EOG Resources Q3 2026 Earnings Call Transcript

EOG Resources (NYSE:EOG) reported third-quarter financial results on Friday. The transcript from the company’s third-quarter earnings call has been provided below.

This transcript is brought to you by Benzinga APIs. For real-time access to our entire catalog, please visit https://www.benzinga.com/apis/ for a consultation.

View the webcast at https://event.choruscall.com/mediaframe/webcast.html?webcastid=0JRJn9zl

Summary

EOG Resources reported record oil, NGL, and natural gas production in Q3 2026, with cash operating costs and DD&A below guidance midpoints.

The company announced an 8% increase in its regular dividend for 2027, continuing its track record of dividend growth at a 20% CAGR over 28 years.

EOG signed a new long-term natural gas supply agreement with ENGIE, increasing LNG feed gas exposure to over 1 Bcf per day by 2030.

The Janus gas processing plant in the Delaware Basin will be expanded, doubling capacity and enhancing operational control.

Earnings per share for Q3 2026 was $4.87, with free cash flow of $2.2 billion, and $1.5 billion returned to shareholders.

The company maintains a stable balance sheet with $5.7 billion in cash and net debt of $2.2 billion, targeting total debt below 1x EBITDA.

EOG expects low single-digit oil production growth in 2027, driven by continued strong oil market fundamentals.

The company divested non-core assets in the Barnett and Woodford regions for $400 million to focus on high-return assets.

Management highlighted operational excellence and cost control as key drivers of sustained long-term value creation.

Full Transcript

OPERATOR

Good day everyone and welcome to the EOG Resources Third Quarter 2026 Earnings Results Conference Call. As a reminder, this call is being recorded. For opening remarks and introductions, I will turn the call over to EOG Resources Vice President of Investor Relations, Mr. Pierce Hammond. Please go ahead, sir.

Pierce Hammond (Vice President, Investor Relations)

Good morning and thank you for joining us for the EOG Resources third quarter 2026 earnings conference call. I am Pierce Hammond, Vice President, Investor Relations. An updated investor presentation has been posted to the Investor Relations section of our website and we will reference certain slides during today’s discussion. A replay of this call will be available on our website beginning later today. As a reminder, 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 may also contain certain historical and forward-looking non-GAAP financial measures. Definitions and reconciliation schedules for these non-GAAP measures and related discussion can be found on the Investor Relations section of EOG’s website.

In addition, any reserve estimates on this conference call may include estimated potential reserves as well as estimated resource potential not necessarily calculated in accordance with the SEC’s reserve reporting guidelines. Participating on the call this morning are Ezra Y Yacob, Chairman and Chief Executive Officer; Jeff Leitzell, Chief Operating Officer; Ann Janssen, Chief Financial Officer; Jeff Hibbard, Senior Vice President, Finance; and Keith Trasko, Senior Vice President, Exploration and Production. Here’s Ezra.

Ezra Y Yacob (Chief Executive Officer)

Thanks Pierce. Good morning and thank you for joining us. 2026 has been an outstanding year for EOG and I’m pleased to report that through three quarters we’ve delivered exceptional results that reflect the strength of our assets, the efficiency of our operations and the dedication of our teams across our portfolio. Our third quarter results include record oil, NGL and natural gas production and excellent cost discipline as total per-unit cash operating costs and DD&A came in below guidance midpoints.

This operational execution combined with strong price realizations produced superb financial results. EOG’s business and the outlook for the company have never been stronger. As a testament to that, we are pleased to announce an 8% increase in our regular dividend for 2027. The increase reflects confidence in our business and EOG’s pristine balance sheet, both of which support our ability to sustain the higher dividend through industry cycles. EOG has grown its regular dividend at almost a 20% compound annual growth rate over 28 years without ever cutting or suspending it.

This is a differentiated track record reflecting our enduring commitment to the regular dividend as the primary means for cash return to shareholders. Beyond the regular dividend, cash return remains a priority and we continue to expect to return a minimum of 70% of free cash flow to the investors this year. The EOG culture is one of continuous improvement. As such, we remain focused on further strengthening our business for the long term and two recent developments illustrate this commitment. First, we signed a new long-term natural gas supply agreement with ENGIE which expands our access to premium markets linked to JKM pricing. This agreement lifts our premium-priced exposure across LNG feed gas agreements to more than 1 billion cubic feet per day by 2030.

This is a clear differentiator for EOG and a direct result of our marketing strategy which is built on flexibility, diversification, control and appropriate management of contract duration to support strong margins and netbacks for our asset base. In addition, this new long-term agreement allows us to supply independently certified natural gas which reflects EOG’s ability to access further differentiated markets. Second, we approved the expansion of our Janus gas processing plant in the Delaware Basin.

In the current environment where we are starting to see a tighter market for gas processing, the investment in Janus provides outsized benefits to our netbacks. The expansion has strong operating synergies with our existing infrastructure supporting robust returns and long-term value creation. Turning to the oil macro outlook, market fundamentals remain tight. Middle East exports have recovered from lows reached in the spring. However, the recovery has been uneven. While Strategic Petroleum Reserve releases and coordinated refinery measures across the G7 are providing some relief at the margin, they are not a substitute for consistent and reliable supply from the region. The security of these flows remains a key variable in shaping near-term market conditions.

While we expect oil prices to remain volatile, we continue to be constructive on oil market fundamentals for several reasons. First, oil demand has demonstrated considerable resilience despite elevated product prices. Consumption has held firm and as supply has returned to the market, demand has recovered alongside it. This reinforces our view that demand reduction observed early in the conflict was temporary in nature rather than a structural shift.

Second, although the pace of inventory draws is beginning to moderate, global inventories remain well below their five-year average. We expect the process of rebuilding stocks to those historic levels will take considerable time. Third, the supply recovery remains fragile. As recent events have shown, the restoration of flows from the Middle East is subject to ongoing disruption risk. Taken together, we expect oil prices to remain above mid-cycle price levels in both the near and medium term and we see the balance of risks supporting upside price volatility.

Turning to the natural gas outlook, we continue to see the North American market evolve from a seasonal commodity story into a strategic energy resource. While storage levels will continue to fluctuate year to year, underlying demand remains robust with LNG exports, electricity demand, industrial growth and grid reliability increasingly competing for domestic supply. Our medium to long-term outlook remains constructive and our deliberate investment in building a low-cost natural gas position with access to premium markets and as a complement to our core oil business provides ample opportunity to capitalize on this demand growth.

Looking to 2027, we are well positioned with tremendous flexibility. Earlier this year we redirected capital to oil assets, raising liquids production and setting a strong foundation for growth in 2027. If current oil supply-demand fundamentals persist, we believe the market needs more oil supply next year. Accordingly, we anticipate staying consistent with our three-year scenario and expect to deliver low single-digit oil production growth in 2027 regardless of commodity prices.

EOG’s commitment is to deliver sustainable value creation through industry cycles by being among the highest-return, lowest-cost producers while maintaining strong environmental performance and playing a meaningful role in the long-term future of energy. This mission rests on four pillars: capital discipline, operational excellence, sustainability and culture. Our decentralized, non-bureaucratic structure enables value creation in the field. At the asset level, it is our unique culture that drives a sustainable competitive advantage and we expect to continue extending that advantage into the future.

In summary, we are performing at a high level in 2026 and are positioned to finish the year strong and carry significant momentum into 2027. We remain focused on delivering sustainable free cash flow, maintaining operational excellence and creating long-term value for our shareholders. I’ll now turn it over to Ann for details on our financial results.

Ann Janssen (Chief Financial Officer)

Thank you Ezra. EOG delivered another quarter of outstanding financial performance, underscoring the power of our consistent approach to capital allocation, which is invest with discipline, return cash and maintain a pristine balance sheet. In the third quarter we delivered adjusted earnings per share of $4.87 and adjusted cash flow from operations per share of $7.23, yielding free cash flow of $2.2 billion. We returned just over $1.5 billion to shareholders during the third quarter, approximately $540 million to our regular dividend and $1 billion in share repurchases.

The foundation of our cash return remains the regular dividend, which we are raising by 8% to an indicated annual rate of $4.40 per share. This dividend increase is a reflection of EOG’s ability to continue increasing the free cash flow potential of the company through our commitment to capital discipline and operational excellence, which deliver one of the industry’s lowest breakeven oil prices. Our 2026 plan funds production growth, domestic and international exploration and our regular dividend, all at a WTI breakeven price below $50 per barrel. At strip pricing and using guidance midpoints, our 2026 plan generates $9.7 billion in free cash flow. Our regular dividend yield remains attractive versus peers as well as the S&P 500 and we continue to supplement the regular dividend with opportunistic share repurchases. Since we started repurchasing shares in 2023, we have reduced our share count by 13%, with $10.6 billion remaining under our repurchase authorization at September 30, we have substantial capacity to act.

Our balance sheet remains a strategic asset. We ended the quarter with $5.7 billion in cash and net debt of approximately $2.2 billion. Our leverage target of total debt below 1 times EBITDA at bottom-cycle prices of $45 WTI and $2.50 Henry Hub remains among the most stringent in the sector. That strength gives us a stable foundation to navigate a dynamic macro environment with confidence. We are generating significant free cash flow, returning meaningful cash to shareholders and maintaining the flexibility to capitalize on opportunities as they emerge.

Operational excellence, a low-cost structure and financial discipline position us extremely well for sustained long-term value creation. With that, I’ll turn it over to Jeff to discuss our operating results.

Ezra Y Yacob (Chief Executive Officer)

Thanks, Jeff. Before we open the line up for questions, I’d like to leave you with four key takeaways. First, EOG delivered an outstanding third quarter. We posted record oil, NGL, and natural gas production, and total per unit cash operating costs and DD&A both came in below guidance midpoints. Second, our commitment to shareholders is unwavering. We raised the regular dividend by 8%, extending our 28-year dividend payment track record. Third, we continue to strengthen the portfolio for the long term, including our new LNG agreement with ENGIE that lifts our premium-priced LNG feed gas exposure to more than 1 billion cubic feet per day by 2030 and the Janus gas processing plant expansion in the Delaware Basin. Finally, we are constructive on oil fundamentals. If current oil supply-demand fundamentals persist, we are well positioned to deliver low single-digit oil production growth in 2027.

I’d like to finish by thanking Ann Janssen for her dedicated service to EOG Resources over the past 31 years. Ann will be retiring next year and Jeff Hibbard will be assuming the CFO role on January 1st. Ann has long recognized the value of a peer-leading balance sheet, strong financial results, sustainable free cash flow, and, most importantly, developing EOG Resources’ next generation of leaders as the path to consistently creating long-term value for our shareholders.

I’m grateful for Ann’s leadership and her contributions to the financial strategy and the strength of EOG Resources. I want to congratulate Jeff Hibbard on his new role and offer Ann Janssen and her family our best wishes in retirement. With that, we’ll turn it back to the operator for questions.

OPERATOR

Thank you. The question and answer session will be conducted electronically. If you would like to ask a question, please do so by pressing the star key followed by the digit one on your touchtone telephone. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. You are allowed one question and one follow-up. We will take as many questions as time permits. Once again, please press star one on your touchtone telephone to ask a question.

To remove yourself from the queue, press star two. The first question today comes from Neil Mehta with Goldman Sachs. Please go ahead.

Neil Mehta (Analyst at Goldman Sachs)

Hey, Ezra. Congratulations, Ann, and congratulations, Jeff, as well as you take on this new role. Couple update questions for you guys. First is the long-term gas sales agreement that’s been linked into JKM here. Ezra, can you spend some time talking about this and how mechanically it can work and give us a sense of the quantification of what it could mean for a cash flow uplift in a normalized JKM environment?

Jeff Hibbard (Senior Vice President, Finance)

Yeah, Neil, thanks for the question. It’s Jeff Hibbard here. Maybe I’ll start. So the gas sales agreement announced with ENGIE provides additional pricing diversification for our gas volumes with many similarities to our deal with Cheniere. So some of the specifics: 140,000 MMBtu per day is linked to JKM with DDUCs. It’s a 10-year agreement. It starts by 2030, and the offtake is at the U.S. Gulf Coast, which allows us to source gas from multiple basins.

The addition of the ENGIE agreement increases our LNG feed gas-associated volumes to over 1 Bcf gross per day by 2030. Additionally, we increase exposure to premium price indices, really linked to strong markets with growing long-term demand. Our ability to supply gas from across our low-cost, multi-basin portfolio, in combination with our strong balance sheet, make us a preferred partner for long-term agreements that support strong netback margins and returns.

We’re really seeing those benefits today. As you saw our LNG exposure, our gas realizations this quarter came out right at $3.73, and we expect that to continue as you see in our guidance really going forward.

Neil Mehta (Analyst at Goldman Sachs)

Jeff, and then Ezra and team, can you spend some time just talking about the M&A strategy here? Historically this has been such an organic company. Of course you’ve done Encino and Yates over the years. But as commodity prices eventually normalize, how do you think about the potential for corporate M&A or larger-scale M&A? Or is this more of a bolt-on type of story going forward?

Ezra Y Yacob (Chief Executive Officer)

Yes, Neil, it’s Ezra. Listen, nothing has changed with our corporate strategy, our long-term strategy. I think over multiple decades here a cornerstone of our company’s value proposition has been our ability as an organic exploration outfit, as a first mover, utilizing data and technology to continue to unlock resources and turn them into highly economic, high-return value opportunities, investment opportunities for our investors. We do, as you said, at the right time of the cycle, are very interested in doing, you know, bolt-ons, small bolt-ons, things that typically don’t come with a lot of production but offer us the ability to do what we do best, which is drill and complete horizontal wells and bring that value forward. Corporate M&A has typically never been something that we see a significant amount of value in when we look at the rest of our portfolio and inventory. But again, we continue to evaluate, you know, opportunities through the cycles and try to determine the best way to create long-term shareholder value.

OPERATOR

The next question comes from Steve Richardson with Evercore. Please go ahead.

Steve Richardson (Analyst at Evercore ISI)

Good morning. I was wondering if I could follow up on Jeff’s comments about expectations for some cost inflation in 2027. Could you maybe just walk us through where you’re seeing that, be it consumables or other services, and then maybe just how well positioned are you to absorb that? Not only from the below-ground efficiencies you’re talking about in the plays, but also either tubulars or all the things that EOG Resources normally does to kind of manage an inflationary environment, if you could.

Jeff Hibbard (Senior Vice President, Finance)

Yeah, Steve, this is Jeff. Let me give you a little bit of color on it. So kind of this year we started seeing some modest well cost increases over the last few months, as we’ve talked about, and you know, the market for high-spec equipment, it was stable at the beginning of the year, but it’s really tightened after kind of the start of the Iran conflict. And you know, we’ve seen service utilization at a fairly high level. So now we’re starting to see that tighter service market translate into price increases.

And then, you know, just to note, that level of increase has not really been consistent across the basins and it’s varied regionally. Also, as you talked about, we’ve seen cost increases for diesel and steel progressively over the course of the year, adding additional inflationary headwinds. But, you know, however, in aggregate, I’d say for 2026 we’re still on track for that low single-digit average year-over-year well cost reduction, just because our efficiency gains have more than offset the rising costs that we’re seeing in the value chain. And then looking forward, you know, for 2027, we’re currently expecting some upward service pricing pressure as well as higher steel and diesel costs. You know, our main focus remains on really leveraging all of our operational capabilities, the scale of the company, and our purchasing power to really manage through those inflationary headwinds.

And just to give you a little bit more color, kind of breaking things down. I mean, starting on the service side, you know, first what we’ll do is we’ll look to offset some of those headwinds through our operational efficiencies, which we always say typically we see on average about 3 to 5% improvement each year. And then next, you know, we’ll look to leverage our strong relationships with all of our service partners. And what we’ve done is we’ve really staggered all of our contracts in both length and renewal timing to really help mitigate the impact of those raising rates.

And then lastly, I’d say currently we have about 60% of our services contracted for 2027, which is really on the high end of our historical range. So we feel pretty good and well positioned on the service side. When looking at steel cost, we expect continued upward pressure for the industry. But internally what we’ve done is really lean on our direct sourcing and mill diversification to support keeping our prices really lower than the broader market. And at this point, we’ve already secured around half of our casing and tubular needs for 2027. So we continue to focus on just opportunistic inventory management with our supply chain group. So really any exposure, I think on the steel side, really would be more towards the second half of the year if prices keep increasing.

And then lastly just on the diesel side, you know, while prices have increased meaningfully over the year, much of the impact of those higher prices on capex really has been pretty minimal since 70% of our rigs we run off natural gas, 100% of our frac fleets also do too. And then, you know, any other diesel increases we think we’ll see will just be kind of in the form of fuel surcharges from some of our other service providers. So, you know, ultimately I think we feel really, really good at where we’re at.

We’re well ahead of schedule preparing for next year and we’ll just look to continue to insulate ourselves from any potential inflation as we move forward towards the end of the year.

Steve Richardson (Analyst at Evercore ISI)

Great, thanks for the fulsome answer. I was wondering, quick follow-up on natural gas markets. Understand the points on how strong your realizations have been and the low-cost supply perspective that you have. I was just wondering if you could talk about willingness to take on additional, be it pipeline projects or other things. Appreciate you talking about Janus today on the processing side, but wondering if you could talk a little bit about beyond the wellhead, if you have interest in other projects or other things as you look at the outlook here.

Ezra Y Yacob (Chief Executive Officer)

Thanks, Steve. This is Ezra. Yeah, at times in the past, especially at parts of the cycle where we are right now, we have taken on some of those strategic infrastructure opportunities where we see significant value. It’s not a primary focus for us though. Typically we see the returns profile—you know, our investments are better spent bringing low-cost oil and gas to the surface rather than moving it into the markets. We tend to prefer to partner with high-quality partners to be able to move our molecules to the market.

But two things cause us to step into that space. First, if we’re unwilling to find a strong partner to be able to do that. And the second is at times, which is usually like current times where you’re at the top of the cycle or high above mid-cycle price ranges, where the fees start to get a little bit higher and there’s enough value there for us to step in and capture that for our shareholders. Now that’s really in line with how Jeff described it this morning in the script, as we’re seeing an opportunity here with Janus not only to capture the synergies that we have with the Janus gas plant expansion, but really to expand the margins there in an environment where we’re seeing processing capacity kind of get a little bit tighter and the fees have a little bit of upward pressure to them.

OPERATOR

The next question comes from Doug Leggett with Wolfe. Please go ahead.

Doug Leggett (Analyst at Wolfe Research)

Thank you, everybody. Good morning, Ezra, and congratulations to you, especially on your balance sheet diligence. I’m sure we’ll come back to that. Ezra, the earlier question from Neil was on inorganic growth and resource. I’d like to ask you about organic opportunities, particularly your exploration plays, and I wonder if you could touch on two specifically. The first one, obviously Alaska. You’ve now got your acreage position, it looks like. What’s your play concept?

And any color you can offer on your recent permitting in Frio County around the Pearsall Shale in South Texas would be much appreciated. Thank you.

Ezra Y Yacob (Chief Executive Officer)

Yes, Doug, this is Ezra. Appreciate the question. So let’s start with Alaska. We’ve talked about it a little bit before. You had picked up on our Alaska activity kind of early on before anybody else, before, in fact, we ended up putting all the leases together. But we put together some state leases in that area, and so we’ve got good long runway. Those are 10-year leases in Alaska. And this play is a conventional oil play. It is an analog to some of the other Alaska plays that have been in the news recently, Pikka and Willow.

In general, what I’d say is Alaska is undergoing, from industry’s perspective, a bit of a renaissance by applying new technologies up there, especially on the seismic processing. Our prospect was identified through some loose 2D seismic lines and some well control. It is seismically identified. It’s got some amplitude support with that 2D data. It’s a bit of a different formation than what’s in Pikka and Willow. It’s a little bit younger sands—it’s Shrader Bluff sands, which are Paleocene, instead of kind of the Nanushuk Formation, because we are off to kind of the east side going forward. The strategy going forward for Alaska, like I said, it will take a little bit of time.

The next step for us is to get some 3D data. We’ll be purchasing some 3D data as it becomes publicly available later next year and we’ll reprocess that, and that’ll be kind of the next step in evaluating the prospect that we have. And then going all the way down to South Texas for the Pearsall. That’s a play that we haven’t really talked about yet. As I think everybody knows, Pearsall exists underneath our entire Eagle Ford oil acreage position. But starting about two years ago, we identified a bit of a sweet spot outside of our area adjacent to—I would say we leased it up organically. We’ve drilled a handful of wells there. It’s in the oil window—maybe a bit more of a combo play—but the well production looks pretty good.

We’ve captured probably about 100 locations there. And to be perfectly honest, while the play benefits from sharing activity in our Eagle Ford area, we still have a little bit of work to do to get the cost down to make those wells competitive with our core inventory. But like I said, we’re excited by it. It’s another kind of step-out organic opportunity that we were able to bring into the mix just because of our subsurface knowledge in the area.

Doug Leggett (Analyst at Wolfe Research)

Twenty years ago, I want to say. Right. Thanks, Ezra. My follow-up is a quick one. It might be for you, it might be for Ann. It’s really just the quick comment about the way the balance sheet is today. There seems to be a lot of focus still on EOG’s duration of production. What I want to ask you about is the duration of free cash flow to support that dividend bump and the sustainable dividend growth that you expect. Do you have the portfolio today to sustain the free cash flow as opposed to sustain the production mix?

I guess is the core of my question. Thanks.

Ann Janssen (Chief Financial Officer)

Yeah, Doug, maybe I’ll just give you the brief answer there. I mean, I think we think absolutely, and it really comes down to our low breakevens and that 12 billion BOE of resource in addition to the financial strength of the company. So we test our dividend across multiple scenarios, and really including bottom-cycle price assumptions down even below $45. So yeah, we feel very good about that dividend over the long term. In addition, I would just add, I feel like the regular dividend is extremely competitive with both the industry and the broader S&P 500. I think we’ve established a differentiated record, as Ezra said in his remarks, of sustainable dividend growth. The company’s grown our regular dividend at a compound annual rate of 20% over the last 28 years without any reduction or suspension of that dividend obligation. So we’ve got strong confidence in our ability to continue to improve and remain committed to returning a significant portion of our free cash flow to investors, with the regular dividend as the primary mode of cash return over the long term.

OPERATOR

The next question comes from Philip Jungwirth with BMO. Please go ahead.

Philip Jungwirth (Analyst at BMO)

Yeah, good morning and thanks for taking the question. You mentioned in the script that the three-year scenario should be the base case for next year. I guess after year one, how would you say you’re tracking this? I mean, obviously we can see the production guidance, but it’s also on the capital, operating cost side, plus just corporate with interest, tax, given the stronger macro. Since you are growing cash flow, free cash flow more than oil. And then just to stay on track into ’27, how much Utica or kind of elsewhere activity would you need to add to drive low single-digit oil growth for EOG Resources?

Ezra Y Yacob (Chief Executive Officer)

Yeah, Philip, this is Ezra. It’s really a pretty consistent activity level going forward. As Jeff said in the opening script, you can kind of start with a Q4 run rate, which means that activity level is pretty consistent. Of course, when you’re looking at the CapEx, we do have the strategic infrastructure that we’ve talked about, the Janus expansion, that would need to be contemplated on top of that and then a little bit of increased growth. But it’s really more on the margin than adding anything significant to capture that low single digit.

As we talked about before, we really took this year to kind of position ourselves to not only grow liquids production in ’26, but actually to position ourselves to be able to grow into ’27 as well. With regards to the three-year scenario and where we’re at here towards the end of year one, obviously in the first year, there’s been a significant increase in the commodity price from what we had forecasted before. I think what we have is illustrated on a $60 to $80 range over that three-year period, and year one is obviously coming in at current strip somewhere right around $87 for the year one.

So that would lead us to know that ROCE is kind of on the high side. Free cash flow generation is on the high side. As far as the capital expenditures that were contemplated or not contemplated in this three-year scenario, really the only one would be that Janus would be on top of it that wasn’t originally in the three-year scenario. And again, that’s a strategic option for us that at the top of the cycle feels like a great time to layer that in. And for ’27, it’s essentially a $200 million capital investment that we’re planning for.

Philip Jungwirth (Analyst at BMO)

Okay, that’s great to hear. And then this might also be contributing, but you noted in the script Permian well performance outperforming your expectations of study year on year. We’ve probably all noticed this in the public data. But one thing that stood out to me was really across all your plays, the well performance looks better or at least consistent with last year. Just wondering if you could speak to some of the bigger drivers here on the productivity side, just whether it’s some of the high-intensity completions targeting or other items that you’ve pursued operationally in 2026.

Keith Trasko (Vice President and General Manager)

Yeah, good morning, this is Keith. I’ll start with the Delaware. Yeah, we’re very pleased with how our Delaware Basin development’s progressing. We haven’t really made any changes to our development plan relative to what we communicated earlier this year. Well productivity has been a little better than our expectations. The results are flat to slightly up versus 2025. And the important thing is that we expect similar consistency in productivity going forward.

So the 2026 plan reflects the changes that we made last year in our development strategy. We continue to take advantage of the operational improvements to maximize the value of the asset, and that’s really driven by our ability to drive down costs, allowing us to target zones that meet the strict return hurdles and better maximize the value capture across the assets. We’re really happy with the Delaware. We expect consistent returns and cash flow for the next 10 years.

And yeah, a lot of it is on the completion side. Like you said, our high-intensity fracs, adding horsepower, and doing smart tests on various things on the completion side. That had its genesis in the Eagle Ford in the early days, and we’ve applied it to the Permian, we applied it to the Utica very early on. We’re seeing improvements in Dorado associated with that. And as we take those learnings and iterate them, we’ve even been able to apply that back to our Eagle Ford oil as kind of a revision 2 and 3 and 4.

We’ve seen improvement there as well. So very happy with our well performance across the board.

OPERATOR

The next question comes from Scott Hanold with RBC Capital Markets. Please go ahead.

Scott Hanold (Analyst at RBC Capital Markets)

Yeah, thanks. If we could go back to where the Q&A started and that’s on the gas sales agreement. It’s kind of a two-part question with that. Number one, I understand there are a lot of confidentiality around it, but in this market that we’ve seen for the past nine months, how are you all able to get a contract like that done at this point? And do you see the economics a little bit different from the original ones? And as you look going forward, how much exposure to these international markets do you want? Should we expect you guys continuing to layer on new types of contracts like these, or is there a certain threshold you want to limit yourself to?

Jeff Hibbard (Senior Vice President, Finance)

Sure. Scott, it’s Jeff Hibbard. Maybe I’ll take that one. U.S. LNG projects continue to reach FID and operators are still seeking commitments to get additional capacity built. As the LNG market has expanded both physically and financially over time, it’s created really new and different opportunities to seek international price exposure for us. So, look, we remain engaged with several potential partners and look for attractive win‑win opportunities as they present them.

So I would expect us to continue to look at those types of deals. We really have a number of advantages, again, that make us an attractive counterparty for folks. It’s our low-cost multi-basin portfolio, it’s our extremely strong balance sheet, and it’s our track record with these types of deals. So, yeah, I think you can continue to see us always looking at those going forward.

Scott Hanold (Analyst at RBC Capital Markets)

Appreciate that. If I could pivot to shareholder returns. Appreciate your, again, commitment to hitting that annual 70% return. Based on, I guess, your $9.7 billion forecast and buybacks to date, including what you’ve done based on the 10‑Q, it looks like there’s probably another, what, one and a half to maybe $1.6 billion that needs to get done through the balance of the year. That seems like a lot. And given the volatility in commodity prices, how do you manage hitting that annual threshold when we’re coming up on to the end of the year?

Jeff Hibbard (Senior Vice President, Finance)

Yeah, look, it’s Jeff again. I would say cash returns remain a priority for us. You heard Ezra mention it early on in the script. And we remain confident in our ability to meet our threshold commitment of 70% of our annual free cash flow. So, you hit the numbers on the head. At $88 WTI and $3.40 Henry Hub, we expect to return $6.8 billion of cash this year. And when you back off our dividend commitment, which is that $2.2 billion, I think your numbers are accurate.

I think given the volume that we have in our stock, we feel very comfortable being able to achieve those amounts. And, look, we continue to see a lot of value in our stock. So, consequently, we favor buybacks for additional cash return and think we’ll be able to get there.

OPERATOR

The next question comes from Leo Mariani with Roth. Please go ahead.

Leo Mariani (Analyst at Roth MKM)

Hey, good morning. Just wanted to touch base on your initial comments. For 2027 you talked about low single-digit oil growth. That certainly seems to be reasonable in this price environment. I just wanted to get a sense: do you see a contribution from the UAE there to get to those numbers for next year?

Jeff Leitzell (EVP & Chief Operating Officer)

Yeah, Leo, this is Jeff. You can actually see in our guidance we did guide towards a little bit of volumes, but it’s fairly minimal as far as we’re still in the exploration phase. Even though we’re seeing outstanding, strong results over there, before we really see a meaningful amount of volumes and we start getting closer to DOC, I wouldn’t expect them to be a huge part of the overall 2026 volume. Ultimately, we feel great about it. I think we’re getting to a place where we’re getting closer and closer to DOC with the results that we’re seeing, and we’re excited about it. So you’ll just kind of see that in our guidance as we move forward, and we’ll keep you posted on the results.

Leo Mariani (Analyst at Roth MKM)

Okay, appreciate that. And then just wanted to also ask: you announced a new gas sales agreement today, clearly made a commitment to expanding the Janus plant. Can you provide a little bit more color on your thoughts around gas? Is EOG Resources making a larger pivot towards gas as we get later in the decade? Do you see great opportunities for returns on the gas side in several years?

Ezra Y Yacob (Chief Executive Officer)

Hey, Leo, this is Ezra. I wouldn’t say that EOG Resources is making a big pivot to gas or a big call on gas. This all starts with our organic exploration effort and the fact that we captured Dorado. We do continue to believe that Dorado is the lowest-cost gas in North America, and then we’re advantaged in the geographic position of it being close to multiple demand centers. What that’s really allowed us to do is invest at the right pace, capital-disciplined, to grow what we think is essentially a premium gas company underneath the umbrella of our premium oil company here at EOG Resources. We continue to invest in gas as we develop and capture markets. We’re not just growing or investing in gas to move a whole bunch of gas to the Gulf Coast and hope that it prices on gas, because the margins oftentimes are so skinny and volatile.

You’ve got to be very, very diligent and disciplined looking at the entire value chain. It starts with low well costs, continues with low operating costs, including transportation, and then the last part of it is making sure that you’re delivering your molecules to a demand center and getting yourself exposed to premium pricing.

OPERATOR

The next question comes from Arun Jayaram with JP Morgan. Please go ahead.

Arun Jayaram (Analyst at JP Morgan)

Yeah, good morning, team. Your fourth quarter guide included better realizations than we’re modeling. Clearly on the gas side, the Cheniere contract’s been a nice tailwind, but I was wondering if you could elaborate on how you’re capturing the premium realizations on the oil side. I know you have dock capacity, but maybe walk us through the marketing and how you’re able to capture that premium relative to WTI.

Jeff Leitzell (EVP & Chief Operating Officer)

Hey, Arun, this is Jeff Leitzell. So, yeah, great question. And really I’d break it down into a couple different things. The first thing is just the way that our marketing team is so ingrained in the business. They’re in each one of our divisions, they’re tied in and trying to find the absolute best contracts in each area, give us a lot of diversification, flexibility, and control with our molecules to really maximize those netbacks. I think that’s one, and that’s one of the reasons you’ve always seen our price realization throughout time really outrun the peers.

And then the second thing on that, which has really been a big mover here as of recent, is our exports. We’ve talked about on previous calls we’re exporting anywhere from 200,000 to 250,000 barrels a day. And obviously with the premiums that we’re seeing overseas with those barrels, it’s really helping our overall price realizations and netbacks from that aspect. So, really, it’s just great work by our marketing team, kind of staying ahead of things and making sure we’ve got a lot of flexibility to send those molecules to the best markets.

Keith Trasko (Vice President and General Manager)

Yeah, good morning, this is Keith. I touched a little bit on this on the productivity side, but what we’ve seen in the last several years is just our teams continuing to increase efficiencies and drop costs and do some really nice, detailed geologic work that has allowed us to add targets into our existing development, both as like a second phase and then when you’re initially developing as well. So today we have more targets than I ever imagined several years ago.

That’s what you’re seeing on our development strategy and our consistent productivity that we’ve had this year compared to last year and going forward. So we see a lot of it just on the acreage that we already have. So our co-development strategy leverages all that deep knowledge of basin geology. We’ve identified up to 17-plus unique targets and our operational capabilities to develop them, maintain the strong productivity and low cost. So that has really allowed us to maximize the value of the asset, be the leading Delaware Basin operator in terms of well costs and breakeven price, and have that durable inventory associated with it as well.

OPERATOR

The next question comes from Bob Brackett with Bernstein Research. Please go ahead.

Bob Brackett (Analyst at Bernstein Research)

Good morning. You’ve intrigued us around declarations of commerciality for the Aldofra concession. A question would be, as you convert that license from exploration to production, how does it work? Would you keep all 900,000 acres, or is there an HPP scheme, or is it negotiated between you and the host government? Any color would be helpful.

Ezra Y Yacob (Chief Executive Officer)

Yeah, Bob, this is Ezra. As it works, the path to DOC and conversion from an exploration concession to a production concession includes a field development plan and then essentially annual reviews are typically how these international agreements work. And so, yes, you end up, it’s really to be negotiated if we wanted to turn less of the concession over into production or the entire 900,000 acres. Today where we’re at, we’re seeing very, very strong results in those initial two wells as highlighted previously. They responded very, very well to the artificial lift and then we brought a couple additional wells on. We don’t have 30-day rates, it’s a little bit soon for that. But the wells look good and, quite frankly, with the efforts that we’ve seen, the conversations we’ve had with oilfield service partners and their level of engagement to enter the country, at this point I’d reiterate what Keith said before: we’re well on our way to targeting a DOC probably long before the expiration of the exploration agreement.

Bob Brackett (Analyst at Bernstein Research)

Fascinating. Follow-up would be that field development plan, that’s where you would finally sort of lock down capex, how many rigs you’re going to run, what the production forecast would be. In a conventional field that would be pretty well constrained, but with unconventionals you can dial up, dial down, and grow. I guess there’d be flexibility in what your field development plan would look like.

Ezra Y Yacob (Chief Executive Officer)

Yeah, Bob, I think what you’ve hit on is something that we’ve highlighted whenever we talk about going to international, whether it’s conventional or, in this case, unconventional. It’s the importance of aligning yourself with the right partners, folks that understand what it takes to make these plays work, what it takes to make unconventionals work. And as you touched on, the way these unconventional plays work, you almost have to construct a virtual manufacturing plant in the field before you can really step in and start to get the repeatability and the scale that makes these unconventional plays work.

So it does start with a field development plan. And, yeah, you should expect, as I’ve talked about it before, we’ve got great partners between BAPCO and ADNOC, and I think all of us, there’s great alignment there that the field development plan will be a fixed yet flexible plan to go forward and best develop the resource for the stakeholders.

OPERATOR

The next question comes from Kevin McCurdy with Pickering Energy Partners. Please go ahead.

Kevin McCurdy (Analyst at Pickering Energy Partners)

Hey, good morning. You took advantage of the hot markets to sell some assets in the Woodford and Barnett this quarter. As I look across your portfolio, there are a couple of areas that are not getting a lot of capital, and just curious how those asset sales came about this quarter and how you’re thinking about further streamlining the portfolio, particularly in the U.S., if at all.

Jeff Hibbard (Senior Vice President, Finance)

Sure, Kevin, I’ll take that one. It’s Jeff Hibbard. So, as you mentioned, we took advantage of favorable market conditions really to divest those legacy Barnett and Woodford assets. I’d say we selectively divest non-core positions that lack the size and scale to meaningfully impact shareholders, allowing us really to high-grade our portfolio, pull value forward. If you look back over the last five or 10 years, we’ve divested several assets including our legacy positions in the Marcellus and China, U.K. North Sea among others. And we try to maintain a disciplined approach to portfolio management, continuously evaluating assets against our return hurdles and strategic priorities. These divestments of non-core assets are really just another example of our relentless focus on capital discipline. So I’d say we’ve got no current plans for additional asset sales at the moment.

We generally think assets are worth more in our hands, but we continuously evaluate our portfolio with the goal to maximize shareholder value.

Kevin McCurdy (Analyst at Pickering Energy Partners)

Great, I appreciate that. And maybe as a follow-up, you have a unique view on the Texas gas markets as you have assets in several different basins there. Are there any opportunities that you see that maybe in the form of supply and demand that the market is missing? Obviously there’s been a lot of attention on Permian, both from a supply factor, takeaway, and demand. But is there anything else that you think is underappreciated? And how does that fit into your thoughts on ramping Dorado over the next couple of years?

Ezra Y Yacob (Chief Executive Officer)

Yeah, Kevin, kind of like we touched on before, the way that we think about investing in gas growth really starts with knowing where our molecules are going to go and making sure that we’re not just investing into a volatile market and leaving our gas exposed. It really comes back to where we’ve spent a lot of time talking today about our marketing strategy and making sure that we’ve got the flexibility and diversification, even at an asset level, to be able to make sure that we put gas into a premium market.

We’ve done a great job not only exposing ourselves to LNG and international offtake and LNG pricing, but also things like the Transco pipeline that allows us to move gas from the Texas Gulf Coast all the way up into Louisiana and expose ourselves to some different markets there, including the Station 65 power pool and things of that nature. Ultimately in gas, like we said, it’s a fascinating time in the North American gas market because we really are seeing a transition from this seasonally, driven by weather, driven by residential and commercial heating in the history of gas demand, and now it’s really becoming much more where the future fundamentals are going to be driven by AI-powered electricity demand and global LNG exports, industrial reshoring, 24/7 baseload power to ensure grid reliability.

And so all those things we think will ultimately provide upward pressure on pricing, which for a company like ours with an asset like Dorado puts us in a great position.

OPERATOR

The next question comes from Josh Silverstein with UBS. Please go ahead.

Josh Silverstein (Analyst at UBS)

Thanks. Good morning, guys. Maybe on that gas supply front, I was curious up in the Utica if you guys are exploring some of these gas supply agreements. A lot of power generation demand growth coming to the area. I know you signed these international agreements. I was curious about the domestic agreements you guys may be looking at.

Ezra Y Yacob (Chief Executive Officer)

Yeah, Josh, this is Ezra. We are in discussions with data centers and hyperscalers, and we feel we’re very well positioned because of, like you highlighted, not just Dorado, but really just our multi-basin portfolio in general. We’ve got production near several growing potential areas that are seeking direct gas supply. And you highlighted the Utica as well. We’re also having discussions with power generators and I’d say we continue to see growth in gas-fired generation as well.

Basically it comes down to the immense gas transportation portfolio on intra- and interstate pipelines that allow us to have the ability to serve power generators across our operations footprint. So we’re very well poised for the demand growth story for both power gen demand to pull off transport serving utilities, our ability to connect directly with data centers, and the supply position is what gives us that advantage.

Josh Silverstein (Analyst at UBS)

And then maybe lastly, just sticking with Utica. I think that the gas processing capacity up there has been pretty good for you guys to grow into. But I know you guys were working some oil and liquids-side midstream infrastructure projects up there. I’m just curious to get an update on that front too.

Jeff Hibbard (Senior Vice President, Finance)

Yeah, Josh, this is Jeff. Everything does still look good on the gas processing side up there. We have plenty of capacity and, like we said, we’re over in that liquids-rich window. So, obviously, any of the residue associated gas has a lot of those liquids-rich molecules in it that they’re really looking forward to grab ahold of. And then on the oil side, we continue to have really constructive conversations. As I’ve stated, for the next handful of years we’ve got really good oil takeaway, but we’re going to focus on really getting our netbacks up. And as we said, we’ve got a little bit of a differential there. So there’s a couple things that we can do. We can obviously blend some of our lighter molecules with our heavier molecules as we get infrastructure into play, which will actually help those differentials.

And then we’ll continue to get it onto pipe to try to get to additional markets. Like I said, we’re having really constructive conversations, but really nothing to announce right now. But we’ll definitely keep you abreast of our progress.

OPERATOR

This concludes our question and answer session. I would like to turn the conference back over to Mr. Jacob for any closing remarks.

Ezra Y Yacob (Chief Executive Officer)

Appreciate it. We’d also like to thank our shareholders for your support and special thanks especially to our employees for delivering another exceptional quarter.

OPERATOR

The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company’s SEC filings and official press releases. Corporate participants’ and analysts’ statements reflect their views as of the date of this call and are subject to change without notice.