EOG Resources(EOG) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements 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 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 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 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 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 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] - 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][50] - 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] - 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] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 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] - The company completed the acquisition of Encino on August 1, 2025, adding 675,000 core net acres in the Utica play[93] - Total 2025 capital expenditures are estimated to be between $6.2 billion and $6.4 billion, focusing on high-return plays in key basins[98] - EOG maintains a strong capital structure with a debt-to-total capitalization ratio of 13% at June 30, 2025[100] Results of Operations Operating revenues decreased in Q2 and H1 2025 due to lower crude oil prices, partially offset by increased natural gas revenues from higher prices and volumes Q2 2025 vs Q2 2024 Production Volumes | Product | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Crude Oil & Condensate (MBbld) | 504.2 | 490.7 | +2.7% | | Natural Gas Liquids (MBbld) | 258.4 | 244.8 | +5.6% | | Natural Gas (MMcfd) | 2,229 | 1,872 | +19.1% | Q2 2025 vs Q2 2024 Average Realized Prices | Product | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Crude Oil & Condensate ($/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] - 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] Capital Resources and Liquidity 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] 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][173][174] Item 3. Quantitative and Qualitative Disclosures About Market Risk 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] Item 4. Controls and Procedures 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] - 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] PART II. OTHER INFORMATION Item 1. Legal Proceedings 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] - There are no environmental proceedings to disclose for the quarter ended June 30, 2025, based on a $1 million disclosure threshold[188] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 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] Item 5. Other Information 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][194] Item 6. Exhibits 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][198]