EOG Resources, Inc.

And welcome to the EOG Resources Third Quarter 2020 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Tim Driggers, CFO. Please go ahead.

Good morning and thanks for joining us. We hope everyone has seen the press release announcing third quarter 2020 earnings and operational results. This conference call includes forward-looking statements. The risk 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 are in the accompanying investor presentation slides. 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 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 Baedeker, EVP, Expiration and Production, Ezra Jacob, EVP, Expiration and Production, Lance Treveen, Senior VP Marketing, and David Streit, VP in Investor Relations and Public Relations. Here's Bill Thomas.

Thanks, Tim, and good morning, everyone. Our third quarter results underscore EOG's unique ability to organically create sustainable shareholder value through the commodity cycle. Along with substantial cost reductions and solid earnings results, we announced Serato, our new premium South Texas natural gas plant. We also introduced a three-year reinvestment and production outlook. First, I want to highlight our stellar execution this year, then provide some context on our capital allocation and three-year outlook. We continue to make rapid and sustainable improvements to our cost structure and capital efficiency through innovation, while also improving the quality and size of our premium portfolio through exploration. Our results show we can invest in both innovation and exploration to improve the company and while also generating significant free cash flow, improving the balance sheet, and protecting the dividend. Capital spent in the third quarter was $2.7 billion, over $300 million less than our revised plan had forecasted. In the third quarter, we substantially beat our cash unit cost targets, as well as each of our oil, NGL, and natural gas production targets. As a result, we have generated more than $930 million of free cash flow year to date. already more than enough to cover the full-year dividend. Our 21-TCF Dorado natural gas play announced yesterday is a great example of the OG's ability to identify and capture high-quality rock and add substantial premium inventory to our organic exploration efforts. We believe Dorado will be one of the lowest cost and lowest emission natural gas plays in the U.S., with advanced access to both domestic market hubs and international market via LNG. EOG has a long and successful exploration history, and we continue to be excited about the potential of our current exploration portfolio. I am incredibly proud of EOG employees' performance during this pandemic. They remain highly motivated and have demonstrated EOG's return-focused culture by improving the company at a record pace in a volatile environment. We will encourage We will emerge from this downturn an even stronger company, positioning EOG to excel through the commodity price cycles. Yesterday, we also introduced a three-year outlook. The goals of disclosing this outlook are to provide more transparency into our capital allocation process and meaningful visibility into the next three years, particularly given the ongoing level of uncertainty in the oil and gas market. Our capital and growth profile optimizes the total shareholder value of the company through the cycles. Our strategy remains dynamic, and our operations are flexible enough to adjust our spending to match market conditions. At the bottom of the cycle, as we find ourselves today, we have no interest in growing oil into an overbalanced market. In an improved market, our disciplined growth strategy compounds the benefits of growth and continuous operational improvements to optimize returns and free cash flow potential and maximize long-term shareholder value. EOG represents a full-cycle investment opportunity. At lower prices, EOG is clearly a sustainable business. Maintenance capital and the dividend can be funded with oil in the mid-30s. In a more constructive market, EOG has significant leverage to higher oil prices through high return reinvestment and significant incremental free cash flow. EOG has a unique business model in our industry. We approach this business differently, which has become more apparent than ever with recent industry developments. First, the state of recent M&A activity stands in contrast to one of our most distinctive competitive advantages, organic exploration. Capturing high-quality rock is the primary way of improving the quality of our premium inventory. It's how we create more value than our competitors. Our newest play, Dorado, is a prime example. It's great rock in a great location, and that's a resource you can't buy through M&A. Second, we're decentralized. Value is created in the field, not at headquarters. The exploration idea behind Dorado emerged bottom-up from one of our eight operating areas. In fact, perhaps for the first time in our history, every one of our eight areas has significant potential for premium plays, plays that, if successful, will add to the top of our inventory, not the bottom. Third, the improvements we're making are sustainable. The number one source of our cost reduction this year is from innovation, not cyclic service price reductions. Once again, that's the power of our decentralized organization. It's an innovation incubator and a driving force behind EOG's leading performance. Fourth, we execute our operational plans reliably and consistently. This year, we worked hard to provide transparency in our operations by providing guidance throughout one of the most volatile periods in the industry's history, and we delivered on our plan. Fifth, performance drives our ESG efforts, not PR. We believe the demand for oil and natural gas will gravitate towards the most efficient producers, the most efficient from a capital perspective, and the most efficient from an emissions perspective. Our goal is to be part of the long-term global energy solution while generating strong returns for our shareholders. Finally, and most importantly, We believe we have the most talented and motivated employees in the industry. We've not laid off employees, and we've empowered our workforce by leveraging our robust information technology infrastructure to support collaboration and innovation. Our employees and culture are a massive competitive advantage during these unusual times. And we're not standing still. Our relentless drive to improve means that this is just a starting point. We are confident that we will continue to improve performance through the development of new plays like Dorado, further cost reductions, and well productivity improvements. We're excited about the future of EOG. Now here's Tim.