EOG Resources, Inc. (EOG) Q1 2023 Earnings Call Transcript

For the period ending March 31, 2023

May 5, 2023 10:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good day, everyone, and welcome to the EOG Resources First Quarter 2023 Earnings Results Conference Call. As a reminder, this call is being recorded.

At this time, for opening remarks and introductions, I would like to turn the call over to Chief Financial Officer of EOG Resources, Mr. Tim Driggers. Please go ahead, sir.

Tim Driggers - CFO

Thank you and good morning. Thanks for joining us. This conference call includes forward-looking statements. Factors that could cause our actual results to differ materially from those in our forward-looking statements have been outlined in the earnings release and EOG’s SEC filings.

This conference call also contains certain non-GAAP financial measures. Definitions and reconciliation schedules for these non-GAAP measures can be found on EOG’s website. Some of the reserve estimates on this conference call may include estimated potential reserves and estimated resource potential not necessarily calculated in accordance with the SEC’s reserve reporting guidelines.

Participating on the call this morning are Ezra Yacob, Chairman and CEO; Billy Helms, President and Chief Operating Officer; Ken Boedeker, EVP, Exploration and Production; Jeff Leitzell, EVP, Exploration and Production; Lance Terveen, Senior VP, Marketing; and David Streit, VP, Investor Relations. Here is Ezra.

Ezra Yacob - Chairman and CEO

Thanks, Tim. Good morning, everyone. Strong first quarter execution from every operating team across our multi-basin portfolio has positioned the company to deliver exceptional results in 2023. Production, CapEx, cash operating costs and DD&A all beat targets, which underpinned our excellent financial performance during the first quarter.

We earned $1.6 billion of adjusted net income and generated $1.1 billion of free cash flow. Free cash flow helped fund year-to-date cash return to shareholders of $1.4 billion through a combination of regular and special dividends, and share repurchases executed during the first quarter.

Combined with our full year regular dividend, we have committed to return $2.8 billion to shareholders in 2023 or about 50% of our estimated 2023 free cash flow assuming an $80 oil price. We are well on our way to achieve our target minimum return of 60% of annual free cash flow to shareholders.

Our first quarter results demonstrate the value of EOG’s multi-basin portfolio. We have decades of low cost, high return inventory that spans oil, combo and dry natural gas basins throughout the country.