EOG Resources(EOG)2024-08-01 20:23Financial Performance - EOG's operating revenues for Q2 2024 increased by $452 million, or 8%, to $6,025 million compared to $5,573 million in Q2 2023[86] - Total wellhead revenues rose by $515 million, or 13%, to $4,510 million in Q2 2024, driven by higher production and prices[86] - Operating revenues for the first six months of 2024 increased by $531 million, or 5%, to $12,148 million compared to $11,617 million in the same period of 2023[104] - Wellhead crude oil and condensate revenues for the first six months of 2024 increased by $738 million, or 11%, to $7,172 million, attributed to a higher average price and increased production[108] - Wellhead natural gas revenues for the first six months of 2024 decreased by $166 million, or 20%, to $685 million, primarily due to a lower average price despite increased deliveries[110] - EOG recognized net gains on financial commodity derivatives of $190 million in the first six months of 2024, down from $477 million in the same period of 2023[111] Production and Deliveries - EOG's crude oil and condensate production increased by 14.1 MBbld, or 3%, to 490.7 MBbld in Q2 2024 from 476.6 MBbld in Q2 2023[88] - EOG's natural gas deliveries increased by 204 MMcfd, or 12%, to 1,872 MMcfd in Q2 2024 compared to 1,668 MMcfd in Q2 2023[92] Revenue Sources - The average crude oil price for EOG in the U.S. increased by 10% to $82.71 per barrel in Q2 2024, up from $74.98 per barrel in Q2 2023[90] - NGL revenues increased by $106 million, or 26%, to $515 million in Q2 2024, attributed to a 13% rise in deliveries[91] Expenses - Operating expenses for Q2 2024 were $3,895 million, an increase of $292 million from $3,603 million in Q2 2023[95] - DD&A expenses for Q2 2024 increased by $118 million to $984 million from $866 million in Q2 2023, primarily due to increased production in the U.S. and higher unit rates[100] - G&A expenses for Q2 2024 rose to $151 million, an increase of $9 million from $142 million in Q2 2023, mainly driven by higher employee-related costs[100] Shareholder Returns - EOG repurchased 5.5 million shares for approximately $690 million in Q2 2024, with $2.6 billion remaining under the share repurchase authorization[83] - EOG announced a commitment to return a minimum of 70% of annual net cash from operating activities to stockholders starting in fiscal year 2024[81] - The Board declared a quarterly cash dividend of $0.91 per share for Q2 2024, with payments scheduled for April 30, July 31, and October 31, 2024[82] - Cash dividend payments for the first six months of 2024 amounted to $1,045 million, compared to $1,547 million in the same period of 2023[122] Cash Flow and Investments - Cash balance increased by $153 million to $5,431 million as of June 30, 2024, from $5,278 million at the end of 2023[120] - Net cash provided by operating activities for the first six months of 2024 was $5,792 million, an increase of $260 million compared to the same period in 2023, driven by a $701 million increase in wellhead revenues[121] - Net cash used in investing activities decreased by $179 million to $3,130 million for the first six months of 2024, primarily due to a decrease in cash used in working capital associated with investing activities[122] - Exploration and development expenditures for the first six months of 2024 totaled $3,010 million, which is $164 million higher than the same period in 2023, mainly due to increased facilities expenditures and drilling in Trinidad[125] - Total expenditures for the full-year 2024 are estimated to range from approximately $6.0 billion to $6.4 billion, including exploration and development drilling and other capital expenditures[124] Risk Factors - EOG is facing risks related to government policies and regulations, including climate change-related initiatives and tax laws, which may impact operations and costs[136] - The company is addressing climate change concerns and potential shifts in consumer behavior, which could affect demand for oil and gas products[136] - EOG's ability to integrate acquired oil and gas properties and accurately estimate reserves and costs is critical for operational success[136] - The company is subject to competition for licenses and properties in the oil and gas exploration and production industry, which may affect growth opportunities[136] - EOG's access to credit and capital markets is essential for financing its capital expenditure requirements and operational needs[136] - The accuracy of reserve estimates is influenced by professional judgment, which may lead to imprecision in financial projections[136] - Weather conditions can impact crude oil and natural gas demand, as well as cause delays in drilling and production operations[136] - EOG's customers' ability to meet their obligations is crucial for maintaining financial stability and operational continuity[136] - The company is exposed to geopolitical factors and political conditions that could disrupt operations in various regions[136] - EOG's forward-looking statements are subject to uncertainties and should not be relied upon without consideration of potential risks and changes[137] Future Commitments - EOG entered into a 10-year agreement in February 2024 to sell 180,000 MMBtud of natural gas production starting in 2027, with a portion indexed to Brent crude oil prices[132] - The company expects to adjust its exploration and development expenditure budget based on energy market conditions and other economic factors, indicating significant flexibility in financing alternatives[126] - EOG's updated budget for exploration and development expenditures reflects a commitment to ongoing operational investments despite market fluctuations[124]