EOG Resources Reports Outstanding First Quarter 2019 Results and Raises Dividend by 31 Percent
HOUSTON, May 2, 2019 /PRNewswire/ --
-- Increased Crude Oil Production 20 Percent YOY and Exceeded Target
-- Delivered First Quarter Capital Expenditures Below Target and Reiterates
Unchanged FY 2019 Target
-- Reduced Per-Unit Cash Operating Costs 8 Percent YOY and Beat Targets
-- Achieved Reductions in Well Costs and On-Track to Reach 5 Percent
Reduction Goal
-- Established Significant Crude Oil Export Capacity
-- Increased Common Stock Dividend 31 Percent
EOG Resources, Inc. (EOG) today reported first quarter 2019 net income of $635 million, or $1.10 per share, compared with first quarter 2018 net income of $639 million, or $1.10 per share. Net cash from operating activities for the first quarter 2019 was $1.6 billion. Discretionary cash flow for the first quarter 2019 of $1.9 billion increased three percent compared to the first quarter 2018, despite a 13 percent drop in the average WTI NYMEX price compared to the same prior year period.
Adjusted non-GAAP net income for the first quarter 2019 was $689 million, or $1.19 per share, compared with adjusted non-GAAP net income of $689 million, or $1.19 per share, for the same prior year period. Please refer to the attached tables for the reconciliation of non-GAAP measures to GAAP measures.
First Quarter 2019 Review
EOG delivered stellar operational and financial performance in the first quarter 2019. Crude oil production volumes exceeded the target range, while capital expenditures were below the target range. Total company crude oil volumes grew 20 percent compared to the first quarter 2018, to 435,900 barrels of oil per day (Bopd). Natural gas liquids production increased 19 percent, while natural gas volumes grew 11 percent, contributing to total company production growth of 17 percent.
Cash operating costs declined by eight percent during the first quarter 2019 on a per-unit basis compared to the same prior year period. Lower transportation, lease operating and general and administrative costs contributed to the overall cost reduction. EOG's marketing operations added to the strong first quarter financial performance, as the average price on U.S. crude oil sales was $1.21 per barrel higher than the average WTI NYMEX price. The company also achieved reductions in well costs during the first quarter 2019.
EOG generated $1.9 billion of discretionary cash flow in the first quarter 2019. The company incurred total expenditures of $2.1 billion, including $1.7 billion of cash capital expenditures before acquisitions. After considering dividend payments of $128 million, EOG generated free cash flow during the first quarter of $55 million. Please refer to the attached tables for the reconciliation of non-GAAP measures to GAAP measures.
"EOG's consistent long-term strategy of exploration-led organic growth, focus on operating and capital cost control and disciplined capital allocation is generating robust financial results. We are growing more efficiently than ever before," said William R. "Bill" Thomas, Chairman and Chief Executive Officer. "We are on track to reduce well costs five percent for the year. Combined with strong price realizations, EOG is positioned to further improve margins and returns. The tremendous first quarter results demonstrate that EOG is achieving its goal of performing with the best companies in the S&P 500."
Dividend Increase
EOG's Board of Directors declared a quarterly dividend of $0.2875 per share on the common stock, an increase of 31 percent. The dividend will be payable July 31, 2019, to holders of record as of July 17, 2019. The indicated annual rate is $1.15 per share.
"EOG's commitment to increasing cash returns to stockholders continues, as we have now increased our dividend by 72 percent during the past 14 months. This is made possible through our relentless efforts to lower costs, increase returns and fundamentally reset the business to be profitable even in a low oil price environment. We are confident our results will continue to improve, guided by our unique culture and sustainable business model," Thomas said.
Crude Oil Export Capacity
EOG has reached agreements that provide access to crude oil export capacity on the Gulf Coast. Export capacity available to EOG will increase from 100,000 Bopd in 2020 to 250,000 Bopd in 2022 and subsequent years. The company expects to sell a portion of its crude oil from its Eagle Ford and Delaware Basin plays to export markets. The new agreements complement EOG's existing pipeline and terminal tankage capacity, further increasing the reliability and diversification of its marketing operations.
"These agreements extend control of our crude oil production to the water's edge and open significant new markets to EOG. We enhance our flexibility to capture the highest margins for our crude oil by maintaining firm capacity for our production downstream, providing access to a diverse group of potential customers in multiple end markets," commented D. Lance Terveen, Senior Vice President, Marketing.
Operating Highlights
EOG brought on line 78 wells in the Delaware Basin during the first quarter 2019 using one less rig and completion crew than it did in the first quarter 2018 to bring on line 70 wells. This tremendous operating performance, as well as infrastructure investments such as water handling and reuse, are enabling EOG to achieve further cost reductions.
The South Texas Eagle Ford remains a foundation asset for EOG, capable of sustaining high-return growth for at least 10 years. EOG is improving capital productivity across the entire 120-mile length of its acreage position in the heart of this world class resource play. The further adoption of local sources of sand supply, increased efficiencies in completion operations and the continued development of new completion designs are contributing to lower costs with consistent well productivity. With less than 40 percent of its identified locations in the play developed, there is significant opportunity to convert additional acreage to premium status.
In the Powder River Basin Turner, EOG brought five wells to sales during the first quarter. The company also further progressed plans for infrastructure development, including crude oil and natural gas gathering pipelines and water handling systems. EOG brought on line 25 wells in the Wyoming DJ Basin Codell during the first quarter. With low well costs and a high oil mix, EOG's Codell development program realizes low finding costs and premium rates of return.
EOG brought on line four wells in the Eastern Anadarko Basin Woodford Oil Window during the first quarter. The drilling program in the first quarter was focused on further delineating the play and testing additional targets.
In the Williston Basin, EOG drilled two wells during the first quarter and deferred completions until the summer as part of its seasonal development program.
Financial Review
At March 31, 2019, EOG's total debt outstanding was $6.1 billion for a debt-to-total capitalization ratio of 23 percent. Considering cash on the balance sheet at the end of the first quarter, EOG's net debt was $4.9 billion for a net debt-to-total capitalization ratio of 20 percent. For a reconciliation of non-GAAP measures to GAAP measures, please refer to the attached tables.
First Quarter 2019 Results Webcast
Friday, May 3, 2019, 9:00 a.m. Central time (10:00 a.m. Eastern time)
Webcast will be available on EOG website for one year.
http://investors.eogresources.com/Investors
About EOG
EOG Resources, Inc. (NYSE: EOG) is one of the largest crude oil and natural gas exploration and production companies in the United States with proved reserves in the United States, Trinidad, and China. To learn more visit www.eogresources.com.
Investor Contacts
David Streit 713-571-4902
Neel Panchal 713-571-4884
John Wagner 713-571-4404
Media and Investor Contact
Kimberly Ehmer 713-571-4676
This press release may include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, including, among others, statements and projections regarding EOG's future financial position, operations, performance, business strategy, returns, budgets, reserves, levels of production, capital expenditures, costs and asset sales, statements regarding future commodity prices and statements regarding the plans and objectives of EOG's management for future operations, are forward-looking statements. EOG typically uses words such as "expect," "anticipate," "estimate," "project," "strategy," "intend," "plan," "target," "aims," "goal," "may," "will," "should" and "believe" or the negative of those terms or other variations or comparable terminology to identify its forward-looking statements. In particular, statements, express or implied, concerning EOG's future operating results and returns or EOG's ability to replace or increase reserves, increase production, generate returns, replace or increase drilling locations, reduce or otherwise control operating costs and capital expenditures, generate cash flows, pay down or refinance indebtedness or pay and/or increase dividends are forward-looking statements. Forward-looking statements are not guarantees of performance. Although EOG believes the expectations reflected in its forward-looking statements are reasonable and are based on reasonable assumptions, no assurance can be given that these assumptions are accurate or that any of these expectations will be achieved (in full or at all) or will prove to have been correct. Moreover, EOG's forward-looking statements may be affected by known, unknown or currently unforeseen risks, events or circumstances that may be outside EOG's control. Furthermore, this press release and any accompanying disclosures may include or reference certain forward-looking, non-GAAP financial measures, such as free cash flow or discretionary cash flow, and certain related estimates regarding future performance, results and financial position. Any such forward-looking measures and estimates are intended to be illustrative only and are not intended to reflect the results that EOG will necessarily achieve for the period(s) presented; EOG's actual results may differ materially from such measures and estimates. Important factors that could cause EOG's actual results to differ materially from the expectations reflected in EOG's forward-looking statements include, among others:
-- the timing, extent and duration of changes in prices for, supplies of,
and demand for, crude oil and condensate, natural gas liquids, natural
gas and related commodities;
-- the extent to which EOG is successful in its efforts to acquire or
discover additional reserves;
-- the extent to which EOG is successful in its efforts to economically
develop its acreage in, produce reserves and achieve anticipated
production levels from, and maximize reserve recovery from, its existing
and future crude oil and natural gas exploration and development
projects;
-- the extent to which EOG is successful in its efforts to market its crude
oil and condensate, natural gas liquids, natural gas and related
commodity production;
-- the availability, proximity and capacity of, and costs associated with,
appropriate gathering, processing, compression, storage, transportation
and refining facilities;
-- the availability, cost, terms and timing of issuance or execution of,
and competition for, mineral licenses and leases and governmental and
other permits and rights-of-way, and EOG's ability to retain mineral
licenses and leases;
-- the impact of, and changes in, government policies, laws and
regulations, including tax laws and regulations; climate change and
other environmental, health and safety laws and regulations relating to
air emissions, disposal of produced water, drilling fluids and other
wastes, hydraulic fracturing and access to and use of water; laws and
regulations imposing conditions or restrictions on drilling and
completion operations and on the transportation of crude oil and natural
gas; laws and regulations with respect to derivatives and hedging
activities; and laws and regulations with respect to the import and
export of crude oil, natural gas and related commodities;
-- EOG's ability to effectively integrate acquired crude oil and natural
gas properties into its operations, fully identify existing and
potential problems with respect to such properties and accurately
estimate reserves, production and costs with respect to such properties;
-- the extent to which EOG's third-party-operated crude oil and natural gas
properties are operated successfully and economically;
-- competition in the oil and gas exploration and production industry for
the acquisition of licenses, leases and properties, employees and other
personnel, facilities, equipment, materials and services;
-- the availability and cost of employees and other personnel, facilities,
equipment, materials (such as water and tubulars) and services;
-- the accuracy of reserve estimates, which by their nature involve the
exercise of professional judgment and may therefore be imprecise;
-- weather, including its impact on crude oil and natural gas demand, and
weather-related delays in drilling and in the installation and operation
(by EOG or third parties) of production, gathering, processing,
refining, compression, storage and transportation facilities;
-- the ability of EOG's customers and other contractual counterparties to
satisfy their obligations to EOG and, related thereto, to access the
credit and capital markets to obtain financing needed to satisfy their
obligations to EOG;
-- EOG's ability to access the commercial paper market and other credit and
capital markets to obtain financing on terms it deems acceptable, if at
all, and to otherwise satisfy its capital expenditure requirements;
-- the extent to which EOG is successful in its completion of planned asset
dispositions;
-- the extent and effect of any hedging activities engaged in by EOG;
-- the timing and extent of changes in foreign currency exchange rates,
interest rates, inflation rates, global and domestic financial market
conditions and global and domestic general economic conditions;
-- geopolitical factors and political conditions and developments around
the world (such as the imposition of tariffs or trade or other economic
sanctions, political instability and armed conflict), including in the
areas in which EOG operates;
-- the use of competing energy sources and the development of alternative
energy sources;
-- the extent to which EOG incurs uninsured losses and liabilities or
losses and liabilities in excess of its insurance coverage;
-- acts of war and terrorism and responses to these acts;
-- physical, electronic and cybersecurity breaches; and
-- the other factors described under ITEM 1A, Risk Factors, on pages 13
through 22 of EOG's Annual Report on Form 10-K for the fiscal year ended
December 31, 2018 and any updates to those factors set forth in EOG's
subsequent Quarterly Reports on Form 10-Q or Current Reports on Form
8-K.
In light of these risks, uncertainties and assumptions, the events anticipated by EOG's forward-looking statements may not occur, and, if any of such events do, we may not have anticipated the timing of their occurrence or the duration or extent of their impact on our actual results. Accordingly, you should not place any undue reliance on any of EOG's forward-looking statements. EOG's forward-looking statements speak only as of the date made, and EOG undertakes no obligation, other than as required by applicable law, to update or revise its forward-looking statements, whether as a result of new information, subsequent events, anticipated or unanticipated circumstances or otherwise.
The United States Securities and Exchange Commission (SEC) permits oil and gas companies, in their filings with the SEC, to disclose not only "proved" reserves (i.e., quantities of oil and gas that are estimated to be recoverable with a high degree of confidence), but also "probable" reserves (i.e., quantities of oil and gas that are as likely as not to be recovered) as well as "possible" reserves (i.e., additional quantities of oil and gas that might be recovered, but with a lower probability than probable reserves). Statements of reserves are only estimates and may not correspond to the ultimate quantities of oil and gas recovered. Any reserve or resource estimates provided in this press release that are not specifically designated as being estimates of proved reserves may include "potential" reserves, "resource potential" and/or other estimated reserves or estimated resources not necessarily calculated in accordance with, or contemplated by, the SEC's latest reserve reporting guidelines. Investors are urged to consider closely the disclosure in EOG's Annual Report on Form 10-K for the fiscal year ended December 31, 2018, available from EOG at P.O. Box 4362, Houston, Texas 77210-4362 (Attn: Investor Relations). You can also obtain this report from the SEC by calling 1-800-SEC-0330 or from the SEC's website at www.sec.gov. In addition, reconciliation and calculation schedules for non-GAAP financial measures can be found on the EOG website at www.eogresources.com.
EOG RESOURCES, INC.
Financial Report
---
(Unaudited; in millions, except per share data)
Three Months Ended
March 31,
2019 2018
---
Operating Revenues and Other $
4,058.6 $
3,681.2
Net Income $
635.4 $
638.6
Net Income Per Share
Basic $
1.10 $
1.11
Diluted $
1.10 $
1.10
Average Number of Common Shares
Basic 577.2 575.8
Diluted 580.2 579.7
Summary Income Statements
---
(Unaudited; in thousands, except per share data)
Three Months Ended
March 31,
2019 2018
---
Operating Revenues and Other
Crude Oil and Condensate $
2,200,403 $
2,101,308
Natural Gas Liquids 218,638 221,415
Natural Gas 334,972 299,766
Losses on Mark-to-Market Commodity (20,580) (59,771)
Derivative Contracts
Gathering, Processing and Marketing 1,285,654 1,101,822
Losses on Asset Dispositions, Net (3,836) (14,969)
Other, Net 43,391 31,591
Total 4,058,642 3,681,162
Operating Expenses
Lease and Well 336,291 300,064
Transportation Costs 176,522 176,957
Gathering and Processing Costs 111,295 101,345
Exploration Costs 36,324 34,836
Dry Hole Costs 94
Impairments 72,356 64,609
Marketing Costs 1,270,057 1,106,390
Depreciation, Depletion and Amortization 879,595 748,591
General and Administrative 106,672 94,698
Taxes Other Than Income 192,906 179,084
Total 3,182,112 2,806,574
Operating Income 876,530 874,588
Other Income, Net 5,612 727
Income Before Interest Expense and Income Taxes 882,142 875,315
Interest Expense, Net 54,906 61,956
Income Before Income Taxes 827,236 813,359
Income Tax Provision 191,810 174,770
Net Income $
635,426 $
638,589
Dividends Declared per Common Share $
0.2200 $
0.1850
EOG RESOURCES, INC.
Operating Highlights
---
(Unaudited)
Three Months Ended
March 31,
2019 2018
---
Wellhead Volumes and Prices
---
Crude Oil and Condensate Volumes (MBbld) (A)
United States 435.1 359.7
Trinidad 0.7 0.9
Other International (B) 0.1 2.7
Total 435.9 363.3
Average Crude Oil and Condensate Prices ($/Bbl) (C)
United States $
56.11 $
64.24
Trinidad 43.68 54.86
Other International (B) 60.13 71.61
Composite 56.09 64.27
Natural Gas Liquids Volumes (MBbld) (A)
United States 119.8 100.6
Other International (B)
Total 119.8 100.6
Average Natural Gas Liquids Prices ($/Bbl) (C)
United States $
20.28 $
24.46
Other International (B)
Composite 20.28 24.46
Natural Gas Volumes (MMcfd) (A)
United States 1,003 853
Trinidad 267 293
Other International (B) 38 30
Total 1,308 1,176
Average Natural Gas Prices ($/Mcf) (C)
United States $
2.77 $
2.76
Trinidad 2.91 2.88
Other International (B) 4.37 4.36
Composite 2.85 2.83
Crude Oil Equivalent Volumes (MBoed) (D)
United States 722.0 602.5
Trinidad 45.1 49.8
Other International (B) 6.5 7.6
Total 773.6 659.9
Total MMBoe (D) 69.6 59.4
(A) Thousand barrels per day or
million cubic feet per day, as
applicable.
(B) Other International includes
EOG's United Kingdom, China and
Canada operations. The United
Kingdom operations were sold in
the fourth quarter of 2018.
(C) Dollars per barrel or per
thousand cubic feet, as
applicable. Excludes the impact
of financial commodity
derivative instruments (see Note
12 to the Consolidated Financial
Statements in EOG's Annual
Report on Form 10-K for the year
ended December 31, 2018).
(D) Thousand barrels of oil
equivalent per day or million
barrels of oil equivalent, as
applicable; includes crude oil
and condensate, NGLs and natural
gas. Crude oil equivalent
volumes are determined using a
ratio of 1.0 barrel of crude oil
and condensate or NGLs to 6.0
thousand cubic feet of natural
gas. MMBoe is calculated by
multiplying the MBoed amount by
the number of days in the period
and then dividing that amount by
one thousand.
EOG RESOURCES, INC.
Summary Balance Sheets
---
(Unaudited; in thousands, except share data)
March 31, December 31,
2019 2018
---
ASSETS
Current Assets
Cash and Cash Equivalents $
1,135,810 $
1,555,634
Accounts Receivable, Net 2,203,438 1,915,215
Inventories 860,764 859,359
Assets from Price Risk Management Activities 3,909 23,806
Income Taxes Receivable 440,217 427,909
Other 263,747 275,467
Total 4,907,885 5,057,390
Property, Plant and Equipment
Oil and Gas Properties (Successful Efforts Method) 58,691,746 57,330,016
Other Property, Plant and Equipment 4,277,888 4,220,665
Total Property, Plant and Equipment 62,969,634 61,550,681
Less: Accumulated Depreciation, Depletion and Amortization (33,840,631) (33,475,162)
Total Property, Plant and Equipment, Net 29,129,003 28,075,519
Deferred Income Taxes 1,224 777
Other Assets 1,625,423 800,788
Total Assets $
35,663,535 $
33,934,474
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable $
2,452,337 $
2,239,850
Accrued Taxes Payable 239,524 214,726
Dividends Payable 126,979 126,971
Liabilities from Price Risk Management Activities 746
Current Portion of Long-Term Debt 914,861 913,093
Current Portion of Operating Lease Liabilities 396,294
Other 170,527 233,724
Total 4,301,268 3,728,364
Long-Term Debt 5,166,050 5,170,169
Other Liabilities 1,772,248 1,258,355
Deferred Income Taxes 4,520,172 4,413,398
Commitments and Contingencies
Stockholders' Equity
Common Stock, $0.01 Par, 1,280,000,000 Shares Authorized and 205,807 205,804
580,740,395 Shares Issued at March 31, 2019 and 580,408,117
Shares Issued at December 31, 2018
Additional Paid in Capital 5,695,197 5,658,794
Accumulated Other Comprehensive Loss (2,869) (1,358)
Retained Earnings 14,050,676 13,543,130
Common Stock Held in Treasury, 425,637 Shares at March 31, 2019 (45,014) (42,182)
and 385,042 Shares at December 31, 2018
Total Stockholders' Equity 19,903,797 19,364,188
Total Liabilities and Stockholders' Equity $
35,663,535 $
33,934,474
EOG RESOURCES, INC.
Summary Statements of Cash Flows
---
(Unaudited; in thousands)
Three Months Ended
March 31,
2019 2018
---
Cash Flows from Operating Activities
Reconciliation of Net Income to Net Cash Provided by Operating Activities:
Net Income $
635,426 $
638,589
Items Not Requiring (Providing) Cash
Depreciation, Depletion and Amortization 879,595 748,591
Impairments 72,356 64,609
Stock-Based Compensation Expenses 39,087 35,486
Deferred Income Taxes 106,324 171,362
Losses on Asset Dispositions, Net 3,836 14,969
Other, Net 2,952 2,013
Dry Hole Costs 94
Mark-to-Market Commodity Derivative Contracts
Total Losses 20,580 59,771
Net Cash Received from (Payments for) Settlements of Commodity Derivative Contracts 20,846 (21,965)
Other, Net 976 (478)
Changes in Components of Working Capital and Other Assets and Liabilities
Accounts Receivable (308,996) (109,654)
Inventories (18,979) (106,799)
Accounts Payable 194,082 53,652
Accrued Taxes Payable 114,998 21,950
Other Assets (6,935) (8,863)
Other Liabilities (54,092) (29,055)
Changes in Components of Working Capital Associated with Investing and Financing (94,381) 17,988
Activities
Net Cash Provided by Operating Activities 1,607,769 1,552,166
Investing Cash Flows
Additions to Oil and Gas Properties (1,939,473) (1,365,111)
Additions to Other Property, Plant and Equipment (60,963) (76,100)
Proceeds from Sales of Assets 15,049 2,829
Changes in Components of Working Capital Associated with Investing Activities 94,381 (18,045)
Net Cash Used in Investing Activities (1,891,006) (1,456,427)
Financing Cash Flows
Dividends Paid (127,546) (97,026)
Treasury Stock Purchased (6,248) (16,776)
Proceeds from Stock Options Exercised and Employee Stock Purchase Plan 403 1,453
Repayment of Capital Lease Obligation (3,190) (1,671)
Changes in Components of Working Capital Associated with Financing Activities 57
Net Cash Used in Financing Activities (136,581) (113,963)
Effect of Exchange Rate Changes on Cash (6) 90
Decrease in Cash and Cash Equivalents (419,824) (18,134)
Cash and Cash Equivalents at Beginning of Period 1,555,634 834,228
Cash and Cash Equivalents at End of Period $
1,135,810 $
816,094
EOG RESOURCES, INC.
First Quarter 2019 Well Results by Play
---
(Unaudited)
Wells On Line Initial Gross 30-Day Average Production Rate
Gross
Net
Lateral
Crude Oil and
Natural Gas
Natural Gas
Crude Oil
Length Condensate Liquids (MMcfd) (A) Equivalent
(ft) (Bbld) (A) (Bbld) (A) (Boed) (B)
Delaware Basin
Wolfcamp 61 53 7,800 1,950 400 3.8 2,950
Bone Spring 12 10 5,500 1,500 300 1.9 2,100
Leonard 5 5 7,600 1,650 650 4.3 3,000
South Texas Eagle Ford 93 89 8,300 1,350 150 0.8 1,650
Powder River Basin
Turner 5 4 9,800 650 650 1.0 1,450
DJ Basin Codell 25 13 9,600 600 50 0.3 700
Anadarko Basin Woodford Oil Window 4 3 9,700 900 100 0.6 1,100
(A) Barrels per day or million
cubic feet per day, as
applicable.
(B) Barrels of oil equivalent
per day; includes crude oil
and condensate, natural gas
liquids and natural gas.
Crude oil equivalent volumes
are determined using a ratio
of 1.0 barrel of crude oil and
condensate or natural gas
liquids to 6.0 thousand cubic
feet of natural gas.
EOG RESOURCES, INC.
Quantitative Reconciliation of Adjusted Net Income (Non-GAAP)
---
To Net Income (GAAP)
---
(Unaudited; in thousands, except per share data)
The following chart adjusts the three-month periods ended March 31, 2019 and 2018 reported Net Income (GAAP) to reflect actual net cash received from (payments for) settlements of commodity derivative contracts by eliminating the unrealized mark-to-market losses from these transactions, to eliminate the net losses on asset dispositions in 2019 and 2018, to
add back impairment charges related to certain of EOG's assets in 2019 and 2018 and to eliminate certain adjustments in 2018 related to the 2017 U.S. tax reform. EOG believes this presentation may be useful to investors who follow the practice of some industry analysts who adjust reported company earnings to match hedge realizations to production settlement
months and make certain other adjustments to exclude non-recurring and certain other items. EOG management uses this information for purposes of comparing its financial performance with the financial performance of other companies in the industry.
Three Months Ended
Three Months Ended
March 31, 2019
March 31, 2018
---
Income Diluted Income Diluted
Before
Tax After Earnings Before
Tax After Earnings
Tax Impact
Tax per Share
Tax Impact
Tax per Share
---
Reported Net Income (GAAP) $827,236 $(191,810) $635,426 $1.10 $813,359 $(174,770) $638,589 $1.10
Adjustments:
Losses on Mark-to-Market Commodity 20,580 (4,533) 16,047 0.02 59,771 (13,166) 46,605 0.08
Derivative Contracts
Net Cash Received from (Payments for) 20,846 (4,592) 16,254 0.03 (21,965) 4,838 (17,127) (0.03)
Settlements of Commodity Derivative
Contracts
Add: Losses on Asset Dispositions 3,836 (736) 3,100 0.01 14,969 (3,324) 11,645 0.02
Add: Impairments 23,745 (5,230) 18,515 0.03 20,876 (4,598) 16,278 0.03
Less: Tax Reform Impact - (6,524) (6,524) (0.01)
Adjustments to Net Income 69,007 (15,091) 53,916 0.09 73,651 (22,774) 50,877 0.09
Adjusted Net Income (Non-GAAP) $896,243 $(206,901) $689,342 $1.19 $887,010 $(197,544) $689,466 $1.19
Average Number of Common Shares (GAAP)
Basic 577,207 575,775
Diluted 580,222 579,726
EOG RESOURCES, INC.
Quantitative Reconciliation of Discretionary Cash Flow (Non-GAAP)
---
To Net Cash Provided By Operating Activities (GAAP)
---
(Unaudited; in thousands)
Calculation of Free Cash Flow (Non-GAAP)
---
(Unaudited; in thousands)
The following chart reconciles the three-month periods ended March 31, 2019 and 2018 Net Cash Provided by Operating Activities (GAAP) to Discretionary Cash Flow (Non-GAAP). EOG believes this presentation may be useful to investors who follow the
practice of some industry analysts who adjust Net Cash Provided by Operating Activities for Exploration Costs (excluding Stock-Based Compensation Expenses), Other Non-Current Income Taxes - Net Receivable, Changes in Components of Working
Capital and Other Assets and Liabilities, and Changes in Components of Working Capital Associated with Investing and Financing Activities. EOG defines Free Cash Flow (Non-GAAP) for a given period as Discretionary Cash Flow (Non-GAAP) (see below
reconciliation) for such period less the total cash capital expenditures excluding acquisitions incurred (Non-GAAP) during such period and dividends paid (GAAP) during such period, as is illustrated below for the three months ended March 31, 2019
and 2018. EOG management uses this information for comparative purposes within the industry.
Three Months Ended
March 31,
2019 2018
Net Cash Provided by Operating Activities (GAAP) $
1,607,769 $
1,552,166
Adjustments:
Exploration Costs (excluding Stock-Based Compensation Expenses) 29,787 27,936
Other Non-Current Income Taxes - Net Receivable 102,918 118,921
Changes in Components of Working Capital and Other Assets
and Liabilities
Accounts Receivable 308,996 109,654
Inventories 18,979 106,799
Accounts Payable (194,082) (53,652)
Accrued Taxes Payable (114,998) (21,950)
Other Assets 6,935 8,863
Other Liabilities 54,092 29,055
Changes in Components of Working Capital Associated with
Investing and Financing Activities 94,381 (17,988)
Discretionary Cash Flow (Non-GAAP) $
1,914,777 $
1,859,804
Discretionary Cash Flow (Non-GAAP) - Percentage Increase 3%
Discretionary Cash Flow (Non-GAAP) $
1,914,777 $
1,859,804
Less:
Total Cash Expenditures Excluding Acquisitions (Non-GAAP)(a) (1,732,476) (1,478,097)
Dividends Paid (GAAP) (127,546) (97,026)
Free Cash Flow (Non-GAAP) $
54,755 $
284,681
(a) See below reconciliation of Total Expenditures (GAAP) to Total Cash Expenditures Excluding Acquisitions (Non-GAAP) for the three-month periods ended March 31, 2019 and 2018:
Total Expenditures (GAAP) $
2,101,919 $
1,546,641
Less:
Asset Retirement Costs (5,156) (12,100)
Non-Cash Expenditures of Other Property, Plant and Equipment (47,635)
Non-Cash Acquisition Costs of Unproved Properties (43,481) (8,809)
Acquisition Costs of Proved Properties (320,806)
Total Cash Expenditures Excluding Acquisitions (Non-GAAP) $
1,732,476 $
1,478,097
EOG RESOURCES, INC.
Quantitative Reconciliation of Adjusted Earnings Before Interest Expense, Net,
---
Income Taxes, Depreciation, Depletion and Amortization, Exploration Costs,
---
Dry Hole Costs, Impairments and Additional Items (Adjusted EBITDAX)
---
(Non-GAAP) to Net Income (GAAP)
---
(Unaudited; in thousands)
The following chart adjusts the three-month periods ended March 31, 2019 and 2018 reported Net Income (GAAP) to Earnings Before Interest Expense (Net), Income Taxes (Income Tax Provision), Depreciation, Depletion and Amortization,
Exploration Costs, Dry Hole Costs and Impairments (EBITDAX) (Non-GAAP) and further adjusts such amount to reflect actual net cash received from (payments for) settlements of commodity derivative contracts by eliminating the unrealized
mark-to-market (MTM) losses from these transactions and to eliminate the losses on asset dispositions (Net). EOG believes this presentation may be useful to investors who follow the practice of some industry analysts who adjust reported
Net Income (GAAP) to add back Interest Expense (Net), Income Taxes (Income Tax Provision), Depreciation, Depletion and Amortization, Exploration Costs, Dry Hole Costs and Impairments and further adjust such amount to match realizations to
production settlement months and make certain other adjustments to exclude non-recurring and certain other items. EOG management uses this information for purposes of comparing its financial performance with the financial performance of
other companies in the industry.
Three Months Ended
March 31,
2019 2018
Net Income (GAAP) $
635,426 $
638,589
Adjustments:
Interest Expense, Net 54,906 61,956
Income Tax Provision 191,810 174,770
Depreciation, Depletion and Amortization 879,595 748,591
Exploration Costs 36,324 34,836
Dry Hole Costs 94
Impairments 72,356 64,609
EBITDAX (Non-GAAP) 1,870,511 1,723,351
Total Losses on MTM Commodity Derivative Contracts 20,580 59,771
Net Cash Received from (Payments for) Settlements of Commodity 20,846 (21,965)
Derivative Contracts
Losses on Asset Dispositions, Net 3,836 14,969
Adjusted EBITDAX (Non-GAAP) $
1,915,773 $
1,776,126
Adjusted EBITDAX (Non-GAAP) - Percentage Increase 8%
EOG RESOURCES, INC.
Quantitative Reconciliation of Net Debt (Non-GAAP) and Total
---
Capitalization (Non-GAAP) as Used in the Calculation of
---
The Net Debt-to-Total Capitalization Ratio (Non-GAAP) to
---
Current and Long-Term Debt (GAAP) and Total Capitalization (GAAP)
---
(Unaudited; in millions, except ratio data)
The following chart reconciles Current and Long-Term Debt (GAAP) to Net Debt (Non-GAAP) and Total Capitalization (GAAP) to Total Capitalization (Non-GAAP), as used in the Net Debt-to-Total
Capitalization ratio calculation. A portion of the cash is associated with international subsidiaries; tax considerations may impact debt paydown. EOG believes this presentation may be useful to
investors who follow the practice of some industry analysts who utilize Net Debt and Total Capitalization (Non-GAAP) in their Net Debt-to-Total Capitalization ratio calculation. EOG management uses
this information for comparative purposes within the industry.
At At
March 31, December 31,
2019 2018
---
Total Stockholders' Equity - (a) $
19,904 $
19,364
Current and Long-Term Debt (GAAP) - (b) 6,081 6,083
Less: Cash (1,136) (1,556)
Net Debt (Non-GAAP) - (c) 4,945 4,527
Total Capitalization (GAAP) - (a) + (b) $
25,985 $
25,447
Total Capitalization (Non-GAAP) - (a) + (c) $
24,849 $
23,891
Debt-to-Total Capitalization (GAAP) - (b) / [(a) + (b)] 23% 24%
Net Debt-to-Total Capitalization (Non-GAAP) - (c) / [(a) + (c)] 20% 19%
EOG RESOURCES, INC.
Crude Oil and Natural Gas Financial Commodity
---
Derivative Contracts
---
EOG accounts for financial commodity derivative contracts using the mark-to-market accounting method. Prices received by EOG for its crude oil production generally vary from NYMEX West Texas Intermediate prices
due to adjustments for delivery location (basis) and other factors. EOG has entered into crude oil basis swap contracts in order to fix the differential between pricing in Midland, Texas, and Cushing, Oklahoma
(Midland Differential). Presented below is a comprehensive summary of EOG's Midland Differential basis swap contracts through April 26, 2019. The weighted average price differential expressed in $/Bbl represents
the amount of reduction to Cushing, Oklahoma, prices for the notional volumes expressed in Bbld covered by the basis swap contracts.
Midland Differential Basis Swap Contracts
---
Weighted
Average Price
Volume
Differential
(Bbld)
($/Bbl)
2019
---
January 1, 2019 through May 31, 2019 (closed) 20,000 $1.075
June 1, 2019 through December 31, 2019 20,000 1.075
EOG has also entered into crude oil basis swap contracts in order to fix the differential between pricing in the U.S. Gulf Coast and Cushing, Oklahoma (Gulf Coast Differential). Presented below is a comprehensive
summary of EOG's Gulf Coast Differential basis swap contracts through April 26, 2019. The weighted average price differential expressed in $/Bbl represents the amount of addition to Cushing, Oklahoma, prices for
the notional volumes expressed in Bbld covered by the basis swap contracts.
Gulf Coast Differential Basis Swap Contracts
---
Weighted
Average Price
Volume
Differential
(Bbld)
($/Bbl)
2019
---
January 1, 2019 through May 31, 2019 (closed) 13,000 $5.572
June 1, 2019 through December 31, 2019 13,000 5.572
Presented below is a comprehensive summary of EOG's crude oil price swap contracts through April 26, 2019, with notional volumes expressed in Bbld and prices expressed in $/Bbl.
Crude Oil Price Swap Contracts
---
Weighted
Volume
Average Price
(Bbld)
($/Bbl)
2019
---
April 2019 25,000 $60.00
May 1, 2019 through December 31, 2019 150,000 62.50
Presented below is a comprehensive summary of EOG's natural gas price swap contracts through April 26, 2019, with notional volumes expressed in MMBtud and prices expressed in $/MMBtu.
Natural Gas Price Swap Contracts
---
Weighted
Volume
Average Price
(MMBtud)
($/MMBtu)
2019
---
April 1, 2019 through May 31, 2019 (closed) 250,000 $2.90
June 1, 2019 through October 31, 2019 250,000 2.90
Definitions
---
Bbld
Barrels per day
$/Bbl
Dollars per barrel
MMBtud
Million British thermal units per day
$/MMBtu
Dollars per million British thermal units
NYMEX
U.S. New York Mercantile Exchange
EOG RESOURCES, INC.
Direct After-Tax Rate of Return (ATROR)
---
The calculation of our direct after-tax rate of return (ATROR) with respect to our capital expenditure program for a particular play or well is based on the estimated
recoverable reserves ("net" to EOG's interest) for all wells in such play or such well (as the case may be), the estimated net present value (NPV) of the future net
cash flows from such reserves (for which we utilize certain assumptions regarding future commodity prices and operating costs) and our direct net costs incurred in
drilling or acquiring (as the case may be) such wells or well (as the case may be). As such, our direct ATROR with respect to our capital expenditures for a particular
play or well cannot be calculated from our consolidated financial statements.
Direct ATROR
---
Based on Cash Flow and Time Value of Money
- Estimated future commodity prices and operating costs
- Costs incurred to drill, complete and equip a well, including facilities
Excludes Indirect Capital
- Gathering and Processing and other Midstream
- Land, Seismic, Geological and Geophysical
Payback ~12 Months on 100% Direct ATROR Wells
First Five Years ~1/2 Estimated Ultimate Recovery Produced but ~3/4 of NPV Captured
Return on Equity / Return on Capital Employed
---
Based on GAAP Accrual Accounting
Includes All Indirect Capital and Growth Capital for Infrastructure
- Eagle Ford, Bakken, Permian Facilities
- Gathering and Processing
Includes Legacy Gas Capital and Capital from Mature Wells
EOG RESOURCES, INC.
Quantitative Reconciliation of After-Tax Net Interest Expense (Non-GAAP), Adjusted Net Income (Non-GAAP),
---
Net Debt (Non-GAAP) and Total Capitalization (Non-GAAP) as Used in the Calculations of Return on Capital
---
Employed (Non-GAAP) and Return on Equity (Non-GAAP) to Net Interest Expense (GAAP), Net Income
---
(GAAP), Current and Long-Term Debt (GAAP) and Total Capitalization (GAAP), Respectively
---
(Unaudited; in millions, except ratio data)
The following chart reconciles Net Interest Expense (GAAP), Net Income (GAAP), Current and Long-Term Debt (GAAP) and Total Capitalization (GAAP) to After-Tax Net Interest Expense (Non-GAAP), Adjusted Net Income (Non-GAAP), Net Debt (Non-GAAP) and Total Capitalization
(Non-GAAP), respectively, as used in the Return on Capital Employed (ROCE) and Return on Equity (ROE) calculations. EOG believes this presentation may be useful to investors who follow the practice of some industry analysts who utilize After-Tax Net Interest Expense,
Adjusted Net Income, Net Debt and Total Capitalization (Non-GAAP) in their ROCE and ROE calculations. EOG management uses this information for purposes of comparing its financial performance with the financial performance of other companies in the industry.
2018 2017
Return on Capital Employed (ROCE) (Non-GAAP)
---
Net Interest Expense (GAAP) $
245
Tax Benefit Imputed (based on 21%) (51)
After-Tax Net Interest Expense (Non-GAAP) - (a) $
194
Net Income (GAAP) - (b) $
3,419
Adjustments to Net Income, Net of Tax (See Accompanying Schedule) (201) (1)
Adjusted Net Income (Non-GAAP) - (c) $
3,218
Total Stockholders' Equity - (d) $
19,364 $
16,283
Average Total Stockholders' Equity * - (e) $
17,824
Current and Long-Term Debt (GAAP) - (f) $
6,083 $
6,387
Less: Cash (1,556) (834)
Net Debt (Non-GAAP) - (g) $
4,527 $
5,553
Total Capitalization (GAAP) - (d) + (f) $
25,447 $
22,670
Total Capitalization (Non-GAAP) - (d) + (g) $
23,891 $
21,836
Average Total Capitalization (Non-GAAP) * - (h) $
22,864
ROCE (GAAP Net Income) - [(a) + (b)] / (h) 15.8%
ROCE (Non-GAAP Adjusted Net Income) - [(a) + (c)] / (h) 14.9%
Return on Equity (ROE)
---
ROE (GAAP Net Income) - (b) / (e) 19.2%
ROE (Non-GAAP Adjusted Net Income) - (c) / (e) 18.1%
* Average for the current and immediately preceding year
Adjustments to Net Income (GAAP)
---
(1) See below schedule for detail of adjustments to Net Income (GAAP) in 2018:
Year Ended December 31, 2018
---
Before
Income Tax After
Tax
Impact Tax
Adjustments:
Add: Mark-to-Market Commodity Derivative Contracts Impact $
(93) $
20 $
(73)
Add: Impairments of Certain Assets 153 (34) 119
Less: Net Gains on Asset Dispositions (175) 38 (137)
Less: Tax Reform Impact (110) (110)
Total $
(115) $
(86) $
(201)
EOG RESOURCES, INC.
Quantitative Reconciliation of After-Tax Net Interest Expense (Non-GAAP), Net Debt (Non-GAAP) and Total
---
Capitalization (Non-GAAP) as Used in the Calculation of Return on Capital Employed (Non-GAAP) to Net Interest
---
Expense (GAAP), Current and Long-Term Debt (GAAP) and Total Capitalization (GAAP), Respectively
---
(Unaudited; in millions, except ratio data)
The following chart reconciles Net Interest Expense (GAAP), Current and Long-Term Debt (GAAP) and Total Capitalization (GAAP) to After-Tax Net Interest Expense (Non-GAAP), Net Debt (Non-GAAP) and Total Capitalization (Non-GAAP), respectively, as used in the Return on Capital Employed (ROCE) (Non-
GAAP) calculation. EOG believes this presentation may be useful to investors who follow the practice of some industry analysts who utilize After-Tax Net Interest Expense, Net Debt and Total Capitalization (Non-GAAP) in their ROCE calculation. EOG management uses this information for purposes of
comparing its financial performance with the financial performance of other companies in the industry.
2017 2016 2015 2014 2013
Return on Capital Employed (ROCE) (Non-GAAP)
---
(Calculated Using GAAP Net Income)
---
Net Interest Expense (GAAP) $
274 $
282 $
237 $
201 $
235
Tax Benefit Imputed (based on 35%) (96) (99) (83) (70) (82)
After-Tax Net Interest Expense (Non-GAAP) - (a) $
178 $
183 $
154 $
131 $
153
Net Income (Loss) (GAAP) - (b) $
2,583 $
(1,097) $
(4,525) $
2,915 $
2,197
Total Stockholders' Equity - (d) $
16,283 $
13,982 $
12,943 $
17,713 $
15,418
Average Total Stockholders' Equity * - (e) $
15,133 $
13,463 $
15,328 $
16,566 $
14,352
Current and Long-Term Debt (GAAP) - (f) $
6,387 $
6,986 $
6,655 $
5,906 $
5,909
Less: Cash (834) (1,600) (719) (2,087) (1,318)
Net Debt (Non-GAAP) - (g) $
5,553 $
5,386 $
5,936 $
3,819 $
4,591
Total Capitalization (GAAP) - (d) + (f) $
22,670 $
20,968 $
19,598 $
23,619 $
21,327
Total Capitalization (Non-GAAP) - (d) + (g) $
21,836 $
19,368 $
18,879 $
21,532 $
20,009
Average Total Capitalization (Non-GAAP) * - (h) $
20,602 $
19,124 $
20,206 $
20,771 $
19,365
ROCE (GAAP Net Income) - [(a) + (b)] / (h) 13.4% -4.8% -21.6% 14.7% 12.1%
Return on Equity (ROE) (GAAP)
---
ROE (GAAP Net Income) - (b) / (e) 17.1% -8.1% -29.5% 17.6% 15.3%
* Average for the current and immediately preceding year
EOG RESOURCES, INC.
Quantitative Reconciliation of After-Tax Net Interest Expense (Non-GAAP), Net Debt (Non-GAAP) and Total
---
Capitalization (Non-GAAP) as Used in the Calculation of Return on Capital Employed (Non-GAAP) to Net Interest
---
Expense (GAAP), Current and Long-Term Debt (GAAP) and Total Capitalization (GAAP), Respectively
---
(Unaudited; in millions, except ratio data)
The following chart reconciles Net Interest Expense (GAAP), Current and Long-Term Debt (GAAP) and Total Capitalization (GAAP) to After-Tax Net Interest Expense (Non-GAAP), Net Debt (Non-GAAP) and Total Capitalization (Non-GAAP), respectively, as used in the Return on Capital Employed (ROCE) (Non-
GAAP) calculation. EOG believes this presentation may be useful to investors who follow the practice of some industry analysts who utilize After-Tax Net Interest Expense, Net Debt and Total Capitalization (Non-GAAP) in their ROCE calculation. EOG management uses this information for purposes of
comparing its financial performance with the financial performance of other companies in the industry.
2012 2011 2010 2009 2008
Return on Capital Employed (ROCE) (Non-GAAP)
---
(Calculated Using GAAP Net Income)
---
Net Interest Expense (GAAP) $
214 $
210 $
130 $
101 $
52
Tax Benefit Imputed (based on 35%) (75) (74) (46) (35) (18)
After-Tax Net Interest Expense (Non-GAAP) - (a) $
139 $
136 $
84 $
66 $
34
Net Income (Loss) (GAAP) - (b) $
570 $
1,091 $
161 $
547 $
2,437
Total Stockholders' Equity - (d) $
13,285 $
12,641 $
10,232 $
9,998 $
9,015
Average Total Stockholders' Equity * - (e) $
12,963 $
11,437 $
10,115 $
9,507 $
8,003
Current and Long-Term Debt (GAAP) - (f) $
6,312 $
5,009 $
5,223 $
2,797 $
1,897
Less: Cash (876) (616) (789) (686) (331)
Net Debt (Non-GAAP) - (g) $
5,436 $
4,393 $
4,434 $
2,111 $
1,566
Total Capitalization (GAAP) - (d) + (f) $
19,597 $
17,650 $
15,455 $
12,795 $
10,912
Total Capitalization (Non-GAAP) - (d) + (g) $
18,721 $
17,034 $
14,666 $
12,109 $
10,581
Average Total Capitalization (Non-GAAP) * - (h) $
17,878 $
15,850 $
13,388 $
11,345 $
9,351
ROCE (GAAP Net Income) - [(a) + (b)] / (h) 4.0% 7.7% 1.8% 5.4% 26.4%
Return on Equity (ROE) (GAAP)
---
ROE (GAAP Net Income) - (b) / (e) 4.4% 9.5% 1.6% 5.8% 30.5%
* Average for the current and immediately preceding year
EOG RESOURCES, INC.
Quantitative Reconciliation of After-Tax Net Interest Expense (Non-GAAP), Net Debt (Non-GAAP) and Total
---
Capitalization (Non-GAAP) as Used in the Calculation of Return on Capital Employed (Non-GAAP) to Net Interest
---
Expense (GAAP), Current and Long-Term Debt (GAAP) and Total Capitalization (GAAP), Respectively
---
(Unaudited; in millions, except ratio data)
The following chart reconciles Net Interest Expense (GAAP), Current and Long-Term Debt (GAAP) and Total Capitalization (GAAP) to After-Tax Net Interest Expense (Non-GAAP), Net Debt (Non-GAAP) and Total Capitalization (Non-GAAP), respectively, as used in the Return on Capital Employed (ROCE) (Non-
GAAP) calculation. EOG believes this presentation may be useful to investors who follow the practice of some industry analysts who utilize After-Tax Net Interest Expense, Net Debt and Total Capitalization (Non-GAAP) in their ROCE calculation. EOG management uses this information for purposes of
comparing its financial performance with the financial performance of other companies in the industry.
2007 2006 2005 2004 2003
Return on Capital Employed (ROCE) (Non-GAAP)
---
(Calculated Using GAAP Net Income)
---
Net Interest Expense (GAAP) $
47 $
43 $
63 $
63 $
59
Tax Benefit Imputed (based on 35%) (16) (15) (22) (22) (21)
After-Tax Net Interest Expense (Non-GAAP) - (a) $
31 $
28 $
41 $
41 $
38
Net Income (Loss) (GAAP) - (b) $
1,090 $
1,300 $
1,260 $
625 $
430
Total Stockholders' Equity - (d) $
6,990 $
5,600 $
4,316 $
2,945 $
2,223
Average Total Stockholders' Equity * - (e) $
6,295 $
4,958 $
3,631 $
2,584 $
1,948
Current and Long-Term Debt (GAAP) - (f) $
1,185 $
733 $
985 $
1,078 $
1,109
Less: Cash (54) (218) (644) (21) (4)
Net Debt (Non-GAAP) - (g) $
1,131 $
515 $
341 $
1,057 $
1,105
Total Capitalization (GAAP) - (d) + (f) $
8,175 $
6,333 $
5,301 $
4,023 $
3,332
Total Capitalization (Non-GAAP) - (d) + (g) $
8,121 $
6,115 $
4,657 $
4,002 $
3,328
Average Total Capitalization (Non-GAAP) * - (h) $
7,118 $
5,386 $
4,330 $
3,665 $
3,068
ROCE (GAAP Net Income) - [(a) + (b)] / (h) 15.7% 24.7% 30.0% 18.2% 15.3%
Return on Equity (ROE) (GAAP)
---
ROE (GAAP Net Income) - (b) / (e) 17.3% 26.2% 34.7% 24.2% 22.1%
* Average for the current and immediately preceding year
EOG RESOURCES, INC.
Quantitative Reconciliation of After-Tax Net Interest Expense (Non-GAAP), Net Debt (Non-GAAP) and Total
---
Capitalization (Non-GAAP) as Used in the Calculation of Return on Capital Employed (Non-GAAP) to Net Interest
---
Expense (GAAP), Current and Long-Term Debt (GAAP) and Total Capitalization (GAAP), Respectively
---
(Unaudited; in millions, except ratio data)
The following chart reconciles Net Interest Expense (GAAP), Current and Long-Term Debt (GAAP) and Total Capitalization (GAAP) to After-Tax Net Interest Expense (Non-GAAP), Net Debt (Non-GAAP) and Total Capitalization (Non-GAAP), respectively, as used in the Return on Capital Employed (ROCE) (Non-
GAAP) calculation. EOG believes this presentation may be useful to investors who follow the practice of some industry analysts who utilize After-Tax Net Interest Expense, Net Debt and Total Capitalization (Non-GAAP) in their ROCE calculation. EOG management uses this information for purposes of
comparing its financial performance with the financial performance of other companies in the industry.
2002 2001 2000 1999 1998
Return on Capital Employed (ROCE) (Non-GAAP)
---
(Calculated Using GAAP Net Income)
---
Net Interest Expense (GAAP) $
60 $
45 $
61 $
62
Tax Benefit Imputed (based on 35%) (21) (16) (21) (22)
After-Tax Net Interest Expense (Non-GAAP) - (a) $
39 $
29 $
40 $
40
Net Income (Loss) (GAAP) - (b) $
87 $
399 $
397 $
569
Total Stockholders' Equity - (d) $
1,672 $
1,643 $
1,381 $
1,130 $
1,280
Average Total Stockholders' Equity * - (e) $
1,658 $
1,512 $
1,256 $
1,205
Current and Long-Term Debt (GAAP) - (f) $
1,145 $
856 $
859 $
990 $
1,143
Less: Cash (10) (3) (20) (25) (6)
Net Debt (Non-GAAP) - (g) $
1,135 $
853 $
839 $
965 $
1,137
Total Capitalization (GAAP) - (d) + (f) $
2,817 $
2,499 $
2,240 $
2,120 $
2,423
Total Capitalization (Non-GAAP) - (d) + (g) $
2,807 $
2,496 $
2,220 $
2,095 $
2,417
Average Total Capitalization (Non-GAAP) * - (h) $
2,652 $
2,358 $
2,158 $
2,256
ROCE (GAAP Net Income) - [(a) + (b)] / (h) 4.8% 18.2% 20.2% 27.0%
Return on Equity (ROE) (GAAP)
---
ROE (GAAP Net Income) - (b) / (e) 5.2% 26.4% 31.6% 47.2%
* Average for the current and immediately preceding year
EOG RESOURCES, INC.
Cash Operating Expenses per Barrel of Oil Equivalent (Boe)
---
(Unaudited; in thousands, except per Boe amounts)
1st Quarter
2019 2018
Cash Operating Expenses (GAAP)*
---
Lease and Well $336,291 $300,064
Transportation Costs 176,522 176,957
General and Administrative 106,672 94,698
Cash Operating Expenses 619,485 571,719
Less: Non-GAAP Adjustments
Adjusted Cash Operating Expenses (Non-GAAP) - (a) $619,485 $571,719
Volume - Thousand Barrels of Oil Equivalent - (b) 69,623 59,394
Adjusted Cash Operating Expenses Per Boe (Non-GAAP) - (a) / (b) $8.90 (c) $9.63 (d)
Adjusted Cash Operating Expenses Per Boe (Non-GAAP) -
Percentage Decrease
---
1Q19 compared to 1Q18 - [(c) - (d)] / (d) -8%
* Includes stock compensation expense and other non-cash items.
EOG RESOURCES, INC.
Cash Operating Expenses per Barrel of Oil Equivalent (Boe)
---
(Unaudited; in thousands, except per Boe amounts)
Year Ended
December 31,
2018 2017 2016 2015 2014
Cash Operating Expenses (GAAP)*
---
Lease and Well $1,282,678 $1,044,847 $927,452 $1,182,282 $1,416,413
Transportation Costs 746,876 740,352 764,106 849,319 972,176
General and Administrative 426,969 434,467 394,815 366,594 402,010
Cash Operating Expenses 2,456,523 2,219,666 2,086,373 2,398,195 2,790,599
Less: Legal Settlement - Early Leasehold Termination (10,202) (19,355)
Less: Voluntary Retirement Expense (42,054)
Less: Acquisition Costs - Yates Transaction (5,100)
Less: Joint Venture Transaction Costs (3,056)
Less: Joint Interest Billings Deemed Uncollectible (4,528)
Adjusted Cash Operating Expenses (Non-GAAP) - (a) $2,456,523 $2,201,880 $2,039,219 $2,378,840 $2,790,599
Volume - Thousand Barrels of Oil Equivalent - (b) 262,516 222,251 204,929 208,862 217,073
Adjusted Cash Operating Expenses Per Boe (Non-GAAP) - (a) / (b) $9.36 (c) $9.91 (d) $9.95 (e) $11.39 (f) $12.86 (g)
Adjusted Cash Operating Expenses Per Boe (Non-GAAP) -
Percentage Decrease
---
2018 compared to 2017 - [(c) - (d)] / (d) -6%
2018 compared to 2016 - [(c) - (e)] / (e) -6%
2018 compared to 2015 - [(c) - (f)] / (f) -18%
2018 compared to 2014 - [(c) - (g)] / (g) -27%
* Includes stock compensation expense and other non-cash items.
EOG RESOURCES, INC.
Cost per Barrel of Oil Equivalent (Boe)
---
(Unaudited; in thousands, except per Boe amounts)
Three Months Ended
March 31,
2019
Volume - Thousand Barrels of Oil Equivalent - (a) 69,623
Crude Oil and Condensate $2,200,403
Natural Gas Liquids 218,638
Natural Gas 334,972
Total Wellhead Revenues - (b) $2,754,013
Operating Costs
Lease and Well $336,291
Transportation Costs 176,522
Gathering and Processing Costs 111,295
General and Administrative 106,672
Taxes Other Than Income 192,906
Interest Expense, Net 54,906
Total Cash Operating Cost (excluding $978,592
DD&A and Total Exploration Costs) - (c)
Depreciation, Depletion and Amortization (DD&A) 879,595
Total Operating Cost (excluding Total Exploration $1,858,187
Costs) - (d)
Exploration Costs $36,324
Dry Hole Costs 94
Impairments 72,356
Total Exploration Costs 108,774
Less: Impairments (Non-GAAP) (23,745)
Total Exploration Costs (Non-GAAP) $85,029
Total Operating Cost (Non-GAAP) (including Total Exploration $1,943,216
Costs) - (e)
Composite Average Wellhead Revenue per Boe - (b) / (a) $39.56
Total Cash Operating Cost per Boe $14.06
(excluding DD&A and Total Exploration Costs) - (c) / (a)
Composite Average Margin per Boe (excluding $25.50
DD&A and Total Exploration Costs) - [(b) / (a) - (c) / (a)]
Total Operating Cost per Boe (excluding Total $26.69
Exploration Costs) - (d) / (a)
Composite Average Margin per Boe (excluding Total $12.87
Exploration Costs) - [(b) / (a) - (d) / (a)]
Total Operating Cost per Boe (Non-GAAP) (including $27.91
Total Exploration Costs) - (e) / (a)
Composite Average Margin per Boe (Non-GAAP) $11.65
(including Total Exploration Costs) - [(b) / (a) - (e) / (a)]
EOG RESOURCES, INC.
Cost per Barrel of Oil Equivalent (Boe)
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(Unaudited; in thousands, except per Boe amounts)
Year Ended
December 31,
2018 2017 2016 2015 2014
Volume - Thousand Barrels of Oil Equivalent - (a) 262,516 222,251 204,929 208,862 217,073
Crude Oil and Condensate $9,517,440 $6,256,396 $4,317,341 $4,934,562 $9,742,480
Natural Gas Liquids 1,127,510 729,561 437,250 407,658 934,051
Natural Gas 1,301,537 921,934 742,152 1,061,038 1,916,386
Total Wellhead Revenues - (b) $11,946,487 $7,907,891 $5,496,743 $6,403,258 $12,592,917
Operating Costs
Lease and Well $1,282,678 $1,044,847 $927,452 $1,182,282 $1,416,413
Transportation Costs 746,876 740,352 764,106 849,319 972,176
Gathering and Processing Costs 436,973 148,775 122,901 146,156 145,800
General and Administrative 426,969 434,467 394,815 366,594 402,010
Less: Voluntary Retirement Expense (42,054)
Less: Acquisition Costs (5,100)
Less: Legal Settlement - Early Leasehold Termination (10,202) (19,355)
Less: Joint Venture Transaction Costs (3,056)
Less: Joint Interest Billings Deemed Uncollectible (4,528)
General and Administrative (Non-GAAP) 426,969 416,681 347,661 347,239 402,010
Taxes Other Than Income 772,481 544,662 349,710 421,744 757,564
Interest Expense, Net 245,052 274,372 281,681 237,393 201,458
Total Cash Operating Cost (Non-GAAP) (excluding $3,911,029 $3,169,689 $2,793,511 $3,184,133 $3,895,421
DD&A and Total Exploration Costs) - (c)
Depreciation, Depletion and Amortization (DD&A) 3,435,408 3,409,387 3,553,417 3,313,644 3,997,041
Total Operating Cost (Non-GAAP) (excluding Total Exploration $7,346,437 $6,579,076 $6,346,928 $6,497,777 $7,892,462
Costs) - (d)
Exploration Costs $148,999 $145,342 $124,953 $149,494 $184,388
Dry Hole Costs 5,405 4,609 10,657 14,746 48,490
Impairments 347,021 479,240 620,267 6,613,546 743,575
Total Exploration Costs 501,425 629,191 755,877 6,777,786 976,453
Less: Impairments (Non-GAAP) (152,671) (261,452) (320,617) (6,307,593) (824,312)
Total Exploration Costs (Non-GAAP) $348,754 $367,739 $435,260 $470,193 $152,141
Total Operating Cost (Non-GAAP) (including Total Exploration $7,695,191 $6,946,815 $6,782,188 $6,967,970 $8,044,603
Costs) - (e)
Composite Average Wellhead Revenue per Boe - (b) / (a) $45.51 $35.58 $26.82 $30.66 $58.01
Total Cash Operating Cost per Boe (Non-GAAP) $14.90 $14.25 $13.64 $15.25 $17.95
(excluding DD&A and Total Exploration Costs) - (c) / (a)
Composite Average Margin per Boe (Non-GAAP) (excluding $30.61 $21.33 $13.18 $15.41 $40.06
DD&A and Total Exploration Costs) - [(b) / (a) - (c) / (a)]
Total Operating Cost per Boe (Non-GAAP) (excluding $27.99 $29.59 $30.98 $31.11 $36.38
Total Exploration Costs) - (d) / (a)
Composite Average Margin per Boe (Non-GAAP) $17.52 $5.99 $(4.16) $(0.45) $21.63
(excluding Total Exploration Costs) - [(b) / (a) - (d) / (a)]
Total Operating Cost per Boe (Non-GAAP) (including $29.32 $31.24 $33.10 $33.36 $37.08
Total Exploration Costs) - (e) / (a)
Composite Average Margin per Boe (Non-GAAP) $16.19 $4.34 $(6.28) $(2.70) $20.93
(including Total Exploration Costs) - [(b) / (a) - (e) / (a)]
EOG RESOURCES, INC.
Second Quarter and Full Year 2019 Forecast and Benchmark Commodity Pricing
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(a) Second Quarter and Full Year 2019 Forecast
The forecast items for the second quarter and full year 2019 set forth below for EOG Resources, Inc. (EOG) are based on current available information and expectations as of the date of the accompanying press release. EOG undertakes no obligation, other than as required by applicable law, to update or revise this
forecast, whether as a result of new information, subsequent events, anticipated or unanticipated circumstances or otherwise. This forecast, which should be read in conjunction with the accompanying press release and EOG's related Current Report on Form 8-K filing, replaces and supersedes any previously issued
guidance or forecast.
(b) Capital Expenditures
The forecast includes expenditures for Exploration and Development Drilling, Facilities, Leasehold Acquisitions, Capitalized Interest, Exploration Costs, Dry Hole Costs and Other Property, Plant and Equipment. The forecast excludes Property Acquisitions, Asset Retirement Costs and any Non-Cash Exchanges.
(c) Benchmark Commodity Pricing
EOG bases United States and Trinidad crude oil and condensate price differentials upon the West Texas Intermediate crude oil price at Cushing, Oklahoma, using the simple average of the NYMEX settlement prices for each trading day within the applicable calendar month.
EOG bases United States natural gas price differentials upon the natural gas price at Henry Hub, Louisiana, using the simple average of the NYMEX settlement prices for the last three trading days of the applicable month.
Estimated Ranges
(Unaudited)
2Q 2019
Full Year 2019
Daily Sales Volumes
Crude Oil and Condensate Volumes (MBbld)
United States 446.5 454.1 442.6 458.2
Trinidad 0.5 0.7 0.4 0.6
Other International 0.0 0.2 0.0 0.2
Total 447.0 455.0 443.0 459.0
Natural Gas Liquids Volumes (MBbld)
Total 122.0 132.0 120.0 140.0
Natural Gas Volumes (MMcfd)
United States 1,025 1,075 1,030 1,130
Trinidad 245 275 250 290
Other International 30 40 30 40
Total 1,300 1,390 1,310 1,460
Crude Oil Equivalent Volumes (MBoed)
United States 739.3 765.3 734.3 786.5
Trinidad 41.3 46.5 42.1 48.9
Other International 5.0 6.9 5.0 6.9
Total 785.6 818.7 781.4 842.3
Capital Expenditures ($MM) $
1,600 $
1,800 $
6,100 $
6,500
Estimated Ranges
(Unaudited)
2Q 2019
Full Year 2019
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Operating Costs
Unit Costs ($/Boe)
Lease and Well $
4.65 $
5.05 $
4.50 $
5.30
Transportation Costs $
2.30 $
2.80 $
2.50 $
3.00
Depreciation, Depletion and Amortization $
12.75 $
13.25 $
12.25 $
13.25
Expenses ($MM)
Exploration and Dry Hole $
30 $
40 $
155 $
195
Impairment $
55 $
65 $
190 $
230
General and Administrative $
110 $
120 $
450 $
490
Gathering and Processing $
110 $
120 $
440 $
480
Capitalized Interest $
7 $
9 $
30 $
35
Net Interest $
50 $
52 $
185 $
195
Taxes Other Than Income (% of Wellhead Revenue) 7.0% 7.4% 7.0% 7.4%
Income Taxes
Effective Rate 21% 26% 21% 26%
Current Tax (Benefit) / Expense ($MM)
$ $
40 $
(10) $
30
Pricing - (Refer to Benchmark Commodity Pricing in text)
Crude Oil and Condensate ($/Bbl)
Differentials
United States - above (below) WTI $
0.50 $
1.50 $
(0.50) $
1.50
Trinidad - above (below) WTI $
(11.00) $
(9.00) $
(11.00) $
(9.00)
Other International - above (below) WTI $
(9.00) $
(5.00) $
(1.00) $
1.00
Natural Gas Liquids
Realizations as % of WTI 32% 40% 32% 40%
Natural Gas ($/Mcf)
Differentials
United States - above (below) NYMEX Henry Hub $
(0.60) $
(0.20) $
(0.80) $
(0.20)
Realizations
Trinidad $
2.60 $
3.00 $
2.50 $
3.20
Other International $
4.20 $
4.70 $
4.00 $
5.00
Definitions
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$/Bbl U.S. Dollars per barrel
$/Boe U.S. Dollars per barrel of oil equivalent
$/Mcf U.S. Dollars per thousand cubic feet
$MM U.S. Dollars in millions
MBbld Thousand barrels per day
MBoed Thousand barrels of oil equivalent per day
MMcfd Million cubic feet per day
NYMEX U.S. New York Mercantile Exchange
WTI West Texas Intermediate
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SOURCE EOG Resources, Inc.
