EOG Resources Inc (NYSE: EOG) stock fell over 3.4% on 3rd August, 2018 (as of 12:16 PM GMT-4; Source: Google finance). EOG in the second quarter of FY 18 has reported the adjusted earnings per share of $1.20, missing the analysts’ estimates for the adjusted earnings per share of $1.23. Moreover, the results at rivals including Devon Energy Corp and Anadarko Petroleum Corp fall during the quarter because of the settlement of commodity derivatives. Companies hedged production at about $55 a barrel, losing out on revenue gains from market prices that rose above $70 a barrel last quarter.
EOG has grown its total crude production by 15 percent from a year ago to a company record of 384,600 barrels per day, which raised the profit for the quarter to $696.7 million from $23.1 million a year earlier. Meanwhile, U.S. producers have benefitted from a rise in oil activity, as benchmark U.S. crude futures have climbed almost 40 percent in the past year to around $70 a barrel. EOG has increased crude derivative contracts during the second quarter, and received an average crude and condensate price of $67.91, up from $47.51 a year ago. The company had reported the adjusted revenue growth of 35.9 percent to $4.24 billion in the second quarter of FY 18, beating the analysts’ estimates for revenue of $3.91 billion.
Moreover, EOG has increased its estimated resource potential in Wyoming’s Powder River Basin oil field to 2.1 billion barrels of oil equivalent. That basin is now its third largest asset. EOG is expected to operate a two-rig program in the Powder River Basin during 2018 and would expand its drilling activity next year. It is targeting well costs between $4.5 million and $6.1 million per well.
Additionally, EOG has increased the cash dividend on the common stock by 19 percent and declared a quarterly dividend of $0.22 per share on the common stock. At June 30, 2018, EOG’s total debt outstanding was $6.4 billion for a debt-to-total capitalization ratio of 27 percent.
Meantime, EOG was targeting 18 percent growth in its crude production for the year. EOG maintained its forecast for 2018 exploration and development expenditures of $5.4 to $5.8 billion, excluding acquisitions and non-cash transactions. The company also maintained its target to reduce average well costs by five percent in 2018