EOG Resources Inc Q4 2020 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Leo Paul Mariani - KeyBanc Capital Markets Inc., Research Division - Analyst : Just wanted to delve a little bit into the CapEx here in 2021. Certainly noticing from the slides that you guys are spending an extra $500 million kind of above maintenance. I wanted to get a sense of how much of that is devoted to some of these new exploration plays that you guys were discussing here. And then ultimately, it sounds like there's quite a bit of testing happening with the drill bit in '21 versus last year. Do you guys see this year as really having a potential as kind of a breakout year for exploration success for EOG, given the higher spend?

Question: Leo Paul Mariani - KeyBanc Capital Markets Inc., Research Division - Analyst : That's great color, for sure. I really appreciate that. Just for my follow-up question, I just wanted to ask a little bit about kind of production cadence here on the oil side in 2021. Obviously, the goal is to kind of keep things roughly flat with the 4Q '20 levels of 442,000. You're kind of obviously REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 26, 2021 / 3:00PM, EOG.N - Q4 2020 EOG Resources Inc Earnings Call starting at a lower point in 1Q because of a lot of the storm downtime. Does that imply that we're going to see a bit of a gradual ramp on those volumes to kind of get to the average as we work our way into midyear and second half '21 for the U.S. oil volumes?

Question: Charles Arthur Meade - Johnson Rice & Company, L.L.C., Research Division - Analyst : I wanted to ask a question about your double-premium inventory and really the rate of change there. If you took that definition of double premium and applied that to your '19 program and your '20 program, what percentage of that '19 program or '20 program would have fit -- would have qualified for that double premium bucket? And what's it going to be in '21?

Question: Charles Arthur Meade - Johnson Rice & Company, L.L.C., Research Division - Analyst : Bill, that's helpful insight into your thinking process. And perhaps picking up that one thread on better rock, am I interpreting that the right way that -- is that essentially the shift from these -- the resource shale plays more towards these combo-clastic kind of plays? And is that a -- is that just kind of a coincidence? Or is that more of a fundamental arrow for you guys?

Question: Paul Cheng - Scotiabank Global Banking and Markets, Research Division - Analyst : Two questions, please. Last year, you signed a gas supply agreement. That seems to be well timed, given the sharp rise in the JKM prices. Can you tell us that what is that volume for this year? And how quickly you would ramp to 440 million cubic feet per day? How many years that we get there? And also that since it's linked to both JKM and Henry Hub, can you tell us that what percent is on JKM and what percent is in Henry Hub? That's the first question. Second question, I think this is probably for Bill. Some of your competitors have decided to formalize the excess cash return framework that once that they have excess free cash after CapEx and paid dividend, they will pay that out. Just curious that why from EOG standpoint, you don't think that will be a maybe workable program for you because I think the market would love cash return, but that they also love transparency and sort of understanding that under what circumstances they can get what. So just curious that why that we do not believe that will fit into the EOG model?

Question: Paul Cheng - Scotiabank Global Banking and Markets, Research Division - Analyst : And for the JKM link, is that a 1:1 or that (inaudible)?

Question: Paul Cheng - Scotiabank Global Banking and Markets, Research Division - Analyst : For the link to the JKM, is it a direct price you get the JKM? Or you say (inaudible)? Is there an S-curve or anything like that?