HOUSTON - EOG Resources, Inc. (EOG) today reported fourth quarter 2019 net income of $637 million, or $1.10 per share, compared with fourth quarter 2018 net income of $893 million, or $1.54 per share.

Net cash from operating activities for the fourth quarter 2019 was $1.8 billion. For the full year 2019, EOG reported net income of $2.7 billion, or $4.71 per share, compared with net income of $3.4 billion, or $5.89 per share, for the full year 2018. Net cash from operating activities for the full year 2019 was $8.2 billion.

Adjusted non-GAAP net income for the fourth quarter 2019 was $787 million, or $1.35 per share, compared with adjusted non-GAAP net income of $718 million, or $1.24 per share, for the same prior year period. Adjusted non-GAAP net income for the full year 2019 was $2.9 billion, or $4.98 per share, compared with adjusted non-GAAP net income of $3.2 billion, or $5.54 per share, for the full year 2018.

Increased crude oil production from high-return operating areas and reductions in per-unit operating costs contributed to EOG's strong fourth quarter 2019 financial results. Adjusted earnings per share, discretionary cash flow and adjusted EBITDAX increased in the fourth quarter 2019 compared with the same prior year period, demonstrating EOG's resiliency and ability to overcome declines in commodity prices.

Fourth Quarter and Full Year 2019 Operating Review

Capital efficiency improvements from increased well productivity and cost reductions across EOG's premium plays supported strong operating and financial performance in 2019. United States crude oil volumes grew 15 percent to 455,500 barrels of oil per day (Bopd). Total company natural gas liquids production increased 16 percent, while total company natural gas volumes grew 12 percent.

Total crude oil volumes in the fourth quarter 2019 were 468,900 Bopd, which was above the midpoint of the target range and represents an eight percent increase compared with the same prior year period. Natural gas liquids and natural gas volumes increased by 17 percent and 15 percent, respectively, during this same period. EOG incurred total expenditures of $1.5 billion in the fourth quarter. Total cash capital expenditures before acquisitions of $1.4 billion were below the low end of the target range.

EOG continued to lower operating costs during the fourth quarter 2019. Lease and well costs declined 13 percent, transportation costs fell five percent and depreciation, depletion and amortization (DD&A) expenses fell six percent, all on a per-unit basis compared with the same prior-year period. The company also continued to implement sustainable efficiency improvements to reduce well costs. The fourth quarter improvements brought full-year 2019 well cost reductions to seven percent, two percentage points ahead of the target.

EOG generated $2.1 billion of discretionary cash flow in the fourth quarter 2019. After considering total cash capital expenditures before acquisitions of $1.4 billion, EOG generated free cash flow during the fourth quarter 2019 of $723 million. For the full year 2019, EOG generated $8.1 billion of discretionary cash flow and incurred total cash capital expenditures before acquisitions of $6.2 billion, resulting in free cash flow of $1.9 billion. EOG believes this definition of free cash flow is more consistent with that utilized by other companies in the industry.

'Year after year, EOG keeps getting better, delivering record operating performance in 2019. Significant capital efficiency improvements from strong well productivity and sustainable cost reductions allowed us to deliver higher production with less capital investment than we planned at the beginning of the year,' said William R. 'Bill' Thomas, Chairman and Chief Executive Officer. 'We did this while generating substantial free cash flow, strengthening our financial position and increasing the dividend. This was the third consecutive year since our transition to premium drilling that EOG delivered double-digit returns and production growth along with strong free cash flow.'

2020 Capital Plan

The purpose of EOG's annual capital program is to generate high returns on investment and increase the company's business value. Exploration and development expenditures for 2020 are expected to range from $6.3 billion to $6.7 billion, including facilities and gathering, processing and other expenditures, and excluding acquisitions and non-cash exchanges. The disciplined capital program supports growth in crude oil production of 10 to 14 percent in 2020 and funds dividend payments with net cash from operating activities at less than $50 oil.

Due to the decline in crude oil prices, the 2020 capital plan allocates slightly less capital to growing oil production than in 2019. To continue to improve the company, the 2020 plan allocates more capital than in 2019 to fund new high-quality drilling potential and high-return infrastructure to further lower EOG's cost structure and environmental footprint. With the benefit of sustainable cost reductions and operational efficiencies, EOG expects to complete approximately 800 net wells in 2020 compared with 750 net wells in 2019. Activity will remain focused in EOG's highest rate-of-return oil assets in the Delaware Basin, Eagle Ford and Rocky Mountain Area.

'EOG's 2020 capital plan reflects continued improvement in capital efficiency, highlights the resiliency of our business model, and ensures the capital program and dividend payments can be funded at a conservative oil price. Looking to the future, our 2020 plan also invests in new high-return drilling potential and infrastructure development to lower costs and further improve the company,' Thomas said. 'EOG's sustainable competitive advantages already position us as one of the lowest cost oil producers in the global market and we are poised to extend our cost advantage well into the future.'

Dividend Increase

The board of directors declared a dividend of $0.375 per share on EOG's Common Stock, an increase of 30 percent. The dividend will be payable April 30, 2020, to stockholders of record as of April 16, 2020. The indicated annual rate is $1.50 per share.

'EOG's high-return premium drilling program and our low cost structure allow us to continue upholding the commitment we have made to return more cash to shareholders. This latest dividend increase demonstrates the confidence we have in our ability to grow cash flow, generate high returns through our premium well strategy and improve our future inventory with high quality new drilling potential,' Thomas said.

Reserves

At year-end 2019, total company net proved reserves were 3,329 million barrels of oil equivalent (MMBoe), a 14 percent increase compared with year-end 2018. Net proved reserve additions from all sources, excluding revisions due to price, replaced 253 percent of EOG's 2019 production at a finding and development cost of $8.21 per barrel of oil equivalent. Revisions due to price decreased net proved reserves by 60 MMBoe and asset divestitures decreased net proved reserves by five MMBoe.

About EOG

EOG Resources, Inc. (NYSE: EOG) is one of the largest crude oil and natural gas exploration and production companies in the United States with proved reserves in the United States, Trinidad, and China.

Contact:

David Streit

Tel: 713-571-4902

(C) 2020 Electronic News Publishing, source ENP Newswire