EOG Resources(US:EOG)2025-11-06 21:37Revenue 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]