EOG Resources, Inc.

Good day everyone and welcome to EOG Resources Third Quarter 2023 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 in EOG's SEC filings. This conference call also contains certain non-GAAP financial measures. Definitions and reconciliations for these non-GAAP measures can be found on EOG's website. In addition, some of the reserve estimates on this conference call may include estimated potential reserves and estimated resource potential not necessarily calculated in accordance with the SEC's reserve reporting guidelines. Participating on the call this morning are Ezra Jacob, Chairman and CEO, Billy Helms, President and Chief Operating Officer, Jeff Leitzel, EVP Exploration and Production, Lance Turveen, Senior VP Marketing, and Pierce Hammond, VP Investor Relations. Here's Ezra.

Thanks, Tim. Good morning, everyone. Over the past five years, EOG has increased production 33%, decreased per unit operating costs 17%, generated over $20 billion of free cash flow, and over $20 billion in net income. We've increased our regular dividend rate nearly 350%, and including both regular and special dividends paid and committed to, have returned about $13 billion directly to shareholders, all while reducing total debt by more than 40%. At the core of our historical and future success are EOG's employees, who embrace and embody the EOG culture. And our third quarter results continue to reflect our employees' outstanding execution. Strong performance in our foundational Delaware Basin and Eagleford assets, as well as continued progress across our emerging plays, have delivered production volumes, capital expenditures, and per unit operating costs better than expectations. and enabled us to raise our full-year oil production guidance and reduce our full-year cash operating cost guidance. In addition to announcing third-quarter results yesterday, we demonstrated our confidence in the outlook for our business by increasing the regular dividend 10%, announcing a $1.50 per share special dividend, and raising our cash return commitment to shareholders beginning in 2024 to a minimum of 70% of annual free cash flow. Our annualized regular dividend is now $3.64 per share, which represents the highest regular dividend yield amongst our peers and is competitive with the broader market. This dividend increase reflects two things. First, the progress we continue to make on our cost structure by leveraging technology and innovation sustainably improves EOG's capital efficiency. Furthermore, we expect the advantages of operating in multiple basins will drive additional improvements to EOG's cost structure and returns, and reduce the break-even oil price to fund the dividend in the years ahead. Today, we estimate that we can maintain our current level of production and fund the $2.1 billion regular dividend commitment at an oil price as low as $45 WTI. This dividend increase reflects our confidence in EOG's expanding portfolio of premium plays to grow the company's future income and future free cash flow. This quarter, we've highlighted recent well-performance results in the newest addition to our premium portfolio of assets, the Utica Combo Play. Over the last several years, our success in organic exploration continues to add low-cost reserves and consistently drive down our DD&A rate, enabling EOG to create value through industry cycles. Beyond our regular dividend, which we've never cut or suspended, we raised our cash return commitment to shareholders to a minimum of 70% of annual free cash flow beginning in 2024. Alongside our portfolio of premium assets and our cash flow margins, EOG's balance sheet continues to strengthen, allowing us to supplement the dividend with a larger commitment of future free cash flow through special dividends and share repurchases. In addition to the $1.50 per share special dividend declared yesterday, we executed additional opportunistic share repurchases for the third consecutive quarter. For 2023, we estimate our committed cash return will be about 75% of free cash flow. EOG continues to consistently execute, lower our cost structure through innovation and efficiencies, and organically grow the quality of our portfolio to improve capital efficiency and free cash flow potential. Our transparent cash return strategy is anchored to a sustainable, growing regular dividend and backstopped by an impeccable balance sheet. EOG is in a better position than ever to deliver value for our shareholders through industry cycles and play a leading role in the long-term future of energy. Here's Tim to review our financial position.