EOG Resources Reports Record Q2 2026 Results, $5.07 Adjusted EPS

EOG Resources (NYSE: EOG ) released second-quarter financial results and hosted an earnings call on Wednesday. Read the complete transcript below. This content is powered APIs. 8 billion.

9 billion in cash. EOG delivered 5% oil production growth and 14% total production growth, and remains committed to returning at least 70% of annual free cash flow to shareholders. Strategically, EOG expanded its exploration portfolio with successful initial results from UAE wells and emphasized its competitive advantage in organic exploration. EOG's international efforts in the UAE and Bahrain are progressing, with promising results from initial wells and potential for further development.

The company remains constructive on the oil market and expects oil prices to remain above mid-cycle levels, with a positive long-term outlook for natural gas demand. Operational highlights include efficiency gains and cost reductions in the Delaware Basin, Eagle Ford, and other domestic operations. EOG's development strategy in the Delaware Basin continues to yield positive results, with improvements in drilling and completion efficiencies. Full Transcript OPERATOR (Operator) Good day, everyone, and welcome to EOG Resources Second Quarter 2026 Earnings Results Conference Call.

As a reminder, this call is being recorded. For opening remarks and introductions, I will turn the call over to EOG Resources Vice President of Investor Relations, Mr. Pierce Hammond. Please go ahead, sir.

Pierce Hammond, Vice President of Investor Relations Good morning and thank you for joining us for the EOG Resources second quarter 2026 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 Leitzell, Chief Operating Officer; Ann Janssen, Chief Financial Officer; and Keith Trasko, Senior Vice President, Exploration and Production. Here's Ezra. Ezra Jacob, Chairman and Chief Executive Officer Thanks, Pierce. Good morning and thank you for joining us.

EOG delivered exceptional second quarter results with adjusted earnings per share, adjusted cash flow per share, and free cash flow all reaching record levels. Robust oil prices provided a meaningful tailwind, but these results reflect something more durable: consistent, high-quality execution across the company. We expect that operational momentum to carry through the second half of the year. Our low-cost, multibasin asset base and peer-leading balance sheet place EOG in a strong position to navigate today's dynamic macro environment.

8 billion to shareholders in the second quarter through our regular dividend and opportunistic share repurchases, reflecting our conviction in EOG's value and our growing opportunity set. Comparing our performance to a recent quarter with similar oil prices offers a useful lens for appreciating how substantially EOG's business has improved since the first quarter of 2022 when the Russia-Ukraine war broke out. EOG has grown oil production 22%, total production by 60%, adjusted cash flow per share by 44%, and the regular dividend by 36%. This impressive progress is underpinned by several achievements over the same period.

We forged a stronger path to future value creation by improving our multibasin portfolio with two additional foundational assets, expanding a deep exploration pipeline including high-quality international and conventional opportunities, and enhancing our marketing flexibility and end-market diversification. We accomplished all of this while preserving a pristine balance sheet and paying a growing regular dividend, which has been stress tested across a range of commodity price scenarios. Taken together, these accomplishments are a clear demonstration of EOG's business model in action.

Turning to the oil macro outlook, supply disruptions associated with the Iran conflict continue to weigh on global inventories, with the trajectory and duration of the conflict remaining key variables in shaping near-term market conditions. While we expect oil prices to remain volatile given the fluid nature of the war, we remain constructive on oil market fundamentals for several reasons. First, the disruption of crude and product supply from the Middle East has resulted in a meaningful reduction in commercial inventories and strategic petroleum reserves.

Second, while reduced demand has partially offset supply loss in the near term, we do not view this as a structural shift. Rather, it reflects temporary rationing that we expect to normalize over time. Third, energy security has emerged as a strategic priority across many nations, and we expect this to translate into structurally higher oil demand over time as countries look to strengthen their energy positions and restock both commercial and strategic petroleum reserves. Taken together, these factors support oil prices remaining above mid-cycle levels in both the near and medium term, with price volatility likely skewed to the upside.

On natural gas, we continue to see the North American market evolve from a seasonal commodity story into a strategic energy resource. While storage levels will continue to fluctuate year to year, the underlying demand trajectory is strengthening as LNG exports, electricity demand, industrial growth, and grid reliability increasingly compete for domestic supply. Our medium- to long-term outlook remains constructive, and our deliberate investment in building a low-cost natural gas position with access to premium markets and as a complement to our core oil business leaves us well positioned to capitalize on this demand growth regardless of commodity prices.

EOG's commitment is to deliver sustainable value creation through industry cycles. We pursue that by focusing on being among the highest-return and lowest-cost producers, committed to strong environmental performance, and playing a significant role in the long-term future of energy. This mission rests on four pillars: capital discipline, operational excellence, sustainability, and culture. Today I want to discuss in greater detail one area of our operational excellence pillar that is a significant differentiator versus peers: organic exploration.

Organic exploration has been central to EOG's success since the company's founding. By identifying opportunities early and building positions ahead of broader market interest, we are able to create significant long-term returns. Supported by a proprietary database and the knowledge gained from thousands of wells drilled across a wide range of geologic settings, EOG has a proven ability to discover and develop new resource opportunities. Today, that expertise is demonstrated in international unconventionals, where EOG is a first mover, working in close partnership with ADNOC in the UAE and BAPCO in Bahrain.

For national oil companies looking to develop their unconventional resources, we offer a compelling partnership. EOG brings technical leadership, a proven track record, and the ability to accelerate their development programs. Our UAE exploration program provides a convincing proof point. We drilled, completed, and brought online two 1-mile lateral wells in June and are extremely pleased with the results.

During the first 30 days of production operations, the wells produced on average over 25,000 barrels of oil per well. Both wells are naturally flowing up casing and will be placed on artificial lift in the coming weeks. Early well results are exceeding our expectations during the natural flow period. There is still meaningful work ahead in the UAE given the size of the 900,000-acre concession, but we are extremely encouraged by what we are seeing in the early days of this important project, confirming that EOG's competitive advantage is not confined to a specific geographical location; it is embedded in our technical expertise and resource development approach.

S. Each domestic division is actively advancing its own pipeline of exploration prospects, and we look forward to sharing updates as those programs mature. In summary, we're off to a strong start in 2026 and are well positioned to execute in the current macro environment and beyond. We remain focused on delivering sustainable free cash flow, maintaining operational excellence, and creating long-term value for shareholders.

I'll now turn it over to Ann for details on our financial performance. Ann Janssen, Executive Vice President and Chief Financial Officer Thank you, Ezra. EOG delivered another quarter of outstanding financial results, which speak to the durability and discipline at the core of our business model. 8 billion, a record performance and a direct reflection of our low-cost operating structure and capital efficiency.

3 billion in share repurchases. The foundation of our cash return remains our regular dividend, which we have not cut or suspended in 28 years. This is an impressive track record in any industry and demonstrates our commitment to return value back to shareholders. 7 billion remaining under the share repurchase authorization at June 30th.

We have substantial capacity for continued opportunistic buybacks. 8 billion, and we reiterate our commitment to returning at least 70% of annual free cash flow to shareholders. In 2026, our balance sheet remains a strategic asset. 1 billion from the end of the first quarter, and with net debt of $3 billion.

This financial strength continues to provide a stable foundation as we navigate dynamic macro environment shifts. At strip pricing and using guidance midpoints, our 2026 plan generates $8 billion in free cash flow. Our 2026 program funds production growth, domestic and international exploration, and a peer-leading regular dividend, all at a WTI breakeven price below $50 per barrel. EOG's financial foundation has never been stronger.

We are generating significant free cash flow, returning meaningful cash to shareholders, and maintaining financial flexibility to capitalize on opportunities as they emerge. This combination of operational excellence, a low-cost structure, and financial discipline positions us exceptionally well not only for 2026 but for sustained long-term value creation. With that, I'll turn it over to Jeff to discuss our operating results. Jeff Leitzell, Executive Vice President, Exploration and Production Thanks, Ann.

I'd like to begin by recognizing our employees for their outstanding performance and execution. In the second quarter we delivered strong operational results highlighted by lower-than-expected LOE and GP&T expenses and total company volumes higher than our guidance midpoint. Total company volumes included nearly 500 barrels of oil per day, primarily from initial production from our UAE exploration wells and as reported in our Other International segment. Second-quarter capital expenditures came in below the guidance midpoint, primarily driven by shifts in operational timing, largely in the Gulf States.

5 billion. As Ezra previously highlighted, we are extremely pleased with our exploration efforts in the UAE. Along with strong initial well results, we also saw exceptional operational performance for the balance of the year. In the UAE, we are targeting lateral lengths in excess of 2 miles and will be completing additional wells.

We have also successfully replicated key elements from our domestic operations playbook to realize immediate cost reductions in the UAE. An example includes utilizing in-basin surface sand processing which can be located directly adjacent to our well locations, thereby minimizing transportation and processing costs of our future completions. In Bahrain, operations have been intermittent due to the ongoing conflict. While we hope to have results in the second half of the year, our priority is the safety of our employees, contractors, and partners in the region.

Turning to domestic operations, our Delaware Basin team continues to execute well on their development strategy. Well performance has been in line with our expectations. We continue to develop this world-class asset at the right pace, resulting in continued operational improvements. We are realizing drilling and completion efficiencies relative to last year.

Year to date, drilling feet per day is up 13% and year to date completed lateral feet per day is up 5%. These efficiency gains are contributing to well cost reductions as, year to date, we have been able to reduce direct well costs by $15 per foot with direct well costs averaging less than $710 per foot. In addition, our Janus gas processing plant continues to deliver outstanding results. This strategic infrastructure project came online last year with current capacity of 300 million cubic feet per day and is expandable by an additional 300 million cubic feet per day.

65 per MCF helping support our strong margins in the Delaware Basin. Eagle Ford operations are also performing strongly this year. Year to date, we have been able to increase drilled feet per day by 4% and completed lateral feet per day by 11% compared to 2025. These efficiency gains have helped drive further well cost reductions.

We have reduced Eagle Ford direct well cost to less than $525 per foot, which is the lowest in our long history in the play. In the second quarter we drilled the Aspen L11H, which is the longest lateral drilled in the Eagle Ford to date, with a drilled lateral of 24,115 feet, or more than four and a half miles. We continue to unlock additional resource across the Eagle Ford oil trend through cost reductions as well as through organic leasing and strategic acquisitions. Last year we acquired approximately 30,000 net acres in Atascosa County.

We have since drilled 20 net wells on the acquired acreage with these wells achieving a less than one-year payout at $65 WTI. This quarter we are announcing an exciting Austin Chalk sweet spot in Lavaca County. We utilized our robust understanding of the regional geologic and reservoir model to identify this extension to our Eagle Ford acreage that also achieves a less than one-year payout at $65 WTI. We have organically leased 60,000 net acres for an average cost of $1,200 per acre and drilled over a dozen wells confirming this high-return prospect.

These high-pressure wells offer high deliverability and benefit from our learnings in other basins. We have confidently identified one year's worth of two-mile lateral inventories at current Eagle Ford activity. Furthermore, we continue to gather data and evaluate its extent. Further south in Dorado, this low-cost dry gas asset continues to improve.

In 2026 we have increased lateral lengths by approximately 16% compared to last year and are further lowering well cost. Year to date, direct well costs are less than $700 per foot, or 7% lower than last year. 50 per MCF year to date. In the Utica, our Zeno acquisition has been a home run.

Number one, we have exceeded our $150 million synergy target ahead of schedule. We have driven direct well costs below $600 per foot and continued reductions in sight. Number three, we continue to push margin expansion through supply chain optimization, including in-basin sand which should be secured by the end of this year, and number four, EOG Resources' proprietary in-house production optimizers delivered a 5% improvement in base production and a 5% reduction in downtime.