EOG Resources, Inc. ( EOG Quick Quote EOG - Free Report) reported fourth-quarter 2020 adjusted earnings per share of 71 cents, beating the Zacks Consensus Estimate for earnings of 38 cents. The bottom line, however, deteriorated from the year-ago quarter profit of $1.35 per share.
Total revenues for the reported quarter decreased to $2,965 million from the year-ago $4,320 million. However, the top line beat the Zacks Consensus Estimate of $2,901 million.
The better-than-expected results were due to a decline in lease and well expenses, offset partially by lower oil equivalent production volumes.
The company declared a quarterly dividend of 41.25 cents per share, representing an increase of 10% from the prior dividend. The increased dividend will likely be paid on Apr 30, to stockholders of record as of Apr 16.
For the quarter under review, EOG Resources’ total volumes declined 5.8% year over year to 73.7 million barrels of oil equivalent (MMBoe) on lower U.S. output.
Crude oil and condensate production for the quarter totaled 444.8 thousand barrels per day (MBbl/d), down 5.1% from the year-ago level. Natural gas liquids (NGL) volume declined 1.8% year over year to 141.4 MBbl/d. Natural gas volume decreased to 1,292 million cubic feet per day (MMcf/d) from the year-earlier quarter’s 1,425 MMcf/d.
Average price realization for crude oil and condensates fell 27% year over year to $41.81 per barrel. However, natural gas was sold at $2.54 per Mcf, representing a year-over-year improvement of 8%. Moreover, quarterly NGL prices, improved 8% to $17.54 per barrel from $16.23 a year ago.
Lease and Well expenses declined to $260.9 million from $334.5 million a year ago. Moreover, transportation costs decreased to $194.7 million from $208.3 million a year ago. Also, the company reported Gathering and Processing costs of $119.2 million, lower than the year-ago quarter’s $127.6 million. Exploration expenses, however, increased to $40.4 million from the year-ago level of $36.5 million.
Liquidity Position & Capital Expenditure
At fourth quarter-end, EOG Resources had cash and cash equivalents of $3,328.9 million. Long-term debt was reported at $5,035.4 million. This represents a net debt to capitalization of 22.3%.
In the quarter, the company generated $1,494 million in discretionary cash flow and $666 million free cash flow. It incurred $829 million of cash capital expenditure before acquisition in the fourth quarter.
Proved Reserves Decline
At 2020-end, the company reported proved reserves at 3,219.9 MMBoe, representing a decline from 3,329.1 MMBoe a year ago.
The company expects 2021 production in the range of 779.8- 856.9 MBoe/d. For this year, the leading upstream energy company projects capital spending in the range of $3,700 to $ 4,100 million. The company added that by 2025, it is planning for zero routine flaring.
Zacks Rank & Other Key Picks
EOG Resources currently carries a Zacks Rank #2 (Buy). Other prospective players in the energy space include
Matador Resources Company ( MTDR Quick Quote MTDR - Free Report) , Antero Resources Corporation ( AR Quick Quote AR - Free Report) and Diamondback Energy, Inc. ( FANG Quick Quote FANG - Free Report) . While Antero Resources carries a Zacks Rank #2 (Buy),Diamondback and Matador sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here .
Matador is likely to see earnings growth of 201.3% in 2021.
Antero Resources has seen upward estimate revisions for 2021 earnings in the past 30 days.
Diamondback is likely to see earnings growth of 55% in 2021.
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