Earnings Call Transcript - EOG Q3 2025

Operator, Operator

Good day, everyone, and welcome to the EOG Resources Third Quarter 2025 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. Pearce Hammond. Please go ahead, sir.

Pearce Hammond, Vice President of Investor Relations

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 Yacob, Chairman and Chief Executive Officer; Jeff Leitzell, Chief Operating Officer; Ann Janssen, Chief Financial Officer; and Keith Trasco, Senior Vice President, Exploration and Production. Here's Ezra.

Ezra Yacob, CEO

Thanks, Pearce. 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, diversifying 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 3 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 4 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, Eagle Ford 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 the 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 3 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 breakeven costs by enhancing reliability, lowering operating expenses and improving price realizations. Operational execution and 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. Third, 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 1x total debt-to-EBITDA at 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 2 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 Ann with a detailed review of our financial performance.

Ann Janssen, CFO

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 3 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 1x 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 31, 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 5 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 midpoint of guidance. This increase is driven by outstanding performance through the first 3 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 positioned 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.

Jeffrey Leitzell, COO

Thanks, Ann. 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 costs 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 5 rigs down to 4 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 Bakken wells each had an average 30-day IP of 35 million cubic feet per day. This was a 3-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 we'll 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 2 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 1 year and direct well level rates of return across both shallow and deep targets in excess of 100% at current prices. In the Eagle Ford, economics continue to improve even after 15-plus years of development. For our 2025 program, we have reduced our breakeven 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 Eagle Ford 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 will spud our first well in the UAE this quarter. We are excited about these opportunities that allow us to leverage our technical expertise and 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% 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 up.

Ezra Yacob, CEO

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, maintained a robust balance sheet and further positioned 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 breakeven 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. Third, 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.

Operator, Operator

The first question today comes from Neil Mehta with Goldman Sachs.

Neil Mehta, Analyst

Appreciate 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. And it sounds like on oil, you guys have a pretty cautious near-term view, but a more constructive medium-term view. And on gas as well, you had some commentary. 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.

Ezra Yacob, CEO

Yes, this is Ezra Yacob. I appreciate the question. I agree with your assessment of a cautious near-term outlook and a more positive medium- to long-term perspective. Overall, despite the daily or weekly fluctuations, our broad view hasn't changed much since last quarter. We are witnessing consistent and moderate demand growth for 2025 extending into 2026. The earlier volatility stemming from uncertainty about potential tariffs has subsided as the policy has become clearer. Currently, the near-term fundamentals are being influenced more by the return of spare capacity to the market rather than significant new supply investments. It’s crucial to note that while we expect a short-term oversupply, there is a potential shift to an undersupplied market in the medium term due to ongoing demand growth. This suggests a bullish long-term outlook for supply-demand balances concerning liquids, especially considering the decrease in spare capacity and investment alongside persistent geopolitical risks. For natural gas, as I indicated earlier, we view 2025 as a significant turning point. While storage levels are about 5% above the five-year average, we are observing a rise in LNG demand for feed gas and sustained growth in electrical demand. Our long-term forecast indicates a compound annual growth rate of roughly 4% to 6% for the latter half of the decade, with some forecasts beginning to exceed that range for North American gas demand.

Neil Mehta, Analyst

Good perspective as always. The follow-up question is a bit more specific. We understand that data can be quite variable, but there has been considerable focus on Delaware, particularly with some third-party productivity data coming in slightly weaker. This aligns with growing concerns about the maturity of wells in the Permian. I wanted to give you a chance to address this directly and potentially reassure the market regarding that risk.

Jeffrey Leitzell, COO

Yes, Neil, this is Jeff. And as we just talked about in our opening remarks, 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 ultimately, our team is fully focused on taking that asset and maximizing the value. The first thing that I'd 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. A couple of examples of that is we've increased our lateral length this year alone 20%, which has really helped cost. And when you look at that cost reduction, we've had about a 15% reduction over the last 2 years. And then on top of that, 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 are meeting right now our 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 Ford, for example, we lowered well costs 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 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 cost, keep improving well performance and unlock as much resource as we can out there in the Delaware.

Scott Hanold, Analyst

Ezra, you mentioned your willingness to extend shareholder returns beyond 70%, especially considering the current attractive valuation. It appears you've already repurchased at least 1 million shares in the fourth quarter. What is your perspective on potentially increasing that to 100% or more this year at this valuation? How does today's valuation compare to one or two years ago when you were nearing 100%?

Ezra Yacob, CEO

Yes, Scott, thanks for the question. We've definitely got the flexibility and the strength of the balance sheet that would support going to higher levels than the 70% minimum and really going to the higher levels of the 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, 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 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 are opportunities to return close to 100%.

Jeffrey Leitzell, COO

Thank you for the question, Scott. We've seen significant operational momentum from the integration process over the past few months by leveraging our drilling, completion, and production expertise on the asset. We’ve noted efficiency improvements on the drilling side, which is allowing us to reduce our rig count from five to four, reflecting strong performance in that area. On the production front, we’ve successfully implemented our high-intensity completion design at scale, which is starting to yield benefits. Additionally, as you mentioned, we have transitioned all 1,100 legacy wells to our suite of proprietary applications, with 80% of those wells now utilizing our artificial lift optimizers. This has led to noticeable uplift benefits and contributed to our strong Q3 performance in the Utica. There's still much to achieve; we have technologies to introduce and more efficiency improvements to make, but we are progressing well in the Utica and reaping the synergies and production uplift we anticipated.

David Deckelbaum, Analyst

I wanted to ask a little bit more about the optimization and lower operating costs. I think you cited lower workover expense for this year. And I'm curious, is that 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 workover intervention?

Jeffrey Leitzell, COO

Yes, David, this is Jeff. 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 wellbores and the different artificial lift systems and how to go ahead and alleviate those failures out of the front end. And then some of the additional technologies we actually talked about on our last call with some of these HiFi 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 failures, 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 they're not leaving any stone unturned. We're making sure we take all of our data and apply it 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.

Ezra Yacob, CEO

Yes, David, it's a great question. Downturns are an excellent opportunity to explore because many companies tend to reduce their exploration efforts during these times. Regarding inorganic growth, we expect to focus on small bolt-on acquisitions to strengthen our acreage position. The Encino acquisition is quite similar to the Yates acquisition we made ten years ago. It was a unique opportunity in an emerging asset with complementary acreage that is highly beneficial to us. We secured it at an attractive price because it was emerging, making it a compelling investment. Typically, these opportunities become scarce as competition increases and prices rise with positive well results. Therefore, we assess all opportunities, whether inorganic or organic, through a focus on returns. Each exploration opportunity needs to compete with our current portfolio. We're not just interested in expanding our inventory; we aim to enhance the quality of our portfolio and improve the overall returns for our shareholders.

Betty Jones, Analyst

I wanted to ask about technology. EOG has always been at the forefront of integrating technology and big data. We're hearing a lot about AI models, so I would like to know your thoughts on the impact of AI integration on your operations and exploration efforts. Do you still see an advantage in building these capabilities in-house?

Ezra Yacob, CEO

Yes, Betty, this is Ezra. 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 downhole 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, 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. We started with smart technology really prior to COVID. And that's 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, 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 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 organized geologic data and attempt to uncover 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. 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.

Jeffrey Leitzell, COO

Yes, we're extremely excited about the Bakken wells. Each one has shown individual 30-day initial production rates of around 30 million a day, which is very strong. These wells were acquired after they were drilled, and we've just completed them and brought them on production. While we are thrilled with these results, we are also aware of our multi-basin portfolio across the country. This gives us the flexibility to capitalize on various markets and strategically maximize our price realizations and netbacks. In the Utica, as in-basin demand grows and additional pipeline capacity is built, we believe we will be in a strong position to benefit. When discussing gas growth within the company, we have Dorado, which offers the lowest cost gas in the U.S. and is situated near the Gulf Coast market center. The LNG market is expanding, and demand is increasing. We have a 21 Tcf resource there and are excited about the market opportunities it presents. In the Utica, our immediate focus will be on the volatile oil window, although there may be opportunities to grow gas in the future. For now, our main focus for gas growth will be on Dorado.

Keith Trasco, Senior Vice President, Exploration and Production

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 or 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.

Ezra Yacob, CEO

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.

Operator, Operator

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