Core Viewpoint - EOG Resources, Inc. has experienced a decline in share value, losing over 15% over the past year, resulting in shares being near a 52-week low despite recent market movements [1] Company Performance - EOG Resources, Inc. shares have underperformed, with a significant drop of over 15% in value over the last year [1] - The current share price is close to a 52-week low, indicating a challenging market position for the company [1] Market Context - The broader market has recently shown positive movements, contrasting with the poor performance of EOG Resources, Inc. shares [1]

Group 1 - The article does not provide any specific content or key points related to a company or industry [1]

Financial Data and Key Metrics Changes - For Q3 2025, EOG Resources reported $1.4 billion in free cash flow, $1.5 billion in net income, and $1 billion returned to shareholders through dividends and share repurchases [6][14][16] - Adjusted earnings per share were $2.71, and adjusted cash flow from operations per share was $5.57 [14] - The company has committed to returning nearly 90% of its estimated 2025 free cash flow, including $2.2 billion in dividends and $1.8 billion in share repurchases [6][17] Business Line Data and Key Metrics Changes - Oil, natural gas, and NGL volumes exceeded guidance midpoints, while capital expenditures and cash operating costs were below guidance midpoints [6][19] - The Delaware Basin, Eagle Ford, and Utica remain foundational assets driving strong returns, with emerging plays like Dorado and Powder River Basin showing improved well performance [7][8][24] Market Data and Key Metrics Changes - The company anticipates continued inventory builds in the oil market due to spare capacity returning, with a cautious near-term outlook but a constructive medium-term view [12][34] - For natural gas, EOG expects structural bullish drivers from record LNG feed gas demand and growing electricity demand, supporting price stability [12][35] Company Strategy and Development Direction - EOG's strategy focuses on capital discipline, operational excellence, sustainability, and culture, with a commitment to generating sustainable free cash flow [6][11][28] - The acquisition of Encino enhances EOG's portfolio, diversifying production and accelerating free cash flow generation [5][14] - The company is exploring international opportunities in the UAE and Bahrain, aiming to leverage its technical expertise [9][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate a dynamic market environment, emphasizing the importance of operational improvements and cost reductions [11][12][19] - The outlook for 2026 remains cautious, with expectations of no to low oil growth in the near term but continued investment in gas plays [46][48] Other Important Information - EOG has maintained a pristine balance sheet with a leverage target of less than 1 times total debt to EBITDA, providing flexibility for investments [11][15] - The company has returned over $20 billion to investors through dividends and share repurchases over the past five years [17][18] Q&A Session All Questions and Answers Question: Can you unpack your macro view on oil and gas? - Management maintains a cautious near-term view on oil due to spare capacity but is bullish on medium-term supply-demand balances, particularly for natural gas driven by LNG demand and electricity growth [32][34][35] Question: How is the Delaware Basin performing amid concerns about productivity? - Management reassured that Delaware Basin wells are performing as designed, with significant cost reductions and efficiency gains achieved through innovation [37][39][41] Question: What are the considerations for 2026 capital expenditures? - Management indicated that the Q4 run rate is a good starting point for 2026, with continued investment in gas plays and international opportunities [45][46][50] Question: How will free cash flow be allocated post-Encino acquisition? - The company plans to maintain a minimum commitment of 70% of free cash flow to shareholders, with flexibility to exceed this based on market conditions [60][61][90] Question: Can you provide insights on the Utica's base production performance? - Management noted that integration efforts and operational momentum have led to improved performance in the Utica, with efficiency gains from high-intensity completion designs [92]

Core Insights - EOG Resources, Inc. reported third-quarter 2025 adjusted earnings per share of $2.71, exceeding the Zacks Consensus Estimate of $2.43, but down from $2.89 in the same quarter last year [1][8] - Total quarterly revenues were $5.85 billion, missing the Zacks Consensus Estimate of $5.95 billion and declining from $5.97 billion in the prior-year quarter [1][8] Operational Performance - Total production volumes increased by 21% year over year to 119.7 million barrels of oil equivalent (MMBoe), driven by contributions from the Delaware Basin, Eagle Ford, and Utica [4] - Crude oil and condensate production reached 534.5 thousand barrels per day (MBbls/d), an increase of 8.4% from the previous year, surpassing estimates [4] - NGL volumes rose by 21.6% year over year to 309.3 MBbls/d, exceeding estimates [5] - Natural gas volumes increased to 2,745 million cubic feet per day (MMcf/d), up from 1,970 MMcf/d a year earlier, also beating estimates [5] - Average price realization for crude oil and condensates fell by 14.3% year over year to $65.95 per barrel, while natural gas prices improved by nearly 37% to $2.80 per Mcf [5][8] Operating Costs - Lease and well expenses rose to $431 million from $392 million a year ago [6] - Gathering, processing, and transportation costs increased to $587 million from $445 million in the prior year [6] - Total operating expenses for the quarter were $4.01 billion, up from $3.88 billion a year ago [6] Liquidity Position & Capital Expenditure - As of September 30, 2025, EOG had cash and cash equivalents of $3.5 billion and long-term debt of $7.7 billion [7] - The company generated $1.4 billion in free cash flow during the quarter, with capital expenditures amounting to $1.65 billion [7] Guidance - For 2025, EOG expects total production between 1,211.5 to 1,234.4 MBoe/d and anticipates fourth-quarter production of 1,346.4-1,386.3 MBoe/d [9]

Financial Performance & Capital Allocation - EOG's strategy delivers peer-leading Return on Capital Employed[8] - EOG is committed to returning a minimum of 70% of annual Free Cash Flow[4] - In 2024, EOG returned $53 Billion or 98% of annual Free Cash Flow to shareholders[16] - EOG's marketing strategy provides a competitive advantage through diverse markets[31] Operational Excellence & Efficiency - EOG's decentralized structure provides a broad footprint for learnings, innovation, & technology transfer[23] - In 2024, average well costs were reduced by 6% due to operational excellence[25] - In 2024, total production increased by 8% due to operational excellence[25] - EOG achieved an outstanding cash recycle ratio of 45x at $65 oil[26] Sustainability & Emissions Reduction - EOG is committed to safe operations, leading environmental performance, and community engagement[4] - EOG aims to reduce GHG emissions intensity rate by 25% from 2019 levels by 2030, targeting 147 metric tons CO2e/MBoe[51][52] - EOG is targeting near-zero methane emissions, aiming for 020% or less between 2025-2030[58][62]

Core Viewpoint - EOG Resources reported quarterly earnings of $2.71 per share, exceeding the Zacks Consensus Estimate of $2.43 per share, but down from $2.89 per share a year ago, indicating a mixed performance in earnings despite a positive surprise [1][2]. Financial Performance - The company achieved revenues of $5.85 billion for the quarter ended September 2025, which was 1.7% below the Zacks Consensus Estimate and a decrease from $5.97 billion in the same quarter last year [2]. - Over the last four quarters, EOG Resources has surpassed consensus EPS estimates four times, but has only topped revenue estimates once [2]. Stock Performance - EOG Resources shares have declined approximately 14.2% year-to-date, contrasting with the S&P 500's gain of 15.6%, indicating underperformance relative to the broader market [3]. - The stock currently holds a Zacks Rank of 3 (Hold), suggesting it is expected to perform in line with the market in the near future [6]. Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $2.28, with projected revenues of $6.02 billion, while the estimate for the current fiscal year is $9.93 on revenues of $22.98 billion [7]. - The trend of earnings estimate revisions for EOG Resources has been mixed ahead of the earnings release, which may influence future stock performance [6]. Industry Context - The Oil and Gas - Exploration and Production - United States industry is currently ranked in the bottom 21% of over 250 Zacks industries, suggesting a challenging environment for companies within this sector [8].

Revenue Performance - In Q3 2025, total operating revenues decreased by $118 million, or 2%, to $5,847 million compared to $5,965 million in Q3 2024[116] - Crude oil and condensate revenues fell by $245 million, or 7%, to $3,243 million in Q3 2025, primarily due to a lower composite average price[121] - Natural gas revenues surged by $335 million, or 90%, to $707 million in Q3 2025, driven by a 39% increase in natural gas deliveries[123] - Total operating revenues for the first nine months of 2025 decreased by $1,119 million, or 6%, to $16,994 million from $18,113 million in the same period of 2024[144] - Crude oil and condensate revenues for the first nine months of 2025 decreased by $1,150 million, or 11%, to $9,510 million, attributed to a lower composite average price[147] - Natural gas revenues for the first nine months of 2025 increased by $887 million, or 84%, to $1,944 million, driven by a higher composite average price and increased natural gas deliveries[149] Operating Expenses - Operating expenses for Q3 2025 were $4,011 million, an increase of $135 million from $3,876 million in Q3 2024[127] - Operating expenses for the first nine months of 2025 were $11,552 million, a decrease of $71 million from $11,623 million in the same period of 2024[152] - G&A expenses for the first nine months of 2025 increased by $116 million to $596 million, primarily due to increased professional services and costs related to the Encino acquisition[157] - Exploration costs for Q3 2025 were $71 million, an increase of $28 million from $43 million in Q3 2024, primarily due to geological and geophysical expenditures in Trinidad and the United States[138] Financial Metrics - EOG's cash return commitment was increased to a minimum of 70% of annual net cash provided by operating activities starting in fiscal year 2024[110] - The Board declared a quarterly cash dividend of $1.02 per share for Q4 2025, an increase from the previous $0.975 per share[113] - The net effective tax rate for Q3 2025 decreased to 19% from 22% in Q3 2024, primarily due to a reduction in state deferred income tax liability[143] - Cash and cash equivalents on hand at September 30, 2025, were $3.5 billion, with an additional $1.9 billion available under the senior unsecured revolving credit facility[162] - Net cash provided by operating activities for the first nine months of 2025 was $7,432 million, a decrease of $1,948 million compared to the same period of 2024[165] - Total impairments for the first nine months of 2025 were $154 million, an increase from $115 million in the same period of 2024[160] Investment and Financing Activities - Net cash used in investing activities for the first nine months of 2025 was $9,174 million, an increase of $4,483 million compared to the same period in 2024, primarily due to the acquisition of Encino for $4,464 million[166] - Net cash used in financing activities for the first nine months of 2025 was $1,820 million, which included treasury stock purchases of $1,887 million and dividend payments of $1,611 million[167] - Total expenditures for the full year 2025 are estimated to range from $6.2 billion to $6.4 billion, excluding the Encino acquisition[169] - Exploration and development expenditures for the first nine months of 2025 were $11,493 million, which is $7,160 million higher than the same period in 2024, primarily due to increased property acquisitions[172] - Property acquisitions for the first nine months of 2025 included $6,721 million related to the Encino acquisition[170] Strategic Initiatives and Risks - EOG's acquisition of Encino Acquisition Partners, LLC is expected to enhance its operational capabilities and strategic positioning in the market[191] - The company aims to increase production levels and achieve anticipated rates of return from its existing and future crude oil and natural gas projects[192] - EOG is focused on controlling drilling, completion, and operating costs to maximize reserve recoveries and improve overall efficiency[192] - The company is actively working on cost-mitigation initiatives to offset inflationary pressures on operating costs and capital expenditures[192] - EOG's future financial performance may be impacted by fluctuations in commodity prices, which are subject to market demand and supply dynamics[193] - The company is committed to developing and implementing emissions and environmental initiatives to meet its sustainability targets[193] - EOG's ability to integrate Encino's assets and operations effectively is crucial for realizing the anticipated benefits of the acquisition[193] - The company faces risks related to cybersecurity threats that could disrupt its business operations[192] - EOG's financial performance is influenced by geopolitical factors and economic conditions in the regions where it operates[193] - The company is exposed to market risks including commodity price risk, interest rate risk, and foreign currency exchange rate risk[196] Commodity and Derivative Contracts - EOG recognized net gains on financial commodity derivatives of $116 million in Q3 2025, up from $79 million in Q3 2024[124] - The total fair value of EOG's financial commodity and other derivative contracts was a net asset of $46 million as of September 30, 2025[175] - The net cash received from settlements of financial commodity derivative contracts during the third quarter of 2025 was $27 million[175] - EOG entered into a 10-year agreement to sell 180,000 MMBtud of domestic natural gas production starting in 2027, with a portion indexed to Brent crude oil prices[184] - EOG's updated budget for exploration and development expenditures for 2025 reflects a significant increase in capital expenditures compared to 2024[169] - EOG believes it has significant flexibility regarding financing alternatives and can adjust its exploration and development expenditure budget as needed[173]

Financial Performance - Total revenue for Q3 2025 was $5.847 billion, an increase from $5.478 billion in Q2 2025[4] - Net income for Q3 2025 was $1.471 billion, or $2.70 per share, compared to $1.345 billion, or $2.46 per share in Q2 2025[4] - Operating income decreased from $8.1 billion in 2024 to $5.4 billion in 2025[45] - Net income for 2024 was $6.4 billion, declining to $4.3 billion in 2025[45] - Reported Net Income (GAAP) for Q3 2025 was $1,824 million, resulting in an Adjusted Net Income (Non-GAAP) of $1,821 million, with diluted earnings per share of $2.71[60] - For Q2 2025, Reported Net Income (GAAP) was $1,751 million, leading to an Adjusted Net Income (Non-GAAP) of $1,649 million, with diluted earnings per share of $2.32[62] - In Q1 2025, Reported Net Income (GAAP) was $1,877 million, with an Adjusted Net Income (Non-GAAP) of $2,031 million, resulting in diluted earnings per share of $2.87[64] - For FY 2024, Reported Net Income (GAAP) was $8,218 million, while Adjusted Net Income (Non-GAAP) reached $8,477 million, with diluted earnings per share of $11.62[67] Cash Flow and Expenditures - Generated $1.4 billion in free cash flow and returned nearly $1.0 billion to shareholders through dividends and share repurchases[5][8] - Cash Operating Costs for Q3 2025 were $2.00 per Boe, an increase from $1.80 per Boe in Q2 2025[1] - Total Cash Operating Costs per Boe for Q3 2025 were $20.27, slightly higher than $20.25 in Q2 2025[71] - Net Cash Provided by Operating Activities (GAAP) for 2025 was $7,432 million, with Adjusted Cash Flow from Operations (Non-GAAP) at $8,340 million[78] - Free Cash Flow (Non-GAAP) for 2025 totaled $3,685 million, reflecting strong operational performance[78] - The company incurred $5,967 million in net cash used in investing activities for the year 2024[50] - The company reported a total of $12,143 million in net cash provided by operating activities for the year 2024[50] Production and Operations - Crude oil production reached 534.5 MBod, exceeding the guidance midpoint of 532.4 MBod[6][22] - In Q3 2025, total crude oil and condensate volumes reached 534.5 MBod, exceeding guidance by 2.1 MBod and up from 504.2 MBod in Q2 2025[33] - Natural gas liquids volumes totaled 309.3 MBbld, surpassing guidance by 4.3 MBbld, and significantly increased from 258.4 MBbld in Q2 2025[33] - Total crude oil equivalent volumes were 1,301.2 MBoed, exceeding guidance by 7.9 MBoed, and up from 1,134.1 MBoed in Q2 2025[33] - The company expects natural gas volumes in the U.S. for Q4 2025 to be between 2,740 MMcfd and 2,840 MMcfd, with a midpoint of 2,790 MMcfd[34] - For Q4 2025, crude oil and condensate volumes are guided to be between 542.5 MBod and 547.5 MBod, with a midpoint of 545.0 MBod[34] Capital Expenditures and Investments - Capital expenditures for Q3 2025 totaled $1.648 billion, slightly below the guidance midpoint of $1.650 billion[6] - The guidance for total capital expenditures for FY 2025 is between $6,200 million and $6,400 million, with a midpoint of $6,300 million[34] - The company made significant investments in oil and gas properties, totaling $5,353 million for the year 2024[50] - Total Capital Expenditures (Non-GAAP) for FY 2023 were $6,041 million, compared to $4,607 million in FY 2022, marking a 31% increase[80] Debt and Equity - Net debt increased to $4.164 billion, with a net debt-to-total capitalization ratio of 12.1%[4] - The net debt-to-total capitalization ratio was reported at 30%[45] - Long-term debt increased significantly from $3,757 million in March 2024 to $7,667 million by September 2025, indicating a rise of 104.8%[49] - Debt-to-Total Capitalization (GAAP) ratio increased to 20.3% in September 2025 from 12.7% in June 2025[82] Market Conditions and Risks - The average benchmark price for WTI crude oil was $64.95 per barrel, compared to $71.42 in Q2 2025, reflecting a decrease of 9.3%[33] - EOG's future financial position and performance are subject to risks including commodity price fluctuations and operational costs[1] - The company anticipates benefits from the acquisition of Encino, although integration risks exist[1] - The effective income tax rate for Q3 2025 was 19.4%, lower than the guidance of 20.5%[33] Shareholder Returns - The company declared a regular dividend of $1.02 per share, representing an indicated annual rate of $4.08 per share[10] - EOG committed to returning 89% of its estimated annual free cash flow to shareholders, with potential for additional returns[8] - The company declared dividends of $2.97 per share for 2025, compared to $3.70 per share in 2024[45]

Core Insights - EOG Resources exceeded analysts' profit expectations for the third quarter, driven by increased output which helped mitigate the impact of declining crude prices [1] Company Performance - The rise in output from EOG Resources played a crucial role in offsetting the negative effects of lower crude prices [1]

Company Overview - EOG Resources, Inc. is a leading independent oil and gas company based in Houston, Texas, focusing on efficient exploration, development, and production of hydrocarbons, primarily in key U.S. basins like the Permian Basin, Eagle Ford, and Bakken [1] - The company has a market capitalization of $56.68 billion and emphasizes sustainability while maximizing resource potential and operational efficiency to create long-term shareholder value [2] Stock Performance - EOG's stock has faced challenges, declining by 12.6% over the past 52 weeks and 4.7% over the past six months, with a 52-week high of $138.18 in January, representing a 23.6% decrease from that peak [3] - The stock has underperformed compared to the S&P 500 Index, which gained 19.6% over the past 52 weeks and 20.5% over the past six months, as well as the Energy Select Sector SPDR Fund (XLE), which saw a marginal increase over the same periods [4] Financial Performance - For Q2 of fiscal 2025, EOG reported revenue of $5.48 billion, which is 9.1% lower year-over-year but above the analyst expectation of $5.46 billion; adjusted net income per share was $2.32, lower than the previous year's $3.16 but higher than the expected $2.21 [5] - Following the Encino acquisition, EOG revised its full-year total capital expenditures outlook to a range of $6.2 billion to $6.4 billion [5] Analyst Outlook - Wall Street analysts have a mixed outlook for EOG, expecting a 14.5% year-over-year drop in EPS to $9.93 for fiscal year 2025, but a slight increase of 1.4% to $10.07 in fiscal 2026 [6] - For Q3, EPS is projected to decrease by 15.9% annually to $2.43, although the company has a strong track record of exceeding consensus EPS estimates in the previous four quarters [7]