EOG Resources, Inc. (NYSE:EOG) Q3 2019 Earnings Conference Call Transcript

Nov 07, 2019 • 10:00 am ET

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EOG Resources, Inc. (NYSE:EOG) Q3 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good day everyone and welcome to EOG Resources Third Quarter 2019 Earnings Results Conference Call. [Operator Instructions]. At this time for opening remarks and introductions, I would like to turn the call over to the Chief Financial Officer of EOG Resources, Mr. Tim Driggers. Please go ahead, sir.

Analyst
Brian Singer

Good morning and thanks for joining us. We hope everyone has seen the press release announcing third quarter 2019 earnings and operational results. This conference call includes forward-looking statements. The risks associated with forward-looking statements have been outlined in the earnings release, in EOG's SEC filings, and we incorporate those by reference for this call. This conference call also contains certain non-GAAP financial measures, definitions, as well as reconciliation schedules for these non-GAAP measures to comparable GAAP measures can be found on our website at www.eogresources.com.

Some of the reserve estimates on this conference call and in the accompanying investor presentation slides may include estimated resource potential and other estimates of potential reserves not necessarily calculated in accordance with the SEC's reserve reporting guidelines. We incorporate by reference the cautionary note to US investors that appears at the bottom of our earnings release issued yesterday.

Participating on the call this morning are Bill Thomas, Chairman and CEO; Billy Helms, Chief Operating Officer; Ken Boedeker, EVP Exploration and Production; Ezra Yacob, EVP Exploration and Production; Lance Terveen, Senior VP, Marketing; David Streit, VP Investor and Public Relations.

Here's Bill Thomas.

Executive
Bill Thomas

Thanks, Tim, and good morning everyone. EOG has a deeply rooted competitive advantage and that is our culture. Our culture drives innovation and a long history of continuous improvement and success. Most importantly, our culture drives resiliency. In an ever-changing business environment, we have demonstrated this resiliency time and time again during the past 20 years. As we will continue to do so moving forward.

In the 1990s when vertical prospects were in short supply our culture fostered innovations that made EOG our first mover in horizontal shale gas technology. As natural gas prices came under pressure in the late 2000s, we introduced horizontal shale oil with the Eagle Ford discovery. As a result of our first-mover advantage, EOG is now the largest on-shore oil producer in the lower 48 states and among the lowest-cost producers in the world. In the wake of a pronounced commodity price downcycle beginning in late 2014, the company has remained a leader in low-cost, high return oil growth, switching to our premium drilling strategy. Our premium strategy uses a strict investment hurdle that produces strong economic returns using a flat $40 and $250 natural gas price scenario, ensuring that the company will generate strong financial performance even in commodity downcycles.

After our third consecutive quarter of exceptional results, we believe that EOG's 2019 operational performance will be the best in Company's history.To reflect our year-to-date performance, we have raised our US Oil growth targets from 14% to 15% along with lowering our well costs and per-unit operating cost targets. Strong well results have compounded the benefit of cost