October 17, 2019 - 7:35 AM EDT
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EOG Shares Have Been Cut in Half in 2019: What's Going On?

When oil prices start falling, it's important to recognize the oil and gas companies with the greatest risk/reward offering. EOG Resources (NYSE: EOG) is one of the largest exploration and production (E&P) companies in the United States but has seen its stock decline by more than 50% in 2019, a new three-year low. Yet the investment thesis for EOG remains strong. The company is lead by forward-thinking management that has spent the last five years positioning the company to operate profitably despite market cycles. With companywide breakeven levels around or below $50 a barrel and the commitment to paying down debt, EOG has proved to be a good steward of shareholder capital.

Ever since selling its offshore assets in the United Kingdom in September 2018, EOG has become a pure-play U.S. onshore oil and gas investment. The company has nearly 3 billion barrels of oil equivalent in estimated proved reserves, of which 52% is petroleum, 21% is natural gas liquids, and 27% is natural gas. As of the end of 2018, EOG is now the largest petroleum producer in the Eagle Ford shale.

EOG continues to make moves in the natural gas space, most recently landing long-term gas supply agreements (GSAs) with liquefied natural gas (LNG) titan Cheniere Energy. "Under the GSAs, EOG has agreed to sell natural gas to Cheniere over a period of approximately 15 years beginning in early 2020, with the quantity starting at 140,000 MMBtu per day and increasing to 440,000 MMBtu per day," said the company in a recent press release.  

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Source: Motley Fool (October 17, 2019 - 7:35 AM EDT)

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