UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 6, 2020
_______________
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
EOG RESOURCES, INC.
Item 2.02 Results of Operations and Financial Condition.
On August 6, 2020, EOG Resources, Inc. issued a press release announcing second quarter 2020 financial and operational results and third quarter and full year 2020 forecast and benchmark commodity pricing information (see Item 7.01 below). A copy of this release is attached as Exhibit 99.1 to this filing and is incorporated herein by reference. This information shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, and is not incorporated by reference into any filing under the Securities Act of 1933, as amended, or Securities Exchange Act of 1934, as amended.
Item 7.01 Regulation FD Disclosure.
Accompanying the press release announcing second quarter 2020 financial and operational results attached hereto as Exhibit 99.1 is third quarter and full year 2020 forecast and benchmark commodity pricing information for EOG Resources, Inc., which information is incorporated herein by reference. This information shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, and is not incorporated by reference into any filing under the Securities Act of 1933, as amended, or Securities Exchange Act of 1934, as amended.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
104 Cover Page Interactive Data File (formatted as Inline XBRL).
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| EOG RESOURCES, INC. (Registrant) | ||||||||
| Date: August 6, 2020 | By: | /s/ TIMOTHY K. DRIGGERS Timothy K. Driggers Executive Vice President and Chief Financial Officer (Principal Financial Officer and Duly Authorized Officer) | ||||||
3
EXHIBIT 99.1
August 6, 2020
EOG Resources Reports Second Quarter 2020 Results
•Generated Positive Net Cash Provided by Operating Activities and Free Cash Flow
•Produced 7% More Crude Oil for 26% Less Capital Expenditures than Forecast
•Per-Unit Cash Operating Costs Below Targets
•Discovered 500 Bcf Net Natural Gas Resource Potential in Trinidad
•Increased 2020 Well Cost Savings Target to 12% from 8%, Supporting Improved Outlook for Capital Efficiency
HOUSTON – (PR Newswire) – EOG Resources, Inc. (EOG) today reported a second quarter 2020 net loss of $909 million, or $1.57 per share, compared with second quarter 2019 net income of $848 million, or $1.46 per share.
Adjusted non-GAAP net loss for the second quarter 2020 was $131 million, or $0.23 per share, compared with adjusted non-GAAP net income of $762 million, or $1.31 per share, for the same prior year period. Please refer to the attached tables for the reconciliation of non-GAAP measures to GAAP measures.
Second Quarter 2020 Review
Earnings in the second quarter 2020 were lower than the same prior year period due to lower commodity prices and production volumes, partially offset by reduced operating costs. EOG adjusted quickly to the decline in commodity prices – a result of COVID-19’s impact on demand – by slowing drilling activity and lowering both capital expenditures and operating costs. EOG also deferred production by delaying initial production from most new wells and shutting in production from lower-margin, existing wells across multiple basins. Deferring production volumes into higher-priced time periods is a return-based decision designed to maximize net present value.
As a result of EOG’s actions to address the rapid change in market conditions, total company crude oil volumes were 331,100 barrels of oil per day (Bopd), 27 percent below the second quarter 2019. Natural gas liquids production was 23 percent lower and natural gas volumes were 15 percent lower, contributing to 23 percent lower total company daily production.
Net crude oil volumes associated with the shut-in of existing wells peaked at approximately 107,000 Bopd in May, with an average of approximately 73,000 Bopd shut in during the second quarter. The company estimates that approximately 25,000 Bopd will remain shut-in on average during the third quarter 2020. EOG began to return shut-in volumes to production in June, and expects nearly all shut-in wells to begin production before the end of the third quarter. EOG also deferred initial production from most new wells until late June, with ten net new wells contributing less than 1,000 Bopd of production in the second quarter. EOG continues to closely monitor market conditions and retains flexibility to adjust its plans in response to changes in commodity prices.
Lease and well, transportation, and gathering and processing costs each declined in the second quarter compared with the prior year period. Lease and well costs were the largest contributor to the overall cost reduction and were down eight percent on a per-unit basis. Sustainable efficiency improvements and service cost reductions contributed to the savings. These factors also contributed to an improved well cost reduction target of 12 percent for 2020, an increase from the forecast at the start of the year of eight percent.
During the second quarter, EOG received net cash from settlements of financial commodity derivative contracts of $639 million. The company also elected to sell a portion of its crude oil production in May and June under fixed-price agreements to further limit its exposure to commodity price volatility. This contributed to lower average crude oil prices compared with the prior year period and reduced revenues from gathering, processing and marketing relative to marketing costs.
Net cash provided by operating activities was $88 million. Changes in working capital and other assets and liabilities generated a net cash outflow of $1.0 billion in the second quarter 2020 and a net cash inflow of $0.2 billion in the first six months of 2020. Excluding changes in working capital and certain other items, EOG generated $672 million of discretionary cash flow in the second quarter 2020. The company incurred total expenditures of $534 million, including $478 million of capital expenditures before acquisitions, non‐cash transactions and asset retirement costs, resulting in $194 million of free cash flow. Please refer to the attached tables for the reconciliation of non-GAAP measures to GAAP measures.
“EOG generated positive free cash flow in the second quarter, made possible by our ability to quickly reduce activity and cut operating costs in all of our operating areas in response to historically low oil prices,” said William R. “Bill” Thomas, Chairman and Chief Executive Officer. “This is a testament to EOG’s unique culture and the flexibility provided by a decentralized organizational structure. In addition, our focus on safety, innovation, technical advancements and continuous improvement has not wavered. Our talented employees quickly and safely adapted to these volatile conditions, and I want to thank them for their dedication and commitment to EOG.
“Going forward, we will remain flexible and ready to respond to changes in market conditions with the goal of maximizing long-term shareholder value. Our priorities are unchanged: generate high returns on any capital invested and generate free cash flow to fund the dividend and protect our strong balance sheet. The sustainable improvements we are making across the company will support improved capital efficiency in the future, enabling EOG to maintain production at lower oil prices. We are confident EOG will emerge from the downturn an even better company.”
Trinidad Exploration Success
EOG announced significant discoveries from its drilling campaign in Trinidad that have estimated gross resource potential of up to 1.0 trillion cubic feet of natural gas, or 500 billion cubic feet, net to EOG. The discoveries are based on results from four wells drilled in the past year located on three different blocks in shallow water off the southeast coast of Trinidad. The discoveries will support the installation of two new production platforms and development programs for the next three to five years. EOG plans to drill two additional wells over the remainder of 2020. Additional resource potential could be confirmed through further evaluation of the discovery wells and subsequent development. The exploration success supports EOG’s long-term strategy in Trinidad of generating high returns and strong free cash flow through low-cost operations and targeted exploration.
Financial Review
EOG retains exceptional financial flexibility, with strong investment-grade credit ratings, low leverage ratios and ample liquidity. At June 30, 2020, total debt outstanding was $5.7 billion for a debt-to-total capitalization ratio of 22 percent. Considering $2.4 billion of cash on the balance sheet at the end of the second quarter, EOG’s net debt was $3.3 billion for a net debt-to-total capitalization ratio of 14 percent. EOG’s liquidity is further enhanced by $2.0 billion of availability under its senior unsecured revolving credit agreement as of June 30, 2020. For a reconciliation of non-GAAP measures to GAAP measures, please refer to the attached tables.
On April 1, 2020, EOG repaid, with cash on hand, the $500 million aggregate principal amount of its 2.45% Senior Notes due 2020 that matured on that date. In addition, on April 14, 2020, EOG closed its offering of $750 million aggregate principal amount of its 4.375% Senior Notes due 2030 and $750 million aggregate principal amount of its 4.950% Senior Notes due 2050. EOG received aggregate net proceeds from the sale, after deducting underwriting discounts and offering expenses, of approximately $1.48 billion. On June 1, 2020, EOG repaid, with cash on hand, the $500 million aggregate principal amount of its 4.40% Senior Notes due 2020 that matured on that date.
During the second quarter, EOG entered into offsetting contracts to lock-in the value of outstanding crude oil NYMEX WTI price swap contracts and other financial commodity derivative contracts effective from June through December 2020. As of June 30, EOG expects to receive net cash payments of $360 million from the settlement of these contracts over the remainder of 2020.
Second Quarter 2020 Results Webcast
Friday, August 7, 2020, 9:00 a.m. Central time (10:00 a.m. Eastern time)
Webcast will be available on EOG’s 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
Media and Investor Contact
Kimberly Ehmer 713-571-4676
Category: Earnings
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. Because we provide these measures on a forward-looking basis, we cannot reliably or reasonably predict certain of the necessary components of the most directly comparable forward-looking GAAP measures, such as future impairments and future changes in working capital. Accordingly, we are unable to present a quantitative reconciliation of such forward-looking, non-GAAP financial measures to the respective most directly comparable forward-looking GAAP financial measures. Management believes these forward-looking, non-GAAP measures may be a useful tool for the investment community in comparing EOG’s forecasted financial performance to the forecasted financial performance of other companies in the industry. 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 (i) economically develop its acreage in, (ii) produce reserves and achieve anticipated production levels and rates of return from, (iii) decrease or otherwise control its drilling, completion, operating and capital costs related to, and (iv) maximize reserve recovery from, its existing and future crude oil and natural gas exploration and development projects and associated potential and existing drilling locations;
•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;
•security threats, including cybersecurity threats and disruptions to our business and operations from breaches of our information technology systems, physical breaches of our facilities and other infrastructure or breaches of the information technology systems, facilities and infrastructure of third parties with which we transact business;
•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 drilling, completing and operating 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;
•the duration and economic and financial impact of epidemics, pandemics or other public health issues, including the COVID-19 pandemic;
•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; and
•the other factors described under ITEM 1A, Risk Factors, on pages 13 through 23 of EOG’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019 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, 2019, 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.
| Table of Contents |  | ||||
| Second Quarter 2020 | |||||
| Supplemental Financial and Operating Data | Page | ||||
| Income Statements | |||||
| Wellhead Volumes and Prices | |||||
| Balance Sheets | |||||
| Cash Flows Statements | |||||
| Non-GAAP Financial Measures | |||||
| Adjusted Net Income (Loss) | |||||
| Discretionary Cash Flow and Free Cash Flow | |||||
| Total Expenditures | |||||
| EBITDAX and Adjusted EBITDAX | |||||
| Net Debt-to-Total Capitalization Ratio | |||||
| Reserve Replacement Cost Data | |||||
| Financial Commodity Derivative Contracts | |||||
| Direct After-Tax Rate of Return | |||||
| ROCE & ROE | |||||
| Cost per Barrel of Oil Equivalent | |||||
| Quarter and Full Year Guidance | |||||
| Income Statements | | ||||||||||||||||||||||
| In thousands of USD, except per share data (Unaudited) | |||||||||||||||||||||||
| 2Q 2020 | 2Q 2019 | YTD 2020 | YTD 2019 | ||||||||||||||||||||
| Operating Revenues and Other | |||||||||||||||||||||||
| Crude Oil and Condensate | 614,627 | 2,528,866 | 2,680,125 | 4,729,269 | |||||||||||||||||||
| Natural Gas Liquids | 93,909 | 186,374 | 254,444 | 405,012 | |||||||||||||||||||
| Natural Gas | 141,696 | 269,892 | 351,460 | 604,864 | |||||||||||||||||||
Gains (Losses) on Mark-to-Market Commodity Derivative Contracts | (126,362) | 177,300 | 1,079,411 | 156,720 | |||||||||||||||||||
| Gathering, Processing and Marketing | 362,786 | 1,501,386 | 1,401,432 | 2,787,040 | |||||||||||||||||||
| Gains on Asset Dispositions, Net | 13,233 | 8,009 | 29,693 | 4,173 | |||||||||||||||||||
| Other, Net | 3,485 | 25,803 | 24,501 | 69,194 | |||||||||||||||||||
| Total | 1,103,374 | 4,697,630 | 5,821,066 | 8,756,272 | |||||||||||||||||||
| Operating Expenses | |||||||||||||||||||||||
| Lease and Well | 245,346 | 347,281 | 575,005 | 683,572 | |||||||||||||||||||
| Transportation Costs | 151,728 | 174,101 | 360,024 | 350,623 | |||||||||||||||||||
| Gathering and Processing Costs | 96,767 | 112,643 | 225,249 | 223,938 | |||||||||||||||||||
| Exploration Costs | 27,283 | 32,522 | 66,960 | 68,846 | |||||||||||||||||||
| Dry Hole Costs | 87 | 3,769 | 459 | 3,863 | |||||||||||||||||||
| Impairments | 305,415 | 112,130 | 1,878,350 | 184,486 | |||||||||||||||||||
| Marketing Costs | 444,444 | 1,500,915 | 1,553,437 | 2,770,972 | |||||||||||||||||||
| Depreciation, Depletion and Amortization | 706,679 | 957,304 | 1,706,739 | 1,836,899 | |||||||||||||||||||
| General and Administrative | 131,855 | 121,780 | 246,128 | 228,452 | |||||||||||||||||||
| Taxes Other Than Income | 80,319 | 204,414 | 237,679 | 397,320 | |||||||||||||||||||
| Total | 2,189,923 | 3,566,859 | 6,850,030 | 6,748,971 | |||||||||||||||||||
| Operating Income (Loss) | (1,086,549) | 1,130,771 | (1,028,964) | 2,007,301 | |||||||||||||||||||
| Other Income (Expense), Net | (4,500) | 8,503 | 13,608 | 14,115 | |||||||||||||||||||
Income (Loss) Before Interest Expense and Income Taxes | (1,091,049) | 1,139,274 | (1,015,356) | 2,021,416 | |||||||||||||||||||
| Interest Expense, Net | 54,213 | 49,908 | 98,903 | 104,814 | |||||||||||||||||||
| Income (Loss) Before Income Taxes | (1,145,262) | 1,089,366 | (1,114,259) | 1,916,602 | |||||||||||||||||||
| Income Tax Provision (Benefit) | (235,878) | 241,525 | (214,688) | 433,335 | |||||||||||||||||||
| Net Income (Loss) | (909,384) | 847,841 | (899,571) | 1,483,267 | |||||||||||||||||||
| Dividends Declared per Common Share | 0.3750 | 0.2875 | 0.7500 | 0.5075 | |||||||||||||||||||
| Net Income (Loss) Per Share | |||||||||||||||||||||||
| Basic | (1.57) | 1.47 | (1.55) | 2.57 | |||||||||||||||||||
| Diluted | (1.57) | 1.46 | (1.55) | 2.56 | |||||||||||||||||||
| Average Number of Common Shares | |||||||||||||||||||||||
| Basic | 578,719 | 577,460 | 578,581 | 577,333 | |||||||||||||||||||
| Diluted | 578,719 | 580,247 | 578,581 | 580,204 | |||||||||||||||||||
7
| Wellhead Volumes and Prices | | ||||||||||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||||||||||
| 2Q 2020 | 2Q 2019 | % Change | YTD 2020 | YTD 2019 | % Change | ||||||||||||||||||||||||||||||
Crude Oil and Condensate Volumes (MBbld) (A) | |||||||||||||||||||||||||||||||||||
| United States | 330.9 | 454.9 | -27 | % | 406.8 | 445.1 | -9 | % | |||||||||||||||||||||||||||
| Trinidad | 0.1 | 0.6 | -83 | % | 0.3 | 0.7 | -57 | % | |||||||||||||||||||||||||||
Other International (B) | 0.1 | 0.2 | -50 | % | 0.1 | — | |||||||||||||||||||||||||||||
| Total | 331.1 | 455.7 | -27 | % | 407.2 | 445.8 | -9 | % | |||||||||||||||||||||||||||
Average Crude Oil and Condensate Prices ($/Bbl) (C) | |||||||||||||||||||||||||||||||||||
| United States | 20.40 | 61.01 | -67 | % | 36.17 | 58.63 | -38 | % | |||||||||||||||||||||||||||
| Trinidad | 0.60 | 49.56 | -99 | % | 27.75 | 46.62 | -40 | % | |||||||||||||||||||||||||||
Other International (B) | 48.78 | 55.07 | -11 | % | 53.41 | 57.78 | -8 | % | |||||||||||||||||||||||||||
| Composite | 20.40 | 60.99 | -67 | % | 36.16 | 58.61 | -38 | % | |||||||||||||||||||||||||||
Natural Gas Liquids Volumes (MBbld) (A) | |||||||||||||||||||||||||||||||||||
| United States | 101.2 | 131.1 | -23 | % | 131.2 | 125.4 | 5 | % | |||||||||||||||||||||||||||
Other International (B) | — | — | — | — | |||||||||||||||||||||||||||||||
| Total | 101.2 | 131.1 | -23 | % | 131.2 | 125.4 | 5 | % | |||||||||||||||||||||||||||
Average Natural Gas Liquids Prices ($/Bbl) (C) | |||||||||||||||||||||||||||||||||||
| United States | 10.20 | 15.63 | -35 | % | 10.65 | 17.84 | -40 | % | |||||||||||||||||||||||||||
Other International (B) | — | — | — | — | |||||||||||||||||||||||||||||||
| Composite | 10.20 | 15.63 | -35 | % | 10.65 | 17.84 | -40 | % | |||||||||||||||||||||||||||
Natural Gas Volumes (MMcfd) (A) | |||||||||||||||||||||||||||||||||||
| United States | 939 | 1,047 | -10 | % | 1,039 | 1,025 | 1 | % | |||||||||||||||||||||||||||
| Trinidad | 174 | 273 | -36 | % | 188 | 270 | -30 | % | |||||||||||||||||||||||||||
Other International (B) | 34 | 36 | -6 | % | 35 | 37 | -5 | % | |||||||||||||||||||||||||||
| Total | 1,147 | 1,356 | -15 | % | 1,262 | 1,332 | -5 | % | |||||||||||||||||||||||||||
Average Natural Gas Prices ($/Mcf) (C) | |||||||||||||||||||||||||||||||||||
| United States | 1.11 | 1.98 | -44 | % | 1.32 | 2.37 | -44 | % | |||||||||||||||||||||||||||
| Trinidad | 2.13 | 2.69 | -21 | % | 2.15 | 2.80 | -23 | % | |||||||||||||||||||||||||||
Other International (B) | 4.36 | 4.25 | 2 | % | 4.34 | 4.31 | 1 | % | |||||||||||||||||||||||||||
| Composite | 1.36 | 2.19 | -38 | % | 1.53 | 2.51 | -39 | % | |||||||||||||||||||||||||||
Crude Oil Equivalent Volumes (MBoed) (D) | |||||||||||||||||||||||||||||||||||
| United States | 588.5 | 760.4 | -23 | % | 711.1 | 741.3 | -4 | % | |||||||||||||||||||||||||||
| Trinidad | 29.2 | 46.1 | -37 | % | 31.6 | 45.6 | -31 | % | |||||||||||||||||||||||||||
Other International (B) | 5.7 | 6.3 | -10 | % | 6.1 | 6.4 | -5 | % | |||||||||||||||||||||||||||
| Total | 623.4 | 812.8 | -23 | % | 748.8 | 793.3 | -6 | % | |||||||||||||||||||||||||||
Total MMBoe (D) | 56.7 | 74.0 | -23 | % | 136.3 | 143.6 | -5 | % | |||||||||||||||||||||||||||
| (A) Thousand barrels per day or million cubic feet per day, as applicable. | |||||||||||||||||||||||||||||||||||
(B) Other International includes EOG's China and Canada operations. | |||||||||||||||||||||||||||||||||||
(C) Dollars per barrel or per thousand cubic feet, as applicable. Excludes the impact of financial commodity derivative instruments (see Note 12 to the Condensed Consolidated Financial Statements in EOG's Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2020). | |||||||||||||||||||||||||||||||||||
(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. | |||||||||||||||||||||||||||||||||||
8
| Balance Sheets | | ||||||||||
| In thousands of USD, except per share data (Unaudited) | |||||||||||
| June 30, | December 31, | ||||||||||
| 2020 | 2019 | ||||||||||
| Current Assets | |||||||||||
| Cash and Cash Equivalents | 2,416,501 | 2,027,972 | |||||||||
| Accounts Receivable, Net | 943,354 | 2,001,658 | |||||||||
| Inventories | 676,580 | 767,297 | |||||||||
| Assets from Price Risk Management Activities | 207,019 | 1,299 | |||||||||
| Income Taxes Receivable | 196,958 | 151,665 | |||||||||
| Other | 156,979 | 323,448 | |||||||||
| Total | 4,597,391 | 5,273,339 | |||||||||
| Property, Plant and Equipment | |||||||||||
| Oil and Gas Properties (Successful Efforts Method) | 64,406,245 | 62,830,415 | |||||||||
| Other Property, Plant and Equipment | 4,665,815 | 4,472,246 | |||||||||
| Total Property, Plant and Equipment | 69,072,060 | 67,302,661 | |||||||||
| Less: Accumulated Depreciation, Depletion and Amortization | (39,838,595) | (36,938,066) | |||||||||
| Total Property, Plant and Equipment, Net | 29,233,465 | 30,364,595 | |||||||||
| Deferred Income Taxes | 1,846 | 2,363 | |||||||||
| Other Assets | 1,388,969 | 1,484,311 | |||||||||
| Total Assets | 35,221,671 | 37,124,608 | |||||||||
| Current Liabilities | |||||||||||
| Accounts Payable | 1,281,166 | 2,429,127 | |||||||||
| Accrued Taxes Payable | 193,763 | 254,850 | |||||||||
| Dividends Payable | 217,004 | 166,273 | |||||||||
| Liabilities from Price Risk Management Activities | — | 20,194 | |||||||||
| Current Portion of Long-Term Debt | 21,121 | 1,014,524 | |||||||||
| Current Portion of Operating Lease Liabilities | 252,642 | 369,365 | |||||||||
| Other | 188,685 | 232,655 | |||||||||
| Total | 2,154,381 | 4,486,988 | |||||||||
| Long-Term Debt | 5,703,141 | 4,160,919 | |||||||||
| Other Liabilities | 2,138,696 | 1,789,884 | |||||||||
| Deferred Income Taxes | 4,837,896 | 5,046,101 | |||||||||
| Commitments and Contingencies | |||||||||||
| Stockholders' Equity | |||||||||||
Common Stock, $0.01 Par, 1,280,000,000 Shares Authorized and 582,386,649 Shares Issued at June 30, 2020 and 582,213,016 Shares Issued at December 31, 2019 | 205,824 | 205,822 | |||||||||
| Additional Paid in Capital | 5,886,298 | 5,817,475 | |||||||||
| Accumulated Other Comprehensive Loss | (6,130) | (4,652) | |||||||||
| Retained Earnings | 14,312,493 | 15,648,604 | |||||||||
Common Stock Held in Treasury, 142,025 Shares at June 30, 2020 and 298,820 Shares at December 31, 2019 | (10,928) | (26,533) | |||||||||
| Total Stockholders' Equity | 20,387,557 | 21,640,716 | |||||||||
| Total Liabilities and Stockholders' Equity | 35,221,671 | 37,124,608 | |||||||||
9
| Cash Flows Statements | | ||||||||||||||||||||||
| In thousands of USD (Unaudited) | |||||||||||||||||||||||
| 2Q 2020 | 2Q 2019 | YTD 2020 | YTD 2019 | ||||||||||||||||||||
| Cash Flows from Operating Activities | |||||||||||||||||||||||
Reconciliation of Net Income (Loss) to Net Cash Provided by Operating Activities: | |||||||||||||||||||||||
| Net Income (Loss) | (909,384) | 847,841 | (899,571) | 1,483,267 | |||||||||||||||||||
| Items Not Requiring (Providing) Cash | |||||||||||||||||||||||
| Depreciation, Depletion and Amortization | 706,679 | 957,304 | 1,706,739 | 1,836,899 | |||||||||||||||||||
| Impairments | 305,415 | 112,130 | 1,878,350 | 184,486 | |||||||||||||||||||
| Stock-Based Compensation Expenses | 39,571 | 38,566 | 79,643 | 77,653 | |||||||||||||||||||
| Deferred Income Taxes | (252,466) | 217,970 | (207,692) | 324,294 | |||||||||||||||||||
| Gains on Asset Dispositions, Net | (13,233) | (8,009) | (29,693) | (4,173) | |||||||||||||||||||
| Other, Net | 8,986 | 2,487 | 171 | 5,439 | |||||||||||||||||||
| Dry Hole Costs | 87 | 3,769 | 459 | 3,863 | |||||||||||||||||||
| Mark-to-Market Commodity Derivative Contracts | |||||||||||||||||||||||
| Total (Gains) Losses | 126,362 | (177,300) | (1,079,411) | (156,720) | |||||||||||||||||||
Net Cash Received from Settlements of Commodity Derivative Contracts | 639,388 | 10,444 | 723,761 | 31,290 | |||||||||||||||||||
| Other, Net | (365) | 663 | (720) | 1,639 | |||||||||||||||||||
Changes in Components of Working Capital and Other Assets and Liabilities | |||||||||||||||||||||||
| Accounts Receivable | 469,294 | 239,250 | 1,191,457 | (69,746) | |||||||||||||||||||
| Inventories | (18,095) | 7,720 | 84,575 | (11,259) | |||||||||||||||||||
| Accounts Payable | (1,618,276) | (67,229) | (1,184,718) | 126,853 | |||||||||||||||||||
| Accrued Taxes Payable | (6,482) | (61,718) | (61,087) | 53,280 | |||||||||||||||||||
| Other Assets | 194,682 | 494,322 | 252,978 | 487,387 | |||||||||||||||||||
| Other Liabilities | 1,675 | (4,014) | (64,403) | (58,106) | |||||||||||||||||||
Changes in Components of Working Capital Associated with Investing and Financing Activities | 414,236 | 72,347 | 282,154 | (22,034) | |||||||||||||||||||
| Net Cash Provided by Operating Activities | 88,074 | 2,686,543 | 2,672,992 | 4,294,312 | |||||||||||||||||||
| Investing Cash Flows | |||||||||||||||||||||||
| Additions to Oil and Gas Properties | (423,982) | (1,507,024) | (1,990,033) | (3,446,497) | |||||||||||||||||||
| Additions to Other Property, Plant and Equipment | (24,591) | (55,918) | (147,366) | (116,881) | |||||||||||||||||||
| Proceeds from Sales of Assets | 17,567 | 2,593 | 43,368 | 17,642 | |||||||||||||||||||
Changes in Components of Working Capital Associated with Investing Activities | (414,236) | (72,325) | (282,154) | 22,056 | |||||||||||||||||||
| Net Cash Used in Investing Activities | (845,242) | (1,632,674) | (2,376,185) | (3,523,680) | |||||||||||||||||||
| Financing Cash Flows | |||||||||||||||||||||||
| Long-Term Debt Borrowings | 1,483,852 | — | 1,483,852 | — | |||||||||||||||||||
| Long-Term Debt Repayments | (1,000,000) | (900,000) | (1,000,000) | (900,000) | |||||||||||||||||||
| Dividends Paid | (217,042) | (127,135) | (384,100) | (254,681) | |||||||||||||||||||
| Treasury Stock Purchased | (402) | (2,155) | (5,057) | (8,403) | |||||||||||||||||||
Proceeds from Stock Options Exercised and Employee Stock Purchase Plan | 8,548 | 8,292 | 8,614 | 8,695 | |||||||||||||||||||
| Debt Issuance Costs | (2,635) | (4,902) | (2,635) | (4,902) | |||||||||||||||||||
| Repayment of Finance Lease Liabilities | (4,824) | (3,213) | (8,445) | (6,403) | |||||||||||||||||||
Changes in Components of Working Capital Associated with Financing Activities | — | (22) | — | (22) | |||||||||||||||||||
| Net Cash Provided by (Used in) Financing Activities | 267,497 | (1,029,135) | 92,229 | (1,165,716) | |||||||||||||||||||
| Effect of Exchange Rate Changes on Cash | (680) | (59) | (507) | (65) | |||||||||||||||||||
| Increase (Decrease) in Cash and Cash Equivalents | (490,351) | 24,675 | 388,529 | (395,149) | |||||||||||||||||||
| Cash and Cash Equivalents at Beginning of Period | 2,906,852 | 1,135,810 | 2,027,972 | 1,555,634 | |||||||||||||||||||
| Cash and Cash Equivalents at End of Period | 2,416,501 | 1,160,485 | 2,416,501 | 1,160,485 | |||||||||||||||||||
10
| Non-GAAP Financial Measures | | |||||||||||||
To supplement the presentation of its financial results prepared in accordance with generally accepted accounting principles in the United States of America (GAAP), EOG’s quarterly earnings releases and related conference calls, accompanying investor presentation slides and presentation slides for investor conferences contain certain financial measures that are not prepared or presented in accordance with GAAP. These non-GAAP financial measures may include, but are not limited to, Adjusted Net Income (Loss), Discretionary Cash Flow, Free Cash Flow, Adjusted EBITDAX, Net Debt and related statistics.
A reconciliation of each of these measures to their most directly comparable GAAP financial measure is included in the tables below and can also be found in the “Reconciliations & Guidance” section of the “Investors” page of the EOG website at www.eogresources.com.
EOG believes these measures may be useful to investors who follow the practice of some industry analysts who make certain adjustments to GAAP measures (for example, to exclude non-recurring items) to facilitate comparisons to others in EOG’s industry, and who utilize non-GAAP measures in their calculations of certain statistics (for example, return on capital employed and return on equity) used to evaluate EOG’s performance.
EOG believes that the non-GAAP measures presented, when viewed in combination with its financial and operating results prepared in accordance with GAAP, provide a more complete understanding of the factors and trends affecting the company’s performance. EOG uses these non-GAAP measures for purposes of (i) comparing EOG’s financial and operating performance with the financial and operating performance of other companies in the industry and (ii) analyzing EOG’s financial and operating performance across periods.
The non-GAAP measures presented should not be considered in isolation, and should not be considered as a substitute for, or as an alternative to, EOG’s reported Net Income (Loss), Total Debt, Net Cash Provided by Operating Activities and other financial results calculated in accordance with GAAP. The non-GAAP measures presented should be read in conjunction with EOG's consolidated financial statements prepared in accordance with GAAP.
In addition, because not all companies use identical calculations, EOG’s presentation of non-GAAP measures may not be comparable to, and may be calculated differently from, similarly titled measures disclosed by other companies, including its peer companies. EOG may also change the calculation of one or more of its non-GAAP measures from time to time – for example, to account for changes in its business and operations or to more closely conform to peer company or industry analysts’ practices.
11
| Adjusted Net Income (Loss) | | ||||||||||||||||||||||
| In thousands of USD, except per share data (Unaudited) | |||||||||||||||||||||||
| 2Q 2020 | |||||||||||||||||||||||
| Before Tax | Income Tax Impact | After Tax | Diluted Earnings per Share | ||||||||||||||||||||
Reported Net Loss (GAAP) | (1,145,262) | 235,878 | (909,384) | (1.57) | |||||||||||||||||||
| Adjustments: | |||||||||||||||||||||||
(Gains) Losses on Mark-to-Market Commodity Derivative Contracts | 126,362 | (27,734) | 98,628 | 0.17 | |||||||||||||||||||
Net Cash Received from Settlements of Commodity Derivative Contracts | 639,388 | (140,333) | 499,055 | 0.86 | |||||||||||||||||||
Less: Gains on Asset Dispositions, Net | (13,233) | 2,930 | (10,303) | (0.02) | |||||||||||||||||||
Add: Certain Impairments | 239,167 | (48,351) | 190,816 | 0.33 | |||||||||||||||||||
Adjustments to Net Loss | 991,684 | (213,488) | 778,196 | 1.34 | |||||||||||||||||||
Adjusted Net Loss (Non-GAAP) | (153,578) | 22,390 | (131,188) | (0.23) | |||||||||||||||||||
Average Number of Common Shares (GAAP) | |||||||||||||||||||||||
| Basic | 578,719 | ||||||||||||||||||||||
| Diluted | 578,719 | ||||||||||||||||||||||
| Average Number of Common Shares (Non-GAAP) | |||||||||||||||||||||||
| Basic | 578,719 | ||||||||||||||||||||||
| Diluted | 578,719 | ||||||||||||||||||||||
| 2Q 2019 | |||||||||||||||||||||||
| Before Tax | Income Tax Impact | After Tax | Diluted Earnings per Share | ||||||||||||||||||||
| Reported Net Income (GAAP) | 1,089,366 | (241,525) | 847,841 | 1.46 | |||||||||||||||||||
| Adjustments: | |||||||||||||||||||||||
| (Gains) Losses on Mark-to-Market Commodity Derivative Contracts | (177,300) | 38,930 | (138,370) | (0.24) | |||||||||||||||||||
| Net Cash Received from Settlements of Commodity Derivative Contracts | 10,444 | (2,276) | 8,168 | 0.01 | |||||||||||||||||||
| Less: Gains on Asset Dispositions, Net | (8,009) | 1,734 | (6,275) | (0.01) | |||||||||||||||||||
| Add: Certain Impairments | 65,289 | (14,311) | 50,978 | 0.09 | |||||||||||||||||||
| Adjustments to Net Income | (109,576) | 24,077 | (85,499) | (0.15) | |||||||||||||||||||
| Adjusted Net Income (Non-GAAP) | 979,790 | (217,448) | 762,342 | 1.31 | |||||||||||||||||||
| Average Number of Common Shares (GAAP) | |||||||||||||||||||||||
| Basic | 577,460 | ||||||||||||||||||||||
| Diluted | 580,247 | ||||||||||||||||||||||
| Average Number of Common Shares (Non-GAAP) | 577,460 | ||||||||||||||||||||||
| Basic | 580,247 | ||||||||||||||||||||||
| Diluted | |||||||||||||||||||||||
12
| Adjusted Net Income (Loss) | | ||||||||||||||||||||||
| In thousands of USD, except per share data (Unaudited) | |||||||||||||||||||||||
| YTD 2020 | |||||||||||||||||||||||
| Before Tax | Income Tax Impact | After Tax | Diluted Earnings per Share | ||||||||||||||||||||
| Reported Net Loss (GAAP) | (1,114,259) | 214,688 | (899,571) | (1.55) | |||||||||||||||||||
| Adjustments: | |||||||||||||||||||||||
| Gains Mark-to-Market Commodity Derivative Contracts | (1,079,411) | 236,909 | (842,502) | (1.47) | |||||||||||||||||||
| Net Cash Received from Settlements of Commodity Derivative Contracts | 723,761 | (158,851) | 564,910 | 0.98 | |||||||||||||||||||
| Less: Gains on Asset Dispositions, Net | (29,693) | 6,543 | (23,150) | (0.04) | |||||||||||||||||||
| Add: Certain Impairments | 1,755,483 | (368,324) | 1,387,159 | 2.40 | |||||||||||||||||||
| Adjustments to Net Loss | 1,370,140 | (283,723) | 1,086,417 | 1.87 | |||||||||||||||||||
| Adjusted Net Income (Non-GAAP) | 255,881 | (69,035) | 186,846 | 0.32 | |||||||||||||||||||
| Average Number of Common Shares (GAAP) | |||||||||||||||||||||||
| Basic | 578,581 | ||||||||||||||||||||||
| Diluted | 578,581 | ||||||||||||||||||||||
| Average Number of Common Shares (Non-GAAP) | |||||||||||||||||||||||
| Basic | 578,581 | ||||||||||||||||||||||
| Diluted | 580,179 | ||||||||||||||||||||||
| YTD 2019 | |||||||||||||||||||||||
| Before Tax | Income Tax Impact | After Tax | Diluted Earnings per Share | ||||||||||||||||||||
| Reported Net Income (GAAP) | 1,916,602 | (433,335) | 1,483,267 | 2.56 | |||||||||||||||||||
| Adjustments: | |||||||||||||||||||||||
| Gains on Mark-to-Market Commodity Derivative Contracts | (156,720) | 34,397 | (122,323) | (0.21) | |||||||||||||||||||
| Net Cash Received from Settlements of Commodity Derivative Contracts | 31,290 | (6,868) | 24,422 | 0.04 | |||||||||||||||||||
| Less: Gains on Asset Dispositions, Net | (4,173) | 998 | (3,175) | (0.01) | |||||||||||||||||||
| Add: Certain Impairments | 89,034 | (19,541) | 69,493 | 0.12 | |||||||||||||||||||
| Adjustments to Net Income | (40,569) | 8,986 | (31,583) | (0.06) | |||||||||||||||||||
| Adjusted Net Income (Non-GAAP) | 1,876,033 | (424,349) | 1,451,684 | 2.50 | |||||||||||||||||||
| Average Number of Common Shares (GAAP) | |||||||||||||||||||||||
| Basic | 577,333 | ||||||||||||||||||||||
| Diluted | 580,204 | ||||||||||||||||||||||
| Average Number of Common Shares (Non-GAAP) | |||||||||||||||||||||||
| Basic | 577,333 | ||||||||||||||||||||||
| Diluted | 580,204 | ||||||||||||||||||||||
13
| Discretionary Cash Flow and Free Cash Flow | | ||||||||||||||||||||||
| In thousands of USD (Unaudited) | |||||||||||||||||||||||
| 2Q 2020 | 2Q 2019 | YTD 2020 | YTD 2019 | ||||||||||||||||||||
Net Cash Provided by Operating Activities (GAAP) | 88,074 | 2,686,543 | 2,672,992 | 4,294,312 | |||||||||||||||||||
| Adjustments: | |||||||||||||||||||||||
Exploration Costs (excluding Stock-Based Compensation Expenses) | 20,484 | 26,089 | 52,966 | 55,876 | |||||||||||||||||||
Other Non-Current Income Taxes - Net Receivable | — | 42,764 | 112,704 | 145,682 | |||||||||||||||||||
Changes in Components of Working Capital and Other Assets and Liabilities | |||||||||||||||||||||||
Accounts Receivable | (469,294) | (239,250) | (1,191,457) | 69,746 | |||||||||||||||||||
Inventories | 18,095 | (7,720) | (84,575) | 11,259 | |||||||||||||||||||
Accounts Payable | 1,618,276 | 67,229 | 1,184,718 | (126,853) | |||||||||||||||||||
Accrued Taxes Payable | 6,482 | 61,718 | 61,087 | (53,280) | |||||||||||||||||||
Other Assets | (194,682) | (494,322) | (252,978) | (487,387) | |||||||||||||||||||
Other Liabilities | (1,675) | 4,014 | 64,403 | 58,106 | |||||||||||||||||||
Changes in Components of Working Capital Associated with Investing and Financing Activities | (414,236) | (72,347) | (282,154) | 22,034 | |||||||||||||||||||
| Discretionary Cash Flow (Non-GAAP) | 671,524 | 2,074,718 | 2,337,706 | 3,989,495 | |||||||||||||||||||
Discretionary Cash Flow (Non-GAAP) - Percentage Decrease | -68 | % | -41 | % | |||||||||||||||||||
Discretionary Cash Flow (Non-GAAP) | 671,524 | 2,074,718 | 2,337,706 | 3,989,495 | |||||||||||||||||||
Less: | |||||||||||||||||||||||
Total Cash Capital Expenditures Before Acquisitions (Non-GAAP) (a) | (477,616) | (1,595,726) | (2,162,336) | (3,328,202) | |||||||||||||||||||
Free Cash Flow (Non-GAAP) (b) | 193,908 | 478,992 | 175,370 | 661,293 | |||||||||||||||||||
(a) See below reconciliation of Total Expenditures (GAAP) to Total Cash Capital Expenditures Before Acquisitions (Non-GAAP) for the three-month and six-month periods ended June 30, 2020 and 2019: | |||||||||||||||||||||||
Total Expenditures (GAAP) | 534,411 | 1,663,127 | 2,360,189 | 3,765,046 | |||||||||||||||||||
Less: | |||||||||||||||||||||||
Asset Retirement Costs | (5,955) | (55,425) | (25,563) | (60,581) | |||||||||||||||||||
Non-Cash Expenditures of Other Property, Plant and Equipment | (60) | (586) | (60) | (586) | |||||||||||||||||||
Non-Cash Acquisition Costs of Unproved Properties | (23,243) | (10,240) | (47,731) | (53,721) | |||||||||||||||||||
| Non-Cash Finance Leases | (24,319) | — | (73,277) | — | |||||||||||||||||||
Acquisition Costs of Proved Properties | (3,218) | (1,150) | (51,222) | (321,956) | |||||||||||||||||||
Total Cash Capital Expenditures Before Acquisitions (Non-GAAP) | 477,616 | 1,595,726 | 2,162,336 | 3,328,202 | |||||||||||||||||||
(b) To better align the presentation of free cash flow for comparative purposes within the industry, free cash flow excludes dividends paid (GAAP) as a reconciling item for the three-month and six-month periods ending June 30, 2020. The comparative prior periods shown have been revised to conform to this presentation. | |||||||||||||||||||||||
| Maintenance Capital Expenditures | |||||||||||||||||||||||
| The capital expenditures required to fund drilling and infrastructure requirements to keep U.S. oil production in 2021 flat relative to anticipated 4Q 2020 U.S. oil production. | |||||||||||||||||||||||
14
| Discretionary Cash Flow and Free Cash Flow | | ||||||||||||||||
| In thousands of USD (Unaudited) | |||||||||||||||||
| FY 2019 | FY 2018 | FY 2017 | |||||||||||||||
Net Cash Provided by Operating Activities (GAAP) | 8,163,180 | 7,768,608 | 4,265,336 | ||||||||||||||
| Adjustments: | |||||||||||||||||
Exploration Costs (excluding Stock-Based Compensation Expenses) | 113,733 | 123,986 | 122,688 | ||||||||||||||
Other Non-Current Income Taxes - Net (Payable) Receivable | 238,711 | 148,993 | (513,404) | ||||||||||||||
Changes in Components of Working Capital and Other Assets and Liabilities | |||||||||||||||||
Accounts Receivable | 91,792 | 368,180 | 392,131 | ||||||||||||||
Inventories | (90,284) | 395,408 | 174,548 | ||||||||||||||
Accounts Payable | (168,539) | (439,347) | (324,192) | ||||||||||||||
Accrued Taxes Payable | (40,122) | 92,461 | 63,937 | ||||||||||||||
Other Assets | (358,001) | 125,435 | 658,609 | ||||||||||||||
Other Liabilities | 56,619 | (10,949) | 89,871 | ||||||||||||||
Changes in Components of Working Capital Associated with Investing and Financing Activities | 115,061 | (301,083) | (89,992) | ||||||||||||||
| Discretionary Cash Flow (Non-GAAP) | 8,122,150 | 8,271,692 | 4,839,532 | ||||||||||||||
Discretionary Cash Flow (Non-GAAP) - Percentage Increase (Decrease) | -2 | % | 71 | % | |||||||||||||
Discretionary Cash Flow (Non-GAAP) | 8,122,150 | 8,271,692 | 4,839,532 | ||||||||||||||
Less: | |||||||||||||||||
Total Cash Capital Expenditures Before Acquisitions (Non-GAAP) (a) | (6,234,454) | (6,172,950) | (4,228,859) | ||||||||||||||
Free Cash Flow (Non-GAAP) (b) | 1,887,696 | 2,098,742 | 610,673 | ||||||||||||||
(a) See below reconciliation of Total Expenditures (GAAP) to Total Cash Capital Expenditures Before Acquisitions (Non-GAAP) for the twelve-month periods ended December 31, 2019, 2018 and 2017: | |||||||||||||||||
Total Expenditures (GAAP) | 6,900,450 | 6,706,359 | 4,612,746 | ||||||||||||||
Less: | |||||||||||||||||
Asset Retirement Costs | (186,088) | (69,699) | (55,592) | ||||||||||||||
Non-Cash Expenditures of Other Property, Plant and Equipment | (2,266) | (49,484) | — | ||||||||||||||
Non-Cash Acquisition Costs of Unproved Properties | (97,704) | (290,542) | (255,711) | ||||||||||||||
Acquisition Costs of Proved Properties | (379,938) | (123,684) | (72,584) | ||||||||||||||
Total Cash Capital Expenditures Before Acquisitions (Non-GAAP) | 6,234,454 | 6,172,950 | 4,228,859 | ||||||||||||||
(b) To better align the presentation of free cash flow for comparative purposes within the industry, free cash flow excludes dividends paid (GAAP) as a reconciling item for the twelve-month period ending December 31, 2019. The comparative prior periods shown have been revised to conform to this presentation. | |||||||||||||||||
15
| Discretionary Cash Flow and Free Cash Flow | | ||||||||||||||||
| In thousands of USD (Unaudited) | |||||||||||||||||
| FY 2014 | FY 2013 | FY 2012 | |||||||||||||||
Net Cash Provided by Operating Activities (GAAP) | 8,649,155 | 7,329,414 | 5,236,777 | ||||||||||||||
| Adjustments: | |||||||||||||||||
Exploration Costs (excluding Stock-Based Compensation Expenses) | 157,453 | 134,531 | 159,182 | ||||||||||||||
Excess Tax Benefits from Stock-Based Compensation | 99,459 | 55,831 | 67,035 | ||||||||||||||
Changes in Components of Working Capital and Other Assets and Liabilities | |||||||||||||||||
Accounts Receivable | (84,982) | 23,613 | 178,683 | ||||||||||||||
Inventories | 161,958 | (53,402) | 156,762 | ||||||||||||||
Accounts Payable | (543,630) | (178,701) | 17,150 | ||||||||||||||
Accrued Taxes Payable | (16,486) | (75,142) | (78,094) | ||||||||||||||
Other Assets | 14,448 | 109,567 | 118,520 | ||||||||||||||
Other Liabilities | (75,420) | 20,382 | (36,114) | ||||||||||||||
Changes in Components of Working Capital Associated with Investing and Financing Activities | 103,414 | 51,361 | (74,158) | ||||||||||||||
| Discretionary Cash Flow (Non-GAAP) | 8,465,369 | 7,417,454 | 5,745,743 | ||||||||||||||
Discretionary Cash Flow (Non-GAAP) - Percentage Increase | 14 | % | 29 | % | |||||||||||||
Discretionary Cash Flow (Non-GAAP) | 8,465,369 | 7,417,454 | 5,745,743 | ||||||||||||||
Less: | |||||||||||||||||
Total Cash Capital Expenditures Before Acquisitions (Non-GAAP) (a) | (8,292,090) | (7,101,791) | (7,539,994) | ||||||||||||||
Free Cash Flow (Non-GAAP) (b) | 173,279 | 315,663 | (1,794,251) | ||||||||||||||
(a) See below reconciliation of Total Expenditures (GAAP) to Total Cash Capital Expenditures Before Acquisitions (Non-GAAP) for the twelve-month periods ended December 31, 2014, 2013 and 2012: | |||||||||||||||||
Total Expenditures (GAAP) | 8,631,906 | 7,361,457 | 7,753,828 | ||||||||||||||
Less: | |||||||||||||||||
Asset Retirement Costs | (195,630) | (134,445) | (126,987) | ||||||||||||||
Non-Cash Expenditures of Other Property, Plant and Equipment | — | — | (65,791) | ||||||||||||||
Non-Cash Acquisition Costs of Unproved Properties | (5,085) | (5,007) | (20,317) | ||||||||||||||
Acquisition Costs of Proved Properties | (139,101) | (120,214) | (739) | ||||||||||||||
Total Cash Capital Expenditures Before Acquisitions (Non-GAAP) | 8,292,090 | 7,101,791 | 7,539,994 | ||||||||||||||
(b) To better align the presentation of free cash flow for comparative purposes within the industry, the presentation of free cash flow for the comparative prior periods shown has been revised to exclude dividends paid (GAAP) as a reconciling item. | |||||||||||||||||
16
| Total Expenditures | | ||||||||||||||||||||||||||||
| In millions of USD (Unaudited) | |||||||||||||||||||||||||||||
| 2Q 2020 | 2Q 2019 | FY 2019 | FY 2018 | FY 2017 | |||||||||||||||||||||||||
| Exploration and Development Drilling | 381 | 1,290 | 4,951 | 4,935 | 3,132 | ||||||||||||||||||||||||
| Facilities | 31 | 174 | 629 | 625 | 575 | ||||||||||||||||||||||||
| Leasehold Acquisitions | 30 | 38 | 276 | 488 | 427 | ||||||||||||||||||||||||
| Property Acquisitions | 3 | 1 | 380 | 124 | 73 | ||||||||||||||||||||||||
| Capitalized Interest | 8 | 11 | 38 | 24 | 27 | ||||||||||||||||||||||||
| Subtotal | 453 | 1,514 | 6,274 | 6,196 | 4,234 | ||||||||||||||||||||||||
| Exploration Costs | 27 | 33 | 140 | 149 | 145 | ||||||||||||||||||||||||
| Dry Hole Costs | — | 4 | 28 | 5 | 5 | ||||||||||||||||||||||||
Exploration and Development Expenditures | 480 | 1,551 | 6,442 | 6,350 | 4,384 | ||||||||||||||||||||||||
| Asset Retirement Costs | 5 | 56 | 186 | 70 | 56 | ||||||||||||||||||||||||
Total Exploration and Development Expenditures | 485 | 1,607 | 6,628 | 6,420 | 4,440 | ||||||||||||||||||||||||
| Other Property, Plant and Equipment | 49 | 56 | 272 | 286 | 173 | ||||||||||||||||||||||||
| Total Expenditures | 534 | 1,663 | 6,900 | 6,706 | 4,613 | ||||||||||||||||||||||||
17
| EBITDAX and Adjusted EBITDAX | | ||||||||||||||||||||||
| In thousands of USD (Unaudited) | |||||||||||||||||||||||
| 2Q 2020 | 2Q 2019 | YTD 2020 | YTD 2019 | ||||||||||||||||||||
Net Income (Loss) (GAAP) | (909,384) | 847,841 | (899,571) | 1,483,267 | |||||||||||||||||||
| Adjustments: | |||||||||||||||||||||||
| Interest Expense, Net | 54,213 | 49,908 | 98,903 | 104,814 | |||||||||||||||||||
| Income Tax Provision (Benefit) | (235,878) | 241,525 | (214,688) | 433,335 | |||||||||||||||||||
| Depreciation, Depletion and Amortization | 706,679 | 957,304 | 1,706,739 | 1,836,899 | |||||||||||||||||||
| Exploration Costs | 27,283 | 32,522 | 66,960 | 68,846 | |||||||||||||||||||
| Dry Hole Costs | 87 | 3,769 | 459 | 3,863 | |||||||||||||||||||
| Impairments | 305,415 | 112,130 | 1,878,350 | 184,486 | |||||||||||||||||||
| EBITDAX (Non-GAAP) | (51,585) | 2,244,999 | 2,637,152 | 4,115,510 | |||||||||||||||||||
(Gains) Losses on MTM Commodity Derivative Contracts | 126,362 | (177,300) | (1,079,411) | (156,720) | |||||||||||||||||||
Net Cash Received from Settlements of Commodity Derivative Contracts | 639,388 | 10,444 | 723,761 | 31,290 | |||||||||||||||||||
| Less: Gains on Asset Dispositions, Net | (13,233) | (8,009) | (29,693) | (4,173) | |||||||||||||||||||
| Adjusted EBITDAX (Non-GAAP) | 700,932 | 2,070,134 | 2,251,809 | 3,985,907 | |||||||||||||||||||
Adjusted EBITDAX (Non-GAAP) - Percentage Decrease | -66 | % | -44 | % | |||||||||||||||||||
| Definitions | |||||||||||||||||||||||
| EBITDAX - Earnings Before Interest Expense; Income Taxes; Depreciation, Depletion and Amortization; Exploration Costs; Dry Hole Costs; and Impairments | |||||||||||||||||||||||
18
| Net Debt-to-Total Capitalization Ratio | | ||||||||||||||||||||||||||||||||||
| In millions of USD, except ratio data (Unaudited) | |||||||||||||||||||||||||||||||||||
| June 30, 2020 | March 31, 2020 | December 31, 2019 | September 30, 2019 | June 30, 2019 | March 31, 2019 | ||||||||||||||||||||||||||||||
| Total Stockholders' Equity - (a) | 20,388 | 21,471 | 21,641 | 21,124 | 20,630 | 19,904 | |||||||||||||||||||||||||||||
| Current and Long-Term Debt (GAAP) - (b) | 5,724 | 5,222 | 5,175 | 5,177 | 5,179 | 6,081 | |||||||||||||||||||||||||||||
| Less: Cash | (2,417) | (2,907) | (2,028) | (1,583) | (1,160) | (1,136) | |||||||||||||||||||||||||||||
| Net Debt (Non-GAAP) - (c) | 3,307 | 2,315 | 3,147 | 3,594 | 4,019 | 4,945 | |||||||||||||||||||||||||||||
| Total Capitalization (GAAP) - (a) + (b) | 26,112 | 26,693 | 26,816 | 26,301 | 25,809 | 25,985 | |||||||||||||||||||||||||||||
| Total Capitalization (Non-GAAP) - (a) + (c) | 23,695 | 23,786 | 24,788 | 24,718 | 24,649 | 24,849 | |||||||||||||||||||||||||||||
Debt-to-Total Capitalization (GAAP) - (b) / [(a) + (b)] | 22 | % | 20 | % | 19 | % | 20 | % | 20 | % | 23 | % | |||||||||||||||||||||||
Net Debt-to-Total Capitalization (Non-GAAP) - (c) / [(a) + (c)] | 14 | % | 10 | % | 13 | % | 15 | % | 16 | % | 20 | % | |||||||||||||||||||||||
19
| Net Debt-to-Total Capitalization Ratio | | ||||||||||||||||||||||
| In millions of USD, except ratio data (Unaudited) | |||||||||||||||||||||||
| December 31, 2018 | September 30, 2018 | June 30, 2018 | March 31, 2018 | ||||||||||||||||||||
| Total Stockholders' Equity - (a) | 19,364 | 18,538 | 17,452 | 16,841 | |||||||||||||||||||
| Current and Long-Term Debt (GAAP) - (b) | 6,083 | 6,435 | 6,435 | 6,435 | |||||||||||||||||||
| Less: Cash | (1,556) | (1,274) | (1,008) | (816) | |||||||||||||||||||
| Net Debt (Non-GAAP) - (c) | 4,527 | 5,161 | 5,427 | 5,619 | |||||||||||||||||||
| Total Capitalization (GAAP) - (a) + (b) | 25,447 | 24,973 | 23,887 | 23,276 | |||||||||||||||||||
| Total Capitalization (Non-GAAP) - (a) + (c) | 23,891 | 23,699 | 22,879 | 22,460 | |||||||||||||||||||
| Debt-to-Total Capitalization (GAAP) - (b) / [(a) + (b)] | 24 | % | 26 | % | 27 | % | 28 | % | |||||||||||||||
| Net Debt-to-Total Capitalization (Non-GAAP) - (c) / [(a) + (c)] | 19 | % | 22 | % | 24 | % | 25 | % | |||||||||||||||
20
| Net Debt-to-Total Capitalization Ratio | | ||||||||||||||||||||||
| In millions of USD, except ratio data (Unaudited) | |||||||||||||||||||||||
| December 31, 2017 | September 30, 2017 | June 30, 2017 | March 31, 2017 | ||||||||||||||||||||
| Total Stockholders' Equity - (a) | 16,283 | 13,922 | 13,902 | 13,928 | |||||||||||||||||||
| Current and Long-Term Debt (GAAP) - (b) | 6,387 | 6,387 | 6,987 | 6,987 | |||||||||||||||||||
| Less: Cash | (834) | (846) | (1,649) | (1,547) | |||||||||||||||||||
| Net Debt (Non-GAAP) - (c) | 5,553 | 5,541 | 5,338 | 5,440 | |||||||||||||||||||
| Total Capitalization (GAAP) - (a) + (b) | 22,670 | 20,309 | 20,889 | 20,915 | |||||||||||||||||||
| Total Capitalization (Non-GAAP) - (a) + (c) | 21,836 | 19,463 | 19,240 | 19,368 | |||||||||||||||||||
| Debt-to-Total Capitalization (GAAP) - (b) / [(a) + (b)] | 28 | % | 31 | % | 33 | % | 33 | % | |||||||||||||||
| Net Debt-to-Total Capitalization (Non-GAAP) - (c) / [(a) + (c)] | 25 | % | 28 | % | 28 | % | 28 | % | |||||||||||||||
21
| Net Debt-to-Total Capitalization Ratio | | ||||||||||||||||||||||||||||
| In millions of USD, except ratio data (Unaudited) | |||||||||||||||||||||||||||||
| December 31, 2016 | September 30, 2016 | June 30, 2016 | March 31, 2016 | December 31, 2015 | |||||||||||||||||||||||||
| Total Stockholders' Equity - (a) | 13,982 | 11,798 | 12,057 | 12,405 | 12,943 | ||||||||||||||||||||||||
| Current and Long-Term Debt (GAAP) - (b) | 6,986 | 6,986 | 6,986 | 6,986 | 6,660 | ||||||||||||||||||||||||
| Less: Cash | (1,600) | (1,049) | (780) | (668) | (719) | ||||||||||||||||||||||||
| Net Debt (Non-GAAP) - (c) | 5,386 | 5,937 | 6,206 | 6,318 | 5,941 | ||||||||||||||||||||||||
| Total Capitalization (GAAP) - (a) + (b) | 20,968 | 18,784 | 19,043 | 19,391 | 19,603 | ||||||||||||||||||||||||
| Total Capitalization (Non-GAAP) - (a) + (c) | 19,368 | 17,735 | 18,263 | 18,723 | 18,884 | ||||||||||||||||||||||||
Debt-to-Total Capitalization (GAAP) - (b) / [(a) + (b)] | 33 | % | 37 | % | 37 | % | 36 | % | 34 | % | |||||||||||||||||||
Net Debt-to-Total Capitalization (Non-GAAP) - (c) / [(a) + (c)] | 28 | % | 33 | % | 34 | % | 34 | % | 31 | % | |||||||||||||||||||
22
| Reserve Replacement Cost Data | | ||||||||||||||||||||||||||||||||||
| In millions of USD, except reserves and ratio data (Unaudited) | |||||||||||||||||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||||||||||||||||||||||
Total Costs Incurred in Exploration and Development Activities (GAAP) | 6,628.2 | 6,419.7 | 4,439.4 | 6,445.2 | 4,928.3 | 7,904.8 | |||||||||||||||||||||||||||||
| Less: Asset Retirement Costs | (186.1) | (69.7) | (55.6) | 19.9 | (53.5) | (195.6) | |||||||||||||||||||||||||||||
Non-Cash Acquisition Costs of Unproved Properties | (97.7) | (290.5) | (255.7) | (3,101.8) | — | — | |||||||||||||||||||||||||||||
| Acquisition Costs of Proved Properties | (379.9) | (123.7) | (72.6) | (749.0) | (480.6) | (139.1) | |||||||||||||||||||||||||||||
Total Exploration and Development Expenditures for Drilling Only (Non-GAAP) - (a) | 5,964.5 | 5,935.8 | 4,055.5 | 2,614.3 | 4,394.2 | 7,570.1 | |||||||||||||||||||||||||||||
Total Costs Incurred in Exploration and Development Activities (GAAP) | 6,628.2 | 6,419.7 | 4,439.4 | 6,445.2 | 4,928.3 | 7,904.8 | |||||||||||||||||||||||||||||
| Less: Asset Retirement Costs | (186.1) | (69.7) | (55.6) | 19.9 | (53.5) | (195.6) | |||||||||||||||||||||||||||||
Non-Cash Acquisition Costs of Unproved Properties | (97.7) | (290.5) | (255.7) | (3,101.8) | — | — | |||||||||||||||||||||||||||||
Non-Cash Acquisition Costs of Proved Properties | (52.3) | (70.9) | (26.2) | (732.3) | — | — | |||||||||||||||||||||||||||||
Total Exploration and Development Expenditures (Non-GAAP) - (b) | 6,292.1 | 5,988.6 | 4,101.9 | 2,631.0 | 4,874.8 | 7,709.2 | |||||||||||||||||||||||||||||
Net Proved Reserve Additions From All Sources - Oil Equivalents (MMBoe) | |||||||||||||||||||||||||||||||||||
| Revisions Due to Price - (c) | (59.7) | 34.8 | 154.0 | (100.7) | (573.8) | 52.2 | |||||||||||||||||||||||||||||
| Revisions Other Than Price | (0.3) | (39.5) | 48.0 | 252.9 | 107.2 | 48.4 | |||||||||||||||||||||||||||||
| Purchases in Place | 16.8 | 11.6 | 2.3 | 42.3 | 56.2 | 14.4 | |||||||||||||||||||||||||||||
| Extensions, Discoveries and Other Additions - (d) | 750.0 | 669.7 | 420.8 | 209.0 | 245.9 | 519.2 | |||||||||||||||||||||||||||||
| Total Proved Reserve Additions - (e) | 706.8 | 676.6 | 625.1 | 403.5 | (164.5) | 634.2 | |||||||||||||||||||||||||||||
| Sales in Place | (4.6) | (10.8) | (20.7) | (167.6) | (3.5) | (36.3) | |||||||||||||||||||||||||||||
| Net Proved Reserve Additions From All Sources | 702.2 | 665.8 | 604.4 | 235.9 | (168.0) | 597.9 | |||||||||||||||||||||||||||||
| Production | 300.9 | 265.0 | 224.4 | 207.1 | 211.2 | 219.1 | |||||||||||||||||||||||||||||
| Reserve Replacement Costs ($ / Boe) | |||||||||||||||||||||||||||||||||||
| Total Drilling, Before Revisions - (a / d) | 7.95 | 8.86 | 9.64 | 12.51 | 17.87 | 14.58 | |||||||||||||||||||||||||||||
| All-in Total, Net of Revisions - (b / e) | 8.90 | 8.85 | 6.56 | 6.52 | (29.63) | 12.16 | |||||||||||||||||||||||||||||
| All-in Total, Excluding Revisions Due to Price - (b / ( e - c)) | 8.21 | 9.33 | 8.71 | 5.22 | 11.91 | 13.25 | |||||||||||||||||||||||||||||
| Definitions | |||||
| $/Boe | U.S. Dollars per barrel of oil equivalent | ||||
| MMBoe | Million barrels of oil equivalent | ||||
23
| Financial Commodity Derivative Contracts | | |||||||||||||
| EOG accounts for financial commodity derivative contracts using the mark-to-market accounting method. | ||||||||||||||
| ICE Brent Differential Basis Swap Contracts | ||||||||||||||
| Prices received by EOG for its crude oil production generally vary from NYMEX WTI 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 ICE Brent pricing and pricing in Cushing, Oklahoma (ICE Brent Differential). Presented below is a comprehensive summary of EOG's ICE Brent Differential basis swap contracts through July 30, 2020. The weighted average price differential expressed in $/Bbl represents the amount of addition to Cushing, Oklahoma, prices for the notional volumes expressed in Bbld covered by the basis swap contracts. | ||||||||||||||
| 2020 | Volume (Bbld) | Weighted Average Price Differential ($/Bbl) | ||||||||||||
| May 2020 (CLOSED) | 10,000 | 4.92 | ||||||||||||
| Houston Differential Basis Swap Contracts | ||||||||||||||
| EOG has also entered into crude oil basis swap contracts in order to fix the differential between pricing in Houston, Texas, and Cushing, Oklahoma (Houston Differential). Presented below is a comprehensive summary of EOG's Houston Differential basis swap contracts through July 30, 2020. The weighted average price differential expressed in $/Bbl represents the amount of addition to Cushing, Oklahoma, prices for the notional volumes expressed in Bbld covered by the basis swap contracts. | ||||||||||||||
| 2020 | Volume (Bbld) | Weighted Average Price Differential ($/Bbl) | ||||||||||||
| May 2020 (CLOSED) | 10,000 | 1.55 | ||||||||||||
| Roll Differential Swap Contracts | ||||||||||||||
| EOG has also entered into crude oil swaps in order to fix the differential in pricing between the NYMEX calendar month average and the physical crude oil delivery month (Roll Differential). Presented below is a comprehensive summary of EOG's Roll Differential swap contracts through July 30, 2020. The weighted average price differential expressed in $/Bbl represents the amount of net addition (reduction) to delivery month prices for the notional volumes expressed in Bbld covered by the swap contracts. | ||||||||||||||
| 2020 | Volume (Bbld) | Weighted Average Price Differential ($/Bbl) | ||||||||||||
| February 1, 2020 through June 30, 2020 (CLOSED) | 10,000 | 0.70 | ||||||||||||
| July 1, 2020 through August 31, 2020 (CLOSED) | 88,000 | (1.16) | ||||||||||||
| September 2020 | 88,000 | (1.16) | ||||||||||||
| October 1, 2020 through December 31, 2020 | 66,000 | (1.16) | ||||||||||||
24
| In May 2020, EOG entered into crude oil Roll Differential swap contracts for the period from July 1, 2020 through September 30, 2020, with notional volumes of 22,000 Bbld at a weighted average price differential of $(0.43) per Bbl, and for the period from October 1, 2020 through December 31, 2020, with notional volumes of 44,000 Bbld at a weighted average price differential of $(0.73) per Bbl. These contracts partially offset certain outstanding Roll Differential swap contracts for the same time periods and volumes at a weighted average price differential of $(1.16) per Bbl. EOG expects to pay net cash of $3.2 million for the settlement of these contracts. The offsetting contracts were excluded from the above table. | ||||||||||||||
| Crude Oil NYMEX WTI Price Swap Contracts | ||||||||||||||
| Presented below is a comprehensive summary of EOG's crude oil NYMEX WTI price swap contracts through July 30, 2020, with notional volumes expressed in Bbld and prices expressed in $/Bbl. | ||||||||||||||
| 2020 | Volume (Bbld) | Weighted Average Price ($/Bbl) | ||||||||||||
| January 1, 2020 through March 31, 2020 (CLOSED) | 200,000 | 59.33 | ||||||||||||
| April 1, 2020 through May 31, 2020 (CLOSED) | 265,000 | 51.36 | ||||||||||||
| In April and May 2020, EOG entered into crude oil NYMEX WTI price swap contracts for the period from June 1, 2020 through June 30, 2020, with notional volumes of 265,000 Bbld at a weighted average price of $33.80 per Bbl, for the period from July 1, 2020 through July 31, 2020, with notional volumes of 254,000 Bbld at a weighted average price of $33.75 per Bbl, for the period from August 1, 2020 through September 30, 2020, with notional volumes of 154,000 Bbld at a weighted average price of $34.18 per Bbl and for the period from October 1, 2020 through December 31, 2020, with notional volumes of 47,000 Bbld at a weighted average price of $30.04 per Bbl. These contracts offset the remaining NYMEX WTI price swap contracts for the same time periods and volumes at a weighted average price of $51.36 per Bbl for the period from June 1, 2020 through June 30, 2020, $42.36 per Bbl for the period from July 1, 2020 through July 31, 2020, $50.42 per Bbl for the period from August 1, 2020 through September 30, 2020 and $31.00 per Bbl for the period from October 1, 2020 through December 31, 2020. EOG expects to receive net cash of $364.0 million for the settlement of these contracts. The offsetting contracts were excluded from the above table. | ||||||||||||||
| Crude Oil ICE Brent Price Swap Contracts | ||||||||||||||
| Presented below is a comprehensive summary of EOG's crude oil ICE Brent price swap contracts through July 30, 2020, with notional volumes expressed in Bbld and prices expressed in $/Bbl. | ||||||||||||||
| 2020 | Volume (Bbld) | Weighted Average Price ($/Bbl) | ||||||||||||
| April 2020 (CLOSED) | 75,000 | 25.66 | ||||||||||||
| May 2020 (CLOSED) | 35,000 | 26.53 | ||||||||||||
| Mont Belvieu Propane Price Swap Contracts | ||||||||||||||
| Presented below is a comprehensive summary of EOG's Mont Belvieu propane (non-TET) financial price swap contracts (Mont Belvieu Propane Price Swap Contracts) through July 30, 2020, with notional volumes expressed in Bbld and prices expressed in $/Bbl. | ||||||||||||||
| 2020 | Volume (Bbld) | Weighted Average Price ($/Bbl) | ||||||||||||
| January 1, 2020 through February 29, 2020 (CLOSED) | 4,000 | 21.34 | ||||||||||||
| March 1, 2020 through April 30, 2020 (CLOSED) | 25,000 | 17.92 | ||||||||||||
| In April and May 2020, EOG entered into Mont Belvieu propane price swap contracts for the period from May 1, 2020 through December 31, 2020, with notional volumes of 25,000 Bbld at a weighted average price of $16.41 per Bbl. These contracts offset the remaining Mont Belvieu propane price swap contracts for the same time period with notional volumes of 25,000 Bbld at a weighted average price of $17.92 per Bbl. EOG expects to receive net cash of $9.2 million for the settlement of these contracts. The offsetting contracts were excluded from the above table. | ||||||||||||||
25
| Natural Gas Price Swap Contracts | ||||||||||||||
| Presented below is a comprehensive summary of EOG's natural gas price swap contracts through July 30, 2020, with notional volumes expressed in MMBtud and prices expressed in $/MMBtu. | ||||||||||||||
| 2021 | Volume (MMBtud) | Weighted Average Price ($/MMBtu) | ||||||||||||
| January 1, 2021 through December 31, 2021 | 50,000 | 2.75 | ||||||||||||
| Natural Gas Collar Contracts | ||||||||||||||||||||
| EOG has entered into natural gas collar contracts, which establish ceiling and floor prices for the sale of notional volumes of natural gas as specified in the collar contracts. The collars require that EOG pay the difference between the ceiling price and the NYMEX Henry Hub natural gas price for the contract month (Henry Hub Index Price) in the event the Henry Hub Index Price is above the ceiling price. The collars grant EOG the right to receive the difference between the floor price and the Henry Hub Index Price in the event the Henry Hub Index Price is below the floor price. In March 2020, EOG executed the early termination provision granting EOG the right to terminate certain 2020 natural gas collar contracts with notional volumes of 250,000 MMBtud at a weighted average ceiling price of $2.50 per MMBtu and a weighted average floor price of $2.00 per MMBtu for the period from April 1, 2020 through July 31, 2020. The net cash EOG received for settling these contracts was $7.8 million. Presented below is a comprehensive summary of EOG's natural gas collar contracts through July 30, 2020, with notional volumes expressed in MMBtud and prices expressed in $/MMBtu. | ||||||||||||||||||||
| 2020 | Volume (MMBtud) | Weighted Average Ceiling Price ($/MMBtu) | Weighted Average Floor Price ($/MMBtu) | |||||||||||||||||
| April 1, 2020 through July 31, 2020 (CLOSED) | 250,000 | 2.50 | 2.00 | |||||||||||||||||
| In April 2020, EOG entered into natural gas collar contracts for the period from August 1, 2020 through October 31, 2020, with notional volumes of 250,000 MMBtud at a ceiling price of $2.50 per MMBtu and a floor price of $2.00 per MMBtu. These contracts offset the remaining natural gas collar contracts for the same time period with notional volumes of 250,000 MMBtud at a ceiling price of $2.50 per MMBtu and a floor price of $2.00 per MMBtu. EOG expects to receive net cash of $1.1 million for the settlement of these contracts. The offsetting contracts were excluded from the above table. | ||||||||||||||||||||
| Rockies Differential Basis Swap Contracts | ||||||||||||||
| Prices received by EOG for its natural gas production generally vary from NYMEX Henry Hub prices due to adjustments for delivery location (basis) and other factors. EOG has entered into natural gas basis swap contracts in order to fix the differential between pricing in the Rocky Mountain area and NYMEX Henry Hub prices (Rockies Differential). Presented below is a comprehensive summary of EOG's Rockies Differential basis swap contracts through July 30, 2020. The weighted average price differential expressed in $/MMBtu represents the amount of reduction to NYMEX Henry Hub prices for the notional volumes expressed in MMBtud covered by the basis swap contracts. | ||||||||||||||
| 2020 | Volume (MMBtud) | Weighted Average Price Differential ($/MMBtu) | ||||||||||||
| January 1, 2020 through July 31, 2020 (CLOSED) | 30,000 | 0.55 | ||||||||||||
| August 1, 2020 through December 31, 2020 | 30,000 | 0.55 | ||||||||||||
26
| HSC Differential Basis Swap Contracts | ||||||||||||||
| EOG has also entered into natural gas basis swap contracts in order to fix the differential between pricing at the Houston Ship Channel (HSC) and NYMEX Henry Hub prices (HSC Differential). In March 2020, EOG executed the early termination provision granting EOG the right to terminate certain 2020 HSC Differential basis swaps with notional volumes of 60,000 MMBtud at a weighted average price differential of $0.05 per MMBtu for the period from April 1, 2020 through December 31, 2020. The net cash EOG paid for settling these contracts was $0.4 million. Presented below is a comprehensive summary of EOG's HSC Differential basis swap contracts through July 30, 2020. The weighted average price differential expressed in $/MMBtu represents the amount of reduction to NYMEX Henry Hub prices for the notional volumes expressed in MMBtud covered by the basis swap contracts. | ||||||||||||||
| 2020 | Volume (MMBtud) | Weighted Average Price Differential ($/MMBtu) | ||||||||||||
| January 1, 2020 through December 31, 2020 (CLOSED) | 60,000 | 0.05 | ||||||||||||
| Waha Differential Basis Swap Contracts | ||||||||||||||
| EOG has also entered into natural gas basis swap contracts in order to fix the differential between pricing at the Waha Hub in West Texas and NYMEX Henry Hub prices (Waha Differential). Presented below is a comprehensive summary of EOG's Waha Differential basis swap contracts through July 30, 2020. The weighted average price differential expressed in $/MMBtu represents the amount of reduction to NYMEX Henry Hub prices for the notional volumes expressed in MMBtud covered by the basis swap contracts. | ||||||||||||||
| 2020 | Volume (MMBtud) | Weighted Average Price Differential ($/MMBtu) | ||||||||||||
| January 1, 2020 through April 30, 2020 (CLOSED) | 50,000 | 1.40 | ||||||||||||
| In April 2020, EOG entered into Waha Differential basis swap contracts for the period from May 1, 2020 through December 31, 2020, with notional volumes of 50,000 MMBtud at a weighted average price differential of $0.43 per MMBtu. These contracts offset the remaining Waha Differential basis swap contracts for the same time period with notional volumes of 50,000 MMBtud at a weighted average price differential of $1.40 per MMBtu. EOG expects to pay net cash of $11.9 million for the settlement of these contracts. The offsetting contracts were excluded from the above table. | ||||||||||||||
| Definitions | |||||||||||
| Bbld | Barrels per day | ||||||||||
| $/Bbl | Dollars per barrel | ||||||||||
| ICE | Intercontinental Exchange | ||||||||||
| MMBtud | Million British thermal units per day | ||||||||||
| $/MMBtu | Dollars per million British thermal units | ||||||||||
| NYMEX | U.S. New York Mercantile Exchange | ||||||||||
| WTI | West Texas Intermediate | ||||||||||
27
| Direct After-Tax Rate of Return | | ||||
| 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 | |||||
28
| ROCE & ROE | | ||||||||||||||||
| In millions of USD, except ratio data (Unaudited) | |||||||||||||||||
| 2019 | 2018 | 2017 | |||||||||||||||
| Net Interest Expense (GAAP) | 185 | 245 | |||||||||||||||
Tax Benefit Imputed (based on 21%) | (39) | (51) | |||||||||||||||
| After-Tax Net Interest Expense (Non-GAAP) - (a) | 146 | 194 | |||||||||||||||
| Net Income (GAAP) - (b) | 2,735 | 3,419 | |||||||||||||||
Adjustments to Net Income, Net of Tax (See Below Detail) (1) | 158 | (201) | |||||||||||||||
| Adjusted Net Income (Non-GAAP) - (c) | 2,893 | 3,218 | |||||||||||||||
Total Stockholders' Equity - (d) | 21,641 | 19,364 | 16,283 | ||||||||||||||
| Average Total Stockholders' Equity * - (e) | 20,503 | 17,824 | |||||||||||||||
| Current and Long-Term Debt (GAAP) - (f) | 5,175 | 6,083 | 6,387 | ||||||||||||||
| Less: Cash | (2,028) | (1,556) | (834) | ||||||||||||||
| Net Debt (Non-GAAP) - (g) | 3,147 | 4,527 | 5,553 | ||||||||||||||
| Total Capitalization (GAAP) - (d) + (f) | 26,816 | 25,447 | 22,670 | ||||||||||||||
| Total Capitalization (Non-GAAP) - (d) + (g) | 24,788 | 23,891 | 21,836 | ||||||||||||||
| Average Total Capitalization (Non-GAAP) * - (h) | 24,340 | 22,864 | |||||||||||||||
| Return on Capital Employed (ROCE) | |||||||||||||||||
| GAAP Net Income - [(a) + (b)] / (h) | 11.8 | % | 15.8 | % | |||||||||||||
Non-GAAP Adjusted Net Income - [(a) + (c)] / (h) | 12.5 | % | 14.9 | % | |||||||||||||
| Return on Equity (ROE) | |||||||||||||||||
| GAAP Net Income - (b) / (e) | 13.3 | % | 19.2 | % | |||||||||||||
Non-GAAP Adjusted Net Income - (c) / (e) | 14.1 | % | 18.1 | % | |||||||||||||
| * Average for the current and immediately preceding year | |||||||||||||||||
| (1) Detail of adjustments to Net Income (GAAP): | |||||||||||||||||
| Before Tax | Income Tax Impact | After Tax | |||||||||||||||
| Year Ended December 31, 2019 | |||||||||||||||||
| Adjustments: | |||||||||||||||||
| Add: Mark-to-Market Commodity Derivative Contracts Impact | 51 | (11) | 40 | ||||||||||||||
| Add: Impairments of Certain Assets | 275 | (60) | 215 | ||||||||||||||
| Less: Net Gains on Asset Dispositions | (124) | 27 | (97) | ||||||||||||||
| Total | 202 | (44) | 158 | ||||||||||||||
| Year Ended December 31, 2018 | |||||||||||||||||
| 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) | ||||||||||||||
29
| ROCE & ROE | | ||||||||||||||||||||||||||||
| In millions of USD, except ratio data (Unaudited) | |||||||||||||||||||||||||||||
| 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||||||||||
| 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 | ||||||||||||||||||||||||
| Return on Capital Employed (ROCE) | |||||||||||||||||||||||||||||
| GAAP Net Income (Loss) - [(a) + (b)] / (h) | 13.4 | % | -4.8 | % | -21.6 | % | 14.7 | % | 12.1 | % | |||||||||||||||||||
| Return on Equity (ROE) | |||||||||||||||||||||||||||||
| GAAP Net Income (Loss) - (b) / (e) | 17.1 | % | -8.1 | % | -29.5 | % | 17.6 | % | 15.3 | % | |||||||||||||||||||
| * Average for the current and immediately preceding year | |||||||||||||||||||||||||||||
30
| ROCE & ROE | | ||||||||||||||||||||||||||||
| In millions of USD, except ratio data (Unaudited) | |||||||||||||||||||||||||||||
| 2012 | 2011 | 2010 | 2009 | 2008 | |||||||||||||||||||||||||
| 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 (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 | ||||||||||||||||||||||||
| Return on Capital Employed (ROCE) | |||||||||||||||||||||||||||||
| GAAP Net Income - [(a) + (b)] / (h) | 4.0 | % | 7.7 | % | 1.8 | % | 5.4 | % | 26.4 | % | |||||||||||||||||||
| Return on Equity (ROE) | |||||||||||||||||||||||||||||
| GAAP Net Income - (b) / (e) | 4.4 | % | 9.5 | % | 1.6 | % | 5.8 | % | 30.5 | % | |||||||||||||||||||
| * Average for the current and immediately preceding year | |||||||||||||||||||||||||||||
31
| ROCE & ROE | | ||||||||||||||||||||||||||||
| In millions of USD, except ratio data (Unaudited) | |||||||||||||||||||||||||||||
| 2007 | 2006 | 2005 | 2004 | 2003 | |||||||||||||||||||||||||
| 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 (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 | ||||||||||||||||||||||||
| Return on Capital Employed (ROCE) | |||||||||||||||||||||||||||||
| GAAP Net Income - [(a) + (b)] / (h) | 15.7 | % | 24.7 | % | 30.0 | % | 18.2 | % | 15.3 | % | |||||||||||||||||||
| Return on Equity (ROE) | |||||||||||||||||||||||||||||
| GAAP Net Income - (b) / (e) | 17.3 | % | 26.2 | % | 34.7 | % | 24.2 | % | 22.1 | % | |||||||||||||||||||
| * Average for the current and immediately preceding year | |||||||||||||||||||||||||||||
32
| ROCE & ROE | | ||||||||||||||||||||||||||||
| In millions of USD, except ratio data (Unaudited) | |||||||||||||||||||||||||||||
| 2002 | 2001 | 2000 | 1999 | 1998 | |||||||||||||||||||||||||
| 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 (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 | |||||||||||||||||||||||||
| Return on Capital Employed (ROCE) | |||||||||||||||||||||||||||||
| GAAP Net Income - [(a) + (b)] / (h) | 4.8 | % | 18.2 | % | 20.2 | % | 27.0 | % | |||||||||||||||||||||
| Return on Equity (ROE) | |||||||||||||||||||||||||||||
| GAAP Net Income - (b) / (e) | 5.2 | % | 26.4 | % | 31.6 | % | 47.2 | % | |||||||||||||||||||||
| * Average for the current and immediately preceding year | |||||||||||||||||||||||||||||
33
| Costs per Barrel of Oil Equivalent | | ||||||||||||||||
| In thousands of USD, except Boe and per Boe amounts (Unaudited) | |||||||||||||||||
| 1Q 2020 | 2Q 2020 | YTD 2020 | |||||||||||||||
| Cost per Barrel of Oil Equivalent (Boe) Calculation | |||||||||||||||||
Volume - Thousand Barrels of Oil Equivalent - (a) | 79,548 | 56,733 | 136,281 | ||||||||||||||
Crude Oil and Condensate | 2,065,498 | 614,627 | 2,680,125 | ||||||||||||||
Natural Gas Liquids | 160,535 | 93,909 | 254,444 | ||||||||||||||
Natural Gas | 209,764 | 141,696 | 351,460 | ||||||||||||||
| Total Wellhead Revenues - (b) | 2,435,797 | 850,232 | 3,286,029 | ||||||||||||||
| Operating Costs | |||||||||||||||||
| Lease and Well | 329,659 | 245,346 | 575,005 | ||||||||||||||
| Transportation Costs | 208,296 | 151,728 | 360,024 | ||||||||||||||
| Gathering and Processing Costs | 128,482 | 96,767 | 225,249 | ||||||||||||||
| General and Administrative | 114,273 | 131,855 | 246,128 | ||||||||||||||
| Taxes Other Than Income | 157,360 | 80,319 | 237,679 | ||||||||||||||
| Interest Expense, Net | 44,690 | 54,213 | 98,903 | ||||||||||||||
Total Cash Operating Cost (excluding DD&A and Total Exploration Costs) - (c) | 982,760 | 760,228 | 1,742,988 | ||||||||||||||
| Depreciation, Depletion and Amortization (DD&A) | 1,000,060 | 706,679 | 1,706,739 | ||||||||||||||
Total Operating Cost (excluding Total Exploration Costs) - (d) | 1,982,820 | 1,466,907 | 3,449,727 | ||||||||||||||
| Exploration Costs | 39,677 | 27,283 | 66,960 | ||||||||||||||
| Dry Hole Costs | 372 | 87 | 459 | ||||||||||||||
| Impairments | 1,572,935 | 305,415 | 1,878,350 | ||||||||||||||
| Total Exploration Costs | 1,612,984 | 332,785 | 1,945,769 | ||||||||||||||
| Less: Certain Impairments (Non-GAAP) | (1,516,316) | (239,167) | (1,755,483) | ||||||||||||||
| Total Exploration Costs (Non-GAAP) | 96,668 | 93,618 | 190,286 | ||||||||||||||
Total Operating Cost (Non-GAAP) (including Total Exploration Costs) - (e) | 2,079,488 | 1,560,525 | 3,640,013 | ||||||||||||||
Composite Average Wellhead Revenue per Boe - (b) / (a) | 30.62 | 14.99 | 24.11 | ||||||||||||||
Total Cash Operating Cost per Boe (excluding DD&A and Total Exploration Costs) - (c) / (a) | 12.36 | 13.40 | 12.79 | ||||||||||||||
Composite Average Margin per Boe (excluding DD&A and Total Exploration Costs) - [(b) / (a) - (c) / (a)] | 18.26 | 1.59 | 11.32 | ||||||||||||||
Total Operating Cost per Boe (excluding Total Exploration Costs) - (d) / (a) | 24.93 | 25.86 | 25.31 | ||||||||||||||
Composite Average Margin per Boe (excluding Total Exploration Costs) - [(b) / (a) - (d) / (a)] | 5.69 | (10.87) | (1.20) | ||||||||||||||
Total Operating Cost per Boe (Non-GAAP) (including Total Exploration Costs) - (e) / (a) | 26.15 | 27.51 | 26.71 | ||||||||||||||
Composite Average Margin per Boe (Non-GAAP) (including Total Exploration Costs) - [(b) / (a) - (e) / (a)] | 4.47 | (12.52) | (2.60) | ||||||||||||||
34
| Costs per Barrel of Oil Equivalent | | ||||||||||||||||
| In thousands of USD, except Boe and per Boe amounts (Unaudited) | |||||||||||||||||
| 2019 | 2018 | 2017 | |||||||||||||||
| Cost per Barrel of Oil Equivalent (Boe) Calculation | |||||||||||||||||
Volume - Thousand Barrels of Oil Equivalent - (a) | 298,565 | 262,516 | 222,251 | ||||||||||||||
| Crude Oil and Condensate | 9,612,532 | 9,517,440 | 6,256,396 | ||||||||||||||
| Natural Gas Liquids | 784,818 | 1,127,510 | 729,561 | ||||||||||||||
| Natural Gas | 1,184,095 | 1,301,537 | 921,934 | ||||||||||||||
| Total Wellhead Revenues - (b) | 11,581,445 | 11,946,487 | 7,907,891 | ||||||||||||||
| Operating Costs | |||||||||||||||||
| Lease and Well | 1,366,993 | 1,282,678 | 1,044,847 | ||||||||||||||
| Transportation Costs | 758,300 | 746,876 | 740,352 | ||||||||||||||
| Gathering and Processing Costs | 479,102 | 436,973 | 148,775 | ||||||||||||||
| General and Administrative | 489,397 | 426,969 | 434,467 | ||||||||||||||
Less: Legal Settlement - Early Leasehold Termination | — | — | (10,202) | ||||||||||||||
| Less: Joint Venture Transaction Costs | — | — | (3,056) | ||||||||||||||
Less: Joint Interest Billings Deemed Uncollectible | — | — | (4,528) | ||||||||||||||
| General and Administrative (Non-GAAP) | 489,397 | 426,969 | 416,681 | ||||||||||||||
| Taxes Other Than Income | 800,164 | 772,481 | 544,662 | ||||||||||||||
| Interest Expense, Net | 185,129 | 245,052 | 274,372 | ||||||||||||||
Total Cash Operating Cost (Non-GAAP) (excluding DD&A and Total Exploration Costs) - (c) | 4,079,085 | 3,911,029 | 3,169,689 | ||||||||||||||
| Depreciation, Depletion and Amortization (DD&A) | 3,749,704 | 3,435,408 | 3,409,387 | ||||||||||||||
Total Operating Cost (Non-GAAP) (excluding Total Exploration Costs) - (d) | 7,828,789 | 7,346,437 | 6,579,076 | ||||||||||||||
| Exploration Costs | 139,881 | 148,999 | 145,342 | ||||||||||||||
| Dry Hole Costs | 28,001 | 5,405 | 4,609 | ||||||||||||||
| Impairments | 517,896 | 347,021 | 479,240 | ||||||||||||||
| Total Exploration Costs | 685,778 | 501,425 | 629,191 | ||||||||||||||
| Less: Certain Impairments (Non-GAAP) | (274,974) | (152,671) | (261,452) | ||||||||||||||
| Total Exploration Costs (Non-GAAP) | 410,804 | 348,754 | 367,739 | ||||||||||||||
Total Operating Cost (Non-GAAP) (including Total Exploration Costs) - (e) | 8,239,593 | 7,695,191 | 6,946,815 | ||||||||||||||
35
| Cost per Barrel of Oil Equivalent | | ||||||||||||||||
| In thousands of USD, except Boe and per Boe amounts (Unaudited) | |||||||||||||||||
| 2019 | 2018 | 2017 | |||||||||||||||
Composite Average Wellhead Revenue per Boe - (b) / (a) | 38.79 | 45.51 | 35.58 | ||||||||||||||
Total Cash Operating Cost per Boe (Non-GAAP) (excluding DD&A and Total Exploration Costs) - (c) / (a) | 13.66 | 14.90 | 14.25 | ||||||||||||||
Composite Average Margin per Boe (Non-GAAP) (excluding DD&A and Total Exploration Costs) - [(b) / (a) - (c) / (a)] | 25.13 | 30.61 | 21.33 | ||||||||||||||
| Total Operating Cost per Boe (Non-GAAP) (excluding Total Exploration Costs) - (d) / (a) | 26.22 | 27.99 | 29.59 | ||||||||||||||
Composite Average Margin per Boe (Non-GAAP) (excluding Total Exploration Costs) - [(b) / (a) - (d) / (a)] | 12.57 | 17.52 | 5.99 | ||||||||||||||
| Total Operating Cost per Boe (Non-GAAP) (including Total Exploration Costs) - (e) / (a) | 27.60 | 29.32 | 31.24 | ||||||||||||||
Composite Average Margin per Boe (Non-GAAP) (including Total Exploration Costs) - [(b) / (a) - (e) / (a)] | 11.19 | 16.19 | 4.34 | ||||||||||||||
36
| Cost per Barrel of Oil Equivalent | | ||||||||||||||||
| In thousands of USD, except Boe and per Boe amounts (Unaudited) | |||||||||||||||||
| 2016 | 2015 | 2014 | |||||||||||||||
| Cost per Barrel of Oil Equivalent (Boe) Calculation | |||||||||||||||||
Volume - Thousand Barrels of Oil Equivalent - (a) | 204,929 | 208,862 | 217,073 | ||||||||||||||
| Crude Oil and Condensate | 4,317,341 | 4,934,562 | 9,742,480 | ||||||||||||||
| Natural Gas Liquids | 437,250 | 407,658 | 934,051 | ||||||||||||||
| Natural Gas | 742,152 | 1,061,038 | 1,916,386 | ||||||||||||||
| Total Wellhead Revenues - (b) | 5,496,743 | 6,403,258 | 12,592,917 | ||||||||||||||
| Operating Costs | |||||||||||||||||
| Lease and Well | 927,452 | 1,182,282 | 1,416,413 | ||||||||||||||
| Transportation Costs | 764,106 | 849,319 | 972,176 | ||||||||||||||
| Gathering and Processing Costs | 122,901 | 146,156 | 145,800 | ||||||||||||||
| General and Administrative | 394,815 | 366,594 | 402,010 | ||||||||||||||
| Less: Voluntary Retirement Expense | (42,054) | — | — | ||||||||||||||
Less: Acquisition Costs | (5,100) | — | — | ||||||||||||||
Less: Legal Settlement - Early Leasehold Termination | — | (19,355) | — | ||||||||||||||
| General and Administrative (Non-GAAP) | 347,661 | 347,239 | 402,010 | ||||||||||||||
| Taxes Other Than Income | 349,710 | 421,744 | 757,564 | ||||||||||||||
| Interest Expense, Net | 281,681 | 237,393 | 201,458 | ||||||||||||||
Total Cash Operating Cost (Non-GAAP) (excluding DD&A and Total Exploration Costs) - (c) | 2,793,511 | 3,184,133 | 3,895,421 | ||||||||||||||
| Depreciation, Depletion and Amortization (DD&A) | 3,553,417 | 3,313,644 | 3,997,041 | ||||||||||||||
Total Operating Cost (Non-GAAP) (excluding Total Exploration Costs) - (d) | 6,346,928 | 6,497,777 | 7,892,462 | ||||||||||||||
| Exploration Costs | 124,953 | 149,494 | 184,388 | ||||||||||||||
| Dry Hole Costs | 10,657 | 14,746 | 48,490 | ||||||||||||||
| Impairments | 620,267 | 6,613,546 | 743,575 | ||||||||||||||
| Total Exploration Costs | 755,877 | 6,777,786 | 976,453 | ||||||||||||||
| Less: Certain Impairments (Non-GAAP) | (320,617) | (6,307,593) | (824,312) | ||||||||||||||
| Total Exploration Costs (Non-GAAP) | 435,260 | 470,193 | 152,141 | ||||||||||||||
Total Operating Cost (Non-GAAP) (including Total Exploration Costs) - (e) | 6,782,188 | 6,967,970 | 8,044,603 | ||||||||||||||
37
| Cost per Barrel of Oil Equivalent | | ||||||||||||||||
| In thousands of USD, except Boe and per Boe amounts (Unaudited) | |||||||||||||||||
| 2016 | 2015 | 2014 | |||||||||||||||
Composite Average Wellhead Revenue per Boe - (b) / (a) | 26.82 | 30.66 | 58.01 | ||||||||||||||
Total Cash Operating Cost per Boe (Non-GAAP) (excluding DD&A and Total Exploration Costs) - (c) / (a) | 13.64 | 15.25 | 17.95 | ||||||||||||||
Composite Average Margin per Boe (Non-GAAP) (excluding DD&A and Total Exploration Costs) - [(b) / (a) - (c) / (a)] | 13.18 | 15.41 | 40.06 | ||||||||||||||
| Total Operating Cost per Boe (Non-GAAP) (excluding Total Exploration Costs) - (d) / (a) | 30.98 | 31.11 | 36.38 | ||||||||||||||
Composite Average Margin per Boe (Non-GAAP) (excluding Total Exploration Costs) - [(b) / (a) - (d) / (a)] | (4.16) | (0.45) | 21.63 | ||||||||||||||
| Total Operating Cost per Boe (Non-GAAP) (including Total Exploration Costs) - (e) / (a) | 33.10 | 33.36 | 37.08 | ||||||||||||||
Composite Average Margin per Boe (Non-GAAP) (including Total Exploration Costs) - [(b) / (a) - (e) / (a)] | (6.28) | (2.70) | 20.93 | ||||||||||||||
38
| Quarter and Full Year Guidance | | ||||||||||||||||||||||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||
| (a) Third Quarter and Full Year 2020 Forecast | |||||||||||||||||||||||||||||||||||||||||||||||
| The forecast items for the third quarter and full year 2020 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 Transactions. | |||||||||||||||||||||||||||||||||||||||||||||||
| (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 for Third Quarter and Full Year 2020 | 3Q 2020 | FY 2020 | |||||||||||||||||||||||||||||||||||||||||||||
| Daily Sales Volumes | |||||||||||||||||||||||||||||||||||||||||||||||
| Crude Oil and Condensate Volumes (MBbld) | |||||||||||||||||||||||||||||||||||||||||||||||
| United States | 363.0 | - | 373.0 | 402.0 | - | 408.0 | |||||||||||||||||||||||||||||||||||||||||
| Trinidad | 0.6 | - | 1.0 | 0.6 | - | 1.0 | |||||||||||||||||||||||||||||||||||||||||
| Other International | — | - | 0.2 | — | - | 0.2 | |||||||||||||||||||||||||||||||||||||||||
| Total | 363.6 | - | 374.2 | 402.6 | - | 409.2 | |||||||||||||||||||||||||||||||||||||||||
| Natural Gas Liquids Volumes (MBbld) | |||||||||||||||||||||||||||||||||||||||||||||||
| Total | 125.0 | - | 135.0 | 130.0 | - | 140.0 | |||||||||||||||||||||||||||||||||||||||||
| Natural Gas Volumes (MMcfd) | |||||||||||||||||||||||||||||||||||||||||||||||
| United States | 940 | - | 1,000 | 985 | - | 1,075 | |||||||||||||||||||||||||||||||||||||||||
| Trinidad | 165 | - | 185 | 180 | - | 195 | |||||||||||||||||||||||||||||||||||||||||
| Other International | 20 | - | 30 | 20 | - | 30 | |||||||||||||||||||||||||||||||||||||||||
| Total | 1,125 | - | 1,215 | 1,185 | - | 1,300 | |||||||||||||||||||||||||||||||||||||||||
| Crude Oil Equivalent Volumes (MBoed) | |||||||||||||||||||||||||||||||||||||||||||||||
| United States | 644.7 | - | 674.7 | 696.2 | - | 727.2 | |||||||||||||||||||||||||||||||||||||||||
| Trinidad | 28.1 | - | 31.8 | 30.6 | - | 33.5 | |||||||||||||||||||||||||||||||||||||||||
| Other International | 3.3 | - | 5.2 | 3.3 | - | 5.2 | |||||||||||||||||||||||||||||||||||||||||
| Total | 676.1 | - | 711.7 | 730.1 | - | 765.9 | |||||||||||||||||||||||||||||||||||||||||
39
| Quarter and Full Year Guidance | | ||||||||||||||||||||||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||
| Estimated Ranges for Third Quarter and Full Year 2020 | 3Q 2020 | FY 2020 | |||||||||||||||||||||||||||||||||||||||||||||
| Capital Expenditures ($MM) | 600 | - | 700 | 3,400 | - | 3,600 | |||||||||||||||||||||||||||||||||||||||||
| Operating Costs | |||||||||||||||||||||||||||||||||||||||||||||||
| Unit Costs ($/Boe) | |||||||||||||||||||||||||||||||||||||||||||||||
| Lease and Well | 4.20 | - | 4.70 | 4.10 | - | 4.50 | |||||||||||||||||||||||||||||||||||||||||
| Transportation Costs | 2.70 | - | 3.10 | 2.50 | - | 2.90 | |||||||||||||||||||||||||||||||||||||||||
| Gathering and Processing | 1.70 | 1.90 | 1.65 | 1.85 | |||||||||||||||||||||||||||||||||||||||||||
| Depreciation, Depletion and Amortization | 12.10 | 12.60 | 11.85 | 12.85 | |||||||||||||||||||||||||||||||||||||||||||
| General and Administrative | 2.25 | - | 2.35 | 1.85 | - | 1.95 | |||||||||||||||||||||||||||||||||||||||||
| Expenses ($MM) | |||||||||||||||||||||||||||||||||||||||||||||||
| Exploration and Dry Hole | 35 | - | 45 | 130 | - | 170 | |||||||||||||||||||||||||||||||||||||||||
| Impairment | 80 | 90 | 290 | 330 | |||||||||||||||||||||||||||||||||||||||||||
| Capitalized Interest | 5 | - | 9 | 27 | - | 33 | |||||||||||||||||||||||||||||||||||||||||
| Net Interest | 50 | - | 54 | 200 | - | 205 | |||||||||||||||||||||||||||||||||||||||||
| Taxes Other Than Income (% of Wellhead Revenue) | 7.0 | % | - | 9.0 | % | 7.0 | % | - | 8.0 | % | |||||||||||||||||||||||||||||||||||||
| Income Taxes | |||||||||||||||||||||||||||||||||||||||||||||||
| Effective Rate | 15 | % | - | 20 | % | 16 | % | - | 21 | % | |||||||||||||||||||||||||||||||||||||
| Current Tax (Benefit) / Expense ($MM) | (15) | - | 25 | (120) | - | (80) | |||||||||||||||||||||||||||||||||||||||||
Pricing - (Refer to Benchmark Commodity Pricing in text) | |||||||||||||||||||||||||||||||||||||||||||||||
| Crude Oil and Condensate ($/Bbl) | |||||||||||||||||||||||||||||||||||||||||||||||
| Differentials | |||||||||||||||||||||||||||||||||||||||||||||||
| United States - above (below) WTI | (2.30) | - | (0.30) | (2.05) | - | (0.05) | |||||||||||||||||||||||||||||||||||||||||
| Trinidad - above (below) WTI | (11.00) | - | (9.00) | (9.50) | - | (7.50) | |||||||||||||||||||||||||||||||||||||||||
| Other International - above (below) WTI | (18.75) | - | (12.75) | 2.00 | - | 7.00 | |||||||||||||||||||||||||||||||||||||||||
| Natural Gas Liquids | |||||||||||||||||||||||||||||||||||||||||||||||
| Realizations as % of WTI | 29 | % | - | 41 | % | 30 | % | - | 36 | % | |||||||||||||||||||||||||||||||||||||
| Natural Gas ($/Mcf) | |||||||||||||||||||||||||||||||||||||||||||||||
| Differentials | |||||||||||||||||||||||||||||||||||||||||||||||
United States - above (below) NYMEX Henry Hub | (0.70) | - | (0.30) | (0.80) | - | (0.20) | |||||||||||||||||||||||||||||||||||||||||
| Realizations | |||||||||||||||||||||||||||||||||||||||||||||||
| Trinidad | 2.10 | - | 2.70 | 2.30 | - | 3.00 | |||||||||||||||||||||||||||||||||||||||||
| Other International | 4.00 | - | 4.50 | 3.85 | - | 4.85 | |||||||||||||||||||||||||||||||||||||||||
| Definitions | |||||||||||||||||||||||||||||||||||||||||||||||
| $/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 | ||||||||||||||||||||||||||||||||||||||||||||||
40
