EOG Resources trims 2025 production, spending targets
EOG Resources Inc., Houston, has taken $200 million out of its 2025 capital spending plan and lowered its production growth guidance as its leaders seek to protect the company’s margins and take note of supply-and-demand trends in the oil-and-gas market.
Speaking to analysts and investors after reporting first-quarter results, Ezra Yacob, chairman and chief executive officer, and his team said they plan to maintain EOG’s production pace from early this year rather than step it up as 2025 progresses. Those numbers—502,100 b/d of oil and total production of 1.09 MMboe/d—now have EOG on track to grow oil production about 2% this year (down from 3% in management’s prior guidance) and total production by 5% (versus 6% before) (OGJ Online, Feb. 28, 2025).
“We’re more focused on generating returns and free cash flow than on delivering volume growth in what looks like could be a potentially oversupplied market in the near term,” Yacob said on a May 2 conference call. “The updated plan still allows each asset to improve year-over-year [and] takes advantage of broader opportunities we see to improve our business.”
Jeff Leitzell, EOG’s chief operating officer, said the company’s teams have “modestly reduced” the scope of work in the Delaware basin, the Eagle Ford—EOG will develop 15 and 10 fewer wells, respectively, this year in those areas—as well as the Powder River basin. But the company is maintaining its production pace in its up-and-coming operations in the Utica and Dorado regions.
As for spending, the moves translate into capex now expected to total $6 billion this year, which is the low end of executives’ previous guidance of $6.0-6.4 billion.
In addition to its first-quarter earnings—net income of nearly $1.5 billion on total revenues of $5.7 billion, down from year-ago numbers of $1.8 billion and $6.1 billion, respectively—EOG executives said they recently completed the $275 million acquisition of about 30,000 net acres in the Eagle Ford, a move Keith Trasko, senior vice-president of exploration and production, said closes what “essentially was a hole in our acreage.”
Trasko added that the deal adds more than a full year of drilling inventory to EOG’s books and can immediately compete for capital with the current drilling program. Among the attraction: The purchased acreage has 120 three-mile locations and teams will be able to extend wells from previously owned acreage into the operator's new footprint. Trasko said 35 wells have the potential to increase by an average of one mile.
Shares of EOG (Ticker: EOG) were changing hands around $108.90 in midday trading May 5, which was down about 2% from where they closed trading before management reported first-quarter results. Over the past 6 months, they have lost about 10% of their value, a move that has cut the company’s market capitalization to about $59.4 billion.
Geert De Lombaerde | Senior Editor
A native of Belgium, Geert De Lombaerde has more than two decades of business journalism experience and writes about markets and economic trends for Endeavor Business Media publications Healthcare Innovation, IndustryWeek, FleetOwner, Oil & Gas Journal and T&D World. With a degree in journalism from the University of Missouri, he began his reporting career at the Business Courier in Cincinnati and later was managing editor and editor of the Nashville Business Journal. Most recently, he oversaw the online and print products of the Nashville Post and reported primarily on Middle Tennessee’s finance sector as well as many of its publicly traded companies.
