EOG
$52.28
Eog Resources
($.04)
(.08%)
Earnings Details
1st Quarter March 2020
Thursday, May 07, 2020 4:15:00 PM
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Summary

Eog Resources Misses

Eog Resources (EOG) reported 1st Quarter March 2020 earnings of $0.55 per share on revenue of $4.7 billion. The consensus earnings estimate was $0.73 per share on revenue of $3.9 billion. The Earnings Whisper number was $0.67 per share. Revenue grew 16.2% on a year-over-year basis.

EOG Resources Inc explores for, develops, produces and markets crude oil and natural gas in the USA, Trinidad, United Kingdom, China, Argentina and, from time to time, select other international areas.

Results
Reported Earnings
$0.55
Earnings Whisper
$0.67
Consensus Estimate
$0.73
Reported Revenue
$4.72 Bil
Revenue Estimate
$3.88 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

EOG Resources Reports First Quarter 2020 Results and Updates 2020 Plan in Response to Oil Market Downturn; Company Well-Positioned to Emerge Stronger in a Recovery

HOUSTON, May 7, 2020 /PRNewswire/ --

  • Reduced Full-Year 2020 Capital Plan by an Additional $1.0 Billion to $3.3 to $3.7 Billion, Representing a Total Reduction of 46% Compared with Original Plan
  • Target 2020 Well Cost Savings of 8%
  • Declared Unchanged Common Stock Dividend of $0.375 per Share, or $1.50 Indicated Annual Rate
  • First Quarter Crude Oil Production Within Target Range with Capital Expenditures 14% Below Target Midpoint

EOG Resources, Inc. (EOG) today reported first quarter 2020 net income of $10 million, or $0.02 per share, compared with first quarter 2019 net income of $635 million, or $1.10 per share. 

Adjusted non-GAAP net income for the first quarter 2020 was $318 million, or $0.55 per share, compared with adjusted non-GAAP net income of $689 million, or $1.19 per share, for the same prior year period. Please refer to the attached tables for the reconciliation of non-GAAP measures to GAAP measures.

First Quarter 2020 Review

EOG continued to deliver strong operational and financial performance in the first quarter 2020 while responding to rapidly changing market conditions. The company moved quickly to reduce activity and capital expenditures. EOG also elected to defer production by delaying the startup of new wells and shutting in production from existing wells. 

Crude oil production volumes in the first quarter 2020 were in line with the target range while capital expenditures were 14 percent below the target midpoint. Total company crude oil volumes of 483,300 barrels of oil per day (Bopd) grew 11 percent compared with the first quarter 2019, despite electing to delay the startup of some new wells in the quarter and the shut-in of approximately 8,000 Bopd in March. Natural gas liquids production increased 35 percent, supported by the increased recovery of ethane in natural gas processing operations. Natural gas volumes grew five percent, contributing to total company daily production growth of 13 percent.

Cash operating expenses declined by eight percent on a per-unit basis during the first quarter 2020 compared with the same prior year period. Lower per-unit lease and well and general and administrative costs contributed to the overall cost reduction.

Net cash provided by operating activities for the first quarter 2020 was $2.6 billion. EOG generated $1.7 billion of discretionary cash flow in the first quarter 2020. The company incurred total expenditures of $1.8 billion, including $1.7 billion of capital expenditures before acquisitions, non-cash transactions and asset retirement costs. Please refer to the attached tables for the reconciliation of non-GAAP measures to GAAP measures.

"EOG is a resilient company. During the first quarter the company adjusted operations quickly to manage extreme commodity price volatility and the challenges from the COVID-19 pandemic," said William R. "Bill" Thomas, Chairman and Chief Executive Officer. "These unprecedented market conditions have super-charged our unique culture to vigorously lower costs and generate innovative productivity gains that will make EOG a much better company as we emerge from this downturn. Our years of continuous improvement, disciplined high-return investments, free cash flow generation and focus on strengthening our balance sheet have positioned the company for sustainable success through commodity price cycles."

Updated 2020 Capital Plan

EOG has further revised its full-year 2020 plan as a result of the significant decline and increased volatility of commodity prices. The goals of the plan are to generate high rates of return on capital investments, maintain EOG's strong financial position and support the dividend. The revised plan retains funding for projects that support the long-term value of the company, including targeted infrastructure, exploration and environmental projects.

Exploration and development expenditures for 2020 are now expected to range from $3.3 billion to $3.7 billion, including facilities and gathering, processing and other expenditures, and excluding acquisitions, non-cash transactions and asset retirement costs. This represents a reduction of $1.0 billion from the previous updated plan that was announced on March 16 and a reduction of $3.0 billion, or 46 percent, from the original plan at the start of the year.

EOG has moved quickly to reduce its operating activity. The company lowered its operated rig count from 36 rigs to eight rigs during the last six weeks, with an average of approximately six rigs expected for the remainder of 2020. EOG has identified over 4,500 net drilling locations - more than nine years of inventory at the 2020 activity pace - that are capable of generating strong rates of return at less than $30 WTI oil. The company plans to focus its 2020 activity on these high-return wells.

Driven by its innovative culture and decentralized organization, EOG is accelerating cost reductions and sustainable efficiency improvements across its operations. Targeted well costs are forecast to decline an average of eight percent compared with 2019 levels, including reductions of nine percent and seven percent, respectively, in EOG's premier Delaware Basin and South Texas Eagle Ford operations.

EOG's revised capital plan targets full-year 2020 crude oil production of approximately 390,000 Bopd, representing a decline of 15 percent compared with full-year 2019 levels. EOG currently plans to bring approximately 485 net wells onto production for the full-year 2020 compared with the original forecast of 800 net wells, with a focus on the Delaware Basin and South Texas Eagle Ford.

In order to generate higher rates of return, the company has elected to defer some of its production until oil prices recover. This includes delaying the startup of approximately 150 net new wells until the second half of 2020 and the shut-in of existing production. The net production volume associated with the shut-in of existing wells was approximately 8,000 Bopd in March, 24,000 Bopd in April and is estimated to be 125,000 Bopd in May and 100,000 Bopd in June, with an average of 40,000 Bopd for the full-year 2020.

"Our guiding principles in this environment remain consistent with EOG's long-term strategy: to make returns-based decisions and spend within our means to protect our strong balance sheet. This is intended to preserve EOG's business value and position the company to thrive in an upturn," Thomas said.

"Over the last several years as we implemented our premium strategy, EOG significantly lowered its cost structure and strengthened its financial position, giving us a distinct advantage in the current environment. Our operational flexibility, favorable hedges and strong liquidity leave us well-positioned to respond to volatile market conditions. Since the end of the first quarter, we have further bolstered our liquidity by adjusting our hedge position and issuing new long-term debt to refinance bond maturities. Because we have acted decisively, we will be able to utilize these advantages as we navigate the downturn."

"During these challenging times, our first priority is the health and safety of our employees and their families, our contractors and our communities. We are also committed to sustaining our unique culture, EOG's most important asset. I am incredibly proud of our exceptional people, who have quickly adjusted to the new environment. Our employees are the foundation of the EOG culture. Thanks to their hard work and dedication, EOG is well-positioned to emerge even stronger in the recovery."

Dividend

The board of directors declared a dividend of $0.375 per share on EOG's Common Stock. The dividend will be payable July 31, 2020, to stockholders of record as of July 17, 2020. The indicated annual rate is $1.50 per share.

Financial Review

At March 31, 2020, EOG's total debt outstanding was $5.2 billion for a debt-to-total capitalization ratio of 20 percent. Considering $2.9 billion of cash on the balance sheet at the end of the first quarter, EOG's net debt was $2.3 billion for a net debt-to-total capitalization ratio of 10 percent. EOG's liquidity is further enhanced by $2.0 billion of availability under its senior unsecured revolving credit agreement as of March 31, 2020. For a reconciliation of non-GAAP measures to GAAP measures, please refer to the attached tables.

Subsequent to the end of the first quarter, on April 1, 2020, EOG repaid, with cash on hand, the $500 million aggregate principal amount of its 2.45% Senior Notes due 2020 that matured on that date. In addition, on April 14, 2020, EOG closed its sale of $750 million aggregate principal amount of its 4.375% Senior Notes due 2030 and $750 million aggregate principal amount of its 4.950% Senior Notes due 2050. EOG received aggregate net proceeds from the sale, after deducting underwriting discounts and estimated offering expenses, of approximately $1.48 billion.

First Quarter 2020 Results Webcast
Friday, May 8, 2020, 9:00 a.m. Central time (10:00 a.m. Eastern time)
Webcast will be available on EOG's website for one year.
http://investors.eogresources.com/Investors

About EOG
EOG Resources, Inc. (NYSE: EOG) is one of the largest crude oil and natural gas exploration and production companies in the United States with proved reserves in the United States, Trinidad, and China. To learn more visit www.eogresources.com.

Investor Contacts
David Streit  713-571-4902
Neel Panchal  713-571-4884

Media and Investor Contact
Kimberly Ehmer  713-571-4676

Source: EOG Resources, Inc.
Category: Earnings

This press release may include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  All statements, other than statements of historical facts, including, among others, statements and projections regarding EOG's future financial position, operations, performance, business strategy, returns, budgets, reserves, levels of production, capital expenditures, costs and asset sales, statements regarding future commodity prices and statements regarding the plans and objectives of EOG's management for future operations, are forward-looking statements.  EOG typically uses words such as "expect," "anticipate," "estimate," "project," "strategy," "intend," "plan," "target," "aims," "goal," "may," "will," "should" and "believe" or the negative of those terms or other variations or comparable terminology to identify its forward-looking statements.  In particular, statements, express or implied, concerning EOG's future operating results and returns or EOG's ability to replace or increase reserves, increase production, generate returns, replace or increase drilling locations, reduce or otherwise control operating costs and capital expenditures, generate cash flows, pay down or refinance indebtedness or pay and/or increase dividends are forward-looking statements.  Forward-looking statements are not guarantees of performance.  Although EOG believes the expectations reflected in its forward-looking statements are reasonable and are based on reasonable assumptions, no assurance can be given that these assumptions are accurate or that any of these expectations will be achieved (in full or at all) or will prove to have been correct.  Moreover, EOG's forward-looking statements may be affected by known, unknown or currently unforeseen risks, events or circumstances that may be outside EOG's control.  Furthermore, this press release and any accompanying disclosures may include or reference certain forward-looking, non-GAAP financial measures, such as free cash flow or discretionary cash flow, and certain related estimates regarding future performance, results and financial position.  Because we provide these measures on a forward-looking basis, we cannot reliably or reasonably predict certain of the necessary components of the most directly comparable forward-looking GAAP measures, such as future impairments and future changes in working capital. Accordingly, we are unable to present a quantitative reconciliation of such forward-looking, non-GAAP financial measures to the respective most directly comparable forward-looking GAAP financial measures. Management believes these forward-looking, non-GAAP measures may be a useful tool for the investment community in comparing EOG's forecasted financial performance to the forecasted financial performance of other companies in the industry.  Any such forward-looking measures and estimates are intended to be illustrative only and are not intended to reflect the results that EOG will necessarily achieve for the period(s) presented; EOG's actual results may differ materially from such measures and estimates.  Important factors that could cause EOG's actual results to differ materially from the expectations reflected in EOG's forward-looking statements include, among others:

  • the timing, extent and duration of changes in prices for, supplies of, and demand for, crude oil and condensate, natural gas liquids, natural gas and related commodities;
  • ­the extent to which EOG is successful in its efforts to acquire or discover additional reserves;
  • ­the extent to which EOG is successful in its efforts to (i) economically develop its acreage in, (ii) produce reserves and achieve anticipated production levels and rates of return from, (iii) decrease or otherwise control its drilling, completion, operating and capital costs related to, and (iv) maximize reserve recovery from, its existing and future crude oil and natural gas exploration and development projects and associated potential and existing drilling locations;
  • ­the extent to which EOG is successful in its efforts to market its crude oil and condensate, natural gas liquids, natural gas and related commodity production;
  • ­security threats, including cybersecurity threats and disruptions to our business and operations from breaches of our information technology systems, physical breaches of our facilities and other infrastructure or breaches of the information technology systems, facilities and infrastructure of third parties with which we transact business;
  • ­the availability, proximity and capacity of, and costs associated with, appropriate gathering, processing, compression, storage, transportation and refining facilities;
  • ­the availability, cost, terms and timing of issuance or execution of, and competition for, mineral licenses and leases and governmental and other permits and rights-of-way, and EOG's ability to retain mineral licenses and leases;
  • ­the impact of, and changes in, government policies, laws and regulations, including tax laws and regulations; climate change and other environmental, health and safety laws and regulations relating to air emissions, disposal of produced water, drilling fluids and other wastes, hydraulic fracturing and access to and use of water; laws and regulations imposing conditions or restrictions on drilling and completion operations and on the transportation of crude oil and natural gas; laws and regulations with respect to derivatives and hedging activities; and laws and regulations with respect to the import and export of crude oil, natural gas and related commodities;
  • ­EOG's ability to effectively integrate acquired crude oil and natural gas properties into its operations, fully identify existing and potential problems with respect to such properties and accurately estimate reserves, production and drilling, completing and operating costs with respect to such properties;
  • ­the extent to which EOG's third-party-operated crude oil and natural gas properties are operated successfully and economically;
  • ­competition in the oil and gas exploration and production industry for the acquisition of licenses, leases and properties, employees and other personnel, facilities, equipment, materials and services;
  • ­the availability and cost of employees and other personnel, facilities, equipment, materials (such as water and tubulars) and services;
  • ­the accuracy of reserve estimates, which by their nature involve the exercise of professional judgment and may therefore be imprecise;
  • ­weather, including its impact on crude oil and natural gas demand, and weather-related delays in drilling and in the installation and operation (by EOG or third parties) of production, gathering, processing, refining, compression, storage and transportation facilities;
  • the ability of EOG's customers and other contractual counterparties to satisfy their obligations to EOG and, related thereto, to access the credit and capital markets to obtain financing needed to satisfy their obligations to EOG;
  • ­EOG's ability to access the commercial paper market and other credit and capital markets to obtain financing on terms it deems acceptable, if at all, and to otherwise satisfy its capital expenditure requirements;
  • ­the extent to which EOG is successful in its completion of planned asset dispositions;
  • ­the extent and effect of any hedging activities engaged in by EOG;
  • ­the timing and extent of changes in foreign currency exchange rates, interest rates, inflation rates, global and domestic financial market conditions and global and domestic general economic conditions;
  • ­the duration and economic and financial impact of epidemics, pandemics or other public health issues, including the COVID-19 pandemic;
  • ­geopolitical factors and political conditions and developments around the world (such as the imposition of tariffs or trade or other economic sanctions, political instability and armed conflict), including in the areas in which EOG operates;
  • ­the use of competing energy sources and the development of alternative energy sources;
  • ­the extent to which EOG incurs uninsured losses and liabilities or losses and liabilities in excess of its insurance coverage;
  • ­acts of war and terrorism and responses to these acts; and
  • ­the other factors described under ITEM 1A, Risk Factors, on pages 13 through 23 of EOG's Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and any updates to those factors set forth in EOG's subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K.

In light of these risks, uncertainties and assumptions, the events anticipated by EOG's forward-looking statements may not occur, and, if any of such events do, we may not have anticipated the timing of their occurrence or the duration or extent of their impact on our actual results.  Accordingly, you should not place any undue reliance on any of EOG's forward-looking statements. EOG's forward-looking statements speak only as of the date made, and EOG undertakes no obligation, other than as required by applicable law, to update or revise its forward-looking statements, whether as a result of new information, subsequent events, anticipated or unanticipated circumstances or otherwise.

The United States Securities and Exchange Commission (SEC) permits oil and gas companies, in their filings with the SEC, to disclose not only "proved" reserves (i.e., quantities of oil and gas that are estimated to be recoverable with a high degree of confidence), but also "probable" reserves (i.e., quantities of oil and gas that are as likely as not to be recovered) as well as "possible" reserves (i.e., additional quantities of oil and gas that might be recovered, but with a lower probability than probable reserves).  Statements of reserves are only estimates and may not correspond to the ultimate quantities of oil and gas recovered. Any reserve or resource estimates provided in this press release that are not specifically designated as being estimates of proved reserves may include "potential" reserves, "resource potential" and/or other estimated reserves or estimated resources not necessarily calculated in accordance with, or contemplated by, the SEC's latest reserve reporting guidelines.  Investors are urged to consider closely the disclosure in EOG's Annual Report on Form 10-K for the fiscal year ended December 31, 2019, available from EOG at P.O. Box 4362, Houston, Texas 77210-4362 (Attn: Investor Relations). You can also obtain this report from the SEC by calling 1-800-SEC-0330 or from the SEC's website at www.sec.gov.  In addition, reconciliation and calculation schedules for non-GAAP financial measures can be found on the EOG website at www.eogresources.com.

EOG RESOURCES, INC.

Financial Report

(Unaudited; in millions, except per share data)











Three Months Ended




March 31,




2020


2019










Operating Revenues and Other


$

4,717.7


$

4,058.6


Net Income 


$

9.8


$

635.4


Net Income Per Share 








        Basic


$

0.02


$

1.10


        Diluted


$

0.02


$

1.10


Average Number of Common Shares








        Basic



578.5



577.2


        Diluted



580.3



580.2


















 

Summary Income Statements

(Unaudited; in thousands, except per share data)











Three Months Ended




March 31,




2020


2019


Operating Revenues and Other






        Crude Oil and Condensate


$

2,065,498


$

2,200,403


        Natural Gas Liquids



160,535



218,638


        Natural Gas



209,764



334,972


        Gains (Losses) on Mark-to-Market Commodity
           Derivative Contracts



1,205,773



(20,580)


        Gathering, Processing and Marketing



1,038,646



1,285,654


        Gains (Losses) on Asset Dispositions, Net



16,460



(3,836)


        Other, Net



21,016



43,391


               Total



4,717,692



4,058,642


Operating Expenses








        Lease and Well



329,659



336,291


        Transportation Costs



208,296



176,522


        Gathering and Processing Costs



128,482



111,295


        Exploration Costs



39,677



36,324


        Dry Hole Costs



372



94


        Impairments 



1,572,935



72,356


        Marketing Costs



1,108,993



1,270,057


        Depreciation, Depletion and Amortization



1,000,060



879,595


        General and Administrative



114,273



106,672


        Taxes Other Than Income



157,360



192,906


               Total



4,660,107



3,182,112










Operating Income 



57,585



876,530










Other Income, Net



18,108



5,612










Income Before Interest Expense and Income Taxes



75,693



882,142










Interest Expense, Net



44,690



54,906










Income Before Income Taxes



31,003



827,236










Income Tax Provision 



21,190



191,810










Net Income 


$

9,813


$

635,426










Dividends Declared per Common Share


$

0.3750


$

0.2200


EOG RESOURCES, INC.

Operating Highlights

(Unaudited)










Three Months Ended




March 31,




2020


2019


% Change

Wellhead Volumes and Prices




Crude Oil and Condensate Volumes (MBbld) (A)




      United States


482.7



435.1


11%

      Trinidad


0.5



0.7


-29%

      Other International (B)


0.1



0.1


0%

            Total


483.3



435.9


11%









Average Crude Oil and Condensate Prices ($/Bbl) (C)








      United States

$

46.97


$

56.11


-16%

      Trinidad


34.93



43.68


-20%

      Other International (B)


57.51



60.13


-4%

            Composite


46.96



56.09


-16%









Natural Gas Liquids Volumes (MBbld) (A)








      United States


161.3



119.8


35%

      Other International (B)


-



-



            Total


161.3



119.8


35%









Average Natural Gas Liquids Prices ($/Bbl) (C)








      United States

$

10.94


$

20.28


-46%

      Other International (B)


-



-



            Composite


10.94



20.28


-46%









Natural Gas Volumes (MMcfd) (A)








      United States


1,139



1,003


14%

      Trinidad


201



267


-25%

      Other International (B)


38



38


0%

            Total


1,378



1,308


5%









Average Natural Gas Prices ($/Mcf) (C)








      United States

$

1.50


$

2.77


-46%

      Trinidad


2.17



2.91


-26%

      Other International (B)


4.32



4.37


-1%

            Composite


1.67



2.85


-41%









Crude Oil Equivalent Volumes (MBoed) (D)








      United States 


833.8



722.0


15%

      Trinidad


34.0



45.1


-25%

      Other International (B)


6.3



6.5


-3%

            Total


874.1



773.6


13%









Total MMBoe (D)


79.5



69.6


14%









(A) Thousand barrels per day or million cubic feet per day, as applicable.

(B) Other International includes EOG's China and Canada operations. 

(C) Dollars per barrel or per thousand cubic feet, as applicable.  Excludes the impact of financial commodity derivative instruments (see Note 12 to the Consolidated Financial Statements in EOG's Annual Report on Form 10-K for the year ended December 31, 2019).

(D) Thousand barrels of oil equivalent per day or million barrels of oil equivalent, as applicable; includes crude oil and condensate, NGLs and natural gas.  Crude oil equivalent volumes are determined using a ratio of 1.0 barrel of crude oil and condensate or NGLs to 6.0 thousand cubic feet of natural gas.  MMBoe is calculated by multiplying the MBoed amount by the number of days in the period and then dividing that amount by one thousand.

EOG RESOURCES, INC.

Summary Balance Sheets

(Unaudited; in thousands, except share data)








March 31,


December 31,


2020


2019

ASSETS

Current Assets






     Cash and Cash Equivalents

$

2,906,852


$

2,027,972

     Accounts Receivable, Net


1,449,637



2,001,658

     Inventories


662,398



767,297

     Assets from Price Risk Management Activities


932,928



1,299

     Income Taxes Receivable


309,328



151,665

     Other


229,906



323,448

            Total


6,491,049



5,273,339







Property, Plant and Equipment






     Oil and Gas Properties (Successful Efforts Method)


64,046,355



62,830,415

     Other Property, Plant and Equipment


4,648,834



4,472,246

            Total Property, Plant and Equipment


68,695,189



67,302,661

     Less:  Accumulated Depreciation, Depletion and Amortization


(39,001,135)



(36,938,066)

            Total Property, Plant and Equipment, Net


29,694,054



30,364,595

Deferred Income Taxes


2,558



2,363

Other Assets


1,446,423



1,484,311

Total Assets

$

37,634,084


$

37,124,608







LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities






     Accounts Payable

$

2,892,320


$

2,429,127

     Accrued Taxes Payable


200,240



254,850

     Dividends Payable


216,933



166,273

     Liabilities from Price Risk Management Activities


-



20,194

     Current Portion of Long-Term Debt


519,017



1,014,524

     Current Portion of Operating Lease Liabilities


322,367



369,365

     Other


154,134



232,655

            Total


4,305,011



4,486,988













Long-Term Debt


4,703,152



4,160,919

Other Liabilities


2,064,175



1,789,884

Deferred Income Taxes


5,091,071



5,046,101

Commitments and Contingencies












Stockholders' Equity






     Common Stock, $0.01 Par, 1,280,000,000 Shares Authorized and 
        582,356,329 Shares Issued at March 31, 2020 and 582,213,016
        Shares Issued at December 31, 2019 


205,824



205,822

     Additional Paid in Capital


5,852,821



5,817,475

     Accumulated Other Comprehensive Loss


(3,305)



(4,652)

     Retained Earnings


15,440,142



15,648,604

     Common Stock Held in Treasury, 319,162 Shares at March 31, 2020
        and 298,820 Shares at December 31, 2019


(24,807)



(26,533)

            Total Stockholders' Equity


21,470,675



21,640,716

Total Liabilities and Stockholders' Equity

$

37,634,084


$

37,124,608

EOG RESOURCES, INC.

Summary Statements of Cash Flows

(Unaudited; in thousands)








Three Months Ended


March 31,


2020


2019

Cash Flows from Operating Activities






Reconciliation of Net Income to Net Cash Provided by Operating Activities:






     Net Income

$

9,813


$

635,426

     Items Not Requiring (Providing) Cash






            Depreciation, Depletion and Amortization


1,000,060



879,595

            Impairments 


1,572,935



72,356

            Stock-Based Compensation Expenses


40,072



39,087

            Deferred Income Taxes


44,774



106,324

            (Gains) Losses on Asset Dispositions, Net


(16,460)



3,836

            Other, Net


(8,815)



2,952

     Dry Hole Costs


372



94

     Mark-to-Market Commodity Derivative Contracts






            Total (Gains) Losses


(1,205,773)



20,580

            Net Cash Received from Settlements of Commodity Derivative Contracts 


84,373



20,846

     Other, Net


(355)



976

     Changes in Components of Working Capital and Other Assets and Liabilities






            Accounts Receivable


722,163



(308,996)

            Inventories


102,670



(18,979)

            Accounts Payable


433,558



194,082

            Accrued Taxes Payable


(54,605)



114,998

            Other Assets


58,296



(6,935)

            Other Liabilities


(66,078)



(54,092)

     Changes in Components of Working Capital Associated with Investing
        Activities


(132,082)



(94,381)

Net Cash Provided by Operating Activities


2,584,918



1,607,769







Investing Cash Flows






     Additions to Oil and Gas Properties


(1,566,051)



(1,939,473)

     Additions to Other Property, Plant and Equipment


(122,775)



(60,963)

     Proceeds from Sales of Assets


25,801



15,049

     Changes in Components of Working Capital Associated with Investing Activities


132,082



94,381

Net Cash Used in Investing Activities


(1,530,943)



(1,891,006)







Financing Cash Flows






     Dividends Paid


(167,058)



(127,546)

     Treasury Stock Purchased


(4,655)



(6,248)

     Proceeds from Stock Options Exercised and Employee Stock Purchase Plan 


66



403

     Repayment of Finance Lease Liabilities


(3,621)



(3,190)

Net Cash Used in Financing Activities


(175,268)



(136,581)







Effect of Exchange Rate Changes on Cash


173



(6)







Increase (Decrease) in Cash and Cash Equivalents


878,880



(419,824)

Cash and Cash Equivalents at Beginning of Period


2,027,972



1,555,634

Cash and Cash Equivalents at End of Period

$

2,906,852


$

1,135,810

EOG RESOURCES, INC.

Reconciliation of Adjusted Net Income

(Unaudited; in thousands, except per share data)

































The following chart adjusts the three-month periods ended March 31, 2020 and 2019 reported Net Income (GAAP) to reflect actual net cash received from settlements of commodity derivative contracts by eliminating the unrealized mark-to-market (gains) losses from these transactions, to eliminate the net (gains) losses on asset dispositions in 2020 and 2019 and to add back impairment charges related to certain of EOG's assets in 2020 and 2019.  EOG believes this presentation may be useful to investors who follow the practice of some industry analysts who adjust reported company earnings to match hedge realizations to production settlement months and make certain other adjustments to exclude non-recurring and certain other items.  EOG management uses this information for purposes of comparing its financial performance with the financial performance of other companies in the industry.


















Three Months Ended 


Three Months Ended 


March 31, 2020


March 31, 2019




















Income




Diluted




Income




Diluted


Before


Tax


After


Earnings


Before


Tax


After


Earnings


Tax


Impact


Tax


per Share


Tax


Impact


Tax


per Share

Reported Net Income (GAAP)

$    31,003


$(21,190)


$     9,813


$     0.02


$827,236


$(191,810)


$635,426


$     1.10

Adjustments:
















(Gains) Losses on Mark-to-Market Commodity
     Derivative Contracts

(1,205,773)


264,643


(941,130)


(1.62)


20,580


(4,533)


16,047


0.02

Net Cash Received from Settlements of
     Commodity Derivative Contracts

84,373


(18,518)


65,855


0.11


20,846


(4,592)


16,254


0.03

Add:  (Gains) Losses on Asset Dispositions, Net

(16,460)


3,613


(12,847)


(0.02)


3,836


(736)


3,100


0.01

Add:  Impairments

1,516,316


(319,973)


1,196,343


2.06


23,745


(5,230)


18,515


0.03

Adjustments to Net Income 

378,456


(70,235)


308,221


0.53


69,007


(15,091)


53,916


0.09

















Adjusted Net Income (Non-GAAP)

$  409,459


$(91,425)


$ 318,034


$     0.55


$896,243


$(206,901)


$689,342


$     1.19

















Average Number of Common Shares (GAAP)
















       Basic







578,462








577,207

       Diluted







580,283








580,222

EOG RESOURCES, INC.

Reconciliation of Discretionary Cash Flow 

(Unaudited; in thousands)






Calculation of Free Cash Flow 

(Unaudited; in thousands)






The following chart reconciles the three-month periods ended March 31, 2020 and 2019 Net Cash Provided by Operating Activities (GAAP) to Discretionary Cash Flow (Non-GAAP).  EOG believes this presentation may be useful to investors who follow the practice of some industry analysts who adjust Net Cash Provided by Operating Activities for Exploration Costs (excluding Stock-Based Compensation Expenses), Other Non-Current Income Taxes - Net Receivable, Changes in Components of Working Capital and Other Assets and Liabilities, and Changes in Components of Working Capital Associated with Investing Activities.  EOG defines Free Cash Flow (Non-GAAP) for a given period as Discretionary Cash Flow (Non-GAAP) (see below reconciliation) for such period less the total cash capital expenditures (before acquisitions) incurred (Non-GAAP) during such period, as is illustrated below for the three months ended March 31, 2020 and 2019.  EOG management uses this information for comparative purposes within the industry.








Three Months Ended



March 31,



2020


2019






Net Cash Provided by Operating Activities (GAAP)


$2,584,918


$1,607,769






Adjustments:





Exploration Costs (excluding Stock-Based Compensation Expenses) 


32,482


29,787

Other Non-Current Income Taxes - Net Receivable


112,704


102,918

Changes in Components of Working Capital and Other Assets





and Liabilities





Accounts Receivable


(722,163)


308,996

Inventories


(102,670)


18,979

Accounts Payable


(433,558)


(194,082)

Accrued Taxes Payable


54,605


(114,998)

Other Assets


(58,296)


6,935

Other Liabilities


66,078


54,092

Changes in Components of Working Capital Associated with 





Investing Activities


132,082


94,381






Discretionary Cash Flow (Non-GAAP)


$1,666,182


$1,914,777






Discretionary Cash Flow (Non-GAAP) - Percentage Decrease 


-13%













Discretionary Cash Flow (Non-GAAP)


$1,666,182


$1,914,777

Less:  





Total Cash Capital Expenditures Before Acquisitions (Non-GAAP)(a)


(1,684,720)


(1,732,476)

Free Cash Flow (Non-GAAP)(b)


$    (18,538)


$   182,301











(a) See below reconciliation of Total Expenditures (GAAP) to Total Cash Capital Expenditures Before Acquisitions (Non-GAAP) for the three-month periods ended March 31, 2020 and 2019:






Total Expenditures (GAAP)


$1,825,778


$2,101,919

Less:  





          Asset Retirement Costs


(19,608)


(5,156)

          Non-Cash Expenditures of Other Property, Plant and Equipment


-


-

          Non-Cash Acquisition Costs of Unproved Properties


(24,488)


(43,481)

          Non-Cash Finance Leases


(48,958)


-

          Acquisition Costs of Proved Properties


(48,004)


(320,806)

Total Cash Capital Expenditures Before Acquisitions (Non-GAAP) 


$1,684,720


$1,732,476






(b) To better align the presentation of free cash flow for comparative purposes within the industry, free cash flow has been updated to exclude dividends paid (GAAP) as a reconciling item for the three-month period ending March 31, 2020.  The comparative prior period has been revised for this change in presentation.











Maintenance Capital Expenditures






The capital expenditures required to fund drilling and infrastructure requirements to keep U.S. oil production in 2021 flat relative to anticipated 4Q 2020 U.S. oil production.

EOG RESOURCES, INC.

Reconciliation of Discretionary Cash Flow 

(Unaudited; in thousands)







Calculation of Free Cash Flow 

(Unaudited; in thousands)







The following chart reconciles the twelve-month periods ended December 31, 2019, 2018 and 2017 Net Cash Provided by Operating Activities (GAAP) to Discretionary Cash Flow (Non-GAAP).  EOG believes this presentation may be useful to investors who follow the practice of some industry analysts who adjust Net Cash Provided by Operating Activities for Exploration Costs (excluding Stock-Based Compensation Expenses), Other Non-Current Income Taxes - Net (Payable) Receivable, Changes in Components of Working Capital and Other Assets and Liabilities, and Changes in Components of Working Capital Associated with Investing and Financing Activities.  EOG defines Free Cash Flow (Non-GAAP) for a given period as Discretionary Cash Flow (Non-GAAP) (see below reconciliation) for such period less the total cash capital expenditures (before acquisitions) incurred (Non-GAAP) during such period, as is illustrated below for the twelve months ended December 31, 2019, 2018 and 2017.  EOG management uses this information for comparative purposes within the industry.








Twelve Months Ended


December 31,


2019


2018


2017







Net Cash Provided by Operating Activities (GAAP)

$ 8,163,180


$ 7,768,608


$  4,265,336







Adjustments:






Exploration Costs (excluding Stock-Based Compensation Expenses) 

113,733


123,986


122,688

Other Non-Current Income Taxes - Net (Payable) Receivable

238,711


148,993


(513,404)

Changes in Components of Working Capital and Other Assets






and Liabilities






Accounts Receivable

91,792


368,180


392,131

Inventories

(90,284)


395,408


174,548

Accounts Payable

(168,539)


(439,347)


(324,192)

Accrued Taxes Payable

(40,122)


92,461


63,937

Other Assets

(358,001)


125,435


658,609

Other Liabilities

56,619


(10,949)


89,871

Changes in Components of Working Capital Associated with 






Investing and Financing Activities

115,061


(301,083)


(89,992)







Discretionary Cash Flow (Non-GAAP)

$ 8,122,150


$ 8,271,692


$  4,839,532







Discretionary Cash Flow (Non-GAAP) - Percentage Increase/Decrease 

-2%


71%















Discretionary Cash Flow (Non-GAAP)

$ 8,122,150


$ 8,271,692


$  4,839,532

Less:  






Total Cash Capital Expenditures Before Acquisitions (Non-GAAP)(a)

(6,234,454)


(6,172,950)


(4,228,859)

Free Cash Flow (Non-GAAP)(b)

$ 1,887,696


$ 2,098,742


$     610,673













(a) See below reconciliation of Total Expenditures (GAAP) to Total Cash Capital Expenditures Before Acquisitions (Non-GAAP) for the twelve-month periods ended December 31, 2019, 2018 and 2017:







Total Expenditures (GAAP)

$ 6,900,450


$ 6,706,359


$  4,612,746

Less:  






          Asset Retirement Costs

(186,088)


(69,699)


(55,592)

          Non-Cash Expenditures of Other Property, Plant and Equipment

(2,266)


(49,484)


-

          Non-Cash Acquisition Costs of Unproved Properties

(97,704)


(290,542)


(255,711)

          Acquisition Costs of Proved Properties

(379,938)


(123,684)


(72,584)

Total Cash Capital Expenditures Before Acquisitions (Non-GAAP) 

$ 6,234,454


$ 6,172,950


$  4,228,859







(b) To better align the presentation of free cash flow for comparative purposes within the industry, free cash flow has been updated to exclude dividends paid (GAAP) as a reconciling item for the twelve-month period ending December 31, 2019.  Comparative prior periods have been revised for this change in presentation.













EOG RESOURCES, INC.

Reconciliation of Discretionary Cash Flow 

(Unaudited; in thousands)







Calculation of Free Cash Flow 

(Unaudited; in thousands)







The following chart reconciles the twelve-month periods ended December 31, 2014, 2013 and 2012 Net Cash Provided by Operating Activities (GAAP) to Discretionary Cash Flow (Non-GAAP).  EOG believes this presentation may be useful to investors who follow the practice of some industry analysts who adjust Net Cash Provided by Operating Activities for Exploration Costs (excluding Stock-Based Compensation Expenses), Excess Tax Benefits from Stock-Based Compensation, Changes in Components of Working Capital and Other Assets and Liabilities, and Changes in Components of Working Capital Associated with Investing and Financing Activities.  EOG defines Free Cash Flow (Non-GAAP) for a given period as Discretionary Cash Flow (Non-GAAP) (see below reconciliation) for such period less the total cash capital expenditures (before acquisitions) incurred (Non-GAAP) during such period, as is illustrated below for the twelve months ended December 31, 2014, 2013 and 2012.  EOG management uses this information for comparative purposes within the industry.








Twelve Months Ended


December 31,


2014


2013


2012







Net Cash Provided by Operating Activities (GAAP)

$ 8,649,155


$ 7,329,414


$  5,236,777







Adjustments:






Exploration Costs (excluding Stock-Based Compensation Expenses) 

157,453


134,531


159,182

Excess Tax Benefits from Stock-Based Compensation

99,459


55,831


67,035

Changes in Components of Working Capital and Other Assets






and Liabilities






Accounts Receivable

(84,982)


23,613


178,683

Inventories

161,958


(53,402)


156,762

Accounts Payable

(543,630)


(178,701)


17,150

Accrued Taxes Payable

(16,486)


(75,142)


(78,094)

Other Assets

14,448


109,567


118,520

Other Liabilities

(75,420)


20,382


(36,114)

Changes in Components of Working Capital Associated with 






Investing and Financing Activities

103,414


51,361


(74,158)







Discretionary Cash Flow (Non-GAAP)

$ 8,465,369


$ 7,417,454


$  5,745,743







Discretionary Cash Flow (Non-GAAP) - Percentage Increase

14%


29%









Discretionary Cash Flow (Non-GAAP)

$ 8,465,369


$ 7,417,454


$  5,745,743

Less:  






Total Cash Capital Expenditures Before Acquisitions (Non-GAAP)(a)

(8,292,090)


(7,101,791)


(7,539,994)

Free Cash Flow (Non-GAAP)(b)

$   173,279


$   315,663


$ (1,794,251)













(a) See below reconciliation of Total Expenditures (GAAP) to Total Cash Capital Expenditures Before Acquisitions (Non-GAAP) for the twelve-month periods ended December 31, 2014, 2013 and 2012:







Total Expenditures (GAAP)

$ 8,631,906


$ 7,361,457


$  7,753,828

Less:  






          Asset Retirement Costs

(195,630)


(134,445)


(126,987)

          Non-Cash Expenditures of Other Property, Plant and Equipment

-


-


(65,791)

          Non-Cash Acquisition Costs of Unproved Properties

(5,085)


(5,007)


(20,317)

          Acquisition Costs of Proved Properties

(139,101)


(120,214)


(739)

Total Cash Capital Expenditures Before Acquisitions (Non-GAAP) 

$ 8,292,090


$ 7,101,791


$  7,539,994







(b) To better align the presentation of free cash flow for comparative purposes within the industry, free cash flow has been updated to exclude dividends paid (GAAP) as a reconciling item.  Comparative prior periods presented herein have been revised for this change in presentation. 

EOG RESOURCES, INC.

Total Expenditures

(Unaudited; in millions)

























Three Months Ended


Twelve Months Ended



March 31,


December 31,



2020


2019


2019


2018


2017












Exploration and Development Drilling


$1,313


$1,402


$4,951


$4,935


$3,132

Facilities


179


164


629


625


575

Leasehold Acquisitions


45


107


276


488


427

Property Acquisitions


48


321


380


124


73

Capitalized Interest


9


7


38


24


27

       Subtotal


1,594


2,001


6,274


6,196


4,234

Exploration Costs


40


36


140


149


145

Dry Hole Costs


-


-


28


5


5

     Exploration and Development Expenditures


1,634


2,037


6,442


6,350


4,384

Asset Retirement Costs


20


4


186


70


56

     Total Exploration and Development Expenditures


1,654


2,041


6,628


6,420


4,440

Other Property, Plant and Equipment


172


61


272


286


173

     Total Expenditures


$1,826


$2,102


$6,900


$6,706


$4,613

EOG RESOURCES, INC.

Reconciliation of Adjusted EBITDAX

(Unaudited; in thousands)








The following chart adjusts the three-month periods ended March 31, 2020 and 2019 reported Net Income (GAAP) to Earnings Before Interest Expense (Net), Income Taxes (Income Tax Provision), Depreciation, Depletion and Amortization, Exploration Costs, Dry Hole Costs and Impairments (EBITDAX) (Non-GAAP) and further adjusts such amount to reflect actual net cash received from settlements of commodity derivative contracts by eliminating the unrealized mark-to-market (MTM) (gains) losses from these transactions and to eliminate the (gains) losses on asset dispositions (Net).  EOG believes this presentation may be useful to investors who follow the practice of some industry analysts who adjust reported Net Income (GAAP) to add back Interest Expense (Net), Income Taxes (Income Tax Provision), Depreciation, Depletion and Amortization, Exploration Costs, Dry Hole Costs and Impairments and further adjust such amount to match realizations to production settlement months and make certain other adjustments to exclude non-recurring and certain other items.  EOG management uses this information for purposes of comparing its financial performance with the financial performance of other companies in the industry.









Three Months Ended



March 31,



2020


2019









Net Income (GAAP)

$

9,813


$

635,426









Adjustments:







     Interest Expense, Net


44,690



54,906


     Income Tax Provision


21,190



191,810


     Depreciation, Depletion and Amortization


1,000,060



879,595


     Exploration Costs


39,677



36,324


     Dry Hole Costs


372



94


     Impairments 


1,572,935



72,356


             EBITDAX (Non-GAAP)


2,688,737



1,870,511


     Total (Gains) Losses on MTM Commodity Derivative Contracts  


(1,205,773)



20,580


     Net Cash Received from Settlements of Commodity
         Derivative Contracts


84,373



20,846


     (Gains) Losses on Asset Dispositions, Net


(16,460)



3,836









Adjusted EBITDAX (Non-GAAP)

$

1,550,877


$

1,915,773









Adjusted EBITDAX (Non-GAAP) - Percentage Decrease


-19%





EOG RESOURCES, INC.

Reconciliation of Net Debt and Total Capitalization

Calculation of Net Debt-to-Total Capitalization Ratio 

(Unaudited; in millions, except ratio data)











The following chart reconciles Current and Long-Term Debt (GAAP) to Net Debt (Non-GAAP) and Total Capitalization (GAAP) to Total Capitalization (Non-GAAP), as used in the Net Debt-to-Total Capitalization ratio calculation.  A portion of the cash is associated with international subsidiaries; tax considerations may impact debt paydown.  EOG believes this presentation may be useful to investors who follow the practice of some industry analysts who utilize Net Debt and Total Capitalization (Non-GAAP) in their Net Debt-to-Total Capitalization ratio calculation.  EOG management uses this information for comparative purposes within the industry.












At


At


At


At


At


March 31,


December 31,


September 30,


June 30,


March 31,


2020


2019


2019


2019


2019











Total Stockholders' Equity - (a)

$       21,471


$         21,641


$         21,124


$ 20,630


$       19,904











Current and Long-Term Debt (GAAP) - (b)

5,222


5,175


5,177


5,179


6,081

Less: Cash 

(2,907)


(2,028)


(1,583)


(1,160)


(1,136)

Net Debt (Non-GAAP) - (c)

2,315


3,147


3,594


4,019


4,945











Total Capitalization (GAAP) - (a) + (b)

$       26,693


$         26,816


$         26,301


$ 25,809


$       25,985











Total Capitalization (Non-GAAP) - (a) + (c)

$       23,786


$         24,788


$         24,718


$ 24,649


$       24,849











Debt-to-Total Capitalization (GAAP) - (b) / [(a) + (b)]

20%


19%


20%


20%


23%











Net Debt-to-Total Capitalization (Non-GAAP) - (c) / [(a) + (c)]

10%


13%


15%


16%


20%











 

EOG RESOURCES, INC.



Reconciliation of Net Debt and Total Capitalization



Calculation of Net Debt-to-Total Capitalization Ratio 



(Unaudited; in millions, except ratio data)













The following chart reconciles Current and Long-Term Debt (GAAP) to Net Debt (Non-GAAP) and Total Capitalization (GAAP) to Total Capitalization (Non-GAAP), as used in the Net Debt-to-Total Capitalization ratio calculation.  A portion of the cash is associated with international subsidiaries; tax considerations may impact debt paydown.  EOG believes this presentation may be useful to investors who follow the practice of some industry analysts who utilize Net Debt and Total Capitalization (Non-GAAP) in their Net Debt-to-Total Capitalization ratio calculation.  EOG management uses this information for comparative purposes within the industry.














At


At


At


At




December 31,


September 30,


June 30,


March 31,




2018


2018


2018


2018













Total Stockholders' Equity - (a)

$       19,364


$         18,538


$         17,452


$ 16,841













Current and Long-Term Debt (GAAP) - (b)

6,083


6,435


6,435


6,435



Less: Cash 

(1,556)


(1,274)


(1,008)


(816)



Net Debt (Non-GAAP) - (c)

4,527


5,161


5,427


5,619













Total Capitalization (GAAP) - (a) + (b)

$       25,447


$         24,973


$         23,887


$ 23,276













Total Capitalization (Non-GAAP) - (a) + (c)

$       23,891


$         23,699


$         22,879


$ 22,460













Debt-to-Total Capitalization (GAAP) - (b) / [(a) + (b)]

24%


26%


27%


28%













Net Debt-to-Total Capitalization (Non-GAAP) - (c) / [(a) + (c)]

19%


22%


24%


25%













 

EOG RESOURCES, INC.



Reconciliation of Net Debt and Total Capitalization



Calculation of Net Debt-to-Total Capitalization Ratio 



(Unaudited; in millions, except ratio data)













The following chart reconciles Current and Long-Term Debt (GAAP) to Net Debt (Non-GAAP) and Total Capitalization (GAAP) to Total Capitalization (Non-GAAP), as used in the Net Debt-to-Total Capitalization ratio calculation.  A portion of the cash is associated with international subsidiaries; tax considerations may impact debt paydown.  EOG believes this presentation may be useful to investors who follow the practice of some industry analysts who utilize Net Debt and Total Capitalization (Non-GAAP) in their Net Debt-to-Total Capitalization ratio calculation.  EOG management uses this information for comparative purposes within the industry.














At


At


At


At




December 31,


September 30,


June 30,


March 31,




2017


2017


2017


2017













Total Stockholders' Equity - (a)

$       16,283


$         13,922


$         13,902


$ 13,928













Current and Long-Term Debt (GAAP) - (b)

6,387


6,387


6,987


6,987



Less: Cash 

(834)


(846)


(1,649)


(1,547)



Net Debt (Non-GAAP) - (c)

5,553


5,541


5,338


5,440













Total Capitalization (GAAP) - (a) + (b)

$       22,670


$         20,309


$         20,889


$ 20,915













Total Capitalization (Non-GAAP) - (a) + (c)

$       21,836


$         19,463


$         19,240


$ 19,368













Debt-to-Total Capitalization (GAAP) - (b) / [(a) + (b)]

28%


31%


33%


33%













Net Debt-to-Total Capitalization (Non-GAAP) - (c) / [(a) + (c)]

25%


28%


28%


28%













 

EOG RESOURCES, INC.

Reconciliation of Net Debt and Total Capitalization

Calculation of Net Debt-to-Total Capitalization Ratio 

(Unaudited; in millions, except ratio data)











The following chart reconciles Current and Long-Term Debt (GAAP) to Net Debt (Non-GAAP) and Total Capitalization (GAAP) to Total Capitalization (Non-GAAP), as used in the Net Debt-to-Total Capitalization ratio calculation.  A portion of the cash is associated with international subsidiaries; tax considerations may impact debt paydown.  EOG believes this presentation may be useful to investors who follow the practice of some industry analysts who utilize Net Debt and Total Capitalization (Non-GAAP) in their Net Debt-to-Total Capitalization ratio calculation.  EOG management uses this information for comparative purposes within the industry.












At


At


At


At


At


December 31,


September 30,


June 30,


March 31,


December 31,


2016


2016


2016


2016


2015











Total Stockholders' Equity - (a)

$       13,982


$         11,798


$         12,057


$ 12,405


12,943











Current and Long-Term Debt (GAAP) - (b)

6,986


6,986


6,986


6,986


6,660

Less: Cash 

(1,600)


(1,049)


(780)


(668)


(719)

Net Debt (Non-GAAP) - (c)

5,386


5,937


6,206


6,318


5,941











Total Capitalization (GAAP) - (a) + (b)

$       20,968


$         18,784


$         19,043


$ 19,391


19,603











Total Capitalization (Non-GAAP) - (a) + (c)

$       19,368


$         17,735


$         18,263


$ 18,723


18,884











Debt-to-Total Capitalization (GAAP) - (b) / [(a) + (b)]

33%


37%


37%


36%


34%











Net Debt-to-Total Capitalization (Non-GAAP) - (c) / [(a) + (c)]

28%


33%


34%


34%


31%

EOG RESOURCES, INC.

Reconciliation of Total Exploration and Development Expenditures

For Drilling Only and Total Exploration and Development Expenditures 

Calculation of Reserve Replacement Costs ($ / BOE)

(Unaudited; in millions, except ratio data)














The following chart reconciles Total Costs Incurred in Exploration and Development Activities (GAAP) to Total Exploration and Development Expenditures for Drilling Only (Non-GAAP) and Total Exploration and Development Expenditures (Non-GAAP), as used in the calculation of Reserve Replacement Costs per Boe.  There are numerous ways that industry participants present Reserve Replacement Costs, including "Drilling Only" and "All-In", which reflect total exploration and development expenditures divided by total net proved reserve additions from extensions and discoveries only, or from all sources.  Combined with Reserve Replacement, these statistics provide management and investors with an indication of the results of the current year capital investment program.  Reserve Replacement Cost statistics are widely recognized and reported by industry participants and are used by EOG management and other third parties for comparative purposes within the industry.  Please note that the actual cost of adding reserves will vary from the reported statistics due to timing differences in reserve bookings and capital expenditures.  Accordingly, some analysts use three or five year averages of reported statistics, while others prefer to estimate future costs.  EOG has not included future capital costs to develop proved undeveloped reserves in exploration and development expenditures.
















2019


2018


2017


2016


2015


2014






Total Costs Incurred in Exploration and Development Activities (GAAP)


$ 6,628.2


$ 6,419.7


$ 4,439.4


$ 6,445.2


$ 4,928.3


$ 7,904.8

Less:  Asset Retirement Costs


(186.1)


(69.7)


(55.6)


19.9


(53.5)


(195.6)

          Non-Cash Acquisition Costs of Unproved Properties


(97.7)


(290.5)


(255.7)


(3,101.8)


-


-

          Acquisition Costs of Proved Properties


(379.9)


(123.7)


(72.6)


(749.0)


(480.6)


(139.1)

Total Exploration and Development Expenditures for Drilling Only (Non-GAAP) - (a) 


$ 5,964.5


$ 5,935.8


$ 4,055.5


$ 2,614.3


$ 4,394.2


$ 7,570.1














Total Costs Incurred in Exploration and Development Activities (GAAP)


$ 6,628.2


$ 6,419.7


$ 4,439.4


$ 6,445.2


$ 4,928.3


$ 7,904.8

Less:  Asset Retirement Costs


(186.1)


(69.7)


(55.6)


19.9


(53.5)


(195.6)

          Non-Cash Acquisition Costs of Unproved Properties


(97.7)


(290.5)


(255.7)


(3,101.8)


-


-

          Non-Cash Acquisition Costs of Proved Properties


(52.3)


(70.9)


(26.2)


(732.3)


-


-

Total Exploration and Development Expenditures (Non-GAAP) - (b) 


$ 6,292.1


$ 5,988.6


$ 4,101.9


$ 2,631.0


$ 4,874.8


$ 7,709.2














Net Proved Reserve Additions From All Sources - Oil Equivalents (MMBoe) 













Revisions Due to Price - (c)


(59.7)


34.8


154.0


(100.7)


(573.8)


52.2

Revisions Other Than Price


(0.3)


(39.5)


48.0


252.9


107.2


48.4

Purchases in Place


16.8


11.6


2.3


42.3


56.2


14.4

Extensions, Discoveries and Other Additions - (d)


750.0


669.7


420.8


209.0


245.9


519.2

Total Proved Reserve Additions - (e) 


706.8


676.6


625.1


403.5


(164.5)


634.2

Sales in Place


(4.6)


(10.8)


(20.7)


(167.6)


(3.5)


(36.3)

Net Proved Reserve Additions From All Sources


702.2


665.8


604.4


235.9


(168.0)


597.9














Production 


300.9


265.0


224.4


207.1


211.2


219.1














RESERVE REPLACEMENT COSTS ($ / Boe)













Total Drilling, Before Revisions - (a / d) 


$     7.95


$     8.86


$     9.64


$   12.51


$   17.87


$   14.58

All-in Total, Net of Revisions - (b / e)  


$     8.90


$     8.85


$     6.56


$     6.52


$  (29.63)


$   12.16

All-in Total, Excluding Revisions Due to Price - (b / (e - c)) 


$     8.21


$     9.33


$     8.71


$     5.22


$   11.91


$   13.25

EOG RESOURCES, INC.

Crude Oil, NGLs and Natural Gas Financial Commodity

Derivative Contracts













EOG accounts for financial commodity derivative contracts using the mark-to-market accounting method. 













Prices received by EOG for its crude oil production generally vary from NYMEX WTI prices due to adjustments for delivery location (basis) and other factors.  EOG has entered into crude oil basis swap contracts in order to fix the differential between Intercontinental Exchange (ICE) Brent pricing and pricing in Cushing, Oklahoma (ICE Brent Differential).  Presented below is a comprehensive summary of EOG's ICE Brent Differential basis swap contracts through May 5, 2020.  The weighted average price differential expressed in $/Bbl represents the amount of addition to Cushing, Oklahoma, prices for the notional volumes expressed in Bbld covered by the basis swap contracts.













ICE Brent Differential Basis Swap Contracts










Weighted












Average Price










Volume


Differential










(Bbld) 


($/Bbl) 

2020











May 2020








10,000


$            4.92

























EOG has also entered into crude oil basis swap contracts in order to fix the differential between pricing in Houston, Texas, and Cushing, Oklahoma (Houston Differential).  Presented below is a comprehensive summary of EOG's Houston Differential basis swap contracts through May 5, 2020.  The weighted average price differential expressed in $/Bbl represents the amount of addition to Cushing, Oklahoma, prices for the notional volumes expressed in Bbld covered by the basis swap contracts.

























Houston Differential Basis Swap Contracts










Weighted












Average Price










Volume


Differential










(Bbld) 


($/Bbl) 

2020











May 2020 (closed)







10,000


$            1.55

























EOG has also entered into crude oil swaps to fix the differential in pricing between the NYMEX calendar month average and the physical crude oil delivery month (Roll Differential).  Presented below is a comprehensive summary of EOG's Roll Differential swap contracts through May 5, 2020.  The weighted average price differential expressed in $/Bbl represents the amount of net addition (reduction) to delivery month prices for the notional volumes expressed in Bbld covered by the swap contracts.

























Roll Differential Swap Contracts










Weighted












Average Price










Volume


Differential










(Bbld) 


($/Bbl) 

2020











February 1, 2020 through May 31, 2020 (closed)



10,000


$            0.70

June 2020








10,000


0.70

July 1, 2020 through September 30, 2020





110,000


(1.16)

October 1, 2020 through December 31, 2020





93,000


(1.16)

























In May 2020, EOG entered into crude oil Roll Differential contracts for the period from October 1, 2020 through December 31, 2020, with notional volumes of 17,000 Bbld at a weighted average price differential of $(1.01) per Bbl.  These contracts partially offset certain outstanding Roll Differential contracts for the same time period with notional volumes of 17,000 Bbld at a weighted average price differential of $(1.16) per Bbl.  EOG expects to pay net cash of $0.2 million for the settlement of these contracts.  The offsetting contracts were excluded from the above table.

























Presented below is a comprehensive summary of EOG's crude oil NYMEX WTI price swap contracts through May 5, 2020, with notional volumes expressed in Bbld and prices expressed in $/Bbl.

























Crude Oil NYMEX WTI Price Swap Contracts










Weighted










Volume


Average Price










(Bbld) 


($/Bbl) 

2020











January 1, 2020 through March 31, 2020 (closed)




200,000


$          59.33

April 2020 (closed)







265,000


51.36

May 1, 2020 through June 30, 2020



265,000


51.36

July 2020








254,000


42.36

August 1, 2020 through September 30, 2020





154,000


50.42

























In April and May 2020, EOG entered into crude oil NYMEX WTI price swap contracts for the period from October 1, 2020 through December 31, 2020, with notional volumes of 47,000 Bbld at a weighted average price of $30.04 per Bbl.  These contracts offset the remaining NYMEX WTI price swap contracts for the same time period with notional volumes of 47,000 Bbld at a weighted average price of $31.00 per Bbl.  EOG expects to receive net cash of $4.1 million for the settlement of these contracts.  The offsetting contracts were excluded from the above table.

























Presented below is a comprehensive summary of EOG's crude oil ICE Brent price swap contracts through May 5, 2020, with notional volumes expressed in Bbld and prices expressed in $/Bbl.

























Crude Oil ICE Brent Price Swap Contracts












Weighted










Volume


Average Price










(Bbld) 


($/Bbl) 

2020











April 2020 (closed)







75,000


$          25.66

May 2020








35,000


26.53

























Presented below is a comprehensive summary of EOG's Mont Belvieu propane (non-TET) financial price swap contracts (Mont Belvieu Propane Price Swap Contracts) through May 5, 2020, with notional volumes expressed in Bbld and prices expressed in $/Bbl.

























Mont Belvieu Propane Price Swap Contracts










Weighted










Volume


Average Price










(Bbld) 


($/Bbl) 

2020











January 1, 2020 through February 29, 2020 (closed)



4,000


$          21.34

March 1, 2020 through April 30, 2020 (closed)




25,000


17.92

May 1, 2020 through December 31, 2020





7,000


17.92

























In April and May 2020, EOG entered into Mont Belvieu Propane Price Swap Contracts for the period from May 1, 2020 through December 31, 2020, with notional volumes of 18,000 Bbld at a weighted average price of $15.68 per Bbl.  These contracts partially offset certain outstanding Mont Belvieu Propane Price Swap Contracts for the same time period with notional volumes of 18,000 Bbld at a weighted average price of $17.92 per Bbl.  EOG expects to receive net cash of $9.9 million for the settlement of these contracts.  The offsetting contracts were excluded from the above table.

























Presented below is a comprehensive summary of EOG's natural gas price swap contracts through May 5, 2020, with notional volumes expressed in MMBtud and prices expressed in $/MMBtu.

























Natural Gas Price Swap Contracts










Weighted










Volume


Average Price










(MMBtud)


($/MMBtu)

2021











January 1, 2021 through December 31, 2021





50,000


$            2.75

























EOG has entered into natural gas collar contracts, which establish ceiling and floor prices for the sale of notional volumes of natural gas as specified in the collar contracts.  The collars require that EOG pay the difference between the ceiling price and the NYMEX Henry Hub natural gas price for the contract month (Henry Hub Index Price) in the event the Henry Hub Index Price is above the ceiling price.  The collars grant EOG the right to receive the difference between the floor price and the Henry Hub Index Price in the event the Henry Hub Index Price is below the floor price.  On March 24, 2020, EOG executed the early termination provision granting EOG the right to terminate certain 2020 natural gas collar contracts with notional volumes of 250,000 MMBtud at a weighted average ceiling price of $2.50 per MMBtu and a weighted average floor price of $2.00 per MMBtu for the period April 1, 2020 through July 31, 2020.  The net cash EOG received for settling these contracts was $7.8 million.  Presented below is a comprehensive summary of EOG's natural gas collar contracts through May 5, 2020, with notional volumes expressed in MMBtud and prices expressed in $/MMBtu.

























Natural Gas Collar Contracts










Weighted Average Price ($/MMBtu)








Volume (MMBtud)


Ceiling Price


Floor Price

2020











April 1, 2020 through July 31, 2020 (closed)



250,000


$         2.50


$            2.00

























On April 14, 2020, EOG entered into natural gas collar contracts for the period August 1, 2020 through October 31, 2020, with notional volumes of 250,000 MMBtud at a ceiling price of $2.50 per MMBtu and a floor price of $2.00 per MMBtu.  These contracts offset the remaining natural gas collar contracts for the same time period with notional volumes of 250,000 MMBtud at a ceiling price of $2.50 per MMBtu and a floor price of $2.00 per MMBtu.  EOG expects to receive net cash of $1.1 million for the settlement of these contracts.  The offsetting contracts were excluded from the above table.

























Prices received by EOG for its natural gas production generally vary from NYMEX Henry Hub prices due to adjustments for delivery location (basis) and other factors.  EOG has entered into natural gas basis swap contracts in order to fix the differential between pricing in the Rocky Mountain area and NYMEX Henry Hub prices (Rockies Differential).  Presented below is a comprehensive summary of EOG's Rockies Differential basis swap contracts through May 5, 2020.  The weighted average price differential expressed in $/MMBtu represents the amount of reduction to NYMEX Henry Hub prices for the notional volumes expressed in MMBtud covered by the basis swap contracts.

























Rockies Differential Basis Swap Contracts












Weighted












Average Price










Volume


Differential










(MMBtud)


($/MMBtu)

2020











January 1, 2020 through May 31, 2020 (closed)




30,000


$            0.55

June 1, 2020 through December 31, 2020





30,000


0.55

























EOG has also entered into natural gas basis swap contracts in order to fix the differential between pricing at the Houston Ship Channel (HSC) and NYMEX Henry Hub prices (HSC Differential).  On March 27, 2020, EOG executed the early termination provision granting EOG the right to terminate certain 2020 HSC Differential basis swaps with notional volumes of 60,000 MMBtud at a weighted average price differential of $0.05 per MMBtu for the period April 1, 2020 through December 31, 2020.  The net cash EOG paid for settling these contracts was $0.4 million.  Presented below is a comprehensive summary of EOG's HSC Differential basis swap contracts through May 5, 2020.  The weighted average price differential expressed in $/MMBtu represents the amount of reduction to NYMEX Henry Hub prices for the notional volumes expressed in MMBtud covered by the basis swap contracts.

























HSC Differential Basis Swap Contracts












Weighted












Average Price










Volume


Differential










(MMBtud)


($/MMBtu)

2020











January 1, 2020 through December 31, 2020 (closed)



60,000


$            0.05

























EOG has also entered into natural gas basis swap contracts in order to fix the differential between pricing at the Waha Hub in West Texas and NYMEX Henry Hub prices (Waha Differential).  Presented below is a comprehensive summary of EOG's Waha Differential basis swap contracts through May 5, 2020.  The weighted average price differential expressed in $/MMBtu represents the amount of reduction to NYMEX Henry Hub prices for the notional volumes expressed in MMBtud covered by the basis swap contracts.

























Waha Differential Basis Swap Contracts












Weighted












Average Price










Volume


Differential










(MMBtud)


($/MMBtu)

2020











January 1, 2020 through April 30, 2020 (closed)




50,000


$            1.40

























In April 2020, EOG entered into Waha Differential basis swap contracts for the period from May 1, 2020 through December 31, 2020, with notional volumes of 50,000 MMBtud at a weighted average price differential of $0.43 per MMBtu.  These contracts offset the remaining Waha Differential basis swap contracts for the same time period with notional volumes of 50,000 MMBtud at a weighted average price differential of $1.40 MMBtu.  EOG expects to pay net cash of $11.9 million for the settlement of these contracts.  The offsetting contracts were excluded from the above table.

























Definitions











Bbld

Barrels per day







$/Bbl

Dollars per barrel






MMBtud      

Million British thermal units per day





$/MMBtu

Dollars per million British thermal units







NYMEX

U.S. New York Mercantile Exchange





WTI

West Texas Intermediate







EOG RESOURCES, INC.

Direct After-Tax Rate of Return (ATROR)


The calculation of our direct after-tax rate of return (ATROR) with respect to our capital expenditure program for a particular play or well is based on the estimated recoverable reserves ("net" to EOG's interest) for all wells in such play or such well (as the case may be), the estimated net present value (NPV) of the future net cash flows from such reserves (for which we utilize certain assumptions regarding future commodity prices and operating costs) and our direct net costs incurred in drilling or acquiring (as the case may be) such wells or well (as the case may be).  As such, our direct ATROR with respect to our capital expenditures for a particular play or well cannot be calculated from our consolidated financial statements. 



Direct ATROR

Based on Cash Flow and Time Value of Money

  - Estimated future commodity prices and operating costs

  - Costs incurred to drill, complete and equip a well, including facilities

Excludes Indirect Capital

  - Gathering and Processing and other Midstream

  - Land, Seismic, Geological and Geophysical


Payback ~12 Months on 100% Direct ATROR Wells

First Five Years ~1/2 Estimated Ultimate Recovery Produced but ~3/4 of NPV Captured



Return on Equity / Return on Capital Employed 

Based on GAAP Accrual Accounting

Includes All Indirect Capital and Growth Capital for Infrastructure

  - Eagle Ford, Bakken, Permian Facilities

  - Gathering and Processing

Includes Legacy Gas Capital and Capital from Mature Wells

EOG RESOURCES, INC.

Reconciliation of After-Tax Net Interest Expense, Adjusted Net Income,

Net Debt and Total Capitalization

Calculations of Return on Capital Employed and Return on Equity

(Unaudited; in millions, except ratio data)










The following chart reconciles Net Interest Expense (GAAP), Net Income (GAAP), Current and Long-Term Debt (GAAP) and Total Capitalization (GAAP) to After-Tax Net Interest Expense (Non-GAAP), Adjusted Net Income (Non-GAAP), Net Debt (Non-GAAP) and Total Capitalization (Non-GAAP), respectively, as used in the Return on Capital Employed (ROCE) and Return on Equity (ROE) calculations.  EOG believes this presentation may be useful to investors who follow the practice of some industry analysts who utilize After-Tax Net Interest Expense, Adjusted Net Income, Net Debt and Total Capitalization (Non-GAAP) in their ROCE and ROE calculations.  EOG management uses this information for purposes of comparing its financial performance with the financial performance of other companies in the industry.












2019



2018



2017

Return on Capital Employed (ROCE) (Non-GAAP)


















Net Interest Expense (GAAP)

$

185


$

245




Tax Benefit Imputed (based on 21%) 


(39)



(51)




After-Tax Net Interest Expense (Non-GAAP) - (a) 

$

146


$

194













Net Income (GAAP) - (b)                                                   

$

2,735


$

3,419




Adjustments to Net Income, Net of Tax (See Accompanying Schedule)


158

(1)


(201)

(2)



Adjusted Net Income (Non-GAAP) - (c)   

$

2,893


$

3,218













Total Stockholders' Equity - (d)   

$

21,641


$

19,364


$

16,283










Average Total Stockholders' Equity * - (e)   

$

20,503


$

17,824













Current and Long-Term Debt (GAAP) - (f) 

$

5,175


$

6,083


$

6,387

Less: Cash                                                       


(2,028)



(1,556)



(834)

Net Debt (Non-GAAP) - (g) 

$

3,147


$

4,527


$

5,553










Total Capitalization (GAAP) - (d) + (f)  

$

26,816


$

25,447


$

22,670










Total Capitalization (Non-GAAP) - (d) + (g) 

$

24,788


$

23,891


$

21,836










Average Total Capitalization (Non-GAAP) * - (h)   

$

24,340


$

22,864













ROCE (GAAP Net Income) - [(a) + (b)] / (h)       


11.8%



15.8%













ROCE (Non-GAAP Adjusted Net Income) - [(a) + (c)] / (h)       


12.5%



14.9%













Return on Equity (ROE)


















ROE (GAAP Net Income) - (b) / (e)


13.3%



19.2%













ROE (Non-GAAP Adjusted Net Income) - (c) / (e)


14.1%



18.1%













* Average for the current and immediately preceding year



























Adjustments to Net Income (GAAP)



























(1) See below schedule for detail of adjustments to Net Income (GAAP) in 2019:

















Year Ended December 31, 2019



 Before 



 Income Tax  



 After 



 Tax 



 Impact 



 Tax 

Adjustments:









    Add:   Mark-to-Market Commodity Derivative Contracts Impact

$

51


$

(11)


$

40

    Add:   Impairments of Certain Assets


275



(60)



215

    Less:   Net Gains on Asset Dispositions


(124)



27



(97)

Total

$

202


$

(44)


$

158










(2) See below schedule for detail of adjustments to Net Income (GAAP) in 2018:

















Year Ended December 31, 2018



 Before 



 Income Tax  



 After 



 Tax 



 Impact 



 Tax 

Adjustments:









    Add:   Mark-to-Market Commodity Derivative Contracts Impact

$

(93)


$

20


$

(73)

    Add:   Impairments of Certain Assets


153



(34)



119

    Less:   Net Gains on Asset Dispositions


(175)



38



(137)

    Less:  Tax Reform Impact


-



(110)



(110)

Total

$

(115)


$

(86)


$

(201)

 

EOG RESOURCES, INC.

Reconciliation of After-Tax Net Interest Expense, 

Net Debt and Total Capitalization 

Calculation of Return on Capital Employed 

(Unaudited; in millions, except ratio data)












The following chart reconciles Net Interest Expense (GAAP), Current and Long-Term Debt (GAAP) and Total Capitalization (GAAP) to After-Tax Net Interest Expense (Non-GAAP), Net Debt (Non-GAAP) and Total Capitalization (Non-GAAP), respectively, as used in the Return on Capital Employed (ROCE) (Non-GAAP) calculation.  EOG believes this presentation may be useful to investors who follow the practice of some industry analysts who utilize After-Tax Net Interest Expense, Net Debt and Total Capitalization (Non-GAAP) in their ROCE calculation.  EOG management uses this information for purposes of comparing its financial performance with the financial performance of other companies in the industry.














2017


2016


2015


2014


2013

Return on Capital Employed (ROCE) (Non-GAAP)











(Calculated Using GAAP Net Income)






















Net Interest Expense (GAAP)

$

274

$

282

$

237

$

201

$

235

Tax Benefit Imputed (based on 35%) 


(96)


(99)


(83)


(70)


(82)

After-Tax Net Interest Expense (Non-GAAP) - (a) 

$

178

$

183

$

154

$

131

$

153












Net Income (Loss) (GAAP) - (b)                                                   

$

2,583

$

(1,097)

$

(4,525)

$

2,915

$

2,197












Total Stockholders' Equity - (d)   

$

16,283

$

13,982

$

12,943

$

17,713

$

15,418












Average Total Stockholders' Equity * - (e)   

$

15,133

$

13,463

$

15,328

$

16,566

$

14,352












Current and Long-Term Debt (GAAP) - (f) 

$

6,387

$

6,986

$

6,655

$

5,906

$

5,909

Less: Cash                                                       


(834)


(1,600)


(719)


(2,087)


(1,318)

Net Debt (Non-GAAP) - (g) 

$

5,553

$

5,386

$

5,936

$

3,819

$

4,591












Total Capitalization (GAAP) - (d) + (f)  

$

22,670

$

20,968

$

19,598

$

23,619

$

21,327












Total Capitalization (Non-GAAP) - (d) + (g) 

$

21,836

$

19,368

$

18,879

$

21,532

$

20,009












Average Total Capitalization (Non-GAAP) * - (h)   

$

20,602

$

19,124

$

20,206

$

20,771

$

19,365












ROCE (GAAP Net Income) - [(a) + (b)] / (h)       


13.4%


-4.8%


-21.6%


14.7%


12.1%












Return on Equity (ROE) (GAAP)






















ROE (GAAP Net Income) - (b) / (e)


17.1%


-8.1%


-29.5%


17.6%


15.3%























* Average for the current and immediately preceding year
































EOG RESOURCES, INC.

Reconciliation of After-Tax Net Interest Expense, 

Net Debt and Total Capitalization 

Calculation of Return on Capital Employed 

(Unaudited; in millions, except ratio data)












The following chart reconciles Net Interest Expense (GAAP), Current and Long-Term Debt (GAAP) and Total Capitalization (GAAP) to After-Tax Net Interest Expense (Non-GAAP), Net Debt (Non-GAAP) and Total Capitalization (Non-GAAP), respectively, as used in the Return on Capital Employed (ROCE) (Non-GAAP) calculation.  EOG believes this presentation may be useful to investors who follow the practice of some industry analysts who utilize After-Tax Net Interest Expense, Net Debt and Total Capitalization (Non-GAAP) in their ROCE calculation.  EOG management uses this information for purposes of comparing its financial performance with the financial performance of other companies in the industry.














2012


2011


2010


2009


2008

Return on Capital Employed (ROCE) (Non-GAAP)











(Calculated Using GAAP Net Income)






















Net Interest Expense (GAAP)

$

214

$

210

$

130

$

101

$

52

Tax Benefit Imputed (based on 35%) 


(75)


(74)


(46)


(35)


(18)

After-Tax Net Interest Expense (Non-GAAP) - (a) 

$

139

$

136

$

84

$

66

$

34












Net Income (Loss) (GAAP) - (b)                                                   

$

570

$

1,091

$

161

$

547

$

2,437












Total Stockholders' Equity - (d)   

$

13,285

$

12,641

$

10,232

$

9,998

$

9,015












Average Total Stockholders' Equity * - (e)   

$

12,963

$

11,437

$

10,115

$

9,507

$

8,003












Current and Long-Term Debt (GAAP) - (f) 

$

6,312

$

5,009

$

5,223

$

2,797

$

1,897

Less: Cash                                                       


(876)


(616)


(789)


(686)


(331)

Net Debt (Non-GAAP) - (g) 

$

5,436

$

4,393

$

4,434

$

2,111

$

1,566












Total Capitalization (GAAP) - (d) + (f)  

$

19,597

$

17,650

$

15,455

$

12,795

$

10,912












Total Capitalization (Non-GAAP) - (d) + (g) 

$

18,721

$

17,034

$

14,666

$

12,109

$

10,581












Average Total Capitalization (Non-GAAP) * - (h)   

$

17,878

$

15,850

$

13,388

$

11,345

$

9,351












ROCE (GAAP Net Income) - [(a) + (b)] / (h)       


4.0%


7.7%


1.8%


5.4%


26.4%












Return on Equity (ROE) (GAAP)






















ROE (GAAP Net Income) - (b) / (e)


4.4%


9.5%


1.6%


5.8%


30.5%























* Average for the current and immediately preceding year
































EOG RESOURCES, INC.

Reconciliation of After-Tax Net Interest Expense, 

Net Debt and Total Capitalization 

Calculation of Return on Capital Employed 

(Unaudited; in millions, except ratio data)












The following chart reconciles Net Interest Expense (GAAP), Current and Long-Term Debt (GAAP) and Total Capitalization (GAAP) to After-Tax Net Interest Expense (Non-GAAP), Net Debt (Non-GAAP) and Total Capitalization (Non-GAAP), respectively, as used in the Return on Capital Employed (ROCE) (Non-GAAP) calculation.  EOG believes this presentation may be useful to investors who follow the practice of some industry analysts who utilize After-Tax Net Interest Expense, Net Debt and Total Capitalization (Non-GAAP) in their ROCE calculation.  EOG management uses this information for purposes of comparing its financial performance with the financial performance of other companies in the industry.














2007


2006


2005


2004


2003

Return on Capital Employed (ROCE) (Non-GAAP)











(Calculated Using GAAP Net Income)






















Net Interest Expense (GAAP)

$

47

$

43

$

63

$

63

$

59

Tax Benefit Imputed (based on 35%) 


(16)


(15)


(22)


(22)


(21)

After-Tax Net Interest Expense (Non-GAAP) - (a) 

$

31

$

28

$

41

$

41

$

38












Net Income (Loss) (GAAP) - (b)                                                   

$

1,090

$

1,300

$

1,260

$

625

$

430












Total Stockholders' Equity - (d)   

$

6,990

$

5,600

$

4,316

$

2,945

$

2,223












Average Total Stockholders' Equity * - (e)   

$

6,295

$

4,958

$

3,631

$

2,584

$

1,948












Current and Long-Term Debt (GAAP) - (f) 

$

1,185

$

733

$

985

$

1,078

$

1,109

Less: Cash                                                       


(54)


(218)


(644)


(21)


(4)

Net Debt (Non-GAAP) - (g) 

$

1,131

$

515

$

341

$

1,057

$

1,105












Total Capitalization (GAAP) - (d) + (f)  

$

8,175

$

6,333

$

5,301

$

4,023

$

3,332












Total Capitalization (Non-GAAP) - (d) + (g) 

$

8,121

$

6,115

$

4,657

$

4,002

$

3,328












Average Total Capitalization (Non-GAAP) * - (h)   

$

7,118

$

5,386

$

4,330

$

3,665

$

3,068












ROCE (GAAP Net Income) - [(a) + (b)] / (h)       


15.7%


24.7%


30.0%


18.2%


15.3%












Return on Equity (ROE) (GAAP)






















ROE (GAAP Net Income) - (b) / (e)


17.3%


26.2%


34.7%


24.2%


22.1%























* Average for the current and immediately preceding year
































EOG RESOURCES, INC.

Reconciliation of After-Tax Net Interest Expense, 

Net Debt and Total Capitalization 

Calculation of Return on Capital Employed 

(Unaudited; in millions, except ratio data)












The following chart reconciles Net Interest Expense (GAAP), Current and Long-Term Debt (GAAP) and Total Capitalization (GAAP) to After-Tax Net Interest Expense (Non-GAAP), Net Debt (Non-GAAP) and Total Capitalization (Non-GAAP), respectively, as used in the Return on Capital Employed (ROCE) (Non-GAAP) calculation.  EOG believes this presentation may be useful to investors who follow the practice of some industry analysts who utilize After-Tax Net Interest Expense, Net Debt and Total Capitalization (Non-GAAP) in their ROCE calculation.  EOG management uses this information for purposes of comparing its financial performance with the financial performance of other companies in the industry.














2002


2001


2000


1999


1998

Return on Capital Employed (ROCE) (Non-GAAP)











(Calculated Using GAAP Net Income)






















Net Interest Expense (GAAP)

$

60

$

45

$

61

$

62



Tax Benefit Imputed (based on 35%) 


(21)


(16)


(21)


(22)



After-Tax Net Interest Expense (Non-GAAP) - (a) 

$

39

$

29

$

40

$

40














Net Income (Loss) (GAAP) - (b)                                                   

$

87

$

399

$

397

$

569














Total Stockholders' Equity - (d)   

$

1,672

$

1,643

$

1,381

$

1,130

$

1,280












Average Total Stockholders' Equity * - (e)   

$

1,658

$

1,512

$

1,256

$

1,205














Current and Long-Term Debt (GAAP) - (f) 

$

1,145

$

856

$

859

$

990

$

1,143

Less: Cash                                                       


(10)


(3)


(20)


(25)


(6)

Net Debt (Non-GAAP) - (g) 

$

1,135

$

853

$

839

$

965

$

1,137












Total Capitalization (GAAP) - (d) + (f)  

$

2,817

$

2,499

$

2,240

$

2,120

$

2,423












Total Capitalization (Non-GAAP) - (d) + (g) 

$

2,807

$

2,496

$

2,220

$

2,095

$

2,417












Average Total Capitalization (Non-GAAP) * - (h)   

$

2,652

$

2,358

$

2,158

$

2,256














ROCE (GAAP Net Income) - [(a) + (b)] / (h)       


4.8%


18.2%


20.2%


27.0%














Return on Equity (ROE) (GAAP)






















ROE (GAAP Net Income) - (b) / (e)


5.2%


26.4%


31.6%


47.2%

























* Average for the current and immediately preceding year










EOG RESOURCES, INC.

Cash Operating Expenses per Barrel of Oil Equivalent (Boe)

(Unaudited; in thousands, except per Boe amounts)






































1st Quarter





2020


2019
























Cash Operating Expenses (GAAP)*














Lease and Well


$   329,659


$   336,291










Transportation Costs


208,296


176,522










General and Administrative


114,273


106,672










     Cash Operating Expenses 


652,228


619,485










Less:  Non-GAAP Adjustments


-


-










     Adjusted Cash Operating Expenses (Non-GAAP) - (a)


$   652,228


$   619,485
























Volume - Thousand Barrels of Oil Equivalent - (b)


79,548


69,623
























Adjusted Cash Operating Expenses Per Boe (Non-GAAP) - (a) / (b)


$         8.20

(c)

$         8.90

(d)























Adjusted Cash Operating Expenses Per Boe (Non-GAAP) -
   Percentage Decrease














1Q20 compared to 1Q19 - [(c) - (d)] / (d)       


-8%








































* Includes stock compensation expense and other non-cash items.










































EOG RESOURCES, INC.

Cash Operating Expenses per Barrel of Oil Equivalent (Boe)

(Unaudited; in thousands, except per Boe amounts)













































Year Ended




December 31,




2019


2018


2017


2016


2015


2014
















Cash Operating Expenses (GAAP)*














Lease and Well


$1,366,993


$1,282,678


$1,044,847


$   927,452


$1,182,282


$1,416,413


Transportation Costs


758,300


746,876


740,352


764,106


849,319


972,176


General and Administrative


489,397


426,969


434,467


394,815


366,594


402,010


     Cash Operating Expenses


2,614,690


2,456,523


2,219,666


2,086,373


2,398,195


2,790,599


Less:  Legal Settlement - Early Leasehold Termination


-


-


(10,202)


-


(19,355)


-


Less:  Voluntary Retirement Expense


-


-


-


(42,054)


-


-


Less:  Acquisition Costs - Yates Transaction


-


-


-


(5,100)


-


-


Less:  Joint Venture Transaction Costs


-


-


(3,056)


-


-


-


Less:  Joint Interest Billings Deemed Uncollectible


-


-


(4,528)


-


-


-


     Adjusted Cash Operating Expenses (Non-GAAP) - (a)


$2,614,690


$2,456,523


$2,201,880


$2,039,219


$2,378,840


$2,790,599
















Volume - Thousand Barrels of Oil Equivalent - (b)


298,565


262,516


222,251


204,929


208,862


217,073
















Adjusted Cash Operating Expenses Per Boe (Non-GAAP) - (a) / (b)


$         8.76

(c)

$         9.36

(d)

$         9.91

(e)

$         9.95

(f)

$       11.39

(g)

$       12.86

(h)















Adjusted Cash Operating Expenses Per Boe (Non-GAAP) -
   Percentage Decrease














2019 compared to 2018 - [(c) - (d)] / (d)       


-6%












2019 compared to 2017 - [(c) - (e)] / (e)       


-12%












2019 compared to 2016 - [(c) - (f)] / (f)       


-12%












2019 compared to 2015 - [(c) - (g)] / (g)       


-23%












2019 compared to 2014 - [(c) - (h)] / (h)       


-32%








































* Includes stock compensation expense and other non-cash items.








EOG RESOURCES, INC.

Cost per Barrel of Oil Equivalent (Boe)

(Unaudited; in thousands, except per Boe amounts)





















Three Months Ended









March 31,









2020
















Volume - Thousand Barrels of Oil Equivalent - (a)


79,548
















     Crude Oil and Condensate


$               2,065,498







     Natural Gas Liquids


160,535







     Natural Gas


209,764







Total Wellhead Revenues - (b)


$               2,435,797
















Operating Costs









     Lease and Well


$                 329,659







     Transportation Costs


208,296







     Gathering and Processing Costs


128,482







     General and Administrative


114,273







     Taxes Other Than Income


157,360







     Interest Expense, Net


44,690







Total Cash Operating Cost (excluding DD&A and Total
  Exploration Costs) - (c)


$                 982,760
















     Depreciation, Depletion and Amortization (DD&A)


1,000,060







Total Operating Cost (excluding Total Exploration Costs) - (d)


$               1,982,820
















     Exploration Costs


$                   39,677







     Dry Hole Costs


372







     Impairments


1,572,935







     Total Exploration Costs 


1,612,984







          Less:  Impairments (Non-GAAP)


(1,516,316)







     Total Exploration Costs (Non-GAAP)


$                   96,668
















Total Operating Cost (Non-GAAP) (including Total
  Exploration Costs) - (e)


$               2,079,488
















Composite Average Wellhead Revenue per Boe - (b) / (a)


$                     30.62
















Total Cash Operating Cost per Boe (excluding DD&A 
  and Total Exploration Costs) - (c) / (a)


$                     12.36
















Composite Average Margin per Boe (excluding DD&A
   and Total Exploration Costs) - [(b) / (a) - (c) / (a)]


$                     18.26
















Total Operating Cost per Boe (excluding Total
  Exploration Costs) - (d) / (a)


$                     24.93
















Composite Average  Margin per Boe (excluding Total
   Exploration Costs) - [(b) / (a) - (d) / (a)]


$                       5.69
















Total Operating Cost per Boe (Non-GAAP) (including
  Total Exploration Costs) - (e) / (a)


$                     26.15
















Composite Average Margin per Boe (Non-GAAP)
  (including Total Exploration Costs) - [(b) / (a) - (e) / (a)]


$                       4.47

























EOG RESOURCES, INC.



Cost per Barrel of Oil Equivalent (Boe)



(Unaudited; in thousands, except per Boe amounts)























Year Ended





December 31,





2019


2018


2017












Volume - Thousand Barrels of Oil Equivalent - (a)


298,565


262,516


222,251












     Crude Oil and Condensate


$               9,612,532


$     9,517,440


$    6,256,396



     Natural Gas Liquids


784,818


1,127,510


729,561



     Natural Gas


1,184,095


1,301,537


921,934



Total Wellhead Revenues - (b)


$             11,581,445


$   11,946,487


$    7,907,891












Operating Costs









     Lease and Well


$               1,366,993


$     1,282,678


$    1,044,847



     Transportation Costs


758,300


746,876


740,352



     Gathering and Processing Costs


479,102


436,973


148,775












     General and Administrative


489,397


426,969


434,467



          Less:  Legal Settlement - Early Leasehold Termination


-


-


(10,202)



          Less:  Joint Venture Transaction Costs


-


-


(3,056)



          Less:  Joint Interest Billings Deemed Uncollectible


-


-


(4,528)



     General and Administrative (Non-GAAP)


489,397


426,969


416,681












     Taxes Other Than Income


800,164


772,481


544,662



     Interest Expense, Net


185,129


245,052


274,372



Total Cash Operating Cost (Non-GAAP) (excluding DD&A
  and Total Exploration Costs) - (c)


$               4,079,085


$     3,911,029


$    3,169,689












     Depreciation, Depletion and Amortization (DD&A)


3,749,704


3,435,408


3,409,387



Total Operating Cost (Non-GAAP) (excluding Total
  Exploration Costs) - (d)


$               7,828,789


$     7,346,437


$    6,579,076












     Exploration Costs


$                 139,881


$       148,999


$       145,342



     Dry Hole Costs


28,001


5,405


4,609



     Impairments


517,896


347,021


479,240



     Total Exploration Costs 


685,778


501,425


629,191



          Less:  Impairments (Non-GAAP)


(274,974)


(152,671)


(261,452)



     Total Exploration Costs (Non-GAAP)


$                 410,804


$       348,754


$       367,739












Total Operating Cost (Non-GAAP) (including Total
  Exploration Costs) - (e)


$               8,239,593


$     7,695,191


$    6,946,815












Composite Average Wellhead Revenue per Boe - (b) / (a)


$                     38.79


$           45.51


$           35.58












Total Cash Operating Cost per Boe (Non-GAAP)
  (excluding DD&A and Total Exploration Costs) - (c) / (a)


$                     13.66


$           14.90


$           14.25












Composite Average Margin per Boe (Non-GAAP) (excluding
   DD&A and Total Exploration Costs) - [(b) / (a) - (c) / (a)]


$                     25.13


$           30.61


$           21.33












Total Operating Cost per Boe (Non-GAAP) (excluding
  Total Exploration Costs) - (d) / (a)


$                     26.22


$           27.99


$           29.59












Composite Average Margin per Boe (Non-GAAP)
   (excluding Total Exploration Costs) - [(b) / (a) - (d) / (a)]


$                     12.57


$           17.52


$             5.99












Total Operating Cost per Boe (Non-GAAP) (including
  Total Exploration Costs) - (e) / (a)


$                     27.60


$           29.32


$           31.24












Composite Average Margin per Boe (Non-GAAP)
  (including Total Exploration Costs) - [(b) / (a) - (e) / (a)]


$                     11.19


$           16.19


$             4.34





















EOG RESOURCES, INC.



Cost per Barrel of Oil Equivalent (Boe)



(Unaudited; in thousands, except per Boe amounts)























Year Ended





December 31,





2016


2015


2014












Volume - Thousand Barrels of Oil Equivalent - (a)


204,929


208,862


217,073












     Crude Oil and Condensate


$               4,317,341


$     4,934,562


$    9,742,480



     Natural Gas Liquids


437,250


407,658


934,051



     Natural Gas


742,152


1,061,038


1,916,386



Total Wellhead Revenues - (b)


$               5,496,743


$     6,403,258


$   12,592,917












Operating Costs









     Lease and Well


$                 927,452


$     1,182,282


$    1,416,413



     Transportation Costs


764,106


849,319


972,176



     Gathering and Processing Costs


122,901


146,156


145,800












     General and Administrative


394,815


366,594


402,010



          Less:  Voluntary Retirement Expense


(42,054)


-


-



          Less:  Acquisition Costs


(5,100)


-


-



          Less:  Legal Settlement - Early Leasehold Termination


-


(19,355)


-



     General and Administrative (Non-GAAP)


347,661


347,239


402,010












     Taxes Other Than Income


349,710


421,744


757,564



     Interest Expense, Net


281,681


237,393


201,458



Total Cash Operating Cost (Non-GAAP) (excluding DD&A
  and Total Exploration Costs) - (c)


$               2,793,511


$     3,184,133


$    3,895,421












     Depreciation, Depletion and Amortization (DD&A)


3,553,417


3,313,644


3,997,041



Total Operating Cost (Non-GAAP) (excluding Total
  Exploration Costs) - (d)


$               6,346,928


$     6,497,777


$    7,892,462












     Exploration Costs


$                 124,953


$       149,494


$       184,388



     Dry Hole Costs


10,657


14,746


48,490



     Impairments


620,267


6,613,546


743,575



     Total Exploration Costs 


755,877


6,777,786


976,453



          Less:  Impairments (Non-GAAP)


(320,617)


(6,307,593)


(824,312)



     Total Exploration Costs (Non-GAAP)


$                 435,260


$       470,193


$       152,141












Total Operating Cost (Non-GAAP) (including Total
  Exploration Costs) - (e)


$               6,782,188


$     6,967,970


$    8,044,603












Composite Average Wellhead Revenue per Boe - (b) / (a)


$                     26.82


$           30.66


$           58.01












Total Cash Operating Cost per Boe (Non-GAAP)
  (excluding DD&A and Total Exploration Costs) - (c) / (a)


$                     13.64


$           15.25


$           17.95












Composite Average Margin per Boe (Non-GAAP) (excluding
   DD&A and Total Exploration Costs) - [(b) / (a) - (c) / (a)]


$                     13.18


$           15.41


$           40.06












Total Operating Cost per Boe (Non-GAAP) (excluding
  Total Exploration Costs) - (d) / (a)


$                     30.98


$           31.11


$           36.38












Composite Average Margin per Boe (Non-GAAP)
   (excluding Total Exploration Costs) - [(b) / (a) - (d) / (a)]


$                      (4.16)


$            (0.45)


$           21.63












Total Operating Cost per Boe (Non-GAAP) (including
  Total Exploration Costs) - (e) / (a)


$                     33.10


$           33.36


$           37.08












Composite Average Margin per Boe (Non-GAAP)
  (including Total Exploration Costs) - [(b) / (a) - (e) / (a)]


$                      (6.28)


$            (2.70)


$           20.93



EOG RESOURCES, INC.

Second Quarter and Full Year 2020 Forecast and Benchmark Commodity Pricing













     (a)  Second Quarter and Full Year 2020 Forecast


















The forecast items for the second quarter and full year 2020 set forth below for EOG Resources, Inc. (EOG) are based on current available information and expectations as of the date of the accompanying press release.  EOG undertakes no obligation, other than as required by applicable law, to update or revise this forecast, whether as a result of new information, subsequent events, anticipated or unanticipated circumstances or otherwise.  This forecast, which should be read in conjunction with the accompanying press release and EOG's related Current Report on Form 8-K filing, replaces and supersedes any previously issued guidance or forecast.













     (b)  Capital Expenditures





















The forecast includes expenditures for Exploration and Development Drilling, Facilities, Leasehold Acquisitions, Capitalized Interest, Exploration Costs, Dry Hole Costs and Other Property, Plant and Equipment. The forecast excludes Property Acquisitions, Asset Retirement Costs and any Non-Cash Transactions.













     (c)  Benchmark Commodity Pricing





















EOG bases United States and Trinidad crude oil and condensate price differentials upon the West Texas Intermediate crude oil price at Cushing, Oklahoma, using the simple average of the NYMEX settlement prices for each trading day within the applicable calendar month.













EOG bases United States natural gas price differentials upon the natural gas price at Henry Hub, Louisiana, using the simple average of the NYMEX settlement prices for the last three trading days of the applicable month.

















Estimated Ranges








(Unaudited)






2Q 2020



Full Year 2020

Daily Sales Volumes












     Crude Oil and Condensate Volumes (MBbld)












          United States


300.0

-


320.0



376.0

-


402.0

          Trinidad


0.2

-


0.6



0.5

-


0.7

          Other International


0.0

-


0.2



0.0

-


0.2

               Total


300.2

-


320.8



376.5

-


402.9













     Natural Gas Liquids Volumes (MBbld)












               Total


85.0

-


95.0



105.0

-


125.0













     Natural Gas Volumes (MMcfd)












          United States


870

-


930



950

-


1,050

          Trinidad


160

-


180



170

-


190

          Other International


20

-


30



20

-


30

               Total


1,050

-


1,140



1,140

-


1,270













     Crude Oil Equivalent Volumes (MBoed)  












          United States


530.0

-


570.0



639.3

-


702.0

          Trinidad


26.9

-


30.6



28.8

-


32.4

          Other International


3.3

-


5.2



3.3

-


5.2

               Total


560.2

-


605.8



671.4

-


739.6

























Capital Expenditures ($MM)

$

600

-

$

700


$

3,300

-

$

3,700

















Estimated Ranges








(Unaudited)





2Q 2020



Full Year 2020

Operating Costs












     Unit Costs ($/Boe)












          Lease and Well

$

4.65

-

$

5.15


$

4.20

-

$

4.80

          Transportation Costs

$

3.00

-

$

3.40


$

2.60

-

$

3.20

          Gathering and Processing

$

2.15

-

$

2.35


$

1.80

-

$

2.10

          Depreciation, Depletion and Amortization

$

12.10

-

$

12.60


$

11.85

-

$

12.85

          General and Administrative

$

2.40

-

$

2.50


$

1.90

-

$

2.10













Expenses ($MM)












     Exploration and Dry Hole

$

32

-

$

42


$

130

-

$

170

     Impairment

$

75

-

$

85


$

300

-

$

340

     Capitalized Interest

$

5

-

$

9


$

27

-

$

33

     Net Interest

$

51

-

$

55


$

200

-

$

205













Taxes Other Than Income (% of Wellhead Revenue)


9.0%

-


11.0%



7.0%

-


8.0%













Income Taxes












     Effective Rate 


19%

-


24%



17%

-


22%

     Current Tax (Benefit) / Expense ($MM)

$

(5)

-

$

35


$

(110)

-

$

(70)













Pricing - (Refer to Benchmark Commodity Pricing in text)












     Crude Oil and Condensate ($/Bbl)












          Differentials












               United States - above (below) WTI

$

(7.75)

-

$

(2.75)


$

(0.40)

-

$

1.60

               Trinidad - above (below) WTI

$

(12.00)

-

$

(10.00)


$

(12.00)

-

$

(10.00)

               Other International - above (below) WTI

$

26.50

-

$

32.50


$

7.00

-

$

12.00













     Natural Gas Liquids












          Realizations as % of WTI


38%

-


48%



30%

-


36%













     Natural Gas ($/Mcf)












          Differentials












               United States - above (below) NYMEX Henry Hub

$

(0.85)

-

$

(0.45)


$

(0.85)

-

$

(0.25)













          Realizations












               Trinidad

$

2.90

-

$

3.50


$

2.60

-

$

3.30

               Other International

$

5.00

-

$

5.50


$

4.45

-

$

5.45













Definitions












$/Bbl         U.S. Dollars per barrel









$/Boe        U.S. Dollars per barrel of oil equivalent








$/Mcf         U.S. Dollars per thousand cubic feet








$MM          U.S. Dollars in millions








MBbld       Thousand barrels per day








MBoed      Thousand barrels of oil equivalent per day








MMcfd       Million cubic feet per day







NYMEX     U.S. New York Mercantile Exchange








WTI           West Texas Intermediate







 

Cision View original content:http://www.prnewswire.com/news-releases/eog-resources-reports-first-quarter-2020-results-and-updates-2020-plan-in-response-to-oil-market-downturn-company-well-positioned-to-emerge-stronger-in-a-recovery-301055288.html

SOURCE EOG Resources, Inc.