EOG Resources, Inc. (EOG) Q3 2026 Earnings Call Transcript

Operator: Good day, everyone. And welcome to the EOG Resources Third Quarter 26 Earnings Results Conference Call. As a reminder, this call is being recorded. For opening remarks and introductions, I will turn the call over to EOG Resources' Vice President of Investor Relations, Mr. Pearce Hammond. Please go ahead, sir.

Pearce Wheless Hammond Jr.: Good morning, and thank you for joining us for the EOG Resources third Quarter 26 Earnings Conference Call. I am Pearce Hammond, Vice President, Investor Relations. An updated investor presentation has been posted to the Investor section of our website and we will reference certain slides during today's discussion. A replay of this call will be available on our website beginning later today. As a reminder, this conference call includes forward looking statements. Factors that could cause our actual results to differ materially from those in our forward looking statements have been outlined in the earnings release and EOG's SEC filings. This conference call may also contain certain historical and forward looking non GAAP financial measures. Definitions and reconciliation schedules for these non GAAP measures and related discussion can be found on the Investor Relations section of EOG's website. In addition, any reserve estimates on this conference call may include estimated potential reserves as well as estimated resource potential, not necessarily calculated in accordance with the SEC's reserve reporting guidelines. Participating on the call this morning are Ezra Y. Yacob, Chairman and Chief Executive Officer Jeffrey R. Leitzell, Chief Operating Officer Ann D. Janssen, Chief Financial Officer Jeffrey Hibbert, Senior Vice President, Finance and Keith Trasko, Senior Vice President, Exploration and Production. Here's Ezra.

Ezra Y. Yacob: Thanks, Pearce. Good morning and thank you for joining us. 2026 has been an outstanding year for EOG. And I am pleased to report that through 3 quarters, we have delivered exceptional results that reflect the strength of our assets the efficiency of our operations, the dedication of our teams across our portfolio. Our third quarter results include record oil, NGL, and natural gas production, and excellent cost discipline as total per unit cash operating costs and DD&A came in below guidance midpoints. This operational execution combined with strong price realizations produced superb financial results. EOG's business and the outlook for the company have never been stronger. As a testament to that, we are pleased to announce an 8% increase in our regular dividend for 2027. The increase reflects confidence in our business, and EOG's pristine balance sheet both of which support our ability to sustain the higher dividend through industry cycles. EOG has grown its regular dividend at almost a 20% compound annual growth rate over 28 years without ever cutting or suspending it. This is a differentiated track record reflecting our enduring commitment to the regular dividend as the primary means for cash return to shareholders. Beyond the regular dividend, cash return remains a priority. And we continue to expect to return a minimum of 70% of free cash flow to investors this year. The EOG culture is 1 of continuous improvement. As such, we remain focused on further strengthening our business for the long term and 2 recent developments illustrate this commitment. First, we signed a new long term natural gas supply agreement with ENGIE which expands our access to premium markets. Linked to JKM pricing, this agreement lifts our premium price exposure across LNG feed gas agreements to more than 1 billion cubic feet per day by 2030. This is a clear differentiator for EOG and a direct result of our marketing strategy. Which is built on flexibility, diversification, control and appropriate management of contract duration to support strong margins and netbacks for our asset base. In addition, this new long term agreement allows us to supply independently certified natural gas which reflects EOG's ability to access further differentiated markets. Second, we approved the expansion of our Janus gas processing plant in the Delaware Basin. In the current environment, where we are starting to see a tighter market for gas processing, the investment in Janus provides outsized benefits to our netbacks. The expansion has strong operating synergies with our existing infrastructure, supporting robust returns, and long term value creation. Turning to the oil macro outlook. Market fundamentals remain tight. Middle East exports have recovered from lows reached in the Spring, However, the recovery has been uneven. While Strategic Petroleum Reserve Releases And Coordinated Refinery Measures Across The G7 are providing some relief at the margin, they are not a substitute for consistent and reliable supply from the region. The security of these flows remains a key variable in shaping near term market conditions. While we expect oil prices to remain volatile, we continue to be constructive on oil market fundamentals for several reasons. First, oil demand has demonstrated considerable resilience. Despite elevated product prices, consumption has held firm and as supply has returned to the market, demand has recovered alongside it. This reinforces our view that demand observed early in the conflict was temporary in nature rather than a structural shift. Second, although the pace of inventory draws is beginning to moderate, global inventories remain well below their 5 year average. We expect the process of rebuilding stocks to those historic levels will take considerable time. Third, the supply recovery remains fragile. As recent events have shown, the restoration of flows from the Middle East is subject to ongoing disruption risk. Taken together, we expect oil prices to remain above mid cycle price levels in both the near and medium term, and we see the balance of risks supporting upside price volatility. Turning to the natural gas outlook, we continue to see the North American market evolve from a seasonal commodity story into a strategic energy resource. While storage levels will continue to fluctuate year to year, underlying demand remains robust with LNG exports, electricity demand industrial growth and grid reliability increasingly competing for domestic supply. Our medium to long term outlook remains constructive and our deliberate investment in building a low cost natural gas position with access to premium markets and as a complement to our core oil business, provides ample opportunity to capitalize on this demand growth. Looking to 2027, we are well positioned with tremendous flexibility. Earlier this year, we redirected capital to oil assets, raising liquids production setting a strong foundation for growth in 2027. If current oil supply demand fundamentals persist, we believe the market needs more oil supply next year. Accordingly, we anticipate staying consistent with our 3 year scenario, and expect to deliver low single digit oil production growth in 2027. Regardless of commodity prices, EOG's commitment is to deliver sustainable value creation through industry cycles by being among the highest return lowest cost producers, while maintaining strong environmental performance and playing a meaningful role in the long term future of energy. This mission rests on 4 pillars: capital discipline, operational excellence, sustainability, and culture. Our decentralized non bureaucratic structure enables value creation in the field at the asset level. It is our unique culture that drives a sustainable competitive advantage. And we expect to continue extending that advantage into the future. In summary, we are performing at a high level in 2026 and are positioned to finish the year strong and carry significant momentum into 2027. We remain focused on delivering sustainable free cash flow maintaining operational excellence and creating long term value for our shareholders. I will now turn it over to Ann for details on our financial results.

Ann D. Janssen: Thank you, Ezra. EOG delivered another quarter of outstanding financial performance, underscoring the power of our consistent approach to capital allocation which is invest with discipline, return cash and maintain a pristine balance sheet. In the third quarter, we delivered adjusted earnings per share of $4.87 and adjusted cash flow from operations per share of $7.23 yielding free cash flow of $2.2 billion We returned just over $1.5 billion to shareholders during the third quarter, approximately $540 million to our regular dividend and $1 billion in share repurchases. The foundation of our cash return remains the regular dividend which we are raising by 8% to an indicated annual rate of $4.40 per share. This dividend increase is a reflection of EOG's ability to continue increasing the free cash flow potential of the company through our commitment to capital discipline and operational excellence. Which deliver 1 of the industry's lowest breakeven oil prices. Our 2026 plan funds production growth domestic and international exploration and our regular dividend all at a WTI breakeven price below $50 per barrel. At strip pricing and using guidance midpoints, our 2026 plan generates $9.7 billion in free cash flow. Our regular dividend yield remains attractive versus peers as well as the S&P 500 and we continue to supplement the regular dividend with opportunistic share repurchases. Since we started repurchasing shares in 2023, we have reduced our share count by 13%. With $10.6 billion remaining under our repurchase authorization at September 30, we have substantial capacity to act. Our balance sheet remains a strategic asset We ended the quarter with $5.7 billion in cash, and net debt of approximately $2.2 billion Our leverage target of total debt below 1x EBITDA at bottom cycle prices of $45 WTI and $2.50 Henry Hub remains among the most stringent in the sector That strength gives us a stable foundation to navigate a dynamic macro environment with confidence. We are generating significant free cash flow returning meaningful cash to shareholders and maintaining the flexibility to capitalize on opportunities as they emerge. Operational excellence, a low cost structure financial discipline position us extremely well for sustained long term value creation. With that, I will turn it over to Jeffrey R. Leitzell to discuss our operating results.

Jeffrey R. Leitzell: Thanks, Ann. I would like to begin by recognizing our employees for their outstanding performance and execution. In the third quarter, we delivered exceptional operational results. Highlighted by record oil, NGL and natural gas volumes with all 3 streams above our guidance midpoint. Total per unit cash operating costs and DD&A both came in below guidance midpoint. Reflecting disciplined execution in the quarter. Third quarter capital expenditures also came in below the guidance midpoint. Primarily driven by shifts in our operational timing. For the full year 2026, we expect to deliver 5% oil production growth and 14% total production growth with capital expenditures unchanged at $6.5 billion The focus of our international activity continues to be applying EOG's operating model to unlock resources of significant scale while maintaining the capital discipline and return thresholds our shareholders expect. This is not about international growth for its own sake. it is about taking what EOG does best to places where we believe we can create substantial value. We remain very excited about the progress we are making on our UAE oil concession. Our first 2 1-mile laterals continue to exceed our expectations and during their first 30 days on artificial lift, have averaged stabilized production of 700 barrels of oil per day per well. Our operations are running smoothly as we focus on drilling and completing 2 plus mile wells. We are assessing several items to move us towards a decision on commerciality. These include completing wells in different areas across the approximate 900 thousand-acre concession, testing new landing zones, assessing geo steering and targeting execution, confirming the fluid mix relative to our initial model, evaluating options for artificial lift, and appraising well performance over a longer time period. In Bahrain, we remain extremely pleased with our partnership with Bapco. However, operations have remained intermittent due to the ongoing conflict. While we hope to have well results this year, our priority is the safety of our employees, contractors and partners in the region. Turning to domestic operations, our Delaware Basin team continues to execute on our development strategy. With well performance this year above our expectations. We continue to develop this world class asset at the right pace delivering operational efficiencies impressive well costs of less than $710 per foot and peer leading average per well rate of return. We are pleased to announce the expansion of the Janus gas processing plant in the Delaware Basin. This strategic infrastructure project will double the current plant's capacity to 600 million cubic feet per day with targeted completion in the second half of 28. The total cost should be approximately $300 million with 2-thirds of that spending occurring in 2027. Janus has added significant value since it is been online delivering year to date net back uplifts of greater than $0.65 per Mcf while running at a greater than 99% utilization year to date. The expansion benefits from embedded synergies from our initial 300 million cubic feet per day processing capacity and is expected to deliver a rate of return in excess of 30%. This project will enhance our operational control and diversify our processing options at a time when processing capacity is tightening as more natural gas production comes online due to improved pipeline takeaway capacity. Given the proven performance of the existing facility, we believe this attractive high return investment represents a compelling opportunity to extend the value created by Janus for years to come. In the Utica, operations continue to run at a high level. Year to date, we have improved drilled feet per day by 24% and completed lateral feet per day by 14%. Compared to the first half of 2025 with well costs at less than $600 per foot. We expect to have an in basin sand mine open by the end of this year and anticipate cost savings in excess of $300 thousand per well. The new Ohio sand mine underscores our operational excellence and use of self sourced materials to reduce well costs and improve operational efficiencies. In the Eagle Ford, operations are also performing strongly. Year to date, we have increased drilled feet per day by 4% and completed lateral feet per day by 15% compared to 2025. These efficiency gains have helped drive further cost reductions with Eagle Ford wells cost at less than $525 per foot. Further south in Dorado, this low cost dry gas asset continues to improve. In 2026, we have increased average lateral length by 16% compared to last year with well costs at less than $700 per foot. In addition, the countercyclical investment in the Verde gas pipeline continues to pay dividends. As we are realizing net back uplifts of $0.50 per Mcf year to date. Turning to service cost environment, diesel and steel prices remain elevated. But we have mitigated the impact and continue to expect a low single digit reduction in well costs this year. We are seeing services tighten and expect modest inflation next year for drilling and completions. Finally, I would like to touch on 2 non core asset dispositions we executed this year. Taking advantage of a favorable market environment we recently divested our legacy Barnett and Woodford positions for an aggregate $400 million In the third quarter, these assets had total production of 16 thousand barrels of oil equivalent per day including 2,000 barrels of oil per day. We have been able to meet our annual production guidance that we outlined earlier this year despite these divestitures. This illustrates the strength and quality of our core assets to be able to deliver capital efficient volumes. Overall, the divestitures were an efficient way to sharpen our focus on other high return assets and exploration prospects in our portfolio. With that, I will turn it back to Ezra for closing remarks.

Ezra Y. Yacob: Thanks, Jeffrey. Before we open the line up for questions, I would like to leave you with 4 key takeaways. First, EOG delivered an outstanding third quarter. We posted record oil, NGL and natural gas production and total per unit cash operating costs and DD&A both came in below guidance midpoints. Second, commitment to shareholders is unwavering. We raised the regular dividend by 8% extending our 28 year dividend payment track record. Third, we continue to strengthen the portfolio for the long term including our new LNG agreement with ENGIE that lifts our premium priced LNG feed gas exposure to more than 1 billion cubic feet per day by 2030, and the Janus gas processing plant expansion in the Delaware Basin. Finally, we are constructive on oil fundamentals. If current oil supply demand fundamentals persist, we are well positioned to deliver low single digit oil production growth in 2027. I would like to finish by thanking Ann Jansen for her dedicated service to EOG over the past 31 years. Ann will be retiring next year and Jeffrey Hibbert will be assuming the CFO role on January 1. Ann has long recognized the value of a peer leading balance sheet strong financial results sustainable free cash flow, and most importantly, developing EOG's next generation of leaders is the path to consistently creating long term value for our shareholders. I am grateful for Ann's leadership and her contributions to the financial strategy and the strength of EOG. I want to congratulate Jeffrey Hibbert on his new role and offer Ann D. Janssen and her family our best wishes in retirement. With that, we will turn it back to the operator for questions.

Operator: Thank you. The question and answer session will be conducted electronically. Do so by pressing the star key, followed by the digit 1, on your touch tone telephone. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. You are allowed 1 question and 1 follow-up. We will take as many questions as time permits. Once again, please press *1 on your touch-tone telephone to ask a question. To remove yourself from the queue, press *2. The first question today comes from Neil Singhvi Mehta with Goldman Sachs. Please go ahead.

Neil Mehta: Hey, Ezra. Congratulations, Ann, and congratulations, Jeffrey, As well as you take on this new role. And, a couple update questions for you guys. First is the long term sales gas sales agreement that is been linked into JKM here. Ezra, can you spend some time talking about this and how mechanically it can work and give us a sense of the quantification of what it could mean for a cash flow uplift in a normalized JKM environment.

Jeffrey R. Leitzell: Yeah, Neil. Thanks for the question. it is Jeffrey Hibbert here. Maybe I will start. So the gas sales agreement announced with ENGIE provides additional pricing diversification for our gas volumes. With many similarities to our deal with Cheniere, So some of the specifics: 140 thousand MMBtu per day is linked to JKM with deducts. it is a 10-year agreement. It starts by 2030. And the offtake is at the US Gulf Coast, which allows us to source gas from multiple basins. The addition of the NG agreement increases our LNG feed gas associated volume to over 1 Bcf gross per day by 2030. Additionally, we increased exposure to premium prices premium price indices really linked to strong markets with growing long term demand. Our ability to supply gas from across our low cost multi basin portfolio in combination with our strong balance sheet make us a preferred partner for long term agreements that support strong netback margins and returns. We are really seeing those benefits, today as you saw our LNG exposure, our gas realizations this quarter came out right at $3.73 and we expect that to continue as you see in our guidance really going forward. Yes.

Neil Mehta: And then, Ezra and team, can you spend some time just talking about the M&A strategy here? Historically, this has been such an organic company. Of course, you have done Encino and Yates over the years. But as commodity prices eventually normalize, are there how do you think about potential for corporate M&A or larger scale M&A? Or is this more of a bolt on type of story? Going forward?

Ezra Y. Yacob: Yes, Neil. it is Ezra. Listen, nothing has changed with our corporate strategy, our long term strategy. Think over multiple decades here, a cornerstone of our company's value proposition has been our ability as an organic exploration outfit, as a first mover utilizing data and technology to continue to unlock resources and turn them into highly economic high return value opportunities, investment opportunities for our investors. We do, as you said, at the right time of the cycle, are very interested in doing bolt ons small bolt ons things that typically do not come with a lot of production but offer us the ability to do what we do best, which is drill and complete horizontal wells and bring that value forward. Corporate M&A has typically never been something that we see a significant amount of value in when we look at the rest of our portfolio and inventory. But again, we continue to evaluate opportunities through the cycles that we and try to determine the best way to create long term shareholder value.

Operator: The next question comes from Stephen Richardson with Evercore. Please go ahead.

Stephen Richardson: Hey, good morning. I was wondering if I could follow-up on Jeffrey R. Leitzell's comments about expectations for some positive inflation in 2027. Could you maybe just walk us through where you are seeing that be it consumables other services? And then maybe just how well positioned are you to absorb that not only from the below ground efficiencies you are talking about in the plays, but also either tubulars or all the things that EOG normally does to kind of manage an inflationary environment if you could?

Jeffrey R. Leitzell: Yes, Steve. This is Jeffrey R. Leitzell. Let me give you a little bit of color on it. So kind of this year, we started seeing some modest well cost increases over the last few months as we have talked about. And the market for high spec equipment, it was stable at the beginning of the year, but it is really tightened after kind of the start of the Iran conflict. And we have seen service utilization at a fairly high level. So now we are starting to see that tighter service market translate into price increases. And then, just to know that level of increase has not really been consistent across the basins and it is varied regionally. All as you talked about, we have seen cost increase for diesel and steel progressively over the course of the year adding additional inflationary headwinds. But however, in aggregate, I would say for 2026, we are still on track for that single digit average year over year well cost reduction just because of our efficiency gains have more than offset the rising costs that we are seeing in the value chain. And then looking forward for 2027, we are currently expecting some upward service pricing pressure as well as higher steel and diesel costs. Our main focus remains on really leveraging all of our operational capabilities the scale of the company and our purchasing power to really manage through those inflationary headwinds And just to give you a little bit more color kind of breaking things down, I mean, on the service side, first, what we will do is we will look to offset some of those headwinds through our operational efficiencies, which we always say typically we see on average about 3% to 5% improvement in each year And then next, we will look to leverage our strong relationships with all of our service partners. And what we have done is we have really staggered all of our contracts in both length and renewal timing to really help mitigate the impact of those rising rates. And then lastly, I would say currently we have about 60% of our services contracted for 2027, which is really on the high end of our historical range. So we feel pretty good and well positioned on the service side. When looking at steel cost, we expect continued upward pressure for the but, internally,, what we have done is really lean on our direct sourcing and mill diversification to support keeping our prices really lower than the broader market. And at this point, we have already secured around half of our casing and tubular needs for 2027. So we continue to focus on just opportunistic inventory management with our supply chain group. So really any exposure I think on the steel side really would be more towards the second half of the year if prices keep increasing. And then lastly, just on the diesel side, while prices have increased meaningfully over the year, much of the impact of those higher prices on CapEx really have been pretty minimal, since 70% of our rigs we run off natural gas and 100% of our frac fleets also do. And then, you know, any other diesel increases we think, we will see. We will just be kind of in the form of fuel surcharges from some of our other service providers. So ultimately, I think we feel really, really good at where we are at. We are well ahead of schedule preparing for next year, and we will just look to continue to insulate ourselves from any potential inflation as we move forward towards the end of the year.

Stephen Richardson: Great. Thanks for the fulsome question. I was wondering if I could just quickly follow-up on natural gas markets. Understand the points on how strong your realizations have been the low cost supply perspective that you have. I was just wondering if you could talk about willingness to take on additional, be it pipeline projects or other things. Appreciate you are talking about Janus today on the processing side, but wondering if you could talk a little bit about beyond the wellhead If you have interest in other projects or other things as you look at the outlook here.

Ezra Y. Yacob: Thanks, Steve. This is Ezra. At times in the past, especially parts of the cycle where we are right now, we have taken on some of those strategic infrastructure opportunities. Where we see significant value. it is not a it is not a primary focus for us though. Typically, we see the returns profile, our investments are better spent bringing low cost oil and gas to the surface rather than moving it into the markets. Tend to prefer to partner with high quality partners to be able to move our molecules to the market. But 2 things caused us to step into that space. it is, first, if we are unwilling to find a strong partner to be able to do that, And the second is, at times, which is usually like current times where at the top of the cycle or high above mid cycle price ranges, the fees start to get a little bit higher, and there is enough value there for us to step in and capture that for our shareholders. And that is really in line with how Jeffrey R. Leitzell described it this morning in the script is we are seeing an opportunity here with Janus not only to capture the synergies that we have with the Janus gas plant expansion, but really to expand the margin there in an environment where we are seeing processing capacity get a little bit tighter and the fees have a little bit of upward pressure to them.

Operator: The next question comes from Doug Leggate with Wolfe Research. Please go ahead.

Doug Leggate: Thank you, everybody. Good morning, Ezra and congratulations to you on especially on your balance sheet diligence. I am sure we will come back to that. Ezra, the other question from Neil was on inorganic growth and resource. I. I would like to ask you about organic opportunities, particularly your exploration plays. And I wonder if you could touch on 2 specifically. First 1, obviously, Alaska. You have now got your acreage position, it looks like. what is your preconcept And any color you can offer on your recent permitting in Frio County around the Pearsall shale in South Texas would be much appreciated. Thank you.

Ezra Y. Yacob: Yes, Doug. This is Ezra. Appreciate the question. So let's start with Alaska. We have talked about it a little bit before. Had picked up on our Alaska activity kind of early on before anybody else. Before, in fact, we ended up leasing the-- we put all the leases together, But we put together some state leases in that area, and so we have got a good long runway. Those are 10-year leases in Alaska. And this play is a conventional oil play. it is an analog to some of the other Alaska plays that have been in the news recently, Pika and Willow. In general, I would say is Alaska is undergoing from the industry's perspective a bit of a renaissance by applying new technologies up there, especially on the seismic processing. Our prospect was identified through some loose 2D seismic lines and some well control. It is seismically identified. it is got some amplitude support with that 2D data. it is a bit of a difference formation than what is in Pika and Willow. it is a little bit younger sands, it is the Strata bluff sands, which are paleocene. Instead of kind of the Nanshuk formation. Because we are off to kind of the east side. Going forward, the strategy going forward for Alaska, like I said, it will take a little bit of time. The next step for us is to get some 3D data. We will be purchasing some 3D data as it becomes publicly available later next year. And we will reprocess that and that will be kind of the next step in evaluating the prospect that we have. And then going all the way down to South Texas for the Pearsall, that is a play that we have not really talked about yet. it is As I think everybody knows, we have Pearsall exists underneath our entire Eagle Ford oil acreage position, but starting about 2 years ago, we identified a bit of a sweet spot outside of our area, adjacent to, I would say, We leased it up organically. We have drilled a handful of wells there. it is in the oil window, maybe a bit more of a combo play. The well production looks pretty good, We have captured probably about 100 locations there And to be perfectly honest, while the play benefits from sharing activity in our Eagle Ford area, We still have a little bit of work to do to get the cost down to make those wells competitive with our core inventory. But like I said, we are excited by it. it is another step out organic opportunity that we were able to bring into the mix just because of our subsurface knowledge in the area.

Doug Leggate: 20 years ago, I want to say, right? But thanks, Ezra. My follow-up is a quick 1. It might be for you, might be for Ann. it is really just the quick comment about the way the balance sheet is today. There seems to be a lot of focus still on EOG's duration of production. I want to ask you about the duration of free cash flow to support that dividend bump and the sustainable dividend growth that you expect. Do you have the portfolio today to sustain the free cash flow as opposed to sustain the production mix, I guess is the core of my question? Thanks.

Ann D. Janssen: Yes, Doug. Maybe I will just give you the brief answer there. I mean, I think we think absolutely, and it really comes down to our low breakevens and that 12 billion BOE resource in addition to the financial strength of the company. So we test our dividend across multiple scenarios and really including bottom cycle price assumptions down even below $45. We feel very good about that dividend over the long term. In addition, I would just add, I feel like the regular dividend is extremely competitive with both the industry and the broader S and P 500. I think we have established a differentiated record, as Ezra said in his remarks, sustainable dividend growth. The company has grown our regular dividend at a compound annual rate of 20% over the last 28 years without any reduction or suspension of that dividend obligation. So, we have got strong confidence in our ability to continue to improve and remain committed to returning significant portion of our free cash flow to investors. With the regular dividend as the primary mode of cash return over the long term.

Operator: The next question comes from Phillip Jungwirth with BMO. Please go ahead.

Phillip Jungwirth: Yes, good morning, and thanks for taking the question. You mentioned in the script that the 3 year scenario should be the base case for next year. I guess after year 1, how would you say you are tracking this? I mean,, obviously, can see the production guidance, but it is also on the capital operating cost side. Plus just corporate with interest tax given the stronger macro. Since you are growing cash flow, free cash flow more than oil? And then just to stay on track into 2027, how much Utica or kind of elsewhere activity would you need to add to drive low single digit oil growth for EOG?

Ezra Y. Yacob: Yes. Philip, this is Ezra. it is really a pretty consistent activity levels going forward as Jeffrey R. Leitzell said in the opening script, you can kind of start with a Q4 run rate which means that activity level is pretty consistent. Of course, when you are looking at the CapEx, we do have the strategic infrastructure that we have talked about, the Janus expansion that would need to be contemplated on top of that. And then a little bit of increased growth, but it is really more on the margin than adding anything significant to capture that low single digit As we talked about before, we really took this year to kind of position ourselves to not only grow liquids production in 2026, but actually to position ourselves to be able to grow into 2027 as well. With regards to the 3 year scenario and where we are at here towards the end of year 1, obviously, the first year, there is been a significant increase in the commodity price from what we had forecasted before. Think what we have is illustrated on a $60 to $80 range over that 3 year period, and year 1 is obviously coming in at current strip somewhere right around $87 for the year 1. So that would lead us to know that ROCE is on the high side, free cash flow generation is on the high side. As far as maybe capital expenditures that were contemplated or not contemplated in 3 year scenario, really the only 1 would be that Janus. Would be on top of it. That was not originally into the 3 year scenario. And again, that is a strategic option for us that at the top of the cycle, feels like a great time to layer that in. And for 2027, it is essentially a $200 million capital investment that we are planning for.

Phillip Jungwirth: Okay. that is great to hear. And then this might also be contributing, but you noted in the script, Permian well performance outperforming your expectations of steady year on year. We have probably all noticed this in the public data. But 1 thing that stood out to me was really across all your plays, the well performance looks better or at least consistent with last year. Just wondering if you could speak to some of the bigger drivers here on the productivity side, just whether it is some of the high intensity completions targeting or other items that you have that you have pursued operationally in 2026?

Keith Trasko: Yes. Good morning. This is Keith. I will start with the Delaware. Yes, we are very pleased with how our Delaware Basin developments progressing. We have not really made any changes to our development plan relative to what we communicated earlier this year. Well productivity has been a little better than our expectations. The results are flat to slightly up versus 2025. And the important thing is that we expect similar consistency and productivity going forward. 2026 plan reflects the changes that we made last year to our development strategy. So, we continue to take advantage of the operational improvements to maximize, the value of the asset. And that is really driven by our ability to drive down costs, allowing us to add new target zones that meet the strict return hurdles, better maximize the value capture across the assets. So we are really happy with the Delaware. We expect consistent returns and cash flow for the next 10 years.

Ezra Y. Yacob: And yes, a lot of it is on the completion side. Like said, our high intensity fracs adding horsepower and doing smart tests just on various things on the completion side. And that had its genesis in the Eagle Ford in the early and we applied it to the Permian, we applied it to the Utica very early on. We are seeing improvements in Dorado associated with that. And as we take those learnings and iterate them, we have been able to apply that back to our Eagle Ford oil as kind of a revision 2 and 3 and 4. We have seen improvement there as well. So very happy with our well performance across the board.

Operator: The next question comes from Scott Hanold with RBC Capital Markets. Please go ahead.

Scott Hanold: Yes, thanks. If we could go back to where the Q and A started and that is on gas sales agreement. it is kind of a 2 part question with that. Number 1, you know, the commercial turns, I understand there are lot of confidentiality around it. But like in this market that we have seen for the past 9 months, how are you all able to get a contract like that done at this point? And do you see the economics a little bit different from the original ones? And as you look going forward, how much exposure to these international markets do you want? Should we expect you guys continuing to layer on new types of contracts like these? Or is there a certain threshold you want to limit yourself to?

Jeffrey R. Leitzell: Sure, Scott. it is Jeffrey Hibbert. Maybe I will take that 1. So US LNG projects continue to reach FID and operators are still seeking commitments to get additional capacity built. As, the LNG market has expanded, both physically and financially over time, it is created really new and different opportunities to seek international price exposure for us. So, look, we remain engaged with several potential partners and look for attractive win-win opportunities as they present themselves. So I would expect us to continue to look at those types of deals. We really have a number of advantages. Again, that make us an attractive counterparty for folks. it is our low-cost multi-basin portfolio, it is our extremely strong balance sheet, and it is our track record. With these types of deals. So, yeah, I think you can continue to see us, always looking at those, going forward.

Scott Hanold: Appreciate that. If I could pivot to shareholder returns, you know, appreciate your, again, commitment to the. annual 70% return. Based on, I guess, your $9.7 billion forecast and buybacks today, including what you have done based on the 10 Q looks like there is probably another, what, $1.5 to maybe $1.6 billion that needs to get done through the balance of the year. That seems like a lot. And given the volatility in commodity prices, how do you manage hitting that annual threshold when we are coming up on the end of the year?

Jeffrey R. Leitzell: Yeah. Look. I mean, it is Jeffrey again. I would say, cash returns remain a priority for us. You heard Ezra mention it early on in the script, and we remain confident in our ability to meet our threshold commitment of 70% of our annual free cash flow. You hit the numbers on the head at $88 WTI and $3.40 Henry Hub, we expect to return $6.8 billion of cash this year and when you back off our dividend commitment, which is that $2.2 billion I think your numbers are accurate I think given the volume that we have, you know, in our stock, we feel very comfortable being able to achieve, those amounts and look, we continue to see a lot of value in our stock. So consequently, we favor buybacks for additional cash return. I think we will be able to get there.

Operator: The next question comes from Leo Mariani with ROTH. Please go ahead.

Leo Mariani: Hey, good morning. Just wanted to touch base on your initial comments for 2027. You talked about low single digit oil growth. That certainly seems to be reasonable in this price environment. Just wanted to kind of get a sense do you see a contribution from the UAE there to get to those numbers for next year?

Jeffrey R. Leitzell: Yeah. Leo, this is Jeffrey. You can actually see in our guidance, we did guide towards a little bit of volumes, but it is fairly minimal. As far as that. We are still in the exploration phase even though we are seeing outstanding strong results over there. You know, before we really see meaningful amount of volumes and we start getting closer to a DOC, I would not expect them to be a huge part of the overall 2026 volumes. So, ultimately, you know, we feel great about it. I think we are getting to a place where we are getting closer and closer to DOC with the results that we are seeing, and we are excited about. So you will just kind of see that in our guidance as we move forward and we will keep you updated on the results.

Leo Mariani: Okay. Appreciate that. And then just want to also just ask, obviously, you announced a new gas sales agreement today. Clearly, you made a commitment to expanding the Janus plant. Just can you provide a little bit more color just on your thoughts around gas. Is EOG making a larger pivot towards gas as we get later in the decade? Do you see great opportunities for returns on the gas side in several years?

Ezra Y. Yacob: Hey, Leo. This is Ezra. Yeah. I want to say that EOG is making a big pivot to gas or a big call on gas. I mean, what-- this all starts with our organic exploration effort. And the fact that we captured Dorado. We do continue to believe that Dorado is the lowest cost gas in North America And then we are advantaged in the geographic position of it being close to multiple demand centers. What that is really allowed us to do is basically invest at the right pace, capitally disciplined, to grow what we think is essentially a premium gas company underneath the umbrella of our premium oil company here at EOG. We continue to invest in gas as we develop and capture markets, We are not just growing or investing in gas to move a whole bunch of gas to the Gulf Coast and hope that at prices. On gas, because the margins oftentimes are so skinny and volatile, you have got to be very, very diligent and disciplined looking at the entire value chain. It starts with low well costs, continues with low operating costs including transportation, And then, the last part of it is making sure that you are delivering molecules to a demand center and getting yourself exposed to premium pricing.

Operator: The next question comes from Arun Jayaram with JPMorgan. Please go ahead.

Arun Jayaram: Yeah. Good morning, team. Your fourth quarter guide included better realizations than we are modeling Clearly, the gas side, the Cheniere contract has been a nice tailwind. But I was wondering if you could elaborate on how you are capturing the premium realizations on the oil side? I know you have dock capacity, but maybe walk us through the marketing and how you are able to capture that premium relative to WTI.

Jeffrey R. Leitzell: Hey, Arun. This is, Jeffrey R. Leitzell. So, yeah. Great question. And really, I would break it down into a couple of different things. I mean, the first thing is just the way that our marketing team is just so ingrained in the business. They are in each 1 of our divisions. They are tied in and trying to find the absolute best contracts in each area, give us a lot of diversification, flexibility and control with our molecules to really maximize those netbacks. So I think that is 1, and that is 1 of the reasons you have always seen our price realization throughout time really run with the peers. And then the second thing on that, which has really been a big mover here as of recent is our exports. We have talked about on previous calls we are exporting anywhere from 200 thousand to 250 thousand barrels a day. And obviously, with the premiums that we are seeing, and so forth with those barrels, it is really helping our overall price realizations and netbacks from that aspect. So really, it is just great work by our marketing team kind of staying ahead of things and making sure we have got a lot of flexibility to send those molecules to the best markets.

Arun Jayaram: Great. And my follow-up is, Ezra, I would love to hear your thoughts on your strategy for inventory renewal in the Delaware Basin. I know that you know, producers have been focused on a ground game where, doing a lot of small transactions, extending lateral lengths and things like that. But love to hear some insights on how you are thinking about bolstering your Delaware Basin inventory position to offset wells that you have drill and complete? Yes.

Keith Trasko: Good morning. This is Keith. I will add a little bit on this on the productivity side. But what we have seen the last several years is just the team our teams continuing to increase efficiencies and drop costs and do some really nice detailed geologic work that has allowed us to add targets, into our existing development, both as a second phase and then when you are initially developing as well. So, today, we have more targets than I ever imagined several years ago. that is what you are seeing on our development strategy and our consistent productivity that we have had this year compared to last year and going forward. So we see a lot of it just on the acreage that we already have. So, our co development strategy leverages all that deep knowledge of basin geology. We have identified up to 17-plus unique targets and our operational capabilities to develop them maintain the strong productivity and low cost. So, that has really allowed us to maximize the value of the assets to be the leading Delaware Basin operator in terms of well costs, and breakeven price and have that durable inventory associated with it as well.

Operator: The next question comes from Bob Brackett with Bernstein Research. Please go ahead.

Analyst: Good morning. You have intrigued us around declarations of commerciality for the Aldofra concession. A question would be as you convert that license from exploration to production, how does it work? Would you keep all 900 thousand acres? Or is there an HBP scheme? Or is it negotiated between you and the host government? Any color would be helpful.

Ezra Y. Yacob: Yeah, Bob. This is Ezra. As it works, the path to DOC and conversion from an exploration concession to a production concession includes a field development plan and then essentially annual reviews are typically how these international agreements work. And so, yes, you end up-- it is really to be negotiated if we wanted to turn less of the concession over into production or the entire 900 thousand-acre. Today, where we are at, we are seeing very, very strong results in those initial 2 wells as highlighted previously. They responded very, very well to the artificial lift and then we brought a couple additional wells on We do not have 30-day rates. it is a little bit soon for that, but the wells look good. And quite frankly, with the efforts that we have seen the conversations we have had with oilfield service partners and their level of engagement to enter the country At this point, I would say we are I would reiterate what Keith said before is that we are well on our way to targeting kind of a DOC probably long before the expiration of the exploration agreement. that is been probably in that field development plan, that is where you would finally sort of walk down sort of CapEx, how many rigs you are gonna run, what the production forecast would be. In a conventional field, that would be pretty well constrained, but with unconventionals, you can dial up, dial down, and grow. I guess there would be flexibility in what your field development plan would look like? Yes, Bob. I think what you have hit on is something we have highlighted whenever we talk about going to whether it is conventional or in this case unconventional. it is the importance of aligning yourself with the right partners. Folks that understand what it takes to make these plays work, what it takes to make unconventionals work. And as you touched on, the way these unconventional plays work, essentially need to-- you almost have to build, a virtual manufacturing plant in the field before you can really step in and start to get the repeatability and the scale that makes these unconventional plays work. So, it does start with a field development plan, and yeah, you should expect, as I have talked about it before, we have got great partners between BAPCO and ADNOC. And I think all of us are there is great alignment there that the field development plan will be a fixed yet flexible plan to go forward and best develop the resource for the stakeholders.

Operator: The next question comes from Kevin McCurdy with Pickering Energy Partners. Please go ahead.

Analyst: Hey. Good morning. You took advantage of the hot markets to sell some assets in the Woodford and Barnett this quarter. As I look across your portfolio, there are a couple of areas that are not getting a lot of capital. And just curious how those asset sales came about this quarter. And how you are thinking about further streamlining the portfolio, particularly in The U. S? If at all?

Jeffrey R. Leitzell: Sure, Kevin. I will take that 1. it is Jeffrey Hibbert. So, as you mentioned, we took advantage of favorable market conditions really to divest those legacy Barnett and Woodford assets. I would say we selectively divest non-core positions that lack the size and scale to meaningfully impact shareholders. Allowing us really to high grade our portfolio, pull value forward, you look back, over the last 5 or 10 years, we have divested several assets including our legacy positions in the Marcellus and China, UK North Sea among others. And we try to maintain a disciplined approach to portfolio management continuously evaluating assets against our return hurdles, and strategic priorities These divestments of non-core assets are really just another example of our relentless focus on capital discipline. So I would say we have got no current plans for additional assets sales at the moment. We generally think assets are worth more in our hands, but we continuously evaluate our portfolio with the goal to maximize shareholder value.

Analyst: Great. I appreciate that. And maybe as a follow-up, do you have a unique view on the Texas gas markets as you have kind of assets in several different basins there? Are there any opportunities that you see that maybe in the form of supply and demand that the market is missing? Obviously, there is been a lot of attention on Permian, a supply factor takeaway and demand. But is there anything else that maybe you think is underappreciated? And how does that fit into your thoughts on ramping Dorado over the next couple of years?

Ezra Y. Yacob: Yes, Kevin. Kind of like I touched on before, the way that we think about investing in gas growth really starts with knowing where our molecules are going to go and make sure that we are not just investing into a volatile market and leaving our gas exposed. It really comes back to where we have spent a lot of time talking today. About our marketing strategy and making sure that we have got the flexibility and diversification even at an asset level to be able to make sure that we put gas into a premium market. We have done a great job not only exposing ourselves to LNG and international offtake in LNG pricing, also things like the Transco pipeline that allows us to move gas from the Texas Gulf Coast all the way up into Louisiana and expose ourselves to some different markets there, including the Station, 65 Power Pool and things of that nature. Ultimately, in gas, like we said, it is a fascinating time in the North American gas market because we really are seeing a transition from this seasonally driven by weather, driven by residential and commercial heating, in the history of gas demand, And now it is really becoming much more where the future fundamentals are going to be driven by AI powered electricity demand and global LNG exports, industrial reshoring, 24/7 baseload power to ensure grid reliability. And so, all of those things we think will ultimately provide upward pressure on pricing, which is-- for a company like ours with an asset like Dorado puts us in a great position.

Operator: The next question comes from Joshua Silverstein with UBS. Please go ahead.

Joshua Silverstein: Yeah. Thanks. Good morning, guys. Maybe on that gas supply front, I was curious up in the Utica if you guys are exploring some of these gas supply agreements, clearly there is a lot of power generation demand growth coming to the area. I know you have signed international agreements, but I was curious about some of the domestic agreements you guys may be looking at.

Ezra Y. Yacob: Joshua, this is Ezra. We are in discussions with data centers and hyperscalers, and we feel we are very well positioned because of, as you highlighted, not just Dorado, but really just our multi basin portfolio in general. We have got production near several growing potential areas that are seeking direct gas supply, and you highlighted the Utica as well. We are also having discussions with power generators and I would say we continue to see growth in gas fired generation as well. Basically, it comes down to the immense gas transportation portfolio on intra and interstate pipelines that allow us to get to have the ability to serve power generations across our operations footprint. So, we are very well poised for the demand growth story for both power gen demand to pull off transport serving utilities, our ability to connect directly with data centers and the supply position is what gives us that advantage.

Joshua Silverstein: Got it. And then maybe lastly, just sticking with Utica. I think that the gas processing capacity up there has been pretty good for you guys to grow into. But I know you guys were working on some oil and liquid side, midstream infrastructure projects up there. I am just curious to get an update on that front too.

Jeffrey R. Leitzell: Yes, Joshua, this is Jeffrey. Yes, everything does still look good on the gas processing side up there. We have plenty of capacity and like we said, we are over in that liquid rich window. So obviously, any of the just residue associated gas has a lot of that liquid rich molecules in it that they are really looking forward to grabbing a hold of. And then on the oil side, yes, we continue to have really constructive conversations. As I have stated, for the next handful of years, we have got really good oil takeaway, but we are going to focus on really focusing on getting our net backs up. And as we said, we have got a little bit of differential there, so there is a couple of things that we can do. We can obviously blend some of our lighter with our heavier molecules as we get infrastructure into play, which will actually help those differentials. And then we will continue to get it on the pipe to try to get to additional markets. And like I said, we are having really constructive conversations, but really nothing to announce right now, but we will definitely keep you abreast of our progress.

Operator: This concludes our question and answer session. I would like to turn the conference back over to Mr. Yacob for any closing remarks.

Ezra Y. Yacob: Appreciate it. I would also like to thank our shareholders for your support and special thanks especially to our employees for delivering another exceptional quarter.

Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.