the 5-minute guide to eog resources inc stock
TRANSCRIPT
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The 5-Minute Guide to EOG Resources Stock
Photo credit: Flickr user Roy Luck.
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EOG Resources 101EOG Resources is one of the largest independent exploration and production companies in the U.S. The company is focused on drilling oil-rich horizontal wells in four core areas: • The Eagle Ford Shale• The Delaware Basin• The Bakken/Three Forks• Powder River/DJ Basin
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EOG Resources 101
Source: EOG Resources Investor Presentation
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EOG Resources 101EOG Resources is a returns-driven organization. It separates itself from the rest of the sector by focusing on the following five factors:• It operates high-quality assets at scale
• Large acreage positions in the core of the play• It focuses on innovation and technology
• Merges data science with geoscience• It is a low-cost operator
• Vertically integrated• It focuses on organic growth over acquisitions
• First mover to lock up new acreage• It puts a premium on organization and culture
• It incentivizes employees for returns, not growth
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EOG Resources 101EOG Resources is focused on using innovation to improve returns:
Source: EOG Resources Investor Presentation
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EOG Resources 101By improving returns through technology and innovation, EOG Resources has an increasing number of premium drilling locations, which are those that are profitable at sub-$40 oil:
Source: EOG Resources Investor Presentation
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EOG Resources 101EOG Resources also maintains a strong investment grade balance sheet with low leverage:
Source: EOG Resources Investor Presentation
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EOG Resources 101EOG Resources in a nutshell:• It is focused on horizontal oil
• It has locked up the best acreage in the top horizontal oil plays in the U.S.
• It is focused on returns over growth• Last year it kept its production flat while peers pushed
through double digit growth• It is a science and innovation based company
• It continues to work towards maximizing the recovery of hydrocarbons within its acreage
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EOG Resources 101The company is built for any oil price:• EOG has 3,200 premium well locations that are profitable at
a sub-$40 oil price and will last it more than a decade at its current drilling pace
• The company also has an investment grade balance sheet, which gives it tremendous financial flexibility
• When oil prices improve, it has another 9,300 well locations outside its current premium inventory to fuel returns-drive production growth
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This could be the next billion-dollar iSecret