EOG Resources, Inc. (NYSE:EOG) Q4 2019 Earnings Conference Call - Final Transcript
Feb 28, 2020 • 10:00 am ET
Good day everyone and welcome to EOG Resources Fourth Quarter 2019 Earnings Results Conference Call. As a reminder, this call is being recorded. 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.
Thank you and good morning. Thanks for joining us. We hope everyone has seen the press release announcing fourth quarter and full-year 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 and 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 may include estimated potential reserves and estimated resource potential, 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; and David Streit, VP, Investor and Public Relations. For the call this morning, we want to cover three topics. First, Bill Thomas will review the characteristics of EOG that have contributed to our long-term sustainable success; second, I will discuss our financial strategy; and third Billy Helms will review the outstanding 2019 operating performance and the 2020 plan.
Here's Bill Thomas.
Thanks, Tim, and good morning everyone. In times of uncertainty, EOG's sustainable business model is well suited to navigate a volatile environment. In fact, we are more confident in EOG's future today than we've ever been in the history of the Company. With our strong balance sheet and flexibility, EOG is better positioned now, both financially and operationally to weather the storms than it's ever been in the past. Our operational performance last year was the best in the Company history, and we believe EOG's performance in 2020 will be even better than 2019. With an industry-leading return on capital employed of 12% in 2019, we beat our plan in every respect. Capital spending was below plan, volumes were over plan, and per unit operating expenses declined more than forecast. We grew oil production at a lower cost per barrel than ever before and delivered on our goal of double-digit returns and double-digit growth in a modest oil price environment.
The Company also generated nearly $1.9 billion of free cash flow, defined as our discretionary cash flow less our total cash capital expenditures. That cash flow funded the retirement of $900 million of debt and the payment of $588 million in dividends. We accomplished all this with oil prices averaging $57 a