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Evercore ISI Elite Energy Summit – EOG Resources, Inc.

EOG Resources, Inc. · Mar 17, 2021 · 60 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. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 1
    Shifting to Double Premium Higher Returns + Lower Declines + More Free Cash Flow Evercore ISI Elite Energy Summit Bill Thomas Chairman and Chief Executive Officer
  2. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 2
    Sustainable Value Creation Through Industry Cycles Consistent Strategy to Maximize LongTerm Shareholder Value ReturnsFocused EOG is focused on being among the lowest cost, highest return and lowest Disciplined Growth emissions…
  3. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 3
    Exceptional 2020 Results Value Creation in a Challenging Year Improved Reinvestment Achieved 50% Direct ATROR1,2 and 25% AllIn ATROR1,2 on 3.5 Bn Capex2 Reduced Well Costs 15%3 Returns Reduced PerUnit Cash Operating Costs 4%4…
  4. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 4
    2021 Game Plan: Increase Total Shareholder Value Focused on a Consistent Goal Develop Wells that Earn 60% Direct ATROR1,2 at 40 WTI Increase Returns with Shift to Target 5% Well Cost Reduction3 Double Premium Lower Base Decline…
  5. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 5
    Double Premium: Higher Returns + Higher Cash Flow 60% Direct ATROR1,2 at 40 Oil & 2.50 Natural Gas Direct AfterTax Rate of Return(%)1 110 5,700+ Double Premium Locations Shifting to Double Premium Across Multiple Basins Raising the…
  6. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 6
    Shift to Double Premium Better Wells with Lower Decline Rates Improve Returns and Cash Flow Average Premium Well EUR Cumulative Oil Production (Mboe) (Mbo) Double Premium: Higher 1,225 300 Production + Lower Declines 850 900 970 970…
  7. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 7
    Shift to Double Premium Better Wells Lower WTI Breakeven for 10%+ ROCE Double Premium Net Wells Completed Oil Price Required for 10% ROCE1 375 83 81 75 290 290 230 65 210 57 150 55 54 50 40 50 Premium Drilling 2014 2015…
  8. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 8
    2021: Low Breakeven & Significant Free Cash Flow1,2,3 Leverage 32 WTI Total Capex Breakeven with 2.4 Bn Free Cash Flow at 50 WTI 2.4 Bn Free Cash Flow at 50 WTI Free Cash Flow Funds: 50 WTI 1.5 Bn 10% Dividend Increase Repayment of…
  9. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 9
    No Growth Until Market Clearly Needs the Barrels Growth Dependent on Market Fundamentals, Not Price Demand Recovery to PreCovid Levels Inventories at or Below 5 Year Average Low Spare Capacity Applies in 2021 and Beyond…
  10. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 10
    EOG: Consistently Generating Free Cash Flow Since 2017 2017 2020 Average Reinvestment Ratio1 133% 102% 101% 98% 92% 88% 76% 74% 64% A B C D E F EOG G H Source: Factset (1) Peers include APA, COP, DVN, FANG, HES, MRO,…
  11. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 11
    Delivering on Our Free Cash Flow Priorities 2017 2020 Performance 53 Avg. WTI 76% Reinvestment1,3 Ratio 6.2 Bn Free Cash Flow2,3 2.9 Bn Net Debt3 Reduction 11% Net Debt to Cap4,3 2.2 Bn Dividends Paid 124% Dividend Growth5…
  12. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 12
    Free Cash Flow Priorities Flexibility to Allocate FCF to Maximize LongTerm Value Creation Sustainable Dividend Primary Mode of Capital Return Growth Protect Dividend Through Cycles Target 2 Bn Debt Reduction Strengthen Balance…
  13. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 13
    Sustainable Dividend Growth Through Price Cycles Dividend Remains Primary Avenue to Return Capital to Shareholders Sustainable, Growing Dividend per Share 1.75 146% Dividend Growth1 Since Switch to 1.50 Premium Drilling 1.25 Strong…
  14. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 14
    Committed to Strengthening the Balance Sheet Low Net Debt1 Protects Business Through Price Cycles Target 3.3 Bn Debt Reduction From 2017 2023 Peer Group Net Debt to Total Capitalization3 Bn 100% 7.0 1.35 65% 0.75 0.00 52% 1.25…
  15. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 15
    EOG Sustainability Ambitions 2025 2040 EOG Ambitions Eliminate Routine Flaring Net Zero Scope 1 and 2 GHG Emissions Target 13.5 GHG Emissions Intensity Rate1 Target Near Zero Methane Emissions Percentage2 Public…
  16. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 16
    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…
  17. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 17
    Appendix Evercore ISI 2021 18
  18. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 18
    2021 Game Plan Details Increase Returns with Shift to Double Premium Develop Wells that Earn Minimum 60% Direct ATROR1,2 at 40 WTI Lower Base Decline Rate Target 5% Well Cost Reduction3 50 WTI Oil Price Required for 10% ROCE2,5 in…
  19. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 19
    Well Positioned to Navigate Evolving Regulatory Environment Acreage with Existing Operations and Positive Alignment with Stakeholder Interests Total U.S Acreage1 Anticipate Minimal Impact to Development Program 3.8 MM Net Acres No…
  20. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 20
    Lower Costs Drive Higher Margins 2020 2014 2015 2016 2017 2018 2019 1Q 2Q 3Q 4Q FY Composite Average Wellhead Revenue per Boe 58.01 30.66 26.82 35.58 45.51 38.79 30.62 14.99 26.77 30.39 26.42 Operating Costs per Boe Lease & Well 6.53…
  21. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 21
    1Q & FY 2021 Guidance1 Estimated Ranges Estimated Ranges (Unaudited) (Unaudited) 1Q 2021 Full Year 2021 1Q 2021 Full Year 2021 Daily Sales Volumes Expenses (MM) Crude Oil and Condensate Volumes (MBbld) Exploration and Dry Hole 35 45…
  22. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 22
    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…
  23. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 23
    2022 2023 Outlook Maximizes Business Value 8% 10% Oil Growth Optimizes All Key Value Creation Metrics OPTIMAL 5% Growth 8% 10% Growth 15% Growth Base Oil Decline Rate < 25% by 2023 < 25% by 2023 25% by 2023 Operating Efficiency…
  24. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 24
    EOG Culture Drives Sustainable Competitive Advantage Culture Exploration Internal Prospect Generation Early Mover Advantage Best Rock / Best Plays Operations LowCost Acreage Information Most Prolific U.S. Horizontal Wells…
  25. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 25
    ReturnFocused Organic Growth Driven by Exploration Exploration Capturing First Mover Advantage of HighQuality Rock at Low Cost MBoed Wolfcamp M & 1,000 3rd Bone Spring PRB Niobrara Dorado 900 PRB Mowry 800 Woodford 700 1st…
  26. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 26
    Exploration EOG Continued Leading the Thousand Club in 2020 Number of Wells with 30Day Peak Rate 1,000 Boed Oil Focused 400 Gas Focused 350 300 250 200 150 100 50 0 EOG A B C D E F G H I J K L M N O P Q R…
  27. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 27
    EOG Culture Drives Sustainable Competitive Advantage Culture Exploration LowCost Operator Industry Leading Drilling & Completion Technology Operations Proven Track Record of Execution Information High Realized Product Prices…
  28. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 28
    Operations 2021 Capital Budget Focused on Improving Returns 2021 Plan Does Not Change with Higher Oil Price Strong Capital Efficiency5,6 on Total Capital Program Capital Program Funds Current and Future Potential Growth M per Boepd…
  29. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 29
    Operations New Premium Plays Get Better Faster EOG Culture Compounds the Impact of Innovation Total Well Cost Embrace Change and Challenge Everything (/ft)1 2,200 Pleased But Not Satisfied 2,000 Decentralized Structure 1,800…
  30. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 30
    Operations Low Cost Structure Relentless Focus on Sustainable Operating and Well Cost Reductions Cash Operating Costs1 Wolfcamp U Oil Well Cost3 per Boe (MM) 7.8 13.53 Accounting Standards Update2 12.18 7.3 10.78 10.65…
  31. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 31
    Operations LOE Reduction Driven by Sustainable Efficiency Improvements Lease Operating Expense (LOE) (/BOE) 4.58 0.38 0.07 0.04 0.03 0.02 0.03 0.16 3.85 2019 Workovers Maintenance Water Fuel and Power Supplies…
  32. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 32
    Operations EOGs Diversified Marketing Options Provide Pricing Advantage & Flow Assurance EOG Marketing Strategy 2021 EOG Estimated Sales Markets Control U.S. Oil U.S. Gas NGLs EOG Firm Capacity Provides Flow Assurance Rockies…
  33. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 33
    Operations 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…
  34. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 34
    Operations EOG Realizes Higher Oil Prices than Peers U.S. Crude Oil and Condensate Price Realization vs. Peers1 ( per Bbl) 5.27 3.93 3.07 2.10 2.37 2.33 2.28 1.72 2.40 per Bbl EOG Average Advantage 1.45 4Q 2018 1Q 2019…
  35. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 35
    Innovative Employees Power Productivity Advancements Operations EOG Production per Employee and Total Employees MBoe per Employee (Left) 120 Employees (Right) 4,600 105 100 96 95 4,000 84 80 75 76 3,400 73 68 60 2,800…
  36. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 36
    EOG Culture Drives Sustainable Competitive Advantage Culture Exploration RealTime DataDriven Decision Making Large Proprietary Integrated Operations Data Warehouses Predictive Analytics Information 140+ InHouse Desktop & Mobile…
  37. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 37
    SM Owning Data from Creation to Delivery via 140+ Apps Info. Tech. EOGs Supply Chain of Data: Evercore ISI 2021 38
  38. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 38
    Leveraging EOGs Supply Chain of Data for ESG Info. Tech. Weekly Utilization Rate GLOPT SMSM SM SM iEnvironmental SM 8,000 SM SM SM SM ESG SM SM ThataW ay SM SM 7,000 12 ESG Apps SM SM SM SM SM 6,000 SM SM SM SM SM…
  39. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 39
    EOG Culture Drives Sustainable Competitive Advantage Culture Exploration Commitment to Safety, Environment and our Communities Operations Commitment to Ethical Conduct Collaborative and Inclusive Culture Information Compensation…
  40. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 40
    Sustainability Commitment to Sustainability: Measure and Deliver Results EMISSIONS WATER SAFETY Decreased overall water Methane intensity rate1 down Total recordable incident rate intensity rate3 45% down 30% Increased reuse…
  41. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 41
    Sustainability Applying Technology & Innovation to Reduce Greenhouse Gas (GHG) Emissions GHG Intensity Rate1 GHG Reduction Initiatives by Source 17.1 17.7 Other (includes Fugitives) 14.8 13.5 Companywide Leak Detection and…
  42. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 42
    Sustainability 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…
  43. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 43
    Sustainability Tackling GHG Emissions with Innovation Flaring ClosedLoop Gas Capture (CLGC) Downstream Interruption Project Scope: CLGC Infrastructure Automated Flow Control to Close Loop Between Compression Station and…
  44. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 44
    Sustainability 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…
  45. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 45
    Sustainability 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…
  46. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 46
    Play Details Evercore ISI 2021 47
  47. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 47
    Deep Inventory of Premium Crude Oil and Natural Gas Assets Net Undrilled 2021 Average 2021 Average 4Q 2020 Net 2021 Net Expected Play Premium Locations1 Drilling Rigs Completion Spreads Wells Online Well Completions Eagle Ford 1,900 3…
  48. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 48
    Delaware Basin Brushy Canyon 2020 Highlights Record AllIn Rate of Return 98% of Wells Completed Met Premium Delaware Basin Leonard Rate of Return1 Hurdle 404,000 Increased Oil Production with 11% Net Acres Reduction in Well…
  49. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 49
    South Texas Eagle Ford Oil 2020 Highlights Continued to Add Premium Locations Through San Antonio NonPremium Conversions and Acreage Trades Material Improvement in Capital Efficiency Across the Play Gonzales Bexar Lavaca…
  50. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 50
    Relentless Focus on Sustainable Well Cost Reduction Eagle Ford Well Costs1 MM 8.5 Target 6% Well Cost 6.4 5.7 Reduction in 2021 4.9 4.6 4.1 2013 2018 2019 2020 2021 Target Best to Date (1) Well Costs = Drilling,…
  51. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 51
    Powder River Basin Parkman 2020 Highlights Continued Delineation of PRB Plays Installed Infrastructure Along Development Shannon Corridor to Reduce Costs Niobrara 2021 Plan 4,800 of Stacked Pay 45 Net Planned Well…
  52. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 52
    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 Prior…
  53. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 53
    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…
  54. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 54
    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…
  55. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 55
    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…
  56. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 56
    Trinidad Oil Fields Highlights Gas Fields 1 Tcf Gross, 500 Bcf Net Natural Gas Resource Potential1 EOG Blocks Delineated by 2020 Exploration Program 182,000 Net Acres Under Lease Gas Sold Into Domestic Market TOBAGO Caribbean…
  57. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 57
    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…
  58. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 58
    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…
  59. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 59
    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 Potential1,2 Net…
  60. Evercore ISI Elite Energy Summit – EOG Resources, Inc. – slide 60
    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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