Good day, everyone, and welcome to the EOG Resources Third Quarter 2025 Earning 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.

Thank you, Betsy. Good morning, and thank you for joining us for the EOG Resources Third Quarter 2025 Earnings Conference Call. 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 Jacob, Chairman and Chief Executive Officer, Jeff Leitzel, Chief Operating Officer, Ann Janssen, Chief Financial Officer, and Keith Trasco, Senior Vice President, Exploration and Production. Here's Ezra. Thanks, Pierce.

Good morning, and thank you for joining us. It's been a significant quarter for EOG, one that marks both a pivotal strategic milestone and a disciplined continuation of our financial framework. As you know, we have successfully closed the acquisition of Encino in early August. This transaction strengthens our portfolio, cementing a third high-return foundational asset, diversing our production base, and accelerating our free cash flow generation potential, even during a more dynamic commodity environment. This acquisition was part of an exceptional quarter where EOG once again delivered outstanding operational performance that has translated directly into strong financial results. For the third quarter 2025, oil, natural gas, and NGL volumes exceeded the midpoints of our guidance, while capital expenditures, cash operating costs, and DD&A all came in below guidance midpoints, resulting in $1.4 billion of free cash flow, $1.5 billion in net income, and $1 billion of cash returned to shareholders through our regular dividend and share repurchases. Through the first three quarters of this year, we have committed to return nearly 90% of our estimated 2025 free cash flow, including $2.2 billion in regular dividends and $1.8 billion of share repurchases. In today's dynamic energy equity environment, Share repurchases are especially compelling, and we expect to remain active in our buyback program, further enhancing returns to shareholders through the cycles. EOG's value proposition is guided by our strategic priorities of capital discipline, operational excellence, sustainability, and culture. Our continued outperformance this quarter and throughout the year demonstrates consistent execution of our value proposition by teams across EOG's premier multi-basin portfolio, while our cash return performance highlights our unwavering commitment to disciplined value creation for our shareholders through industry cycles. I want to highlight four key differentiators that set us apart and position EOG to deliver value to our shareholders in a dynamic market. First, our diverse high-return portfolio with a deep inventory of opportunities. We invest at a pace that generates high returns while optimizing both short- and long-term free cash flow generation. Our foundational assets in the Delaware Basin, Eagleford, and Utica continue to underpin our activity, driving strong full-cycle returns, while our emerging plays, Dorado and the Powder River Basin, are making tremendous progress on improving well performance and lowering costs. And our consistent focus on exploration, both domestically and internationally, gives us confidence in our ability to continue improving one of industry's highest quality portfolios. We are especially excited about the potential for international unconventional development through our entry into the UAE and Bahrain. Our differentiated exposure to both North American liquids and natural gas, as well as international unconventionals, positions EOG to benefit from medium and long-term growth in all three areas, creating multiple avenues for future value creation. Second, our focus on lowering breakeven costs. Each year, EOG utilizes data and technology to drive continuous operational improvements, capturing incremental efficiency gains and identifying opportunities to reduce our cost structure. In addition, at times, we make strategic infrastructure investments that further lower costs. In the past year, we've brought online the Janus Gas Processing Plant in the Delaware Basin and the Verde Natural Gas Pipeline connecting Dorado to the Agua Dulce Hub. These high-return strategic infrastructure projects helped further reduce our break-even costs by enhancing reliability, lowering operating expenses, and improving price realizations. Operational execution, an investment focused on improving our broader asset base, not only strengthens our resilience in a lower-price environment, but also improves margins and returns for shareholders through industry cycles. Our commitment to generating sustainable free cash flow. Our low-cost structure drives robust, sustainable free cash flow generation, supporting EOG's regular dividend, as well as additional cash return to shareholders. EOG has generated annual free cash flow every year since 2016 and has never cut nor suspended its dividend in 27 years, a remarkable track record that is a testament to our resilient business model and represents a key differentiator versus peers. And fourth, EOG's financial strength. Our pristine balance sheet is anchored by a leverage target of less than one times total debt to EBITDA bottom cycle prices of $45 WTI, $2.50 Henry Hub. With nearly $5.5 billion in total liquidity, we have tremendous capacity and flexibility to invest through the cycle, ensuring EOG emerges from any downturn an even stronger company than when it entered. On commodity fundamentals, the impact of spare capacity returning to the oil market is slowly becoming evident. We expect inventories to continue to build as it will take a few quarters for growing demand to absorb spare capacity barrels reentering the market. Beyond near-term oversupply, evolving geopolitical risk, the rapid decline in spare capacity, reduced investment in new supply, and further demand growth will remain key drivers of the oil price. Looking past the next few quarters, we see constructive support for oil prices. And turning to natural gas, our outlook remains positive. U.S. natural gas enjoys two structural bullish drivers, record levels of LNG feed gas demand, and growing electricity demand, which should provide price support. Our investments to build a premier gas business has EOG poised to deliver supply into these growing markets. Looking to 2026, it's too early to provide specifics on activity and capital spending. Our capital allocation remains driven by returns-focused investments, our view on the outlook for supply-demand fundamentals, and a reinvestment pace that supports continuous improvement across our multi-basin portfolio. This disciplined approach allows for optimal development of our assets while balancing both short- and long-term free cash flows to drive higher cash returns to shareholders. 2025 has truly been a transformative year for EOG. with the successful acquisition of Encino, as well as our strategic entries into the UAE and Bahrain. And moving into 2026, EOG is better positioned than ever to execute on our value proposition and create shareholder value. Now, here's Anne with a detailed review of our financial performance.

Thank you, Ezra. As Ezra mentioned, the closing of the Encino acquisition in early August is a significant event for EOG. The acquisition enhances the foundation of our value proposition, sustainable value creation through industry cycles, and our financial strategy remains unchanged, a pristine balance sheet to support a sustainable, growing regular dividend, disciplined investment in high-return inventory, and significant cash return to shareholders. The third quarter is an excellent example of this strategy at work. We generated adjusted earnings per share of $2.71 and adjusted cash flow from operations per share of $5.57. In the third quarter, free cash flow totaled $1.4 billion, and through the first three quarters of this year, EOG has generated $3.7 billion in free cash flow. Regarding our balance sheet, following the funding of the Encino acquisition, we ended the quarter with a robust cash position of $3.5 billion and $7.7 billion in long-term debt. Our balance sheet continues to serve as a pillar of our financial strength. Our leverage target of total debt at less than one times EBITDA at bottom cycle prices remains one of the most stringent in the energy sector, and we continue to view our pristine balance sheet as a competitive advantage, providing both protection in volatile markets and the ability to strategically invest through the cycles. During the third quarter, we continued our history of significant cash returns to shareholders, anchored by our robust regular dividend of nearly $550 million and supplemented by nearly $450 million in share repurchases, demonstrating our commitment to both sustainable and opportunistic cash returns. For calendar year 2025, we have paid regular dividends of $3.95 per share, representing an 8% increase over calendar year 2024. On October 31st, we paid our latest regular dividend, which was $1.02 per share, equating to an annualized rate of $4.08 per share, or a 3.9% dividend yield at the current share price. This dividend yield significantly exceeds the S&P 500. Our sustainable and growing regular dividend forms the foundation of our cash return strategy. We also have other incremental levers, such as share repurchases, providing an avenue for further cash return through industry cycles. Since initiating buybacks in 2023, we have repurchased nearly 50 million shares, or approximately 9% of shares outstanding. We have ample flexibility for additional share buybacks, with $4 billion remaining under our current buyback authorization. In the past five years, we have returned over $20 billion to investors through a mix of dividends and share repurchases. For the full year 2025, we are forecasting a $4.5 billion in free cash flow, a $200 million increase in annual free cash flow versus our previous forecast at the midpoints of guidance. This increase is driven by outstanding performance through the first three quarters of 2025 and strong fourth quarter guidance that leaves us well-positioned entering 2026. In summary, EOG delivered another outstanding quarter. We strengthened our portfolio, maintained the robustness of our balance sheet, and position the company for sustainable value creation through commodity cycles. As we look forward to next year, we remain focused on what we can control, operational excellence, cost discipline, and capital returns. With that, I'll turn it over to Jeff for an update on operating results.

Thanks, Anne. First, I want to recognize the exceptional dedication of the entire EOG team, Consistent, outstanding execution across every part of the organization is what enables us to convert our operational strengths into value for shareholders. We had another strong quarter of execution across the business. Our teams continue to deliver consistent results, meeting or exceeding expectations on nearly every operational metric. Production volumes outperformed, largely driven by stronger-than-expected base production performance in our Utica asset, while capital expenditures were below target, supporting strong free cash flow while keeping us on track for full-year guidance. Cash operating costs also came in under target, dominantly driven by reductions in lease operating expenses and GP&T across our foundational assets. These strong quarterly results reflect the quality of our assets and the continued discipline of our operating culture. In the Utica, the Encino integration is progressing exceptionally well. I want to thank all of our employees, including new employees from Encino, for their efforts in efficiently integrating this asset and fast-tracking the execution of high-return development. We have excellent line of sight to realize our $150 million of synergies target within the first year and lower well cost being the primary driver. We are extending EOG's culture and multi-basin portfolio of learnings, innovation, and technology transfer to the acquired assets with excellent outcomes thus far. By applying EOG's drilling and completions technical expertise across the acquired Encino acreage, we have already realized strong efficiency gains. As a result, we can maintain the same targeted 65 net well completions for 2025 while reducing our Utica rig count from five rigs down to four for the remainder of the year. With respect to production, over 80% of the applicable Encino wells have been placed on artificial lift optimization. Moving forward, we anticipate continued efficiency gains and strong field performance as we implement EOG's operational best practices and our suite of proprietary software applications. During the third quarter, EOG brought online our first well in the Utica gas window. The Peckins wells each had an average 30-day IP of 35 million cubic feet per day. This was a three-well package with average lateral lengths of just under 20,000 feet. Our focus in the Utica will remain on the volatile oil window, but we are extremely pleased with the potential upside from the Utica gas window over time. Turning to the Delaware Basin, we are pleased with our recent well results, which are on forecast and in line with our development strategy. Our teams continue to drive operational improvements that are helping us to unlock additional value from this already prolific asset. Over the last several years, innovations like our EOG motor program, super zipper operations, high-intensity completions, and production optimizers have allowed us to lower cost and improve returns across our acreage. Throughout our core areas, we have built out our surface locations, facilities, and gathering systems, and will be able to take advantage of this infrastructure when we return to these areas to continue development. Another major driver in well cost reductions has been longer laterals, where we have increased our average lateral length by over 20% in 2025 alone. Overall, we have lowered well costs more than 15% over the last two years. Due to this positive step change in capital efficiency, we continue to evolve our development approach to balance returns with resource recovery. This has enabled our team to unlock additional distinct landing zones that now meet or exceed our stringent economic hurdle rates and increase our total recovery per section. We see outstanding economics on these new targets with payback periods of less than one year and direct well-level rates of return across both shallow and deep targets in excess of 100% at current prices. In the Eagleford, economics continue to improve even after 15-plus years of development. For our 2025 program, we have reduced our break-even price by 10% due to extended lateral lengths and reductions in both well costs and operating costs. Moving forward, we will continue to leverage technology and efficiency gains to drive strong returns and margin enhancement across the Eagleford play. In Trinidad, we have completed the first wells of our MENTO program and are extremely pleased with the initial results. For 2026, we plan to commence installation of the coconut platform, reflecting further investment in our high-return Trinidad program. Finally, we are advancing the barrel oil discovery towards FID with our partners and look forward to giving you an update in the near future. In the Gulf states, our exploration programs are moving forward, and we are pleased with our progress. We drilled our initial wells in Bahrain in the third quarter, and we'll spud our first well in the UAE this quarter. We are excited about these opportunities that allow us to leverage our technical expertise an extensive data set from drilling thousands of unconventional wells across a wide variety of plays. The opportunities in the UAE and Bahrain are just another example of EOG's focus on exploration as we continue to look for organic ways to improve and expand our inventory. Regarding service costs, as industry activity has decreased in the second half of 2025, we are seeing some softening in the market. The majority of these decreases have been associated with non-high spec equipment since these are the first to be released and become available. For the high spec services that EOG utilizes, we have observed much more resilient pricing, with utilization remaining high. We have just recently started seeing a low single-digit reduction in spot rates for high spec equipment, but this has largely been offset by the impact from tariffs, primarily on non-casing steel products. As we look to the future, we currently have around 45 percent of our service costs locked in for 2026, and we'll look for opportunities throughout the next few quarters to take advantage of any additional softening in the market. Regardless of how service costs shake out, we remain focused on delivering sustainable efficiency gains year in and year out. After an outstanding third quarter, we are poised to finish 2025 strong and enter next year with tremendous momentum. Now I'll hand it back to Ezra to wrap.

Thanks, Jeff. In closing, let me highlight a few key messages. First, this has been an exceptional quarter for EOG. We strengthened our portfolio with the successful completion of the Encino acquisition, maintain a robust balance sheet, and further position the company for long-term value creation. Second, today's dynamic market environment is exactly what EOG is built to excel in. Our diversified portfolio enables ongoing investment in high-return projects, while our low break-even costs drive strong free cash flow that supports both our regular dividend and additional shareholder returns. Our industry-leading balance sheet remains the cornerstone of our financial strategy, ensuring value creation through every phase of the cycle. EOG holds a distinctive position in the upstream sector with access to a deep inventory of growth opportunities spanning North American liquids, North American natural gas, and international, conventional, and unconventional plays. Our continuous data collection and development of proprietary technology reinforce EOG's culture of innovation and exploration, keeping us at the forefront of industry advancement. And finally, this quarter's results highlight the enduring strength of EOG's value proposition, anchored in capital discipline, operational excellence, sustainability, and a high-performing culture. Thank you for your continued interest in EOG. We will now open the line for questions.

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 1 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 1 on your touchtone telephone to ask a question. To remove yourself from the queue, press star 2. The first question today comes from Neil Mehta with Goldman Sachs. Please go ahead.

Good morning, Ezra. Good morning, team. Appreciate the time. One macro, one micro question. So the macro, Ezra, you guys do really good macro work, especially given the analytical department that you set up a couple of years ago. So it sounds like on oil, you guys got a pretty cautious near-term view, but a more constructive medium-term view. And on gas as well, you had some cum. So can you just unpack it and maybe put some numbers behind your viewpoint? Because I know everything you say is backed up by some analytics here.

Yeah, Neil, this is Ezra Jacob. Good morning. That's a great question. I like how you phrased that, you know, cautious near-term, constructive medium and long-term. I think, you know, broadly, even in spite of a lot of rather daily or weekly volatility, I don't know if that much has changed in our broad view since we discussed it last quarter. You know, we continue to see fairly consistent and what I would call moderate demand growth for 2025 and continuing into 2026. The volatility, you know, earlier this year with uncertainty around potential tariffs has generally eased as that policy, as those policies have become a bit more transparent. And what we see, as I spoke to in the opening remarks driving near-term fundamentals, is the spare capacity return to the market. Rather, you know, the spare capacity return of the market is really causing concern more so than investment in significant new supply. And that's an important distinction because what we forecast with continued growth and demand is while the near term looks to be oversupplied, like you mentioned, we have a potential where you could rapidly see us move from an undersupplied environment from an oversupplied environment in the near term to an undersupplied environment, really, in the medium term. And it actually sets up for us that we end up being quite bullish when we look out longer term on the supply-demand balances for liquids in light of the reduction in spare capacity and the reduction in investment that you see right now. In combination with, you know, there's always going to be ongoing geopolitical risks. And, you know, and then we also see, you know, a continued long runway for demand growth to continue. That's on the oil side. On the natural gas side, as I mentioned in the opening remarks, you know, again, we see 2025 as being kind of that inflection point, and it's playing out that way. While you do have storage approaching the five-year, really about 5%, I think, above the five-year average, we are seeing the increase from LNG demand for feed gas, and we're really starting to see the increase in electrical demand continue. Our forecast has always been that kind of the back half of the decade we'll end up seeing somewhere around a 4% to 6% compound annual growth rate, and I think you're starting to see a number of forecasts actually even exceed that range for North American gas demand.

Yeah, thanks, that was a good perspective as always. And then the follow-up is a little bit more micro. We recognize well data can be super noisy, but there's been a lot of attention on the Delaware in particular and some of the third parties around productivity data coming in a little bit softer. And that times up well with people getting concerned about Permian maturity around some of the wells. And so I wanted to give you an opportunity to address that directly and help potentially comfort the market around that risk.

Yeah, Neil, this is Jeff. You know, and as we just talked about in our opening remarks, you know, our Delaware Basin Wells, they're performing just as we have them designed. And it's really just a continued evolution of our development strategy out there, which, you know, ultimately our team is fully focused on taking that asset and maximizing the value. You know, the first thing that I tell you the team's focus on is they're always looking to balance returns with maximizing NPV per acre and the overall recovery of the acreage. And what we've really seen over the last handful of years just through innovation and efficiency gains is we've really lowered the cost there in the Delaware and seen a pretty big step change in our capital efficiency of the play. You know, a couple examples of that is, you know, we've increased our lateral length this year alone 20 percent, which has really helped cost. And when you look at that cost reduction, we've had about 15 percent reduction over the last two years. And then on top of that, you know, through all of our core areas, we've been able to build out our infrastructure. And whenever we return to these sections, we're able to use that infrastructure for a benefit. So when you take all this and you add it all up, what we've been able to do is unlock additional unique landing zones there in the Delaware that they're meeting right now are stringent economic hurdle rates at bottom cycle pricing. And what I'd say about these zones is they really vary all the way up and down the stratigraphic column, and they kind of vary from area to area but really if you look at this kind of development progression it's very similar to what we've done in other plays. I mean take the Eagle for example you know we lowered well cost there we applied new completion technology and we were really able to unlock additional resource in that play and you're seeing the same thing out here in the Delaware. And then you know the important thing to really take away with this is that these new targets have just outstanding economics. With payback periods, they're less than a year. And then at the direct well level rates of return, I mean, they're greater than 100% at current prices right now. So I'd say our teams are really excited about the progress they're making with the program. And they're going to continue to look for innovative ways to drive down costs, keep improving well performance, and unlock as much resources as we can out there in the Delaware.

The next question comes from Steve Richardson with Evercore ISI.

please go ahead. Morning. Ezra, I was wondering if we could talk a little bit about 26. I know you said explicitly it's too early to talk about 26, but I was wondering maybe you could, if we take fourth quarter CapEx, which is a number you just guided to, and annualize that. I know there's a whole bunch of problems with that framework, but I was wondering if you could kind of talk about activity levels today and what that may look like as you roll forward or even just some of the considerations up down international you know utica after you've had it under your belt for three months so just wondering if you could just kind of go around the portfolio and and maybe give us a sense of how you're thinking about things with the the macro backdrop you just outlined

yeah steve uh good morning thanks for the question you know i know uh usually usually there is a lot of pushback on using a fourth quarter number as a run rate, I actually think, you know, in our case right now with where we see the macro environment, you know, under the current macro environment, which I appreciate you prefacing with that, I actually think the Q4 run rate is probably a pretty good spot for everyone to start with, to be honest, because as you said, some of the puts and takes, now again, you know, it is a dynamic market, so you've got a lot of potential for things that can change, but as we see the market going forward on the oil side being, you know, likely oversupplied for the next couple of quarters. Maybe that turns over pretty quickly next year. Maybe it pushes out a little bit farther. But really, on the oil side, we see next year, as we sit here today, is really probably being no to low oil growth. And low oil growth would really mean that, you know, in the next few months we're seeing maybe the potential for some oil supply to increase in the back half of the year. But right now, it's pretty difficult to see the market, you know, asking for increased supply in the front half of the year. So I think no to low oil growth. We obviously are going to continue to invest in our gas play, as we've talked about at Dorado, as we've talked about trying to build a premier gas company basically inside of EOG. We're ramping up our LNG commitments over the next few years. We continue to see, as I talked about at the beginning, kind of 2025 being an inflection point for North American gas demand. So I think continued investment in Dorado. And then we have continued investment in the international at a pretty similar pace to what we're doing today. We do have another platform under construction there in Trinidad, but we've had an active drilling campaign there for this year. And then with the Q4 number, we've actually started investing in both the UAE and Bahrain, and we'll have some consistent activity going there as well. I think, you know, again, with the purview or the asterisk that it is a dynamic environment, I think those are kind of the puts and takes, Steve, that I'd be looking at. And I think, you know, like I said, the Q4 run rate is probably a pretty good starting point.

That's great. We won't hold you to it, but that's a really good starting point. Fourth quarter times four, it is. Maybe you want a little bit more on the asset side on the Utica, but I was wondering if you could talk about are you thinking about oil gathering and market access there, you know, the movement in, you know, what the asset's done to your corporate differentials is meaningful. And I know you've got a number of ways to solve that, either, you know, third party or like you've done yourself in other instances. So I was wondering if you could talk about that and, Dave, the timeline of which we could see something there.

Yeah, Steve, this is Jeff. You know, when we think about the oil markets up there, first off, you know, there's plenty of market for the molecules. That's not the issue. Really what we focus on up there is going to be the differentials. And as you actually alluded to, you know, our premium oil differentials, they did narrow slightly since the Encino differentials were a little bit wider. And that's to be expected. You know, Encino, on that acreage, you know, we were really active in the volatile oil window, and they were a little bit more active to the east of us, which tends to be a little bit more condensate related. So that's really where you're seeing the difference. And, you know, the way I look at it is with any play, you know, over time and maturity, we'll be able to improve those oil differentials there, especially with the added scale from the overall. Next question comes from Josh Silverstein with

UVS. Please go ahead. Yeah, thanks. Good morning, guys. You know, pretty big drop in the overall cost guidance this quarter, 25 cents here. Can you just talk about the drivers of this? Was it a function of adding the Encino assets in and how we should kind of think about the costs

looking forward into next year. Thanks. Yeah, Josh, this is Jeff. Yeah, it's kind of right across the whole board with our operating expenses. We're seeing really good performance. So on the LOE side, you know, we had about a 10 cent beat for midpoint, and that was primarily driven by lower than expected workover costs and compression costs across the whole company in most of our assets, and then also we did see a little bit lower offshore LOE in Trinidad than what we had forecasted. On the GP and T side, we were about 20 cents below midpoint, and what that had to do with was our natural gas gathering and processing fees and the Eagleford and the powder came in a little bit lower than expected, which was good. And then also, with us only having about a week under our belts before the last call, We had a slight forecast variance in the Utica due to the Encino acquisition, so that came in a little bit less on GP&T. And then also everything else was looking pretty good. G&A was about $0.08 below midpoint. That was somewhat tied to the Encino acquisition there coming in under. And then DD&A also came in under, which primarily it's related to a little bit better performance across the portfolio from an overall reserve standpoint, and really good costs flowing through there to the pools.

Got it. Thanks for that. And then just going to the balance sheet and shoulder return profile, now that you're post the Encino acquisition, how should we start thinking about the free cash flow allocation going into next year? Do you want to start trimming away at the debt that you guys have taken on? Do you want to build the cash balance up to that kind of $5, $6 billion level? and then should we still be thinking maybe of that 70% plus of the free cash flow to shareholders?

Hey, Josh, this is Ezra. Good morning. Yeah, I think maybe I'll start with the last point there, that 70% commitment. You know, don't forget that is a minimum commitment. The reason we came out with that 70% commitment of free cash flow to return to shareholders is it's durable throughout the cycle. But as you know, you've seen we've basically exceeded that in the last few years, It's been closer to about 90, I think maybe 92% of free cash flow returned to shareholders. Going forward, you know, we love where our balance sheet is right now. Our total debt is right at our target of total debt versus EBITDA bottom cycle prices at about one times. And I think we're in a great spot with our cash position, as we talked about in the opening remarks with $5.5 billion of liquidity. It gives us a lot of opportunities to continue to invest. throughout the cycle or, you know, look for small bolt-ons or other opportunities to build value for the shareholders. I wouldn't say that it's a priority to continue to build that cash balance at all. I think, as Ann mentioned in the opening remarks, right now we actually see continued return of cash to shareholders through stock buybacks as being a pretty opportunistic avenue that we have in front of us, not only for EOG, but really for the entire sector right now.

Next question comes from Doug Legate with Wolf Research. Please go ahead.

Thank you. Good morning, Ezra and team. Ezra, I wonder if I could try and hit the inventory question. I know you haven't given a lot of updates today on that or sustaining capital for 2026, but my question is really more philosophical about how you think about managing the business. There's been a lot of focus, for example, on what is the Delaware inventory depth. You've already addressed that. But it's almost like folks are looking at, well, that means you can't sustain the production. So my question is, are you running the business to optimize production at basin levels, or are you running the business to sustain portfolio-free cash flow? And in other words, the interplay of the different basins. That's my first question. My follow-up is a quick one on exploration, because obviously you've stepped out into the international arena in certain areas. But our understanding is that EOG may be starting to build a position in Alaska. And my question is, what is your view of business development? Is Alaska part of your portfolio? What are your plans there in terms of incremental spending? And how should

you think about that going forward? Thanks, Doug. Yeah, this is Ezra. I appreciate that you can get on. I know you're traveling a little bit. But listen, to start with the kind of the total portfolio and how I think about the business, you know, multi-basin operations has always been a strategic advantage for us. You know, we've got flexibility, diversity of rock types. We continue to collect data and learn about different reservoirs. It also puts us in, gives us diversity of product mix and direct diverse access to different markets. And we've been able as a first mover to really put together a high return inventory of over 12 billion barrels of equivalents, as we've talked about. And so I think, you know, with that combined with our low-cost structure really gives us a significant runway to continuing generating free cash flow in a very sustainable manner. You know, as I mentioned in the opening remarks, we've actually generated free cash flow 10 years in a row now through a couple of different cycles, and I think it also demonstrates not only the sustainability of that inventory, but also our consistent focus on ultimately capital discipline, you know, the company's commitment to capital discipline. Resource depth by play is part of what you're asking, and I'd say that's a really dynamic question. And Jeff addressed that with specifics to the Delaware Basin and the Eagleford example because, you know, as we continue to build infrastructure, lower well costs, we lower operating costs, and we continue to actually learn about the reservoir, the normal life cycle of any of these unconventional plays is that you'll unlock additional resources. You know, we've seen it in the Bakken, the Eagleford, the Permian to a certain extent in the Powder River Basin. So, you know, as far as assigning a static number, you know, the Permian obviously with its stacked play potential and the high level of landing zones is probably our top resource base. Utica and Eagleford based on sheer size obviously are very strong as well. And that said, you know, we do have a slide in our deck that highlights the payout, the returns, the costs of all three of those foundational assets, and that slide actually does take into consideration the current differentials as well, you know, between the Utica, the Delaware, and the Eagleford. And what you see is really all the economics are quite similar at the basin level in terms of the economics, which directly points to the free cash flow generation of the potential of all three basins being pretty similar. And, again, it's why we see a long runway for sustainable free cash flow generation of the current inventory. The way we think about the business is investing in each asset at the right pace at the right time. Part of that is a function of our learnings. Part of it's a function of our infrastructure. And part of it's a function of generating free cash flow, Doug. So we really think about the individual basins individually, and then we roll them up to the company level. And at the company level, of course, we end up viewing the macro environment and then are, like I said, committed to capital discipline and generating free cash flow. Now, on the second part of your question, Doug, as far as exploration, you know as well as anyone that exploration is really nothing new for EOG. It's long been, I'd say, a cornerstone of our strategy is to use data and technology, like I just talked about, to continue to unlock reserves that are typically overlooked. You know, we're not necessarily frontier basin type of a company. You know, we've really built the majority of our inventory with a strategy of using data and technology to look for bypass reserves. And, in fact, we've done that. We've invested in exploration, you know, in the last few years at times when really it's been a little bit unpopular. But we continue to see that as the best way to improve the quality of our asset base. and we think it's key to our high full cycle returns and our lower break evens. So I think the takeaway really should be that we do have a pretty strong pipeline of projects that span, you know, the spectrum from initial ideas to leasing to initial wells to maybe delineation wells. And so we feel very good about our exploration efforts. That being said, you know, in the last 12 months, we have expanded our inventory pretty dramatically with the Utica acquisition. And I think our near-term focus really is continuing to integrate that asset, you know, continuing to drive down our break-evens across all of our plays, especially in the Utica, continuing to invest in growing our Dorado asset, and then, of course, our investment in unlocking the potential that we see internationally in both the UAE and Bahrain.

And you confirm the Alaska position?

No, Doug, as you know, you've been following us for a number of years, Doug, and it would be a first if we actually started talking about individual exploration plays. So we'll just leave that one for some time in the future.

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

Hey, I appreciate y'all's comments on 26. You know, it's certainly helpful here. Clearly, it sounds like on oil, a little concern near-term makes sense. On gas, obviously there, it seems like you're quite bullish as we roll into 2026. So just curious there, do you view 2026 as maybe the year where you can step up Dorado activity a little bit to take advantage of that bullish outlook?

Yeah, Leo, it's Ezra again. It's a good question. I will – so we are bullish on gas, and part of the reason is because we have captured some markets to grow into. We see, you know, the electricity demand has continued to grow. We're taking advantage of that right now, really, with especially our capacity along Transco that delivers our gas into the southeast power demand pool. But also, obviously, our commitments on the LNG side are increasing. The biggest thing with gas, though, as we saw last year, if we just look at the last 12 months, I might be off on this just a little bit, but we really exited last year's injection season right around the five-year high, and then within about six or seven weeks, we were at a five-year low on the five-year range with respect to storage levels due to a pretty cold winter, but I wouldn't say anything exceptionally out of the ordinary. And I think it shows the volatility of gas, because here we sit today with storage levels, again, about a 5% above that five-year inventory level. A little bit of background, Leo, on the ultimate answer, where I say our pace for Dorado, kind of like I just finished up with Doug, is ultimately going to be governed by keeping our full cycle returns high, which means continuing to develop that at an appropriate pace where we can keep our costs very, very low. Now, we've talked about before how, you know, there are a couple of step changes for costs in any of these unconventional plays. The first is when you can really command a rig full time. The second is when you can get to a frack spread full time. And, yeah, 26 will probably get pretty close to that. But, you know, like I said, there is a little bit of flexibility still in the plan that we've baked in. Let's see how it plays out. Let's see where winter goes and really see how the LNG demand continues to increase. And that will kind of determine, again, our investment rate at Dorado. Growth, again, ends up being an output of our ability to kind of invest in these plays, each of these plays at the right pace to drive those returns.

Okay, I appreciate that. And I just wanted to jump over to Bahrain here. So it looks like you guys showed in your results a little bit of international gas production outside of Trinidad on the quarter. I know you drilled some wells in Bahrain 3Q, like you said, so it sounds like there's some production on those wells. Just any kind of early-time kind of read, those wells, you know, kind of hitting or beating expectations at this point? What are you guys seeing there in Bahrain?

Yeah, good morning. This is Keith. You know, we're very excited about the positive momentum we have in the Gulf states. In Bahrain, we have a full team operating there. We've been granted that exploration concession in the partnership with BAPCO. That did allow us to take over a handful of legacy producing wells. That's the gas volumes that you see reported here in the quarter. As far as the expectations for those over the production on those, those are the same wells that led us to want to get into the concession in the first place. So they are a little bit older wells. They were part of the robust data set that we had before entering the country. So they're a little bit older. We have drilled our first few wells, first few new wells, and we're going to look to starting completing them on this quarter. So we'll say we're gaining a better understanding on both the geology and the operations side in Bahrain. It's early days, but we're very excited about the opportunity here.

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

Thanks. You know, Ezra, you, you know, we're clear that you'd be willing to obviously extend above 70% of shareholder returns, especially, you know, at the attractive valuation right now. You know, looking, obviously, it looks like you've already done about a million, at least a million shares of buybacks, you know, in the fourth quarter to date. You know, what's your temperature on, you know, at this valuation to potentially push to 100% or even more this year? I mean, how compelling is valuation today versus, you know, say a year or two ago when you were closer to 100%?

Thanks for the question. You know, we've definitely got the flexibility and the strength of the balance sheet that would support, you know, going to higher levels than the 70% minimum and really going to the higher levels of the, you know, 92% that we've done in the past. Like I said, I think it's very compelling, not just for EOG, but really for all the sector. I think currently, you know, energy's weighting is around 3% of the S&P 500, and so we see a large dislocation in valuations, and we see a large dislocation in valuation of EOG. And so I think it's a fantastic opportunity for us here. When you look at the near term where it looks like there's the potential for continued oversupply, spare capacity to be entering the market, we're focused on capital discipline and continuing to generate free cash flow. And at this point, like I said, building cash on the balance sheet is not a priority for us. Our balance sheet is in a very pristine state where we like it. And so there is opportunities to return close to 100%.

Okay, that's clear. And my follow-up, I think for you, Jeff, you mentioned obviously better base production performance in the Utica. Can you give us a little color on that? Was it some of the artificial lift efforts you did, or was it just better performance of the reservoir as you all got into the Encino assets?

Yeah, Scott, thanks for the question. And, you know, it's really kind of a magnitude of the whole integration. And, you know, really we've, over just a few months, we've realized significant operational momentum, you know, just by putting all of our drilling completion and production expertise, you know, out there into the asset. So we've talked about, you know, the efficiency gains we saw on the drilling side. So we're actually dropping down one rig, going from five to four. So we're seeing really good performance on the efficiency sides there. And then over on the production side, I think, you know, we've implemented the high-intensity completion design there now with scale, so we're starting to see some benefit from all of that. And then, as you alluded to, too, as far as some of the legacy wells, you know, we've moved over the full 1,100 wells to the EOG suite of proprietary applications, and that includes 80% of them that are the applicable wells. We've got them on the EOG artificial lift optimizers. So we're starting to see the uplift benefits from that. And as you alluded to, that's part of the reason that we see the beat there in Q3 out of the Utica. So still have a long ways to go, though. There's still technologies that we can unveil. There's still things from the efficiency aspect. But we're doing really well there in the Utica, and we're realizing a lot of the synergies in the production uplifts that we expected.

The next question comes from David Dekelbaum with P.D. Cowan. Please go ahead.

Thanks, Ezra and team, for taking my questions. I wanted to ask a little bit more about the optimization and the lower operating costs. I think you cited lower work over expense for this year. And I'm curious, is it really just specific to the integration that you're seeing in the Utica, or is this broad based around, I guess, just better reservoir productivity, or are you just seeing better responses from reservoir performance across your assets that requires less work over intervention? Yeah, David, this is Jeff. You know,

what I'd say is it's really across the whole portfolio. We're really seeing improvement where we're focusing on where major failures are. So a lot of it's going to be with our data and our analytics understanding where failures are in each one of these well boards and the different artificial lift systems and how to go ahead and alleviate those failures out of the front end. And then, you know, some of the additional technologies we actually talked about on our last call with some of these hi-fi sensors where we're able to put it on subsurface and surface equipment. We're able to monitor vibrations and other data real time to understand when failures may happen or even understand prior to failure so we're able to catch them and be able to minimize the overall expense. So I really think it's just a credit to all of our teams out there that, you know, they're not leaving any stone unturned. We're making sure we take all of our data and apply it, you know, to all of our wells that are producing to make sure that we're minimizing the downtime and really maximizing the overall production across the portfolio.

I appreciate that. And Ezra, just given some of the commentary, particularly around, you know, spare capacity dwindling, you know, in the ensuing years ahead, how do you put that in the context of your appetite for just expanding in the areas where you're at or overall, I guess, your appetite for trying to hoard as much resource as you can? you know, sort of in the next, call it, 12 to 24 months period, either through M&A or just trying to organically focus on expanding resource?

David, it's a great question. You know, and downturns are a fantastic time to explore because typically a lot of companies, if companies are exploring on a downturn, that's one of the things that's typically easy. That's a program that's easy for them to pull back on and reduce. As far as, you know, the inorganic, you know, I think at this point, you know, small bolt-ons are really, you know, some of the more fundamental blocking and tackling of trades to continue to shore up our acre position is what you should be expecting from us. You know, the Encino acquisition was, you know, very reminiscent of the Yates acquisition, which we did, you know, 10 years ago now. It was a bit of a unicorn that came along in an emerging asset with hand-in-glove acreage positions and fit. It's a very, very high return prospect for us, and we got it at a price because it was really an emerging asset that made it very, very compelling. Typically, in these emerging assets, you don't really have the opportunity to do something like that because as competition starts to see your well results, those entry points, the price points really start to increase. And for us, we look at any of these opportunities, inorganic or organic, through a returns-focused lens. And so what I mean by that is any of our exploration opportunities really need to compete, and this calls back a little bit to Doug's question, it really needs to compete with the existing portfolio. We aren't really interested in just grabbing more inventory, quite frankly. we're continuing to have interest in expanding the quality of our inventory and continuing to improve the returns, really the full cycle returns that we can deliver to our shareholders.

The next question comes from Betty Jones with Barclays. Please go ahead.

I want to ask about technology. EOG has always been on the forefront of integrating technology and big data we're hearing a lot about AI models so just want to get your take on the materiality of AI integration on your operations and exploration efforts and whatnot and you still see advantage of building these your capabilities in

house yes Betty this is Ezra you know AI at EOG yes we definitely see advantages and advantages, significant advantages, to building a lot of our proprietary apps and software developments in-house, typically because we couple them directly with the field operations. Things like Jeff has talked about, I think, on the last call with regard to our high-fidelity sensors, some of our down-hole tools that we've got real-time measurement that's really making a big impact on the way that we operate and driving down costs. I'd say, you know, broadly speaking, AI, and you've heard it throughout this earnings season, everybody mentioned something on their call. So I think it's clear that AI really is transforming the entire industry, the oil and gas industry. And it really is happening, I'd say, at every stage of operation from, as you pointed out, exploration throughout the field, including safety. And as you know, our journey has been maybe a little bit longer in the tooth than others. You know, we started with smart technology really prior to COVID, and that's, you know, some of the technology that we put out on our centralized gas lift systems. I mean, we're coming up on almost 10 years of utilizing that, really, which really manages and optimizes the amount of injection gas versus the production that you're seeing out of it. And we've, you know, since that time developed machine learning algorithms now that we utilize for not only that production optimization, but for other aspects of our operations as well, and it's just recently that we've started to develop some of the deep learning tools where you're really collecting, organizing, and using significantly more types of data, including, you know, human observation and experiences, really experiential learning. And so while we're not quite to true agentic intelligence, we are using quite a bit of generative AI, not only to organize geologic data and attempt to uncover, you know, hidden trends, but we've got real-time drilling optimization. We're improving efficiency and equipment reliability. We've got predictive maintenance, process optimization, really some autonomous operations going on in the field. And then, like I said, maybe I'll just finish up on the safety side. You know, safety is crucial in oil and gas, and AI is definitely helping our efforts in that regard as well, helping to detect anomalies both on the emissions, spills, and safety side throughout our different operation disciplines.

Great. That's a very helpful caller. A follow-up, probably for Jeff, I'm just curious on the dry gas, the goat well drilled. What was the impetus to drill that well? And clearly I see that more as a dry gas option in the portfolio. So what would it take, whether market or price-related, to trigger that option?

Yeah, Betty, this is Jeff. Yeah, we're extremely excited about those Peckins wells. As we said, they came on. Each one had individual 30-day IPs of around $30 million a day. So very, very strong. And they actually, those were wells that we acquired. So we just completed those wells and brought them on production. So they were already drilled when we acquired them. But, you know, what I'd say is, you know, we're excited about those results, but we also know we've got a multi-basin portfolio all around the country. So we have a lot of flexibility to take advantage of all the different markets and be very strategic in, you know, how we're maximizing our price realizations and netbacks. And, you know, in the Utica, as in-basin demand continues to increase and we get some additional pipeline capacities in there built out, you know, we feel like we'll be well positioned to take advantage of it. But ultimately, I mean, when we're talking about gas growth within the company, you know, we have Dorado, which is the lowest cost gas in the U.S. You know, it's located right next to the Gulf Coast Market Center. There's a growing LNG market, as you know, and increasing demand growth. We've got a 21 TCF resource down there. And, you know, we're just excited about the opportunities that gives us in the market. So realistically, up in the Utica, as we said, we're going to focus on the volatile oil window. We have opportunities to grow the gas in the future there, but really with gas growth, I'd say our focus is on Dorado.

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

Yes, we appreciate everyone's time this morning and want to thank our shareholders for your continued support, and a special thanks to all of our employees and partners for delivering another outstanding quarter. Thank you.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.