EOG Resources this week reported first quarter 2022 results.

Highlights

• Announced guidance to return minimum 60% of free cash flow to shareholders each year
• Declared special dividend of $1.80 per share and regular dividend of $0.75 per share
• Earned adjusted net income of $2.3 billion, or $4.00 per share
• Generated $2.4 billion of free cash flow
• Oil, NGL and natural gas production above guidance midpoints
• Capital expenditures near low end of guidance range
• Total per-unit cash operating costs below guidance midpoint

From Ezra Yacob, Chief Executive Officer:
“EOG is off to a great start in 2022. We extended our track record of reliable execution with strong first quarter results. Production volumes, capital expenditures and overall operating costs were each better than expected. Despite challenges from rising inflation and supply chain constraints since we announced our 2022 plan at the start of the year, we remain well positioned to deliver within our production and capital expenditure targets. Consistent with the EOG culture, our employees continue to find new innovations and efficiencies to meet our goals for the year.

“Along with strong operating execution, EOG continues to deliver on our long-term free cash flow priorities. In addition to the $0.75 per share regular dividend, we declared a $1.80 per share special dividend. We also initiated new cash return guidance to provide greater transparency to capital allocation, committing to return at least 60 percent of free cash flow to shareholders each year. Our financial strategy aims to create long-term shareholder value and our free cash flow priorities and cash return guidance remain consistent with this goal.

“Our 2022 game plan is on track, guided by our long-term strategy focused on returns. EOG’s competitive advantage includes a diverse portfolio of plays across multiple basins, powered by our high-performing people and unique culture. Our pristine balance sheet and commitment to low-cost exploration continue to serve us well. We are well positioned to be among the lowest cost, highest return, lowest emissions producers, playing a significant role in the long-term future of energy.”

Volumes

Total company crude oil production in 1Q of 450,100 Bopd was above the midpoint of the guidance range and in-line with 4Q. NGL production was above the midpoint of the guidance range and increased 21% compared with 4Q due to increased extraction of ethane. Natural gas production declined 5% compared with 4Q, also related to extraction of ethane. Total company equivalent daily volumes increased 2% compared with 4Q.

Free Cash Flow

EOG generated cash flow from operations before changes in working capital of $3.4 billion in 1Q. The company incurred $1.0 billion of cash capital expenditures, resulting in $2.4 billion of free cash flow.

Working Capital

Changes in working capital in 1Q represented a use of cash of $2.6 billion. Most of the change is due to an increase in collateral EOG has posted with counterparties to financial commodity derivative contracts that are in a net liability position. 

Link to EOG Resources US country profile