The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Leo Paul Mariani - KeyBanc Capital Markets Inc., Research Division - Analyst
: You obviously highlighted some success on kind of the small bolt-on deals here. And I guess, just from my perspective, it seemed like those were
very, very economic, just very cheap per acre cost at around $2,500 per acre. Is a lot of this just a function of the fact that these are very small deals
and sort of captive to EOG existing acreage and infrastructure, which just gives you kind of the natural ability to kind of buy these without a lot of
competition. And just want to get a sense of how repeatable these type of bolt-ons can be for you guys going forward?
Question: Leo Paul Mariani - KeyBanc Capital Markets Inc., Research Division - Analyst
: Okay. That's helpful. And I guess I also wanted to ask about your comment around seeing a less than $7 per BOE F&D year-to-date. Clearly, you
attributed some of the factors there, where you talked about how your well costs are coming down. I know that's part of it and also the move to
double premium.
But maybe you can provide just a little bit more color. I mean I guess that less than $7 seems like a very low number out there. Are there any other
just kind of key factors where maybe there's more of a mix shift to certain plays or perhaps your higher concentration of certain zones in the
Delaware this year? And now you guys are also drilling some gas wells in South Texas might be helping. Just any color around kind of some of the
key drivers that are getting you to under $7.
Question: Paul Cheng - Scotiabank Global Banking and Markets, Research Division - Analyst
: Two questions, please. The first one, maybe that, Bill, you can help us to frame it to understand the decision a little bit better. If we look at the last
quarter, when you announced the special dividend, I think you set a number of preconditions, and that's all being met, such as you generate
substantial free cash flow.
You don't have much of the debt maturity in the near term and your cash is already in excess of what you think is a reasonable level, which is $2
billion. If we look in this quarter, basically, all those conditions are still being match, but you decided not to declare another special dividend.
So we're just trying to understand that what is the additional consideration in that decision. And also, if you can talk about between buyback and
special dividend at this point of the cycle, which is more preferable for you or how do you look at the differences? So that's the first question.
The second question is related to I think that you guys clearly is one of the unquestioned leaders in many of the basins. You are not interested in
large scale M&A, which understandable. Does it make sense, however, that to work with some of your peers to pull together the asset to form a
really large joint venture? So everyone still have their own equity ownership. You don't pay any premium, but you will be able to allow to use your
technical know-how to apply to even a larger scale asset and drive even better efficiency gains. Do you think that it makes sense for EOG for that
kind of structure?
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