EOG Resources (EOG) Update - Nov 5

[dan_s]

EOG is the largest company in the Sweet 16. It is trading at ~$96 at the time of this post.

My pre-Q3 release valuation was $122/share. My valuation will be going up when I update my model this afternoon.

Stifel's take on EOG's Q3 results:

EOG Resources Inc. (EOG, $90.90, Buy; Target $130.00)
A Special Quarter, 2021 Cash Return Raised to Best-in-Class - Michael S. Scialla
We view the release as positive. The positives included: i) 3Q21 FCF was 5% above consensus as capex was 2% below; ii) the base dividend increased 82% to an annual rate of $3/share implying a yield of 3.3%; iii) a special dividend of $2/share boosts the 2021 cash return to $2.7B, or a best-in-class ~48% of FCF; iv) 2022 well costs targets remained flat y/y. The negatives included: i) 4Q21 capex guidance was 9% above consensus although the 2021 capex guidance midpoint was unchanged. In summary, EOG delivered strong operational results with production, unit cash costs, and capex beats. While the quarter will not silence investor concern over 2022 potential growth plans or the unpredictability of special dividends (vs formula-based variable dividends), this year's ~48% payout of FCF supports management's commitment to return cash to shareholders.

[Fraser921]

Note, the industry is praising of return of cash and not growing opposite of what CLR is doing

>"the quarter will not silence investor concern over 2022 potential growth plans "