EOG Resources Update - Oct 5
Posted: Fri Oct 05, 2018 11:07 am
EOG is the largest company in the Sweet 16. Despite it's size (702,167 BOE pd production in Q2), EOG is on-track to increase production by 18% this year.
I spent an hour this morning going over my EOG forecast model and I have increased by valuation to $155.00/share.
> First Call's forecast for 2019 has moved very close to my forecast ($7.08 EPS and $16.09 operating CFPS)
> EOG will generate over $2 Billion of free cash flow from operation this year
> EOG is #1 in the Eagle Ford where oil is selling for a premium to WTI
> Production mix is approximately 55% crude oil, 29% natural gas and 16% NGLs
> Approximately 32% of 2H oil production is hedged at $60.04/bbl. None of their production is hedged beyond 2018. < Looks like 1H2019 commodity prices could be way above my forecast.
> EOG has a large acreage position in the Powder River Basin, which is expected to become the next "Big Thing".
EOG has 9,500 undrilled horizontal well locations that the company estimates will payout in less than a year and deliver 100% after tax rates of return. < This is incredible.
My updated forecast/valuation model will be posted to the EPG website later today.
I spent an hour this morning going over my EOG forecast model and I have increased by valuation to $155.00/share.
> First Call's forecast for 2019 has moved very close to my forecast ($7.08 EPS and $16.09 operating CFPS)
> EOG will generate over $2 Billion of free cash flow from operation this year
> EOG is #1 in the Eagle Ford where oil is selling for a premium to WTI
> Production mix is approximately 55% crude oil, 29% natural gas and 16% NGLs
> Approximately 32% of 2H oil production is hedged at $60.04/bbl. None of their production is hedged beyond 2018. < Looks like 1H2019 commodity prices could be way above my forecast.
> EOG has a large acreage position in the Powder River Basin, which is expected to become the next "Big Thing".
EOG has 9,500 undrilled horizontal well locations that the company estimates will payout in less than a year and deliver 100% after tax rates of return. < This is incredible.
My updated forecast/valuation model will be posted to the EPG website later today.