eog-20220930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM			10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 1-9743

EOG RESOURCES, INC.

(Exact name of registrant as specified in its charter)


Delaware						47-0684736
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

1111 Bagby, Sky Lobby 2, Houston, Texas 77002

(Address of principal executive offices) (Zip Code)

713-651-7000

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	EOG	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐

Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date.


Title of each class	Number of shares
Common Stock, par value $0.01 per share	587,389,496	(as of October 27, 2022)

EOG RESOURCES, INC.

TABLE OF CONTENTS


PART I.	FINANCIAL INFORMATION		Page No.

	ITEM 1.	Financial Statements (Unaudited)

		Condensed Consolidated Statements of Income and Comprehensive Income - Three Months and Nine Months Ended September 30, 2022 and 2021	3

		Condensed Consolidated Balance Sheets - September 30, 2022 and December 31, 2021	4

		Condensed Consolidated Statements of Stockholders' Equity - Three Months and Nine Months Ended September 30, 2022 and 2021	5

		Condensed Consolidated Statements of Cash Flows - Nine Months Ended September 30, 2022 and 2021	7

		Notes to Condensed Consolidated Financial Statements	8

	ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	23

	ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	42

	ITEM 4.	Controls and Procedures	42

PART II.	OTHER INFORMATION

	ITEM 1.	Legal Proceedings	43

	ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43

	ITEM 4.	Mine Safety Disclosures	43

	ITEM 5.	Other Information	44

	ITEM 6.	Exhibits	45

SIGNATURES			47

-2-

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

EOG RESOURCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(In Millions, Except Per Share Data)

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Operating Revenues and Other
Crude Oil and Condensate	$	4,109	$	2,929	$	12,697	$	7,879
Natural Gas Liquids	693		548		2,151		1,229
Natural Gas	1,235		568		2,951		1,597
Losses on Mark-to-Market Financial Commodity Derivative Contracts	(18)		(494)		(4,215)		(1,288)
Gathering, Processing and Marketing	1,561		1,186		5,199		3,056
Gains (Losses) on Asset Dispositions, Net	(21)		1		101		46
Other, Net	34		27		99		79
Total	7,593		4,765		18,983		12,598
Operating Expenses
Lease and Well	335		270		977		810
Transportation Costs	257		219		729		635
Gathering and Processing Costs	167		145		463		412
Exploration Costs	35		44		115		112
Dry Hole Costs	18		4		41		28
Impairments	94		82		240		170
Marketing Costs	1,621		1,184		5,031		3,013
Depreciation, Depletion and Amortization	906		927		2,664		2,741
General and Administrative	162		142		414		372
Taxes Other Than Income	334		277		1,196		731
Total	3,929		3,294		11,870		9,024
Operating Income	3,664		1,471		7,113		3,574
Other Income, Net	40		6		66		—
Income Before Interest Expense and Income Taxes	3,704		1,477		7,179		3,574
Interest Expense, Net	41		48		137		140
Income Before Income Taxes	3,663		1,429		7,042		3,434
Income Tax Provision	809		334		1,560		755
Net Income	$	2,854	$	1,095	$	5,482	$	2,679
Net Income Per Share
Basic	$	4.90	$	1.88	$	9.40	$	4.62
Diluted	$	4.86	$	1.88	$	9.34	$	4.59
Average Number of Common Shares
Basic	583		581		583		580
Diluted	587		584		587		584
Comprehensive Income
Net Income	$	2,854	$	1,095	$	5,482	$	2,679
Other Comprehensive Income (Loss)
Foreign Currency Translation Adjustments	5		2		6		(1)
Other, Net of Tax	1		—		—		—
Other Comprehensive Income (Loss)	6		2		6		(1)
Comprehensive Income	$	2,860	$	1,097	$	5,488	$	2,678

The accompanying notes are an integral part of these condensed consolidated financial statements.

-3-

EOG RESOURCES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In Millions, Except Share Data)

(Unaudited)


	September 30, 2022		December 31, 2021
ASSETS
Current Assets
Cash and Cash Equivalents	$	5,272	$	5,209
Accounts Receivable, Net	3,343		2,335
Inventories	872		584
Income Taxes Receivable	93		—
Other	621		456
Total	10,201		8,584
Property, Plant and Equipment
Oil and Gas Properties (Successful Efforts Method)	67,065		67,644
Other Property, Plant and Equipment	4,659		4,753
Total Property, Plant and Equipment	71,724		72,397
Less: Accumulated Depreciation, Depletion and Amortization	(42,623)		(43,971)
Total Property, Plant and Equipment, Net	29,101		28,426
Deferred Income Taxes	18		11
Other Assets	1,167		1,215
Total Assets	$	40,487	$	38,236
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable	$	2,718	$	2,242
Accrued Taxes Payable	542		518
Dividends Payable	437		436
Liabilities from Price Risk Management Activities	243		269
Current Portion of Long-Term Debt	1,282		37
Current Portion of Operating Lease Liabilities	235		240
Other	289		300
Total	5,746		4,042

Long-Term Debt	3,802		5,072
Other Liabilities	2,573		2,193
Deferred Income Taxes	4,517		4,749
Commitments and Contingencies (Note 8)

Stockholders' Equity
Common Stock, $0.01 Par, 1,280,000,000 Shares Authorized and 587,891,710 Shares Issued at September 30, 2022 and 585,521,512 Shares Issued at December 31, 2021	206		206
Additional Paid in Capital	6,155		6,087
Accumulated Other Comprehensive Loss	(6)		(12)
Retained Earnings	17,563		15,919
Common Stock Held in Treasury, 646,861 Shares at September 30, 2022 and 257,268 Shares at December 31, 2021	(69)		(20)
Total Stockholders' Equity	23,849		22,180
Total Liabilities and Stockholders' Equity	$	40,487	$	38,236

The accompanying notes are an integral part of these condensed consolidated financial statements.

-4-

EOG RESOURCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(In Millions, Except Per Share Data)

(Unaudited)


	Common Stock		Additional Paid In Capital		Accumulated Other Comprehensive Loss		Retained Earnings		Common Stock Held In Treasury		Total Stockholders' Equity
Balance at June 30, 2022	$	206	$	6,128	$	(12)	$	16,028	$	(38)	$	22,312
Net Income	—		—		—		2,854		—		2,854
Common Stock Dividends Declared, $2.25 Per Share	—		—		—		(1,319)		—		(1,319)
Other Comprehensive Income	—		—		6		—		—		6
Common Stock Issued Under Stock Plans	—		—		—		—		—		—
Change in Treasury Stock - Stock Compensation Plans, Net	—		(5)		—		—		(33)		(38)
Restricted Stock and Restricted Stock Units, Net	—		(2)		—		—		2		—
Stock-Based Compensation Expenses	—		34		—		—		—		34
Treasury Stock Issued as Compensation	—		—		—		—		—		—
Balance at September 30, 2022	$	206	$	6,155	$	(6)	$	17,563	$	(69)	$	23,849


	Common Stock		Additional Paid In Capital		Accumulated Other Comprehensive Loss		Retained Earnings		Common Stock Held In Treasury		Total Stockholders' Equity
Balance at June 30, 2021	$	206	$	6,017	$	(15)	$	14,689	$	(16)	$	20,881
Net Income	—		—		—		1,095		—		1,095
Common Stock Dividends Declared, $0.4125 Per Share	—		—		—		(242)		—		(242)
Other Comprehensive Income	—		—		2		—		—		2
Common Stock Issued Under Stock Plans	—		—		—		—		—		—
Change in Treasury Stock - Stock Compensation Plans, Net	—		(5)		—		—		(17)		(22)
Restricted Stock and Restricted Stock Units, Net	—		(5)		—		—		5		—
Stock-Based Compensation Expenses	—		51		—		—		—		51
Treasury Stock Issued as Compensation	—		—		—		—		—		—
Balance at September 30, 2021	$	206	$	6,058	$	(13)	$	15,542	$	(28)	$	21,765

The accompanying notes are an integral part of these condensed consolidated financial statements.

-5-

EOG RESOURCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(In Millions, Except Per Share Data)

(Unaudited)


	Common Stock		Additional Paid In Capital		Accumulated Other Comprehensive Loss		Retained Earnings		Common Stock Held In Treasury		Total Stockholders' Equity
Balance at December 31, 2021	$	206	$	6,087	$	(12)	$	15,919	$	(20)	$	22,180
Net Income	—		—		—		5,482		—		5,482
Common Stock Dividends Declared, $6.55 Per Share	—		—		—		(3,838)		—		(3,838)
Other Comprehensive Income	—		—		6		—		—		6
Common Stock Issued Under Stock Plans	—		13		—		—		—		13
Change in Treasury Stock - Stock Compensation Plans, Net	—		(40)		—		—		(53)		(93)
Restricted Stock and Restricted Stock Units, Net	—		(4)		—		—		4		—
Stock-Based Compensation Expenses	—		99		—		—		—		99
Treasury Stock Issued as Compensation	—		—		—		—		—		—
Balance at September 30, 2022	$	206	$	6,155	$	(6)	$	17,563	$	(69)	$	23,849


	Common Stock		Additional Paid In Capital		Accumulated Other Comprehensive Loss		Retained Earnings		Common Stock Held In Treasury		Total Stockholders' Equity
Balance at December 31, 2020	$	206	$	5,945	$	(12)	$	14,170	$	(7)	$	20,302
Net Income	—		—		—		2,679		—		2,679
Common Stock Dividends Declared, $2.2375 Per Share	—		—		—		(1,307)		—		(1,307)
Other Comprehensive Loss	—		—		(1)		—		—		(1)
Common Stock Issued Under Stock Plans	—		9		—		—		—		9
Change in Treasury Stock - Stock Compensation Plans, Net	—		(7)		—		—		(27)		(34)
Restricted Stock and Restricted Stock Units, Net	—		(6)		—		—		6		—
Stock-Based Compensation Expenses	—		117		—		—		—		117
Treasury Stock Issued as Compensation	—		—		—		—		—		—
Balance at September 30, 2021	$	206	$	6,058	$	(13)	$	15,542	$	(28)	$	21,765

The accompanying notes are an integral part of these condensed consolidated financial statements.

-6-

EOG RESOURCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Millions)

(Unaudited)


	Nine Months Ended September 30,
	2022		2021
Cash Flows from Operating Activities
Reconciliation of Net Income to Net Cash Provided by Operating Activities:
Net Income	$	5,482	$	2,679
Items Not Requiring (Providing) Cash
Depreciation, Depletion and Amortization	2,664		2,741
Impairments	240		170
Stock-Based Compensation Expenses	99		117
Deferred Income Taxes	(240)		(244)
Gains on Asset Dispositions, Net	(101)		(46)
Other, Net	(15)		15
Dry Hole Costs	41		28
Mark-to-Market Financial Commodity Derivative Contracts
Total Losses	4,215		1,288
Net Cash Payments for Settlements of Financial Commodity Derivative Contracts	(3,257)		(516)
Other, Net	33		8
Changes in Components of Working Capital and Other Assets and Liabilities
Accounts Receivable	(1,008)		(639)
Inventories	(311)		95
Accounts Payable	301		115
Accrued Taxes Payable	24		286
Other Assets	(271)		(55)
Other Liabilities	(548)		(317)
Changes in Components of Working Capital Associated with Investing Activities	301		(100)
Net Cash Provided by Operating Activities	7,649		5,625
Investing Cash Flows
Additions to Oil and Gas Properties	(3,390)		(2,689)
Additions to Other Property, Plant and Equipment	(248)		(147)
Proceeds from Sales of Assets	310		154
Other Investing Activities	(30)		—
Changes in Components of Working Capital Associated with Investing Activities	(301)		100
Net Cash Used in Investing Activities	(3,659)		(2,582)
Financing Cash Flows
Long-Term Debt Repayments	—		(750)
Dividends Paid	(3,821)		(1,278)
Treasury Stock Purchased	(95)		(33)
Proceeds from Stock Options Exercised and Employee Stock Purchase Plan	17		9
Repayment of Finance Lease Liabilities	(27)		(27)
Net Cash Used in Financing Activities	(3,926)		(2,079)
Effect of Exchange Rate Changes on Cash	(1)		—
Increase in Cash and Cash Equivalents	63		964
Cash and Cash Equivalents at Beginning of Period	5,209		3,329
Cash and Cash Equivalents at End of Period	$	5,272	$	4,293

The accompanying notes are an integral part of these condensed consolidated financial statements.

-7-

EOG RESOURCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Summary of Significant Accounting Policies

General. The condensed consolidated financial statements of EOG Resources, Inc., together with its subsidiaries (collectively, EOG), included herein have been prepared by management without audit pursuant to the rules and regulations of the United States Securities and Exchange Commission (SEC). Accordingly, they reflect all normal recurring adjustments which are, in the opinion of management, necessary for a fair presentation of the financial results for the interim periods presented. Certain information and notes normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) have been condensed or omitted pursuant to such rules and regulations. However, management believes that the disclosures included either on the face of the financial statements or in these notes are sufficient to make the interim information presented not misleading. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in EOG's Annual Report on Form 10-K for the year ended December 31, 2021, filed on February 24, 2022 (EOG's 2021 Annual Report).

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The operating results for the three and nine months ended September 30, 2022, are not necessarily indicative of the results to be expected for the full year.

Recently Issued Accounting Standards. In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2020-04, "Reference Rate Reform (Topic 848)" (ASU 2020-04), which provides optional expedients and exceptions for accounting treatment of contracts which are affected by the anticipated discontinuation of the London InterBank Offered Rate (LIBOR) and other rates resulting from rate reform. Contract terms that are modified due to the replacement of a reference rate are not required to be remeasured or reassessed under relevant accounting standards. Early adoption is permitted. ASU 2020-04 covers certain contracts which reference these rates and that are entered into on or before December 31, 2022. EOG has evaluated the provisions of ASU 2020-04 and has concluded that the application of ASU 2020-04 will not have a material impact on its consolidated financial statements and related disclosures related to its $2.0 billion senior unsecured Revolving Credit Agreement.

-8-

EOG RESOURCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

2. Stock-Based Compensation

As more fully discussed in Note 7 to the Consolidated Financial Statements included in EOG's 2021 Annual Report, EOG maintains various stock-based compensation plans. Stock-based compensation expense is included on the Condensed Consolidated Statements of Income and Comprehensive Income based upon the job function of the employees receiving the grants as follows (in millions):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Lease and Well	$	6	$	11	$	29	$	36
Gathering and Processing Costs	1		1		3		2
Exploration Costs	—		4		10		15
General and Administrative	27		35		57		64
Total	$	34	$	51	$	99	$	117

The Amended and Restated EOG Resources, Inc. 2008 Omnibus Equity Compensation Plan (2008 Plan) provided for grants of stock options, stock-settled stock appreciation rights (SARs), restricted stock and restricted stock units, performance units and other stock-based awards.

EOG's stockholders approved the EOG Resources, Inc. 2021 Omnibus Equity Compensation Plan (2021 Plan) at the 2021 Annual Meeting of Stockholders. Therefore, no further grants were made from the 2008 Plan from and after the April 29, 2021 effective date of the 2021 Plan. The 2021 Plan provides for grants of stock options, SARs, restricted stock and restricted stock units, restricted stock units with performance-based conditions (together with the performance units granted under the 2008 Plan, Performance Units) and other stock-based awards, up to an aggregate maximum of 20 million shares of common stock, plus any shares that are subject to outstanding awards under the 2008 Plan as of April 29, 2021, that are subsequently canceled, forfeited, expire or are otherwise not issued or are settled in cash. Under the 2021 Plan, grants may be made to employees and non-employee members of EOG's Board of Directors (Board).

At September 30, 2022, approximately 16 million common shares remained available for grant under the 2021 Plan. EOG's policy is to issue shares related to the 2021 Plan grants from previously authorized unissued shares or treasury shares to the extent treasury shares are available.

Stock Options and Stock-Settled Stock Appreciation Rights and Employee Stock Purchase Plan. The fair value of stock option grants and SAR grants is estimated using the Hull-White II binomial option pricing model. The fair value of Employee Stock Purchase Plan (ESPP) grants is estimated using the Black-Scholes-Merton model. Stock-based compensation expense related to stock option, SAR and ESPP grants totaled $11 million and $20 million during the three months ended September 30, 2022 and 2021, respectively, and $28 million and $39 million during the nine months ended September 30, 2022 and 2021, respectively.

Weighted average fair values and valuation assumptions used to value stock option, SAR and ESPP grants during the nine-month periods ended September 30, 2022 and 2021 are as follows:


	Stock Options/SARs						ESPP
	Nine Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Weighted Average Fair Value of Grants	$	28.30		$	24.92		$	26.71		$	18.15
Expected Volatility	42.20		%	42.24		%	43.08		%	51.23		%
Risk-Free Interest Rate	0.89		%	0.50		%	1.33		%	0.07		%
Dividend Yield	3.28		%	2.25		%	2.88		%	2.88		%
Expected Life	5.3 years			5.2 years			0.5 years			0.5 years

-9-

EOG RESOURCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

Expected volatility is based on an equal weighting of historical volatility and implied volatility from traded options in EOG's common stock. The risk-free interest rate is based upon United States Treasury yields in effect at the time of grant. The expected life is based upon historical experience and contractual terms of stock option, SAR and ESPP grants.

The following table sets forth stock option and SAR transactions for the nine-month periods ended September 30, 2022 and 2021 (stock options and SARs in thousands):


	Nine Months Ended September 30, 2022			Nine Months Ended September 30, 2021
	Number of Stock Options/SARs	Weighted Average Exercise Price		Number of Stock Options/SARs	Weighted Average Exercise Price
Outstanding at January 1	9,969	$	84.37	10,186	$	84.08
Granted	2	97.64		1,976	81.66
Exercised (1)	(4,282)	91.63		(448)	64.18
Forfeited	(192)	84.26		(984)	98.64
Outstanding at September 30 (2)	5,497	$	78.73	10,730	$	83.13
Vested or Expected to Vest (3)	5,344	$	79.05	10,407	$	83.65
Exercisable at September 30 (4)	3,686	$	84.18	6,906	$	92.39

(1)The total intrinsic value of stock options/SARs exercised during the nine months ended September 30, 2022 and 2021 was $122 million and $8 million, respectively. The intrinsic value is based upon the difference between the market price of EOG's common stock on the date of exercise and the exercise price of the stock options/SARs.

(2)The total intrinsic value of stock options/SARs outstanding at September 30, 2022 and 2021 was $194 million and $95 million, respectively. At both September 30, 2022 and 2021, the weighted average remaining contractual life was 4.3 years.

(3)The total intrinsic value of stock options/SARs vested or expected to vest at September 30, 2022 and 2021 was $187 million and $90 million, respectively. At both September 30, 2022 and 2021, the weighted average remaining contractual life was 4.3 years.

(4)The total intrinsic value of stock options/SARs exercisable at September 30, 2022 and 2021 was $114 million and $38 million, respectively. At September 30, 2022 and 2021, the weighted average remaining contractual life was 3.7 years and 3.2 years, respectively.

At September 30, 2022, unrecognized compensation expense related to non-vested stock option, SAR and ESPP grants totaled $38 million. Such unrecognized expense will be amortized on a straight-line basis over a weighted average period of 1.7 years.

Restricted Stock and Restricted Stock Units. Employees may be granted restricted (non-vested) stock and/or restricted stock units without cost to them. Stock-based compensation expense related to restricted stock and restricted stock units totaled $18 million and $20 million for the three months ended September 30, 2022 and 2021, respectively, and $63 million and $65 million for the nine months ended September 30, 2022 and 2021, respectively.

-10-

EOG RESOURCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

The following table sets forth restricted stock and restricted stock unit transactions for the nine-month periods ended September 30, 2022 and 2021 (shares and units in thousands):


	Nine Months Ended September 30, 2022			Nine Months Ended September 30, 2021
	Number of Shares and Units	Weighted Average Grant Date Fair Value		Number of Shares and Units	Weighted Average Grant Date Fair Value
Outstanding at January 1	4,680	$	69.37	4,742	$	74.97
Granted	1,623	113.03		1,409	81.44
Released (1)	(1,953)	82.05		(1,321)	101.63
Forfeited	(130)	65.44		(65)	68.49
Outstanding at September 30 (2)	4,220	$	80.41	4,765	$	69.58

(1)The total intrinsic value of restricted stock and restricted stock units released during the nine months ended September 30, 2022 and 2021 was $215 million and $104 million, respectively. The intrinsic value is based upon the closing price of EOG's common stock on the date the restricted stock and restricted stock units are released.

(2)The total intrinsic value of restricted stock and restricted stock units outstanding at September 30, 2022 and 2021 was $472 million and $383 million, respectively.

At September 30, 2022, unrecognized compensation expense related to restricted stock and restricted stock units totaled $313 million. Such unrecognized expense will be amortized on a straight-line basis over a weighted average period of 2.0 years.

Performance Units. EOG grants Performance Units annually to its executive officers without cost to them. For the grants made prior to September 2022, as more fully discussed in the grant agreements, the applicable performance metric is EOG's total shareholder return (TSR) over a three-year performance period relative to the TSR over the same period of a designated group of peer companies. Upon the application of the applicable performance multiple at the completion of the three-year performance period, a minimum of 0% and a maximum of 200% of the Performance Units granted could be outstanding.

For the grants made beginning in September 2022, as more fully discussed in the grant agreements, the applicable performance metrics are 1) EOG's TSR over a three-year performance period relative to the TSR over the same period of a designated group of peer companies and 2) EOG's average return on capital employed (ROCE) over the three-year performance period. At the end of the three-year performance period, a performance multiple based on EOGs relative TSR ranking will be determined, with a minimum performance multiple of 0% and a maximum performance multiple of 200%. A specified modifier ranging from -70% to +70% will then be applied to the performance multiple based on EOG's average ROCE over the three-year performance period, provided that in no event shall the performance multiple, after applying the ROCE modifier, be less than 0% or exceed 200%. Furthermore, if EOG's TSR over the three-year performance period is negative (i.e., less than 0%), the performance multiple will be capped at 100%, regardless of EOG's relative TSR ranking or three-year average ROCE.

The fair value of the Performance Units is estimated using a Monte Carlo simulation. Stock-based compensation expense related to the Performance Unit grants totaled $5 million and $11 million for the three months ended September 30, 2022 and 2021, respectively, and $8 million and $13 million for the nine months ended September 30, 2022 and 2021, respectively.

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EOG RESOURCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

The following table sets forth the Performance Unit transactions for the nine-month periods ended September 30, 2022 and 2021 (units in thousands):


	Nine Months Ended September 30, 2022				Nine Months Ended September 30, 2021
	Number of Units		Weighted Average Grant Date Fair Value		Number of Units	Weighted Average Grant Date Fair Value
Outstanding at January 1	679		$	84.97	613	$	88.38
Granted	122		126.55		222	90.94
Granted for Performance Multiple (1)	—		—		19	113.81
Released (2)	(57)		136.74		(175)	113.06
Forfeited for Performance Multiple (3)	(56)		136.74		—	—
Outstanding at September 30 (4)	688	(5)	$	83.82	679	$	83.59

(1)Upon completion of the Performance Period for the Performance Units granted in 2017, a performance multiple of 125% was applied to the grants resulting in an additional grant of Performance Units in February 2021.

(2)The total intrinsic value of Performance Units released was $7 million and $13 million for the nine months ended September 30, 2022 and 2021, respectively. The intrinsic value is based upon the closing price of EOG's common stock on the date the Performance Units are released.

(3)Upon completion of the Performance Period for the Performance Units granted in 2018, a performance multiple of 50% was applied to the grants resulting in a forfeiture of Performance Units in February 2022.

(4)The total intrinsic value of Performance Units outstanding at September 30, 2022 and 2021 was approximately $77 million and $55 million, respectively.

(5)Upon the application of the relevant performance multiple at the completion of each of the remaining Performance Periods, a minimum of zero and a maximum of 1,376 Performance Units could be outstanding.

At September 30, 2022, unrecognized compensation expense related to Performance Units totaled $20 million. Such unrecognized expense will be amortized on a straight-line basis over a weighted average period of 1.8 years.

3. Net Income Per Share

The following table sets forth the computation of Net Income Per Share for the three-month and nine-month periods ended September 30, 2022 and 2021 (in millions, except per share data):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Numerator for Basic and Diluted Earnings Per Share -
Net Income	$	2,854	$	1,095	$	5,482	$	2,679
Denominator for Basic Earnings Per Share -
Weighted Average Shares	583		581		583		580
Potential Dilutive Common Shares -
Stock Options/SARs/ESPP	1		1		2		1
Restricted Stock/Units and Performance Units	3		2		2		3
Denominator for Diluted Earnings Per Share -
Adjusted Diluted Weighted Average Shares	587		584		587		584
Net Income Per Share
Basic	$	4.90	$	1.88	$	9.40	$	4.62
Diluted	$	4.86	$	1.88	$	9.34	$	4.59

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EOG RESOURCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

The diluted earnings per share calculation excludes stock option, SAR and ESPP grants that were anti-dilutive. Shares underlying the excluded stock option, SAR and ESPP grants were 1 million and 7 million for the three-month periods ended September 30, 2022 and 2021, respectively, and were 1 million and 7 million shares for the nine-month periods ended September 30, 2022 and 2021, respectively.

4. Supplemental Cash Flow Information

Net cash paid for interest and income taxes was as follows for the nine-month periods ended September 30, 2022 and 2021 (in millions):