EOG Resources Inc., Houston, has lifted its full-year total volume target by 11,800 boe/d, a little more than 1% at the midpoint of guidance, after a second quarter in which both volumes and costs were better than estimates. The operator's leaders also have increased the 2024 estimate for free cash flow.
EOG’s operations, concentrated in the Delaware basin and South Texas, produced an average of 490,700 b/d of oil during the second quarter as well as nearly 1.05 MMboe/d. In this year's third quarter, chairman and chief executive officer Ezra Yacob and his team expect those numbers to grow slightly: The midpoints of guidance ranges are roughly 491,500 b/d and 1.06 MMboe/d, respectively. The latter number is about 9% higher than management’s outlook at the turn of the year (OGJ Online, Jan. 8, 2024).
“There wasn’t one single operation or play that drove our second-quarter outperformance,” Yacob said on an Aug. 2 conference call with analysts. “We made gains in both drilling and completions and every asset contributed.”
EOG executives now expect full-year free cash flows to be $5.7 billion, $100 million more than previously forecast thanks to efficiency gains and a capital spending program holding at $6.2 billion for the year.
Net income at EOG for the 3 months ended June 30 was $1.69 billion, a 9% increase from the same time last year, as revenues rose to $6.03 billion from $5.57 billion. Operating profits came in at $2.13 billion versus $1.97 billion in the prior-year period. Cash operating costs for the quarter were $10.11/boe, up slightly year over year but down from $10.37 early this year and $10.52 in fourth-quarter 2023.
Looking ahead, Yacob and his team expect cash operating costs to fall another 15 cents per boe for all of 2024. Year to date, the company has spent $7.75 billion on operations compared with $7.08 billion in first-half 2023. Steep increases in development or production work are not expected, including in Utica basin where the company is delineating several areas.
“We really pride ourselves on not getting into manufacturing mode but instead developing the acreage package by package,” senior vice-president of exploration and production Keith Trasko said on the conference call.
Shares of EOG (Ticker: EOG) were down nearly 2% to roughly $121 in midday trading Aug. 2, limiting its losses on a very red day for the broader market. Shares have climbed about 10% over the past 6 months, growing the company’s market capitalization to nearly $70 billion.
