EOG Resources Delivers Exceptional Q3 Results, Reinforcing Its Position as a Leader in the Energy Industry
EOG Resources has announced outstanding results for its third quarter of 2024, solidifying its position as a leading player in the energy industry. The company's commitment to operational excellence and capital discipline has paid off, with impressive performance on oil, natural gas, and NGL volumes.
During the conference call, Ezra Yacob, Chairman and CEO, highlighted EOG's remarkable track record of generating free cash flow and adjusted net income since 2020. The company has produced over $22 billion in free cash flow and more than $25 billion in adjusted net income during this period. Furthermore, EOG has increased its regular dividend rate by a staggering 160% while reducing debt by 35%. The company's strong financial performance is reflected in its ability to return $13 billion directly to shareholders through dividends and $3.2 billion indirectly through share repurchases.
The third quarter results are no exception, with EOG generating $1.6 billion of adjusted net income and $1.5 billion of free cash flow. The company's focus on operational excellence has allowed it to outperform expectations on per-unit cash operating costs. A significant portion of the free cash flow was returned to shareholders through a mix of regular dividend payments and opportunistic share repurchases, totaling $1.3 billion.
In addition to announcing third-quarter results, EOG demonstrated confidence in its ability to generate strong free cash flow in the future by increasing the regular dividend by 7% and boosting its share repurchase authorization by $5 billion. The company's commitment to returning a significant portion of its cash to shareholders reflects its confidence in the increasing capital efficiency of its business.
EOG Resources continues to improve its capital efficiency through technology and innovation across both its foundational and emerging assets. This is one of the key advantages of operating in multiple basins, as it allows for technology transfer between those basins, driving improvements to operational performance. The company's drilling program remains robust, with further and faster progress than at any time in its history.
The CEO emphasized that EOG Resources' performance is sustainable due to its culture, which empowers each employee to be a business person first and focus on returns while seeking ways to improve the business every day. This culture is considered the company's competitive advantage and combines with its focus on sustainable value creation through cycles, giving it confidence in ongoing performance as it finishes 2024 and positions itself for 2025.
Looking ahead to 2025, Jeff Leitzell, Chief Operating Officer, provided early commentary on EOG Resources' capital program. The company's investment strategy prioritizes capital discipline, balancing short- and long-term free cash flow generation, return on capital employed, and return of capital to shareholders. Given the dynamic overall macro environment, with oil inventory levels below the 5-year average and moderate growth in supply and demand, EOG Resources expects a strong finish to 2024 followed by increasing demand throughout 2025.
