EOG Resources (EOG) Update - Jan 4

[dan_s]

EOG has been moved to our High Yield Income Portfolio.

At the time of this post EOG was trading for about $122.50.
My updated valuation is $149.00, which compares to TipRanks' consensus price target of $149.42. < 18 analysts cover EOG and their price targets range from $130 to $172.

I have updated my forecast/valuation model and posted it to the EPG website.

EOG has significanly increased their Shareholder return program. Starting with their most recent "Regular + Special Dividend" they are going to return 70% of the Company's free cash to shareholders in the form of regular dividends (raised to $0.91/Qtr), special dividends ($1.50/Qtr based on Q3 results) and stock buybacks each quarter.

2023 FCF was approximately $5 billion.

Based on my forecast, 2024 FCF should be $5.5 to $6.5 billion.

At 9-30-2023 EOG had 583.049 million shares outstanding. Outstanding stock should keep declining.

You will be hard pressed to find a higher quality "Growth + Income" stock because EOG has incredible "Running Room" with annual production growth of 8% to 10% locked in through at least 2030 if they stay with their current active drilling rig program.

Production mix is approximately 48% crude oil, 23% NGLs and 29% natural gas. <~90% of upstream revenues are from liquid sales.

None of EOG's liquids are currently hedged.