EOG Resources, Inc.

Good day, everyone, and welcome to EOG Resources' second quarter 2019 earning 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 Chief Financial Officer of EOG Resources, Mr. Tim Driggers. Please go ahead, sir.

Good morning, and thanks for joining us. We hope everyone has seen the press release announcing second 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 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 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 U.S. 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 Bedecker, EVP, Exploration and Production, Ezra Jacob, EVP, Exploration and Production, Lance Turveen, Senior VP, Marketing, and David Streit, VP, Investor and Public Relations. Here's Bill Thomas.

Thanks, Tim, and good morning, everyone. EOG does not need high oil prices to create significant value for our shareholders. During the second quarter, despite a 12% decline in WTI oil prices, EOG generated more than $350 million of free cash flow, lowered our long-term debt by $900 million, and paid a substantially larger dividend than last year, all while organically growing U.S. oil production by 20%. The EOG culture consistently making improvements throughout the company year after year has propelled EOG to compete financially with the very best in the S&P 500s. all with oil prices averaging below $60 per barrel. We are now capable of delivering double-digit return on capital employed and double-digit growth while generating substantial free cash flow through the commodity price cycles. Our commitment to strong free cash flow is enabling us to rapidly grow the dividend. We've increased the dividend 72% in the last two years, and our ambition is to target a yield that is competitive in the S&P 500, which stands around 2%. EOG never stops improving. We are one of the lowest cost producers in the global oil market, and we continue to lower the cost of our business. In fact, we have strong visibility and high confidence in our ability to lower our costs so that by 2022, we can earn at least 10% return on capital employed at oil prices below $50 per barrel. Our first half results confirm that EOG is stronger than ever, and we are delivering a banner year in operational performance. For two quarters in a row, we delivered more oil for less capital. With efficiency gains and new technology, we are achieving strong capital and operating cost reductions. while at the same time delivering excellent well performance. In addition, the company is leasing acreage and testing new geologic play concepts that we believe could lower our decline rate and continue to reduce our cost to produce oil. At EOG, we have always believed in being a good corporate citizen goes hand in hand with delivering long-term value for our shareholders. And the same spirit of innovation that drives our excellence in operations is aimed at ensuring the business is sustainable in the long run. We are excited about several new environmental, social, and governance initiatives that will both reduce our environmental footprint while helping to lower costs and earn strong returns. We are a leader in water reuse in the Permian Basin, currently sourcing 90% of our water needs from recycled production water. We are busy transferring our reuse technology to other basins. EOG is also a first mover, and we believe the largest user of electric-powered frac fleets. Later this year, we will be testing the use of solar power to generate electricity for natural gas compression. Our expanding implementation of water reuse, electric frac fleets, and solar power are just a few of the many things we're doing to reduce our environmental footprint. Our goal is to be the leader in ESG performance by delivering high returns with responsibly focused operations. We will have more details in our updated sustainability report to be published later this year. EOG culture is more than three decades in the making and the foundation of our competitive advantage. Our ability to continuously improve the company is accelerating over time. It's not just a few items that we work on. It's every nut and bolt in every process in the company. Our culture of innovation leveraged through the application of real-time data analysis with our advanced information technology systems enables everyone in the company to create value. EOG's business is better than ever. and our insatiable desire to improve has us excited about our future. Next up is Billy to review our second quarter operational performance and outlook for the remainder of 2019.