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EOG Resources, Inc. EOG delivered second-quarter 2018 adjusted earnings per share of $1.37, which beat the Zacks Consensus Estimate of $1.25 and improved significantly from the year-ago quarter’s 8 cents.
Total revenues in the quarter jumped 62.3% year over year to $4,238.1 million. The top line also beat the Zacks Consensus Estimate of $3,914 million.
The strong second-quarter 2018 results were supported by increased production as well as higher oil and gas price realizations.
Operational Performance
In the quarter under review, EOG Resources’ total volume increased 16.2% year over year to 63.9 million barrels of oil equivalent (MMBoe), marginally beating the Zacks Consensus Estimate of 63 MMBoe.
Crude oil and condensate production in the quarter totaled 384.6 thousand barrels per day (MBbl/d), up 15% from the prior-year quarter’s level and also above the Zacks Consensus Estimate of 384 MBbl/d. Natural gas liquids (NGL) volumes rose 30.4% year over year to 112.9 MBbl/d and beat the Zacks Consensus Estimate of 105 MBbl/d. Also, natural gas volumes increased to 1,228 million cubic feet per day (MMcf/d) from the year-earlier quarter’s level of 1,096 MMcf/d and surpassed the Zacks Consensus Estimate of 1,216 MMcf/d.
Average price realization for crude oil and condensates grew more than 43% year over year to $67.93 per barrel and surpassed the Zacks Consensus Estimate of $63 a barrel. Quarterly NGL prices grew 49.4% from $18.65 in the prior-year quarter to $27.86 per barrel and beat the Zacks Consensus Estimate of $23.00. Natural gas was sold at $2.69 per thousand cubic feet (Mcf), up 19.6% year over year and above the Zacks Consensus Estimate of $2.35 per Mcf.
Liquidity Position
At the end of the second quarter, EOG Resources had cash and cash equivalents of $1,008.2 million and long-term debt of $5,172.3 million. This represents a debt-to-capitalization ratio of 26.9%.
During the quarter, the company generated approximately $2,062.8 million in discretionary cash flow compared with $1,055.6 million in the year-ago quarter.
Dividend Hike
EOG Resources got approvals from the board of directors to hike quarterly dividend by 19% to 22 cents per share. This is the second time in 2018 that the company has raised the quarterly dividend, reflecting the firm’s strong commitment to return cash to stockholders.
EOG Resources is quite sure that the high dividend payment will be maintained, backed by benefits from investment in premium drilling locations.
Guidance
For 2018, the company expects total production between 706.7 MBoe/d and 728.3 MBoe/d. Of which, crude volumes are projected between 394.6 MBbl/d and 400.8 MBbl/d. For the third quarter, the company anticipates total production in the range of 716.5-754.6 MBoe/d.