EOG Resources (EOG) Q1 Earnings And Revenues Beat Estimates

EOG Resources Inc. (NYSE:EOG) delivered first-quarter 2018 adjusted earnings of $1.19 per share, which beat the Zacks Consensus Estimate of $1.01. The figure increased significantly from the year-earlier quarter’s earnings of 15 cents.

Total revenues in the quarter jumped 41% year over year to $3,681.2 million. Moreover, the top line also beat the Zacks Consensus Estimate of $3,458 million.

The strong first-quarter 2018 results were supported by increased production as well as higher oil and gas price realizations. Further, lower exploration costs contributed to the growth.

Operational Performance

In the quarter under review, EOG Resources’ total volume increased 15.6% year over year to 59.4 million barrels of oil equivalent (MMBoe) and was in line with the Zacks Consensus Estimate.

Crude oil and condensate production in the quarter totaled 363.3 thousand barrels per day (MBbl/d), up 15.1% from the prior-year quarter’s level and also came above the Zacks Consensus Estimate of 360 MBbl/d. Natural gas liquids (NGL) volumes jumped 27.7% year over year to 100.6 MBbl/d and beat the Zacks Consensus Estimate of 98 MBbl/d. Also, natural gas volumes increased to 1,176 million cubic feet per day (MMcf/d) from the year-earlier quarter’s level of 1, 058 MMcf/d and surpassed the Zacks Consensus Estimate of 1,172 MMcf/d.

Average price realization for crude oil and condensates grew nearly 28% year over year to $64.27 per barrel and increased from the Zacks Consensus Estimate of $61 per barrel. Quarterly NGL prices also grew 13.1% from $21.63 in the prior-year quarter to $24.46 per barrel but lagged the Zacks Consensus Estimate of $25.38 per barrel. Natural gas was sold at $2.83 per thousand cubic feet (Mcf), up 17% year over year and came above the Zacks Consensus Estimate of $2.79 per Mcf.

Liquidity Position

At the end of the first quarter, EOG Resources had cash and cash equivalents of $816.1 million and long-term debt of $6,071.6 million. This represents a debt-to-capitalization ratio of 26.5%.

During the quarter, the company generated approximately $1,859.8 million in discretionary cash flow compared with $1,072.8 million in the year-ago quarter.

Guidance

For 2018, the company expects total production between 685.8 MBoe/d and 728.5 MBoe/d. Of which, crude volumes are projected between 389.4 MBbl/d and 405.6 MBbl/d. The company expects crude volume to increase between 16% and 20%. For the second quarter, the company anticipates total production in the range of 670.3-706.2 MBoe/d.

Q1 Price Performance

During the January-to-March period, EOG Resources’ shares lost 2.4% compared with the industry’s 4.4% decline.

Zacks Rank & Key Picks

Currently, EOG Resources carries a Zacks Rank #3 (Hold).

A few better-ranked players in the same sector are Nine Energy Service, Inc (NYSE:NINE) , Baytex Energy Corp (TO:BTE) and Solaris Oilfield Infrastructure, Inc. (NYSE:SOI) . All three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Nine Energy Service is engaged in delivering onshore completion and production services to unconventional oil and gas resource development. The company pulled off a positive earnings surprise of 6.25% in the preceding quarter.

Baytex Energy is a conventional oil and gas income trust focused on maintaining its production and asset base through internal property development and delivering consistent returns to its unitholders. The company delivered an average positive earnings surprise of 77.3% in the trailing three quarters.

Solaris Oilfield Infrastructure manufactures as well as provides patented mobile proppant management systems which unload, store and deliver proppant at oil and natural gas well sites. The company delivered a positive earnings surprise of 5.26% in the preceding quarters.

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