• Adjusted Net Income: $6.6 billion, representing a 25% return on capital employed.
• Free Cash Flow Return: 98% returned to shareholders through dividends and share repurchases.
• Capital Expenditures (CapEx): $6.2 billion, with a focus on disciplined investment.
• Production Growth: 3% increase in oil production and 8% increase in total company volume for 2024.
• Proved Reserves: Increased by 6% to 4.7 billion barrels of oil equivalent, with a 201% reserve replacement rate.
• Dividend Increase: Regular dividend increased by 7% to an annual rate of $3.90 per share.
• Share Repurchases: $3.2 billion worth of shares repurchased at an average price of $123 per share.
• Cash and Debt Targets: Aiming for $5 billion to $6 billion in cash and debt each.
• Cash on Balance Sheet: $7.1 billion at the end of 2024.
• 2025 Capital Plan: $6.2 billion CapEx to deliver 3% oil volume growth and 6% total production growth.
• Well Cost Reduction: Expected low single-digit percentage reduction in well costs for 2025.
• International Projects: Increased capital expenditures for projects in Trinidad and a new partnership in Bahrain.

• Warning! GuruFocus has detected 5 Warning Sign with EOG.

Release Date: February 28, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• EOG Resources Inc (NYSE:EOG) exceeded its original 2024 production forecast while maintaining capital expenditures on target.
• The company achieved a 25% return on capital employed and returned 98% of free cash flow to shareholders through dividends and share repurchases.
• EOG Resources Inc (NYSE:EOG) increased its regular dividend by 7% and has consistently grown its dividend rate twice as fast as its peers since 2019.
• The company holds more than 10 billion barrels of oil equivalent in resource potential, with high returns averaging more than 55% direct after-tax rate of return.
• EOG Resources Inc (NYSE:EOG) has a strong balance sheet with $7.1 billion in cash, providing flexibility for opportunistic investments and shareholder returns.

Negative Points

• The free cash flow guidance for 2025 was softer than expected, partly due to increased cash taxes and higher operating expenses.
• EOG Resources Inc (NYSE:EOG) anticipates a modest increase in international capital expenditures, which may not yield immediate volume impacts.
• Natural gas differential guidance is wider than expected, despite strategic agreements aimed at improving realizations.
• The company faces challenges in optimizing well costs and productivity in emerging plays like the Utica and Dorado.
• EOG Resources Inc (NYSE:EOG) is experiencing increased operating expenses due to higher fuel and power costs in the field.

Q & A Highlights

Q: The free cash flow guidance of $4.7 billion at WTI and $4.25 Henry Hub was softer than expected. Can you explain the timing and investments in emerging plays and infrastructure? A: Ezra Yacob, CEO: The 2025 plan emphasizes capital discipline, with consistent activity in foundational plays and increased capital in emerging assets like Utica and Dorado. The free cash flow is impacted by increased cash taxes due to expiring AMTs and higher operating expenses, including initial transportation contracts. We're excited about the year ahead, focusing on strong results and investments for future free cash flow potential.

Q: Can you provide more details on the increased international spend, particularly in Trinidad and Bahrain? A: Jeffrey R. Leitzell, COO: We have increased international capital by about $100 million, focusing on the Mento program and coconut platform construction in Trinidad, and starting drilling in Bahrain in the second half of the year. Keith Trasko, SVP Exploration and Production, added that Trinidad projects will not impact volumes until 2026, and the partnership with BP is valued for its low-cost structure.

Q: Could you discuss the natural gas differential guidance, which is wider than expected? A: D. Lance Terveen, SVP Marketing and Midstream: The guidance reflects a weaker Gulf Coast basis and increased NYMEX prices. New strategic agreements will ramp up throughout the year, improving realizations. Our strategy is to direct more molecules away from basis deducts to Henry Hub and Southeast markets.

Q: How do you view the Utica's competitiveness with the Eagle Ford? A: Ezra Yacob, CEO: The Utica is progressing well, with significant operational efficiency gains. While the Eagle Ford benefits from established infrastructure and economies of scale, the Utica is advancing with lower well costs and a better understanding of subsurface quality. We expect continued improvements in the Utica's competitiveness.

Q: With the increased activity in emerging plays and international opportunities, are you considering divestitures to unlock value? A: Ezra Yacob, CEO: We continually review our inventory for opportunities to bring value forward. We've been active in the divestiture market, high-grading our portfolio at the right times to ensure optimal capital allocation.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.