EOG Resources (EOG) slightly topped Q2 financial estimates, while initial results from its UAE wells are likely to dominate investor attention, TPH Energy Research said in a Wednesday note.
EOG produced 1.410 million barrels of oil equivalent per day, exceeding TPH's 1.407 million boe/d and the Street's 1.396 million boe/d, according to the note.
Oil production totaled 548,800 b/d, below TPH's 551,100 b/d and the Street's 549,200 b/d, while capital spending reached $1.587 billion, below both estimates, TPH said.
Cash flow from operations before working capital reached $4.39 billion, topping TPH's $4.32 billion and the Street's $4.24 billion, driven mainly by lower cash taxes, according to the note.
Adjusted free cash flow totaled $2.8 billion, ahead of TPH's $2.68 billion and the Street's $2.6 billion, while clean earnings came in at $5.07 per share versus TPH's $5.08 and the Street's $4.97 estimate, TPH said.
TPH expects investors to focus on the first two one-mile wells in the UAE after both posted 30-day initial production cumulative rates exceeding 25,000 barrels of oil.
TPH said infrastructure requirements, commerciality thresholds and fiscal terms will likely remain key investor focus areas.
EOG repurchased about $1.3 billion of shares during the quarter at an average price of $135 per share, well above TPH's $600 million forecast, according to the note.
The company also added about 60,000 net acres in the Austin Chalk, primarily in Lavaca, through smaller acquisitions at roughly $1,200 per acre, TPH said.
TPH also expects investors to seek updates on Permian Basin activity. The firm believes a heavier concentration in Lea County, at about 85% compared with the historical 70%, supported stronger productivity early this year.
For Q3, EOG expects production of 1.390 million boe/d to 1.435 million boe/d, including 546,000 b/d to 551,000 b/d of oil, with capital spending of $1.6 billion to $1.7 billion, the note said.
TPH forecasts Q3 production of 1.420 million boe/d, 553,400 b/d of oil and $1.642 billion of capital spending.
The Street expects Q3 production of 1.404 million boe/d, 550,300 b/d of oil and $1.634 billion of capital spending, according to TPH.