EOG Resources, Inc.

Good day, everyone, and welcome to the EOG Resources First Quarter 2022 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.

Good morning and thanks for joining us. This conference call includes forward-looking statements, factors that could cause our actual results to differ materially from those in our forward-looking statements have been outlined in the earnings release and EOG's SEC filings. This conference call also contains certain non-GAAP financial measures. Definitions and reconciliation schedules for these non-GAAP measures can be found on EOG's website. This conference call also include estimated resource potential not necessarily calculated in accordance with the SEC's reserve reporting guidelines. Participating on the call this morning are Ezra Jacob, Chief Executive Officer, Billy Helms, President and Chief Operating Officer, 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 Ezra.

Thanks, Tim. Good morning, everyone. EOG's cash return strategy demonstrates our commitment to deliver long-term shareholder value. Yesterday we declared a second special dividend for the year of $1.80 per share following last quarter's $1 per share. Combined with our peer-leading annualized regular dividend of $3 per share year-to-date, we have announced $3.4 billion in cash return to shareholders in 2022. EOG has a strong history of cash return. Since we began trading as an independent company in 1999, we have delivered a sustainable, growing regular dividend. It has never been cut or suspended, and its 23-year compound annual growth rate is 22%. Since the transition to premium drilling in 2016, our dividend compound annual growth rate has been even higher at 28%, including doubling our dividend last year. Today, our regular dividend not only leads our E&P peer group, it is more than competitive across all sectors of the market. More recently, we have supplemented our regular dividend with significant special dividends, reflecting our commitment to both capital discipline and returning cash to shareholders. While we are proud of our cash return track record, we acknowledge shareholders' desire for more transparency and predictability. To provide both, we recently formalized and yesterday announced our cash return commitment of returning a minimum of 60% of annual free cash flow. Going forward, our intention is to evaluate and pay the regular dividend and consider options for additional cash return every quarter. The addition of quantitative guidance to our cash return framework reflects our confidence in our business. The pandemic-driven volatility in the oil and gas market is stabilizing. However, the macro environment continues to evolve with the war in Ukraine and other geopolitical events. We have proven to ourselves over the last several years that our business is resilient through the cycle. including unprecedented shocks to the industry. Credit for EOG's resilience for the steady improvement in our ability to generate free cash flow in any environment and the ability to make this free cash flow commitment to our shareholders goes to our employees who embraced our premium return hurdle rate six years ago, which requires that all investments earn a minimum of 30% direct after-tax rate of return using a $40 flat oil and $2.50 flat natural gas price. Last year, we doubled the minimum return to 60%. Both the premium and now double premium hurdle rates have positioned the company to have an outstanding year in 2022. In spite of the ongoing inflationary and supply chain issues facing our industry, our employees outperformed during the first quarter in our position to deliver on our annual capital and volumes plan. We have decades of low-cost, high-return inventory that support the consistent financial performance that our shareholders have come to expect and that drives long-term value. Our inventory spans multiple assets across oil, combo, and dry natural gas basins throughout the country, which enables us to pursue the highest netbacks by diversifying both our investment and sales market options. We also continue to explore. A year and a half ago, we announced Dorado, a premium dry natural gas play where we've captured 21 TCF of resource potential net to EOG. In a moment, Ken will update you on the progress we've made on well performance and well costs in what we believe is the lowest cost and lowest emission source of natural gas onshore U.S. Our organic exploration program has grown our premium inventory by more than three and a half times since the premium metric was introduced in 2016. So our exploration program isn't focused on adding more. We are looking for better inventory. New plays like Dorado and the potential we see in our current exploration pipeline gives us confidence we will continue to grow and improve our double premium inventory in the future as we have done in the past. While we have earmarked and committed to return a minimum of 60% of annual free cash flow, our longstanding framework and priorities for total free cash flow are unchanged. a sustainable growing regular dividend, a pristine balance sheet, additional cash return to shareholders through special dividends and opportunistic stock buybacks, and low-cost property bolt-ons. Sustaining and growing the regular dividend remains our highest priority and reflects our confidence in the long-term performance of the company. A pristine balance sheet is a strategic advantage functioning as a shock absorber that also provides the flexibility to exercise a buyback when the opportunity arises and to take advantage of other counter-cyclical investments. Additional cash returns through special dividends and buybacks complement our other priorities and together with our free cash flow minimum return guidance support our goal to create significant long-term shareholder value. Now here's Tim to review our financial position.