EOG Adjusts Budget to Weather Mid-$30 Oil
EOG Resources Inc. updated its 2020 capital plan as a result of the significant decline and increased volatility of commodity prices. Its exploration and development spend for 2020 is now forecast to range from $4.3- to $4.7 billion. Net cash from operating activities is expected to fund both capital expenditures and dividend payments assuming mid-$30 oil prices for the remainder of the year.
The updated plan supports full-year 2020 oil production of 446,000 to 466,000 barrels of oil per day, which is flat compared to its full-year 2019 levels. The company plans to reduce activity across its operating areas, and it will focus its drilling operations in the Delaware Basin and South Texas Eagle Ford.
"Our first priority is to generate high returns with every dollar we spend even at low oil prices," said William R. "Bill" Thomas, Chairman and Chief Executive Officer. "EOG's premium drilling strategy is the most strict reinvestment hurdle rate in the industry. With oil around $30 our 2020 premium drilling program is expected to generate more than 30 percent direct after-tax rate of return. Our commitment to reinvesting at high returns never wavers."
At year-end 2019, EOG's total debt outstanding was $5.2 billion for a debt-to-total capitalization ratio of 19 percent. Considering $2.0 billion of cash on the balance sheet at the end of the fourth quarter, EOG's net debt-to-total capitalization ratio was 13 percent.
"Our business is more resilient today than it has ever been in the company's history," said Thomas. "By significantly improving the economics of our premium inventory, maintaining operational flexibility and strengthening our balance sheet, we are well positioned to weather the storms of low commodity prices."
EOG has proved reserves in the United States, Trinidad, and China.
To contact the author, email bertie.taylor@rigzone.com.
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- How Likely Is an All-Out War in the Middle East Involving the USA?
- Rooftop Solar Now 4th Largest Source of Electricity in Australia
- EU, Industry Players Ink Charter to Meet Solar Energy Targets
- US Confirms Reimposition of Oil Sanctions against Venezuela
- Analyst Says USA Influence on Middle East Seems to be Fading
- Brazil Court Reinstates Petrobras Chair to Divided Board
- Russian Ships to Remain Banned from US Ports
- EIB Lends $425.7 Million for Thuringia's Grid Upgrades
- Var Energi Confirms Oil Discovery in Ringhorne
- Seatrium, Shell Strengthen Floating Production Systems Collaboration
- An Already Bad Situation in the Red Sea Just Got Worse
- What's Next for Oil? Analysts Weigh In After Iran's Attack
- USA Regional Banks Dramatically Step Up Loans to Oil and Gas
- EIA Raises WTI Oil Price Forecasts
- Venezuela Authorities Arrest Two Senior Energy Officials
- Namibia Expects FID on Potential Major Oil Discovery by Yearend
- How Likely Is an All-Out War in the Middle East Involving the USA?
- Oil Markets Were Already Positioned for Iran Attack
- Is The Iran Nuclear Deal Revival Project Dead?
- Petrobras Chairman Suspended
- Oil and Gas Executives Predict WTI Oil Price
- An Already Bad Situation in the Red Sea Just Got Worse
- New China Climate Chief Says Fossil Fuels Must Keep a Role
- Oil and Gas Execs Reveal Where They See Henry Hub Price Heading
- Equinor Makes Discovery in North Sea
- Macquarie Strategists Warn of Large Oil Price Correction
- DOI Announces Proposal for Second GOM Offshore Wind Auction
- Standard Chartered Reiterates $94 Brent Call
- Chevron, Hess Confident Embattled Merger Will Close Mid-2024
- Analysts Flag 'Remarkable Feature' of 2024 Oil Price Rally