Selloff or Market Correction? Either Way, Here's What to Do NextSee Overvalued Stocks

U.S. shale producer EOG sticks to 4% annual output growth

Published 08/05/2022, 11:13 AM
Updated 08/05/2022, 11:56 AM
© Reuters. FILE PHOTO: The logo of U.S. oil and gas company EOG Resources is seen in its office in Chongqing, China December 15, 2017. REUTERS/Chen Aizhu
EOG
-

By Liz Hampton

(Reuters) -U.S. shale oil producer EOG Resources (NYSE:EOG) on Friday said it expects to deliver roughly 4% oil and gas volume growth this year, and hold a similar trajectory in 2023, as inflation and supply chain problems continue to snarl the oil industry.

Inflation has meaningfully exceeded expectations, the company said, noting that it has been able to offset some costs with efficiency gains. The market could face additional inflation next year, pushing well costs higher, executives warned in a conference call.

"Oilfield service capacity remains extremely tight and is further constrained by the limited availability of materials and experienced labor," Chief Operating Officer Billy Helms told investors. Those constraints are fueling uncertainty in service costs, and would continue to do so next year, he said.

Despite inflationary pressure, U.S. oil producers are reporting blockbuster profits this quarter, supported by higher oil prices, which hovered around $100 a barrel for much of the second quarter.

Unlike some of its rivals that expanded spending budgets this year, EOG has held steady its capital expenditures forecast.

"Good to see reiteration of Capex, given industry inflationary pressures," analysts for Tudor, Pickering, Holt & Co wrote in a note on Friday.

© Reuters. FILE PHOTO: The logo of U.S. oil and gas company EOG Resources is seen in its office in Chongqing, China December 15, 2017. REUTERS/Chen Aizhu

Shares were up about 7% to $106.87 in morning trading.

EOG said it was seeing promising results from its newer Dorado dry gas properties in South Texas, and anticipated directing additional investment there.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.