential Outlook Based on Current Premium Inventory Returns Focused Returns Increase Each Year With Cost Reductions Oil Price (WTI) 50 50+ and Productivity…
  9. Q3 2020 Earnings Presentation – EOG Resources, Inc. – slide 9
    Strong Balance Sheet & Growing Dividend Through Commodity Price Cycles Bond Maturities From 2017 2023 Sustainable, Growing Dividend Bn per Share 7.0 1.75 1.50 1.35 1.25 0.75 1.00 0.00 1.25 0.75 Total Debt1 Debt Reduction…
  10. Q3 2020 Earnings Presentation – EOG Resources, Inc. – slide 10
    Most Stringent Investment Hurdle Rate in the Industry P Premium Drilling Minimum 30% Return1,2 40 Oil and 2.50 Natural Gas Ensures Strong Returns and Cash Flow Through Cycles Direct Finding and Development Cost3 < 10 Per Boe Drives…
  11. Q3 2020 Earnings Presentation – EOG Resources, Inc. – slide 11
    Dorado Premium Dry Gas Play in the Western Gulf Coast Basin Core Area Play Highlights Wharton Stacked Pay in Austin Chalk and Eagle Ford 163,000 Net Acres in Core Area Highly Competitive with EOG Premium Inventory Sales Point 21…
  12. Q3 2020 Earnings Presentation – EOG Resources, Inc. – slide 12
    Dorado LowestCost Dry Gas Play in North America and Competitive with EOG Premium Oil Plays Breakeven Price1 at Henry Hub Direct ATROR2 per Mcfe 1.60 1.55 70 1.50 Median Premium Oil Well ( WTI) 1.40 1.33 175% 60 1.30 1.22 1.24…
  13. Q3 2020 Earnings Presentation – EOG Resources, Inc. – slide 13
    Premium Inventory1 Growing in Quality & Size Premium Inventory Depth 6,000+ Wells Earn 30%+ Return at 30 WTI/2.50 HH 53% of Premium Inventory Located on State or 5,000 Private Acreage Exploration Target Replacing Premium Locations…
  14. Q3 2020 Earnings Presentation – EOG Resources, Inc. – slide 14
    Premium Proves Resilient Large Inventory of HighReturn Premium Wells Across Multiple Basins Direct AfterTax Rate of Return(%)1 110 6,000+ Premium Wells Earn 30%+ Return at 30 WTI and 2.50 HH 100%+ 100 90 80 70 61% Median Rate…
  15. Q3 2020 Earnings Presentation – EOG Resources, Inc. – slide 15
    Commitment to Sustainability: Performance and Innovation Expanded ESG Commitments GHG EMISSIONS REDUCTION METHANE EMISSIONS REDUCTION ESG TIED TO EXECUTIVE TARGET TARGET COMPENSATION Reduce our GHG emissions Reduce our methane…
  16. Q3 2020 Earnings Presentation – EOG Resources, Inc. – slide 16
    Applying Technology & Innovation to Reduce Greenhouse Gas (GHG) Emissions GHG Intensity Rate1 GHG Reduction Initiatives by Source 17.1 17.7 Other (incl. Fugitives) 14.8 13.5 Companywide Leak Detection and Repair (LDAR) Inspections…
  17. Q3 2020 Earnings Presentation – EOG Resources, Inc. – slide 17
    Innovative Employees Power Productivity Advancements EOG Production per Employee and Total Employees MBoe per Employee (Left) 120 Employees (Right) 4,600 105 100 96 4,000 84 76 EOG Ranks 3 80 75 73 3,400 68 S&P 500 60 2,800…
  18. Q3 2020 Earnings Presentation – EOG Resources, Inc. – slide 18
    EOG Culture Drives Sustainable Competitive Advantage Pleased but Not Satisfied RateofReturn MultiDisciplinary Every Employee is a Driven Teamwork Business Person First Decentralized / Innovative / Safety, Environment, Culture…
  19. Q3 2020 Earnings Presentation – EOG Resources, Inc. – slide 19
    Appendix 3Q 2020 20
  20. Q3 2020 Earnings Presentation – EOG Resources, Inc. – slide 20
    Power of Premium Drilling Premium Drilling Drives Higher Returns on Capital and Higher Return of Capital Before Premium: 10% ROCE 95 Oil 1,2 Premium Drilling: 14% ROCE 58 Oil 1,2 2012 2014 Cumulative Performance (Bn) 2017 2019 Cumulative…
  21. Q3 2020 Earnings Presentation – 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. Q3 2020 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. Q3 2020 Earnings Presentation – EOG Resources, Inc. – slide 23
    EOGs Approach to Lower Fresh Water Intensity1 and Costs Sources of Water Water Reuse Advantages: Minimizes Fresh Water Requirements Reuse Minimizes Produced Water Disposal 13% Lowers Operating and Capital Costs 21% NonFresh 34% EOG…
  24. Q3 2020 Earnings Presentation – EOG Resources, Inc. – slide 24
    Tackling GHG Emissions with Innovation Flaring ClosedLoop Gas Capture (CLGC) Pilot Downstream Interruption Project Scope: CLGC Infrastructure Automated Flow Control to Close Loop Between Compression Station and Producing Diverted…
  25. Q3 2020 Earnings Presentation – EOG Resources, Inc. – slide 25
    Tackling GHG Emissions with Innovation Stationary Combustion SolarPowered Compression in the Delaware Basin Online 3Q 2020 Project Scope: Power Electric Drive Compression with Solar/Natural Gas Hybrid Power Generation 8 MW Solar…
  26. Q3 2020 Earnings Presentation – EOG Resources, Inc. – slide 26
    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…
  27. Q3 2020 Earnings Presentation – EOG Resources, Inc. – slide 27
    ReturnFocused Organic Growth Driven by Exploration Capturing First Mover Advantage of HighQuality Rock at Low Cost Wolfcamp M & MBoed 3rd Bone Spring 900 PRB Niobrara Dorado PRB Mowry 800 Woodford 1st & 2nd Bone Spring 700 Austin…
  28. Q3 2020 Earnings Presentation – EOG Resources, Inc. – slide 28
    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…
  29. Q3 2020 Earnings Presentation – EOG Resources, Inc. – slide 29
    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 &…
  30. Q3 2020 Earnings Presentation – EOG Resources, Inc. – slide 30
    EOG Realizes Higher Oil Prices than Peers U.S. Crude Oil and Condensate Price Realization vs. Peers1 5.27 ( per Bbl) 4.96 3.93 3.07 2.10 2.37 2.38 1.72 2.71 per Bbl EOG Average Advantage 1.45 3Q 2018 4Q 2018 1Q 2019 2Q 2019 3Q…
  31. Q3 2020 Earnings Presentation – EOG Resources, Inc. – slide 31
    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…
  32. Q3 2020 Earnings Presentation – EOG Resources, Inc. – slide 32
    Lower Costs Drive Higher Margins 2020 2014 2015 2016 2017 2018 2019 1Q 2Q 3Q Composite Average Wellhead Revenue per Boe 58.01 30.66 26.82 35.58 45.51 38.79 30.62 14.99 26.77 Operating Costs per Boe Lease & Well 6.53 5.66 4.53 4.70…
  33. Q3 2020 Earnings Presentation – EOG Resources, Inc. – slide 33
    4Q & FY 2020 Guidance1 Estimated Ranges Estimated Ranges (Unaudited) (Unaudited) 4Q 2020 Full Year 2020 4Q 2020 Full Year 2020 Daily Sales Volumes Expenses (MM) Crude Oil and Condensate Volumes (MBbld) Exploration and Dry Hole 45 55…
  34. Q3 2020 Earnings Presentation – EOG Resources, Inc. – slide 34
    Play Details 3Q 2020 35
  35. Q3 2020 Earnings Presentation – EOG Resources, Inc. – slide 35
    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 35 Net Wells Online in 2020 Wyoming DJ Basin 15 Net…
  36. Q3 2020 Earnings Presentation – EOG Resources, Inc. – slide 36
    Deep Inventory of Premium Crude Oil and Natural Gas Assets Net Undrilled 2020 Average 2020 Average 3Q 2020 Net 2020 Net Planned Play Premium Locations1 Drilling Rigs Completion Spreads Wells Online Wells Online Eagle Ford 1,900 3 3 18…
  37. Q3 2020 Earnings Presentation – EOG Resources, Inc. – slide 37
    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…
  38. Q3 2020 Earnings Presentation – EOG Resources, Inc. – slide 38
    Amplified Focus on Efficiencies Additional Wolfcamp U Oil Well Cost Reductions Support Returns Days to Drill1 Wolfcamp U Oil Well Cost2 (MM) 7.8 19.0 7.3 14.1 12.4 2018 2019 YTD 2020 6.4 Completed Lateral Feet per Day 6.3…
  39. Q3 2020 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. Q3 2020 Earnings Presentation – EOG Resources, Inc. – slide 40
    Powder River Basin Parkman New Completion Technology Improving Well Results Shannon 2020 Plan 35 Net Planned Wells Online 3Q 2020 12 Net Wells Online Continue Infrastructure Development Niobrara 4,800 of Stacked Pay…
  41. Q3 2020 Earnings Presentation – EOG Resources, Inc. – slide 41
    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) +45% 150 100 8.0 50 New Completion Design 7.6 Prior…
  42. Q3 2020 Earnings Presentation – EOG Resources, Inc. – slide 42
    Powder River Basin Plays Competitive in Premium Portfolio ( per lateral foot) 6.4 7000 Revenue1 6.0 5.3 Well Cost2 5.0 6000 5.0 Profitability Ratio3 4.0 5000 4,438 4,160 3.0 4000 3,665 2.0 3000 1.0 0.0 2000 1.0 1000…
  43. Q3 2020 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. Q3 2020 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 Anticipate Sourcing 50% of Water Needs with Canadian Oklahoma City…
  45. Q3 2020 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 2018 Seismic Program TOBAGO 2020 Drilling Program Gas…
  46. Q3 2020 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 226,000 193,000 100,000 289,000 200,000 160,000 Estimated…
  47. Q3 2020 Earnings Presentation – EOG Resources, Inc. – slide 47
    EOG Premium Play Details Powder River Basin Wyoming Bakken / Turner DJ Basin Mowry Shale Niobrara Shale Three Forks Sand/Parkman Codell/Niobrara Net Prospective Acres 141,000 89,000 154,000 220,000 88,000 Estimated Remaining…
  48. Q3 2020 Earnings Presentation – EOG Resources, Inc. – slide 48
    EOG Premium Play Details Dorado Woodford Oil Eagle Ford Austin Chalk Eagle Ford Window Net Prospective Acres 516,000 163,000 163,000 35,000 Estimated Remaining Resource 950 MMBoe 9.5 Tcf 11.5 Tcf 20 MMBoe Potential2 Net…
  49. Q3 2020 Earnings Presentation – EOG Resources, Inc. – slide 49
    Breakeven Price Data (Certain Natural Gas Plays) per Mcfe Dorado Austin Chalk Dorado Eagle Ford Haynesville NE Marcellus Local Price Differential 0.15 0.15 0.19 0.45 Finding Cost 0.39 0.41 0.55 0.31 Lease & Well 0.10 0.10 0.25 0.09…

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