EOG Resources sees FY18 CapEx $5.4B-$5.8B
EOG's disciplined capital plan is designed to achieve strong returns on capital employed and healthy growth while spending within cash flow. The company expects to grow total company crude oil volumes by 18 percent, generate double-digit ROCE and cover capital investment and dividend payments within discretionary cash flow. EOG can deliver on its 2018 plan at oil prices below $50 and generates significant free cash flow at a $60 oil price. EOG's return-based culture continues to drive cost reductions. The company targets lower well costs and per-unit operating expenses in 2018 despite a potentially inflationary operating environment. EOG is also focused on driving continued improvements in well productivity and pursuing exploration efforts in new plays. Capital expenditures for 2018 are expected to range from $5.4 to $5.8 billion, including production facilities and gathering, processing and other expenditures, and excluding acquisitions. EOG expects to complete approximately 690 net wells in 2018, compared to 536 net wells in 2017. Capital will be allocated primarily to EOG's highest rate-of-return oil assets in the Delaware Basin, Eagle Ford, Rockies, Woodford and the Bakken. At least 90 percent of the wells completed in 2018 are expected to be premium. EOG has an inventory of approximately 8,000 such wells, which have a direct after-tax rate of return of at least 30 percent assuming $40 flat crude oil prices and $2.50 flat natural gas prices.