EOG Sources (EOG) Q3 2024 Earnings Name Transcript

EOG Sources (EOG 6.06%)
Q3 2024 Earnings Name
Nov 08, 2024, 10:00 a.m. ET

Contents:

• Ready Remarks
• Questions and Solutions
• Name Members

Ready Remarks:

Operator

Good day, everybody, and welcome to the EOG Sources’ third quarter 2024 earnings outcomes convention name. As a reminder, this name is being recorded. At the moment for opening remarks and introductions, I want to flip the decision over to the investor relations vice chairman of EOG Sources, Mr. Pearce Hammond.

Please go forward, sir.

Pearce Hammond — Vice President, Investor Relations

Good morning, and thanks for becoming a member of us for the EOG Sources’ third quarter 2024 earnings convention name. An up to date investor presentation has been posted to the investor relations’ part of our web site and we’ll reference sure slides throughout right this moment’s dialogue. A replay of this name might be accessible on our web site starting later right this moment. As a reminder, this convention name consists of forward-looking statements.

Components that might trigger our precise outcomes to vary materially from these in our forward-looking statements have been outlined within the earnings launch and EOG’s SEC filings. This convention name can also include sure historic and forward-looking non-GAAP monetary measures. Definitions and reconciliation schedules for these non-GAAP measures and associated dialogue may be discovered on the Investor Relations’ part of EOG’s web site. As well as, a number of the reserve estimates on this convention name could embrace estimated potential reserves, in addition to estimated useful resource potential not essentially calculated in accordance with the SEC’s reserve reporting tips.

Collaborating on the decision this morning are Ezra Yacob, chairman and CEO; Jeff Leitzell, chief working officer; Ann Janssen, chief monetary officer; Keith Trasko, senior vice chairman, exploration and manufacturing; and Lance Terveen, senior vice chairman, advertising and marketing and midstream. Here is Ezra.

Ezra Y. Yacob — Chairman and Chief Government Officer

Thanks, Pearce. Good morning everybody and thanks for becoming a member of us. Because the finish of 2020, EOG has generated greater than $22 billion of free money circulation and greater than $25 billion in adjusted web earnings. We have elevated our common dividend fee 160%; and together with each common and particular dividends, paid or dedicated to pay greater than $13 billion on to shareholders; and $3.2 billion not directly by means of share repurchases, all whereas decreasing debt 35%.

EOG has a historical past of delivering constantly sturdy monetary and operational outcomes, and the third quarter is just extra of the identical. Led by our staff’ dedication to operational excellence and capital self-discipline, we outperformed on oil, pure gasoline, and NGL volumes for the quarter, in addition to beating expectations on per-unit money working prices. We generated $1.6 billion of adjusted web earnings and $1.5 billion of free money circulation and returned $1.3 billion of that free money circulation again to our shareholders by means of a mixture of our common dividend and opportunistic share repurchases. Along with saying third quarter outcomes yesterday, we demonstrated confidence in our skill to generate sturdy free money circulation sooner or later, in addition to our continued dedication to return a good portion of money to our shareholders by growing the common dividend 7% and boosting our share repurchase authorization by $5 billion.

Money return to shareholders begins with our deal with the common dividend, which has by no means been diminished or suspended within the 27 years since we have been paying one. And it displays our confidence within the growing capital effectivity of our enterprise going ahead. And we proceed to enhance our capital effectivity by leveraging expertise and innovation throughout each our foundational and rising belongings. That is likely one of the key benefits of working in a number of basins.

We’re capable of drive enhancements to operational efficiency by means of expertise switch between these basins. We’re drilling additional and quicker than at any time in our historical past, finishing wells with fewer individuals and fewer tools because of environment friendly operations. And we proceed to seize extra worth by means of our advertising and marketing technique. EOG’s efficiency is sustainable, as a result of it is pushed by our tradition, empowering every worker to be a enterprise individual first, specializing in returns, and in search of methods to enhance the enterprise day by day.

Our tradition is our aggressive benefit. And mixed with deal with sustainable worth creation by means of the cycles, offers us confidence in our ongoing efficiency as we end 2024 and place ourselves for 2025. In a second, Jeff will present some early commentary on our 2025 capital program, however our funding technique at all times begins with capital self-discipline, balancing brief and long-term free money circulation era, return on capital employed and return of capital to shareholders. We additionally contemplate the macro setting by which we’re working.

And at present, the general macro setting stays dynamic. Oil stock ranges are beneath the five-year common with each provide and demand displaying average progress yr over yr. We count on to complete 2024 with sturdy demand, slowing right into a seasonally decrease first quarter after which growing all through the remainder of 2025. Domestically, whereas effectivity good points proceed throughout the business, we anticipate one other yr of slower U.S.

liquids progress grounded within the decrease variety of lively drilling rigs and drilled however uncompleted wells. Relating to North American pure gasoline, stock ranges have moved nearer to the five-year common all year long because of a mixture of producer self-discipline and elevated demand pushed primarily by energy era. We stay optimistic on the long-term outlook for gasoline demand starting in and growing all through 2025 from extra LNG initiatives coming on-line and ongoing will increase in energy era. Lastly, final month, we launched our annual sustainability report for 2023, highlighting our main environmental efficiency and dedication to secure operations.

We achieved a GHG depth fee beneath our 2025 goal for the second yr in a row and achieved a methane emissions proportion at/or beneath our 2025 goal for the third consecutive yr. Our in-house methane monitoring resolution has progressed past the pilot section and is built-in into our customary working procedures. And our carbon seize and storage pilot challenge is operational, and we stand able to deploy our learnings to future operations. Our constant sustainability efficiency is a results of our empowered and collaborative workforce and our continued funding in innovation and expertise to attain not solely main environmental efficiency, but additionally sturdy and constant security efficiency all through our operations.

This yr’s report highlights our progressive tradition that drives EOG’s mission to be among the many highest return, lowest price and lowest emissions producers taking part in a big position within the long-term way forward for power. Now this is Ann with particulars on our monetary efficiency.

Ann Janssen — Government Vice President, Chief Monetary Officer

Thanks, Ezra. EOG continues to create long-term shareholder worth. In the course of the third quarter, we earned $1.6 billion of adjusted web earnings and generated $1.5 billion of free money circulation on $1.5 billion capital expenditures. Third quarter capital expenditures have been in keeping with forecast, and we nonetheless count on our full yr capital expenditures to be about $6.2 billion.

Money on the stability sheet at quarter-end is quickly greater as a result of postponement of sure tax funds till the primary quarter of subsequent yr from catastrophe reduction granted for extreme climate occasions in Texas, together with Hurricane Beryl. Our ongoing advertising and marketing technique to diversify and broaden our entry to premium markets additionally delivered distinctive outcomes in the course of the third quarter with peer-leading U.S. value realizations of $76.95 per barrel of oil and $1.84 per mcf for pure gasoline. Lastly, we paid a $0.91 per share dividend and repurchased $758 million of shares in the course of the quarter.

Yr thus far, we have now generated $4.1 billion of billion of free money circulation which helped fund $3.8 billion of money returned to shareholders. Of that $3.8 billion, $1.6 billion was paid in common dividends and was complemented by $2.2 billion in share repurchases by means of the third quarter. Taking into consideration our full yr common dividend, we have now dedicated to return $4.3 billion to shareholders in 2024, and we’re on monitor to exceed not solely our minimal money return dedication of 70% of annual free money circulation, but additionally final yr’s money return of 85%. The EOG’s dedication to high-return investments is delivering excessive returns to our shareholders.

Yesterday, we have been happy to announce a 7% enhance to what’s already a top-tier common dividend, not just for our business however the broader market. This enhance displays our confidence within the basic energy of our enterprise which continues to get higher by means of constant execution of EOG’s worth proposition. Efficiencies and expertise utilized all through our multi-basin portfolio proceed to sustainably enhance EOG’s capital effectivity. A rising sustainable common dividend stays the inspiration of our money return dedication and we consider is one of the best indicator of the corporate’s confidence in its future efficiency.

Along with the dividend enhance, the Board authorised a $5 billion enhance in our share repurchase authorization to complement the $1.8 billion remaining on the authorization as of quarter-end. The entire $6.8 billion buyback capability retains our flexibility to ship on our money return dedication to shareholders. During the last a number of quarters, we have now favored buybacks to enrich our common dividend, and we’ll proceed to observe the marketplace for alternatives to step in and repurchase shares for the rest of the yr. EOG’s stability sheet underpins the monetary energy of the corporate and stays a strategic precedence.

To optimize EOG’s capital construction going ahead, we intend to place our stability sheet such that our complete debt-to-EBITDA ratio equals lower than one instances at $45 WTI. We consider that is an environment friendly and prudent long-term capital construction for a cyclical business that can assist our dedication to ship shareholder worth. In consequence, we anticipate refinancing upcoming debt maturities, growing our debt stability to $5 billion to $6 billion vary within the subsequent 12 to 18 months, and sustaining our money stability at ranges just like what we have now carried for the final two years. By managing our debt ranges towards this extra environment friendly capital construction, we’re growing our capability to return money to shareholders.

Now, this is Jeff to evaluate working outcomes.

Jeffrey Leitzell — Government Vice President, Chief Working Officer

Thanks, Ann. We delivered one other excellent quarter, because of our staff and their constant execution throughout our multi-basin portfolio. Their deal with continued enchancment by means of innovation, expertise developments, and operational management is why our third quarter volumes and per-unit money working prices beat expectations. Oil volumes beat our forecast, primarily because of better-than-expected productiveness from new wells, pushed by steady enchancment to our completion designs.

Yr over yr, we have now elevated our most pumping fee capability by roughly 15% per frac fleet on common. The profit is twofold: quicker pump instances and higher properly efficiency. Larger pumping charges present our staff with the flexibleness to tailor every high-intensity completion design across the distinctive geological traits of each goal. This, in flip, has helped to maximise the stimulated rock quantity within the reservoir, leading to improved properly efficiency.

Effectivity enhancements because of quicker pump instances, mixed with stronger properly efficiency have greater than offset the extra price for these elevated pumping charges. On account of third quarter quantity efficiency beats, we’re as soon as once more elevating full yr steering. Our oil manufacturing midpoint has elevated by 800 barrels per day, pure gasoline liquids by 2,800 per day, and pure gasoline by 24 million customary cubic ft per day. We additionally beat per unit money working price targets in the course of the third quarter.

The first drivers have been decrease lease working expense because of much less work-over expense and gasoline financial savings. We now count on our full yr per unit money working price to be decrease than forecasted and have diminished steering accordingly. Our capital expenditures within the third quarter have been in keeping with our forecast with solely minor variations primarily because of timing of operations. As well as, properly price deflation pushed primarily by efficiencies is taking part in out as we had forecasted at the beginning of the yr, leading to a 3% to five% year-over-year lower in properly price.

In consequence, our expectations for full yr capex stay unchanged at $6.2 billion on the midpoint. The effectivity good points we proceed to appreciate this yr exhibit the worth of our multi-basin portfolio and decentralized construction. Concepts born in a single working space are replicated throughout a number of basins by means of expertise switch. Two examples of innovation, increasing by means of our portfolio and driving efficiencies this yr are prolonged laterals and our in-house motor program.

Common lateral lengths for our home drilling program continued to extend. Within the Delaware Basin, we now count on to drill greater than 70 three-mile laterals this yr in comparison with our unique forecast of fifty. We have additionally set a brand new lateral size file within the Eagle Ford, not just for EOG, however for all of Texas. Our Aspen A 1H properly was drilled in our western acreage and has a lateral size of over 22,000 ft.

As we highlighted final quarter, longer laterals permit for extra time targeted on drilling downhole and fewer time shifting tools on floor, lowering total downtime in days to drill. As well as, longer laterals assist unlock new potential from acreage which may not in any other case meet our financial thresholds. EOG’s in-house motor program additionally continues to pay dividends. Within the Delaware Basin, we’re testing the bounds of our drilling motors within the shallower Leonard Shale and Bone Spring formations.

Whereas drilling the manufacturing gap part, we try and drill as a lot of the vertical curve and lateral parts of the wellbore with one motor run. Traditionally, this operation requires a minimal of three motor runs and two journeys, which is a pause in drilling to drag a motor out of the wellbore and exchange it with a brand new one. In consequence, we have now eradicated over one full journey per properly within the shallower Delaware Basin targets. Given that every journey can price $150,000 or extra, the price financial savings and effectivity good points from utilizing higher designed higher-quality motors continues so as to add vital worth to our drilling program.

This is only one of a number of examples of the worth the EOG Motor program has created. Wanting companywide, for the reason that begin of 2023, we have now elevated our drilled footage per motor run by over 20% versus third-party rental choices. As we proceed to check, be taught, and redesign our drilling motors, we see substantial upside to our future drilling efficiency as we broaden motor innovation all through our multi-basin portfolio. In Ohio, we have made vital progress this yr transitioning the 225,000 web acres of the risky oil window within the Utica play from delineation into improvement.

We now have 5 packages on-line and producing for greater than 100 days, three of which have been producing properly over 180 days. Each oil and liquids efficiency continues to fulfill or exceed expectations, demonstrating the premium high quality of this play. We’re additionally capturing sustainable operational efficiencies by means of multi-well pad improvement and steady operations. On the drilling facet, the Utica supplies a great operational setting to make vital good points shortly.

We’ve got decreased drilling days to drill three-mile laterals 29% yr over yr and have already achieved a file of drilling greater than two miles in a single day. We even have made vital good points on the completion facet, attaining a virtually 13% enhance in accomplished lateral ft per day in comparison with final yr. Over the subsequent few years, exercise within the Utica will proceed to be primarily targeted within the risky oil window, the place we anticipate our properly prices will common lower than $650 per efficient handled lateral foot with discovering price and improvement prices within the vary of $6 to $8 per barrel of oil equal. For 2025, we anticipate a 50% enhance in Utica exercise as we proceed to leverage constant operations to attain extra economies of scale.

Our giant contiguous acreage place lends itself to growing a long-life, repeatable, low-cost play aggressive with the premier unconventional performs throughout North America. Previewing 2025 companywide, with the excellent efficiency we have now delivered this yr, we don’t see a must considerably regulate exercise subsequent yr. We do, nevertheless, count on very minor shifts in exercise between basins with a continued enhance in exercise within the Utica and one other yr of actively managing our Dorado funding with a one-rig program. This can permit us to proceed to seize some economies of scale throughout our rising belongings and advance our technological understanding of those performs whereas delivering the operational and monetary efficiency that our shareholders respect.

Now, this is Ezra to wrap up.

Ezra Y. Yacob — Chairman and Chief Government Officer

Thanks Jeff. EOG lately celebrated our twenty fifth anniversary as an independently traded public firm. And whereas many issues have modified throughout our business, EOG’s basic technique and dedication to creating share worth for our shareholders has remained constant. First, our dedication to capital self-discipline begins with reinvestment at a tempo to assist steady enchancment throughout our belongings delivering returns by means of the cycle, producing free money circulation, and sustaining a pristine stability sheet to assist a sustainable rising common dividend.mSecond, our sturdy operational execution begins with being a primary mover in exploration to take care of a low-cost, high-quality multi-basin stock.

We leverage in-house technical experience proprietary data expertise, and self-sourced supplies assist drive properly efficiency and price management, and we deal with a balanced strategy to product, geographic, and pricing diversification to drive margin enlargement. Third, we’re dedicated to secure operations, main environmental efficiency, and stakeholder engagement. Our sustainability report highlights progress on our emissions discount pathway, in addition to total environmental stewardship. And at last, our tradition is our aggressive benefit.

A decentralized non-bureaucratic group locations worth creation within the subject on the asset stage and within the arms of every of our staff. We take delight in our collaborative, multidisciplinary groups that drive innovation, using our expertise and real-time information assortment to drive decision-making. Thanks for listening. Now we’ll go to Q&A.

Questions & Solutions:

Operator

[Operator instructions] And our first query right this moment will come from Steve Richardson with Evercore ISI. Please go forward.

Steve Richardson — Evercore ISI — Analyst

Hello, good morning. I used to be questioning, if we may begin with the optimization of the stability sheet. It is a new wrinkle from the corporate. And I ponder for those who may simply speak about this incremental gross debt that you are looking at including the timeframe? Ought to we take into consideration that $2 billion coming concurrent whenever you would look to refi the present maturities? After which, additionally, you recognize, the knock-on of that’s — how do you have a look at redeploying that money, assuming into the buyback? And does this imply that you’re going to be taking shareholder returns above — you recognize, type of sustainably above that minimal dedication for the subsequent couple of quarters? Perhaps simply speak about time-frame round that, please?

Ezra Y. Yacob — Chairman and Chief Government Officer

Sure, Steve. Good morning. Thanks for the query. The choice is aimed toward actually simply making our capital construction extra environment friendly.

You recognize, we’re shifting to a stage of debt that is extra applicable for a corporation of our dimension and energy, nonetheless being respectful that we’re in a cyclical business. Finally, you recognize, the transfer is designed to permit us to maneuver extra fairness into the debt facet. We have at all times talked about we have been fairly constant, however the purpose of our firm has by no means been to get to a zero absolute debt. And so, you recognize, actually, the timing proper now seems to be fairly good as we have now a few bonds coming into maturity within the subsequent 12 18 months, the market is wanting a bit extra favorable than it has in the previous couple of quarters.

And in order we step into this — as we talked about, as Ann talked about, our debt goal might be to maintain complete debt to EBITDA at lower than one instances, leverage ratio at a $45 WTI, which for those who calculate that out is roughly a $5 billion to $6 billion vary. And so, you are proper, that can release some extra money. And actually, what I might search for is, sure, within the near-term, that does indicate that we’ll positively be ready to exceed the 70% dedication and, fairly frankly, be nearer to 100% and at instances, greater than 100% of return of free money circulation to the shareholders. However I wish to put a extra particular time goal on it apart from the subsequent 12-month time-frame, the subsequent 12 to 18 months is we glance to be opportunistic available in the market, not solely with share repurchases, but additionally the timing of reaching out on these bonds.

Steve Richardson — Evercore ISI — Analyst

That is nice. Actually sturdy alternative capital allocation. Thanks. If I may perhaps only a follow-up on pure gasoline.

You will have arguably the bottom price dry gasoline asset available in the market. And with the Verde Pipeline ending, you have bought some actual alternatives right here. I respect the feedback on a one rig program for 2025, however, you recognize, you talked about off the highest as how optimistic the pure gasoline demand outlook seems to be. So, how ought to we take into consideration the contango of the gasoline curve and what sign you are in search of, you recognize, to use extra capital there, arguably that you’re on the low finish of the price curve in North America?

Ezra Y. Yacob — Chairman and Chief Government Officer

Sure, Steve, that is one other nice query on Dorado. You recognize, we have highlighted final quarter that money working prices are proper round that $1 already for the asset. And so, we do contemplate it to be one of many lowest price pure gasoline initiatives in all the U.S. and really properly positioned.

Verde is on-line, which we’re very enthusiastic about. However the North American gasoline stock, as you mentioned, is, you recognize, it is at present about 5% above the five-year common nonetheless. And we’ll see what occurs with winter. However both means, whether or not it is heat or chilly, the business, you recognize, does seem to haven’t just some curtailed volumes, however there’s additionally some gasoline DUCs that can seemingly come on-line fairly shortly.

And so what we see — and that is considerably in keeping with the place we have been for the final two years is that 2025 is actually going to be an inflection level for North American gasoline demand with LNG starting to return on-line after which coming on-line actually ’25, ’26 ’27. And once we take into consideration that, it is — as we calculated about 10 to 12 bcf a day of LNG that is underneath development and will come on-line in that time-frame. After which, above and past that, we really see one other nearly 10 to 12 bcf a day in demand progress between now and the tip of the last decade, that is actually related to energy demand, a bit bit of business, some Mexico exports, however actually, it is energy demand pushed not solely by new energy demand from AI and electrification, but additionally coal energy retirements. And so, you recognize, our purpose with Dorado is to proceed to take a position at a tempo the place we are able to seize a number of the economies of scale, as Jeff talked about, which within the final two years has actually been a one rig program.

And because the market begins to open up for us, we might like to extend that. The following type of crucial level in these unconventional performs is to get to a steady completion unfold. However we’re very enthusiastic about the place we are able to go and the asset that we have captured there.

Operator

And our subsequent query right this moment will come from Arun Jayaram with JPMorgan Securities LLC. Please go forward.

Arun Jayaram — Analyst

Yeah, good morning. Ezra, I used to be questioning if we may speak about places and takes when it comes to 2025 capital. Jeff talked about, that you simply count on to run comparatively flattish exercise however with the actions between some basins. So, I used to be questioning for those who may type of characterize how capital would transfer.

You are going to be a bit bit extra lively at Dorado, we expect, within the Utica I believe your strategic infrastructure spend goes to go down on a year-over-year foundation, and there is clearly a number of the effectivity good points that Jeff was highlighting.

Jeffrey Leitzell — Government Vice President, Chief Working Officer

Yeah, Arun, that is Jeff. Yeah. Thanks for the query. So sure, as you talked about, and we talked about in our opening feedback, the plan proper now, which remains to be early, is to take care of comparatively flat exercise subsequent yr.

And people minor shifts, I imply, they’ll be pretty small. I imply just a few wells right here and there and fairly immaterial throughout the portfolio, which is able to result in the modest enhance in exercise we talked about within the Utica. So, what I might first say is nearly our present program and the exercise ranges we’re at, you recognize, we’re extraordinarily pleased with the progress we have made. And the enhancements we have seen throughout the entire portfolio by actually specializing in that.

And the place we’re at now’s actually we wish to deal with the rising performs and actually getting them to that crucial exercise stage to maximise our efficiencies, which step one in that’s getting it to at least one full drilling rig. After which. actually, the subsequent hurdle goes to be getting these performs to at least one full frac fleet. So, within the Utica, as we have touched on, we needs to be there subsequent yr.

We’re a couple of 50% enhance in exercise. We’ll be as much as two full rigs and one full frac fleet by year-end, so we’ll attain these crucial factors. After which Dorado, which you speak about we actually anticipate sustaining simply the one full rig that we have been operating. We have been seeing excellent efficiency and efficiencies from that constant operations.

However we’ll proceed to handle the investments in our completion exercise simply as we watch the pure gasoline market and transfer by means of the winter. So, I believe by doing all this, this actually permits us to proceed progress every a kind of rising performs, however we’ll nonetheless be capable to ship one other yr of sturdy outcomes from the portfolio. After which, simply actual fast on infrastructure. You probably did hit on it.

You recognize, over the previous couple of years, we have had a bit little bit of extra infrastructure spend that was strategic with the Janus gasoline plant and the Verde pipeline. This yr, it was round $400 million. And searching ahead to 2025, actually, we simply — we’ll be ending up that Janus plant and some little issues from a services facet on the Verde pipeline. So, we count on strategic spend there subsequent yr to be someplace round $100 million.

After which, as these proceed to roll off and we glance sooner or later, we’ll begin shifting again towards that 15% to type of 20% oblique stage.

Arun Jayaram — Analyst

Acquired it. That is useful. Perhaps only a follow-up to Steve’s query on the optimization of the stability sheet. You talked about, Ezra, that this might perhaps drive greater money returns to buyers.

How a lot does the potential to do A&D or bolt-ons, countercyclical A&D? How did that progress when it comes to your considering phrases of, you recognize, going to $5 billion $6 billion of gross debt?

Ezra Y. Yacob — Chairman and Chief Government Officer

Yeah, Arun. That is Ezra. Yeah, I imply, I believe you are proper. Whereas we’ll be making our capital construction extra environment friendly, we’ll be very properly positioned nonetheless to have what we contemplate business’s main stability sheet, fairly frankly.

And that does going to protect — it will protect the monetary energy of the enterprise for us. You recognize, that can give us the power to nonetheless keep the power to proceed to spend money on counter-cyclic, you recognize, low-cost property bolt-ons, different issues that we have achieved up to now alongside those self same traces. And what I might say is the power to return, you recognize, greater than 100% of annual free money circulation the close to time period and ship extra cash to shareholders over time. It is actually simply an impact of, once more, shifting a number of the fairness into the debt facet.

The place we’re beginning at right this moment is such a place of energy with a money optimistic place that even leveraging up on this debt facet, it nonetheless places us in an ideal place to have the ability to proceed to execute on loads of our priorities. Like I mentioned, you recognize, together with low-cost property bolt-ons to have the ability to be ready to opportunistically step into bigger share repurchases if the chance presents itself. And so, we actually see this as a really shareholder-friendly maneuver that we’re doing. And like I mentioned, you recognize, the timing of it’s actually simply what we type of see available in the market and the truth that we do have a number of the bonds maturing.

Operator

And our subsequent query right this moment will come from Scott Hanold with RBC Capital Markets. Please go forward.

Scott Hanold — Analyst

Thanks. I will hit on the stability sheet optimization. And, Ezra, you’ll be able to simply form of answered a part of my query there almost about just like the why now. It is positively distinctive to the sector.

And simply type of curious, was this a choice you have been considering for a while. Sort of what was the catalyst to maneuver on it now? And in addition, with respect to that, how a lot worth creation from shifting to a decrease price capital construction like shifting from fairness to debt, a few of that worth, how a lot of a worth enchancment do you count on to see from that?

Ezra Y. Yacob — Chairman and Chief Government Officer

Yeah, Scott. That is Ezra once more. So, on the strategic portion, after which perhaps I will hand over to Ann to get in a bit bit extra of the mechanics. However, yeah, I believe that is actually in keeping with the place the administration and Board has been considering for a very long time.

As I began off the Q&A session with Steve, I discussed that I believe we have been fairly constant speaking about, you recognize, the purpose of the corporate has by no means been to go to an absolute zero debt stage. However actually, we prefer to be positioned to create long-term shareholder worth and having completely different measures — completely different talents to try this. One factor that we love about having that pristine stability sheet that I ought to have simply talked about when talking with Arun can be the peer main common dividend that we have now. And this offers us confidence in having the ability to proceed to develop that and keep that dividend.

As I mentioned in my opening remarks, you recognize, it has been 27 years that we have been paying that dividend with out ever needing to droop it or lower it. And that is one thing we’re very proud about. So, we actually have a look at your entire, you recognize, precedence of our money flows once we have been occupied with this. And the set off once more that is induced it proper now’s simply the place we’re at within the macro setting.

And never from the commodity facet, however actually from the monetary facet. If you happen to recall, Scott, the final bond that we retired was a couple of $1.2 billion bond again in Q1 of 2023. And that was proper determination on the time for us, however one of many causes isn’t solely have been rates of interest climbing at the moment, however as all of us recall, there was a — what turned out to be a quite considerably small banking disaster on the time, felt prefer it may, you recognize, perhaps presumably balloon into one thing bigger. So, we refinanced that — or I am sorry, we paid that off with money readily available.

And basically, since then, rates of interest have at all times been climbing up till the latest final couple of quarters the place issues have type of plateaued, and we’re beginning to see them bend over a bit bit. So, these are actually the issues which have type of given us the arrogance to type of go forward and make this determination now. So far as shifting the fairness onto the debt facet and the impression for us, I will hand that off to Ann.

Ann Janssen — Government Vice President, Chief Monetary Officer

Yeah, the best way we have a look at it’s the optimum capital construction is one the place the stability sheet has extra debt than what we have now right this moment. So, mainly, we’re placing on a stage of debt that’s extra applicable for our firm of our dimension and energy on this level within the cyclical business. So, if you wish to have a look at these parameters as we talked about, first, we needed to be lower than one instances complete debt to EBITDA leverage ratio at approximate backside cycle costs round $45. And for those who compute that out, that provides us a yield of complete debt stage of about $5 billion to $6 billion.

Conversely, for those who have a look at the money facet of the enterprise, as we have a look at the suitable stage of money, we expect that is at present concerning the stage we have held for the final two years. We want a couple of minimal of $2 billion in money to run the enterprise every day. After which, that extra money permits us to backstop the common dividend in addition to assist extra money return and make the most of these countercyclical alternatives. So, once more, echoing Ezra’s feedback, our principal goal is simply to create long-term worth for our shareholders.

And we expect organising the stability sheet the best way we’re will higher place us to have an applicable stage of money to run the enterprise, proceed to make these investments as they current themselves, and backs up our common dividend by means of the cycle.

Scott Hanold — Analyst

Understood. Thanks. My follow-up is a bit bit on the election. The outcomes actually have created loads of volatility within the markets.

And as you have a look at what this implies to the power business and particularly for EOG, what are a few of your preliminary type of takeaways and the potential tailwinds at play?

Ezra Y. Yacob — Chairman and Chief Government Officer

Yeah, Scott. We nonetheless bought clearly, the presidential and the Senate is getting near — you’ll be able to type of see who’s going to manage these two parts of our Congress, after which we’ll see the place the home finally ends up after that. I believe for us, you recognize, what we actually put together for is type of this subsequent couple of months. Each time there is a change of administration, that is the time interval once we actually begin to focus in, perhaps take some steps to arrange simply in case issues can decelerate.

So, we’re feeling excellent excellent with the place we’re at proper now. So far as going ahead on the business, you recognize, I believe the business has come a good distance so far as our relationship with not solely on the federal stage, however actually on the native stage, working alongside policymakers, regulators, and such. And I believe the business is in a spot to proceed the efficiency that we have had over the previous couple of years. When — I do know I can communicate a bit extra instantly for EOG within the areas that we function, even the brand new areas like in Ohio with our Utica play.

We have actually developed an impressive relationship, I believe. Many throughout business policymakers, actually simply stakeholders, typically, see that there’s a lengthy — that oil and pure gasoline are going to play a protracted — are going to play part of the long-term power resolution and that working with the business is actually one of the best ways type of obtain the objectives of low-cost, dependable, and decrease emissions kind of power sources.

Operator

And our subsequent query right this moment will come from Leo Mariani with ROTH. Please go forward.

Leo Mariani — ROTH MKM — Analyst

Hey, guys. Wished to simply contact base a bit bit right here on the Utica once more. So, simply curious, you guys talked about, you recognize, $6 to $8 a BOE. I believe that was unique to the risky oil window.

Do you assume there’s room to type of proceed to get prices down over time? I do know you guys have talked a couple of long-term purpose of BOE discovering price, however I believe that will have included a number of the gassier home windows as properly. So, you recognize, the place are you at in the price cycle within the Utica? And do you assume there’s nonetheless vital room to take that down?

Keith Trasko — Senior Vice President, Exploration and Manufacturing

Yeah, Leo, that is Keith. The discovering price vary, yeah, you are proper. It’s particular to the risky oil window and the 225,000 web acres we have now there. The vary represents the expectations for the subsequent two to 3 years of improvement.

That is the identical for the properly price vary. If you happen to again out science on a few of our early wells, we have hit the higher finish of this vary a number of instances, and we’ll proceed to drive it down with the economies of scale. Versus the $5 discovering prices we beforehand disclosed, that displays your entire 445,000 acre subject. That features the up-dip oil window and the down-dip condensate window.

It additionally incorporates full subject improvement. So we nonetheless see line of sight to that, however what we’re doing right here is giving extra steering within the near-term. Total, we have made nice progress within the play, the properly productiveness and properly price proceed to exhibit the premium high quality, and it actually highlights our natural exploration technique.

Leo Mariani — ROTH MKM — Analyst

OK. Admire that. I needed to see if there was any replace on the PRB. I really feel prefer it’s been a bit time since we have type of heard on that.

How are you type of viewing that play when it comes to the way it stacks up in opposition to others? And I believe you are doing a bit bit much less on the properly facet this yr than you probably did. Final yr, you talked about including a bit little bit of exercise within the Utica for 2025. Simply type of any replace when it comes to how the PRB is performing and the way you are type of occupied with future exercise ranges there.

Jeffrey Leitzell — Government Vice President, Chief Working Officer

Yeah, Leo. That is Jeff. So sure, the powder is progressing properly. As we have talked about for the previous handful of years, we have actually been targeted on the Mowry formation, which is the deeper formation and actually type of lining out our geologic mannequin and what our improvement plans are there, and we bought actually good success with it.

So, we have shifted over since we have gotten all that overlying geologic information within the Niobrara to the place we’re actually doing a cut up program this yr of about 25 wells cut up between the extra and the Niobrara. And what I might say is we have utilized the brand new geologic fashions, and we’re persevering with to refine our completion strategies up there. And thru the primary a part of the yr, we introduced on a few of these Niobrara wells. And I imply, outcomes are very early proper now, however they’re very encouraging.

We’re seeing an uptick of better than most likely about 10% enhance in productiveness versus 2023 within the Niobrara. So, shifting ahead proper now, I believe we’re in a really comfy spot. We nonetheless have little to be taught there within the Niobrara and type of simply our improvement patterns and when to offset in depletion and area. And so, I believe we’re most likely going to be fairly according to our program as we transfer into 2025 as we proceed to refine these fashions.

Operator

And our subsequent query right this moment will come from Kalei Akamine with Financial institution of America. Please go forward.

Kalei Akamine — Financial institution of America Merrill Lynch — Analyst

Hey, good morning, guys. Thanks for getting me on. My first query is on the gasoline information. So, we have seen it go up each single quarter this yr, and we expect that, that is the Permian.

I respect that the Janus plant is coming on-line. However I am questioning if that gasoline outperformance pulls ahead any of your extra midstream improvement time traces?

Jeffrey Leitzell — Government Vice President, Chief Working Officer

Yeah, Kalei. That is Jeff. And, no, our plans are fairly safe so far as that goes. And actually, there should not be any development.

I imply all the — any of the type of midstream — or I ought to say strategic infrastructure initiatives that we have talked about, I imply, they’re on time and so they’re on tempo to return on-line once we anticipated. With the Janus gasoline plant, as we have talked about, the plan is to finish that subsequent yr. So, as we talked about, we’ll have a bit little bit of strategic infrastructure {dollars} related to that, about $100 million. However apart from that, no, there might be actually no acceleration in any of these initiatives.

Kalei Akamine — Financial institution of America Merrill Lynch — Analyst

Acquired it. For my follow-up, I might like to return to Dorado. I respect that it is bought very low money prices. I believe up to now, we have talked about $1, and that falling by $0.50 to $0.60 due to Verde.

And form of given its place on the coast, I think about that it will be fairly a resilient play. My query is, are you going to optimize manufacturing round that money price determine? Or do you assume that there’s a return threshold to think about that might trigger you to perhaps curtail manufacturing or perhaps decelerate?

Ezra Y. Yacob — Chairman and Chief Government Officer

Sure, Kalei. That is Ezra. Dorado, the best way we have a look at Dorado, fairly frankly, is just like the best way that we spend money on any of our basins, and it begins with the returns profile. Are we investing on the proper tempo to optimize the returns and the last word NPV of that asset? And fairly frankly, what we present in Dorado, particularly with its location there near the demand heart, coupled with a number of the strategic selections we have been capable of make on the advertising and marketing facet, is that this dry gasoline play from an economics perspective actually competes with lots of our oil performs.

And so, that is actually what governs how shortly that we make investments into that play. On the decrease stage, as we have talked about with any of those unconventional assets or these rising belongings, we prefer to try to get to those crucial factors of the place you seize the economies of scale. So, the primary is constant rigs. The second level could be a constant completion unfold the place you are not mobilizing out and in of basin, loads of crews and issues like that.

It offers you the power to actually know the crew that you simply’re working with and the tools and you may actually begin to leverage the learnings. On the higher finish of it, you’ll be able to positively outrun your tempo of funding there and your skill to be taught on every properly and make every properly a bit bit higher, whether or not it is discovering price or properly efficiency. After which, layered on prime of that, clearly, is the macro setting. Now, we have achieved an ideal job with Dorado by strategically permitting that gasoline to succeed in a number of markets.

It is bought a number of retailers and it is well-positioned alongside the Gulf Coast like we mentioned. And in order that does deliver to it an inherent alternative to proceed to ship that gasoline. And we expect that it is going to be, you recognize, a good portion of the longer term provide that ought to develop into the North American rising gasoline demand.

Operator

And our subsequent query right this moment will come from Neal Dingmann with Truist. Please go forward.

Neal Dingmann — Analyst

Thanks for the time, guys. I am hoping I can ask one other one on the Utica particularly. I might love to listen to your newest ideas on the way you’re occupied with the prospectivity extra on the west facet of the play, both in that black oil or risky oil within the play? After which, only one different query on this play. What is the newest on simply the decline? I do know it is nonetheless early, however I am simply questioning are these wells declining extra like typical oil wells or like a Marcellus gasoline properly?

Keith Trasko — Senior Vice President, Exploration and Manufacturing

Yeah. That is — that is Keith. On the prospectivity total, you recognize, we’re nonetheless targeted primarily on the risky oil window and making an attempt to, you recognize, dial down spacing there. We’ll finally leap as much as the west facet or to the — additionally to the condensate window in some unspecified time in the future.

We’re nonetheless within the information gathering section there. On the decline facet, I might say we’re not seeing something out of the strange. It is a combo play, and we see, you recognize, the declines like a typical tight shale properly just like the Eagle Ford.

Neal Dingmann — Analyst

Acquired it. OK. OK. After which, perhaps only a second one, a follow-up simply on total stock.

I am simply questioning, I perceive now not put out the properly depend in your slides such as you beforehand had within the appendix. I am simply questioning — I hoped you could possibly give a way or perhaps a ballpark of what number of years you are occupied with of operating room particularly within the Del, Eagle Ford, and Bakken on the present rig paces.

Ezra Y. Yacob — Chairman and Chief Government Officer

Yeah, Neal. That is Ezra. What we do disclose is our useful resource potential in — so far as useful resource, and we have continued to indicate that we have got about 10 billion barrels of equivalents the premium useful resource multi-basin portfolio. Those that you simply’re highlighting are — it is an fascinating assortment since you’ve bought a mixture of type of — these are foundational performs, however they’re all at completely different type of legacy elements.

So, within the Bakken, you recognize, we run mainly a one rig program, and we’re at some extent the place we really feel that we are able to proceed to try this and generate comparable returns for a variety of years to return. Within the Eagle Ford, many issues have modified within the Eagle Ford, and I believe everybody has seen that we have slowed down our tempo of funding type of only for lack of a greater information level, say, pre-COVID till post-COVID, the place nowadays, we put the gross sales perhaps 120 wells to gross sales yearly or one thing like that. And once more, the slowing down of that funding, it is much less concerning the stock that we have now remaining, and it is extra about what I used to be talking with Kalei about so far as investing in every of those performs on the proper tempo. Slowing down there within the Eagle Ford, we have really elevated the returns and expanded the margin profile, and that is actually the factor that we deal with.

After which, within the final one which I might point out is the Delaware Basin, after all. To be sincere with the Delaware Basin, I believe it is tough. Trade has achieved loads of drilling there over the previous decade. However with the expertise developments, I believe business continues to unlock — particularly on the Delaware Basin facet, unlock extra targets yearly.

And so, to be fairly sincere, it is a bit bit tough to quantify simply how a lot stock could be left in such a strong useful resource because the Delaware Basin. You are speaking about actually a far price of oil and gasoline saturated reservoirs in that basin. And so, we really feel excellent concerning the premium useful resource that we have now in place. We have got a really high-quality, very deep bench of belongings throughout a number of basins.

And actually, on the tempo that we’re working within the final couple of years and the place the macro setting seems to be proper now, you recognize, stock is — lack of stock isn’t actually one thing that we actually ever makes our radar. What we proceed to search for is bettering the standard of that stock by means of our natural exploration efforts, which is likely one of the issues that is pushed the success there in Utica.

Operator

And our subsequent query right this moment will come from Charles Meade with Johnson Rice. Please go forward.

Charles Meade — Analyst

Sure. Good morning, guys. Congrats to you and your entire staff there. I needed to return to your ready feedback, you spoke a bit concerning the commodity macro.

And also you gave a thought on the U.S. provide image. However I ponder for those who may type of share with us your viewpoint on what the vary of attainable outcomes is for 2025? And never that we’re in search of particular prediction, however extra of simply making an attempt to get an understanding of your considering that is informing your strategy to 2025?

Ezra Y. Yacob — Chairman and Chief Government Officer

Sure, Charles, let me offer you a bit extra background on that. As you guys know, we type of construct our fashions. We begin internally with the issues that we all know finest, that are operationally within the subject. And so, the largest factor that’s driving our type of U.S.

numbers. And only for historic 2023, I believe the U.S. was about 1.5 million barrels liquids progress. Final yr — or I am sorry, this yr, it is wanting extra like it will be proper round half of that, perhaps about 700,000.

And so, in 2025, we see a bit bit lower than that, even moderated progress off of that quantity for the U.S. And it actually begins with the place the rig counts are at and the place the oily drilled however uncompleted properly ranges are at. Each of these are comparatively low. And on the rig depend facet, it hasn’t actually moved.

The rig depend actually hasn’t moved in nearly a yr now. And so, that is actually the largest factor that is informing our expectation for barely much less progress yr over yr within the U.S.

Charles Meade — Analyst

Acquired it. Acquired it. After which may you give us a fast rundown of how, or how or when — you recognize, Beehive 2025 program?

Ezra Y. Yacob — Chairman and Chief Government Officer

I am sorry, Charles, you broke up there. I did not catch that. How or when — what was it?

Charles Meade — Analyst

Beehive, Beehive, the Australia properly.

Ezra Y. Yacob — Chairman and Chief Government Officer

Sure, sir. Yeah, Jeff?

Jeffrey Leitzell — Government Vice President, Chief Working Officer

Sure. Charles, that is Jeff. Sure. So we have now secured the allow there, and we’re actually excited to be testing prospect.

The plan is to check it subsequent yr. So, clearly, it is an oil prospect. It is a big untested construction there. It is actually near markets, and it is there on the Northwest Shelf of Australia.

So, the factor that I might actually level out is it is a prospect that is very comparable in water depth and operations, the setting, I ought to say is Trinidad. So, we’ll actually be capable to leverage all that shallow water experience that we have now there. So, at the moment proper now, we have got a staff in place there in Australia, and we’re excited to go forward and check that prospect someday subsequent yr.

Operator

And our subsequent query right this moment will come from Scott Gruber with Citigroup. Please go forward.

Scott Gruber — Analyst

Sure, good morning. You guys have talked about conserving exercise largely constant for 2025. Your oil volumes might be up about 2% yr on yr on the exit this yr. Is {that a} quantity, we needs to be anticipating type of the same determine for 2025? After which, clearly, there’s some issues on the macro facet.

Simply curious, slightly below what circumstances would you look to dial again exercise to make sure extra of a flattish development in your oil manufacturing?

Ezra Y. Yacob — Chairman and Chief Government Officer

Yeah, Scott, that is Ezra. Such as you mentioned, it is — you recognize, I do not assume we’re at this level prepared to speak a couple of proportion there on 2025, however you’ll be able to go forward and depend on what we have talked about right this moment with comparable exercise ranges. I imply, the best way to actually take into consideration our capital allocation is it isn’t a — it does not start with that progress quantity. It truly is an output of our funding technique.

And as you highlighted, you recognize, we’re probably not rising that a lot proper now. I imply I believe within the final 12 months, we have grown about 10,000 barrels of oil per day, which, you recognize, for a 490,000 barrel of oil per day firm is actually fairly mushy. It is actually one thing that we may develop extra aggressively if we wish to deal with it. However fairly frankly, what we deal with is we make investments stability returns, NPV, free money circulation era in each the brief and long-term, and the way we are able to, you recognize, finest return that money to shareholders.

That is actually the main target of our disciplined funding technique. And once we get it appropriate in every of our performs, you make investments on the proper tempo as we have talked about right this moment, that is whenever you actually begin to notice the operational efficiencies, the price reductions and the efficiency enchancment that Jeff actually highlighted in his opening feedback. So, that is what you must count on for us. Once we take into consideration the success this yr of managing the funding in that means and the way we handle our portfolio, you recognize, the distinctive outcomes that we’re seeing throughout our wells, I believe in simply the Delaware Basin and Eagle Ford alone are foundational performs.

The wells that got here on manufacturing in first half of 2024 really paid again their capital funding in combination by July 1st. And people outcomes are the categories which can be flowing straight by means of to the shareholders as a result of within the first 9 months of the yr, we have been capable of return 92% of that free money circulation to our shareholders. So, that is actually the best way that we strategy it. So far as what state of affairs would we do one thing dramatically completely different.

we do have the flexibleness to both enhance or decelerate our exercise stage. We’ve got put out at the start of this yr, that three-year state of affairs, which supplies a bit little bit of — I do not wish to name it steering, but it surely offers you some eventualities between a $65 to $85 vary and the kind of monetary efficiency that we may count on if we invested it at comparable ranges to what we’re speaking about right this moment. And you may see even at a $65 case, you recognize, it is a very compelling funding state of affairs the place we have got a low reinvestment fee; 6%, I believe, is the money circulation and free money circulation progress per share, which does not embrace any share repurchases. You are speaking a couple of 20% to 30% double-digit ROCE and free money circulation era, not solely to assist our common dividend, however extra free money circulation to assist, you recognize, both extra particular dividends or opportunistic share repurchases as properly.

Scott Gruber — Analyst

I respect all that coloration. I had a follow-up in your carbon seize initiative. With the pilot challenge up and operating, are you able to communicate to your curiosity in doing extra initiatives and would these be confined to inside initiatives? Or would you contemplate third-party initiatives?

Ezra Y. Yacob — Chairman and Chief Government Officer

Sure, Scott, that is a great query. Proper now, we view our carbon seize and storage initiatives as one thing inside to assist our operations and deal with that. We have had good success with our pilot challenge, as I talked about simply briefly within the opening. And it is actually simply turning into extra of a normal piece of our enterprise.

And we’re beginning to search for different alternatives throughout our portfolio the place we would be capable to deploy that expertise. However so far as gathering third celebration or one thing like that, we have checked out it and evaluated it. However like most issues, the true worth for a lot of the expertise that we develop is normally higher saved inside.

Operator

And our subsequent query right this moment will come from Kevin MacCurdy with Pickering Power Companions. Please go forward.

Kevin MacCurdy — Analyst

Hello, good morning. I believe the market is appreciating the reconsideration of your capital construction. My query is on how dynamic do you propose to be on managing that capital construction? As EBITDA grows with greater manufacturing and higher margins over time, it looks as if you must have a extra of a security web on the draw back leverage goal. Would you retain — you recognize, would you propose to maintain returning a better proportion of your free money circulation sooner or later, even when that strikes you to a web debt place?

Ann Janssen — Government Vice President, Chief Monetary Officer

Hello, Kevin, it is Ann. You recognize, we’re in a great place now. We’ve got such a robust stability sheet that the extent of debt we wish to carry and the amount of money we wish to carry has some flexibility constructed into it. So, that is the great facet of it.

So, as we’re the way to return that free money circulation, we’ll keep in keeping with what our fundamentals are and the way we wish to return our free money circulation. We’ve got the money priorities schedule on how we have a look at simply money on the stability sheet and the way we wish to return that to shareholders. And so far as the debt stage we wish to carry, we’re comfy going to a better debt stage, if that is what is sensible for the enterprise on the time. However once more, we have now loads of flexibility in managing these elements, and we’ll transfer ahead based mostly on what the enterprise wants are on the time.

Kevin MacCurdy — Analyst

Sure. I imply it looks as if you highlighted the near-term shareholder return profit, however, you recognize, this construction may set you up for probably even greater proportion of returns sooner or later. I assume my follow-up right here is, you talked about low price property bolt-ons as a part of your stability sheet plans. Do you’ve any coloration on the place you see essentially the most alternatives for that? And what’s the greenback threshold between a low-cost bolt-on and vital M&A, which you have type of averted up to now?

Ezra Y. Yacob — Chairman and Chief Government Officer

Yeah, Kevin, that is Ezra. That is a great query. It is probably not outlined, I believe so far as, you recognize, a low-cost property bolt-on or vital merger and acquisition. I imply, I believe on the one finish, all people is aware of what a big M&A could be.

It might be one thing company of magnitude like that. Actually, the best way we give it some thought is on the worth driver. And so, perhaps that is one of the best ways to reply it’s low PDP with excessive upside on drilled acreage is what we actually search for. And that prime upside on undrilled acreage sometimes comes on rising belongings, to be completely sincere, as a result of for those who’re shopping for high quality of acreage in a play that is recognized and it will be additive to the standard of our stock, you recognize, odds are you are going to be paying an enormous premium for that, and that is going to erode your long-term margins.

Not your wellhead charges of return, however your full cycle margins. So, that is actually what we glance on. And I believe that additionally type of speaks to the place you are at with, you recognize, the place are the alternatives for that. Sometimes, we discover these alternatives most of the time in a number of the rising belongings, simply because, once more, we have a tendency — we expect we have now the power to probably establish and unlock worth that perhaps will get bypassed by others.

And, you recognize, when you consider constructing out our stock that means and persevering with to enhance the standard our stock, that goes a protracted technique to what you have been simply implying so far as the long-term return profit with this capital construction. As you have seen, fairly frankly, within the final couple of years is our rising performs as we have gained extra confidence in these, and people have come to fruition, we have elevated the share of money return from just under 70% — down round 60% to creating our dedication 70% to final yr, and this yr, mainly, at or exceeding 85% of the free money circulation. So, because the energy of enterprise total improves from the operational efficiency, that is what in the end flows by means of to the monetary efficiency.

Operator

This can conclude our question-and-answer session. I want to flip the convention again over to Mr. Ezra Yacob for any closing remarks.

Ezra Y. Yacob — Chairman and Chief Government Officer

We respect everybody’s time right this moment. I simply wish to say thanks to our shareholders to your assist and particular because of our staff for delivering one other distinctive quarter.

Operator

The convention has now concluded. Thanks for attending right this moment’s presentation. [Operator signoff]

Length: 0 minutes

Name individuals:

Pearce Hammond — Vice President, Investor Relations

Ezra Y. Yacob — Chairman and Chief Government Officer

Ann Janssen — Government Vice President, Chief Monetary Officer

Jeffrey Leitzell — Government Vice President, Chief Working Officer

Ezra Yacob — Chairman and Chief Government Officer

Steve Richardson — Evercore ISI — Analyst

Arun Jayaram — Analyst

Jeff Leitzell — Government Vice President, Chief Working Officer

Scott Hanold — Analyst

Leo Mariani — ROTH MKM — Analyst

Keith Trasko — Senior Vice President, Exploration and Manufacturing

Kalei Akamine — Financial institution of America Merrill Lynch — Analyst

Neal Dingmann — Analyst

Charles Meade — Analyst

Scott Gruber — Analyst

Kevin MacCurdy — Analyst

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