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2Q 2021 Earnings Presentation – EOG Resources, Inc.

EOG Resources, Inc. · Aug 4, 2021 · 54 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. 2Q 2021 Earnings Presentation – EOG Resources, Inc. – slide 1
    Shifting to Double Premium Higher Returns + Lower Declines + More Free Cash Flow 2Q 2021 David Streit, Vice President IR/PR Kimberly Ehmer, Director IR/PR Neel Panchal, Director IR (713) 5714902, dstreiteogresources.com (713) 5714676,…
  2. 2Q 2021 Earnings Presentation – 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. 2Q 2021 Earnings Presentation – EOG Resources, Inc. – slide 3
    2Q 2021: Consistent, Strong Operating & Financial Performance Strong 2Q 2021 Performance Record Direct ATROR1 on Reinvestment 1.0 Bn Adjusted Net Income1 and 1.73 Adjusted EPS1 Generated 1.1 Bn Free Cash Flow2,1 Trailing 12 Month…
  4. 2Q 2021 Earnings Presentation – EOG Resources, Inc. – slide 4
    Delivering on Our Free Cash Flow Priorities YTD 2021: Committed to Returning 1.5 Bn Cash to Shareholders YTD Accomplishments 10% Regular Dividend Rate Increase to Sustainable Dividend Primary Mode of Capital Return 960 MM1 Growth…
  5. 2Q 2021 Earnings Presentation – EOG Resources, Inc. – slide 5
    2021: Low Breakeven & Significant Free Cash Flow Leverage 30 WTI Total Capex3 Breakeven with 4.4 Bn Free Cash Flow1,2,3 at 65 WTI 65 WTI 4.4 Bn FCF1,2,3 2H 2021 Est. FCF Committed 2.3 Bn 2.3 Bn of Free Cash Flow YTD 0.8 Bn 750 MM…
  6. 2Q 2021 Earnings Presentation – EOG Resources, Inc. – slide 6
    Committed to Strong Balance Sheet and Growing Dividend Strong Track Record of Delivering on Primary Free Cash Flow Priorities Target 3.3 Bn Debt Reduction From 2017 2023 Sustainable, Growing Regular Dividend Bn per Share 7.0 1.75…
  7. 2Q 2021 Earnings Presentation – EOG Resources, Inc. – slide 7
    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 2Q…
  8. 2Q 2021 Earnings Presentation – EOG Resources, Inc. – slide 8
    Sustainable Cost Reduction From Innovation and Efficiency Increasing 2021 Well Costs1 Reduction Target to 7% Days to Drill2 Completed Lateral Feet per Day2 Sand Cost & Water Costs per Well2 (M) 17.1 1,295 1,765 13.3 1,525 11.2…
  9. 2Q 2021 Earnings Presentation – EOG Resources, Inc. – slide 9
    Well Positioned to Mitigate Inflation Secured 65% of Well Costs1 for 2021 and 45% of Well Costs for 2022 2021 EOG Well Costs Breakdown Inflationary Costs (+) EOG Offsets () Outlook to 2022 Drilling Drilling Fuel, Drilling Fluid &…
  10. 2Q 2021 Earnings Presentation – EOG Resources, Inc. – slide 10
    EOG Sustainability Ambitions & Strategy Dedicated to Being a Responsible Operator and Part of the LongTerm Energy Solution EOG Ambitions Emission Reduction Pathways 2020 REDUCE Expand Closed Loop Gas Capture GHG Intensity Rate1,2…
  11. 2Q 2021 Earnings Presentation – EOG Resources, Inc. – slide 11
    Commitment to Sustainability: Measure and Deliver Results EMISSIONS WATER SAFETY Methane intensity rate1,2 down Decreased overall water Total recordable incident rate 45% intensity rate4 down 30% GHG intensity rate2,3 down 16%…
  12. 2Q 2021 Earnings Presentation – EOG Resources, Inc. – slide 12
    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 7% Well Costs3 Reduction (Update) Double Premium Lower Base…
  13. 2Q 2021 Earnings Presentation – EOG Resources, Inc. – slide 13
    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…
  14. 2Q 2021 Earnings Presentation – EOG Resources, Inc. – slide 14
    Shift to Double Premium Improves Key Financial Metrics Average Annual Performance PrePremium Premium Double Premium 2012 2014 2017 2019 2021E1 Double Premium Wells2: < 10% < 40% 80% WTI Oil: 95 58 65 EPS3 3.46 5.02 7.00 ROCE4…
  15. 2Q 2021 Earnings Presentation – EOG Resources, Inc. – slide 15
    Shift to Double Premium Lower Base Declines Improve Returns, Capital Efficiency and Free Cash Flow Cumulative Oil Production EOG Annual Oil Base Decline Rate1 (Mbo) Double Premium: Higher 300 Production + Lower Declines 31% 250 +39%…
  16. 2Q 2021 Earnings Presentation – EOG Resources, Inc. – slide 16
    Shift to Double Premium Better Wells Lower WTI Breakeven for 10%+ ROCE Double Premium Net Wells Completed Oil Price Required for 10% ROCE1 400 83 81 75 290 290 230 65 210 57 150 55…
  17. 2Q 2021 Earnings Presentation – EOG Resources, Inc. – slide 17
    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…
  18. 2Q 2021 Earnings Presentation – EOG Resources, Inc. – slide 18
    Appendix 2Q 2021 19
  19. 2Q 2021 Earnings Presentation – EOG Resources, Inc. – slide 19
    2021 Game Plan Details Increase Returns with Shift to Double Premium Develop Wells that Earn Minimum 60% Direct ATROR1,2 at 40 WTI Target 7% Well Costs3 Reduction (Update) Lower Base Decline Rate Less Than 49 WTI Oil Price Required for…
  20. 2Q 2021 Earnings Presentation – EOG Resources, Inc. – slide 20
    Lower Costs Drive Higher Margins 2021 2014 2015 2016 2017 2018 2019 2020 1Q 2Q Composite Average Wellhead Revenue per Boe 58.01 30.66 26.82 35.58 45.51 38.79 26.42 45.49 46.07 Operating Costs per Boe Lease & Well 6.53 5.66 4.53 4.70…
  21. 2Q 2021 Earnings Presentation – EOG Resources, Inc. – slide 21
    3Q & FY 2021 Guidance1 Estimated Ranges Estimated Ranges (Unaudited) (Unaudited) 3Q 2021 Full Year 2021 3Q 2021 Full Year 2021 Daily Sales Volumes Expenses (MM) Crude Oil and Condensate Volumes (MBbld) Exploration and Dry Hole 35 45…
  22. 2Q 2021 Earnings Presentation – EOG Resources, Inc. – slide 22
    Hedge Impact & Commodity Price Sensitivity1 Net Cash from Settlement of Derivative Contracts by Quarter (MM)2 Crude Oil 50 60 70 80 Natural Gas 2.50 3.00 3.50 4.00 3Q 20213 (168) (214) (261) (307) 3Q 20213 12 13 14 15 4Q 2021 12 (33)…
  23. 2Q 2021 Earnings Presentation – EOG Resources, Inc. – slide 23
    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…
  24. 2Q 2021 Earnings Presentation – EOG Resources, Inc. – slide 24
    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…
  25. 2Q 2021 Earnings Presentation – EOG Resources, Inc. – slide 25
    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…
  26. 2Q 2021 Earnings Presentation – EOG Resources, Inc. – slide 26
    EOG Culture Drives Sustainable Competitive Advantage Culture Exploration LowCost Operator Sustainable Cost Reductions Industry Leading Drilling & Operations Completion Technology Information Proven Track Record of Execution…
  27. 2Q 2021 Earnings Presentation – EOG Resources, Inc. – slide 27
    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…
  28. 2Q 2021 Earnings Presentation – EOG Resources, Inc. – slide 28
    Operations Low Cost Structure Relentless Focus on Sustainable Operating and Well Cost Reductions Cash Operating Costs1 Wolfcamp U Oil Well Costs3 per Boe (MM) 7.8 13.53 Accounting Standards Update2 12.18 7.3 10.78 10.65…
  29. 2Q 2021 Earnings Presentation – EOG Resources, Inc. – slide 29
    Operations New Premium Plays Get Better Faster EOG Culture Compounds the Impact of Innovation Total Well Costs (/ft)1 Embrace Change and Challenge Everything 2,200 Pleased But Not Satisfied 2,000 Decentralized Structure…
  30. 2Q 2021 Earnings Presentation – EOG Resources, Inc. – slide 30
    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…
  31. 2Q 2021 Earnings Presentation – EOG Resources, Inc. – slide 31
    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…
  32. 2Q 2021 Earnings Presentation – EOG Resources, Inc. – slide 32
    Operations EOG Realizes Higher Oil Prices than Peers U.S. Crude Oil and Condensate Price Realization vs. Peers1 ( per Bbl) 3.07 2.71 2.40 2.10 2.37 2.33 2.28 1.72 1.95 per Bbl EOG Average Advantage 1.45 2Q 2019 3Q…
  33. 2Q 2021 Earnings Presentation – EOG Resources, Inc. – slide 33
    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…
  34. 2Q 2021 Earnings Presentation – EOG Resources, Inc. – slide 34
    SM Owning Data from Creation to Delivery via 140+ Apps Info. Tech. EOGs Supply Chain of Data: 2Q 2021 35
  35. 2Q 2021 Earnings Presentation – EOG Resources, Inc. – slide 35
    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…
  36. 2Q 2021 Earnings Presentation – EOG Resources, Inc. – slide 36
    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…
  37. 2Q 2021 Earnings Presentation – EOG Resources, Inc. – slide 37
    Sustainability Applying Technology & Innovation to Reduce Greenhouse Gas (GHG) Emissions Scope 1 GHG Intensity Rate1,2 GHG Reduction Projects by Source 17.1 17.7 Other (includes Fugitives) 14.8 13.6 13.5 Companywide Leak…
  38. 2Q 2021 Earnings Presentation – EOG Resources, Inc. – slide 38
    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…
  39. 2Q 2021 Earnings Presentation – EOG Resources, Inc. – slide 39
    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…
  40. 2Q 2021 Earnings Presentation – EOG Resources, Inc. – slide 40
    Play Details 2Q 2021 41
  41. 2Q 2021 Earnings Presentation – EOG Resources, Inc. – slide 41
    Deep Inventory of Premium Crude Oil and Natural Gas Assets Net Undrilled 2021 Average 2021 Average 2Q 2021 Net Well 2021 Net Expected Play Premium Locations1 Drilling Rigs Completion Spreads Completions Well Completions Eagle Ford…
  42. 2Q 2021 Earnings Presentation – EOG Resources, Inc. – slide 42
    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…
  43. 2Q 2021 Earnings Presentation – EOG Resources, Inc. – slide 43
    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…
  44. 2Q 2021 Earnings Presentation – EOG Resources, Inc. – slide 44
    Relentless Focus on Sustainable Well Costs Reduction Eagle Ford Well Costs1 MM 8.5 Target 6% Well Costs 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,…
  45. 2Q 2021 Earnings Presentation – EOG Resources, Inc. – slide 45
    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…
  46. 2Q 2021 Earnings Presentation – EOG Resources, Inc. – slide 46
    Innovation and Lower Costs Improve PRB Well Returns Powder River Basin Well Costs and Well Performance PRB Niobrara Cumulative Oil Production (Mbo)1 PRB Niobrara Well Costs2 (MM) +45% 150 100 8.0 50 New Completion Design Prior…
  47. 2Q 2021 Earnings Presentation – EOG Resources, Inc. – slide 47
    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…
  48. 2Q 2021 Earnings Presentation – EOG Resources, Inc. – slide 48
    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…
  49. 2Q 2021 Earnings Presentation – EOG Resources, Inc. – slide 49
    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…
  50. 2Q 2021 Earnings Presentation – EOG Resources, Inc. – slide 50
    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…
  51. 2Q 2021 Earnings Presentation – EOG Resources, Inc. – slide 51
    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…
  52. 2Q 2021 Earnings Presentation – EOG Resources, Inc. – slide 52
    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…
  53. 2Q 2021 Earnings Presentation – EOG Resources, Inc. – slide 53
    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 Net…
  54. 2Q 2021 Earnings Presentation – EOG Resources, Inc. – slide 54
    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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