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Section 1: 8-K (8-K)

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K


CURRENT REPORT

Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  February 27, 2018

_______________

EOG RESOURCES, INC.
(Exact name of registrant as specified in its charter)


Delaware
(State or other jurisdiction
 of incorporation)
1-9743
(Commission File
 Number)
47-0684736
(I.R.S. Employer
Identification No.)

1111 Bagby, Sky Lobby 2
Houston, Texas  77002
(Address of principal executive offices) (Zip Code)

713-651-7000
(Registrant's telephone number, including area code)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ]    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ]    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ]    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ]    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o



 
 
 
 
 




EOG RESOURCES, INC.

Item 2.02     Results of Operations and Financial Condition.

On February 27, 2018, EOG Resources, Inc. issued a press release announcing fourth quarter and full year 2017 financial and operational results and first quarter and full year 2018 forecast and benchmark commodity pricing information (see Item 7.01 below).  A copy of this release is attached as Exhibit 99.1 to this filing and is incorporated herein by reference.  This information shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, and is not incorporated by reference into any filing under the Securities Act of 1933, as amended, or Securities Exchange Act of 1934, as amended.

Item 7.01     Regulation FD Disclosure.

Accompanying the press release announcing fourth quarter and full year 2017 financial and operational results attached hereto as Exhibit 99.1 is first quarter and full year 2018 forecast and benchmark commodity pricing information for EOG Resources, Inc., which information is incorporated herein by reference.  This information shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, and is not incorporated by reference into any filing under the Securities Act of 1933, as amended, or Securities Exchange Act of 1934, as amended.

Item 9.01     Financial Statements and Exhibits.

(d)          Exhibits

99.1          Press Release of EOG Resources, Inc. dated February 27, 2018 (including the accompanying first quarter and full year 2018 forecast and benchmark commodity pricing information).


2



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
 
EOG RESOURCES, INC.
(Registrant)
 
 
 
 
 
 
 
 
 
Date: February 27, 2018
By:
/s/ TIMOTHY K. DRIGGERS
Timothy K. Driggers
Executive Vice President and Chief Financial Officer
(Principal Financial Officer and Duly Authorized Officer)


3
(Back To Top)

Section 2: EX-99.1 (PRESS RELEASE OF EOG RESOURCES, INC.)

Exhibit
EXHIBIT 99.1

EOG Resources, Inc.
P.O. Box 4362, Houston, TX 77210-4362
News Release
 
For Further Information Contact:
Investors
 
David J. Streit
 
(713) 571-4902
 
Neel Panchal
 
(713) 571-4884
 
W. John Wagner
 
(713) 571-4404
 
 
 
Media and Investors
 
Kimberly M. Ehmer
 
(713) 571-4676

EOG Resources Reports Fourth Quarter and Full Year 2017 Results and Announces 2018 Capital Program
Delivers 20 Percent U.S. Crude Oil Production Growth and Pays Dividend within Cash Flow
Lowers Per-Unit Transportation and DD&A Expenses Below Targets
Increases Proved Reserves 18 Percent and Replaces 201 Percent of 2017 Production at Low Finding Costs
Raises Common Stock Dividend 10 Percent
Targets 18 Percent Crude Oil Production Growth and 16 Percent Total Production Growth for 2018 with Significant Free Cash Flow at $60 Oil
Expects to Earn Double-Digit ROCE in 2018

FOR IMMEDIATE RELEASE: Tuesday, February 27, 2018

HOUSTON - EOG Resources, Inc. (EOG) today reported fourth quarter 2017 net income of $2,430 million, or $4.20 per share. This compares to a fourth quarter 2016 net loss of $142 million, or $0.25 per share. For the full year 2017, EOG reported net income of $2,583 million, or $4.46 per share, compared to a net loss of $1,097 million, or $1.98 per share, for the full year 2016.
Adjusted non-GAAP net income for the fourth quarter 2017 was $401 million, or $0.69 per share, compared to an adjusted non-GAAP net loss of $7 million, or $0.01 per share, for the same prior year period. Adjusted non-GAAP net income for the full year 2017 was $648 million, or $1.12 per share, compared to an adjusted non-GAAP net loss of $893 million, or $1.61 per share, for the full year 2016. Adjusted non-GAAP net income (loss) is calculated by matching hedge realizations to settlement months and making certain other adjustments in order to exclude non-recurring and certain other items. One of the adjusting items in the fourth quarter and full year 2017 was a non-cash reduction in income tax expense of $2.2 billion, or $3.75 per share, related to the revaluation of EOG’s deferred tax liability and certain other items resulting from the Tax Cuts and Jobs Act. For a reconciliation of non-GAAP measures to GAAP measures, please refer to the attached tables.



Higher commodity prices, increased production volumes, well productivity improvements and per-unit cost reductions resulted in significant increases to adjusted non-GAAP net income, discretionary cash flow and EBITDAX for the fourth quarter 2017 compared to the fourth quarter 2016. For a reconciliation of non-GAAP measures to GAAP measures, please refer to the attached tables.
    
Operational Highlights
Crude oil and condensate volumes in the U.S. increased 20 percent in 2017 to 335,000 barrels of oil per day (Bopd). Increased development activity and well productivity improvements supported the volume increase. Total company natural gas liquids (NGLs) volumes grew 8 percent while natural gas volumes decreased 6 percent primarily due to the sale of the company’s Barnett and Haynesville Shale dry gas assets in late 2016. Transportation expenses decreased 11 percent and depreciation, depletion and amortization expenses decreased 12 percent, on a per-unit basis.
Increased development activity drove substantial volume increases in the Eagle Ford and Delaware Basin during the fourth quarter. Total company crude oil and condensate volumes increased 40,200 Bopd compared to the third quarter 2017. Natural gas liquids volumes grew 15 percent while natural gas volumes increased 6 percent, compared to the third quarter 2017.
“EOG emerged from the industry downturn in 2017 with unprecedented levels of efficiency and productivity, driving oil production volumes to record levels with capital expenditures approximately one half the prior peak,” said William R. “Bill” Thomas, Chairman and Chief Executive Officer. “EOG’s integrated teams demonstrated superb operational performance, overcoming a major hurricane and other challenges to deliver record production volumes and cost savings which surpassed original targets set at the beginning of the year.”

2018 Capital Plan
EOG’s disciplined capital plan is designed to achieve strong returns on capital employed and healthy growth while spending within cash flow. The company expects to grow total company crude oil volumes by 18 percent, generate double-digit ROCE and cover capital investment and dividend payments within discretionary cash flow. EOG can deliver on its 2018 plan at oil prices below $50 and generates significant free cash flow at a $60 oil price.
EOG’s return-based culture continues to drive cost reductions. The company targets lower well costs and per-unit operating expenses in 2018 despite a potentially inflationary operating environment. EOG is also focused on driving continued improvements in well productivity and pursuing exploration efforts in new plays.



Capital expenditures for 2018 are expected to range from $5.4 to $5.8 billion, including production facilities and gathering, processing and other expenditures, and excluding acquisitions. EOG expects to complete approximately 690 net wells in 2018, compared to 536 net wells in 2017. Capital will be allocated primarily to EOG’s highest rate-of-return oil assets in the Delaware Basin, Eagle Ford, Rockies, Woodford and the Bakken.
At least 90 percent of the wells completed in 2018 are expected to be premium. EOG has an inventory of approximately 8,000 such wells, which have a direct after-tax rate of return of at least 30 percent assuming $40 flat crude oil prices and $2.50 flat natural gas prices.
“EOG enters 2018 better positioned than ever to generate significant shareholder value through the development of its large and diverse inventory of high rate-of-return premium wells,” Thomas said. “We are determined to maintain the discipline, record-level operational efficiency and performance gained through the downturn. Our deep inventory of premium wells across the U.S. offers flexibility to adjust to changing conditions. We also see significant opportunities to increase our premium well inventory through organic exploration and development technology to further extend EOG’s return on capital advantage.”

Dividend Increase
The board of directors increased the cash dividend on the common stock by 10.4 percent. Effective with the dividend payable April 30, 2018, to stockholders of record as of April 16, 2018, the board declared a quarterly dividend of $0.185 per share on the common stock. The indicated annual rate is $0.74 per share.

Delaware Basin
2017 was a watershed year for EOG in the Delaware Basin, where it successfully integrated the Yates acquisition, identified 1,240 additional net premium well locations, added the First Bone Spring as its fourth premium play and reduced completed well costs by $800,000 per well. Delaware Basin crude oil and condensate volumes increased over 80 percent in 2017 and exceeded 100,000 Bopd in the fourth quarter 2017.
EOG continued active development of its 416,000 net acre position in the Delaware Basin in the fourth quarter 2017, completing 65 wells.
In the Delaware Basin Wolfcamp, in Lea County, NM, EOG completed a four-well package, the Calm Breeze 2 Fed Com #701-704H, with an average treated lateral length of 7,100 feet per well and average 30-day initial production rates per well of 2,605 Bopd, 440 barrels per day (Bpd) of NGLs and 3.7 million cubic feet per day (MMcfd) of natural gas.



In the Delaware Basin First Bone Spring, in Lea County, NM, EOG completed the Righteous 6 State Com #301H with a treated lateral length of 7,100 feet and 30-day initial production rate of 1,305 Bopd, 170 Bpd of NGLs and 1.4 MMcfd of natural gas.
In the Delaware Basin Leonard, in Loving County, TX, EOG completed a four-well package, the State Atlas A#3H - D#6H, with an average treated lateral length of 9,800 feet per well and average 30-day initial production rates per well of 1,215 Bopd, 270 Bpd of NGLs and 2.3 MMcfd of natural gas.

South Texas Eagle Ford and Austin Chalk
EOG continues to enhance the productivity of its bellwether asset in the South Texas Eagle Ford. Eight years after initiating development, EOG further reduced well costs and improved well performance during 2017 in its 520,000 net acre position in the crude oil window of this world class play. EOG also expanded its enhanced oil recovery program, adding 56 wells last year. For the full year 2017, crude oil production in the Eagle Ford and Austin Chalk increased one percent year-over-year despite interruption to producing volumes as a result of Hurricane Harvey.
In the fourth quarter, EOG completed 74 wells in the Eagle Ford. These included 13 wells with lateral lengths of more than 10,000 feet. In LaSalle County, EOG completed a four-well package, the White 5H-8H, with an average treated lateral length of 12,900 feet per well and average 30-day initial production rates per well of 1,545 Bopd, 80 Bpd of NGLs and 0.5 MMcfd of natural gas. In DeWitt County, EOG completed a four-well package, the Hendrix 8H-10H and the Hendrix 12H, with an average treated lateral length of 6,700 feet per well and average 30-day initial production rates per well of 2,545 Bopd, 420 Bpd of NGLs and 2.4 MMcfd of natural gas.
EOG continued to test its position in the South Texas Austin Chalk, a geologically complex formation which lies above the South Texas Eagle Ford, completing four net wells in the fourth quarter.

Rockies
EOG’s Wyoming Powder River Basin and DJ Basin activity both contributed to the company’s 2017 crude oil production growth. In the Powder River Basin, EOG continued exploration activity on its 400,000 net acre position in the core of the play. The company tested the prospectivity of multiple target zones and also tested the aerial extent of various targets in the Powder River Basin during the year. In the DJ Basin, EOG achieved significant well cost reductions during 2017 through a focus on efficiency improvements in drilling and completion operations.
In the fourth quarter, EOG completed nine wells in the Powder River Basin. In Converse County, EOG completed the Mary’s Draw 453-0310H and 455-0310H wells with an average treated lateral length of 7,300 feet per well and average 30-day initial production rates per well of 1,280 Bopd, 610 Bpd of



NGLs and 7.6 MMcfd of natural gas. In the DJ Basin, EOG completed three wells in the fourth quarter. This included the Big Sandy 522-2536H with a treated lateral length of 8,800 feet and 30-day initial production rate of 1,100 Bopd, 110 Bpd of NGLs and 0.2 MMcfd of natural gas.

Reserves
At year-end 2017, total company net proved reserves were 2,527 million barrels of oil equivalent (MMBoe), an increase of 18 percent compared to year-end 2016. Net proved reserve additions from all sources, excluding revisions due to price, replaced 201 percent of EOG’s 2017 production at a finding and development cost of $8.71 per barrel of oil equivalent. Revisions due to price increased net proved reserves by 154 MMBoe and asset divestitures decreased net proved reserves by 21 MMBoe. (For more reserves detail and a reconciliation of non-GAAP measures to GAAP measures, please refer to the attached tables.)
For the 30th consecutive year, internal reserves estimates were within 5 percent of estimates independently prepared by DeGolyer and MacNaughton.

Hedging Activity
During the fourth quarter ended December 31, 2017, EOG entered into crude oil financial price swap contracts and differential basis swap contracts. A comprehensive summary of crude oil and natural gas derivative contracts is provided in the attached tables.

Capital Structure and Asset Sales
At December 31, 2017, EOG’s total debt outstanding was $6.4 billion with a debt-to-total capitalization ratio of 28 percent. Considering cash on the balance sheet at the end of the fourth quarter, EOG’s net debt was $5.6 billion with a net debt-to-total capitalization ratio of 25 percent. For a reconciliation of non-GAAP measures to GAAP measures, please refer to the attached tables.
Proceeds from asset sales for the full year 2017 totaled $227 million.

Conference Call February 28, 2018
EOG’s fourth quarter and full year 2017 results conference call will be available via live audio webcast at 8 a.m. Central time (9 a.m. Eastern time) on Wednesday, February 28, 2018. To access the live audio webcast and related presentation materials, log on to the Investors Overview page on the EOG website at http://investors.eogresources.com/overview.
EOG Resources, Inc. is one of the largest independent (non-integrated) crude oil and natural gas companies in the United States with proved reserves in the United States, Trinidad, the United Kingdom



and China. EOG Resources, Inc. is listed on the New York Stock Exchange and is traded under the ticker symbol "EOG." For additional information about EOG, please visit www.eogresources.com.
This press release includes 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, 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," "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, reduce or otherwise control operating and capital costs, generate income or cash flows or pay 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, EOG has presented or referenced herein or in its accompanying disclosures certain forward-looking, non-GAAP financial measures, such as free cash flow and discretionary cash flow, and certain related estimates regarding future performance, results and financial position. These 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 the measure and estimates presented or referenced herein. 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 economically develop its acreage in, produce reserves and achieve anticipated production levels from, and maximize reserve recovery from, its existing and future crude oil and natural gas exploration and development projects;
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;
the availability, proximity and capacity of, and costs associated with, appropriate gathering, processing, compression, 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; 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 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 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 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;
political conditions and developments around the world (such as 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;
physical, electronic and cyber security breaches; and
the other factors described under ITEM 1A, Risk Factors, on pages 14 through 23 of EOG’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017, 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 and 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 estimates provided in this press release that are not specifically designated as being estimates of proved reserves may include "potential" reserves and/or other estimated reserves 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, 2017, 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
 
Twelve Months Ended
 
December 31,
 
December 31,
 
2017
 
2016
 
2017
 
2016
 
 
 
 
 
 
 
 
 
 
 
 
Net Operating Revenues and Other
$
3,340.4

 
$
2,402.0

 
$
11,208.3

 
$
7,650.6

Net Income (Loss)
$
2,430.5

 
$
(142.4
)
 
$
2,582.6

 
$
(1,096.7
)
Net Income (Loss) Per Share
 
 
 
 
 
 
 
 
 
 
 
Basic
$
4.22

 
$
(0.25
)
 
$
4.49

 
$
(1.98
)
Diluted
$
4.20

 
$
(0.25
)
 
$
4.46

 
$
(1.98
)
Average Number of Common Shares
 
 
 
 
 
 
 
 
 
 
 
Basic
   
575.4

 
 
567.3

 
 
574.6

 
 
553.4

Diluted
 
579.2

 
 
567.3

 
 
578.7

 
 
553.4

 
 
 
 
 
 
 
 
 
 
 
 
Summary Income Statements
(Unaudited; in thousands, except per share data)
 
 
Three Months Ended
 
Twelve Months Ended
 
December 31,
 
December 31,
 
2017
 
2016
 
2017
 
2016
Net Operating Revenues and Other
 
 
 
 
 
 
 
Crude Oil and Condensate
$
1,929,471

 
 $
1,366,223

 
$
6,256,396

 
$
4,317,341

Natural Gas Liquids
 
249,172

 
 
137,849

 
 
729,561

 
 
437,250

Natural Gas
 
246,922

 
 
215,373

 
 
921,934

 
 
742,152

Gains (Losses) on Mark-to-Market Commodity Derivative Contracts
 
(45,032
)
 
 
(65,787
)
 
 
19,828

 
 
(99,608
)
Gathering, Processing and Marketing
 
1,008,385

 
 
614,594

 
 
3,298,087

 
 
1,966,259

Gains (Losses) on Asset Dispositions, Net
 
(65,220
)
 
 
104,034

 
 
(99,096
)
 
 
205,835

Other, Net
 
16,741

 
 
29,753

 
 
81,610

 
 
81,403

Total
 
3,340,439

 
 
2,402,039

 
 
11,208,320

 
 
7,650,632

Operating Expenses
 
 
 
 
 
 
 
 
 
 
 
Lease and Well
 
281,941

 
 
241,846

 
 
1,044,847

 
 
927,452

Transportation Costs
 
191,717

 
 
193,319

 
 
740,352

 
 
764,106

Gathering and Processing Costs
 
43,295

 
 
32,516

 
 
148,775

 
 
122,901

Exploration Costs
 
22,941

 
 
39,110

 
 
145,342

 
 
124,953

Dry Hole Costs
 
4,532

 
 
193

 
 
4,609

 
 
10,657

Impairments
 
153,442

 
 
297,946

 
 
479,240

 
 
620,267

Marketing Costs
 
1,009,566

 
 
634,248

 
 
3,330,237

 
 
2,007,635

Depreciation, Depletion and Amortization
 
881,745

 
 
862,524

 
 
3,409,387

 
 
3,553,417

General and Administrative
 
117,005

 
 
102,182

 
 
434,467

 
 
394,815

Taxes Other Than Income
 
158,343

 
 
103,642

 
 
544,662

 
 
349,710

Total
 
2,864,527

 
 
2,507,526

 
 
10,281,918

 
 
8,875,913

 
 
 
 
 
 
 
 
 
 
 
 
Operating Income (Loss)
 
475,912

 
 
(105,487
)
 
 
926,402

 
 
(1,225,281
)
 
 
 
 
 
 
 
 
 
 
 
 
Other Income (Expense), Net
 
803

 
 
(17,198
)
 
 
9,152

 
 
(50,543
)
 
 
 
 
 
 
 
 
 
 
 
 
Income (Loss) Before Interest Expense and Income Taxes
 
476,715

 
 
(122,685
)
 
 
935,554

 
 
(1,275,824
)
 
 
 
 
 
 
 
 
 
 
 
 
Interest Expense, Net
 
63,362

 
 
71,325

 
 
274,372

 
 
281,681

 
 
 
 
 
 
 
 
 
 
 
 
Income (Loss) Before Income Taxes
 
413,353

 
 
(194,010
)
 
 
661,182

 
 
(1,557,505
)
 
 
 
 
 
 
 
 
 
 
 
 
Income Tax (Benefit)
 
(2,017,115
)
 
 
(51,658
)
 
 
(1,921,397
)
 
 
(460,819
)
 
 
 
 
 
 
 
 
 
 
 
 
Net Income (Loss)
$
2,430,468

 
 $
(142,352
)
 
$
2,582,579

 
$
(1,096,686
)
 
 
 
 
 
 
 
 
 
 
 
 
Dividends Declared per Common Share
$
0.1675

 
$
0.1675

 
$
0.6700

 
$
0.6700

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 





EOG RESOURCES, INC.
Operating Highlights
(Unaudited)
 
 
Three Months Ended
 
Twelve Months Ended
 
December 31,
 
December 31,
 
2017
 
2016
 
2017
 
2016
Wellhead Volumes and Prices
 
 
 
Crude Oil and Condensate Volumes (MBbld) (A)
 
 
 
United States
 
366.9

 
 
306.0

 
 
335.0

 
 
278.3

Trinidad
 
1.1

 
 
0.9

 
 
0.9

 
 
0.8

Other International (B)
 
0.1

 
 
4.8

 
 
0.8

 
 
3.4

Total
 
368.1

 
 
311.7

 
 
336.7

 
 
282.5

 
 
 
 
 
 
 
 
 
 
 
 
Average Crude Oil and Condensate Prices ($/Bbl) (C)
 
 
 
 
 
 
 
 
 
 
 
United States
$
56.95

 
$
47.93

 
$
50.91

 
$
41.84

Trinidad
 
46.56

 
 
40.04

 
 
42.30

 
 
33.76

Other International (B)
 
45.72

 
 
38.96

 
 
57.20

 
 
36.72

Composite
 
56.97

 
 
47.76

 
 
50.91

 
 
41.76

 
 
 
 
 
 
 
 
 
 
 
 
Natural Gas Liquids Volumes (MBbld) (A)
 
 
 
 
 
 
 
 
 
 
 
United States
 
100.6

 
 
80.9

 
 
88.4

 
 
81.6

Other International (B)
 

 
 

 
 

 
 

Total
 
100.6

 
 
80.9

 
 
88.4

 
 
81.6

 
 
 
 
 
 
 
 
 
 
 
 
Average Natural Gas Liquids Prices ($/Bbl) (C)
 
 
 
 
 
 
 
 
 
 
 
United States
$
26.92

 
$
18.51

 
$
22.61

 
$
14.63

Other International (B)
 

 
 

 
 

 
 

Composite
 
26.92

 
 
18.51

 
 
22.61

 
 
14.63

 
 
 
 
 
 
 
 
 
 
 
 
Natural Gas Volumes (MMcfd) (A)
 
 
 
 
 
 
 
 
 
 
 
United States
 
829

 
 
800

 
 
765

 
 
810

Trinidad
 
299

 
 
323

 
 
313

 
 
340

Other International (B)
 
32

 
 
22

 
 
25

 
 
25

Total
 
1,160

 
 
1,145

 
 
1,103

 
 
1,175

 
 
 
 
 
 
 
 
 
 
 
 
Average Natural Gas Prices ($/Mcf) (C)
 
 
 
 
 
 
 
 
 
 
 
United States
$
2.17

 
$
2.05

 
$
2.20

 
$
1.60

Trinidad
 
2.52

 
 
1.89

 
 
2.38

 
 
1.88

Other International (B)
 
4.23

 
 
3.85

 
 
3.89

 
 
3.64

Composite
 
2.31

 
 
2.04

 
 
2.29

 
 
1.73

 
 
 
 
 
 
 
 
 
 
 
 
Crude Oil Equivalent Volumes (MBoed) (D)
 
 
 
 
 
 
 
 
 
 
 
United States
 
605.6

 
 
520.3

 
 
551.0

 
 
494.9

Trinidad
 
51.0

 
 
54.6

 
 
53.0

 
 
57.5

Other International (B)
 
5.4

 
 
8.6

 
 
4.9

 
 
7.6

Total
 
662.0

 
 
583.5

 
 
608.9

 
 
560.0

 
 
 
 
 
 
 
 
 
 
 
 
Total MMBoe (D)
 
60.9

 
 
53.7

 
 
222.3

 
 
205.0


(A)
Thousand barrels per day or million cubic feet per day, as applicable.
(B)
Other International includes EOG's United Kingdom, China, Canada and Argentina operations. The Argentina operations were sold in the third quarter of 2016.
(C)
Dollars per barrel or per thousand cubic feet, as applicable. Excludes the impact of financial commodity derivative instruments.
(D)
Thousand barrels of oil equivalent per day or million barrels of oil equivalent, as applicable; includes crude oil and condensate, natural gas liquids and natural gas. Crude oil equivalent volumes are determined using a ratio of 1.0 barrel of crude oil and condensate or natural gas liquids 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)
 
 
December 31,
 
December 31,
 
2017
 
2016
ASSETS
Current Assets
 
 
 
 
 
Cash and Cash Equivalents
$
834,228

 
$
1,599,895

Accounts Receivable, Net
 
1,597,494

 
 
1,216,320

Inventories
 
483,865

 
 
350,017

Assets from Price Risk Management Activities
 
7,699

 
 

Income Taxes Receivable
 
113,357

 
 
12,305

Other
 
242,465

 
 
206,679

Total
 
3,279,108

 
 
3,385,216

 
Property, Plant and Equipment
 
 
 
 
 
Oil and Gas Properties (Successful Efforts Method)
 
52,555,741

 
 
49,592,091

Other Property, Plant and Equipment
 
3,960,759

 
 
4,008,564

Total Property, Plant and Equipment
 
56,516,500

 
 
53,600,655

Less: Accumulated Depreciation, Depletion and Amortization
 
(30,851,463
)
 
 
(27,893,577
)
Total Property, Plant and Equipment, Net
 
25,665,037

 
 
25,707,078

Deferred Income Taxes
 
17,506

 
 
16,140

Other Assets
 
871,427

 
 
190,767

Total Assets
$
29,833,078

 
$
29,299,201

 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
 
 
 
 
 
Accounts Payable
$
1,847,131

 
$
1,511,826

Accrued Taxes Payable
 
148,874

 
 
118,411

Dividends Payable
 
96,410

 
 
96,120

Liabilities from Price Risk Management Activities
 
50,429

 
 
61,817

Current Portion of Long-Term Debt
 
356,235

 
 
6,579

Other
 
226,463

 
 
232,538

Total
 
2,725,542

 
 
2,027,291

 
 
 
 
 
 
 
 
 
 
 
 
Long-Term Debt
 
6,030,836

 
 
6,979,779

Other Liabilities
 
1,275,213

 
 
1,282,142

Deferred Income Taxes
 
3,518,214

 
 
5,028,408

Commitments and Contingencies
 
 
 
 
 
 
 
 
 
 
 
Stockholders' Equity
 
 
 
 
 
Common Stock, $0.01 Par, 1,280,000,000 Shares and 640,000,000 Shares Authorized at December 31, 2017 and 2016, respectively, and 578,827,768 Shares and 576,950,272 Shares Issued at December 31, 2017 and 2016, respectively
 
205,788

 
 
205,770

Additional Paid in Capital
 
5,536,547

 
 
5,420,385

Accumulated Other Comprehensive Loss
 
(19,297
)
 
 
(19,010
)
Retained Earnings
 
10,593,533

 
 
8,398,118

Common Stock Held in Treasury, 350,961 Shares and 250,155 Shares at December 31, 2017 and 2016, respectively
 
(33,298
)
 
 
(23,682
)
Total Stockholders' Equity
 
16,283,273

 
 
13,981,581

Total Liabilities and Stockholders' Equity
$
29,833,078

 
$
29,299,201








EOG RESOURCES, INC.
Summary Statements of Cash Flows
(Unaudited; in thousands)
 
Twelve Months Ended
 
December 31,
 
2017
 
2016
Cash Flows from Operating Activities
 
 
 
 
 
Reconciliation of Net Income (Loss) to Net Cash Provided by Operating Activities:
 
 
 
 
 
Net Income (Loss)
$
2,582,579

 
$
(1,096,686
)
Items Not Requiring (Providing) Cash
 
 
 
 
 
Depreciation, Depletion and Amortization
 
3,409,387

 
 
3,553,417

Impairments
 
479,240

 
 
620,267

Stock-Based Compensation Expenses
 
133,849

 
 
128,090

Deferred Income Taxes
 
(1,473,872
)
 
 
(515,206
)
(Gains) Losses on Asset Dispositions, Net
 
99,096

 
 
(205,835
)
Other, Net
 
6,546

 
 
61,690

Dry Hole Costs
 
4,609

 
 
10,657

Mark-to-Market Commodity Derivative Contracts
 
 
 
 
 
Total (Gains) Losses
 
(19,828
)
 
 
99,608

Net Cash Received from (Payments for) Settlements of Commodity Derivative Contracts
 
7,438

 
 
(22,219
)
Excess Tax Benefits from Stock-Based Compensation
 

 
 
(29,357
)
Other, Net
 
1,204

 
 
10,971

Changes in Components of Working Capital and Other Assets and Liabilities
 
 
 
 
 
Accounts Receivable
 
(392,131
)
 
 
(232,799
)
Inventories
 
(174,548
)
 
 
170,694

Accounts Payable
 
324,192

 
 
(74,048
)
Accrued Taxes Payable
 
(63,937
)
 
 
92,782

Other Assets
 
(658,609
)
 
 
(40,636
)
Other Liabilities
 
(89,871
)
 
 
(16,225
)
Changes in Components of Working Capital Associated with Investing and Financing Activities
 
89,992

 
 
(156,102
)
Net Cash Provided by Operating Activities
 
4,265,336

 
 
2,359,063

 
 
 
 
 
 
Investing Cash Flows
 
 
 
 
 
Additions to Oil and Gas Properties
 
(3,950,918
)
 
 
(2,489,756
)
Additions to Other Property, Plant and Equipment
 
(173,324
)
 
 
(93,039
)
Proceeds from Sales of Assets
 
226,768

 
 
1,119,215

Net Cash Received from Yates Transaction
 

 
 
54,534

Changes in Components of Working Capital Associated with Investing Activities
 
(89,935
)
 
 
156,102

Net Cash Used in Investing Activities
 
(3,987,409
)
 
 
(1,252,944
)
 
 
 
 
 
 
Financing Cash Flows
 
 
 
 
 
Net Commercial Paper Repayments
 

 
 
(259,718
)
Long-Term Debt Borrowings
 

 
 
991,097

Long-Term Debt Repayments
 
(600,000
)
 
 
(563,829
)
Dividends Paid
 
(386,531
)
 
 
(372,845
)
Excess Tax Benefits from Stock-Based Compensation
 

 
 
29,357

Treasury Stock Purchased
 
(63,408
)
 
 
(82,125
)
Proceeds from Stock Options Exercised and Employee Stock Purchase Plan
 
20,840

 
 
23,296

Debt Issuance Costs
 

 
 
(1,602
)
Repayment of Capital Lease Obligation
 
(6,555
)
 
 
(6,353
)
Other, Net
 
(57
)
 
 

Net Cash Used in Financing Activities
 
(1,035,711
)
 
 
(242,722
)
 
 
 
 
 
 
Effect of Exchange Rate Changes on Cash
 
(7,883
)
 
 
17,992

 
 
 
 
 
 
Increase (Decrease) in Cash and Cash Equivalents
 
(765,667
)
 
 
881,389

Cash and Cash Equivalents at Beginning of Period
 
1,599,895

 
 
718,506

Cash and Cash Equivalents at End of Period
$
834,228

 
$
1,599,895






EOG RESOURCES, INC.
Quantitative Reconciliation of Adjusted Net Income (Loss) (Non-GAAP)
To Net Income (Loss) (GAAP)
(Unaudited; in thousands, except per share data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The following chart adjusts the three-month and twelve-month periods ended December 31, 2017 and 2016 reported Net Income (Loss) (GAAP) to reflect actual net cash received from (payments for) 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 2017 and 2016, to add back impairment charges related to certain of EOG's assets in 2017 and 2016, to eliminate the impact of the Trinidad tax settlement in 2016, to add back certain voluntary retirement expense in 2016, to add back acquisition costs and state apportionment change related to the Yates transaction in 2016, to add back an early lease termination payment as the result of a legal settlement in 2017, to add back the transaction costs for the formation of a joint venture in 2017, to add back joint interest billings deemed uncollectible in 2017, and to eliminate the impact of tax reform in 2017. 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 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
 
 
December 31, 2017
 
 
December 31, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Before Tax
 
 
Income Tax Impact
 
 
After
Tax
 
 
Diluted Earnings per Share
 
 
Before Tax
 
 
Income Tax Impact
 
 
After
Tax
 
 
Diluted Earnings per Share
Reported Net Income (Loss) (GAAP)
$
413,353

 
$
2,017,115

 
$
2,430,468

 
$
4.20

 
$
(194,010
)
 
$
51,658

 
$
(142,352
)
 
$
(0.25
)
Adjustments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Gains) Losses on Mark-to-Market Commodity Derivative Contracts
 
45,032

 
 
(16,142
)
 
 
28,890

 
 
0.05

 
 
65,787

 
 
(23,583
)
 
 
42,204

 
 
0.07

Net Cash Received from (Payments for) Settlements of Commodity Derivative Contracts
 
2,708

 
 
(971
)
 
 
1,737

 
 

 
 

 
 
29

 
 
29

 
 

Add: Net (Gains) Losses on Asset Dispositions
 
65,220

 
 
(23,315
)
 
 
41,905

 
 
0.07

 
 
(104,034
)
 
 
36,856

 
 
(67,178
)
 
 
(0.12
)
Add: Impairments
 
100,304

 
 
(35,954
)
 
 
64,350

 
 
0.11

 
 
217,839

 
 
(76,728
)
 
 
141,111

 
 
0.25

Add: Voluntary Retirement Expense
 

 
 

 
 

 
 

 
 

 
 
(57
)
 
 
(57
)
 
 

Add: Acquisition - State Apportionment Change
 

 
 

 
 

 
 

 
 

 
 
16,424

 
 
16,424

 
 
0.03

Add: Acquisition Costs
 

 
 

 
 

 
 

 
 
2,173

 
 
955

 
 
3,128

 
 
0.01

Add: Joint Interest Billings Deemed Uncollectible
 
4,528

 
 
(1,623
)
 
 
2,905

 
 
0.01

 
 

 
 

 
 

 
 

Less: Tax Reform Impact
 

 
 
(2,169,376
)
 
 
(2,169,376
)
 
 
(3.75
)
 
 

 
 

 
 

 
 

Adjustments to Net Income (Loss)
 
217,792

 
 
(2,247,381
)
 
 
(2,029,589
)
 
 
(3.51
)
 
 
181,765

 
 
(46,104
)
 
 
135,661

 
 
0.24

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted Net Income (Loss) (Non-GAAP)
$
631,145

 
$
(230,266
)
 
$
400,879

 
$
0.69

 
$
(12,245
)
 
$
5,554

 
$
(6,691
)
 
$
(0.01
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average Number of Common Shares (GAAP)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
 
 
 
 
 
 
 
 
 
575,394

 
 
 
 
 
 
 
 
 
 
 
567,337

Diluted
 
 
 
 
 
 
 
 
 
 
579,203

 
 
 
 
 
 
 
 
 
 
 
567,337









 
 
Twelve Months Ended
 
 
Twelve Months Ended
 
 
December 31, 2017
 
 
December 31, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Before
Tax
 
 
Income Tax Impact
 
 
After
Tax
 
 
Diluted Earnings per Share
 
 
Before
Tax
 
 
Income Tax Impact
 
 
After
Tax
 
 
Diluted Earnings per Share
Reported Net Income (Loss) (GAAP)
$
661,182
 
$
1,921,397
 
$
2,582,579

 
$
4.46

 
$
(1,557,505)
 
$
460,819
 
$
(1,096,686)
 
$
(1.98
)
Adjustments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Gains) Losses on Mark-to-Market Commodity Derivative Contracts
 
(19,828)
 
 
7,107
 
 
(12,721
)
 
 
(0.02
)
 
 
99,608
 
 
(35,640)
 
 
63,968
 
 
0.12

Net Cash Received from (Payments for) Settlements of Commodity Derivative Contracts
 
7,438
 
 
(2,666)
 
 
4,772

 
 
0.01

 
 
(22,219)
 
 
7,950
 
 
(14,269)
 
 
(0.03
)
Add: Net (Gains) Losses on Asset Dispositions
 
99,096
 
 
(35,270)
 
 
63,826

 
 
0.11

 
 
(205,835)
 
 
61,491
 
 
(144,344)
 
 
(0.26
)
Add: Impairments
 
261,452
 
 
(93,718)
 
 
167,734

 
 
0.29

 
 
320,617
 
 
(113,368)
 
 
207,249
 
 
0.37

Add: Trinidad Tax Settlement
 
 
 
 
 

 
 

 
 
 
 
43,000
 
 
43,000
 
 
0.08

Add: Voluntary Retirement Expense
 
 
 
 
 

 
 

 
 
42,054
 
 
(15,047)
 
 
27,007
 
 
0.05

Add: Acquisition - State Apportionment Change
 
 
 
 
 

 
 

 
 
 
 
16,424
 
 
16,424
 
 
0.03

Add: Acquisition Costs
 
 
 
 
 

 
 

 
 
5,100
 
 
(88)
 
 
5,012
 
 
0.01

Add: Legal Settlement - Early Lease Termination
 
10,202
 
 
(3,657)
 
 
6,545

 
 
0.01

 
 
 
 
 
 
 
 

Add: Joint Venture Transaction Costs
 
3,056
 
 
(1,095)
 
 
1,961

 
 

 
 
 
 
 
 
 
 

Add: Joint Interest Billings Deemed Uncollectible
 
4,528
 
 
(1,623)
 
 
2,905

 
 
0.01

 
 
 
 
 
 
 
 

Less: Tax Reform Impact
 
 
 
(2,169,376)
 
 
(2,169,376
)
 
 
(3.75
)
 
 
 
 
 
 
 
 

Adjustments to Net Income (Loss)
 
365,944
 
 
(2,300,298)
 
 
(1,934,354
)
 
 
(3.34
)
 
 
239,325
 
 
(35,278)
 
 
204,047
 
 
0.37

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted Net Income (Loss) (Non-GAAP)
$
1,027,126
 
$
(378,901)
 
$
648,225

 
$
1.12

 
$
(1,318,180)
 
$
425,541
 
$
(892,639)
 
$
(1.61
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average Number of Common Shares (GAAP)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
 
 
 
 
 
 
 
 
 
574,620

 
 
 
 
 
 
 
 
 
 
 
553,384

Diluted
 
 
 
 
 
 
 
 
 
 
578,693

 
 
 
 
 
 
 
 
 
 
 
553,384








EOG RESOURCES, INC.
Quantitative Reconciliation of Discretionary Cash Flow (Non-GAAP)
To Net Cash Provided by Operating Activities (GAAP)
(Unaudited; in thousands)

Calculation of Free Cash Flow (Non-GAAP)
(Unaudited; in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
The following chart reconciles the three-month and twelve-month periods ended December 31, 2017 and 2016 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, Other Non-Current Taxes, 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 excluding acquisitions incurred (Non-GAAP) during such period and dividends paid (GAAP) during such period, as is illustrated below for the twelve months ended December 31, 2017. EOG management uses this information for comparative purposes within the industry.
 
 
Three Months Ended
 
Twelve Months Ended
 
December 31,
 
December 31,
 
2017
 
2016
 
2017
 
2016
 
 
 
 
 
 
 
 
 
 
 
 
Net Cash Provided by Operating Activities (GAAP)
$
1,327,548

 
$
804,745

 
$
4,265,336

 
$
2,359,063

 
 
 
 
 
 
 
 
 
 
 
 
Adjustments:
 
 
 
 
 
 
 
 
 
 
 
Exploration Costs (excluding Stock-Based Compensation Expenses)
 
16,420

 
 
33,931

 
 
122,688

 
 
104,199

Excess Tax Benefits from Stock-Based Compensation
 

 
 
7,286

 
 

 
 
29,357

Other Non-Current Taxes (Non-Current Impact of the Tax Cut Jobs Act)
 
(513,404
)
 
 

 
 
(513,404
)
 
 

Changes in Components of Working Capital and Other Assets and Liabilities
 
 
 
 
 
 
 
 
 
 
 
Accounts Receivable
 
366,686

 
 
220,939

 
 
392,131

 
 
232,799

Inventories
 
156,874

 
 
(33,131
)
 
 
174,548

 
 
(170,694
)
Accounts Payable
 
(211,298
)
 
 
(127,165
)
 
 
(324,192
)
 
 
74,048

Accrued Taxes Payable
 
13,970

 
 
21,214

 
 
63,937

 
 
(92,782
)
Other Assets
 
574,669

 
 
28,110

 
 
658,609

 
 
40,636

Other Liabilities
 
20,647

 
 
53,024

 
 
89,871

 
 
16,225

Changes in Components of Working Capital Associated with Investing and Financing Activities
 
(210,365
)
 
 
36,342

 
 
(89,992
)
 
 
156,102

 
 
 
 
 
 
 
 
 
 
 
 
Discretionary Cash Flow (Non-GAAP)
$
1,541,747

 
$
1,045,295

 
$
4,839,532

 
$
2,748,953

 
 
 
 
 
 
 
 
 
 
 
 
Discretionary Cash Flow (Non-GAAP) - Percentage Increase
 
47
%
 
 
 
 
 
76
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Discretionary Cash Flow (Non-GAAP)
 
 
 
 
 
 
$
4,839,532

 
 
 
Less:
 
 
 
 
 
 
 
 
 
 
 
Total Cash Expenditures Excluding Acquisitions (Non-GAAP) (a)
 
 
 
 
 
 
 
(4,228,859
)
 
 
 
Dividends Paid (GAAP)
 
 
 
 
 
 
 
(386,531
)
 
 
 
Free Cash Flow (Non-GAAP)
 
 
 
 
 
 
$
224,142

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 





(a) See below reconciliation of Total Expenditures (GAAP) to Total Cash Expenditures Excluding Acquisitions (Non-GAAP) for the twelve months ended December 31, 2017:
 
 
 
 
 
 
 
 
 
 
 
 
Total Expenditures (GAAP)
 
 
 
 
 
 
$
4,612,746

 
 
 
Less:
 
 
 
 
 
 
 
 
 
 
 
Asset Retirement Costs
 
 
 
 
 
 
 
(55,592
)
 
 
 
Non-Cash Acquisition of Unproved Properties
 
 
 
 
 
 
 
(255,711
)
 
 
 
Acquisition Costs of Proved Properties
 
 
 
 
 
 
 
(72,584
)
 
 
 
Total Cash Expenditures Excluding Acquisitions (Non-GAAP)
 
 
 
 
 
 
$
4,228,859

 
 
 






<
EOG RESOURCES, INC.
Quantitative Reconciliation of Adjusted Earnings Before Interest Expense, Net,
Income Taxes, Depreciation, Depletion and Amortization, Exploration Costs,
Dry Hole Costs, Impairments and Additional Items (Adjusted EBITDAX)
(Non-GAAP) to Net Income (Loss) (GAAP)
(Unaudited; in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
The following chart adjusts the three-month and twelve-month periods ended December 31, 2017 and 2016 reported Net Income (Loss) (GAAP) to Earnings Before Interest Expense (Net), Income Taxes (Income Tax Provision (Benefit)), 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 (payments for) settlements of commodity derivative contracts by eliminating the unrealized mark-to-market (MTM) (gains) losses from these transactions and to eliminate the net (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 (Loss) (GAAP) to add back Interest Expense (Net), Income Taxes (Income Tax Provision (Benefit)), 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
 
Twelve Months Ended
 
December 31,
 
December 31,
 
2017
 
2016
 
2017
 
2016
 
 
 
 
 
 
 
 
 
 
 
 
Net Income (Loss) (GAAP)
$
2,430,468

 
$
(142,352
)
 
$
2,582,579

 
$
(1,096,686
)
 
 
 
 
 
 
 
 
 
 
 
 
Adjustments:
 
 
 
 
 
 
 
 
 
 
 
Interest Expense, Net
 
63,362

 
 
71,325

 
 
274,372

 
 
281,681

Income Tax Provision (Benefit)
 
(2,017,115
)
 
 
(51,658
)
 
 
(1,921,397
)
 
 
(460,819
)
Depreciation, Depletion and Amortization
 
881,745

 
 
862,524

 
 
3,409,387

 
 
3,553,417

Exploration Costs
 
22,941

 
 
39,110

 
 
145,342

 
 
124,953

Dry Hole Costs
 
4,532

 
 
193

 
 
4,609

 
 
10,657

Impairments
 
153,442

 
 
297,946

 
 
479,240

 
 
620,267

EBITDAX (Non-GAAP)
 
1,539,375