Core Insights - EOG Resources reported Q2 2025 non-GAAP EPS of $2.32, exceeding estimates of $2.23, while facing a challenging pricing environment for oil and gas [1][2] - The company proactively reduced capital expenditures to protect free cash flow and shareholder returns, reflecting strong operational discipline [1][4] Financial Performance - Non-GAAP EPS decreased by 26.6% year-over-year from $3.16 in Q2 2024 to $2.32 in Q2 2025 [2] - GAAP revenue for Q2 2025 was $5.48 billion, slightly above the estimate of $5.45 billion [2] - Free cash flow fell by 29.0% year-over-year to $973 million from $1.37 billion in Q2 2024 [2][6] - Average realized price per barrel of oil equivalent dropped to $39.80 from $45.88 in Q1 2025, with U.S. crude oil averaging $64.84 per barrel, down from $72.90 [5][6] Operational Highlights - Production volumes reached 1,134.1 thousand barrels of oil equivalent per day, with oil volumes at 504.2 thousand barrels per day and natural gas liquids at 258.4 thousand barrels daily [6] - The composite margin per Boe decreased to $14.94 from $21.70 in 2024, indicating pressure on profit margins due to weaker pricing [6] - EOG's drilling efficiency improved by 15% year-over-year at the Dorado project, maintaining low gas breakeven costs of approximately $1.40 per Mcf [8] Strategic Focus - EOG Resources operates primarily in the U.S., focusing on developing large proved reserves and leveraging advanced drilling technologies [3][4] - The company reduced its 2025 capital budget by $200 million and narrowed drilling activity in key areas to maintain steady oil production [7] - EOG completed a $275 million acquisition in the Eagle Ford, adding 30,000 net acres [7] Future Outlook - Management expects flat oil production for the remainder of the year, with approximately 2% oil production growth and 5% total production growth anticipated [10] - Free cash flow guidance is set at $4 billion, assuming oil prices at $65 per barrel and natural gas at $3.75 per Mcf [10] - The company maintained a net cash position of $980 million as of June 30, 2025, and paid $528 million in dividends [9]

Core Insights - EOG Resources reported a revenue of $5.48 billion for the quarter ended June 2025, reflecting a 9.1% decrease year-over-year, while EPS was $2.32, down from $3.16 in the same quarter last year [1] - The revenue exceeded the Zacks Consensus Estimate by 0.3%, and the EPS surpassed the consensus estimate by 4.98% [1] Financial Performance Metrics - Crude Oil and Condensate production was 504.2 million barrels per day, slightly above the analyst estimate of 502.78 million barrels per day [4] - Natural Gas production reached 2229 million cubic feet per day, exceeding the average estimate of 2161.91 million cubic feet per day [4] - Natural Gas Liquids production was 258.4 million barrels per day, surpassing the analyst estimate of 249.55 million barrels per day [4] - Total production was reported at 103.20 MBOE, higher than the estimated 101.38 MBOE [4] Revenue Breakdown - Natural Gas revenues were $600 million, significantly up by 98% year-over-year, and above the average estimate of $589.88 million [4] - Crude Oil and Condensate revenues were $2.97 billion, down 19.5% compared to the previous year, and slightly below the estimated $3.01 billion [4] - Natural Gas Liquids revenues totaled $534 million, reflecting a 3.7% increase year-over-year, and above the average estimate of $484 million [4] - Revenues from Gathering, Processing, and Marketing were $1.25 billion, down 17.9% year-over-year, and below the estimate of $1.43 billion [4] - Other revenues were reported at $16 million, a decrease of 30.4% year-over-year, compared to the average estimate of $21.13 million [4] Stock Performance - EOG Resources' shares have returned -4.4% over the past month, contrasting with the Zacks S&P 500 composite's increase of 1.2% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Group 1 - EOG Resources reported quarterly earnings of $2.32 per share, exceeding the Zacks Consensus Estimate of $2.21 per share, but down from $3.16 per share a year ago, representing an earnings surprise of +4.98% [1] - The company posted revenues of $5.48 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 0.30%, but down from $6.03 billion year-over-year [2] - EOG Resources has surpassed consensus EPS estimates in all four of the last quarters, while it has only topped consensus revenue estimates once in the same period [2] Group 2 - The stock has underperformed the market, losing about 4.9% since the beginning of the year compared to the S&P 500's gain of 7.9% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to those expectations [4] - The current consensus EPS estimate for the coming quarter is $2.40 on revenues of $5.85 billion, and for the current fiscal year, it is $10.05 on revenues of $23.33 billion [7] Group 3 - The Zacks Industry Rank indicates that the Oil and Gas - Exploration and Production - United States sector is currently in the bottom 28% of over 250 Zacks industries, which may impact stock performance [8] - The estimate revisions trend for EOG Resources was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, suggesting it is expected to perform in line with the market [6]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=ITEM%201.%20Financial%20Statements) EOG Resources, Inc. presents unaudited condensed consolidated financial statements for Q2 and H1 2025, showing decreased net income and operating cash flow [Condensed Consolidated Statements of Income and Comprehensive Income](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20and%20Comprehensive%20Income) EOG reported decreased net income for Q2 and H1 2025, primarily driven by lower crude oil and condensate revenues despite higher natural gas revenues Financial Performance Summary (In Millions, Except Per Share Data) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total Operating Revenues** | $5,478 | $6,025 | $11,147 | $12,148 | | **Operating Income** | $1,747 | $2,130 | $3,606 | $4,401 | | **Net Income** | $1,345 | $1,690 | $2,808 | $3,479 | | **Diluted EPS** | $2.46 | $2.95 | $5.11 | $6.05 | [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, EOG's total assets slightly decreased to $46.3 billion, mainly due to a reduction in cash and cash equivalents Balance Sheet Summary (In Millions) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | **Current Assets** | | | | Cash and Cash Equivalents | $5,216 | $7,092 | | Total Current Assets | $9,245 | $11,230 | | **Total Assets** | **$46,284** | **$47,186** | | **Current Liabilities** | | | | Current Portion of Long-Term Debt | $778 | $532 | | Total Current Liabilities | $5,175 | $5,354 | | **Long-Term Debt** | $3,458 | $4,220 | | **Total Stockholders' Equity** | **$29,238** | **$29,351** | [Condensed Consolidated Statements of Stockholders' Equity](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Stockholders' equity slightly decreased for H1 2025, driven by net income offset by dividends and treasury stock repurchases Changes in Stockholders' Equity (Six Months Ended June 30, 2025, In Millions) | Item | Amount | | :--- | :--- | | Balance at Dec 31, 2024 | $29,351 | | Net Income | $2,808 | | Common Stock Dividends Declared | $(1,618) | | Treasury Stock Repurchased | $(1,402) | | Other Changes | $(1) | | **Balance at June 30, 2025** | **$29,238** | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities decreased for H1 2025, leading to a $1.9 billion decrease in cash and cash equivalents Cash Flow Summary (Six Months Ended June 30, In Millions) | Cash Flow Category | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $4,321 | $5,792 | | Net Cash Used in Investing Activities | $(3,211) | $(3,130) | | Net Cash Used in Financing Activities | $(2,987) | $(2,509) | | **Decrease in Cash and Cash Equivalents** | **$(1,876)** | **$153** | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes provide detailed disclosures on segment performance, debt management, share repurchases, and the significant Encino acquisition - For the six months ended June 30, 2025, the United States segment generated **$11.0 billion in revenue** and **$3.6 billion in operating income**, representing the vast majority of the company's performance[42](index=42&type=chunk) - On April 1, 2025, EOG repaid **$500 million** of its 3.15% Senior Notes, and subsequently issued **$3.5 billion** in new senior notes on July 1, 2025, to fund the Encino acquisition[49](index=49&type=chunk)[50](index=50&type=chunk) - During the first six months of 2025, EOG repurchased **11.7 million shares** of common stock for approximately **$1.4 billion**, with **$4.5 billion** remaining available under the authorization as of June 30, 2025[53](index=53&type=chunk) - On August 1, 2025, EOG completed the acquisition of Encino Acquisition Partners for approximately **$4.48 billion in cash** and assumed **$1.2 billion in senior notes**, adding significant assets in the Utica play[75](index=75&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=ITEM%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial condition and operations, highlighting the impact of volatile commodity prices, the Encino acquisition, and a strong capital structure - EOG's strategy focuses on being a high-return, low-cost producer, emphasizing internally generated prospects and maintaining a strong balance sheet[80](index=80&type=chunk) - The company completed the acquisition of Encino on August 1, 2025, adding **675,000 core net acres** in the Utica play[93](index=93&type=chunk) - Total 2025 capital expenditures are estimated to be between **$6.2 billion and $6.4 billion**, focusing on high-return plays in key basins[98](index=98&type=chunk) - EOG maintains a strong capital structure with a debt-to-total capitalization ratio of **13%** at June 30, 2025[100](index=100&type=chunk) [Results of Operations](index=29&type=section&id=Results%20of%20Operations) Operating revenues decreased in Q2 and H1 2025 due to lower crude oil prices, partially offset by increased natural gas revenues from higher prices and volumes Q2 2025 vs Q2 2024 Production Volumes | Product | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Crude Oil & Condensate (MBbld) | 504.2 | 490.7 | +2.7% | | Natural Gas Liquids (MBbld) | 258.4 | 244.8 | +5.6% | | Natural Gas (MMcfd) | 2,229 | 1,872 | +19.1% | Q2 2025 vs Q2 2024 Average Realized Prices | Product | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Crude Oil & Condensate ($/Bbl) | $64.82 | $82.69 | -21.6% | | Natural Gas Liquids ($/Bbl) | $22.70 | $23.11 | -1.8% | | Natural Gas ($/Mcf) | $2.96 | $1.78 | +66.3% | - For the six months ended June 30, 2025, crude oil revenues decreased **13% to $6.3 billion** due to a **15% lower average price**, partially offset by a **3% increase in production volume**[140](index=140&type=chunk) - Natural gas revenues for the first six months of 2025 increased **81% to $1.2 billion**, driven by a **57% higher average price** and a **16% increase in delivery volumes**[142](index=142&type=chunk) [Capital Resources and Liquidity](index=37&type=section&id=Capital%20Resources%20and%20Liquidity) EOG maintained strong liquidity with $5.2 billion in cash and an undrawn credit facility, despite decreased operating cash flow and increased capital expenditures - As of June 30, 2025, EOG had **$5.2 billion of cash and cash equivalents** and **$1.9 billion of availability** under its undrawn revolving credit facility[155](index=155&type=chunk) H1 2025 Expenditures (In Millions) | Category | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Exploration and Development Expenditures | $3,206 | $3,010 | | Other Property, Plant and Equipment | $196 | $663 | | **Total Expenditures** | **$3,429** | **$3,634** | - In connection with the Encino acquisition, EOG assumed various natural gas and NGL financial derivative contracts, including price swaps and collars, extending through 2027[172](index=172&type=chunk)[173](index=173&type=chunk)[174](index=174&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=41&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes to market risk exposure were reported, with updates provided through derivative contract disclosures in other sections of this report - The company's market risk disclosures are updated by reference to the risk management and derivative contract information contained within this Form 10-Q, particularly in Note 10 and the MD&A section[181](index=181&type=chunk) [Item 4. Controls and Procedures](index=41&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting - EOG's principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[183](index=183&type=chunk) - No changes occurred during the quarter that have materially affected, or are reasonably likely to materially affect, EOG's internal control over financial reporting[184](index=184&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=42&type=section&id=ITEM%201.%20Legal%20Proceedings) Management believes pending legal claims will not materially adversely affect EOG's financial position, with no environmental proceedings exceeding the disclosure threshold - Management does not expect pending legal claims from the ordinary course of business to have a material adverse effect on EOG's financial condition or results[48](index=48&type=chunk) - There are no environmental proceedings to disclose for the quarter ended June 30, 2025, based on a **$1 million disclosure threshold**[188](index=188&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=42&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) EOG repurchased 5.4 million shares for approximately $600 million in Q2 2025, with $4.46 billion remaining under the share repurchase authorization Share Repurchase Activity (Q2 2025) | Period | Total Shares Purchased | Average Price Paid/Share | Total Value of Shares Purchased | | :--- | :--- | :--- | :--- | | April 2025 | 5,432,214 | $110.57 | $600.0M | | May 2025 | 3,003 | $110.77 | — | | June 2025 | 9,942 | $121.58 | — | | **Total** | **5,445,159** | **$110.59** | **$600.0M** | - As of June 30, 2025, approximately **$4.46 billion** remained available for repurchases under the **$10 billion** Share Repurchase Authorization[189](index=189&type=chunk) [Item 5. Other Information](index=43&type=section&id=ITEM%205.%20Other%20Information) EVP & COO Jeffrey R. Leitzell adopted a new Rule 10b5-1 trading arrangement for EOG common stock sales, effective June 26, 2025 - On June 26, 2025, EVP & COO Jeffrey R. Leitzell adopted a new Rule 10b5-1 trading plan for selling EOG common stock, which will terminate by June 30, 2027[193](index=193&type=chunk)[194](index=194&type=chunk) [Item 6. Exhibits](index=44&type=section&id=ITEM%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including the Encino acquisition agreement, corporate governance documents, and officer certifications - Key exhibits filed include the purchase agreement for the Encino acquisition, officer certifications required by the Sarbanes-Oxley Act, and interactive data files (XBRL)[197](index=197&type=chunk)[198](index=198&type=chunk)

Second Quarter 2025 Performance Overview [Key Financial and Operating Highlights](index=1&type=section&id=Key%20Financial%20and%20Operating%20Highlights) In Q2 2025, EOG Resources reported adjusted net income of **$1.3 billion** and generated **$1.0 billion** in free cash flow, returning **$1.1 billion** to shareholders while exceeding production guidance and managing costs below levels - Returned **$1.1 billion** to shareholders, comprising **$528 million** in regular dividends and **$600 million** in share repurchases[6](index=6&type=chunk)[9](index=9&type=chunk) - Completed a **$3.5 billion** debt offering to fund the acquisition of Encino Acquisition Partners (Encino)[6](index=6&type=chunk) Q2 2025 Key Financial Results (GAAP vs. Non-GAAP) | Metric | 2Q 2025 (GAAP) | 2Q 2025 (Non-GAAP) | | :--- | :--- | :--- | | **Net Income (in millions USD)** | $1,345 | $1,268 | | **Net Income Per Share ($)** | $2.46 | $2.32 | | **Net Cash from Ops (in millions USD)** | $2,032 | $2,496 (Adjusted CFO) | | **Free Cash Flow (in millions USD)** | N/A | $973 | | **Capital Expenditures (in millions USD)** | $1,883 (Total) | $1,523 | Q2 2025 Production and Capex vs. Guidance | Category | 2Q 2025 Actual | Guidance Midpoint | | :--- | :--- | :--- | | **Crude Oil (MBod)** | 504.2 | 502.1 | | **NGLs (MBbld)** | 258.4 | 251.0 | | **Natural Gas (MMcfd)** | 2,229 | 2,170 | | **Total (MBoed)** | 1,134.1 | 1,114.8 | | **Capital Expenditures (in millions USD)** | $1,523 | $1,550 | [Chairman and CEO Statement](index=2&type=section&id=Chairman%20and%20CEO%20Statement) Chairman and CEO Ezra Yacob highlighted the company's excellent Q2 results, attributing success to strong operational execution and cost discipline across its multi-basin portfolio and emphasizing commitment to cash returns - Operational excellence led to strong financial performance, generating **$973 million** in free cash flow and returning **$1.1 billion** to shareholders in Q2[9](index=9&type=chunk) - The Utica asset, following the Encino acquisition, is now considered a foundational asset for EOG, with a focus on optimizing its development[10](index=10&type=chunk) - EOG's portfolio has been significantly enhanced through the Encino acquisition, entry into Bahrain and the UAE, and exploration progress in Trinidad, strengthening its industry-leading asset base[11](index=11&type=chunk) [Capital Return to Shareholders](index=2&type=section&id=Capital%20Return%20to%20Shareholders) EOG's Board of Directors declared a regular quarterly dividend of **$1.02 per share**, indicating an annual rate of **$4.08 per share**, and executed significant share repurchases totaling **$600 million** - A regular dividend of **$1.02 per share** was declared, payable on October 31, 2025, reflecting an indicated annual rate of **$4.08 per share**[12](index=12&type=chunk) - In Q2 2025, EOG repurchased **5.4 million shares** for **$600 million**, with **$4.5 billion** remaining in its share buyback authorization[13](index=13&type=chunk) [Financial Performance Analysis](index=4&type=section&id=Financial%20Performance%20Analysis) EOG's Q2 2025 GAAP EPS decreased to **$2.46** from **$2.65** in Q1, primarily due to lower commodity prices, partially offset by higher volumes and lower per-unit costs, leading to a **$1.4 billion** decrease in cash position - Lower crude oil, NGL, and natural gas prices were the primary driver of the decrease in EPS from Q1 to Q2 2025[21](index=21&type=chunk) - Production volumes for oil, NGLs, and natural gas all increased compared to Q1 2025 and were above guidance midpoints[25](index=25&type=chunk) - Per-unit costs for LOE, GP&T, and DD&A decreased quarter-over-quarter; however, GAAP G&A costs increased due to expenses related to the Encino acquisition[23](index=23&type=chunk) - The company's cash balance decreased by **$1.4 billion** during Q2, driven by **$528 million** in dividends, **$600 million** in stock repurchases, **$500 million** in debt repayment, and a **$270 million** bolt-on acquisition[20](index=20&type=chunk)[25](index=25&type=chunk) [Operating Performance Analysis](index=5&type=section&id=Operating%20Performance%20Analysis) In Q2 2025, EOG demonstrated strong cost control, with key per-unit operating costs coming in below both Q1 2025 levels and guidance midpoints, driven by lower maintenance, water handling, and natural gas gathering fees - Lease and Well (LOE) costs decreased quarter-over-quarter primarily due to lower maintenance and water handling expenses[32](index=32&type=chunk) - Gathering, Processing, and Transportation (GP&T) costs declined from Q1 due to lower natural gas gathering and processing fees[32](index=32&type=chunk) Q2 2025 Per-Unit Operating Costs ($/Boe) | Cost Category | 2Q 2025 Actual | 2Q 2025 Guidance Midpoint | 1Q 2025 Actual | | :--- | :--- | :--- | :--- | | **Lease and Well (LOE)** | 3.84 | 4.15 | 4.09 | | **GP&T** | 4.41 | 4.55 | 4.48 | | **G&A (Non-GAAP)** | 1.69 | 1.75 | 1.74 | | **Cash Operating Costs (Non-GAAP)** | 9.94 | 10.45 | 10.31 | | **DD&A** | 10.20 | 10.30 | 10.32 | [Second Quarter 2025 Results vs. Guidance](index=6&type=section&id=Second%20Quarter%202025%20Results%20vs.%20Guidance) EOG's Q2 2025 operational results broadly exceeded the company's guidance, with total crude oil equivalent production surpassing the midpoint and non-GAAP capital expenditures favorably below the guided amount Q2 2025 Key Metrics vs. Guidance | Metric | 2Q 2025 Actual | Guidance Midpoint | Variance | | :--- | :--- | :--- | :--- | | **Total Crude Oil Equivalent (MBoed)** | 1,134.1 | 1,114.8 | +19.3 | | **Capital Expenditures (non-GAAP, in millions USD)** | 1,523 | 1,550 | (27) | | **Cash Operating Costs (non-GAAP, $/Boe)** | 9.94 | 10.45 | (0.51) | | **DD&A ($/Boe)** | 10.20 | 10.30 | (0.10) | 2025 Guidance [Full-Year 2025 Guidance Update](index=3&type=section&id=Full-Year%202025%20Guidance%20Update) Following the close of the Encino acquisition and factoring in strong year-to-date performance, EOG has updated its full-year 2025 guidance, expecting total capital expenditures between **$6.2 billion** and **$6.4 billion** - Guidance was updated to reflect the Encino acquisition, strong operational performance, and the impact of new U.S. tax legislation[14](index=14&type=chunk) Updated Full-Year 2025 Guidance | Metric | Guidance Range/Value | | :--- | :--- | | **Total Capital Expenditures** | $6.2 - $6.4 billion | | **Average Oil Production** | 521 MBod (midpoint) | | **Average Total Production** | 1,224 MBoed (midpoint) | [Detailed Q3 and Full-Year 2025 Guidance](index=7&type=section&id=Detailed%20Q3%20and%20Full-Year%202025%20Guidance) EOG provided detailed guidance for Q3 and the full year of 2025, forecasting Q3 total production around **1,293.3 MBoed** with capital expenditures of **$1.6 billion** to **$1.7 billion**, and full-year total production at **1,224.0 MBoed** on a capital budget of **$6.2 billion** to **$6.4 billion** Q3 2025 Guidance (Midpoints) | Metric | Q3 2025 Midpoint | | :--- | :--- | | **Total Production (MBoed)** | 1,293.3 | | **Crude Oil Production (MBod)** | 532.4 | | **Capital Expenditures (in millions USD)** | $1,650 | | **Cash Operating Costs ($/Boe)** | $10.30 | Full-Year 2025 Guidance (Midpoints) | Metric | FY 2025 Midpoint | | :--- | :--- | | **Total Production (MBoed)** | 1,224.0 | | **Crude Oil Production (MBod)** | 520.8 | | **Capital Expenditures (in millions USD)** | $6,300 | | **Cash Operating Costs ($/Boe)** | $10.35 | Supplemental Financial and Operating Data [Income Statements](index=13&type=section&id=Income%20Statements) For Q2 2025, EOG reported total revenues of **$5.48 billion** and a net income of **$1.35 billion**, resulting in a diluted EPS of **$2.46**, a decrease from Q2 2024 primarily due to lower crude oil sales revenues Income Statement Summary (in millions USD) | Item | 2Q 2025 | 1Q 2025 | 2Q 2024 | | :--- | :--- | :--- | :--- | | **Total Revenues** | $5,478 | $5,669 | $6,025 | | **Operating Income** | $1,747 | $1,859 | $2,130 | | **Net Income** | $1,345 | $1,463 | $1,690 | | **Diluted EPS ($)** | $2.46 | $2.65 | $2.95 | [Volumes and Prices](index=14&type=section&id=Volumes%20and%20Prices) In Q2 2025, total crude oil equivalent production increased to **1,134.1 MBoed** from **1,047.5 MBoed** in Q2 2024, despite a significant decline in realized composite crude oil prices to **$64.82 per barrel** Production Volumes | Volume | 2Q 2025 | 2Q 2024 | | :--- | :--- | :--- | | **Crude Oil (MBbld)** | 504.2 | 490.7 | | **NGLs (MBbld)** | 258.4 | 244.8 | | **Natural Gas (MMcfd)** | 2,229 | 1,872 | | **Total (MBoed)** | 1,134.1 | 1,047.5 | Average Realized Prices | Price | 2Q 2025 | 2Q 2024 | | :--- | :--- | :--- | | **Crude Oil ($/Bbl)** | $64.82 | $82.69 | | **NGLs ($/Bbl)** | $22.70 | $23.11 | | **Natural Gas ($/Mcf)** | $2.96 | $1.78 | [Balance Sheets](index=15&type=section&id=Balance%20Sheets) As of June 30, 2025, EOG maintained a strong balance sheet with total assets of **$46.3 billion**, cash and cash equivalents at **$5.2 billion**, and total debt of **$4.2 billion**, with stockholders' equity at **$29.2 billion** Balance Sheet Highlights (in millions USD) | Item | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--- | :--- | :--- | :--- | | **Cash & Cash Equivalents** | $5,216 | $6,599 | $5,431 | | **Total Assets** | $46,284 | $46,982 | $45,224 | | **Current & Long-Term Debt** | $4,236 | $4,744 | $3,784 | | **Total Stockholders' Equity** | $29,238 | $29,516 | $29,159 | [Cash Flow Statements](index=16&type=section&id=Cash%20Flow%20Statements) For Q2 2025, EOG generated **$2.03 billion** in net cash from operating activities, while net cash used in investing activities was **$1.78 billion** and financing activities used **$1.64 billion**, resulting in a net decrease in cash of **$1.38 billion** Cash Flow Summary (in millions USD) | Item | 2Q 2025 | 1Q 2025 | 2Q 2024 | | :--- | :--- | :--- | :--- | | **Net Cash from Operating Activities** | $2,032 | $2,289 | $2,889 | | **Net Cash Used in Investing Activities** | $(1,781) | $(1,430) | $(1,533) | | **Net Cash Used in Financing Activities** | $(1,635) | $(1,352) | $(1,217) | | **Net Change in Cash** | $(1,383) | $(493) | $139 | [Non-GAAP Financial Measures](index=18&type=section&id=Non-GAAP%20Financial%20Measures) This section provides reconciliations for key non-GAAP metrics used by management and analysts to evaluate performance, including Adjusted Net Income, Free Cash Flow, and Net Debt, offering a clearer view of core operational performance [Adjusted Net Income](index=19&type=section&id=Adjusted%20Net%20Income) EOG's Adjusted Net Income for Q2 2025 was **$1.27 billion**, or **$2.32 per diluted share**, adjusting GAAP Net Income by excluding items such as unrealized mark-to-market derivative gains and adding back acquisition-related costs Q2 2025 Reconciliation of Net Income to Adjusted Net Income (in millions USD) | Description | Amount | | :--- | :--- | | **Reported Net Income (GAAP)** | **$1,345** | | Mark-to-Market Derivative Gains | $(84) | | Net Cash Payments for Settlements | $(19) | | Add: Certain Impairments | $11 | | Add: Acquisition-related costs | $15 | | **Adjusted Net Income (Non-GAAP)** | **$1,268** | [Cash Flow from Operations and Free Cash Flow](index=30&type=section&id=Cash%20Flow%20from%20Operations%20and%20Free%20Cash%20Flow) In Q2 2025, EOG generated **$973 million** of Free Cash Flow (a non-GAAP measure), calculated by adjusting GAAP Net Cash Provided by Operating Activities for working capital changes and subtracting non-GAAP Capital Expenditures Q2 2025 Free Cash Flow Calculation (in millions USD) | Item | Amount | | :--- | :--- | | **Net Cash Provided by Operating Activities (GAAP)** | **$2,032** | | Adjustments for Working Capital, etc. | $464 | | **Adjusted Cash Flow from Operations (Non-GAAP)** | **$2,496** | | Less: Total Capital Expenditures (Non-GAAP) | $(1,523) | | **Free Cash Flow (Non-GAAP)** | **$973** | [Net Debt-to-Total Capitalization Ratio](index=33&type=section&id=Net%20Debt-to-Total%20Capitalization%20Ratio) As of June 30, 2025, EOG's Net Debt-to-Total Capitalization ratio was **-3.5%**, an improvement from **-6.7%** in the previous quarter, indicating a strong net cash position calculated using Net Debt of **($980) million** Net Debt-to-Total Capitalization Ratio | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :--- | :--- | :--- | :--- | | **Debt-to-Total Capitalization (GAAP)** | 12.7% | 13.8% | 11.5% | | **Net Debt-to-Total Capitalization (Non-GAAP)** | -3.5% | -6.7% | -6.0% | [Revenues, Costs and Margins Per Barrel of Oil Equivalent](index=35&type=section&id=Revenues%2C%20Costs%20and%20Margins%20Per%20Barrel%20of%20Oil%20Equivalent) In Q2 2025, EOG's composite average revenue per barrel of oil equivalent (Boe) was **$39.80**, with non-GAAP total operating cost of **$24.59 per Boe**, resulting in a non-GAAP composite average margin of **$15.21 per Boe**, down from Q1 2025 due to lower commodity prices Q2 2025 Per Boe Metrics (Non-GAAP) | Item ($/Boe) | 2Q 2025 | 1Q 2025 | 2Q 2024 | | :--- | :--- | :--- | :--- | | **Composite Average Revenue** | $39.80 | $45.88 | $47.31 | | **Total Operating Cost** | $24.59 | $25.79 | $25.24 | | **Composite Average Margin** | $15.21 | $20.09 | $22.07 | [Additional Key Financial Information](index=42&type=section&id=Additional%20Key%20Financial%20Information) This section provides a summary of key annual financial and operating data for 2022, 2023, and 2024, showing consistent growth in total crude oil equivalent production from **908.2 MBoed** in 2022 to **1,062.1 MBoed** in 2024, supported by increased non-GAAP capital expenditures Annual Production and Capex Trend | Metric | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | **Total Production (MBoed)** | 1,062.1 | 984.8 | 908.2 | | **Capital Expenditures (non-GAAP, in millions USD)** | $6,226 | $6,041 | $4,607 | | **Cash Operating Costs (non-GAAP, $/Boe)** | $10.17 | $10.33 | $10.47 |

Core Viewpoint - EOG Resources, Inc. reported strong financial results for the second quarter of 2025, with significant increases in production volumes and free cash flow, while also updating its 2025 guidance following the acquisition of Encino Acquisition Partners. Financial Performance - Total revenue for Q2 2025 was $5.478 billion, a decrease from $5.669 billion in Q1 2025 and $5.585 billion in Q4 2024 [2] - Net income for Q2 2025 was $1.345 billion, down from $1.463 billion in Q1 2025 [2] - Adjusted net income was $1.268 billion, or $2.32 per share, compared to $1.586 billion or $2.87 per share in Q1 2025 [2][8] - Free cash flow generated during the quarter was $973 million [6][8] Production Volumes - Crude oil and condensate production reached 504.2 MBod, exceeding guidance and up from 502.1 MBod in Q1 2025 [4][16] - Natural gas liquids production was 258.4 MBbld, also above guidance and up 7% from Q1 2025 [4][16] - Total crude oil equivalent production was 1,134.1 MBoed, an increase of 4% from Q1 2025 [4][16] Capital Expenditures and Costs - Capital expenditures for Q2 2025 were $1.523 billion, slightly above the guidance midpoint of $1.550 billion [4][12] - Cash operating costs per Boe were $9.94, lower than the guidance midpoint of $10.45 [2][4] - The company maintained cost discipline, with lower cash operating costs and DD&A compared to Q1 2025 [5][14] Shareholder Returns - EOG returned $1.1 billion to shareholders, including $528 million in regular dividends and $600 million in share repurchases [6][8] - The regular quarterly dividend was increased by 5%, reflecting confidence in the business and the positive impact of the Encino acquisition [6][10] 2025 Guidance Update - Full-year capital expenditures are now expected to range from $6.2 billion to $6.4 billion, with average oil production projected at 521 MBod and total production at 1,224 MBoed [12][19] - The updated guidance incorporates strong year-to-date operational performance and the impact of recent U.S. tax legislation [12][19] Strategic Positioning - The acquisition of Encino is viewed as a foundational asset for EOG, enhancing its multi-basin portfolio and operational capabilities [7][9] - The company is focused on optimizing the development of the Utica play and integrating Encino's operations [7][9]

Core Viewpoint - EOG Resources, Inc. is expected to report second-quarter 2025 results on August 7, with earnings per share estimated at $2.20, reflecting a 30.4% decline year-over-year [1][8] Earnings Performance - In the last reported quarter, EOG's adjusted earnings were $2.87 per share, exceeding the Zacks Consensus Estimate of $2.74, driven by higher production volumes [1] - EOG has consistently surpassed the Zacks Consensus Estimate in the past four quarters, with an average surprise of 6.02% [1] Revenue Expectations - The Zacks Consensus Estimate for revenues in the upcoming quarter is $5.43 billion, indicating a 9.8% decrease from the previous year [2] Production and Operational Factors - EOG is anticipated to have stable performance in Q2 2025, supported by productive acreages in key oil shale plays like the Permian and Eagle Ford, along with numerous untapped high-quality drilling sites [3] - However, the company is facing margin pressure due to lower commodity prices, which have negatively impacted upstream profitability despite steady production levels [4] Financial Strategy - EOG has reduced its 2025 capital expenditure budget by $200 million, indicating a cautious investment approach amid uncertain pricing and demand trends [4] - The company is also dealing with higher financing costs related to its $5.6 billion acquisition of Encino Acquisition Partners, which added approximately $3.5 billion in new debt [4] Earnings Outlook - Current analysis suggests that EOG may not achieve an earnings beat this quarter, with an Earnings ESP of -0.89% and a Zacks Rank of 3 (Hold) [6]

Industry Overview - The Zacks Oil-Energy sector presents a strong long-term investment opportunity due to abundant shale reserves, advanced extraction technologies, and steady global energy demand [1] - Innovations such as hydraulic fracturing and horizontal drilling have positioned the United States as a global leader in oil and natural gas production and exports [1][2] Geopolitical and Market Dynamics - U.S. exploration and production companies benefit from strategic geopolitical positioning and expanding LNG export markets, enhancing free cash flow generation through capital discipline and cost optimization [2] - Ongoing industry consolidation and operational efficiencies are strengthening the sector's ability to deliver stable earnings and long-term shareholder value [2] Company Profiles Occidental Petroleum (OXY) - Occidental Petroleum has a diversified asset portfolio, robust free cash flow generation, and a commitment to low-carbon initiatives, with a strong presence in the Permian Basin [3] - The company is focused on prudent capital allocation, ongoing debt reduction, and significant investments in carbon capture technologies, enhancing its long-term growth prospects [3] - The Zacks Consensus Estimate for OXY's earnings indicates a 3.62% increase for 2025 but a decline of 7.14% for 2026 [8] EOG Resources (EOG) - EOG Resources is recognized as one of the most efficient and technologically advanced shale producers in the U.S., with a high-quality, low-decline asset base in premier regions like the Delaware Basin and Eagle Ford [4] - The company consistently delivers strong free cash flow and maintains a solid balance sheet, supporting a resilient shareholder return strategy [4] - EOG's earnings estimates have risen for 2025 and 2026, with a projected long-term earnings growth per share of 1.3% [6][7] Financial Metrics Comparison - EOG shows a stronger return on equity (ROE) at 22.35% compared to OXY's 16.6%, and a lower debt-to-capital ratio of 10.5% versus OXY's 42.17% [7][11][14] - EOG offers a higher dividend yield of 3.21%, surpassing OXY's 2.11% and the S&P 500's 1.45% [10][7] Capital Expenditure Plans - OXY plans to invest between $7.2 billion and $7.4 billion in 2025, while EOG's capital expenditures are projected to be between $5.8 billion and $6.2 billion [16] Conclusion - EOG Resources is positioned for long-term production growth due to its extensive reach to key shale resources and favorable financial metrics, making it a more attractive investment compared to Occidental Petroleum [19]

Core Insights - The article highlights the expertise of Jaime, a former equity research analyst with over two decades of experience in the energy and clean technology sector, focusing on small to mid-cap companies [1]. Group 1 - Jaime is a long-only fundamental analyst, indicating a strategy that involves investing in stocks expected to rise in value over time [1]. - The analysis provided by Jaime is independent and bias-free, as he is no longer affiliated with any sell-side or buy-side institution [1].

Core Insights - Investors are focusing on dividend stocks for regular income amid market volatility [1][2] Group 1: EOG Resources - EOG Resources announced the acquisition of Encino Acquisition Partners for $5.6 billion, leading to a 5% increase in its quarterly dividend to $1.02 per share, with an annualized dividend of $4.08, resulting in a dividend yield of 3.4% [3][4] - Analyst Gabriele Sorbara maintains a buy rating on EOG with a price target of $155, expecting strong quarterly results and significant expansion in the Utica shale due to the acquisition [4][5] - EOG is projected to return at least 70% of its free cash flow to shareholders annually, with an estimated $976.6 million in capital returns, representing 107.7% of free cash flow and a 6.0% capital returns yield [6] Group 2: Williams Companies - Williams Companies offers a quarterly dividend of $0.50 per share, with an annualized dividend of $2.00, reflecting a yield of 3.5% [8] - Analyst Elvira Scotto reaffirmed a buy rating on WMB with a price target of $63, while adjusting Q2 projections due to seasonal factors and commodity price changes [9][11] - Scotto is optimistic about WMB's long-term growth potential, supported by a robust backlog of projects and expected benefits from additional projects and pipeline revivals [12][13] Group 3: Verizon Communications - Verizon Communications reported solid Q2 results, raising its annual profit guidance and announcing a quarterly dividend of $0.6775 per share, with an annualized dividend of $2.71, resulting in a dividend yield of 6.3% [14][15] - Analyst Michael Rollins reiterated a buy rating on Verizon with a price target of $48, noting the company's strong performance and upgraded full-year guidance [15][16] - Despite mixed key performance indicators and increased promotional costs, Rollins believes Verizon is well-positioned to meet its full-year guidance and sustain financial growth [16][17]