Eog Resources, Inc. · NYSE:EOG
Eog Resources — Investor Presentation (June 2014)
39 slides from Eog Resources's investor presentation, June 2014
Slide 1: Investor Relations Contacts
NYSE Stock Symbol: EOG Investor Relations Contacts Common Dividend: $0.50 Maire A. Baldwin, Vice President IR Basic Shares Outstanding: 546.5 Million (713) 651-6364, Fax (713) 651-6473 mbaldwin@eogresources.com David J. Streit, Director IR (713) 571-4902, dstreit@eogresources.com Internet Address: K
Slide 2: Copyright and Forward-Looking Statements
Copyright; Assumption of Risk: Copyright 2014. This presentation and the contents of this presentation have been copyrighted by EOG Resources, Inc. (EOG). All rights reserved. Copying of the presentation is forbidden without the prior written consent of EOG. Information in this presentation is provi
Slide 3: 1Q 2014 Highlights and Operations
1Q 2014 Increased FY Oil Growth to 29%* and Total Company Growth to 12%* Delivered 42% YOY Total Company Oil Growth and 18.5% Overall Growth Grew Non-GAAP EPS 56%,** EBITDAX 30%** and Discretionary Cash Flow 28%** Net Debt-to-Total Cap Ratio 21% at March 31, 2014** Operations Added ≈ 10 Years of Hig
Slide 4: Best Horizontal Crude Oil Assets in North America
Best Hz Crude Oil Assets in North America Strong Organic Crude Oil Production Growth - 2011 +52% - 2012 +39% 40% 4-Year CAGR - 2013 +40% - 2014E* +29% Differentiators Strong Organic Liquids Growth Driven by Crude Oil, Not Condensate or NGLs Exploration Focus Regenerates Drilling Inventory, Adding Ne
Slide 5: Extending Our Lead in Oil
Extending Our Lead in Oil Increased 2014 Production Targets - Grow Crude Oil 29%* and Total Production 12%* YOY Capital Spending Targeted to High ATROR** Oil Plays - Eagle Ford, Bakken/Three Forks and Leonard - PRB Parkman and Turner - DJ Basin Codell and Niobrara Improve Recovery and Rate of Return
Slide 6: DJ Basin Codell
Codell 72,000 Net Acres in Sweet Spot Pole Creek 525-2413H Estimated Reserve Potential* 125 MMBoe, Net to EOG Jubilee 513-0820H Target Well Economics for 9,000’ Lateral Jubilee 103-0433H - 695 Mboe EUR/Well, Gross; 560 Mboe, NAR - $7.3 MM CWC and >100% Direct ATROR** Jubilee 584-1705H Windy Oil API
Slide 7: DJ Basin Niobrara
Niobrara Jubilee 50,000 Net Acres in Sweet Spot 69-04H Estimated Reserve Potential* 85 MMBoe, Net to EOG Jubilee 30-07H Windy Target Well Economics for 9,000’ Lateral 01-18H - 430 Mboe EUR/Well, Gross; 355 Mboe, NAR - $9 MM CWC and ≈40% Direct ATROR** Oil API = 35° 235 Net Drilling Locations - Plan
Slide 8: Powder River Basin Parkman
Wyoming Parkman Bolt 30,000 Net Acres in Sweet Spot Bolt 404-05H 429-05H Estimated Reserve Potential* 75 MMBoe, Net to EOG Target Well Economics for ≈7,300’ Lateral - 850 Mboe EUR/Well, Gross; 680 Mboe, NAR - $5 MM CWC and >100% Direct ATROR** Oil API = 41° Marys Draw 115 Net Drilling Locations Rema
Slide 9: Powder River Basin Turner
Wyoming Turner 63,000 Net Acres in Sweet Spot Bolt 22-05H Estimated Reserve Potential* 115 MMBoe, Net to EOG Target Well Economics for ≈8,200’ Lateral - 860 Mboe EUR/Well, Gross; 705 Mboe, NAR - $7.5 MM CWC and ≈100% Direct ATROR** API = 44° - 56° Blade 01-2116H 160 Net Drilling Locations Remaining
Slide 10: Tactical 2014 and Strategic 2015+ Priorities
Tactical - 2014 Fund Capex with Discretionary Cash Flow Reduce Net Debt with Free Cash Flow Strategic - 2015+ Increase Dividend Increase Capex - Increase E&P Activity in Highest ATROR Plays - Increase Portfolio of Oil/Liquids Inventory through Exploration Further Strengthen Balance Sheet EOG_0614-8
Slide 11: Direct After-Tax Rate of Return
Eagle Ford Bakken/Three Forks Direct After-Tax Rate of Return* Delaware Basin Leonard DJ Basin Codell PRB Parkman PRB Turner 100% Delaware Basin Wolfcamp 60% DJ Basin Niobrara Midland Basin Wolfcamp 30% Barnett Combo Dry Gas * See reconciliation schedules. EOG_0614-9
Slide 12: 2014E Capex Including Facilities and Midstream
Majority of Capex Increase Going to Top Plays: 2014* Eagle Ford, Bakken, Leonard, DJ and PRB 10 Gathering, Exploration and 9 $8.1 to $8.3 Bn Processing Development 8 and Other Facilities $7.1 Bn Gathering, 7 Exploration & 10% 11% Development Processing E&P 6 Facilities and Other Exploration & Develo
Slide 13: Bakken and Eagle Ford Horizontal Crude Oil Production
2,800 Thousands 2,600 Bakken and Eagle Ford ≈ 75% of Current Horizontal Crude Oil Production* 2,400 Rate of 2,200 Growth Eagle Ford Slowing 2,000 1,800 1,164 MBod* 1,600 1,400 1,200 1,000 800 Bakken 917 MBod* 600 400 200 0 Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan Jul Jan 2
Slide 14: U.S. Crude Oil Production Growth
8,500 7,900 8,000 7,500 7,073 7,000 2013 Growth Rate = 0.84 MMbod 6,500 6,000 6,028 2012 Growth Rate = 1.04 MMbod 5,500 Dec Dec Dec Jan Mar May Sep Jan Mar May Sep Jan Mar Oct Nov Oct Nov Feb Apr Jul Aug Feb Apr Jul Aug Feb Jun Jun 2011 2012 2013 2014 * Source: EIA; 2012, 2013 growth calculated as D
Slide 15: Big Three Shale Plays Cumulative Oil Production
Big Three Shale Plays Eagle Ford Eagle Ford, Bakken,** Permian*** January 2011 - February 2014 January 2010 – February 2014 Cumulative Gross Oil Production (MMbo) Cumulative Gross Oil Production (MMbo) 120 EOG EOG 200 100 80 150 60 Peers 100 40 Peers 50 20 0 0 Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr
Slide 16: Eagle Ford Well vs Permian Well Production
1,200,000 1,000,000 Eagle Ford Hz Well ≈ 2x Permian Hz Well 800,000 600,000 400,000 200,000 0 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 Eagle Ford Bakken Permian * Source: IHS Data through February 2014. Crude oil and condensate production from horizontal wells. ** Bakken includ
Slide 17: Crude Oil Production Growth
(Mbod) 300 ≈ 284 250 64 Actual 200 62 150 45 100 38 55 20 50 0 2009 2010 2011 2012 2013 2014E* * Based on mid-point of full-year 2014 production estimates as of May 5, 2014. EOG_0614-15
Slide 18: Drilling Inventory by Play
2014 Drilling Oil Net Wells Years* Eagle Ford 520 12 Bakken/Three Forks 86 8 Delaware Basin Leonard 40 40+ DJ Basin 39 12 Powder River Basin 34 8 Combo Delaware Basin Wolfcamp 14 75+ Midland Basin Wolfcamp 10 50+ >15 Years of Drilling * Based on current technology and 2014 drilling program. Assumes
Slide 19: Production Growth by Product
2011 2012 2013 2014E* 2015E - 2017E Crude Oil and Condensate 52% 39% 40% 29% Continued Best-in-Class NGLs 39% 32% 17% 12% Double-Digit Growth Total Company Liquids 48% 37% 34% 25% North American Gas -7% -9% -13% -6% Flat Other Gas** --% 9% -6% 2% Flat Total Company 9.4% 10.3% 9.4% 12% Highest Annual
Slide 20: Revenue Mix: Liquids vs Natural Gas
86% 88% ≈ 88% NGLs 79% 76% 71% 72% 59% 53% Oil 47% 41% 29% 28% 24% 21% 14% 12% ≈12% 2006 2007 2008 2009 2010 2011 2012 2013 2014E** Liquids (Crude Oil and NGLs) Natural Gas * 2006 - 2013 based on North American actual revenues. ** Based on NYMEX 2014 Current Oil to Gas Prices as of April 25, 2014 an
Slide 21: ROE and ROCE
ROE ROCE 17.9% 15.6% 14.3% 12.4% 11.8% 9.4% 2012* 2013* 2014E** 2012* 2013* 2014E** * See reconciliation schedule. ** Goldman Sachs estimates June 6, 2014, $96.50 WTI and $4.25 Henry Hub in 2014. EOG_0614-19
Slide 22: 2013 ROE and ROCE vs Peers
2013 ROE 2013 ROCE 15.6% 12.4% 12.0% 9.9% 10.0% 9.8% 9.5% 8.2% 8.1% 7.9% 9.4% 9.0% 7.7% 7.7% 7.5% 7.4% 8.3% 8.1% EOG* Co. 1 Co. 2 Co. 3 Peer Co. 4 Co. 5 Co. 6 Co. 7 EOG* Co. 1 Co. 2 Peer Co. 3 Co. 4 Co. 5 Co. 6 Co. 7 Avg Avg * See reconciliation schedule. Peer returns calculated internally using sam
Slide 23: Annual Dividend Rate and Net Debt-to-Total Cap
Annual Dividend Rate Net Debt-to-Total Cap*** $0.50 30% 33% 29% 26% $0.375 23% $0.32 $0.34 21% $0.31 2010* 2011* 2012* 2013* 2014E** 2010 2011 2012 2013 1Q14 * Adjusted for 2-for-1 stock split effective March 31, 2014. ** Indicated annual rate. *** See statistics for reconciliation. EOG_0614-21
Slide 24: Largest Oil Producer and Acreage Holder in the Eagle Ford
Largest Oil Producer and Acreage Holder in the San Antonio Eagle Ford - 1Q 2014 Oil Production Up 62% YOY - 207 MBoed, Net at March 31, 2014 Crude Oil Window Continued Outstanding Well Results Across Acreage Wet Gas (IP Rate) Window County Well Bopd Dry Gas Window Corpus Christi Gonzales Neets Unit
Slide 25: Eagle Ford: Big Fields Get Bigger
Big Fields Get Bigger Increased Estimated Potential Reserves* by 45% Reserve Potential* Since Discovery (BnBoe) Increased Total Well Count to 7,200, Net Locations - ≈ 12-Year Inventory of >60% ATROR** Drilling Locations 3.2 - Average 40-Acre Spacing Across Acreage Increased EUR/Well to 450 MBoe/Well
Slide 26: Eagle Ford Spacing and Per-Well Economics
April 2010 Feb 2012 Feb 2013 Feb 2014 Wells/Section (Unit) 5 10 10 - 16 16 Per Well Spacing (Acres) 130 Acres 65 Acres 40-65 Acres ≈40 Acres Est. Reserves, NAR 320 MBoe 450 MBoe 400 MBoe 450 MBoe CWC $5.25 MM $6 MM $6 MM $5.5 MM Direct ATROR* 80% 130% 100% 100%+ Per Section (640 Acres) Est. Reserves
Slide 27: Average Oil IP Rate and Completed Well Cost
- Average Oil IP Rate* Completed Well Cost* (Bopd) ($MM) 2,077 $7.2 1,879 $6.9 $6.1 1,493 $5.5 2011 2012 2013 2011 2012 2013 2014 Target * Normalized to ≈ 5,300-foot lateral EOG_0614-25
Slide 28: Eagle Ford Crude Oil Window Well Results
Atascosa County Kaiser Sr. A Unit 1H, B Unit 1H, C Unit 1H 2,530 - 2,820 Bopd Michael Wheeler Unit 3H, 4H Gonzales County 2,295 and 2,240 Bopd Riley Potts Unit 1H Neets Unit 1H 2,520 Bopd 4,940 Bopd Magoulas Unit 1H San Antonio 4,195 Bopd DeWitt County Kelley-Wilson Unit 3H, 4H, 5H 2,405 - 2,890 Bop
Slide 29: Bakken Core Transformed into High ROR Crude Oil Growth Play
Transformed into High ROR Crude Oil Growth Play Canada New Frac Technology Improves Recovery and Returns; Stanley, ND State Line Delivering 100% Direct ATROR* from Core and Antelope 86 MBoed Gross Production YE 2013, 38% Increase YOY Bakken Lite Elm Core Area Coulee Bakken Core ≈ 90,000 Net Acres in
Slide 30: Bakken Average Cumulative Oil Production
Average Cumulative Oil Production* Average 90-Day Cumulative Production* (30 Days) (MBo) (Bo) 45,000 40,000 35,000 2014 127 113 30,000 25,000 20,000 2013 15,000 50 42 10,000 5,000 2012 0 0 10 20 30 2011 2012 2013 4Q 2013 (Days) * Normalized to ≈ 9,500-foot lateral EOG_0614-28
Slide 31: Delaware and Midland Basin Acreage and Potential
New Mexico Midland Basin Texas Delaware Basin Leonard Wolfcamp Wolfcamp OOIP** per Net Potential Net Drilling Potential Section Reserves*** Delaware Basin Acres Years* Locations (MMBoe) (MMBoe) Leonard 73,000 40 ≈ 1,600 100 - 200 550 Wolfcamp 134,000 75 ≈ 1,100 50 - 300 800 Midland Basin Wolfcamp 11
Slide 32: Delaware Basin Leonard
Both a Production and Exploration Play EOG’s 3rd Best ROR Play NGLs 26% 73,000 Net Acres Oil - At Least 3 Potential Pay Zones Gas 50% 24% Estimated Reserve Potential* 550 MMBoe, Net to EOG EUR/Well 500 MBoe, Gross; 400 MBoe, NAR Typical Leonard Operations Well Exploration Drilling to Test Multiple Z
Slide 33: Delaware Basin Wolfcamp
134,000 Net Acres - New Leases and Trades Have Increased Position - 3 Potential Pay Targets Estimated Reserve Potential* 800 MMBoe, Net to EOG NGLs Oil - Based on Low Initial Recovery Estimate, 2% - 3% 33% 31% Operations Gas 36% 2014 – Test Spacing Patterns and Evaluate Microseismic - 14 Net Wells P
Slide 34: Natural Gas Acreage Position
Play Net Type Acres Haynesville 143,000 Gas and Combo Marcellus, Bradford County 46,000 Gas S. Texas Frio/Vicksburg 195,000 Gas and Combo Eagle Ford 68,000 Gas Barnett 298,000 Gas and Combo Uinta 94,000 Gas and Combo Horn River 127,000 Gas Acreage Holds Option Value for Natural Gas Price Recovery EO
Slide 35: Trinidad and United Kingdom
Trinidad and Tobago Trinidad ATLANTIC Expect Full Contract Deliverability in 2014 OCEAN TRINIDAD 4(a) 2014 Drilling Program to Maintain Future U(b) U(a) Deliverability SECC - 3-Well Development Program VENEZUELA United Kingdom United Kingdom Central Graben East Irish Sea (Conwy) East Irish - First P
Slide 36: Maintain Low Net Debt-to-Total Cap Ratio
Maintain Low Net Debt-to-Total Cap Ratio - Credit Ratings – Moody’s A3 / S&P A- Successful Efforts Accounting Zero Goodwill YE 2013 Dividend Increase 33% - 15 Increases in 15 Years - Largest $ Increase to Date EOG Reserves Within 5% of Independent Engineering Analysis Prepared by DeGolyer and MacNau
Slide 37: Crude Oil and Natural Gas Derivative Contracts
Crude Oil* 2014 Bbld $/Bbl May 1 to June 30 176,000 $96.45 July 1 to December 31 74,000 $95.37 Natural Gas* 2014 MMBtud $/MMBtu June 1 to December 31 330,000 $4.55 2015 January 1 to December 31 175,000 $4.51 * As of May 5, 2014. Does not reflect options held by certain counterparties to extend curre
Slide 38: Rate-of-Return Focused Investments Drive Shareholder Value
Rate-of-Return Focused Investments Drive Shareholder Value and Growth Exploration Focus - Premier Acreage Positions - Early-Mover Strategy Drives Low Leasing Costs Completions Designed In-House Using Self-Sourced Materials - Highest Productivity Wells in Industry - Lowest Completed Well Costs Target
Slide 39: Copyright and Forward-Looking Statements
Copyright; Assumption of Risk: Copyright 2014. This presentation and the contents of this presentation have been copyrighted by EOG Resources, Inc. (EOG). All rights reserved. Copying of the presentation is forbidden without the prior written consent of EOG. Information in this presentation is provi