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 March 31, 2023

or

☐          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	584,858,641	(as of April 27, 2023)

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 Ended March 31, 2023 and 2022	3
		Condensed Consolidated Balance Sheets - March 31, 2023 and December 31, 2022	4
		Condensed Consolidated Statements of Stockholders' Equity - Three Months Ended March 31, 2023 and 2022	5
		Condensed Consolidated Statements of Cash Flows - Three Months Ended March 31, 2023 and 2022	6
		Notes to Condensed Consolidated Financial Statements	7
	ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	20
	ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	36
	ITEM 4.	Controls and Procedures	36
PART II.	OTHER INFORMATION
	ITEM 1.	Legal Proceedings	37
	ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37
	ITEM 6.	Exhibits	38
SIGNATURES			40

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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 March 31,
	2023		2022
Operating Revenues and Other
Crude Oil and Condensate	$	3,182	$	3,889
Natural Gas Liquids	490		681
Natural Gas	517		716
Gains (Losses) on Mark-to-Market Financial Commodity Derivative Contracts	376		(2,820)
Gathering, Processing and Marketing	1,390		1,469
Gains on Asset Dispositions, Net	69		25
Other, Net	20		23
Total	6,044		3,983
Operating Expenses
Lease and Well	359		318
Transportation Costs	236		228
Gathering and Processing Costs	159		144
Exploration Costs	50		45
Dry Hole Costs	1		3
Impairments	34		55
Marketing Costs	1,361		1,283
Depreciation, Depletion and Amortization	798		847
General and Administrative	145		124
Taxes Other Than Income	329		390
Total	3,472		3,437
Operating Income	2,572		546
Other Income (Expense), Net	65		(1)
Income Before Interest Expense and Income Taxes	2,637		545
Interest Expense, Net	42		48
Income Before Income Taxes	2,595		497
Income Tax Provision	572		107
Net Income	$	2,023	$	390
Net Income Per Share
Basic	$	3.46	$	0.67
Diluted	$	3.45	$	0.67
Average Number of Common Shares
Basic	584		582
Diluted	587		586
Comprehensive Income
Net Income	$	2,023	$	390
Other Comprehensive Loss
Foreign Currency Translation Adjustments	—		(1)
Other, Net of Tax	—		—
Other Comprehensive Loss	—		(1)
Comprehensive Income	$	2,023	$	389

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)

	March 31, 2023		December 31, 2022
ASSETS
Current Assets
Cash and Cash Equivalents	$	5,018	$	5,972
Accounts Receivable, Net	2,455		2,774
Inventories	1,131		1,058
Income Taxes Receivable	—		97
Other	580		574
Total	9,184		10,475
Property, Plant and Equipment
Oil and Gas Properties (Successful Efforts Method)	67,907		67,322
Other Property, Plant and Equipment	5,101		4,786
Total Property, Plant and Equipment	73,008		72,108
Less:  Accumulated Depreciation, Depletion and Amortization	(42,785)		(42,679)
Total Property, Plant and Equipment, Net	30,223		29,429
Deferred Income Taxes	31		33
Other Assets	1,587		1,434
Total Assets	$	41,025	$	41,371
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable	$	2,438	$	2,532
Accrued Taxes Payable	637		405
Dividends Payable	482		482
Liabilities from Price Risk Management Activities	31		169
Current Portion of Long-Term Debt	33		1,283
Current Portion of Operating Lease Liabilities	354		296
Other	253		346
Total	4,228		5,513
Long-Term Debt	3,787		3,795
Other Liabilities	2,620		2,574
Deferred Income Taxes	4,943		4,710
Commitments and Contingencies (Note 8)
Stockholders' Equity
Common Stock, $0.01 Par, 1,280,000,000 Shares Authorized and 588,534,131 Shares Issued at March 31, 2023 and 588,396,757 Shares Issued at December 31, 2022	206		206
Additional Paid in Capital	6,219		6,187
Accumulated Other Comprehensive Loss	(8)		(8)
Retained Earnings	19,423		18,472
Common Stock Held in Treasury, 3,694,718 Shares at March 31, 2023 and 700,281 Shares at December 31, 2022	(393)		(78)
Total Stockholders' Equity	25,447		24,779
Total Liabilities and Stockholders' Equity	$	41,025	$	41,371

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 December 31, 2022	$	206	$	6,187	$	(8)	$	18,472	$	(78)	$	24,779
Net Income	—		—		—		2,023		—		2,023
Common Stock Dividends Declared, $1.825 Per Share	—		—		—		(1,072)		—		(1,072)
Other Comprehensive Loss	—		—		—		—		—		—
Common Stock Issued Under Stock Plans	—		—		—		—		—		—
Restricted Stock and Restricted Stock Units, Net	—		1		—		—		(1)		—
Stock-Based Compensation Expenses	—		34		—		—		—		34
Treasury Stock Repurchased	—		—		—		—		(310)		(310)
Change in Treasury Stock - Stock Compensation Plans, Net	—		(3)		—		—		(4)		(7)
Balance at March 31, 2023	$	206	$	6,219	$	(8)	$	19,423	$	(393)	$	25,447

	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	—		—		—		390		—		390
Common Stock Dividends Declared, $1.75 Per Share	—		—		—		(1,026)		—		(1,026)
Other Comprehensive Loss	—		—		(1)		—		—		(1)
Common Stock Issued Under Stock Plans	—		—		—		—		—		—
Change in Treasury Stock - Stock Compensation Plans, Net	—		(24)		—		—		(14)		(38)
Restricted Stock and Restricted Stock Units, Net	—		(3)		—		—		3		—
Stock-Based Compensation Expenses	—		35		—		—		—		35
Balance at March 31, 2022	$	206	$	6,095	$	(13)	$	15,283	$	(31)	$	21,540

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

-5-

EOG RESOURCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Millions)

(Unaudited)

	Three Months Ended March 31,
	2023		2022
Cash Flows from Operating Activities
Reconciliation of Net Income to Net Cash Provided by Operating Activities:
Net Income	$	2,023	$	390
Items Not Requiring (Providing) Cash
Depreciation, Depletion and Amortization	798		847
Impairments	34		55
Stock-Based Compensation Expenses	34		35
Deferred Income Taxes	234		(465)
Gains on Asset Dispositions, Net	(69)		(25)
Other, Net	4		6
Dry Hole Costs	1		3
Mark-to-Market Financial Commodity Derivative Contracts
(Gains) Losses, Net	(376)		2,820
Net Cash Payments for Settlements of Financial Commodity Derivative Contracts	(123)		(296)
Other, Net	(1)		2
Changes in Components of Working Capital and Other Assets and Liabilities
Accounts Receivable	338		(878)
Inventories	(77)		(14)
Accounts Payable	(77)		130
Accrued Taxes Payable	232		613
Other Assets	52		(213)
Other Liabilities	193		(2,250)
Changes in Components of Working Capital Associated with Investing Activities	35		68
Net Cash Provided by Operating Activities	3,255		828
Investing Cash Flows
Additions to Oil and Gas Properties	(1,305)		(939)
Additions to Other Property, Plant and Equipment	(319)		(70)
Proceeds from Sales of Assets	92		121
Changes in Components of Working Capital Associated with Investing Activities	(35)		(68)
Net Cash Used in Investing Activities	(1,567)		(956)
Financing Cash Flows
Long-Term Debt Repayments	(1,250)		—
Dividends Paid	(1,067)		(1,023)
Treasury Stock Purchased	(317)		(43)
Proceeds from Stock Options Exercised and Employee Stock Purchase Plan	—		4
Repayment of Finance Lease Liabilities	(8)		(10)
Net Cash Used in Financing Activities	(2,642)		(1,072)
Effect of Exchange Rate Changes on Cash	—		—
Decrease in Cash and Cash Equivalents	(954)		(1,200)
Cash and Cash Equivalents at Beginning of Period	5,972		5,209
Cash and Cash Equivalents at End of Period	$	5,018	$	4,009

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

-6-

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, 2022, filed on February 23, 2023 (EOG's 2022 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 months ended March 31, 2023, 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 were entered into on or before December 31, 2022. In December 2022, the FASB issued ASU 2022-06, "Reference Rate Reform (Topic 848)" (ASU 2022-06), which deferred the sunset date of Topic 848 until December 31, 2024. EOG has evaluated the provisions of ASU 2020-04 and ASU 2022-06 and has concluded that their application will not have a material impact on EOG's consolidated financial statements and related disclosures related to its $2.0 billion senior unsecured Revolving Credit Agreement.

-7-

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 2022 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 March 31,
	2023		2022
Lease and Well	$	12	$	13
Gathering and Processing Costs	1		1
Exploration Costs	5		5
General and Administrative	16		16
Total	$	34	$	35

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 Amended and Restated EOG Resources, Inc. 2008 Omnibus Equity Compensation Plan (2008 Plan) from and after the April 29, 2021 effective date of the 2021 Plan. The 2021 Plan provides for grants of stock options, stock-settled stock appreciation rights (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 were 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 March 31, 2023, 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 $6 million and $8 million during the three months ended March 31, 2023 and 2022, respectively.

EOG did not grant any stock options or SARs during the three-month period ended March 31, 2023. Weighted average fair values and valuation assumptions used to value stock options and SARs granted during the three-month period ended March 31, 2022 and ESPP grants during the three-month periods ended March 31, 2023 and 2022 are as follows:

	Stock Options/SARs			ESPP
	Three Months Ended March 31,			Three Months Ended March 31,
	2022			2023			2022
Weighted Average Fair Value of Grants	$	28.30		$	32.31		$	23.07
Expected Volatility	42.20		%	42.97		%	39.72		%
Risk-Free Interest Rate	0.89		%	4.66		%	0.22		%
Dividend Yield	3.28		%	2.47		%	3.32		%
Expected Life	5.3 years			0.5 years			0.5 years

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.

-8-

EOG RESOURCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

The following table sets forth stock option and SAR transactions for the three-month periods ended March 31, 2023 and 2022 (stock options and SARs in thousands):

	Three Months Ended March 31, 2023			Three Months Ended March 31, 2022
	Number of Stock Options/SARs	Weighted Average Exercise Price		Number of Stock Options/SARs	Weighted Average Exercise Price
Outstanding at January 1	4,225	$	77.49	9,969	$	84.37
Granted	—	—		2	97.64
Exercised (1)	(175)	77.08		(2,324)	84.63
Forfeited	(31)	79.83		(81)	85.86
Outstanding at March 31 (2)	4,019	$	77.49	7,566	$	84.28
Vested or Expected to Vest (3)	3,875	$	77.86	7,256	$	85.05
Exercisable at March 31 (4)	2,294	$	84.89	3,886	$	101.26

(1)The total intrinsic value of stock options/SARs exercised during the three months ended March 31, 2023 and 2022 was $8 million and $62 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 March 31, 2023 and 2022 was $155 million and $277 million, respectively. At March 31, 2023 and 2022, the weighted average remaining contractual life was 3.9 years and 4.3 years, respectively.

(3)The total intrinsic value of stock options/SARs vested or expected to vest at March 31, 2023 and 2022 was $149 million and $260 million, respectively. At March 31, 2023 and 2022, the weighted average remaining contractual life was 3.8 years and 4.3 years, respectively.

(4)The total intrinsic value of stock options/SARs exercisable at March 31, 2023 and 2022 was $74 million and $82 million, respectively. At both March 31, 2023 and 2022, the weighted average remaining contractual life was 2.9 years.

At March 31, 2023, unrecognized compensation expense related to non-vested stock option, SAR and ESPP grants totaled $28 million. Such unrecognized expense will be amortized on a straight-line basis over a weighted average period of 1.1 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 $25 million for each of the three months ended March 31, 2023 and 2022.

-9-

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 three-month periods ended March 31, 2023 and 2022 (shares and units in thousands):

	Three Months Ended March 31, 2023			Three Months Ended March 31, 2022
	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	4,113	$	80.77	4,680	$	69.37
Granted	36	122.34		14	110.66
Released (1)	(38)	55.23		(699)	93.37
Forfeited	(42)	84.23		(51)	66.77
Outstanding at March 31 (2)	4,069	$	81.33	3,944	$	65.30

(1)The total intrinsic value of restricted stock and restricted stock units released during the three months ended March 31, 2023 and 2022 was $4 million and $81 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 March 31, 2023 and 2022 was $466 million and $470 million, respectively.

At March 31, 2023, unrecognized compensation expense related to restricted stock and restricted stock units totaled $261 million. Such unrecognized expense will be amortized on a straight-line basis over a weighted average period of 1.6 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 EOG's 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 $3 million and $2 million for the three months ended March 31, 2023 and 2022, respectively.

-10-

EOG RESOURCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

The following table sets forth the Performance Unit transactions for the three-month periods ended March 31, 2023 and 2022 (units in thousands):

	Three Months Ended March 31, 2023				Three Months Ended March 31, 2022
	Number of Units		Weighted Average Grant Date Fair Value		Number of Units	Weighted Average Grant Date Fair Value
Outstanding at January 1	688		$	83.82	679	$	84.97
Granted	—		—		—	—
Released (1)	(86)		79.98		(57)	136.74
Forfeited for Performance Multiple (2)	(86)		79.98		(56)	136.74
Outstanding at March 31 (3)	516	(4)	$	85.10	566	$	74.60

(1)The total intrinsic value of Performance Units released was $10 million and $7 million for the three months ended March 31, 2023 and 2022, respectively. The intrinsic value is based upon the closing price of EOG's common stock on the date the Performance Units are released.

(2)Upon completion of the Performance Period for the Performance Units granted in 2019 and 2018, a performance multiple of 50% was applied to each of the grants resulting in a forfeiture of Performance Units in both February 2023 and February 2022.

(3)The total intrinsic value of Performance Units outstanding at March 31, 2023 and 2022 was approximately $59 million and $67 million, respectively.

(4)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 1,031 Performance Units could be outstanding.

At March 31, 2023, unrecognized compensation expense related to Performance Units totaled $15 million. Such unrecognized expense will be amortized on a straight-line basis over a weighted average period of 2.0 years.

3.    Net Income Per Share

The following table sets forth the computation of Net Income Per Share for the three-month periods ended March 31, 2023 and 2022 (in millions, except per share data):

	Three Months Ended March 31,
	2023		2022
Numerator for Basic and Diluted Earnings Per Share -
Net Income	$	2,023	$	390
Denominator for Basic Earnings Per Share -
Weighted Average Shares	584		582
Potential Dilutive Common Shares -
Stock Options/SARs/ESPP	1		1
Restricted Stock/Units and Performance Units	2		3
Denominator for Diluted Earnings Per Share -
Adjusted Diluted Weighted Average Shares	587		586
Net Income Per Share
Basic	$	3.46	$	0.67
Diluted	$	3.45	$	0.67

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 2 million for the three-month periods ended March 31, 2023 and 2022, respectively.

-11-

EOG RESOURCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

4.    Supplemental Cash Flow Information

Net cash paid for interest and income taxes was as follows for the three-month periods ended March 31, 2023 and 2022 (in millions):

	Three Months Ended March 31,
	2023		2022
Interest (1)	$	33	$	32
Income Taxes, Net of Refunds Received	$	1	$	46

(1)Net of capitalized interest of $8 million for both the three months ended March 31, 2023 and 2022, respectively.

EOG's accrued capital expenditures at March 31, 2023 and 2022 were $751 million and $528 million, respectively.

Non-cash investing activities for the three months ended March 31, 2023 and 2022, included additions of $33 million and $63 million, respectively, to EOG's oil and gas properties as a result of property exchanges.

Operating activities for the three months ended March 31, 2023 and 2022, included net cash received of $324 million and net cash used of $2,275 million, respectively, related to the change in collateral posted for financial commodity derivative contracts. For related discussion, see Note 12. These amounts are reflected in Other Liabilities within the Changes in Components of Working Capital and Other Assets and Liabilities line item on the Condensed Consolidated Statements of Cash Flows.

5.    Segment Information

Selected financial information by reportable segment is presented below for the three-month periods ended March 31, 2023 and 2022 (in millions):

	Three Months Ended March 31,
	2023		2022
Operating Revenues and Other
United States	$	5,941	$	3,914
Trinidad	103		69
Other International (1)	—		—
Total	$	6,044	$	3,983
Operating Income (Loss)
United States	$	2,512	$	519
Trinidad	66		34
Other International (1)	(6)		(7)
Total	2,572		546
Reconciling Items
Other Income, Net	65		(1)
Interest Expense, Net	(42)		(48)
Income Before Income Taxes	$	2,595	$	497

(1)    Other International primarily consists of EOG's international exploration programs and Canada operations. EOG began exploration programs in Australia in the third quarter of 2021 and in Oman in the third quarter of 2020. The decision was reached in the fourth quarter of 2021 to exit Block 36 and Block 49 in Oman.

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EOG RESOURCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

Total assets by reportable segment are presented below at March 31, 2023 and December 31, 2022 (in millions):

	At March 31, 2023		At December 31, 2022
Total Assets
United States	$	39,955	$	40,349
Trinidad	945		879
Other International (1)	125		143
Total	$	41,025	$	41,371

(1)    Other International primarily consists of EOG's international exploration programs and Canada operations. EOG began exploration programs in Australia in the third quarter of 2021 and in Oman in the third quarter of 2020. The decision was reached in the fourth quarter of 2021 to exit Block 36 and Block 49 in Oman.

6.    Asset Retirement Obligations

The following table presents the reconciliation of the beginning and ending aggregate carrying amounts of short-term and long-term legal obligations associated with the retirement of property, plant and equipment for the three-month periods ended March 31, 2023 and 2022 (in millions):

	Three Months Ended March 31,
	2023		2022
Carrying Amount at January 1	$	1,328	$	1,231
Liabilities Incurred	6		20
Liabilities Settled (1)	(30)		(131)
Accretion	13		11
Revisions	1		2
Carrying Amount at March 31	$	1,318	$	1,133
Current Portion	$	39	$	41
Noncurrent Portion	$	1,279	$	1,092

(1)Includes settlements related to asset sales.

The current and noncurrent portions of EOG's asset retirement obligations are included in Current Liabilities - Other and Other Liabilities, respectively, on the Condensed Consolidated Balance Sheets.

-13-

EOG RESOURCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

7.    Exploratory Well Costs

EOG's net changes in capitalized exploratory well costs for the three-month period ended March 31, 2023, are presented below (in millions):

	Three Months Ended March 31, 2023
Balance at January 1	$	15
Additions Pending the Determination of Proved Reserves	4
Reclassifications to Proved Properties	(5)
Costs Charged to Expense	—
Balance at March 31	$	14

	Three Months Ended March 31, 2023
Capitalized exploratory well costs that have been capitalized for a period of one year or less	$	13
Capitalized exploratory well costs that have been capitalized for a period greater than one year (1)	1
Balance at March 31	$	14
Number of exploratory wells that have been capitalized for a period greater than one year	1

(1)Consists of costs related to a project in the United States at March 31, 2023.

8.    Commitments and Contingencies

There are currently various suits and claims pending against EOG that have arisen in the ordinary course of EOG's business, including contract disputes, personal injury and property damage claims and title disputes. While the ultimate outcome and impact on EOG cannot be predicted, management believes that the resolution of these suits and claims will not, individually or in the aggregate, have a material adverse effect on EOG's consolidated financial position, results of operations or cash flow. EOG records reserves for contingencies when information available indicates that a loss is probable and the amount of the loss can be reasonably estimated.

9.    Pension and Postretirement Benefits

Pension Plans. EOG has a defined contribution pension plan in place for most of its employees in the United States. EOG's contributions to the pension plan are based on various percentages of compensation and, in some instances, are based upon the amount of the employees' contributions. EOG's total costs recognized for the pension plan were $14 million and $12 million for the three months ended March 31, 2023 and 2022, respectively. In addition, EOG's Trinidadian subsidiary maintains a contributory defined benefit pension plan and a matched savings plan, both of which are available to most of the employees of the Trinidadian subsidiary, the costs of which are not material.

Postretirement Health Care. EOG has postretirement medical and dental benefits in place for eligible United States and Trinidad employees and their eligible dependents, the costs of which are not material.

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EOG RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

10.    Long-Term Debt and Common Stock

Long-Term Debt. EOG had no outstanding commercial paper borrowings at March 31, 2023 and December 31, 2022, and did not utilize any commercial paper borrowings during the three months ended March 31, 2023 and 2022.

On March 15, 2023, EOG repaid upon maturity the $1,250 million aggregate principal amount of its 2.625% Senior Notes due 2023.

EOG currently has a $2.0 billion senior unsecured Revolving Credit Agreement (Agreement) with domestic and foreign lenders (Banks). The Agreement has a scheduled maturity date of June 27, 2024, and includes an option for EOG to extend, on up to two occasions, the term for successive one-year periods subject to certain terms and conditions. The Agreement (i) commits the Banks to provide advances up to an aggregate principal amount of $2.0 billion at any one time outstanding, with an option for EOG to request increases in the aggregate commitments to an amount not to exceed $3.0 billion, subject to certain terms and conditions and (ii) includes a swingline subfacility and a letter of credit subfacility. Advances under the Agreement will accrue interest based, at EOG's option, on either LIBOR plus an applicable margin (Eurodollar rate) or the base rate (as defined in the Agreement) plus an applicable margin. The Agreement contains representations, warranties, covenants and events of default that EOG believes are customary for investment-grade, senior unsecured commercial bank credit agreements, including a financial covenant for the maintenance of a ratio of total debt-to-capitalization (as such terms are defined in the Agreement) of no greater than 65%. At March 31, 2023, EOG was in compliance with this financial covenant. At March 31, 2023 and December 31, 2022, there were no borrowings or letters of credit outstanding under the Agreement. The Eurodollar rate and base rate (inclusive of the applicable margin), had there been any amounts borrowed under the Agreement at March 31, 2023, would have been 5.76% and 8.0%, respectively.

Common Stock. In November 2021, the Board established a new share repurchase authorization that allows for the repurchase by EOG of up to $5 billion of its common stock (November 2021 Authorization). Under the November 2021 Authorization, EOG may repurchase shares from time to time, at management's discretion, in accordance with applicable securities laws, including through open market transactions, privately negotiated transactions or any combination thereof. The timing and amount of repurchases is at the discretion of EOG's management and depends on a variety of factors, including the trading price of EOG's common stock, corporate and regulatory requirements, and other market and economic conditions. Repurchased shares are held as treasury shares and are available for general corporate purposes. The November 2021 Authorization has no time limit, does not require EOG to repurchase a specific number of shares and may be modified, suspended, or terminated by the Board at any time. During the three months ended March 31, 2023, EOG repurchased 2.9 million shares of common stock for approximately $310 million (inclusive of transaction fees and commissions) pursuant to the November 2021 Authorization. As of March 31, 2023, approximately $4.7 billion remained available for repurchases under the November 2021 Authorization.

On February 23, 2023, the Board declared a quarterly cash dividend on the common stock of $0.825 per share, paid on April 28, 2023, to stockholders of record as of April 14, 2023. The Board also declared on such date a special cash dividend on the common stock of $1.00 per share, paid on March 30, 2023, to stockholders of record as of March 16, 2023.

On May 4, 2023, the Board declared a quarterly cash dividend on the common stock of $0.825 per share to be paid on July 31, 2023, to stockholders of record as of July 17, 2023.

-15-

EOG RESOURCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

11.    Fair Value Measurements

Recurring Fair Value Measurements. As more fully discussed in Note 13 to the Consolidated Financial Statements included in EOG's 2022 Annual Report, certain of EOG's financial and nonfinancial assets and liabilities are reported at fair value on the Condensed Consolidated Balance Sheets. The following table provides fair value measurement information within the fair value hierarchy for certain of EOG's financial assets and liabilities carried at fair value on a recurring basis at March 31, 2023 and December 31, 2022 (in millions):

	Fair Value Measurements Using:
	Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
At March 31, 2023
Financial Assets:
Natural Gas Swaps	$	—	$	21	$	—	$	21
Natural Gas Basis Swaps	—		12		—		12
Financial Liabilities:
Crude Oil Swaps	—		49		—		49
Natural Gas Swaps	—		391		—		391
At December 31, 2022
Financial Assets:
Natural Gas Basis Swaps	$	—	$	29	$	—	$	29
Financial Liabilities:
Natural Gas Swaps	—		703		—		703
Crude Oil Swaps	—		190		—		190

See Note 12 for the balance sheet amounts and classification of EOG's financial commodity derivative instruments at March 31, 2023 and December 31, 2022.

The estimated fair value of financial commodity derivative contracts was based upon forward commodity price curves based on quoted market prices. Financial commodity derivative contracts were valued by utilizing an independent third-party derivative valuation provider who uses various types of valuation models, as applicable.

Non-Recurring Fair Value Measurements. The initial measurement of asset retirement obligations at fair value is calculated using discounted cash flow techniques and is based on internal estimates of future retirement costs associated with property, plant and equipment. Significant Level 3 inputs used in the calculation of asset retirement obligations include plugging costs and reserve lives. A reconciliation of EOG's asset retirement obligations is presented in Note 6.

When circumstances indicate that proved oil and gas properties may be impaired, EOG compares expected undiscounted future cash flows at a depreciation, depletion and amortization group level to the unamortized capitalized cost of the asset. If the expected undiscounted future cash flows, based on EOG's estimate of (and assumptions regarding) significant Level 3 inputs, including future crude oil, natural gas liquids (NGLs) and natural gas prices, operating costs, development expenditures, anticipated production from proved reserves and other relevant data, are lower than the unamortized capitalized cost, the capitalized cost is reduced to fair value. Fair value is generally calculated using the Income Approach described in the FASB's Fair Value Measurement Topic of the Accounting Standards Codification. In certain instances, EOG utilizes accepted offers from third-party purchasers as the basis for determining fair value.

EOG utilized average prices per acre from comparable market transactions and estimated discounted cash flows as the basis for determining the fair value of unproved and proved properties, respectively, received in non-cash property exchanges. See Note 4.

-16-

EOG RESOURCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

Fair Value Disclosures. EOG's financial instruments, other than financial commodity derivative contracts, consist of cash and cash equivalents, accounts receivable, accounts payable and current and long-term debt. The carrying values of cash and cash equivalents, accounts receivable and accounts payable approximate fair value.

At March 31, 2023 and December 31, 2022, respectively, EOG had outstanding $3,640 million and $4,890 million aggregate principal amount of senior notes, which had estimated fair values at such dates of approximately $3,592 million and $4,740 million, respectively. The estimated fair value of debt was based upon quoted market prices and, where such prices were not available, other observable (Level 2) inputs regarding interest rates available to EOG at the end of each respective period.

12.    Risk Management Activities

Commodity Price Risk. As more fully discussed in Note 12 to the Consolidated Financial Statements included in EOG's 2022 Annual Report, EOG engages in price risk management activities from time to time. These activities are intended to manage EOG's exposure to fluctuations in commodity prices for crude oil, NGLs and natural gas. EOG utilizes financial commodity derivative instruments, primarily price swap, option, swaption, collar and basis swap contracts, as a means to manage this price risk. EOG has not designated any of its financial commodity derivative contracts as accounting hedges and, accordingly, accounts for financial commodity derivative contracts using the mark-to-market accounting method.

Financial Commodity Derivative Contracts. Presented below is a comprehensive summary of EOG's financial commodity derivative contracts settled during the three-month period ended March 31, 2023 (closed) and outstanding as of March 31, 2023. Crude oil volumes are presented in thousand barrels per day (MBbld) and prices are presented in dollars per barrel ($/Bbl). Natural gas volumes are presented in million British Thermal Units per day (MMBtud) and prices are presented in dollars per million British Thermal Units ($/MMBtu).

Crude Oil Financial Price Swap Contracts
		Contracts Sold			Contracts Purchased
Period	Settlement Index	Volume (MBbld)	Weighted Average Price ($/Bbl)		Volume (MBbld)	Weighted Average Price ($/Bbl)
January - March 2023 (closed)	New York Mercantile Exchange (NYMEX) West Texas Intermediate (WTI)	95	$	67.90	6	$	102.26
April - May 2023	NYMEX WTI	91	67.63		2	98.15
June 2023	NYMEX WTI	2	69.10		2	98.15

Natural Gas Financial Price Swap Contracts
		Contracts Sold
Period	Settlement Index	Volume (MMBtud in thousands)	Weighted Average Price ($/MMBtu)
January - April 2023 (closed)	NYMEX Henry Hub	300	$	3.36
May - December 2023	NYMEX Henry Hub	300	3.36
January - December 2024	NYMEX Henry Hub	725	3.07
January - December 2025	NYMEX Henry Hub	725	3.07

-17-

EOG RESOURCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

Natural Gas Basis Swap Contracts
		Contracts Sold
Period	Settlement Index	Volume (MMBtud in thousands)	Weighted Average Price Differential ($/MMBtu)
January - March 2023 (closed)	NYMEX Henry Hub Houston Ship Channel (HSC) Differential (1)	135	$	0.01
April - December 2023	NYMEX Henry Hub HSC Differential	135	0.01
January - December 2024	NYMEX Henry Hub HSC Differential	10	0.00
January - December 2025	NYMEX Henry Hub HSC Differential	10	0.00

(1)    This settlement index is used to fix the differential between pricing at the Houston Ship Channel and NYMEX Henry Hub prices.

Financial Commodity Derivatives Location on Balance Sheet. The following table sets forth the amounts and classification of EOG's outstanding financial commodity derivative instruments at March 31, 2023 and December 31, 2022. Certain amounts may be presented on a net basis on the Condensed Consolidated Financial Statements when such amounts are with the same counterparty and subject to a master netting arrangement (in millions):

		Fair Value at
Description	Location on Balance Sheet	March 31, 2023		December 31, 2022
Liability Derivatives
Crude oil, NGLs and natural gas derivative contracts -
Current portion	Liabilities from Price Risk Management Activities (1)	$	31	$	169
Noncurrent portion	Other Liabilities (2)	376		371

(1)    The current portion of Liabilities from Price Risk Management Activities consists of gross liabilities of $63 million, partially offset by gross assets of $32 million and no collateral posted at March 31, 2023. The current portion of Liabilities from Price Risk Management Activities consists of gross liabilities of $287 million, partially offset by gross assets of $26 million and collateral posted with counterparties of $92 million, at December 31, 2022.

(2)    The noncurrent portion of Liabilities from Price Risk Management Activities consists of gross liabilities of $377 million, partially offset by gross assets of $1 million and no collateral posted at March 31, 2023. The noncurrent portion of Liabilities from Price Risk Management Activities consists of gross liabilities of $606 million, partially offset by gross assets of $3 million and collateral posted with counterparties of $232 million, at December 31, 2022.

-18-

EOG RESOURCES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Concluded)

(Unaudited)

Credit Risk. Notional contract amounts are used to express the magnitude of a financial derivative. The amounts potentially subject to credit risk, in the event of nonperformance by the counterparties, are equal to the fair value of such contracts (see Note 11). EOG evaluates its exposures to significant counterparties on an ongoing basis, including those arising from physical and financial transactions. In some instances, EOG renegotiates payment terms and/or requires collateral, parent guarantees or letters of credit to minimize credit risk.

All of EOG's derivative instruments are covered by International Swap Dealers Association Master Agreements (ISDAs) with counterparties. The ISDAs may contain provisions that require EOG, if it is the party in a net liability position, to post collateral when the amount of the net liability exceeds the threshold level specified for EOG's then-current credit ratings. In addition, the ISDAs may also provide that as a result of certain circumstances, including certain events that cause EOG's credit ratings to become materially weaker than its then-current ratings, the counterparty may require all outstanding derivatives under the ISDAs to be settled immediately. See Note 11 for the aggregate fair value of all derivative instruments that were in a net liability position at both March 31, 2023 and December 31, 2022. EOG had no collateral posted and no collateral held at March 31, 2023. EOG had $324 million of collateral posted and no collateral held at December 31, 2022. EOG had no collateral posted and no collateral held at May 3, 2023.

13.  Acquisitions and Divestitures

During the three months ended March 31, 2023, EOG paid cash of $135 million, primarily to acquire a gathering and processing system in the Powder River Basin. Additionally, during the three months ended March 31, 2023, EOG recognized net gains on asset dispositions of $69 million and received proceeds of $92 million, primarily due to the sale of EOG's equity interest in ammonia plant investments in Trinidad, along with certain legacy assets in the Texas Panhandle.

During the three months ended March 31, 2022, EOG recognized net gains on asset dispositions of $25 million and received proceeds of $121 million primarily due to the sale of certain legacy natural gas assets in the Rocky Mountain area.

-19-

PART I.  FINANCIAL INFORMATION

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

EOG RESOURCES, INC.

Overview

EOG Resources, Inc., together with its subsidiaries (collectively, EOG), is one of the largest independent (non-integrated) crude oil and natural gas companies in the United States with proved reserves in the United States and Trinidad. EOG operates under a consistent business and operational strategy that focuses predominantly on maximizing the rate of return on investment of capital by controlling operating and capital costs and maximizing reserve recoveries. Pursuant to this strategy, each prospective drilling location is evaluated by its estimated rate of return. This strategy is intended to enhance the generation of cash flow and earnings from each unit of production on a cost-effective basis, allowing EOG to maximize long-term shareholder value and maintain a strong balance sheet. EOG implements its strategy primarily by emphasizing the drilling of internally generated prospects in order to find and develop low-cost reserves. Maintaining the lowest possible operating cost structure, coupled with efficient and safe operations and robust environmental stewardship practices and performance, is integral in the implementation of EOG's strategy.

Commodity Prices. Prices for crude oil and condensate, natural gas liquids (NGLs) and natural gas have historically been volatile. This volatility is expected to continue due to the many uncertainties associated with the world political and economic environment and the global supply of, and demand for, crude oil, NGLs and natural gas and the availability of other energy supplies, the relative competitive relationships of the various energy sources in the view of consumers and other factors.

The market prices of crude oil and condensate, NGLs and natural gas impact the amount of cash generated from EOG's operating activities, which, in turn, impact EOG's financial position and results of operations.

For the first three months of 2023, the average U.S. New York Mercantile Exchange (NYMEX) crude oil and natural gas prices were $76.11 per barrel and $3.43 per million British thermal units (MMBtu), respectively, representing decreases of 19% and 30%, respectively, from the average NYMEX prices for the same period in 2022. Market prices for NGLs are influenced by the components extracted, including ethane, propane and butane and natural gasoline, among others, and the respective market pricing for each component.

Inflation Considerations; Availability of Materials, Labor & Services. Beginning in the second half of 2021 and continuing through the first three months of 2023, EOG, similar to other companies in its industry, has experienced inflationary pressures on its operating and capital costs - namely the costs of fuel, steel (i.e., wellbore tubulars and facilities manufactured using steel), labor and drilling and completion services. Such inflationary pressures have resulted from (i) supply chain disruptions caused by the COVID-19 pandemic and the resulting limited availability of certain materials and products manufactured using such materials; (ii) increased demand for fuel and steel; (iii) increased demand for drilling and completion services coupled with a limited number of available service providers, resulting in increased competition for such services among EOG and other companies in its industry; (iv) labor shortages; and (v) other factors, including the ongoing conflict between Russia and the Ukraine which began in late February 2022. EOG currently expects such inflationary pressures and contributing factors to continue in 2023.

Such inflationary pressures on EOG's operating costs have, in turn, impacted its cash flows and results of operations. However, by virtue of its continued focus on increasing its drilling, completion and operating efficiencies and improving the performance of its wells, as well as the flexibility provided by its multi-basin drilling portfolio, EOG has, to date, been able to largely offset such impacts. EOG currently expects such inflationary pressures to result in an increase of approximately 10 percent in its fiscal year 2023 well costs (i.e., its costs for drilling, completions and well-site facilities) versus fiscal year 2022. Accordingly, such increase in EOG's fiscal year 2023 well costs did not have a material impact on EOG's first quarter 2023 cash flows, and EOG currently does not expect such increase to have a material impact on its full-year 2023 cash flows. Further, such inflationary pressures and the factors contributing to such inflationary pressures (described above) have not, to date, impacted EOG's results of operations, liquidity, capital resources, cash requirements or financial position or its ability to conduct its day-to-day drilling, completion and production operations.

-20-

The initiatives EOG has undertaken (and continues to undertake) to increase its drilling, completion and operating efficiencies and improve the performance of its wells and, in turn, mitigate such inflationary pressures, include (among others): (i) EOG's downhole drilling motor program, which has resulted in increased footage drilled per day and, in turn, reduced drilling times; (ii) enhanced techniques for completing its wells, which has resulted in increased footage completed per day and pumping hours per day; and (iii) EOG's self-sourced sand program, which has resulted in continued cost savings for the sand utilized in its well completion operations. In addition, EOG enters into agreements with its service providers from time to time, when available and advantageous, to secure the costs and availability of certain drilling and completion services it utilizes as part of its operations.

EOG plans to continue with these initiatives and actions, though there can be no assurance that such efforts will offset, largely or at all, the impacts of any future inflationary pressures on EOG's operating costs, cash flows and results of operations. Further, there can be no assurance that the factors contributing to any future inflationary pressures will not impact EOG's ability to conduct its future day-to-day drilling, completion and production operations.

Climate Change. For discussion of climate change matters and related regulatory matters, including potential developments related to climate change and the potential impacts and risks of such developments on EOG, see ITEM 1A. Risk Factors, and the related discussion in ITEM 1. Business - Regulation, of EOG's Annual Report on Form 10-K for the year ended December 31, 2022, filed on February 23, 2023 (EOG's 2022 Annual Report). EOG will continue to monitor and assess any climate change-related developments that could impact EOG and the oil and gas industry, to determine the impact on its business and operations, and take appropriate actions where necessary.

United States. EOG's efforts to identify plays with large reserve potential have proven to be successful. EOG continues to drill numerous wells in large acreage plays, which in the aggregate have contributed substantially to, and are expected to continue to contribute substantially to, EOG's crude oil and condensate, NGLs and natural gas production. EOG has placed an emphasis on applying its horizontal drilling and completion expertise to unconventional crude oil plays and natural gas plays.

During the first three months of 2023, EOG continued to focus on increasing drilling, completion and operating efficiencies, to improve well performance and, as is further discussed above, to mitigate inflationary pressures on its operating and capital costs (e.g., costs for fuel and tubulars). In addition, EOG continued to evaluate certain potential crude oil and condensate, NGLs and natural gas exploration and development prospects and to look for opportunities to add drilling inventory through leasehold acquisitions, farm-ins, exchanges or tactical or bolt-on acquisitions. On a volumetric basis, as calculated using a ratio of 1.0 barrel of crude oil and condensate or NGLs to 6.0 thousand cubic feet of natural gas, crude oil and condensate and NGLs production accounted for approximately 73% and 75% of EOG's United States production during the first three months of 2023 and 2022, respectively. During the first three months of 2023, EOG's drilling and completion activities occurred primarily in the Delaware Basin play, Eagle Ford play and Rocky Mountain area. EOG's major producing areas in the United States are in New Mexico and Texas.

Trinidad. In the Republic of Trinidad and Tobago (Trinidad), EOG continues to deliver natural gas under existing supply contracts. Several fields in the South East Coast Consortium Block, Modified U(a) Block, Block 4(a), the Banyan Field and the Sercan Area have been developed and are producing natural gas which is sold to the National Gas Company of Trinidad and Tobago Limited and its subsidiary (NGC), and crude oil and condensate which is sold to Heritage Petroleum Company Limited (Heritage).

EOG expects to commence drilling in June 2023 from the recently completed platform in the Modified U(a) Block. EOG expects to complete three development wells and two exploratory wells from this platform in 2023. EOG also expects to commence drilling one exploratory well in the South East Coast Consortium Block in December 2023. Additionally, EOG completed the design phase for the platform and related facilities in the Mento Area and expects to make significant construction progress in 2023.

Also, in February 2023, EOG sold its entire equity interest in its ammonia plant investments.

Other International. In November 2021, a subsidiary of EOG was granted an exploration permit for the WA-488-P Block, located offshore Western Australia. In the first three months of 2023, EOG continued to prepare for the drilling of an exploration well which is expected to commence in 2024, subject to statutory approvals and equipment availability.

EOG continues to evaluate other select crude oil and natural gas opportunities outside the United States, primarily by pursuing exploitation opportunities in countries where indigenous crude oil and natural gas reserves have been identified.

-21-

2023 Capital and Operating Plan. Total 2023 capital expenditures are estimated to range from approximately $5.8 billion to $6.2 billion, including facilities and gathering, processing, transportation and other expenditures, and excluding acquisitions, non-cash transactions and exploration costs. EOG plans to continue to focus a substantial portion of its exploration and development expenditures in its major producing areas in the United States. In particular, EOG will be focused on United States drilling activity in the Delaware Basin, Eagle Ford play, Rocky Mountain area and Dorado gas play where it generates its highest rates-of-return. To further enhance the economics of these plays, EOG expects to continue to improve well performance and to mitigate inflationary pressures on its operating and capital costs (e.g., costs for fuel and tubulars) through efficiency gains; see the above related discussion. Full-year 2023 total crude oil, NGLs and natural gas production is expected to increase modestly versus 2022. In addition, EOG plans to continue to spend a portion of its anticipated 2023 capital expenditures on leasing acreage, evaluating new prospects, transportation infrastructure and environmental projects.

Management continues to believe EOG has one of the strongest prospect inventories in EOG's history. When it fits EOG's strategy, EOG will make acquisitions that bolster existing drilling programs or offer incremental exploration and/or production opportunities.

Capital Structure. One of management's key strategies is to maintain a strong balance sheet with a consistently below average debt-to-total capitalization ratio as compared to those in EOG's peer group. EOG's debt-to-total capitalization ratio was 13% and 17% at March 31, 2023 and December 31, 2022, respectively. As used in this calculation, total capitalization represents the sum of total current and long-term debt and total stockholders' equity.

At March 31, 2023, EOG maintained a strong financial and liquidity position, including $5.0 billion of cash and cash equivalents on hand and $2.0 billion of availability under its senior unsecured revolving credit facility.

On March 15, 2023, EOG repaid upon maturity the $1,250 million aggregate principal amount of its 2.625% Senior Notes due 2023.

EOG has significant flexibility with respect to financing alternatives, including borrowings under its commercial paper program, bank borrowings, borrowings under its senior unsecured revolving credit facility, joint development agreements and similar agreements and equity and debt offerings.

Cash Return Framework. EOG maintains quantitative guidance as part of its cash return framework - specifically, a commitment to return a minimum of 60% of annual net cash provided by operating activities before certain balance sheet-related changes, less total capital expenditures, to stockholders, through a combination of quarterly dividends, special dividends and share repurchases. For discussion regarding our payment of dividends, see ITEM 1A, Risk Factors, and ITEM 5, Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities, of EOG's 2022 Annual Report. For discussion regarding our share repurchases conducted during the first three months of 2023 and our share repurchase authorization, see Part II, Item 2. Unregistered Sales of Equity Securities and Use of Proceeds, in this Quarterly Report on Form 10-Q.

Dividend Declarations. On February 23, 2023, EOG's Board of Directors (Board) declared a quarterly cash dividend on the common stock of $0.825 per share, paid on April 28, 2023, to stockholders of record as of April 14, 2023. The Board also declared on such date a special dividend on the common stock of $1.00 per share, paid on March 30, 2023, to stockholders of record as of March 16, 2023.

On May 4, 2023, the Board declared a quarterly cash dividend on the common stock of $0.825 per share to be paid on July 31, 2023, to stockholders of record as of July 17, 2023.

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Share Repurchases. In November 2021, the Board established a new share repurchase authorization that allows for the repurchase by EOG of up to $5 billion of its common stock (November 2021 Authorization). Under the November 2021 Authorization, EOG may repurchase shares from time to time, at management's discretion, in accordance with applicable securities laws, including through open market transactions, privately negotiated transactions or any combination thereof. The timing and amount of repurchases is at the discretion of EOG's management and depends on a variety of factors, including the trading price of EOG's common stock, corporate and regulatory requirements, and other market and economic conditions. Repurchased shares are held as treasury shares and are available for general corporate purposes. The November 2021 Authorization has no time limit, does not require EOG to repurchase a specific number of shares and may be modified, suspended, or terminated by the Board at any time. During the three months ended March 31, 2023, EOG repurchased 2.9 million shares of common stock for approximately $310 million (inclusive of transaction fees and commissions) pursuant to the November 2021 Authorization. As of March 31, 2023, approximately $4.7 billion remained available for repurchases under the November 2021 Authorization.

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Results of Operations

The following review of operations for the three months ended March 31, 2023 and 2022 should be read in conjunction with the Condensed Consolidated Financial Statements of EOG and notes thereto included in this Quarterly Report on Form 10-Q.

Three Months Ended March 31, 2023 vs. Three Months Ended March 31, 2022

Operating Revenues and Other. During the first quarter of 2023, operating revenues increased $2,061 million, or 52%, to $6,044 million from $3,983 million for the same period of 2022. Total wellhead revenues, which are revenues generated from sales of EOG's production of crude oil and condensate, NGLs and natural gas, for the first quarter of 2023 decreased $1,097 million, or 21%, to $4,189 million from $5,286 million for the same period of 2022. EOG recognized net gains on the mark-to-market of financial commodity derivative contracts of $376 million for the first quarter of 2023 compared to net losses of $2,820 million for the same period of 2022. Gathering, processing and marketing revenues for the first quarter of 2023 decreased $79 million, or 5%, to $1,390 million from $1,469 million for the same period of 2022. Net gains on asset dispositions were $69 million for the first quarter of 2023 compared to net gains of $25 million for the same period of 2022.

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Wellhead volume and price statistics for the three-month periods ended March 31, 2023 and 2022 were as follows:

	Three Months Ended March 31,
	2023		2022
Crude Oil and Condensate Volumes (MBbld) (1)
United States	457.1		449.4
Trinidad	0.6		0.7
Total	457.7		450.1
Average Crude Oil and Condensate Prices ($/Bbl) (2)
United States	$	77.27	$	96.02
Trinidad	68.98		83.82
Composite	77.26		96.00
Natural Gas Liquids Volumes (MBbld) (1)
United States	212.2		190.3
Total	212.2		190.3
Average Natural Gas Liquids Prices ($/Bbl) (2)
United States	$	25.67	$	39.77
Natural Gas Volumes (MMcfd) (1)
United States	1,475		1,249
Trinidad	164