EOG Resources Inc Q4 2024 Earnings Call Transcript

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

Question: Neil Mehta - Goldman Sachs - Analyst : Thanks for the rundown here. Two questions. The first was just the free cash flow guide the $4.7 billion at WTI and 425 Henry Hub was a little softer than I think where we and some consensus had. And I think some of that just might be timing because there's some pretty productive capital in the plan, but maybe you could talk about that some of the investments that you're making in the emerging plays and infrastructure might show up a little bit more in the '26 free cash flow versus '25 as that's been a focus of conversations this morning. 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 28, 2025 / 3:00PM, EOG.N - Q4 2024 EOG Resources Inc Earnings Call

Question: Neil Mehta - Goldman Sachs - Analyst : Yes. That's really helpful as some of those items that could have driven the -- the follow-up is just on international. It sounds like there's a little bit more international spend in the portfolio, the capital program this year. So can you unpack that a little bit, Trinidad, Bahrain, in particular, and what's got you excited?

Question: Arun Jayaram - JPMorgan Securities - Analyst : Just maybe as a follow-up to the updated free cash flow outlook I wondered if you could spend a little bit of time talking about your natural gas differential guidance, which is a bit wider than we expected and also wider on a year-over-year basis. We thought that may narrow just given the higher amount of coverage you have at Henry Hub as well as the startup of Corpus Christi. So I was wondering if you could help us unpack that.

Question: Arun Jayaram - JPMorgan Securities - Analyst : That's helpful, Lance. Maybe my follow-up is just on Bahrain. It sounds like there has been some well control there. Could you talk about what type of capital project like this could look like and just maybe the time line to cash flows if things kind of play out based on your expectations?

Question: Josh Silverstein - UBS - Analyst : So you ended 2024 with $7 billion in cash following the 4Q debt offering. It sounds like you have the $700 million tax payment for this year, but how should we think about the pace of buybacks given you talked about one to stay at a cash balance of $6 billion or less?

Question: Arun Jayaram - JPMorgan Securities - Analyst : And then second, in Dorado, you fell back some activity over the past two years. We're now in a higher price environment. Your pipeline started up in the new LNG facility is starting up around the corner. Are you guys just waiting on kind of confirmation of the $4-plus gas price environment to accelerate more activity or just taking a more kind of a modest pace of growth there?

Question: Leo Mariani - Roth Capital Partners - Analyst : Just wanted to follow up a little bit on the decision to dial back Eagle Ford activity. It looks like net completions are down around 25% year-over-year. I know your lateral lengths are going up. So presumably, total completed feed are down quite that much, but just provide a little bit more color there. Are you just seeing like incremental returns not being as competitive with your Delaware or the emerging plays or obviously increasing activity here in '25?

Question: Leo Mariani - Roth Capital Partners - Analyst : Okay. I appreciate that. And I wanted to just jump back over to the exploration side. I know you guys have been looking at a number of domestic oil exploration plays for the last handful of years. Just wanted to get a sense of what the activity levels there are. Are you still pursuing those type of lower-cost exploration plays domestically for oil here in 2025. Obviously, you've got the Bapco JV, which is international gas. So just trying to kind of get a sense there and there's still some of these plays active? And what should we expect in terms of activity in '25.

Question: Derrick Whitfield - Texas Capital Securities - Analyst : From the outside, it appears you guys have experience on this -- success with all three emerging trends. For my first question, I'd like to focus on the Utica and ask how close is it to competing heads up with the Eagle Ford?

Question: Derrick Whitfield - Texas Capital Securities - Analyst : That's great. And for my second question, with the efficiency and productivity gains you've noted in the Niobrara, where do you think you could drive F&D cost with the benefit of both working as it seems like we're getting closer and closer to a breakthrough in the PRB.

Question: Nitin Kumar - Mizuho Securities - Analyst : I want to focus on the Delaware. You're reading lateral lens there quite significantly. But last year, we had talked about sort of stepping away from the core oil and into other parts of the basin. How would you characterize the productivity of the Delaware program this year versus last year?

Question: Nitin Kumar - Mizuho Securities - Analyst : Great. Jeff. As I'm going to try to take one more shot at the Bahrain opportunity. I know details are limited. Trade accounts for about 10% of your corporate gas production could Bahrain be the same scale or bigger over the years? 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 28, 2025 / 3:00PM, EOG.N - Q4 2024 EOG Resources Inc Earnings Call And then for those of us who don't know what Bahrain local gas pricing looks like, are the returns as competitive as your domestic exploration?

Question: John Freeman - Raymond James - Analyst : I just wanted to circle back on the Utica. Last year, you all tested well spacing from kind of 700 feet to 1,000 feet. And an increased activity pretty meaningfully in the Utica. Are you sort of or, I guess, dialed in on a specific sort of spacing? Or is testing still a big part of what you're doing this year to kind of understand that better?

Question: John Freeman - Raymond James - Analyst : And then as these emerging plays take on more activity, more capital as some of these international opportunities that you have been talking about today. Do you all start to take maybe a harder look at divestitures just as a way to unlock value given the pretty deep global portfolio you've got with maybe some areas having a tougher time kind of competing for capital that may be more valuable to somebody else.

Question: Neal Dingmann - Truist Securities - Analyst : My first question is maybe on IPP or other power gen operations. I'm just wondering, a number of your peers have talked about how their service water and natural gas resources would make for an ideal make them an ideal partner for transactions. And I'm wondering -- you all definitely seem to have those same high asset qualities. And I'm wondering, with that said, are you all actively speaking into some of these hyperscalers? And if so, do you think your opportunities to do something like that would be in the Appalachian, Dell, Eagle Ford, you certainly have a lot of interesting areas where you could do something like that.

Question: Neal Dingmann - Truist Securities - Analyst : Yes, you definitely have some interesting areas. And maybe just a second, if I could ask maybe on the Utica a little bit differently. I'm curious, I don't know if you're able to discuss what part of the Utica you target, the new 15,000 acres or maybe just looking at it another way, I'm just curious how you all are now thinking about maybe you've got a huge footprint, almost 500,000 acres now. I'm wondering how you think about the Western side of the black oil window. I don't know, maybe I can start versus the eastern side well over into like Trimble County?

Question: John Abbott - Wolfe Research, LLC - Analyst : This is John Abbott on for Doug Leggate. Ezra, as your scale it's getting harder to move the needle on value of the resource. You have about 27 years of inventory. So it seems to us the dividend becomes a more important part of market recognition and value. So our question is, how do you think about the evolution of the dividend, the dividend growing rate and the dividend breakeven?

Question: John Abbott - Wolfe Research, LLC - Analyst : Appreciate it. And then for my second question is on cash taxes. At least for us, it was a little difficulty hearing in the beginning when Ann was speaking. Could you talk about the AMT. We thought our impression that you were already a full cash tax payer. Is that correct? Could you discuss a little bit more detail on your cash tax outlook?