EOG Resources (EOG) Valuation Update - June 7

[dan_s]

EOG is the largest company in the Sweet 16 with a market-cap over $85 billion.

I have updated my forecast/valuation model for EOG using my new oil & gas price deck, which already seems to conservative.

My valuation of EOG increases by $5 to $181/share.
> Despite EOG's size, it will deliver 8% to 10% production growth in 2022 and likely more in 2023, but I am using 7.5% growth for 2023 in the forecast.
> Current production is ~895,000 Boepd
> Production mix is approximately 52% crude oil, 27% natural gas and 21% NGLs
> EOG has a fantastic marketing team that consistently gets premium prices for their production. For example, their Q1 2022 realized ngas price was $5.65/mcf.
> None of their NGLs are hedged.
> Operating cash flow per share was $15.91 in 2021 and my 2022 forecast is $14.8 billion, $25.22/share.
> EOG is a "Free Cash Flow Machine" that is going to pay BIG DIVIDENDS going forward.

If anyone tells you that shale companies can't make money, send them my forecast model for EOG.