Aug 5, 2026 earnings call — Record cash flow and early UAE exploration success
EOG reported record free cash flow of $2.8 billion in the second quarter.
Revenue $8.6B (est $8.0B) · EPS $5.07 (est $4.97)
Key quotes
"We returned just over $1.8 billion to shareholders during the second quarter, $540 million through our regular dividend and $1.3 billion in share repurchases."
"During the first 30 days of production operations, the wells produced on average over 25,000 barrels of oil per well."
"These efficiency gains are contributing to well cost reductions as year-to-date, we have been able to reduce direct well costs by $15 per foot with direct well costs averaging less than $710 per foot."
Analyst Q&A 8
planning oil versus gas investment next year
Q (Joshua Silverstein · UBS): Analyst asked if EOG will keep shifting capital toward oil-prone plays for next year given the forward curve. He also asked for timeline and milestones for the UAE work — any shot clock or number of wells before commercial development.
A: The company said the '26 plan remains unchanged from last quarter and they reallocated capital earlier to add incremental oil volumes and better position for 2027. They see potential need for more supply and model a 3-year scenario with low single-digit oil growth assuming WTI of $60 to $80. They said they are preserving optionality and will keep assessing macro factors as they refine the 2027 plan, and that the UAE is in a 3-year exploration phase with ADNOC having an option to back in.
"I would say that we continue to preserve a lot of optionality, and we'll continue to assess all considerations, including the macros as we move throughout the rest of this year and further define our plan for 2027." — Ezra Yacob (CEO·CHAIR)
Austin Chalk acreage and international interest
Q (Stephen Richardson · Evercore): Analyst asked whether EOG is done leasing in the Austin Chalk and how the Chalk will be blended into South Texas capital plans versus Eagle Ford. He also asked if EOG is in active talks about other international unconventional opportunities.
A: Jeff said they identified and leased about 60,000 acres in an Austin Chalk sweet spot and believe they leased most of that sweet spot. He said they've drilled about 12 high-return wells with payouts of less than 1 year and returns over 100% at $65 WTI, and the area adds roughly one more year of drilling inventory for the San Antonio division. Ezra added EOG keeps an international program but still has a larger domestic exploration program; international opportunities must meet subsurface scale, strong partners, geopolitical stability and access to services to compete with domestic inventory.
"Currently, we're seeing on the wells that we've drilled payouts of less than 1 year and the returns are over 100% at $65 WTI, which it's competitive." — Jeffrey Leitzell (COO)
UAE geology, well depth, and costs
Q (Arun Jayaram · JPMorgan): Analyst asked how the UAE unconventional compares geologically to U.S. plays and whether there are good analogies. He also asked how deep the wells are and how D&C costs might evolve versus the Lower 48.
A: Keith said the main analog they see in the UAE is the Eagle Ford: similar rock type and product mix, and the first two wells matched expectations on GOR and API. Jeff said they are early, so initial well costs are higher but should fall as they apply unconventional services and EOG practices, including high-spec rigs and high-rate frac fleets. He said total depth varies but suggested around a 10,000-foot TVD average for the play.
"And then on your overall total depth of this play, obviously, it's 900,000 total acreage, so it does vary a little bit. But I'd say somewhere around the 10,000-foot TVD would probably be a pretty good average to use." — Jeffrey Leitzell (COO)
Canada exploration and Permian well trends
Q (Scott Hanold · RBC): Analyst asked EOG's view on Canadian Lower 48 opportunities, egress and resource quality, and whether Permian well productivity gains will continue or be flat year-over-year.
A: Ezra said Canada carries egress challenges, though regulatory and investment changes may help, and that technology used in the Lower 48 could unlock Canadian and Alaska resources. He said most Lower 48 opportunities now are some form of bypass pay rather than frontier basins. Jeff said they changed the Permian development strategy last year, are continuing that same approach, and the well results are in line with expectations; they pursue small iterative improvements like higher horsepower and rate rather than one big change.
"So the first thing is no changes there, still applying that same strategy." — Jeffrey Leitzell (COO)
UAE fiscal terms and Woodford prospects
Q (Phillip Jungwirth · BMO): Analyst asked if Middle East onshore fiscal terms are a tighter band and if returns are different versus the U.S., and asked for specifics on ADNOC back-in. He also asked about Woodford prospectivity in EOG's Delaware acreage.
A: Ezra said they cannot disclose specific commercial terms, but NOCs have become more willing to change historic terms after learning the capital intensity of unconventional drilling. He said the recent agreements are concessions with tax and royalty structures rather than PSCs, which makes them more attractive, and that they aim for competitiveness on rate of return and NPV with attention to full-cycle economics. On the Woodford, Ezra said it's very deep and quite gassy in their parts of the Delaware (Lea and Loving Counties), so it may not progress as fast industry-wide as some other plays due to depth and phase maturity.
"And concessions, as you know, typically, they do have a tax and royalty structure rather than that PSC, which makes it more attractive." — Ezra Yacob (CEO·CHAIR)
what drives growth and gas outlook
Q (Gabe Daoud · Truist): Analyst asked if the Delaware will be the key driver of EOG's low single-digit production growth and asked for updated views on the gas macro and whether exploration tilts to one commodity.
A: Ezra said that for this year much of their oil growth year-over-year is from the Encino acquisition and that growth this year also comes dominantly from the Utica; the Delaware is slightly down year-over-year and in the 3-year plan is flat to moderate growth. He said they are constructive on gas due to rising LNG feed gas demand, growing electricity consumption and industrial demand, and they forecast U.S. natural gas demand to grow between 3% and 5% CAGR through the end of the decade. On exploration, they are slightly biased to oil but ultimately pursue opportunities based on returns and scale.
"In that 3-year scenario, this year, much of our oil growth year-over-year is really from the Encino acquisition as we bake that in." — Ezra Yacob (CEO·CHAIR)
Middle East return hurdles and Permian sand effects
Q (Scott Gruber · Citi): Analyst asked what return hurdle EOG uses for Middle East commerciality versus the U.S. and whether the recent conflict changed that. He also asked if higher sand loadings are driving Permian productivity gains.
A: Ezra said it's early to set DOC or FID and that the exploration phase measures both subsurface potential and the operating environment, including services, equipment, partners and political considerations; these factors are built into their risk-adjusted returns. He said the conflict has been an opportunity to stress-test partnerships and that they have been very happy with partners, noting clear communication and continued UAE operations with ADNOC support. Jeff said there is no single big change in sand loadings driving results; they make small iterative tweaks and focus on higher horsepower and rate to improve productivity.
"To date, this might be a little bit contrarian, but we've actually been very, very happy with the partners because of the conflict that's going on." — Ezra Yacob (CEO·CHAIR)
UAE well tests and Delaware infrastructure
Q (Charles Meade · Johnson Rice): Analyst asked whether the two UAE wells tested the same concept and how mature landing zone selection and completion design are. He also asked if EOG might need to step in with infrastructure in the Delaware Basin again.
A: Keith said the two 1-mile wells are next to each other, testing the same zone, and they were very happy with the first 30 days of production; the wells averaged over 25,000 barrels of oil per well and are naturally flowing up casing with artificial lift planned. He said they will test different landing zones and continue to evaluate performance over time while applying Eagle Ford best practices and making tweaks. Jeff said Janus was built when processing markets were tight; more egress (another 4 or 5 to 6 Bcf) is coming and fees are currently status quo, and they can expand the plant another 300 million a day if needed to manage fees and play the market.
"Those wells averaged over 25,000 barrels of oil per well." — Keith Trasko