10-QPeriod: Q2 FY2019

EOG RESOURCES INC Quarterly Report for Q2 Ended Jun 30, 2019

Filed August 1, 2019For Securities:EOG

Summary

EOG Resources Inc. (EOG) reported strong financial performance for the second quarter and first half of 2019, driven by increased production volumes and favorable commodity derivative contract mark-to-market gains. Total revenues for the second quarter rose 11% year-over-year to $4.7 billion, while net income increased to $847.8 million, or $1.46 per diluted share. For the first half of the year, revenues reached $8.76 billion, with net income of $1.48 billion, or $2.56 per diluted share. The company also demonstrated a commitment to maintaining a strong balance sheet, with a debt-to-total capitalization ratio of 20% at June 30, 2019. Operationally, EOG saw significant growth in crude oil and condensate production, particularly in key U.S. basins like the Permian Basin and Eagle Ford. While commodity prices experienced some pressure, EOG's strategic focus on operational efficiencies and cost control helped mitigate some of the impact. The company also successfully renegotiated its revolving credit facility, securing $2.0 billion in committed financing through June 2024, underscoring its financial flexibility.

Financial Highlights

45 data points
Beta

Revenue

$4.70B

Net Income

$847.84M

18.0% Net Margin

EPS (Diluted)

$1.46

Total Assets

$35.75B

Cash & Equivalents

$1.16B

Free Cash Flow

$2.69B

Financial Statements
Beta
Revenue$4.70B
Operating Expenses$3.57B
Operating Income$1.13B
Interest Expense$49.91M
Net Income$847.84M
EPS (Basic)$1.47
EPS (Diluted)$1.46
Shares Outstanding (Basic)577.46M
Shares Outstanding (Diluted)580.25M

Key Highlights

  • 1Total revenues for Q2 2019 increased 11% to $4.7 billion compared to Q2 2018.
  • 2Net income for Q2 2019 was $847.8 million, or $1.46 per diluted share, up from $696.7 million ($1.20 per diluted share) in Q2 2018.
  • 3The company's debt-to-total capitalization ratio stood at a healthy 20% as of June 30, 2019.
  • 4Crude oil and condensate production saw an 18% increase in Q2 2019 compared to the prior year period.
  • 5EOG secured a new $2.0 billion senior unsecured revolving credit facility maturing in June 2024.
  • 6Positive gains from mark-to-market commodity derivative contracts significantly boosted net income in Q2 2019.
  • 7Despite lower commodity prices for NGLs and natural gas, overall production volumes increased.

Frequently Asked Questions

EOG reported a significant increase in operating revenues, rising 11% to $4.7 billion in Q2 2019 from $4.2 billion in Q2 2018. Net income also saw a substantial rise from $696.7 million to $847.8 million, with diluted EPS increasing from $1.20 to $1.46.

EOG maintained a strong financial position, with a debt-to-total capitalization ratio of 20% at the end of Q2 2019, which is considered below average for its peer group. This indicates a conservative approach to leverage.

While crude oil and condensate prices saw a decrease in Q2 2019 compared to Q2 2018, EOG's increased production volumes, particularly in key U.S. basins, helped offset some of this pressure. Additionally, significant gains from mark-to-market accounting for commodity derivative contracts positively impacted the net income.

EOG experienced robust growth in crude oil and condensate production, up 18% year-over-year for Q2 2019, driven by strong performance in the Permian Basin and Eagle Ford. The company also continued to focus on operational efficiencies and cost management.