(1)The total intrinsic value of Performance Units released was $5 million and $10 million for the nine months ended September 30, 2024 and 2023, respectively. The intrinsic value is based upon the closing price of EOG's common stock on the date the Performance Units are released.
(2)Upon completion of the Performance Period for the Performance Units granted in 2020 and 2019, a performance multiple of 25% and 50%, respectively, was applied to each of the grants resulting in a forfeiture of Performance Units in February 2024 and February 2023.
(3)The total intrinsic value of Performance Units outstanding at September 30, 2024 and 2023, was $69 million and $79 million, respectively.
(4)Upon the application of the relevant performance multiple at the completion of each of the remaining Performance Periods, a minimum of zero and a maximum of 1,118 Performance Units could be outstanding.
At September 30, 2024, unrecognized compensation expense related to Performance Units totaled $24 million. Such unrecognized expense will be amortized on a straight-line basis over a weighted average period of 1.6 years.
Other Stock Awards. In August 2024, and in recognition of EOG's 25th anniversary as an independent public company, EOG awarded 25 shares of EOG common stock to each of its non-executive officer employees. Stock-based compensation expense related to the awards totaled $9 million for both the three months and nine months ended September 30, 2024, and the intrinsic value of the awards was $9 million (based upon the closing price of EOG's common stock on the August 16, 2024 award date). A gross-up to account for income taxes was also recognized.
-11-
EOG RESOURCES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)
3.Net Income Per Share
The following table sets forth the computation of Net Income Per Share for the three-month and nine-month periods ended September 30, 2024 and 2023 (in millions, except per share data):
Three Months Ended September 30,
Nine Months Ended September 30,
2024
2023
2024
2023
Numerator for Basic and Diluted Earnings Per Share -
Selected financial information by reportable segment is presented below for the three-month and nine-month periods ended September 30, 2024 and 2023 (in millions):
On February 22, 2024, the Board declared a quarterly cash dividend on the common stock of $0.91 per share paid on April 30, 2024, to stockholders of record as of April 16, 2024.
However, there can be no assurance that such efforts will offset, largely or at all, the impacts of any future inflationary pressures on EOG's operating costs and capital expenditures. Further, EOG expects the market for drilling and completion services and related labor and materials will continue to fluctuate and, as a result, there can be no assurance regarding the timing and impact of any future price changes on EOG's operating costs and capital expenditures and, in turn, on EOG's cash flows, results of operations, liquidity, capital resources, cash requirements or financial position or its ability to conduct its day-to-day drilling, completion and production operations.
Climate Change. For discussion of climate change matters and related regulatory matters, including potential developments related to climate change and the potential impacts and risks of such developments on EOG, see ITEM 1A, Risk Factors and the related discussion in ITEM 1, Business - Regulation of EOG's 2023 Annual Report. EOG will continue to monitor and assess any climate change-related developments, including the SEC's climate-related disclosure rules adopted in March 2024, that could impact EOG and the oil and gas industry, to determine the impact on its business and operations, and take appropriate actions where necessary.
United States.EOG's efforts to identify plays with large reserve potential have proven to be successful. EOG continues to drill numerous wells in large acreage plays, which in the aggregate have contributed substantially to, and are expected to continue to contribute substantially to, EOG's crude oil and condensate, NGLs and natural gas production. EOG has placed an emphasis on applying its horizontal drilling and completion expertise to unconventional crude oil plays and natural gas plays.
During the first nine months of 2024, EOG continued to (i) focus on improving well performance and operating efficiencies, (ii) evaluate certain potential crude oil and condensate, NGLs and natural gas exploration and development prospects and (iii) look for opportunities to add drilling inventory through leasehold acquisitions, farm-ins, exchanges or tactical or bolt-on acquisitions. On a volumetric basis, as calculated using a ratio of 1.0 barrel of crude oil and condensate or NGLs to 6.0 thousand cubic feet of natural gas, crude oil and condensate and NGLs production accounted for approximately 72% and 73% of EOG's United States production during the first nine months of 2024 and 2023, respectively. During the first nine months of 2024, EOG's drilling and completion activities occurred primarily in the Delaware Basin play and the Eagle Ford play. EOG's major producing areas in the United States are in New Mexico and Texas.
Trinidad. In Trinidad, EOG continues to deliver natural gas under existing supply contracts. Several fields in the South East Coast Consortium (SECC) Block, Modified U(a) Block, Block 4(a), the Banyan Field and the Sercan Area have been developed and are producing natural gas which is sold to the National Gas Company of Trinidad and Tobago Limited, and crude oil and condensate which is sold to Heritage Petroleum Company Limited.
During the first nine months of 2024, EOG completed one net developmental well and one net exploratory well from the recently installed Osprey B platform in the Modified U(a) Block. EOG also completed one net exploratory well and is currently completing another exploratory well from the Oilbird platform in the SECC Block. In June 2024, EOG relinquished its rights to a portion of the contract area governed by the Trinidad Northern Area License located offshore the southwest coast of Trinidad. In July 2024, EOG signed a farmout agreement with BP Trinidad and Tobago LLC, which allows EOG to earn a 50% working interest to develop the Coconut gas field in the East Mayaro and South East Galeota Areas. Additionally, EOG is currently in discussions with the Government of Trinidad and Tobago regarding the potential award of the Lower Reverse L and NCMA 4(a) Blocks in respect of the 2023 shallow water bid round. In the fourth quarter of 2024, EOG expects to recomplete two wells in the Sercan Area and also drill an exploratory well in the deep Teak, Samaan and Poui Area. Additionally, EOG expects to complete construction and installation of the platform and commence pipeline installation in the Mento Area.
Other International. In November 2021, a subsidiary of EOG was granted an exploration permit for the WA-488-P Block, located offshore Western Australia. During the first nine months of 2024, EOG continued to prepare for the drilling of an exploration well in this block.
EOG continues to evaluate other select crude oil and natural gas opportunities outside the United States, primarily by pursuing exploration opportunities in countries where crude oil and natural gas reserves have been identified.
-22-
2024 Capital and Operating Plan. Total 2024 capital expenditures are estimated to range from approximately $6.1 billion to $6.3 billion, including exploration and development drilling, facilities, leasehold acquisitions, capitalized interest, dry hole costs and other property, plant and equipment and excluding property acquisitions, asset retirement costs, non-cash exchanges and transactions and exploration costs incurred as operating expenses. EOG plans to continue to focus a substantial portion of its exploration and development expenditures in its major producing areas in the United States. In particular, EOG will be focused on United States drilling activity in its plays where it generates the highest rates of return - specifically, in the Delaware Basin, Eagle Ford, Utica and Rocky Mountain area. To further enhance the economics of these plays, EOG expects to continue to improve well performance and to focus on improving operating efficiencies; see the above related discussion. Full-year 2024 total crude oil, NGLs and natural gas production is expected to increase modestly versus 2023. In addition, EOG plans to continue to spend a portion of its anticipated 2024 capital expenditures on leasing acreage, evaluating new prospects, transportation infrastructure and environmental projects.
Management continues to believe EOG has one of the strongest prospect inventories in EOG's history. When it fits EOG's strategy, EOG will make acquisitions that bolster existing drilling programs or offer incremental exploration and/or production opportunities.
Capital Structure. One of management's key strategies is to maintain a strong balance sheet with a consistently below average debt-to-total capitalization ratio as compared to those in EOG's peer group. EOG's debt-to-total capitalization ratio was 11% at September 30, 2024 and 12% at December 31, 2023. As used in this calculation, total capitalization represents the sum of total current and long-term debt and total stockholders' equity.
At September 30, 2024, EOG maintained a strong financial and liquidity position, including $6.1 billion of cash and cash equivalents on hand and $1.9 billion of availability under its senior unsecured revolving credit facility. At September 30, 2024, the $500 million aggregate principal amount of its 3.15% Senior Notes due 2025 was classified as long-term debt based upon EOG's intent and ability to ultimately replace such amount with other long-term debt.
The Internal Revenue Service previously announced tax relief related to 2024 severe weather events occurring in various Texas counties, including Harris County where EOG's corporate offices are located. The tax relief permits eligible taxpayers to postpone certain tax filings and payments.
EOG has significant flexibility with respect to financing alternatives, including borrowings under its commercial paper program, bank borrowings, borrowings under its senior unsecured revolving credit facility, joint development agreements and similar agreements and equity and debt offerings. For related discussion, see ITEM 7, Management's Discussion and Analysis of Financial Condition and Results of Operations - Capital Resources and Liquidity included in EOG's 2023 Annual Report.
Cash Return Framework. In November 2023, EOG announced an increase in its cash return commitment - specifically, a commitment, effective beginning with fiscal year 2024, to return a minimum of 70% of annual net cash provided by operating activities before certain balance sheet-related changes, less total capital expenditures, to stockholders, through a combination of quarterly dividends, special dividends and share repurchases.
For discussion regarding EOG's payment of dividends and share repurchases, see ITEM 1A,Risk Factorsand ITEM 5,Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securitiesin EOG's 2023 Annual Report and Part II, Item 2,Unregistered Sales of Equity Securities and Use of Proceedsin this Quarterly Report on Form 10-Q.
Dividend Declarations. On February 22, 2024, the Board of Directors (Board) declared a quarterly cash dividend on the common stock of $0.91 per share paid on April 30, 2024, to stockholders of record as of April 16, 2024.
On May 2, 2024, the Board declared a quarterly cash dividend on the common stock of $0.91 per share paid on July 31, 2024, to stockholders of record as of July 17, 2024.
On August 1, 2024, the Board declared a quarterly cash dividend on the common stock of $0.91 per share paid on October 31, 2024, to stockholders of record as of October 17, 2024.
-23-
On November 7, 2024, the Board increased the quarterly cash dividend on the common stock from the previous $0.91 per share to $0.975 per share, effective beginning with the dividend payable on January 31, 2025, to stockholders of record as of January 17, 2025.
Share Repurchases. In November 2021, the Board established a new share repurchase authorization that allows for the repurchase by EOG of up to $5 billion of its common stock (Share Repurchase Authorization). During the three and nine months ended September 30, 2024, EOG repurchased 6.1 million and 18.0 million shares of common stock for approximately $758 million and $2,198 million (inclusive of transaction fees and commissions), respectively, pursuant to the Share Repurchase Authorization. As of September 30, 2024, approximately $1.8 billion remained available for repurchases under the Share Repurchase Authorization. Included in the Treasury Stock Repurchased amounts on the Condensed Consolidated Statements of Stockholders' Equity for the three and nine months ended September 30, 2024, are $7 million and $20 million, respectively, of estimated federal excise taxes. Subsequent to September 30, 2024, the Board increased the Share Repurchase Authorization from $5 billion to $10 billion, effective November 7, 2024.
Under the Share Repurchase Authorization, EOG may repurchase shares from time to time, at management's discretion, in accordance with applicable securities laws, including through open market transactions, privately negotiated transactions or any combination thereof.The timing and amount of repurchases is at the discretion of EOG's management and depends on a variety of factors, including the trading price of EOG's common stock, corporate and regulatory requirements, and other market and economic conditions.Repurchased shares are held as treasury shares and are available for general corporate purposes.The Share Repurchase Authorization has no time limit, does not require EOG to repurchase a specific number of shares and may be modified, suspended, or terminated by the Board at any time.
-24-
Results of Operations
The following review of operations for the three months and nine months ended September 30, 2024 and 2023 should be read in conjunction with the Condensed Consolidated Financial Statements of EOG and notes thereto included in this Quarterly Report on Form 10‑Q.
Three Months Ended September 30, 2024 vs. Three Months Ended September 30, 2023
Operating Revenues. During the third quarter of 2024, operating revenues decreased $247 million, or 4%, to $5,965 million from $6,212 million for the same period of 2023. Total wellhead revenues, which are revenues generated from sales of EOG's production of crude oil and condensate, NGLs and natural gas, for the third quarter of 2024 decreased $251 million, or 5%, to $4,384 million from $4,635 million for the same period of 2023. EOG recognized net gains on the mark-to-market of financial commodity and other derivative contracts of $79 million for the third quarter of 2024 compared to net gains of $43 million for the same period of 2023. Gathering, processing and marketing revenues for the third quarter of 2024 increased $3 million to $1,481 million from $1,478 million for the same period of 2023. Net losses on asset dispositions were $7 million for the third quarter of 2024 compared to net gains of $35 million for the same period of 2023.
-25-
Wellhead volume and price statistics for the three-month periods ended September 30, 2024 and 2023 were as follows:
Three Months Ended September 30,
2024
2023
Crude Oil and Condensate Volumes (MBbld) (1)
United States
491.8
482.8
Trinidad
1.2
0.5
Total
493.0
483.3
Average Crude Oil and Condensate Prices ($/Bbl) (2)
United States
$
76.95
$
83.61
Trinidad
63.15
71.38
Composite
76.92
83.60
Natural Gas Liquids Volumes (MBbld) (1)
United States
254.3
231.1
Total
254.3
231.1
Average Natural Gas Liquids Prices ($/Bbl) (2)
United States
$
22.42
$
23.56
Natural Gas Volumes (MMcfd) (1)
United States
1,745
1,562
Trinidad
225
142
Total
1,970
1,704
Average Natural Gas Prices ($/Mcf) (2)
United States
$
1.84
$
2.59
Trinidad
3.68
3.41
Composite
2.05
2.66
Crude Oil Equivalent Volumes (MBoed) (3)
United States
1,037.1
974.2
Trinidad
38.6
24.3
Total
1,075.7
998.5
Total MMBoe (3)
99.0
91.9
(1)Thousand barrels per day or million cubic feet per day, as applicable.
(2)Dollars per barrel or per thousand cubic feet, as applicable. Excludes the impact of financial commodity and other derivative instruments (see Note 12 to the Condensed Consolidated Financial Statements).
(3)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.
-26-
Wellhead crude oil and condensate revenues for the third quarter of 2024 decreased $229 million, or 6%, to $3,488 million from $3,717 million for the same period of 2023. The decrease was due to a lower composite average price ($317 million), partially offset by an increase of 9.7 MBbld, or 2%, in wellhead crude oil and condensate production ($88 million). Increased production was primarily from the Utica. EOG's composite wellhead crude oil and condensate price for the third quarter of 2024 decreased 8% to $76.92 per barrel compared to $83.60 per barrel for the same period of 2023.
NGL revenues for the third quarter of 2024 increased $23 million, or 5%, to $524 million from $501 million for the same period of 2023 due to an increase of 23.2 MBbld, or 10%, in NGL deliveries ($51 million), partially offset by a lower composite average price ($28 million). Increased production was primarily from the Permian Basin. EOG's composite NGL price for the third quarter of 2024 decreased 5% to $22.42 per barrel compared to $23.56 per barrel for the same period of 2023.
Wellhead natural gas revenues for the third quarter of 2024 decreased $45 million, or 11%, to $372 million from $417 million for the same period of 2023. The decrease was due to a lower composite average price ($114 million), partially offset by an increase in natural gas deliveries ($69 million). Natural gas deliveries for the third quarter of 2024 increased 266 MMcfd, or 16%, compared to the same period of 2023 due primarily to increased production of associated natural gas from the Permian Basin and higher natural gas deliveries in Trinidad. EOG's composite wellhead natural gas price for the third quarter of 2024 decreased 23% to $2.05 per Mcf compared to $2.66 per Mcf for the same period of 2023.
During the third quarter of 2024, EOG recognized net gains on the mark-to-market of financial commodity and other derivative contracts of $79 million compared to net gains of $43 million for the same period of 2023. The net gains of $79 million included gains of $15 million related to the Brent crude oil (Brent) linked gas sales contract. During the third quarter of 2024, net cash received from settlements of financial commodity derivative contracts was $61 million compared to net cash received from settlements of financial commodity derivative contracts of $23 million for the same period of 2023.
Gathering, processing and marketing revenues are revenues generated from sales of third-party crude oil, NGLs and natural gas, as well as fees associated with gathering third-party natural gas and revenues from sales of EOG-owned sand. Purchases and sales of third-party crude oil and natural gas may be utilized in order to balance firm capacity at third-party facilities with production in certain areas and to utilize excess capacity at EOG-owned facilities. EOG sells sand primarily in order to balance the timing of firm purchase agreements with completion operations. Marketing costs represent the costs to purchase third-party crude oil, natural gas and sand and the associated transportation costs, as well as costs associated with EOG-owned sand sold to third parties.
Gathering, processing and marketing revenues less marketing costs for the third quarter of 2024 decreased $114 million as compared to the same period of 2023 primarily due to lower margins on crude oil marketing activities.
Operating and Other Expenses. For the third quarter of 2024, operating expenses of $3,876 million were $221 million higher than the $3,655 million incurred during the third quarter of 2023. The following table presents the costs per barrel of oil equivalent (Boe) for the three-month periods ended September 30, 2024 and 2023:
Three Months Ended September 30,
2024
2023
Lease and Well
$
3.96
$
4.02
Gathering, Processing and Transportation Costs (GP&T)
4.50
4.42
Depreciation, Depletion and Amortization (DD&A) -
Oil and Gas Properties
9.89
9.31
Other Property, Plant and Equipment
0.53
0.47
General and Administrative (G&A)
1.69
1.75
Interest Expense, Net
0.31
0.39
Total (1)
$
20.88
$
20.36
(1)Total excludes exploration costs, dry hole costs, impairments, marketing costs and taxes other than income.
-27-
The primary factors impacting the cost components of per-unit rates of lease and well, GP&T, DD&A, G&A and interest expense, net for the three months ended September 30, 2024, compared to the same period of 2023, are set forth below. See "Operating Revenues" above for a discussion of wellhead volumes.
Lease and well expenses include expenses for EOG-operated properties, as well as expenses billed to EOG from other operators where EOG is not the operator of a property. Lease and well expenses can be divided into the following categories: costs to operate and maintain crude oil and natural gas wells, the cost of workovers and lease and well administrative expenses. Operating and maintenance costs include, among other things, pumping services, produced water disposal, equipment repair and maintenance, compression expense, lease upkeep and fuel and power. Workovers are operations to restore or maintain production from existing wells.
Each of these categories of costs individually fluctuates from time to time as EOG attempts to maintain and increase production while maintaining efficient, safe and environmentally responsible operations. EOG continues to increase its operating activities by drilling new wells in existing and new areas. Operating and maintenance costs within these existing and new areas, as well as the costs of services charged to EOG by vendors, fluctuate over time.
Lease and well expenses of $392 million for the third quarter of 2024 increased $23 million from $369 million for the same prior year period primarily due to increased operating and maintenance costs ($18 million) and increased lease and well administrative expenses ($6 million), both in the United States. Lease and well expenses increased in the United States primarily due to increased operating activities resulting from increased production.
GP&T costs represent costs to process and deliver hydrocarbon products from the lease to a downstream point of sale. GP&T costs include operating and maintenance expenses from EOG-owned assets, fees paid to third party operators and administrative expenses associated with operating EOG's GP&T assets. EOG pays third parties to process the majority of its natural gas production to extract NGLs.
GP&T costs of $445 million for the third quarter of 2024 increased $39 million from $406 million for the same prior year period primarily due to increased GP&T costs related to increased production in the Permian Basin and Utica.
DD&A of the cost of proved oil and gas properties is calculated using the unit-of-production method. EOG's DD&A rate and expense are the composite of numerous individual DD&A group calculations.There are several factors that can impact EOG's composite DD&A rate and expense, such as field production profiles, drilling or acquisition of new wells, disposition of existing wells and reserve revisions (upward or downward) primarily related to well performance, economic factors and impairments.Changes to these factors may cause EOG's composite DD&A rate and expense to fluctuate from period to period.DD&A of the cost of other property, plant and equipment is generally calculated using the straight-line depreciation method over the useful lives of the assets.
DD&A expenses for the third quarter of 2024 increased $133 million to $1,031 million from $898 million for the same prior year period. DD&A expenses associated with oil and gas properties for the third quarter of 2024 were $123 million higher than the same prior year period. The increase primarily reflects increased production in the United States ($54 million) and in Trinidad ($8 million), and increased unit rates in the United States ($50 million) and in Trinidad ($11 million). DD&A expenses associated with other property, plant and equipment for the third quarter of 2024 were $10 million higher than the same prior year period primarily due to an increase in expenses related to GP&T assets and equipment.
G&A expenses of $167 million for the third quarter of 2024 increased $6 million from $161 million for the same prior year period primarily due to increased professional and other services costs.
Interest expense, net of $31 million for the third quarter of 2024 decreased $5 million compared to the same prior year period primarily due to higher capitalized interest.
Impairments include: amortization of unproved oil and gas property costs as well as impairments of proved oil and gas properties; other property, plant and equipment; and other assets. Unproved properties with acquisition costs that are not individually significant are aggregated, and the portion of such costs estimated to be nonproductive is amortized over the remaining lease term. Unproved properties with individually significant acquisition costs are reviewed individually for impairment.
-28-
The following table sets forth impairments for the third quarter of 2024 and 2023 (in millions):
Three Months Ended September 30,
2024
2023
Proved properties
$
1
$
23
Unproved properties
14
30
Other assets
—
—
Firm commitment contracts
—
1
Total
$
15
$
54
Taxes other than income include severance/production taxes, ad valorem/property taxes, payroll taxes, franchise taxes and other miscellaneous taxes. Severance/production taxes are generally determined based on wellhead revenues, and ad valorem/property taxes are generally determined based on the valuation of the underlying assets.
Taxes other than income for the third quarter of 2024 decreased $58 million to $283 million (6.5% of wellhead revenues) from $341 million (7.4% of wellhead revenues) for the same prior year period. The decrease in taxes other than income was primarily due to increased state severance tax refunds ($30 million) and decreased severance/production taxes ($25 million), all in the United States.
Other income, net of $76 million for the third quarter of 2024 increased $24 million from $52 million for the same prior year period. The increase was primarily due to increased interest income.
Income taxes of $461 million for the third quarter of 2024 decreased from income taxes of $543 million for the third quarter of 2023 primarily due to decreased pretax income. The net effective tax rate for the third quarter of 2024 increased to 22% from 21% for the third quarter of 2023.
Nine Months Ended September 30, 2024 vs. Nine Months Ended September 30, 2023
Operating Revenues. During the first nine months of 2024, operating revenues increased $284 million, or 2%, to $18,113 million from $17,829 million for the same period of 2023. Total wellhead revenues for the first nine months of 2024 increased $450 million, or 4%, to $13,269 million from $12,819 million for the same period of 2023. During the first nine months of 2024, EOG recognized net gains on the mark-to-market of financial commodity and other derivative contracts of $269 million compared to net gains of $520 million for the same period of 2023. Gathering, processing and marketing revenues for the first nine months of 2024 increased $126 million, or 3%, to $4,459 million from $4,333 million for the same period of 2023. Net gains on asset dispositions were $39 million for the first nine months of 2024 compared to net gains of $95 million for the same period of 2023.
-29-
Wellhead volume and price statistics for the nine-month periods ended September 30, 2024 and 2023 were as follows:
Nine Months Ended September 30,
2024
2023
Crude Oil and Condensate Volumes (MBbld)
United States
489.6
472.0
Trinidad
0.8
0.6
Total
490.4
472.6
Average Crude Oil and Condensate Prices ($/Bbl) (1)
United States
$
79.36
$
78.69
Trinidad
66.22
68.37
Composite
79.34
78.67
Natural Gas Liquids Volumes (MBbld)
United States
243.7
219.7
Total
243.7
219.7
Average Natural Gas Liquids Prices ($/Bbl) (1)
United States
$
23.25
$
23.35
Natural Gas Volumes (MMcfd)
United States
1,691
1,517
Trinidad
209
154
Total
1,900
1,671
Average Natural Gas Prices ($/Mcf) (1)
United States
$
1.84
$
2.70
Trinidad
3.57
3.59
Composite
2.03
2.78
Crude Oil Equivalent Volumes (MBoed)
United States
1,015.0
944.6
Trinidad
35.8
26.2
Total
1,050.8
970.8
Total MMBoe
287.9
265.0
(1) Excludes the impact of financial commodity and other derivative instruments (see Note 12 to the Condensed Consolidated Financial Statements).
-30-
Wellhead crude oil and condensate revenues for the first nine months of 2024 increased $509 million, or 5%, to $10,660 million from $10,151 million for the same period of 2023 due to an increase of 17.8 MBbld, or 4%, in wellhead crude oil and condensate production ($420 million) and a higher composite average price ($89 million). Increased production was primarily in the Permian Basin and Utica. EOG's composite wellhead crude oil and condensate price for the first nine months of 2024 increased 1% to $79.34 per barrel compared to $78.67 per barrel for the same period of 2023.
NGL revenues for the first nine months of 2024 increased $152 million, or 11%, to $1,552 million from $1,400 million for the same period of 2023 due to an increase of 24.0 MBbld, or 11%, in NGL deliveries ($159 million), partially offset by a lower composite average price ($7 million). Increased production was primarily from the Permian Basin. EOG's composite NGL price for the first nine months of 2024 decreased to $23.25 per barrel compared to $23.35 per barrel for the same period of 2023.
Wellhead natural gas revenues for the first nine months of 2024 decreased $211 million, or 17%, to $1,057 million from $1,268 million for the same period of 2023. The decrease was due to a lower composite average price ($393 million), partially offset by an increase in natural gas deliveries ($182 million). Natural gas deliveries for the first nine months of 2024 increased 229 MMcfd, or 14%, compared to the same period of 2023 due primarily to increased production of associated natural gas from the Permian Basin and higher natural gas deliveries in Trinidad. EOG's composite wellhead natural gas price for the first nine months of 2024 decreased 27% to $2.03 per Mcf compared to $2.78 per Mcf for the same period of 2023.
During the first nine months of 2024, EOG recognized net gains on the mark-to-market of financial commodity and other derivative contracts of $269 million compared to net gains of $520 million for the same period of 2023. The net gains of $269 million included gains of $148 million related to the Brent linked gas sales contract. During the first nine months of 2024, net cash received from settlements of financial commodity derivative contracts was $195 million. Net cash paid for settlements of financial commodity derivative contracts was $130 million for the same period of 2023.
Gathering, processing and marketing revenues less marketing costs for the first nine months of 2024 decreased $68 million as compared to the same period of 2023 primarily due to lower margins on crude oil marketing activities, sand sales and natural gas marketing activities.
Operating and Other Expenses. For the first nine months of 2024, operating expenses of $11,623 million were $893 million higher than the $10,730 million incurred during the same period of 2023. The following table presents the costs per Boe for the nine-month periods ended September 30, 2024 and 2023:
Nine Months Ended September 30,
2024
2023
Lease and Well
$
4.09
$
4.06
GP&T
4.45
4.52
DD&A -
Oil and Gas Properties
10.20
9.19
Other Property, Plant and Equipment
0.53
0.48
G&A
1.67
1.69
Interest Expense, Net
0.35
0.43
Total (1)
$
21.29
$
20.37
(1)Total excludes exploration costs, dry hole costs, impairments, marketing costs and taxes other than income.
The primary factors impacting the cost components of per-unit rates of lease and well, GP&T, DD&A, G&A, and interest expense, net for the nine months ended September 30, 2024, compared to the same period of 2023 are set forth below. See "Operating Revenues" above for a discussion of wellhead volumes.
-31-
Lease and well expenses of $1,178 million for the first nine months of 2024 increased $102 million from $1,076 million for the same prior year period primarily due to increased operating and maintenance costs ($71 million), increased lease and well administrative expenses ($19 million) and increased workover expenditures ($14 million), all in the United States. Lease and well expenses increased in the United States primarily due to increased operating activities resulting from increased production.
GP&T costs of $1,281 million for the first nine months of 2024 increased $84 million from $1,197 million for the same prior year period primarily due to increased GP&T costs related to increased production in the Permian Basin and Utica.
DD&A expenses for the first nine months of 2024 increased $527 million to $3,089 million from $2,562 million for the same prior year period. DD&A expenses associated with oil and gas properties for the first nine months of 2024 were $502 million higher than the same prior year period. The increase primarily reflects increased production in the United States ($185 million) and in Trinidad ($18 million), and increased unit rates in the United States ($147 million) and in Trinidad ($30 million). In addition, the recording of an adjustment to DD&A ($117 million) primarily related to natural gas production used by EOG's domestic gathering systems also contributed to the variance. DD&A expenses associated with other property, plant and equipment for the first nine months of 2024 were $25 million higher than the same prior year period primarily due to an increase in expenses related to GP&T assets and equipment.
G&A expenses of $480 million for the first nine months of 2024 increased $32 million from $448 million for the same prior year period primarily due to increased employee-related costs ($20 million), professional and other services costs ($9 million) and information systems costs ($8 million).
Interest expense, net of $100 million for the first nine months of 2024 decreased $13 million compared to the same prior year period primarily due to higher capitalized interest ($8 million) and the repayment in March 2023 of the $1,250 million aggregate principal amount of 2.625% Senior Notes due 2023 ($7 million).
Exploration costs of $122 million for the first nine months of 2024 decreased $18 million from $140 million for the same prior year period due primarily to decreased geological and geophysical expenditures ($27 million), partially offset by increased administrative expenses ($6 million) and delay rentals ($3 million).
The following table sets forth impairments for the nine-month periods ended September 30, 2024 and 2023 (in millions):
Nine Months Ended September 30,
2024
2023
Proved properties
$
36
$
26
Unproved properties
48
95
Other assets
30
—
Firm commitment contracts
1
2
Total
$
115
$
123
Taxes other than income for the first nine months of 2024 decreased $25 million to $958 million (7.2% of wellhead revenues) from $983 million (7.7% of wellhead revenues) for the same prior year period. The decrease in taxes other than income was primarily due to increased state severance tax refunds ($30 million) and decreased ad valorem/property taxes ($21 million), partially offset by increased severance/production taxes ($24 million), all in the United States.
Other income, net of $204 million for the first nine months of 2024 increased $36 million from $168 million for the same prior year period. The increase was primarily due to increased interest income.
Income taxes of $1,442 million for the first nine months of 2024 decreased from income taxes of $1,548 million for the first nine months of 2023 primarily due to decreased pretax income. The net effective tax rate for the first nine months of 2024 was unchanged from the prior year rate of 22%.
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Capital Resources and Liquidity
Cash Flow. The primary sources of cash for EOG during the nine months ended September 30, 2024, were funds generated from operations and, to a lesser extent, net cash received from settlements of financial commodity derivative contracts. The primary uses of cash were exploration and development expenditures; funds used in operations; dividend payments to stockholders; purchases of treasury stock; and other property, plant and equipment expenditures. During the first nine months of 2024, EOG's cash balance increased $844 million to $6,122 million from $5,278 million at December 31, 2023.
Net cash provided by operating activities of $9,380 million for the first nine months of 2024 increased $1,144 million compared to the same period of 2023 primarily due to an increase in wellhead revenues ($450 million), a decrease in net cash used in working capital and other assets and liabilities ($450 million), an increase in net cash received from settlements of financial commodity derivative contracts ($325 million), and a decrease in net cash paid for income taxes ($289 million), partially offset by the return of cash collateral posted for financial commodity derivative contracts in the first nine months of 2023 ($324 million) and an increase in cash operating expenses ($153 million).
Net cash used in investing activities of $4,691 million for the first nine months of 2024 decreased $150 million compared to the same period of 2023 due to a decrease in cash used in working capital associated with investing activities ($610 million), partially offset by an increase in additions to other property, plant and equipment ($264 million), a decrease in proceeds from the sale of assets ($116 million) and an increase in additions to oil and gas properties ($80 million).
Net cash used in financing activities of $3,845 million for the first nine months of 2024 included purchases of treasury stock ($2,253 million), cash dividend payments ($1,578 million) and repayment of finance lease liabilities ($25 million). Net cash used in financing activities of $4,041 million for the first nine months of 2023 included cash dividend payments ($2,041 million), repayments of long-term debt ($1,250 million), purchases of treasury stock ($728 million) and repayment of finance lease liabilities ($24 million).
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Total Expenditures. For the full-year 2024, EOG's updated budget for exploration and development and other property, plant and equipment expenditures is estimated to range from approximately $6.1 billion to $6.3 billion, including exploration and development drilling, facilities, leasehold acquisitions, capitalized interest, dry hole costs and other property, plant and equipment and excluding property acquisitions, asset retirement costs, non-cash exchanges and transactions and exploration costs incurred as operating expenses. The table below sets out components of total expenditures for the nine-month periods ended September 30, 2024 and 2023 (in millions):
Nine Months Ended September 30,
2024
2023
Expenditure Category
Capital
Exploration and Development Drilling (1)
$
3,512
$
3,619
Facilities
430
373
Leasehold Acquisitions (2)
205
153
Property Acquisitions (3)
26
9
Capitalized Interest
32
24
Subtotal
4,205
4,178
Exploration Costs
122
140
Dry Hole Costs
6
1
Exploration and Development Expenditures
4,333
4,319
Asset Retirement Costs (4)
(28)
227
Total Exploration and Development Expenditures
4,305
4,546
Other Property, Plant and Equipment (5)
902
638
Total Expenditures
$
5,207
$
5,184
(1) Exploration and development drilling included $85 million for the nine-month period ended September 30, 2023, related to non-cash development drilling.
(2) Leasehold acquisitions included $82 million and $60 million for the nine-month periods ended September 30, 2024 and 2023, respectively, related to non-cash property exchanges.
(3) Property acquisitions included $24 million and $9 million for the nine-month periods ended September 30, 2024 and 2023, respectively, related to non-cash property exchanges.
(4) Asset Retirement Costs for the nine-month period ended September 30, 2024 included a downward revision to asset retirement obligations of $84 million.
(5) Other Property, Plant and Equipment included $137 million related to the acquisition of a gathering system in South Texas and $134 million related to the acquisition of a gathering and processing system in the Powder River Basin for the nine-month periods ended September 30, 2024 and 2023, respectively.
Exploration and development expenditures of $4,333 million for the first nine months of 2024 were $14 million higher than the same period of 2023 primarily due to increased facilities expenditures ($57 million) and increased leasehold acquisitions ($52 million), partially offset by decreased development drilling expenditures ($92 million). Exploration and development expenditures for the first nine months of 2024 of $4,333 million consisted of $3,797 million in development drilling and facilities, $478 million in exploration, $32 million in capitalized interest and $26 million in property acquisitions. Exploration and development expenditures for the first nine months of 2023 of $4,319 million consisted of $3,836 million in development drilling and facilities, $450 million in exploration, $24 million in capitalized interest and $9 million in property acquisitions.
The level of exploration and development expenditures, including acquisitions, will vary in future periods depending on energy market conditions and other economic factors. EOG believes it has significant flexibility and availability with respect to financing alternatives and the ability to adjust its exploration and development expenditure budget as circumstances warrant. While EOG has certain continuing commitments associated with expenditure plans related to its operations, such commitments are not expected to be material when considered in relation to the total financial capacity of EOG.
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Financial Commodity and Other Derivative Transactions. As more fully discussed in Note 12 to the Consolidated Financial Statements included in EOG's 2023 Annual Report, EOG engages in price risk management activities from time to time. These activities are intended to manage EOG's exposure to fluctuations in commodity prices for crude oil, NGLs and natural gas. EOG utilizes financial commodity derivative instruments, primarily price swap, option, swaption, collar and basis swap contracts, as a means to manage this price risk. EOG has not designated any of its financial commodity and other derivative contracts as accounting hedges and, accordingly, accounts for financial commodity and other derivative contracts using the mark-to-market accounting method, including the Brent linked gas sales contract. Under this accounting method, changes in the fair value of outstanding financial and other derivative instruments are recognized as gains or losses in the period of change and are recorded as Gains on Mark-to-Market Financial Commodity and Other Derivative Contracts on the Condensed Consolidated Statements of Income and Comprehensive Income. The related cash flow impact is reflected in Cash Flows from Operating Activities on the Condensed Consolidated Statements of Cash Flows.
The total fair value of EOG's financial commodity and other derivative contracts was reflected on the Condensed Consolidated Balance Sheets at September 30, 2024, as a net asset of $77 million.
As discussed in "Operating Revenues," the net cash received from settlements of financial commodity derivative contracts during the third quarter and first nine months of 2024 was $61 million and $195 million, respectively.
Presented below is a comprehensive summary of EOG's financial commodity derivative contracts settled during the period from January 1, 2024 to October 31, 2024 (closed) and outstanding as of October 31, 2024. Natural gas volumes are presented in MMBtu per day (MMBtud) and prices are presented in dollars per MMBtu ($/MMBtu).
Natural Gas Financial Price Swap Contracts
Contracts Sold
Period
Settlement Index
Volume (MMBtud in thousands)
Weighted Average Price ($/MMBtu)
January - November 2024 (closed)
NYMEX Henry Hub
725
$
3.07
December 2024
NYMEX Henry Hub
725
3.07
January - December 2025
NYMEX Henry Hub
725
3.07
Natural Gas Basis Swap Contracts
Contracts Sold
Period
Settlement Index
Volume (MMBtud in thousands)
Weighted Average Price Differential ($/MMBtu)
January - October 2024 (closed)
NYMEX Henry Hub Houston Ship Channel (HSC) Differential (1)
10
$
0.00
November - December 2024
NYMEX Henry Hub HSC Differential
10
0.00
January - December 2025
NYMEX Henry Hub HSC Differential
10
0.00
(1) This settlement index is used to fix the differential between pricing at the Houston Ship Channel and NYMEX Henry Hub prices.
In connection with its financial commodity derivative contracts, EOG had no collateral posted and no collateral held at November 6, 2024. The amount of posted collateral will increase or decrease based on fluctuations in forward NYMEX Henry Hub prices.
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Natural Gas Sales Linked to Brent Crude Oil. In February 2024, EOG entered into a 10-year agreement, commencing in 2027, to sell 180,000 MMBtud of its domestic natural gas production, with 140,000 MMBtud to be sold at a price indexed to Brent and the remaining volumes to be sold at a price indexed to Brent or a U.S. Gulf Coast gas index. It was determined that this agreement meets the definition of a derivative under the Derivatives and Hedging Topic of the Accounting Standards Codification and does not qualify for the normal purchases and normal sales scope exception. As such, this agreement is accounted for as a derivative using the mark-to-market accounting method. Changes in the fair value are recognized as gains or losses in the period of change on the Condensed Consolidated Statements of Income and Comprehensive Income.
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Information Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q includes 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, goals, returns and rates of return, budgets, reserves, levels of production, capital expenditures, operating 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," "ambition," "initiative," "goal," "may," "will," "focused on," "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 financial or operating results and returns or EOG's ability to replace or increase reserves, increase production, generate returns and rates of return, replace or increase drilling locations, reduce or otherwise control drilling, completion and operating costs and capital expenditures, generate cash flows, pay down or refinance indebtedness, achieve, reach or otherwise meet initiatives, plans, goals, ambitions or targets with respect to emissions, other environmental matters, safety matters or other ESG (environmental/social/governance) matters, pay and/or increase regular and/or special dividends or repurchase shares 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 such assumptions are accurate or will prove to have been correct or that any of such expectations will be achieved (in full or at all) or will be achieved on the expected or anticipated timelines.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.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 (NGLs), 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 (i) economically develop its acreage in, (ii) produce reserves and achieve anticipated production levels and rates of return from, (iii) decrease or otherwise control its drilling, completion and operating costs and capital expenditures related to, and (iv) maximize reserve recovery from, its existing and future crude oil and natural gas exploration and development projects and associated potential and existing drilling locations;
•the success of EOG's cost-mitigation initiatives and actions in offsetting the impact of inflationary pressures on EOG's operating costs and capital expenditures;
•the extent to which EOG is successful in its efforts to market its production of crude oil and condensate, NGLs and natural gas;
•security threats, including cybersecurity threats and disruptions to our business and operations from breaches of our information technology systems, physical breaches of our facilities and other infrastructure or breaches of the information technology systems, facilities and infrastructure of third parties with which we transact business, and enhanced regulatory focus on prevention and disclosure requirements relating to cyber incidents;
•the availability, proximity and capacity of, and costs associated with, appropriate gathering, processing, compression, storage, transportation, refining, liquefaction and export facilities;
•the availability, cost, terms and timing of issuance or execution of mineral licenses and leases and governmental and other permits and rights-of-way, and EOG's ability to retain mineral licenses and leases;
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•the impact of, and changes in, government policies, laws and regulations, including climate change-related regulations, policies and initiatives (for example, with respect to air emissions); tax laws and regulations (including, but not limited to, carbon tax and emissions-related legislation); environmental, health and safety laws and regulations relating to disposal of produced water, drilling fluids and other wastes, hydraulic fracturing and access to and use of water; laws and regulations affecting the leasing of acreage and permitting for oil and gas drilling and the calculation of royalty payments in respect of oil and gas production; laws and regulations imposing additional permitting and disclosure requirements, additional operating restrictions and conditions or restrictions on drilling and completion operations and on the transportation of crude oil, NGLs and natural gas; laws and regulations with respect to financial derivatives and hedging activities; and laws and regulations with respect to the import and export of crude oil, natural gas and related commodities;
•the impact of climate change-related policies and initiatives at the corporate and/or investor community levels and other potential developments related to climate change, such as (but not limited to) changes in consumer and industrial/commercial behavior, preferences and attitudes with respect to the generation and consumption of energy; increased availability of, and increased consumer and industrial/commercial demand for, competing energy sources (including alternative energy sources); technological advances with respect to the generation, transmission, storage and consumption of energy; alternative fuel requirements; energy conservation measures and emissions-related legislation; decreased demand for, and availability of, services and facilities related to the exploration for, and production of, crude oil, NGLs and natural gas; and negative perceptions of the oil and gas industry and, in turn, reputational risks associated with the exploration for, and production of, crude oil, NGLs and natural gas;
•continuing political and social concerns relating to climate change and the greater potential for shareholder activism, governmental inquiries and enforcement actions and litigation and the resulting expenses and potential disruption to EOG's day-to-day operations;
•the extent to which EOG is able to successfully and economically develop, implement and carry out its emissions and other ESG-related initiatives and achieve its related targets, ambitions and initiatives;
•EOG's ability to effectively integrate acquired crude oil and natural gas properties into its operations, identify and resolve existing and potential issues with respect to such properties and accurately estimate reserves, production, drilling, completion and operating costs and capital expenditures with respect to such properties;
•the extent to which EOG's third-party-operated crude oil and natural gas properties are operated successfully, economically and in compliance with applicable laws and regulations;
•competition in the oil and gas exploration and production industry for the acquisition of licenses, leases and properties;
•the availability and cost of, and competition in the oil and gas exploration and production industry for, employees, labor and other personnel, facilities, equipment, materials (such as water, sand, fuel 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, liquefaction, compression, storage, transportation, and export 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;
•the duration and economic and financial impact of epidemics, pandemics or other public health issues;
•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 conflicts), including in the areas in which EOG operates;
•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; and
•the other factors described under ITEM 1A, Risk Factors of EOG's Annual Report on Form 10-K for the year ended December 31, 2023, 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.
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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.
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PART I. FINANCIAL INFORMATION
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
EOG RESOURCES, INC.
EOG's exposure to commodity price risk, interest rate risk and foreign currency exchange rate risk is discussed in (i) the "Financial Commodity Derivative Transactions," "Financing" and "Outlook" sections of "Management's Discussion and Analysis of Financial Condition and Results of Operations - Capital Resources and Liquidity" included in EOG's Annual Report on Form 10-K for the year ended December 31, 2023, filed on February 22, 2024 (EOG's 2023 Annual Report); and (ii) Note 12, "Risk Management Activities," to EOG's Consolidated Financial Statements included in EOG's 2023 Annual Report. For updated information regarding EOG's financial commodity and other derivative contracts and physical commodity contracts, see (i) Note 12, "Risk Management Activities" to EOG's Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q; (ii) "Management's Discussion and Analysis of Financial Condition and Results of Operations - Results of Operations - Operating Revenues" in this Quarterly Report on Form 10-Q; and (iii) "Management's Discussion and Analysis of Financial Condition and Results of Operations - Capital Resources and Liquidity - Financial Commodity and Other Derivative Transactions" in this Quarterly Report on Form 10-Q.
ITEM 4. CONTROLS AND PROCEDURES
EOG RESOURCES, INC.
Disclosure Controls and Procedures. EOG's management, with the participation of EOG's principal executive officer and principal financial officer, evaluated the effectiveness of EOG's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (Exchange Act)) as of the end of the period covered by this Quarterly Report on Form 10-Q (Evaluation Date). Based on this evaluation, EOG's principal executive officer and principal financial officer have concluded that EOG's disclosure controls and procedures were effective as of the Evaluation Date in ensuring that information that is required to be disclosed in the reports EOG files or furnishes under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the United States Securities and Exchange Commission's rules and forms and (ii) accumulated and communicated to EOG's management, as appropriate, to allow timely decisions regarding required disclosure.
Internal Control Over Financial Reporting. There were no changes in EOG's internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act) that occurred during the quarterly period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, EOG's internal control over financial reporting.
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PART II. OTHER INFORMATION
EOG RESOURCES, INC.
ITEM 1.LEGAL PROCEEDINGS
See Part I, Item 1, Note 8 to Condensed Consolidated Financial Statements, which is incorporated herein by reference.
Item 103 of Regulation S-K promulgated under the Securities Exchange Act of 1934 (as amended, Exchange Act) requires disclosure regarding certain proceedings arising under federal, state or local environmental laws when a governmental authority is a party to the proceedings and such proceedings involve potential monetary sanctions that EOG reasonably believes will exceed a specified threshold. Pursuant to such item, EOG will be using a threshold of $1 million for purposes of determining whether disclosure of any such proceedings is required. EOG believes proceedings under this threshold are not material to EOG's business and financial condition (the choice of this threshold does not imply that matters with potential monetary sanctions in excess of $1 million are necessarily material to EOG's business or financial condition). Applying this threshold, there are no environmental proceedings to disclose for the quarter ended September 30, 2024.
ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
The following table sets forth, for the periods indicated, EOG's share repurchase activity:
Period
Total
Number of
Shares Purchased (1)
Average Price Paid Per Share
Total Value of
Shares Purchased as
Part of Publicly
Announced Plans or Programs (2)
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2)(3)
July 1, 2024 - July 31, 2024
809,797
$
124.95
$
99,999,963
$
2,488,730,725
August 1, 2024 - August 31, 2024
1,866,846
125.82
233,822,313
2,254,908,412
September 1, 2024 - September 30, 2024
3,796,035
121.10
423,737,349
1,831,171,063
Total
6,472,678
122.94
$
757,559,625
(1)Includes 6,161,618 shares repurchased during the quarter ended September 30, 2024, at an average price of $122.95 per share (inclusive of commissions and transaction fees), pursuant to the Share Repurchase Authorization (as defined and further discussed below); such repurchases count against the Share Repurchase Authorization. The share repurchases effected during the period July 1, 2024 through August 1, 2024 were made pursuant to a Rule 10b5-1 trading plan entered into by EOG on June 28, 2024. Also includes 311,060 total shares that were withheld by or returned to EOG during the quarter ended September 30, 2024, at an average price of $122.86 per share, (i) in satisfaction of tax withholding obligations that arose upon the exercise of employee stock options or stock-settled stock appreciation rights or the vesting of restricted stock, restricted stock unit or performance unit grants or (ii) in payment of the exercise price of employee stock options (such shares do not count against the Share Repurchase Authorization).
(2)In November 2021, EOG's Board of Directors (Board) established a new share repurchase authorization that allows for the repurchase by EOG of up to $5 billion of its common stock (Share Repurchase Authorization). As of September 30, 2024, (i) EOG had repurchased an aggregate 26,680,275 shares at a total cost of $3,168,828,937 (inclusive of commissions and transaction fees) under the Share Repurchase Authorization and (ii) an additional $1,831,171,063 of shares remained available for repurchases under the Share Repurchase Authorization. Subsequent to September 30, 2024, the Board increased the Share Repurchase Authorization from $5 billion to $10 billion, effective November 7, 2024.
(3)Under the Share Repurchase Authorization, EOG may repurchase shares from time to time, at management's discretion, in accordance with applicable securities laws, including through open market transactions, privately negotiated transactions or any combination thereof. The timing and amount of repurchases is at the discretion of EOG's management and depends on a variety of factors, including the trading price of EOG's common stock, corporate and regulatory requirements, and other market and economic conditions. Repurchased shares are held as treasury shares and are available for general corporate purposes. The Share Repurchase Authorization has no time limit, does not require EOG to repurchase a specific number of shares and may be modified, suspended or terminated by the Board at any time.
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ITEM 5. OTHER INFORMATION
Trading Plans/Arrangements.On August 30, 2024, Jeffrey R. Leitzell, EOG's Executive Vice President and Chief Operating Officer, adopted a written Rule 10b5-1 trading arrangement in respect of EOG's common stock that is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) promulgated under the Securities Exchange Act of 1934 (as amended). The arrangement, which was adopted at a time when Mr. Leitzell was not in possession of material, non-public information regarding EOG, provides for the sale by Mr. Leitzell of:
(1) up to 15,704 shares currently held by Mr. Leitzell;
(2) 55% of the net shares to be received by Mr. Leitzell upon the vesting of 5,665 shares of restricted stock previously granted to him;
(3) 65% of the net shares to be received by Mr. Leitzell upon the vesting of 4,841 shares of restricted stock previously granted to him; and
(4) the net shares to be received by Mr. Leitzell in connection with the exercise of 8,190 stock-settled stock appreciation rights (SARs) previously granted to him;
in each case, during the specific time periods and subject to the limit price (i.e., trigger price) conditions set forth in the arrangement (and, in the case of the grants of restricted stock and SARs, subject to EOG's withholding of shares in satisfaction of the tax withholding obligations arising upon such vestings and exercise). Mr. Leitzell's Rule 10b5-1 trading arrangement will commence following the applicable cooling-off period and will terminate upon the earlier of (i) the completion of all sales specified in the trading arrangement and (ii) December 31, 2026.
During the quarter ended September 30, 2024, no other Section 16 officer of EOG, and no director of EOG, adopted or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (in each case, as defined in Item 408(a) of Regulation S-K).
Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
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Inline XBRL Calculation Linkbase Document.
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Inline XBRL Definition Linkbase Document.
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Inline XBRL Label Linkbase Document.
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Inline XBRL Presentation Linkbase Document.
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Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
*Attached as Exhibit 101 to this report are the following documents formatted in XBRL (Extensible Business Reporting Language): (i) the Condensed Consolidated Statements of Income and Comprehensive Income - Three Months and Nine Months Ended September 30, 2024 and 2023, (ii) the Condensed Consolidated Balance Sheets - September 30, 2024 and December 31, 2023, (iii) the Condensed Consolidated Statements of Stockholders' Equity - Three Months and Nine Months Ended September 30, 2024 and 2023, (iv) the Condensed Consolidated Statements of Cash Flows - Nine Months Ended September 30, 2024 and 2023 and (v) the Notes to Condensed Consolidated Financial Statements.
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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 thereunto duly authorized.
EOG RESOURCES, INC.
(Registrant)
Date:
November 7, 2024
By:
/s/ ANN D. JANSSEN
Ann D. Janssen
Executive Vice President and Chief Financial Officer
(Principal Financial Officer and Duly Authorized Officer)