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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):  May 2, 2019

_______________

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

Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Common Stock, par value $0.01 per share
Trading symbol(s)
EOG
Name of each exchange on which registered
New York Stock Exchange

 
 
 
 
 




EOG RESOURCES, INC.

Item 2.02     Results of Operations and Financial Condition.

On May 2, 2019, EOG Resources, Inc. issued a press release announcing first quarter 2019 financial and operational results and second quarter and full year 2019 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 first quarter 2019 financial and operational results attached hereto as Exhibit 99.1 is second quarter and full year 2019 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 May 2, 2019 (including the accompanying second quarter and full year 2019 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: May 2, 2019
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



397779738_eoglogoa24.jpg

May 2, 2019

EOG Resources Reports Outstanding First Quarter 2019 Results and Raises Dividend
by 31 Percent
Increased Crude Oil Production 20 Percent YOY and Exceeded Target
Delivered First Quarter Capital Expenditures Below Target and Reiterates Unchanged FY 2019 Target
Reduced Per-Unit Cash Operating Costs 8 Percent YOY and Beat Targets
Achieved Reductions in Well Costs and On-Track to Reach 5 Percent Reduction Goal
Established Significant Crude Oil Export Capacity
Increased Common Stock Dividend 31 Percent
 
HOUSTON - EOG Resources, Inc. (EOG) today reported first quarter 2019 net income of $635 million, or $1.10 per share, compared with first quarter 2018 net income of $639 million, or $1.10 per share. Net cash from operating activities for the first quarter 2019 was $1.6 billion. Discretionary cash flow for the first quarter 2019 of $1.9 billion increased three percent compared to the first quarter 2018, despite a 13 percent drop in the average WTI NYMEX price compared to the same prior year period.
 
Adjusted non-GAAP net income for the first quarter 2019 was $689 million, or $1.19 per share, compared with adjusted non-GAAP net income of $689 million, or $1.19 per share, for the same prior year period. Please refer to the attached tables for the reconciliation of non-GAAP measures to GAAP measures.
 
First Quarter 2019 Review
EOG delivered stellar operational and financial performance in the first quarter 2019. Crude oil production volumes exceeded the target range, while capital expenditures were below the target range. Total company crude oil volumes grew 20 percent compared to the first quarter 2018, to 435,900 barrels of oil per day (Bopd). Natural gas liquids production increased 19 percent, while natural gas volumes grew 11 percent, contributing to total company production growth of 17 percent. 
 
Cash operating costs declined by eight percent during the first quarter 2019 on a per-unit basis compared to the same prior year period. Lower transportation, lease operating and general and administrative costs contributed to the overall cost reduction. EOG’s marketing operations added to the strong first quarter financial performance, as the average price on U.S. crude oil sales was $1.21 per barrel higher than the average WTI NYMEX price. The company also achieved reductions in well costs during the first quarter 2019.
 
EOG generated $1.9 billion of discretionary cash flow in the first quarter 2019. The company incurred total expenditures of $2.1 billion, including $1.7 billion of cash capital expenditures before acquisitions. After considering dividend payments of $128 million, EOG generated free cash flow during the first quarter of $55 million. Please refer to the attached tables for the reconciliation of non-GAAP measures to GAAP measures.



 
“EOG’s consistent long-term strategy of exploration-led organic growth, focus on operating and capital cost control and disciplined capital allocation is generating robust financial results. We are growing more efficiently than ever before,” said William R. “Bill” Thomas, Chairman and Chief Executive Officer. “We are on track to reduce well costs five percent for the year. Combined with strong price realizations, EOG is positioned to further improve margins and returns. The tremendous first quarter results demonstrate that EOG is achieving its goal of performing with the best companies in the S&P 500.”
 
Dividend Increase
EOG’s Board of Directors declared a quarterly dividend of $0.2875 per share on the common stock, an increase of 31 percent. The dividend will be payable July 31, 2019, to holders of record as of July 17, 2019. The indicated annual rate is $1.15 per share.
 
“EOG’s commitment to increasing cash returns to stockholders continues, as we have now increased our dividend by 72 percent during the past 14 months. This is made possible through our relentless efforts to lower costs, increase returns and fundamentally reset the business to be profitable even in a low oil price environment. We are confident our results will continue to improve, guided by our unique culture and sustainable business model," Thomas said.

Crude Oil Export Capacity
EOG has reached agreements that provide access to crude oil export capacity on the Gulf Coast. Export capacity available to EOG will increase from 100,000 Bopd in 2020 to 250,000 Bopd in 2022 and subsequent years. The company expects to sell a portion of its crude oil from its Eagle Ford and Delaware Basin plays to export markets. The new agreements complement EOG’s existing pipeline and terminal tankage capacity, further increasing the reliability and diversification of its marketing operations. 
 
“These agreements extend control of our crude oil production to the water’s edge and open significant new markets to EOG. We enhance our flexibility to capture the highest margins for our crude oil by maintaining firm capacity for our production downstream, providing access to a diverse group of potential customers in multiple end markets,” commented D. Lance Terveen, Senior Vice President, Marketing. 
 
Operating Highlights
EOG brought on line 78 wells in the Delaware Basin during the first quarter 2019 using one less rig and completion crew than it did in the first quarter 2018 to bring on line 70 wells. This tremendous operating performance, as well as infrastructure investments such as water handling and reuse, are enabling EOG to achieve further cost reductions.
 
The South Texas Eagle Ford remains a foundation asset for EOG, capable of sustaining high-return growth for at least 10 years. EOG is improving capital productivity across the entire 120-mile length of its acreage position in the heart of this world class resource play. The further adoption of local sources of sand supply, increased efficiencies in completion operations and the continued development of new completion designs are contributing to lower costs with consistent well productivity. With less than 40 percent of its identified locations in the play developed, there is significant opportunity to convert additional acreage to premium status.

In the Powder River Basin Turner, EOG brought five wells to sales during the first quarter. The company also further progressed plans for infrastructure development, including crude oil and natural gas gathering pipelines and water handling systems. EOG brought on line 25 wells in the Wyoming DJ Basin Codell



during the first quarter. With low well costs and a high oil mix, EOG’s Codell development program realizes low finding costs and premium rates of return.

EOG brought on line four wells in the Eastern Anadarko Basin Woodford Oil Window during the first quarter. The drilling program in the first quarter was focused on further delineating the play and testing additional targets.

In the Williston Basin, EOG drilled two wells during the first quarter and deferred completions until the summer as part of its seasonal development program.
  
Financial Review
At March 31, 2019, EOG’s total debt outstanding was $6.1 billion for a debt-to-total capitalization ratio of 23 percent. Considering cash on the balance sheet at the end of the first quarter, EOG’s net debt was $4.9 billion for a net debt-to-total capitalization ratio of 20 percent. For a reconciliation of non-GAAP measures to GAAP measures, please refer to the attached tables.

First Quarter 2019 Results Webcast
Friday, May 3, 2019, 9:00 a.m. Central time (10:00 a.m. Eastern time)
Webcast will be available on EOG website for one year.
http://investors.eogresources.com/Investors
 
About EOG
EOG Resources, Inc. (NYSE: EOG) is one of the largest crude oil and natural gas exploration and production companies in the United States with proved reserves in the United States, Trinidad, and China. To learn more visit www.eogresources.com.

Investor Contacts
David Streit 713-571-4902
Neel Panchal 713-571-4884
John Wagner 713-571-4404

Media and Investor Contact
Kimberly Ehmer 713-571-4676

This press release may include 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, capital expenditures, 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," “aims,” "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, generate returns, replace or increase drilling locations, reduce or otherwise control operating costs and capital expenditures, generate cash flows, pay down or refinance indebtedness or pay and/or increase 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, this press release and any accompanying disclosures may include or reference certain forward-looking, non-GAAP financial measures, such as free cash flow or discretionary cash flow, and certain related estimates regarding future performance, results and financial position. Any such 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 such measures and estimates. 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, storage, 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; climate change and other 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 tubulars) 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, storage 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;
geopolitical factors and political conditions and developments around the world (such as the imposition of tariffs or trade or other economic sanctions, 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 cybersecurity breaches; and
the other factors described under ITEM 1A, Risk Factors, on pages 13 through 22 of EOG’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018 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 or 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 or resource estimates provided in this press release that are not specifically designated as being estimates of proved reserves may include "potential" reserves, “resource potential” and/or other estimated reserves or estimated resources 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, 2018, 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
 
March 31,
 
2019
 
2018
 
 
 
 
 
 
Operating Revenues and Other
$
4,058.6

 
$
3,681.2

Net Income
$
635.4

 
$
638.6

Net Income Per Share
 
 
 
 
 
Basic
$
1.10

 
$
1.11

Diluted
$
1.10

 
$
1.10

Average Number of Common Shares
 
 
 
 
 
Basic
   
577.2

 
 
575.8

Diluted
 
580.2

 
 
579.7

 
 
 
 
 
 
Summary Income Statements
(Unaudited; in thousands, except per share data)
 
 
Three Months Ended
 
March 31,
 
2019
 
2018
Operating Revenues and Other
 
 
 
Crude Oil and Condensate
$
2,200,403

 
 $
2,101,308

Natural Gas Liquids
 
218,638

 
 
221,415

Natural Gas
 
334,972

 
 
299,766

Losses on Mark-to-Market Commodity Derivative Contracts
 
(20,580
)
 
 
(59,771
)
Gathering, Processing and Marketing
 
1,285,654

 
 
1,101,822

Losses on Asset Dispositions, Net
 
(3,836
)
 
 
(14,969
)
Other, Net
 
43,391

 
 
31,591

Total
 
4,058,642

 
 
3,681,162

Operating Expenses
 
 
 
 
 
Lease and Well
 
336,291

 
 
300,064

Transportation Costs
 
176,522

 
 
176,957

Gathering and Processing Costs
 
111,295

 
 
101,345

Exploration Costs
 
36,324

 
 
34,836

Dry Hole Costs
 
94

 
 

Impairments
 
72,356

 
 
64,609

Marketing Costs
 
1,270,057

 
 
1,106,390

Depreciation, Depletion and Amortization
 
879,595

 
 
748,591

General and Administrative
 
106,672

 
 
94,698

Taxes Other Than Income
 
192,906

 
 
179,084

Total
 
3,182,112

 
 
2,806,574

 
 
 
 
 
 
Operating Income
 
876,530

 
 
874,588

 
 
 
 
 
 
Other Income, Net
 
5,612

 
 
727

 
 
 
 
 
 
Income Before Interest Expense and Income Taxes
 
882,142

 
 
875,315

 
 
 
 
 
 
Interest Expense, Net
 
54,906

 
 
61,956

 
 
 
 
 
 
Income Before Income Taxes
 
827,236

 
 
813,359

 
 
 
 
 
 
Income Tax Provision
 
191,810

 
 
174,770

 
 
 
 
 
 
Net Income
$
635,426

 
 $
638,589

 
 
 
 
 
 
Dividends Declared per Common Share
$
0.2200

 
$
0.1850

 
 
 
 
 
 
 
 
 
 
 
 





EOG RESOURCES, INC.
Operating Highlights
(Unaudited)
 
 
Three Months Ended
 
March 31,
 
2019
2018
Wellhead Volumes and Prices
 
Crude Oil and Condensate Volumes (MBbld) (A)
 
United States
 
435.1

 
359.7

Trinidad
 
0.7

 
0.9

Other International (B)
 
0.1

 
2.7

Total
 
435.9

 
363.3

 
 
 
 
 
Average Crude Oil and Condensate Prices ($/Bbl) (C)
 
 
 
 
United States
$
56.11

$
64.24

Trinidad
 
43.68

 
54.86

Other International (B)
 
60.13

 
71.61

Composite
 
56.09

 
64.27

 
 
 
 
 
Natural Gas Liquids Volumes (MBbld) (A)
 
 
 
 
United States
 
119.8

 
100.6

Other International (B)
 

 

Total
 
119.8

 
100.6

 
 
 
 
 
Average Natural Gas Liquids Prices ($/Bbl) (C)
 
 
 
 
United States
$
20.28

$
24.46

Other International (B)
 

 

Composite
 
20.28

 
24.46

 
 
 
 
 
Natural Gas Volumes (MMcfd) (A)
 
 
 
 
United States
 
1,003

 
853

Trinidad
 
267

 
293

Other International (B)
 
38

 
30

Total
 
1,308

 
1,176

 
 
 
 
 
Average Natural Gas Prices ($/Mcf) (C)
 
 
 
 
United States
$
2.77

$
2.76

Trinidad
 
2.91

 
2.88

Other International (B)
 
4.37

 
4.36

Composite
 
2.85

 
2.83

 
 
 
 
 
Crude Oil Equivalent Volumes (MBoed) (D)
 
 
 
 
United States
 
722.0

 
602.5

Trinidad
 
45.1

 
49.8

Other International (B)
 
6.5

 
7.6

Total
 
773.6

 
659.9

 
 
 
 
 
Total MMBoe (D)
 
69.6

 
59.4


(A)
Thousand barrels per day or million cubic feet per day, as applicable.
(B)
Other International includes EOG's United Kingdom, China and Canada operations. The United Kingdom operations were sold in the fourth quarter of 2018.
(C)
Dollars per barrel or per thousand cubic feet, as applicable. Excludes the impact of financial commodity derivative instruments (see Note 12 to the Consolidated Financial Statements in EOG's Annual Report on Form 10-K for the year ended December 31, 2018).
(D)
Thousand barrels of oil equivalent per day or million barrels of oil equivalent, as applicable; includes crude oil and condensate, NGLs and natural gas. Crude oil equivalent volumes are determined using a ratio of 1.0 barrel of crude oil and condensate or NGLs 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)
 
 
March 31,
 
December 31,
 
2019
 
2018
ASSETS
Current Assets
 
 
 
 
 
Cash and Cash Equivalents
$
1,135,810

 
$
1,555,634

Accounts Receivable, Net
 
2,203,438

 
 
1,915,215

Inventories
 
860,764

 
 
859,359

Assets from Price Risk Management Activities
 
3,909

 
 
23,806

Income Taxes Receivable
 
440,217

 
 
427,909

Other
 
263,747

 
 
275,467

Total
 
4,907,885

 
 
5,057,390

 
Property, Plant and Equipment
 
 
 
 
 
Oil and Gas Properties (Successful Efforts Method)
 
58,691,746

 
 
57,330,016

Other Property, Plant and Equipment
 
4,277,888

 
 
4,220,665

Total Property, Plant and Equipment
 
62,969,634

 
 
61,550,681

Less: Accumulated Depreciation, Depletion and Amortization
 
(33,840,631
)
 
 
(33,475,162
)
Total Property, Plant and Equipment, Net
 
29,129,003

 
 
28,075,519

Deferred Income Taxes
 
1,224

 
 
777

Other Assets
 
1,625,423

 
 
800,788

Total Assets
$
35,663,535

 
$
33,934,474

 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
 
 
 
 
 
Accounts Payable
$
2,452,337

 
$
2,239,850

Accrued Taxes Payable
 
239,524

 
 
214,726

Dividends Payable
 
126,979

 
 
126,971

Liabilities from Price Risk Management Activities
 
746

 
 

Current Portion of Long-Term Debt
 
914,861

 
 
913,093

Current Portion of Operating Lease Liabilities
 
396,294

 
 

Other
 
170,527

 
 
233,724

Total
 
4,301,268

 
 
3,728,364

 
 
 
 
 
 
 
 
 
 
 
 
Long-Term Debt
 
5,166,050

 
 
5,170,169

Other Liabilities
 
1,772,248

 
 
1,258,355

Deferred Income Taxes
 
4,520,172

 
 
4,413,398

Commitments and Contingencies
 
 
 
 
 
 
 
 
 
 
 
Stockholders' Equity
 
 
 
 
 
Common Stock, $0.01 Par, 1,280,000,000 Shares Authorized and 580,740,395 Shares Issued at March 31, 2019 and 580,408,117 Shares Issued at December 31, 2018
 
205,807

 
 
205,804

Additional Paid in Capital
 
5,695,197

 
 
5,658,794

Accumulated Other Comprehensive Loss
 
(2,869
)
 
 
(1,358
)
Retained Earnings
 
14,050,676

 
 
13,543,130

Common Stock Held in Treasury, 425,637 Shares at March 31, 2019 and 385,042 Shares at December 31, 2018
 
(45,014
)
 
 
(42,182
)
Total Stockholders' Equity
 
19,903,797

 
 
19,364,188

Total Liabilities and Stockholders' Equity
$
35,663,535

 
$
33,934,474








EOG RESOURCES, INC.
Summary Statements of Cash Flows
(Unaudited; in thousands)
 
Three Months Ended
 
March 31,
 
2019
 
2018
Cash Flows from Operating Activities
 
 
 
 
 
Reconciliation of Net Income to Net Cash Provided by Operating Activities:
 
 
 
 
 
Net Income
$
635,426

 
$
638,589

Items Not Requiring (Providing) Cash
 
 
 
 
 
Depreciation, Depletion and Amortization
 
879,595

 
 
748,591

Impairments
 
72,356

 
 
64,609

Stock-Based Compensation Expenses
 
39,087

 
 
35,486

Deferred Income Taxes
 
106,324

 
 
171,362

Losses on Asset Dispositions, Net
 
3,836

 
 
14,969

Other, Net
 
2,952

 
 
2,013

Dry Hole Costs
 
94

 
 

Mark-to-Market Commodity Derivative Contracts
 
 
 
 
 
Total Losses
 
20,580

 
 
59,771

Net Cash Received from (Payments for) Settlements of Commodity Derivative Contracts
 
20,846

 
 
(21,965
)
Other, Net
 
976

 
 
(478
)
Changes in Components of Working Capital and Other Assets and Liabilities
 
 
 
 
 
Accounts Receivable
 
(308,996
)
 
 
(109,654
)
Inventories
 
(18,979
)
 
 
(106,799
)
Accounts Payable
 
194,082

 
 
53,652

Accrued Taxes Payable
 
114,998

 
 
21,950

Other Assets
 
(6,935
)
 
 
(8,863
)
Other Liabilities
 
(54,092
)
 
 
(29,055
)
Changes in Components of Working Capital Associated with Investing and Financing Activities
 
(94,381
)
 
 
17,988

Net Cash Provided by Operating Activities
 
1,607,769

 
 
1,552,166

 
 
 
 
 
 
Investing Cash Flows
 
 
 
 
 
Additions to Oil and Gas Properties
 
(1,939,473
)
 
 
(1,365,111
)
Additions to Other Property, Plant and Equipment
 
(60,963
)
 
 
(76,100
)
Proceeds from Sales of Assets
 
15,049

 
 
2,829

Changes in Components of Working Capital Associated with Investing Activities
 
94,381

 
 
(18,045
)
Net Cash Used in Investing Activities
 
(1,891,006
)
 
 
(1,456,427
)
 
 
 
 
 
 
Financing Cash Flows
 
 
 
 
 
Dividends Paid
 
(127,546
)
 
 
(97,026
)
Treasury Stock Purchased
 
(6,248
)
 
 
(16,776
)
Proceeds from Stock Options Exercised and Employee Stock Purchase Plan
 
403

 
 
1,453

Repayment of Capital Lease Obligation
 
(3,190
)
 
 
(1,671
)
Changes in Components of Working Capital Associated with Financing Activities
 

 
 
57

Net Cash Used in Financing Activities
 
(136,581
)
 
 
(113,963
)
 
 
 
 
 
 
Effect of Exchange Rate Changes on Cash
 
(6
)
 
 
90

 
 
 
 
 
 
Decrease in Cash and Cash Equivalents
 
(419,824
)
 
 
(18,134
)
Cash and Cash Equivalents at Beginning of Period
 
1,555,634

 
 
834,228

Cash and Cash Equivalents at End of Period
$
1,135,810

 
$
816,094






EOG RESOURCES, INC.
First Quarter 2019 Well Results by Play
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Wells Online
 
 
 
Initial Gross 30-Day Average Production Rate
 
 
Gross
 
Net
 
Lateral Length
(ft)
 
Crude Oil and Condensate
(Bbld) (A)
 
Natural Gas Liquids
(Bbld) (A)
 
Natural Gas
(MMcfd) (A)
 
Crude Oil Equivalent
(Boed) (B)
Delaware Basin
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Wolfcamp
 
61

 
53

 
7,800

 
1,950

 
400

 
3.8

 
2,950

Bone Spring
 
12

 
10

 
5,500

 
1,500

 
300

 
1.9

 
2,100

Leonard
 
5

 
5

 
7,600

 
1,650

 
650

 
4.3

 
3,000

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
South Texas Eagle Ford
 
93

 
89

 
8,300

 
1,350

 
150

 
0.8

 
1,650

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Powder River Basin
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Turner
 
5

 
4

 
9,800

 
650

 
650

 
1.0

 
1,450

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
DJ Basin Codell
 
25

 
13

 
9,600

 
600

 
50

 
0.3

 
700

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Anadarko Basin Woodford Oil Window
 
4

 
3

 
9,700

 
900

 
100

 
0.6

 
1,100

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(A) Barrels per day or million cubic feet per day, as applicable.
(B) Barrels of oil equivalent per day; 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.






EOG RESOURCES, INC.
Quantitative Reconciliation of Adjusted Net Income (Non-GAAP)
To Net Income (GAAP)
(Unaudited; in thousands, except per share data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The following chart adjusts the three-month periods ended March 31, 2019 and 2018 reported Net Income (GAAP) to reflect actual net cash received from (payments for) settlements of commodity derivative contracts by eliminating the unrealized mark-to-market losses from these transactions, to eliminate the net losses on asset dispositions in 2019 and 2018, to add back impairment charges related to certain of EOG's assets in 2019 and 2018 and to eliminate certain adjustments in 2018 related to the 2017 U.S. tax reform. 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 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
 
 
Three Months Ended
 
 
March 31, 2019
 
 
March 31, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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 (GAAP)
$
827,236

 
$
(191,810
)
 
$
635,426

 
$
1.10

 
$
813,359

 
$
(174,770
)
 
$
638,589

 
$
1.10

Adjustments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Losses on Mark-to-Market Commodity Derivative Contracts
 
20,580

 
 
(4,533
)
 
 
16,047

 
 
0.02

 
 
59,771

 
 
(13,166
)
 
 
46,605

 
 
0.08

Net Cash Received from (Payments for) Settlements of Commodity Derivative Contracts
 
20,846

 
 
(4,592
)
 
 
16,254

 
 
0.03

 
 
(21,965
)
 
 
4,838

 
 
(17,127
)
 
 
(0.03
)
Add: Losses on Asset Dispositions
 
3,836

 
 
(736
)
 
 
3,100

 
 
0.01

 
 
14,969

 
 
(3,324
)
 
 
11,645

 
 
0.02

Add: Impairments
 
23,745

 
 
(5,230
)
 
 
18,515

 
 
0.03

 
 
20,876

 
 
(4,598
)
 
 
16,278

 
 
0.03

Less: Tax Reform Impact
 

 
 

 
 

 
 

 
 

 
 
(6,524
)
 
 
(6,524
)
 
 
(0.01
)
Adjustments to Net Income
 
69,007

 
 
(15,091
)
 
 
53,916

 
 
0.09

 
 
73,651

 
 
(22,774
)
 
 
50,877

 
 
0.09

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted Net Income (Non-GAAP)
$
896,243

 
$
(206,901
)
 
$
689,342

 
$
1.19

 
$
887,010

 
$
(197,544
)
 
$
689,466

 
$
1.19

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average Number of Common Shares (GAAP)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
 
 
 
 
 
 
 
 
 
 
577,207

 
 
 
 
 
 
 
 
 
 
 
575,775

Diluted
 
 
 
 
 
 
 
 
 
 
580,222

 
 
 
 
 
 
 
 
 
 
 
579,726









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 periods ended March 31, 2019 and 2018 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), Other Non-Current Income Taxes - Net Receivable, 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 three months ended March 31, 2019 and 2018. EOG management uses this information for comparative purposes within the industry.
 
 
Three Months Ended
 
March 31,
 
2019
 
2018
 
 
 
 
 
 
Net Cash Provided by Operating Activities (GAAP)
$
1,607,769

 
$
1,552,166

 
 
 
 
 
 
Adjustments:
 
 
 
 
 
Exploration Costs (excluding Stock-Based Compensation Expenses)
 
29,787

 
 
27,936

Other Non-Current Income Taxes - Net Receivable
 
102,918

 
 
118,921

Changes in Components of Working Capital and Other Assets and Liabilities
 
 
 
 
 
Accounts Receivable
 
308,996

 
 
109,654

Inventories
 
18,979

 
 
106,799

Accounts Payable
 
(194,082
)
 
 
(53,652
)
Accrued Taxes Payable
 
(114,998
)
 
 
(21,950
)
Other Assets
 
6,935

 
 
8,863

Other Liabilities
 
54,092

 
 
29,055

Changes in Components of Working Capital Associated with Investing and Financing Activities
 
94,381

 
 
(17,988
)
 
 
 
 
 
 
Discretionary Cash Flow (Non-GAAP)
$
1,914,777

 
$
1,859,804

 
 
 
 
 
 
Discretionary Cash Flow (Non-GAAP) - Percentage Increase
 
3
%
 
 
 
 
 
 
 
 
 
Discretionary Cash Flow (Non-GAAP)
$
1,914,777

 
$
1,859,804

Less:
 
 
 
 
 
Total Cash Expenditures Excluding Acquisitions (Non-GAAP) (a)
 
(1,732,476
)
 
 
(1,478,097
)
Dividends Paid (GAAP)
 
(127,546
)
 
 
(97,026
)
Free Cash Flow (Non-GAAP)
$
54,755

 
$
284,681

 
 
 
 
 
 





(a) See below reconciliation of Total Expenditures (GAAP) to Total Cash Expenditures Excluding Acquisitions (Non-GAAP) for the three month periods ended March 31, 2019 and 2018:
 
 
 
 
 
 
Total Expenditures (GAAP)
$
2,101,919

 
$
1,546,641

Less:
 
 
 
 
 
Asset Retirement Costs
 
(5,156
)
 
 
(12,100
)
Non-Cash Expenditures of Other Property, Plant and Equipment
 

 
 
(47,635
)
Non-Cash Acquisition Costs of Unproved Properties
 
(43,481
)
 
 
(8,809
)
Acquisition Costs of Proved Properties
 
(320,806
)
 
 

Total Cash Expenditures Excluding Acquisitions (Non-GAAP)
$
1,732,476

 
$
1,478,097







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 (GAAP)
(Unaudited; in thousands)
 
 
 
 
 
 
The following chart adjusts the three-month periods ended March 31, 2019 and 2018 reported Net Income (GAAP) to Earnings Before Interest Expense (Net), Income Taxes (Income Tax Provision), 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) losses from these transactions and to eliminate the 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 (GAAP) to add back Interest Expense (Net), Income Taxes (Income Tax Provision), 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
 
March 31,
 
2019
 
2018
 
 
 
 
 
 
Net Income (GAAP)
$
635,426

 
$
638,589

 
 
 
 
 
 
Adjustments:
 
 
 
 
 
Interest Expense, Net
 
54,906

 
 
61,956

Income Tax Provision
 
191,810

 
 
174,770

Depreciation, Depletion and Amortization
 
879,595

 
 
748,591

Exploration Costs
 
36,324

 
 
34,836

Dry Hole Costs
 
94

 
 

Impairments
 
72,356

 
 
64,609

EBITDAX (Non-GAAP)
 
1,870,511

 
 
1,723,351

Total Losses on MTM Commodity Derivative Contracts
 
20,580

 
 
59,771

Net Cash Received from (Payments for) Settlements of Commodity Derivative Contracts
 
20,846

 
 
(21,965
)
Losses on Asset Dispositions, Net
 
3,836

 
 
14,969

 
 
 
 
 
 
Adjusted EBITDAX (Non-GAAP)
$
1,915,773

 
$
1,776,126

 
 
 
 
 
 
Adjusted EBITDAX (Non-GAAP) - Percentage Increase
 
8
%
 
 
 






EOG RESOURCES, INC.
Quantitative Reconciliation of Net Debt (Non-GAAP) and Total
Capitalization (Non-GAAP) as Used in the Calculation of
The Net Debt-to-Total Capitalization Ratio (Non-GAAP) to
Current and Long-Term Debt (GAAP) and Total Capitalization (GAAP)
(Unaudited; in millions, except ratio data)
 
 
 
The following chart reconciles Current and Long-Term Debt (GAAP) to Net Debt (Non-GAAP) and Total Capitalization (GAAP) to Total Capitalization (Non-GAAP), as used in the Net Debt-to-Total Capitalization ratio calculation. A portion of the cash is associated with international subsidiaries; tax considerations may impact debt paydown. EOG believes this presentation may be useful to investors who follow the practice of some industry analysts who utilize Net Debt and Total Capitalization (Non-GAAP) in their Net Debt-to-Total Capitalization ratio calculation. EOG management uses this information for comparative purposes within the industry.
 
 
 
 
At
 
At
 
March 31,
 
December 31,
 
2019
 
2018
 
 
 
Total Stockholders' Equity - (a)
$
19,904

 
$
19,364

 
 
 
 
 
 
Current and Long-Term Debt (GAAP) - (b)
 
6,081

 
 
6,083

Less: Cash
 
(1,136
)
 
 
(1,556
)
Net Debt (Non-GAAP) - (c)
 
4,945

 
 
4,527

 
 
 
 
 
 
Total Capitalization (GAAP) - (a) + (b)
$
25,985

 
$
25,447

 
 
 
 
 
 
Total Capitalization (Non-GAAP) - (a) + (c)
$
24,849

 
$
23,891

 
 
 
 
 
 
Debt-to-Total Capitalization (GAAP) - (b) / [(a) + (b)]
 
23
%
 
 
24
%
 
 
 
 
 
 
Net Debt-to-Total Capitalization (Non-GAAP) - (c) / [(a) + (c)]
 
20
%
 
 
19
%






EOG RESOURCES, INC.
Crude Oil and Natural Gas Financial Commodity
Derivative Contracts
 
 
 
 
 
 
EOG accounts for financial commodity derivative contracts using the mark-to-market accounting method. Prices received by EOG for its crude oil production generally vary from NYMEX West Texas Intermediate prices due to adjustments for delivery location (basis) and other factors. EOG has entered into crude oil basis swap contracts in order to fix the differential between pricing in Midland, Texas, and Cushing, Oklahoma (Midland Differential). Presented below is a comprehensive summary of EOG's Midland Differential basis swap contracts through April 26, 2019. The weighted average price differential expressed in $/Bbl represents the amount of reduction to Cushing, Oklahoma, prices for the notional volumes expressed in Bbld covered by the basis swap contracts.
 
Midland Differential Basis Swap Contracts
 
 
Volume (Bbld)
 
Weighted Average Price Differential
($/Bbl)
2019
 
 
 
 
January 1, 2019 through May 31, 2019 (closed)
 
20,000

 
$
1.075

June 1, 2019 through December 31, 2019
 
20,000

 
1.075


EOG has also entered into crude oil basis swap contracts in order to fix the differential between pricing in the U.S. Gulf Coast and Cushing, Oklahoma (Gulf Coast Differential). Presented below is a comprehensive summary of EOG's Gulf Coast Differential basis swap contracts through April 26, 2019. The weighted average price differential expressed in $/Bbl represents the amount of addition to Cushing, Oklahoma, prices for the notional volumes expressed in Bbld covered by the basis swap contracts.
 
Gulf Coast Differential Basis Swap Contracts
 
 
Volume (Bbld)
 
Weighted Average Price Differential
($/Bbl)
2019
 
 
 
 
January 1, 2019 through May 31, 2019 (closed)
 
13,000

 
$
5.572

June 1, 2019 through December 31, 2019
 
13,000

 
5.572


 
Presented below is a comprehensive summary of EOG's crude oil price swap contracts through April 26, 2019, with notional volumes expressed in Bbld and prices expressed in $/Bbl.
 
 
 
Crude Oil Price Swap Contracts
 
 
 
Volume (Bbld)
 
Weighted Average Price ($/Bbl)
 
 
 
2019
 
 
 
 
 
April 2019
 
25,000

 
$
60.00

 
May 1, 2019 through December 31, 2019
 
150,000

 
62.50








Presented below is a comprehensive summary of EOG's natural gas price swap contracts through April 26, 2019, with notional volumes expressed in MMBtud and prices expressed in $/MMBtu.
 
 
 
 
 
Natural Gas Price Swap Contracts
 
 
Volume (MMBtud)
 
Weighted Average Price ($/MMBtu)
2019
 
 
 
 
April 1, 2019 through May 31, 2019 (closed)
 
250,000

 
$
2.90

June 1, 2019 through October 31, 2019
 
250,000

 
2.90




Definitions
Bbld
 
Barrels per day
$/Bbl
 
Dollars per barrel
MMBtud
 
Million British thermal units per day
$/MMBtu
 
Dollars per million British thermal units
NYMEX
 
U.S. New York Mercantile Exchange






EOG RESOURCES, INC.
Direct After-Tax Rate of Return (ATROR)
 
The calculation of our direct after-tax rate of return (ATROR) with respect to our capital expenditure program for a particular play or well is based on the estimated recoverable reserves ("net" to EOG’s interest) for all wells in such play or such well (as the case may be), the estimated net present value (NPV) of the future net cash flows from such reserves (for which we utilize certain assumptions regarding future commodity prices and operating costs) and our direct net costs incurred in drilling or acquiring (as the case may be) such wells or well (as the case may be). As such, our direct ATROR with respect to our capital expenditures for a particular play or well cannot be calculated from our consolidated financial statements.
 
Direct ATROR
Based on Cash Flow and Time Value of Money
  - Estimated future commodity prices and operating costs
  - Costs incurred to drill, complete and equip a well, including facilities
Excludes Indirect Capital
  - Gathering and Processing and other Midstream
  - Land, Seismic, Geological and Geophysical
 
Payback ~12 Months on 100% Direct ATROR Wells
First Five Years ~1/2 Estimated Ultimate Recovery Produced but ~3/4 of NPV Captured
 
 
Return on Equity / Return on Capital Employed
Based on GAAP Accrual Accounting
Includes All Indirect Capital and Growth Capital for Infrastructure
  - Eagle Ford, Bakken, Permian Facilities
  - Gathering and Processing
Includes Legacy Gas Capital and Capital from Mature Wells






EOG RESOURCES, INC.
Quantitative Reconciliation of After-Tax Net Interest Expense (Non-GAAP), Adjusted Net Income (Non-GAAP),
Net Debt (Non-GAAP) and Total Capitalization (Non-GAAP) as Used in the Calculations of Return on Capital
Employed (Non-GAAP) and Return on Equity (Non-GAAP) to Net Interest Expense (GAAP), Net Income
(GAAP), Current and Long-Term Debt (GAAP) and Total Capitalization (GAAP), Respectively
(Unaudited; in millions, except ratio data)
 
 
 
 
The following chart reconciles Net Interest Expense (GAAP), Net Income (GAAP), Current and Long-Term Debt (GAAP) and Total Capitalization (GAAP) to After-Tax Net Interest Expense (Non-GAAP), Adjusted Net Income (Non-GAAP), Net Debt (Non-GAAP) and Total Capitalization (Non-GAAP), respectively, as used in the Return on Capital Employed (ROCE) and Return on Equity (ROE) calculations. EOG believes this presentation may be useful to investors who follow the practice of some industry analysts who utilize After-Tax Net Interest Expense, Adjusted Net Income, Net Debt and Total Capitalization (Non-GAAP) in their ROCE and ROE calculations. EOG management uses this information for purposes of comparing its financial performance with the financial performance of other companies in the industry.
 
2018
 
2017
Return on Capital Employed (ROCE) (Non-GAAP)
 
 
 
Net Interest Expense (GAAP)
$
245

 
 
Tax Benefit Imputed (based on 21%)
(51
)
 
 
After-Tax Net Interest Expense (Non-GAAP) - (a)
$
194

 

 
 
 
 
Net Income (GAAP) - (b)
$
3,419

 
 
Adjustments to Net Income, Net of Tax (See Accompanying Schedule)
(201
)
(1)
 
Adjusted Net Income (Non-GAAP) - (c)
$
3,218

 

 
 
 
 
Total Stockholders' Equity - (d)
$
19,364

 
$
16,283

 
 
 
 
Average Total Stockholders' Equity * - (e)
$
17,824

 
 
 
 
 
 
Current and Long-Term Debt (GAAP) - (f)
$
6,083

 
$
6,387

Less: Cash
(1,556
)
 
(834
)
Net Debt (Non-GAAP) - (g)
$
4,527

 
$
5,553

 
 
 
 
Total Capitalization (GAAP) - (d) + (f)
$
25,447

 
$
22,670

 
 
 
 
Total Capitalization (Non-GAAP) - (d) + (g)
$
23,891

 
$
21,836

 
 
 
 
Average Total Capitalization (Non-GAAP) * - (h)
$
22,864

 
 
 
 
 
 
ROCE (GAAP Net Income) - [(a) + (b)] / (h)
15.8
%
 
 
 
 
 
 
ROCE (Non-GAAP Adjusted Net Income) - [(a) + (c)] / (h)
14.9
%
 
 
 
 
 
 
Return on Equity (ROE)
 
 
 
 
 
 
 
ROE (GAAP Net Income) - (b) / (e)
19.2
%
 
 
 
 
 
 
ROE (Non-GAAP Adjusted Net Income) - (c) / (e)
18.1
%
 
 
 
 
 
 
* Average for the current and immediately preceding year
 
 
 
 





Adjustments to Net Income (GAAP)

(1) See below schedule for detail of adjustments to Net Income (GAAP) in 2018:
 
 
Year Ended December 31, 2018
 
 
Before
Tax
 
Income Tax Impact
 
After
Tax
Adjustments:
 
 
 
 
 
Add:
Mark-to-Market Commodity Derivative Contracts Impact
$
(93
)
 
$
20

 
$
(73
)
Add:
Impairments of Certain Assets
153

 
(34
)
 
119

Less:
Net Gains on Asset Dispositions
(175
)
 
38

 
(137
)
Less:
Tax Reform Impact

 
(110
)
 
(110
)
Total
 
$
(115
)
 
$
(86
)
 
$
(201
)













EOG RESOURCES, INC.
Quantitative Reconciliation of After-Tax Net Interest Expense (Non-GAAP), Net Debt (Non-GAAP) and Total Capitalization (Non-GAAP) as Used in the Calculation of Return on Capital Employed (Non-GAAP) to Net Interest Expense (GAAP), Current and Long-Term Debt (GAAP) and Total Capitalization (GAAP), Respectively
(Unaudited; in millions, except ratio data)
 
 
 
 
 
 
 
 
 
 
The following chart reconciles Net Interest Expense (GAAP), Current and Long-Term Debt (GAAP) and Total Capitalization (GAAP) to After-Tax Net Interest Expense (Non-GAAP), Net Debt (Non-GAAP) and Total Capitalization (Non-GAAP), respectively, as used in the Return on Capital Employed (ROCE) (Non-GAAP) calculation. EOG believes this presentation may be useful to investors who follow the practice of some industry analysts who utilize After-Tax Net Interest Expense, Net Debt and Total Capitalization (Non-GAAP) in their ROCE calculation. EOG management uses this information for purposes of comparing its financial performance with the financial performance of other companies in the industry.
 
2017
 
2016
 
2015
 
2014
 
2013
Return on Capital Employed (ROCE) (Non-GAAP) (Calculated Using GAAP Net Income)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Interest Expense (GAAP)
$
274

 
$
282

 
$
237

 
$
201

 
$
235

Tax Benefit Imputed (based on 35%)
(96
)
 
(99
)
 
(83
)
 
(70
)
 
(82
)
After-Tax Net Interest Expense (Non-GAAP) - (a)
$
178

 
$
183

 
$
154

 
$
131

 
$
153

 
 
 
 
 
 
 
 
 
 
Net Income (Loss) (GAAP) - (b)
$
2,583

 
$
(1,097
)
 
$
(4,525
)
 
$
2,915

 
$
2,197

 
 
 
 
 
 
 
 
 
 
Total Stockholders' Equity - (d)
$
16,283

 
$
13,982

 
$
12,943

 
$
17,713

 
$
15,418

 
 
 
 
 
 
 
 
 
 
Average Total Stockholders' Equity* - (e)
$
15,133

 
$
13,463

 
$
15,328

 
$
16,566

 
$
14,352

 
 
 
 
 
 
 
 
 
 
Current and Long-Term Debt (GAAP) - (f)
$
6,387

 
$
6,986

 
$
6,655

 
$
5,906

 
$
5,909

Less: Cash
(834
)
 
(1,600
)
 
(719
)
 
(2,087
)
 
(1,318
)
Net Debt (Non-GAAP) - (g)
$
5,553

 
$
5,386

 
$
5,936

 
$
3,819

 
$
4,591

 
 
 
 
 
 
 
 
 
 
Total Capitalization (GAAP) - (d) + (f)
$
22,670

 
$
20,968

 
$
19,598

 
$
23,619

 
$
21,327

 
 
 
 
 
 
 
 
 
 
Total Capitalization (Non-GAAP) - (d) + (g)
$
21,836

 
$
19,368

 
$
18,879

 
$
21,532

 
$
20,009

 
 
 
 
 
 
 
 
 
 
Average Total Capitalization (Non-GAAP)* - (h)
$
20,602

 
$
19,124

 
$
20,206

 
$
20,771

 
$
19,365

 
 
 
 
 
 
 
 
 
 
ROCE (GAAP Net Income) - [(a) + (b)] / (h)
13.4
%
 
-4.8
 %
 
-21.6
 %
 
14.7
%
 
12.1
%
 
 
 
 
 
 
 
 
 
 
Return on Equity (ROE) (GAAP)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ROE (GAAP Net Income) - (b) / (e)
17.1
%
 
-8.1
 %
 
-29.5
 %
 
17.6
%
 
15.3
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
* Average for the current and immediately preceding year
 
 
 
 
 
 
 
 
 






EOG RESOURCES, INC.
Quantitative Reconciliation of After-Tax Net Interest Expense (Non-GAAP), Net Debt (Non-GAAP) and Total Capitalization (Non-GAAP) as Used in the Calculation of Return on Capital Employed (Non-GAAP) to Net Interest Expense (GAAP), Current and Long-Term Debt (GAAP) and Total Capitalization (GAAP), Respectively
(Unaudited; in millions, except ratio data)
 
 
 
 
 
 
 
 
 
 
The following chart reconciles Net Interest Expense (GAAP), Current and Long-Term Debt (GAAP) and Total Capitalization (GAAP) to After-Tax Net Interest Expense (Non-GAAP), Net Debt (Non-GAAP) and Total Capitalization (Non-GAAP), respectively, as used in the Return on Capital Employed (ROCE) (Non-GAAP) calculation. EOG believes this presentation may be useful to investors who follow the practice of some industry analysts who utilize After-Tax Net Interest Expense, Net Debt and Total Capitalization (Non-GAAP) in their ROCE calculation. EOG management uses this information for purposes of comparing its financial performance with the financial performance of other companies in the industry.
 
2012
 
2011
 
2010
 
2009
 
2008
Return on Capital Employed (ROCE) (Non-GAAP) (Calculated Using GAAP Net Income)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Interest Expense (GAAP)
$
214

 
$
210

 
$
130

 
$
101

 
$
52

Tax Benefit Imputed (based on 35%)
(75
)
 
(74
)
 
(46
)
 
(35
)
 
(18
)
After-Tax Net Interest Expense (Non-GAAP) - (a)
$
139

 
$
136

 
$
84

 
$
66

 
$
34

 
 
 
 
 
 
 
 
 
 
Net Income (Loss) (GAAP) - (b)
$
250

 
$
1,091

 
$
161

 
$
547

 
$
2,437

 
 
 
 
 
 
 
 
 
 
Total Stockholders' Equity - (d)
$
13,285

 
$
12,641

 
$
10,232

 
$
9,998

 
$
9,015

 
 
 
 
 
 
 
 
 
 
Average Total Stockholders' Equity* - (e)
$
12,963

 
$
11,437

 
$
10,115

 
$
9,507

 
$
8,003

 
 
 
 
 
 
 
 
 
 
Current and Long-Term Debt (GAAP) - (f)
$
6,312

 
$
5,009

 
$
5,223

 
$
2,797

 
$
1,897

Less: Cash
(876
)
 
(616
)
 
(789
)
 
(686
)
 
(331
)
Net Debt (Non-GAAP) - (g)
$
5,436

 
$
4,393

 
$
4,434

 
$
2,111

 
$
1,566

 
 
 
 
 
 
 
 
 
 
Total Capitalization (GAAP) - (d) + (f)
$
19,597

 
$
17,650

 
$
15,455

 
$
12,795

 
$
10,912

 
 
 
 
 
 
 
 
 
 
Total Capitalization (Non-GAAP) - (d) + (g)
$
18,721

 
$
17,034

 
$
14,666

 
$
12,109

 
$
10,581

 
 
 
 
 
 
 
 
 
 
Average Total Capitalization (Non-GAAP)* - (h)
$
17,878

 
$
15,850

 
$
13,388

 
$
11,345

 
$
9,351

 
 
 
 
 
 
 
 
 
 
ROCE (GAAP Net Income) - [(a) + (b)] / (h)
4.0
%
 
7.7
%
 
1.8
%
 
5.4
%
 
26.4
%
 
 
 
 
 
 
 
 
 
 
Return on Equity (ROE) (GAAP)