EOG Resources (EOG) Q2 Results - August 5
Posted: Thu Aug 05, 2021 10:33 am
I will update my EOG model tomorrow. My valuation of EOG was $116 pre-release of Q2 results. EOG is the largest company in the Sweet 16.
Stifel's take on their Q2 results:
EOG Resources Inc. (EOG, $70.74, Buy; Target $114.00)
Poised for Another Dividend Increase Following Solid Beat - Michael S. Scialla
We view the release as positive. The positives include: i) 2Q FCF was 18% above consensus as CFPS/capex beat by 4%/9%; ii) the 2021 well cost reduction target increased to 7% y/y from 5%; iii) 3Q21 production guidance edged higher, 1% above consensus; iv) the company initiated a CCS pilot project. The negatives include: i) 3Q21 capex was 3% above consensus although the 2021 budget was unchanged. In summary, 2Q beat across the board while most well cost components are trending flat to lower for 2022 as efficiencies and favorable contracts are more than offsetting oilfield service inflation. The company appears well positioned to increase the regular or special dividend in 2H21 as a burgeoning cash balance ($3.9B at midyear vs $3.4 at 3/31/21) could exceed total debt of $5.1B by YE21.
Stifel's take on their Q2 results:
EOG Resources Inc. (EOG, $70.74, Buy; Target $114.00)
Poised for Another Dividend Increase Following Solid Beat - Michael S. Scialla
We view the release as positive. The positives include: i) 2Q FCF was 18% above consensus as CFPS/capex beat by 4%/9%; ii) the 2021 well cost reduction target increased to 7% y/y from 5%; iii) 3Q21 production guidance edged higher, 1% above consensus; iv) the company initiated a CCS pilot project. The negatives include: i) 3Q21 capex was 3% above consensus although the 2021 budget was unchanged. In summary, 2Q beat across the board while most well cost components are trending flat to lower for 2022 as efficiencies and favorable contracts are more than offsetting oilfield service inflation. The company appears well positioned to increase the regular or special dividend in 2H21 as a burgeoning cash balance ($3.9B at midyear vs $3.4 at 3/31/21) could exceed total debt of $5.1B by YE21.