EOG Resources (EOG), also known as the "Apple (AAPL) of Oil" for its use of technology to improve production, crushed earnings forecasts late Thursday and boosted its capital spending outlook.
XEOG Earnings
Estimates: EOG earnings are seen soaring 721% to $1.56 per share with revenue climbing 73% to $4.57 billion.
Results: Adjusted EPS of $1.75 on revenue of $4.78 billion. Crude oil production rose 27% to 415,000 barrels of oil per day. But free cash flow was more than halved to $502.9 million due to exploration and development expenditures of $1.7 billion and dividend payments of $107 million.
Outlook: EOG raised its full-year capital spending forecast to $5.8 billion-$6 billion, vs. $5.4 billion-$5.8 billion previously. Management said it will retain high-performing service providers for the rest of the year to maintain "operational continuity" into 2019. Guidance for full-year crude production was narrowed to 398,000-400,00 barrels a day from a prior forecast of 394,600-400,800.
Management said it's on track to reduce total well costs by 5% in 2018 and expects to complete approximately 720 net wells this year, up by 20 net wells vs. prior guidance.
"We are positioning EOG to carry the operating efficiencies gained this year into 2019," said Chairman and CEO William Thomas in a statement. "We secured a significant proportion of our service costs, which along with disciplined execution will help further reduce well costs and improve returns.
"With a deep inventory of premium drilling locations across multiple plays, EOG will continue to allocate capital to the highest return areas while maintaining a disciplined operating pace. EOG is well positioned to continue delivering its unique combination of high returns, disciplined growth and strong free cash flow for years to come."
EOG Stock
Stock: EOG was flat late, erasing initial gains. Shares closed up 1.5% at 106.89 on the stock market today. EOG stock sold off sharply in October as crude futures fell. Crude oil fell significantly again Thursday.
The company will hold a conference call to discuss results with analysts at 10 a.m. ET Friday.
Other Shale Earnings Reports Mixed
EOG earnings come after a mixed week for shale exploration and production companies. Continental Resources (CLR) topped Q3 estimates and said it will ramp up activity sharply at year's end.
Diamondback Energy (FANG) unit Viper Energy Partners (VNOM) fell short of forecasts.
Apache (APA) results beat Wall Street expectations and it raised its full year production outlook.
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