EOG Resources Inc (NYSE:EOG) Surpasses Topline Estimates

EOG Resources Inc (NYSE:EOG) stock rose 7.15% (As on August 5, 11:20:38 AM UTC-4, Source: Google Finance) after the company posted mixed results for the second quarter of FY 22. Crude oil, NGL and natural gas prices increased significantly in 2Q compared with 1Q. Cash paid for hedge settlements in 2Q increased by $1.8 billion compared with 1Q, of which $1.3 billion related to the early termination of certain contracts. Total company crude oil production in 2Q of 464,100 Bopd was above the high end of the guidance range and 3% more than 1Q. NGL and natural gas production were each above the midpoint of the guidance ranges and increased 6% and 5%, respectively, compared with 1Q. Total company equivalent production increased 4% compared with 1Q. Cash operating costs declined to $10.12 per BOE in 2Q compared with $10.24 per BOE in 1Q. Lower lease and well cost was the most significant contributor to the reduction. EOG generated cash flow from operations before changes in working capital of $2.4 billion in 2Q. The company incurred $1.1 billion of cash capital expenditures, resulting in $1.3 billion of free cash flow.

Moreover, Per-unit LOE costs declined $0.13 in 2Q compared with 1Q and were within the guidance range. The divestiture of legacy gas assets in the Rocky Mountain area and overall efficiency improvements in the Delaware Basin were the largest contributors to the cost reduction. Per-unit transportation and G&P costs in 2Q were in-line with 1Q and slightly below the guidance midpoints.

EOG in the second quarter of FY 22 has reported the adjusted earnings per share of $2.74, missing the analysts’ estimates for the adjusted earnings per share of $2.99, according to Zacks Investment Research. The company had reported the adjusted revenue of $7.41 billion in the second quarter of FY 22, beating the analysts’ estimates for revenue of $6.64 billion.

Additionally, the company has declared a special dividend of $1.50 per share on EOG’s common stock. The special dividend will be payable September 29, 2022, to stockholders of record as of September 15, 2022. EOG paid $1.5 billion in dividends in 2Q, including $1.1 billion of special dividends. Acquisitions and divestitures in 2Q reduced cash by $0.2 billion, primarily related to a bolt-on acquisition in an exploration area and partially offset by sales of non-core assets.

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