EOG Resources, Inc.

This is our first report on upstream oil player, EOG Resources. The company has been benefitting from the positive oil macro and its performance in 2022 so far has exceeded expectations regarding volume, capital expenditure, and total cash operating costs per unit. The company’s drilling teams are constantly cutting down on drilling days and producing good output. The most recent double premium play to come out of their organic exploration program is Dorado. The company increased its Dorado production rate by twofold since last year, and it will be producing 140 million cubic feet per day in the first quarter of 2022. As they increase activity at a pace that enables them to incorporate learnings and savings, they use their proprietary knowledge developed from prior plays to move quickly down the cost curve. The management successfully offset inflation during the initial phase of 2022 by completing seven net wells while keeping well costs constant compared to similar designs during the first quarter of last year. We initiate coverage on EOG with a ‘Hold’ rating on their stock.