EOG Resources, Inc.

Good day, everyone, and welcome to EOG Research's second quarter 2021 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 Chief Financial Officer of EOG Research, Mr. Tim Briggs. Please go ahead, sir.

Good morning, and thanks for joining us. We hope everyone has seen the press release announcing second quarter 2021 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 or 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, Ezra Jacob, President, Ken Bedecker, EVP, Exploration and Production, Jeff Leitzel, 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 is focused on improving returns. Results from the first half of the year are already reflecting the power of VOG's shift to our double premium investment standard. Once again, we posted outstanding results in the second quarter. We delivered adjusted earnings of $1.73 per share and nearly $1.1 billion of free cash flow, repeating the record-level free cash flow we generated last quarter. Our outstanding operational performance included another beat of the high end of our oil production guidance. while capital expenditures and total per unit operating costs were below expectations. We are delivering exceptional well productivity that continues to improve. In addition, even though the industry is in an inflationary environment, EOG continues to demonstrate the company's unique ability to sustainably lower costs. Our performance clearly proves the power of doubling our reinvestment hurdle rate. Double premium requires investments to earn a minimum of 60% direct after-tax rate return using flat commodity prices of $40 oil and $2.50 natural gas. I'm confident our reinvestment hurdle is one of the most stringent in the industry and a powerful catalyst to drive future outperformance across key financial metrics, including return on capital employed and free cash flow. As double premium improves our potential to generate free cash flow, We remain committed to using that cash to maximize shareholder value. The regular dividend, debt reduction, special dividends, opportunistic buybacks, and small, high-return bolt-on acquisitions are our priorities. In the first half of this year, we reduced our long-term debt by $750 million and demonstrated our priority to returning cash, significant cash, to shareholders with a commitment of $1.5 billion in regular and special dividends. We also closed on several low-cost, high-potential Bolton acquisitions in the Delaware Basin over the last 12 months. Year-to-date, we have committed $2.3 billion to debt reduction and dividends, which is slightly more than the $2.1 billion of free cash flow we've generated. Looking ahead to the second half of the year and beyond, our free cash flow priorities and framework have not changed. As we generate additional free cash, we remain committed to returning cash to shareholders in a meaningful way. We are focused on doing the right thing at the right time in order to maximize shareholder returns. Over the last four years, we've made huge progress reducing our GHG and methane intensity rates, nearly eliminating routine flaring, and increasing the use of recycled water in our operations. We are focused on continued progress towards reducing our GHG emissions in line with our targets and ambitions. This quarter we announced a carbon capture and storage pilot project, which we believe will be our next step forward in the process of reaching our net zero ambition. Ken will provide more color on this and other emission reduction projects in a few moments. Driven by EOG's innovative culture, our goal is to be one of the lowest cost, highest return, and lowest emission producers. playing a significant role in the long-term future of energy. Now here's Ezra to talk more about how our returns continue to improve.