EOG Resources(EOG) - 2025 Q2 - Quarterly Results

Second Quarter 2025 Performance Overview Key Financial and Operating Highlights 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][9] - Completed a $3.5 billion debt offering to fund the acquisition of Encino Acquisition Partners (Encino)[6] 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 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] - The Utica asset, following the Encino acquisition, is now considered a foundational asset for EOG, with a focus on optimizing its development[10] - 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] Capital Return to Shareholders 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] - In Q2 2025, EOG repurchased 5.4 million shares for $600 million, with $4.5 billion remaining in its share buyback authorization[13] Financial Performance Analysis 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] - Production volumes for oil, NGLs, and natural gas all increased compared to Q1 2025 and were above guidance midpoints[25] - 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] - 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 $270 million bolt-on acquisition[20][25] Operating Performance Analysis In Q2 2025, EOG demonstrated strong cost control, with key per-unit operating costs coming in below both Q1 2025 levels and guidance midpoints, driven by lower maintenance, water handling, and natural gas gathering fees - Lease and Well (LOE) costs decreased quarter-over-quarter primarily due to lower maintenance and water handling expenses[32] - Gathering, Processing, and Transportation (GP&T) costs declined from Q1 due to lower natural gas gathering and processing fees[32] Q2 2025 Per-Unit Operating Costs ($/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 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 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] 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 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 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 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 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 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 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 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 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 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 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 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 |