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What changed in EOG Resources's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of EOG Resources's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+368 added−390 removedSource: 10-K (2024-02-22) vs 10-K (2023-02-23)

Top changes in EOG Resources's 2023 10-K

368 paragraphs added · 390 removed · 311 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

92 edited+16 added−13 removed73 unchanged
Biggest changeYear Ended December 31 2022 2021 2020 Crude Oil and Condensate Volumes (MMBbl) (1) United States: Eagle Ford Play 46.6 51.8 54.6 Delaware Basin 101.1 84.3 67.0 Other 20.3 25.7 27.8 United States 168.0 161.8 149.4 Trinidad 0.3 0.5 0.4 Other International (2) — — — Total 168.3 162.3 149.8 Natural Gas Liquids Volumes (MMBbl) (1) United States: Eagle Ford Play 10.5 9.0 9.7 Delaware Basin 50.7 30.9 27.7 Other 10.9 12.8 12.4 United States 72.1 52.7 49.8 Other International (2) — — — Total 72.1 52.7 49.8 Natural Gas Volumes (Bcf) (1) United States: Eagle Ford Play 52 55 53 Delaware Basin 279 238 168 Other 149 149 160 United States 480 442 381 Trinidad 66 79 66 Other International (2) — 3 11 Total 546 524 458 Crude Oil Equivalent Volumes (MMBoe) (3) United States: Eagle Ford Play 65.8 70.0 73.1 Delaware Basin 198.3 154.9 122.7 Other 56.0 63.3 66.9 United States 320.1 288.2 262.7 Trinidad 11.4 13.7 11.4 Other International (2) — 0.6 1.8 Total 331.5 302.5 275.9 5 Year Ended December 31 2022 2021 2020 Average Crude Oil and Condensate Prices ($/Bbl) (4) United States $ 97.22 $ 68.54 $ 38.65 Trinidad 86.16 56.26 30.20 Other International (2) — 42.36 43.08 Composite 97.21 68.50 38.63 Average Natural Gas Liquids Prices ($/Bbl) (4) United States $ 36.70 $ 34.35 $ 13.41 Other International (2) — — — Composite 36.70 34.35 13.41 Average Natural Gas Prices ($/Mcf) (4) United States $ 7.27 $ 4.88 $ 1.61 Trinidad 4.43 (5) 3.40 2.57 Other International (2) — 5.67 4.66 Composite 6.93 4.66 1.83 (1) Million barrels or billion cubic feet, as applicable.
Biggest changeYear Ended December 31 2023 2022 2021 Crude Oil and Condensate Volumes (MMBbl) (1) United States: Delaware Basin 110.2 101.1 84.3 Eagle Ford Play 43.9 46.6 51.8 Other 19.4 20.3 25.7 United States 173.5 168.0 161.8 Trinidad 0.2 0.3 0.5 Other International (2) — — — Total 173.7 168.3 162.3 Natural Gas Liquids Volumes (MMBbl) (1) United States: Delaware Basin 59.8 50.7 30.9 Eagle Ford Play 10.5 10.5 9.0 Other 11.4 10.9 12.8 United States 81.7 72.1 52.7 Total 81.7 72.1 52.7 Natural Gas Volumes (Bcf) (1) United States: Delaware Basin 325 279 238 Eagle Ford Play 50 52 55 Other 191 149 149 United States 566 480 442 Trinidad 59 66 79 Other International (2) — — 3 Total 625 546 524 Crude Oil Equivalent Volumes (MMBoe) (3) United States: Delaware Basin 224.2 198.3 154.9 Eagle Ford Play 62.7 65.8 70.0 Other 62.6 56.0 63.3 United States 349.5 320.1 288.2 Trinidad 9.9 11.4 13.7 Other International (2) — — 0.6 Total 359.4 331.5 302.5 5 Year Ended December 31 2023 2022 2021 Average Crude Oil and Condensate Prices ($/Bbl) (4) United States $ 79.18 $ 97.22 $ 68.54 Trinidad 68.58 86.16 56.26 Other International (2) — — 42.36 Composite 79.17 97.21 68.50 Average Natural Gas Liquids Prices ($/Bbl) (4) United States $ 23.07 $ 36.70 $ 34.35 Composite 23.07 36.70 34.35 Average Natural Gas Prices ($/Mcf) (4) United States $ 2.70 $ 7.27 $ 4.88 Trinidad 3.65 4.43 (5) 3.40 Other International (2) — — 5.67 Composite 2.79 6.93 4.66 (1) Million barrels or billion cubic feet, as applicable.
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.
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 costs and capital expenditures and maximizing reserve recoveries. Pursuant to this strategy, each prospective drilling location is evaluated by its estimated rate of return.
EOG also offers its employees a tuition reimbursement program as well as reimbursement for the costs of professional certifications. 6 Diversity and Inclusion . EOG values gender, racial, ethnic and cultural diversity and works to foster a collaborative work environment of different talents, perspectives and experiences.
EOG also offers its employees a tuition reimbursement program as well as reimbursement for the costs of professional certifications. 6 Diversity, Equity and Inclusion . EOG values gender, racial, ethnic and cultural diversity and works to foster a collaborative work environment of different talents, perspectives and experiences.
EOG is focused on innovation and cost-effective utilization of advanced technology associated with three-dimensional seismic and microseismic data, the development of reservoir simulation models and the use of improved drilling equipment and completion technologies for horizontal drilling and formation evaluation.
EOG is also focused on innovation and cost-effective utilization of advanced technology associated with three-dimensional seismic and microseismic data, the development of reservoir simulation models and the use of improved drilling equipment and completion technologies for horizontal drilling and formation evaluation.
At December 31, 2022, EOG was committed to deliver to multiple parties fixed quantities of crude oil of 7 MMBbls in 2023, 7 MMBbls in 2024 and 1 MMBbls in 2025, all of which is expected to be sourced from future production of available reserves.
At December 31, 2023, EOG was committed to deliver to multiple parties fixed quantities of crude oil of 7 MMBbls in 2024 and 1 MMBbls in 2025, all of which is expected to be sourced from future production of available reserves.
The potential increase in the costs of our operations could include costs to operate and maintain our facilities, install new emissions controls on our facilities, acquire allowances or credits to cover our GHG emissions, pay taxes or fees related to our GHG emissions, or administer and manage a GHG emissions program.
The potential increase in the costs of our operations could include costs to operate and maintain our facilities, install new emissions controls on our facilities, acquire allowances or credits to cover our GHG emissions, pay taxes, charges or fees related to our GHG emissions, or administer and manage a GHG emissions program.
Moreover, for any incident involving EOG's operations which results in negative environmental effects, EOG maintains operators extra expense coverage provided by third-party insurers for obligations, expenses or claims that EOG may incur from such an incident, including obligations, expenses or claims in respect of seepage and pollution, cleanup and containment, evacuation expenses and control of the well (subject to policy terms and conditions).
Moreover, for any incident involving EOG's operations which results in negative environmental effects, EOG maintains operators extra expense coverage provided by third-party insurers for obligations, expenses or claims that EOG may incur from such an incident, including obligations, expenses or claims in respect of sudden and accidental seepage and pollution, cleanup and containment, evacuation expenses and control of the well (subject to policy terms and conditions).
In 2022, EOG also sold crude oil at the Port of Corpus Christi for export to foreign destinations. In each case, the price received was based on market prices at that specific sales point or based on the price index applicable for that location. In 2023, the pricing mechanism for such production is expected to remain the same.
In 2023, EOG also sold crude oil at the Port of Corpus Christi for export to foreign destinations. In each case, the price received was based on market prices at that specific sales point or based on the price index applicable for that location. In 2024, the pricing mechanism for such production is expected to remain the same.
EOG owns certain gathering and/or processing facilities supporting EOG's operations in the Permian Basin in West Texas and New Mexico, the Powder River Basin in Wyoming, the Fort Worth Basin Barnett Shale in North Texas, the Williston Basin Bakken and Three Forks plays in North Dakota, and the Eagle Ford play and Dorado gas play in South Texas.
EOG owns certain gathering and/or processing facilities supporting EOG's operations in the Permian Basin in West Texas and New Mexico, the Powder River Basin in Wyoming, the Utica Shale in Ohio, the Fort Worth Basin Barnett Shale in North Texas, the Williston Basin Bakken and Three Forks plays in North Dakota, and the Eagle Ford play and Dorado gas play in South Texas.
In 2022, EOG processed certain of its United States wellhead natural gas production, either at EOG-owned facilities or at third-party facilities, extracting NGLs. NGLs were sold at prevailing market prices, into either local markets or downstream locations. In certain instances, EOG exchanged its NGLs production for purity products received downstream, which were sold at prevailing market prices.
In 2023, EOG processed certain of its United States wellhead natural gas production, either at EOG-owned facilities or at third-party facilities, extracting NGLs. NGLs were sold at prevailing market prices, into either local markets or downstream locations. In certain instances, EOG exchanged its NGLs production for purity products received downstream, which were sold at prevailing market prices.
EOG did not transport any crude oil by rail during 2022. Proposals and proceedings that might affect the oil and gas industry are considered from time to time by Congress, the state legislatures, the FERC and other federal, state and local regulatory commissions, agencies, councils and courts.
EOG did not transport any crude oil by rail during 2023. Proposals and proceedings that might affect the oil and gas industry are considered from time to time by Congress, the state legislatures, the FERC and other federal, state and local regulatory commissions, agencies, councils and courts.
The table also presents crude oil equivalent volumes which are determined using a ratio of 1.0 barrel of crude oil and condensate or NGLs to 6.0 Mcf of natural gas for each of the years ended December 31, 2022, 2021 and 2020.
The table also presents crude oil equivalent volumes which are determined using a ratio of 1.0 barrel of crude oil and condensate or NGLs to 6.0 Mcf of natural gas for each of the years ended December 31, 2023, 2022 and 2021.
In the Powder River Basin, EOG operated a two-rig program and completed 27 net wells in the Niobrara, Mowry, Turner and Parkman formations. In addition, key infrastructure was added in order to lower operating costs and increase price realizations.
In the Powder River Basin, EOG operated a two-rig program and completed 35 net wells in the Niobrara, Mowry, Turner and Parkman formations. In addition, key infrastructure was added in order to lower operating costs and increase price realizations.
Donaldson was elected Executive Vice President, General Counsel and Corporate Secretary in April 2016. Previously, Mr. Donaldson served as Vice President, General Counsel and Corporate Secretary from May 2012 to April 2016. He was elected Corporate Secretary in May 2008, and was appointed Deputy General Counsel and Corporate Secretary in July 2010. Mr. Donaldson joined EOG in September 2007. 13
Donaldson was elected Executive Vice President, General Counsel and Corporate Secretary in April 2016. Previously, Mr. Donaldson served as Vice President, General Counsel and Corporate Secretary from May 2012 to April 2016. He was elected Corporate Secretary in May 2008, and was appointed Deputy General Counsel and Corporate Secretary in July 2010. Mr. Donaldson joined EOG in September 2007. 14
EOG, through its subsidiaries, including EOG Resources Trinidad Limited, holds interests in (i) the exploration and production licenses covering the South East Coast Consortium (SECC) Block, Pelican and Banyan Fields, Sercan Area and each of their related platforms and facilities and the Ska, Mento, Reggae and deep Teak, Saaman and Poui Areas, all of which are offshore Trinidad; and (ii) a production sharing contract with the Government of Trinidad and Tobago for the Modified U(a) and 4(a) Blocks.
EOG, through its subsidiaries, including EOG Resources Trinidad Limited, holds interests in (i) the exploration and production licenses covering the South East Coast Consortium (SECC) Block, Pelican and Banyan Fields, Sercan Area and each of their related platforms and facilities and the Ska, Mento and Reggae and deep Teak, Saaman and Poui (TSP) Areas, all of which are offshore Trinidad; and (ii) two production sharing contracts with the Government of Trinidad and Tobago for the Modified U(a) and 4(a) Blocks.
Including the impact of EOG's natural gas financial derivative contracts and based on EOG's tax position and the portion of EOG's anticipated natural gas volumes for 2023 for which prices have not been determined under long-term marketing contracts, EOG's price sensitivity for each $0.10 per Mcf increase or decrease in wellhead natural gas price is approximately $35 million for net income and $44 million for pretax cash flows from operating activities.
Including the impact of EOG's natural gas financial derivative contracts and based on EOG's tax position and the portion of EOG's anticipated natural gas volumes for 2024 for which prices have not been determined under long-term marketing contracts, EOG's price sensitivity for each $0.10 per Mcf increase or decrease in wellhead natural gas price is approximately $27 million for net income and $35 million for pretax cash flows from operating activities.
The makeup of the fluid used in the hydraulic fracturing process typically includes water and sand, and less than 1% of highly diluted chemical additives; lists of the chemical additives used in fracturing fluids are available to the public via internet websites and in other publications sponsored by industry trade associations and through state agencies in those states that require the reporting of the components of fracturing fluids.
The makeup of the fluid used in EOG’s hydraulic fracturing process includes water and sand, and typically less than 0.5% of highly diluted chemical additives; lists of the chemical additives used in fracturing fluids are available to the public via internet websites and in other publications sponsored by industry trade associations and through state agencies in those states that require the reporting of the components of fracturing fluids.
In 2022, consistent with its diversified marketing strategy, the majority of EOG's United States wellhead natural gas production was transported by pipeline to various locations, including Katy, Texas; East Texas; the Agua Dulce Hub in South Texas; the Cheyenne Hub in Weld County, Colorado; Southern California; and Chicago, Illinois. Remaining natural gas production was sold into local markets.
In 2023, consistent with its diversified marketing strategy, the majority of EOG's United States wellhead natural gas production was transported by pipeline to various locations, including Katy, Texas; East Texas; the Agua Dulce Hub in South Texas; the Cheyenne Hub in Weld County, Colorado; and Chicago, Illinois. Remaining natural gas production was sold into local markets.
He also previously served as Manager, Division Exploration in EOG's Fort Worth, Texas, and Midland, Texas, offices from March 2012 to May 2014 as well as in various geoscience and leadership positions. Mr. Yacob joined EOG in August 2005. Lloyd W. Helms, Jr. was elected President and Chief Operating Officer effective October 2021. Mr.
He also previously served as Manager, Division Exploration in EOG's Fort Worth, Texas, and Midland, Texas, offices from March 2012 to May 2014 as well as in various geoscience and leadership positions. Mr. Yacob joined EOG in August 2005. Lloyd W. Helms, Jr. was elected President in October 2021.
The Paris Agreement (adopted at the conference) calls for nations to undertake efforts with respect to global temperatures and GHG emissions. The Paris Agreement went into effect on November 4, 2016, and which the United States formally rejoined in February 2021.
The Paris Agreement (adopted at the conference) calls for nations to undertake efforts with respect to global temperatures and GHG emissions. The Paris Agreement went into effect in November 2016; the United States formally rejoined the Paris Conference in February 2021.
Congress has, from time to time, proposed legislation for imposing restrictions or requiring fees or carbon taxes for GHG emissions. The IRA imposes a methane emissions charge on certain oil and gas facilities, including onshore and offshore petroleum and natural gas production facilities, that exceed certain emissions thresholds.
Congress has, from time to time, proposed legislation for imposing restrictions on, or requiring fees or carbon taxes in respect of, GHG emissions. Further, the IRA imposes a methane emissions charge on certain oil and gas facilities, including onshore and offshore petroleum and natural gas production facilities, that exceed certain emissions thresholds.
During 2022, three purchasers accounted for more than 10% of EOG's total wellhead crude oil and condensate, NGLs and natural gas revenues and gathering, processing and marketing revenues. The purchasers are in the crude oil refining industry.
During 2023, three purchasers each accounted for more than 10% of EOG's total wellhead crude oil and condensate, NGLs and natural gas revenues and gathering, processing and marketing revenues. The purchasers are in the crude oil refining industry.
Please refer to ITEM 1A, Risk Factors, for further discussion of the risks to which EOG is subject with respect to its operations outside the United States. 12 Information About Our Executive Officers The current executive officers of EOG and their names and ages (as of February 23, 2023) are as follows: Name Age Position Ezra Y.
Please refer to ITEM 1A, Risk Factors, for further discussion of the risks to which EOG is subject with respect to its operations outside the United States. Information About Our Executive Officers The current executive officers of EOG and their names and ages (as of February 22, 2024) are as follows: Name Age Position Ezra Y.
EOG continued to focus on co-development of multiple Wolfcamp targets to maximize the value of the acreage. In 2023, the Delaware Basin Wolfcamp play will continue to be a primary area of focus. In the Bone Spring play, EOG has three main sub-plays: the First, Second and Third Bone Spring.
EOG continued to focus on co-development of multiple Wolfcamp targets to maximize the value of the acreage. In 2024, the Wolfcamp play will continue to be a primary area of focus. In the Bone Spring play, EOG has three main sub-plays: the First, Second and Third Bone Spring.
In the Leonard play, EOG executed its development plan with 21 net wells completed in 2022. EOG continued co-development of multiple Leonard zones simultaneously, and expects the Leonard play to become a more active part of EOG's program in the next several years.
In the Leonard play, EOG executed its development plan with 42 net wells completed in 2023. EOG continued co-development of multiple Leonard zones simultaneously, and expects the Leonard play to become a more active part of EOG's program in the next several years.
In addition, EOG will continue to monitor and assess any new policies, legislation, regulations and treaties in the areas outside the United States where it operates to determine the impact on its operations and take appropriate actions, where necessary. Other Matters Energy Prices.
In addition, EOG will continue to monitor and assess any new policies, legislation, regulations and treaties in the areas outside the United States where it operates to determine the impact on its operations and take appropriate actions, where necessary.
EPA, in May 2016, issued regulations that require operators to reduce methane emissions and emissions of volatile organic compounds (VOC) from new, modified and reconstructed crude oil and natural gas wells and equipment located at natural gas production gathering and booster stations, gas processing plants and natural gas transmission compressor stations.
EPA, in May 2016, issued regulations that require operators to reduce methane emissions and emissions of volatile organic compounds (VOC) from new, modified and reconstructed crude oil and natural gas wells and equipment located at natural gas production gathering and booster stations, gas processing plants and natural gas transmission compressor stations. In November 2021, the U.S.
He was elected Vice President, Engineering and Acquisitions in September 2006, Vice President and General Manager of EOG's Calgary, Alberta, Canada office in March 2008, and served as Executive Vice President, Operations from February 2012 to August 2013. Mr. Helms joined a predecessor of EOG in February 1981. Kenneth W.
He was elected Vice President, Engineering and Acquisitions in September 2006, Vice President and General Manager of EOG's Calgary, Alberta, Canada office in March 2008, and served as Executive Vice President, Operations from February 2012 to August 2013. Mr. Helms joined a predecessor of EOG in February 1981. 13 Jeffrey R.
Fluctuations in average natural gas prices received by EOG for production in the United States resulted in a 49% increase in 2022, a 203% increase in 2021, and a 27% decrease in 2020, each as compared to the immediately preceding year.
Fluctuations in average natural gas prices received by EOG for production in the United States resulted in a 63% decrease in 2023, a 49% increase in 2022, and a 203% increase in 2021, each as compared to the immediately preceding year.
Average crude oil and condensate prices received by EOG for production in the United States increased 42% in 2022, increased 77% in 2021 and decreased 33% in 2020, each as compared to the immediately preceding year.
Average crude oil and condensate prices received by EOG for production in the United States decreased 19% in 2023, increased 42% in 2022 and increased 77% in 2021, each as compared to the immediately preceding year.
Due to the many uncertainties associated with the world political and economic environment (for example, the actions of other crude oil exporting nations, including the Organization of Petroleum Exporting Countries), 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, EOG is unable to predict what changes may occur in the prices of crude oil and condensate, NGLs and natural gas in the future.
Due to the many uncertainties associated with the world political and economic environment (for example, the actions of other crude oil exporting nations, including the Organization of Petroleum Exporting Countries, or the global impacts of wars or military conflicts involving such nations or regions), 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, EOG is unable to predict what changes may occur in the prices of crude oil and condensate, NGLs and natural gas in the future.
In 2022, natural gas volumes from Trinidad were sold under a fixed price contract.
In 2023, natural gas volumes from Trinidad were sold under a fixed price contract.
Average NGLs prices received by EOG for production in the United States increased 7% in 2022, increased 156% in 2021 and decreased 16% in 2020, each as compared to the immediately preceding year.
Average NGLs prices received by EOG for production in the United States decreased 37% in 2023, increased 7% in 2022 and increased 156% in 2021, each as compared to the immediately preceding year.
In the Delaware Basin, EOG completed 358 net wells in 2022, primarily in the Delaware Basin Wolfcamp, Bone Spring and Leonard plays. The Delaware Basin consists of approximately 4,800 feet of oil-rich stacked pay potential offering EOG multiple co-development opportunities throughout its 395,000 net acre position. In the Delaware Basin Wolfcamp play, EOG completed 196 net wells in 2022.
In the Delaware Basin, EOG completed 370 net wells in 2023, primarily in the Wolfcamp, Bone Spring and Leonard plays. The Delaware Basin consists of approximately 4,800 feet of oil-rich stacked pay potential offering EOG multiple co-development opportunities throughout its 395,000 net acre position. In the Wolfcamp play, EOG completed 188 net wells in 2023.
In addition, EOG is in the process of exiting Block 36 and Block 49 in the Sultanate of Oman (Oman) and is executing an abandonment and reclamation program in Canada. Trinidad.
In addition, EOG exited Block 36 and Block 49 in the Sultanate of Oman (Oman) and is executing an abandonment and reclamation program in Canada. Trinidad.
(2) Other International includes EOG's China and Canada operations. The China operations were sold in the second quarter of 2021. (3) Million barrels of oil equivalent; includes crude oil and condensate, NGLs and natural gas. (4) Dollars per barrel or per thousand cubic feet, as applicable.
(2) Other International includes EOG's China and Canada operations. The China operations were sold in the second quarter of 2021. EOG is continuing the process of exiting its Canada operations. (3) Million barrels of oil equivalent; includes crude oil and condensate, NGLs and natural gas. (4) Dollars per barrel or per thousand cubic feet, as applicable.
At December 31, 2022, on a crude oil equivalent basis, 40% of EOG's net proved reserves in the United States were crude oil and condensate, 27% were NGLs and 33% were natural gas. The majority of these reserves are in long-lived fields with well-established production characteristics.
At December 31, 2023, on a crude oil equivalent basis, 39% of EOG's net proved reserves in the United States were crude oil and condensate, 28% were NGLs and 33% were natural gas. The majority of these reserves are in long-lived fields with well-established production characteristics.
Human Capital Management As of December 31, 2022, EOG employed approximately 2,850 persons, including foreign national employees. EOG's approach to human capital management includes oversight by the Board of Directors (Board) and the Compensation and Human Resources Committee of the Board and focuses on various areas, including the following: Culture; Recruiting; Retention .
Human Capital Management As of December 31, 2023, EOG employed approximately 3,050 persons, including foreign national employees. EOG's approach to human capital management includes oversight by the Board of Directors (Board) and the Compensation and Human Resources Committee of the Board and focuses on various areas, including the following: Culture; Recruiting; Retention .
In 2022, EOG completed 141 total net Bone Spring wells within the three sub-plays. Of the three sub-plays, the Second Bone Spring had the majority of the activity in 2022 with EOG completing 106 net wells. The Bone Spring play continues to be an integral part of EOG's Delaware Basin plans and portfolio.
In 2023, EOG completed 140 total net Bone Spring wells within the three sub-plays. Of the three sub-plays, the Second Bone Spring had the majority of the activity in 2023 with EOG completing 89 net wells. The Bone Spring play continues to be an integral part of EOG's Delaware Basin plans and portfolio.
At December 31, 2022, EOG was committed to deliver to multiple parties fixed quantities of natural gas of 347 Bcf in 2023, 321 Bcf in 2024, 277 Bcf in 2025, 297 Bcf in 2026, 293 Bcf in 2027 and 3,540 Bcf thereafter, all of which is expected to be sourced from future production of available reserves.
At December 31, 2023, EOG was committed to deliver to multiple parties fixed quantities of natural gas of 371 Bcf in 2024, 282 Bcf in 2025, 297 Bcf in 2026, 293 Bcf in 2027, 263 Bcf in 2028 and 3,277 Bcf thereafter, all of which is expected to be sourced from future production of available reserves.
EOG's safety performance is also considered in evaluating employee performance and compensation. EOG provides initial, periodic and refresher safety training to employees and contractors. These training programs address various topics, including operating procedures, safe work practices and emergency and incident response procedures.
To foster accountability for conducting operations in a safe manner, EOG's safety performance is also considered in evaluating employee performance and compensation. EOG provides initial, periodic and refresher safety training to employees and contractors. These training programs address various topics, including operating procedures, safe work practices and emergency and incident response procedures.
Environmental Regulation Generally - United States. EOG is subject to various federal, state and local laws and regulations covering the discharge or release of materials into the environment or otherwise relating to the protection of the environment.
EOG is subject to various federal, state and local laws and regulations covering the discharge or release of materials into the environment or otherwise relating to the protection of the environment.
In March 2020, EOG began the process of exiting its Canada operations in the Horn River area in Northeast British Columbia. 3 Marketing In 2022, EOG continued its diversified approach to marketing its wellhead crude oil and condensate production.
EOG continues the process of exiting its Canada operations in the Horn River area in Northeast British Columbia. 3 Marketing In 2023, EOG continued its diversified approach to marketing its wellhead crude oil and condensate production.
For a summary of EOG's financial commodity derivative contracts through February 16, 2023, see ITEM 7, Management's Discussion and Analysis of Financial Condition and Results of Operations - Capital Resources and Liquidity - Financial Commodity Derivative Transactions.
See Note 12 to Consolidated Financial Statements. For a summary of EOG's financial commodity derivative contracts through February 16, 2024, see ITEM 7, Management's Discussion and Analysis of Financial Condition and Results of Operations ‑ Capital Resources and Liquidity - Financial Commodity Derivative Transactions.
Such rules, regulations, policies and legislation may affect, among other things, (i) permitting for oil and gas drilling on federal lands, (ii) the leasing of federal lands for oil and gas development, (iii) the regulation of greenhouse gas (GHG) emissions and/or other climate change-related matters associated with oil and gas operations, (iv) the use of hydraulic fracturing on federal lands, (v) the calculation of royalty payments in respect of oil and gas production from federal lands, (vi) U.S. federal income tax laws applicable to oil and gas exploration and production companies and (vii) the use of financial derivative instruments to hedge the financial impact of fluctuations in crude oil, NGLs and natural gas prices.
Such rules, regulations, policies and legislation may affect, among other things, (i) permitting for oil and gas drilling on state, tribal and federal lands, (ii) the leasing of state, tribal and federal lands for oil and gas development, (iii) the regulation and disclosure of greenhouse gas (GHG) emissions and/or other climate change-related matters associated with oil and gas operations (e.g., the development, implementation and carrying out of carbon capture and storage activities, including associated financial or tax incentives), (iv) the use of hydraulic fracturing on state, tribal and federal lands, (v) the calculation of royalty payments in respect of oil and gas production from state, tribal and federal lands (including, but not limited to, an increase in applicable royalty percentages), (vi) U.S. federal income tax laws applicable to oil and gas exploration and production companies and (vii) the use of financial derivative instruments to hedge the financial impact of fluctuations in crude oil, NGLs and natural gas prices.
This emissions management system calculates emissions based on recognized regulatory methodologies, where applicable, and on commonly accepted engineering practices. 9 EOG is unable to predict the timing, scope and effect of any currently proposed or future investigations, laws, regulations, treaties or policies regarding climate change and GHG emissions (including any laws and regulations that may be enacted in the U.S.), but the direct and indirect costs of such investigations, laws, regulations, treaties or policies (if enacted, issued or applied) could materially and adversely affect EOG's operations, financial condition, results of operations and capital expenditures.
EOG is unable to predict the timing, scope and effect of any currently proposed or future investigations, laws, regulations, treaties or policies regarding climate change and GHG emissions (including any laws and regulations that may be enacted in the U.S.), but the direct and indirect costs of such investigations, laws, regulations, treaties or policies (if enacted, issued or applied) could materially and adversely affect EOG's operations, financial condition, results of operations and capital expenditures.
At December 31, 2022, EOG's total estimated net proved reserves were 4,238 million barrels of oil equivalent (MMBoe), of which 1,661 million barrels (MMBbl) were crude oil and condensate reserves, 1,145 MMBbl were NGLs reserves and 8,591 billion cubic feet (Bcf), or 1,432 MMBoe, were natural gas reserves (see "Supplemental Information to Consolidated Financial Statements").
At December 31, 2023, EOG's total estimated net proved reserves were 4,498 million barrels of oil equivalent (MMBoe), of which 1,756 million barrels (MMBbl) were crude oil and condensate reserves, 1,254 MMBbl were NGLs reserves and 8,930 billion cubic feet (Bcf), or 1,488 MMBoe, were natural gas reserves (see "Supplemental Information to Consolidated Financial Statements").
EPA proposed a rule to further reduce methane and VOC emissions from new and existing sources in the oil and natural gas sector and, in November 2022, the U.S. EPA issued a supplemental proposal to further strengthen and expand its November 2021 proposal.
EPA proposed a rule to further reduce methane and VOC emissions from new and existing sources in the oil and natural gas sector and, in November 2022, the U.S. EPA issued a supplemental proposal to expand its November 2021 proposed rule, including proposed regulation of additional sources of methane and VOC emissions, such as abandoned and unplugged wells.
While the majority of the sand remains underground to hold open the fractures, a significant amount of the water and chemical additives flow back and are then either reused or safely disposed of at sites that are approved and permitted by the appropriate regulatory authorities. EOG periodically conducts regulatory assessments of these disposal facilities to monitor compliance with applicable regulations.
While the majority of the sand remains underground to hold open the fractures, a significant amount of the water and chemical additives flow back and are then either reused or safely disposed of at sites that are approved and permitted by the appropriate regulatory authorities.
In addition, the Inflation Reduction Act of 2022 (IRA) requires that all leases granted and administered by the BLM and entered into on or after August 16, 2022 include a royalty rate of 16.67 percent in respect of the associated oil and gas production. 7 BLM, BIA and BOEM leases contain relatively standardized terms requiring compliance with detailed regulations and, in the case of offshore leases, orders pursuant to the Outer Continental Shelf Lands Act (which are subject to change by the BOEM or BSEE).
In addition, the Inflation Reduction Act of 2022 (IRA) requires that all leases granted and administered by the BLM and entered into on or after August 16, 2022 include a royalty rate of 16.67 percent in respect of the associated oil and gas production. BLM and BIA leases contain relatively standardized terms requiring compliance with detailed regulations.
EPA has also issued regulations that establish standards for VOC emissions from several types of equipment, including storage tanks, compressors, dehydrators, and valves and sweetening units at gas processing plants. In addition, in May 2016, the U.S.
EPA has also issued regulations that establish standards for VOC emissions from several types of equipment, including storage tanks, compressors, dehydrators, and valves and sweetening units at gas processing plants. In addition, and as further discussed above under “Climate Change – United States,” the U.S.
In addition, in the DJ Basin, EOG drilled and completed two net wells in the Codell formation and, in the Williston Basin, EOG completed two net wells in the Bakken and Three Forks formations. In 2023, activity in the Rockies is expected to increase.
In addition, in the DJ Basin, EOG completed eight net wells in the Codell formation and, in the Williston Basin, EOG completed 11 net wells in the Bakken and Three Forks formations. In 2024, activity in the Rockies is expected to decrease.
EOG plans to complete approximately 10 net Williston Basin wells, five net DJ Basin wells and 40 net wells in the Powder River Basin. 2 Operations Outside the United States EOG has operations offshore Trinidad and is making preparations to drill offshore Australia, as well as evaluating additional exploration, development and exploitation opportunities in these and other select international areas.
In 2024, EOG expects to complete approximately 20 net Utica wells. 2 Operations Outside the United States EOG has operations offshore Trinidad and is making preparations to drill offshore Australia, as well as evaluating additional exploration, development and exploitation opportunities in these and other select international areas.
The pricing mechanism for production in Trinidad is expected to remain the same in 2023. In certain instances, EOG purchases and sells third-party crude oil and natural gas in order to balance firm capacity at third-party facilities with production in certain areas and to utilize excess capacity at EOG-owned facilities.
In certain instances, EOG purchases and sells third-party crude oil and natural gas in order to balance firm capacity at third-party facilities with production in certain areas and to utilize excess capacity at EOG-owned facilities.
Including the impact of EOG's crude oil financial derivative contracts (exclusive of basis swaps) and based on EOG's tax position, EOG's price sensitivity in 2023 for each $1.00 per barrel increase or decrease in wellhead crude oil and condensate price, combined with the estimated change in NGLs price, is approximately $137 million for net income and $175 million for pretax cash flows from operating activities.
Based on EOG's tax position, EOG's price sensitivity in 2024 for each $1.00 per barrel increase or decrease in wellhead crude oil and condensate price, combined with the estimated change in NGLs price, is approximately $151 million for net income and $193 million for pretax cash flows from operating activities.
Activity in 2023 will remain focused on the Delaware Basin Wolfcamp, Bone Spring, and Leonard plays, where EOG expects to complete approximately 365 net wells. The South Texas area includes our Eagle Ford play and our Dorado gas play.
Activity in 2024 will remain focused on the Wolfcamp, Bone Spring, and Leonard plays, where EOG expects to complete approximately 360 net wells. The South Texas area includes our Eagle Ford play and our Dorado gas play. EOG holds approximately 535,000 total net acres in the Eagle Ford play and approximately 160,000 net acres in the Dorado gas play.
For a summary of EOG's financial commodity derivative contracts through February 16, 2023, see ITEM 7, Management's Discussion and Analysis of Financial Condition and Results of Operations ‑ Capital Resources and Liquidity - Financial Commodity Derivative Transactions.
For a summary of EOG's financial commodity derivative contracts through February 16, 2024, see ITEM 7, Management's Discussion and Analysis of Financial Condition and Results of Operations - Capital Resources and Liquidity - Financial Commodity Derivative Transactions. For a summary of EOG's financial commodity derivative contracts for the year ended December 31, 2023, see Note 12 to Consolidated Financial Statements.
EOG also offers a holistic wellness program, a matching gifts program, a flexible work schedule, paid family care leave, paid leave for illness or injury and an employee assistance program to support the mental well-being of employees and their dependents.
EOG values attracting and retaining talent, and so it provides competitive salaries, bonuses and a subsidized, comprehensive benefits package. EOG also offers a holistic wellness program, a matching gifts program, a flexible work schedule, paid family care leave, paid leave for illness or injury and an employee assistance program to support the mental well-being of employees and their dependents.
Helms has served as Chief Operating Officer since December 2017. Prior to that, he served as Executive Vice President, Exploration and Production from August 2013 to December 2017.
He served as President and Chief Operating Officer from October 2021 to December 2023. Mr. Helms served as Chief Operating Officer from December 2017 to December 2023 and as Executive Vice President, Exploration and Production from August 2013 to December 2017.
In each case, pricing was based on the spot market price at the ultimate sales point. In 2023, the pricing mechanism for such production is expected to remain the same. Additionally, EOG sells natural gas to a liquefaction facility near Corpus Christi, Texas, and receives pricing based on the Platts Japan Korea Marker.
Additionally, EOG sells natural gas to a liquefaction facility near Corpus Christi, Texas, and receives pricing based on the Platts Japan Korea Marker; such pricing mechanism is expected to remain the same in 2024.
In 2023, such pricing mechanisms are expected to remain the same. In 2022, EOG also sold purity products at the Houston Ship Channel for export to foreign destinations. In each case, the price received was based on market prices at that specific sales point or based on the price index applicable for that location.
In 2024, such pricing mechanisms are expected to remain the same. In 2023, EOG also sold purity products at the Houston Ship Channel. In each case, the price received was based on market prices for that location and purity product. In 2024, such pricing mechanism is expected to remain the same.
Insurance is maintained by EOG against some, but not all, of these risks in accordance with what EOG believes are customary industry practices and in amounts and at costs that EOG believes to be prudent and commercially practicable.
Losses and liabilities arising from such events could reduce EOG's revenues and increase costs to EOG to the extent not covered by insurance. 12 Insurance is maintained by EOG against some, but not all, of these risks in accordance with what EOG believes are customary industry practices and in amounts and at costs that EOG believes to be prudent and commercially practicable.
EOG cannot predict when or whether any such proposals or proceedings may become effective. It should also be noted that the oil and gas industry historically has been very heavily regulated; therefore, there is no assurance that the approach currently being followed by such legislative bodies and regulatory commissions, agencies, councils and courts will remain unchanged.
It should also be noted that the oil and gas industry historically has been very heavily regulated; therefore, there is no assurance that the approach currently being followed by such legislative bodies and regulatory commissions, agencies, councils and courts will remain unchanged. 8 Environmental Regulation Generally - United States.
EOG believes such diversity in background and experience promotes diversity of thought, which helps drive innovation. EOG continues to raise employee awareness to help advance diversity and inclusion efforts within EOG.
EOG believes such diversity in background and experience, as well as an inclusive work environment, promotes diversity of thought, which helps foster creativity and drive innovation. EOG continues to raise employee awareness and provide leadership support to help advance diversity, equity and inclusion efforts within EOG.
Under certain circumstances, the BLM, BIA, BOEM or BSEE (as applicable) may require operations on federal leases to be suspended or terminated. Any such suspension or termination could materially and adversely affect EOG's interests on federal lands. From time to time, the U.S.
Under certain circumstances, the BLM or BIA may require operations on federal leases to be suspended or terminated. Any such suspension or termination could materially and adversely affect EOG's interests on federal lands. From time to time, the U.S. Department of the Interior has also considered limiting or pausing new oil and natural gas leases on federal lands.
Department of the Interior has also considered limiting or pausing new oil and natural gas leases on federal lands or in offshore waters. Any limitation or ban on permitting for oil and gas exploration and production activities on federal lands could have a material and adverse effect on EOG's operations, financial condition and results of operations.
Any limitation or ban on permitting for oil and gas exploration and production activities on federal lands could have a material and adverse effect on EOG's operations, financial condition and results of operations. EOG's interests in offshore leases are de minimis.
Donaldson 60 Executive Vice President, General Counsel and Corporate Secretary Ezra Y. Yacob was appointed Chairman of the Board, effective October 2022, and elected Chief Executive Officer and appointed as a Director effective October 2021.
Yacob was appointed Chairman of the Board, effective October 2022, and elected Chief Executive Officer and appointed as a Director effective October 2021.
EOG's culture is key to its sustainable success. By providing employees with a quality work environment and maintaining a consistent college recruiting and internship program, EOG is able to attract and retain some of the industry's best and brightest. To help assess the effectiveness of its approach to human capital management, EOG conducts an annual employee engagement survey.
EOG's culture is key to its sustainable success. By providing employees with a quality work environment and maintaining a consistent college recruiting and internship program and experienced talent recruiting program, EOG is able to attract and retain many of the industry's best and brightest.
In 2022, EOG continued preparing for the drilling of an exploration well, the timing of which will depend on obtaining regulatory approvals and subsequent equipment availability. Oman . EOG, through its subsidiaries, holds interests in Exploration and Production Sharing Agreements in Block 36 and Block 49 (collectively, Blocks) located in Oman.
In 2023, EOG continued preparing for the drilling of an exploration well, the timing of which will depend on obtaining regulatory approvals and subsequent equipment availability. Oman. In 2023, EOG completed the exit of Block 36 and Block 49 located in Oman. Canada.
Failure to comply with these laws and regulations may result in the assessment of administrative, civil and criminal penalties, including the assessment of monetary penalties, the imposition of investigatory and remedial obligations, the suspension or revocation of necessary permits, licenses and authorizations, the requirement that additional pollution controls be installed and the issuance of orders enjoining future operations or imposing additional compliance requirements. 8 In addition, EOG has acquired certain oil and gas properties from third parties whose actions with respect to the management and disposal or release of hydrocarbons or other wastes were not under EOG's control.
Failure to comply with these laws and regulations may result in the assessment of administrative, civil and criminal penalties, including the assessment of monetary penalties, the imposition of investigatory and remedial obligations, the suspension or revocation of necessary permits, licenses and authorizations, the requirement that additional pollution controls be installed and the issuance of orders enjoining future operations or imposing additional compliance requirements.
The regulation of hydraulic fracturing is primarily conducted at the state and local level through permitting and other compliance requirements. In April 2012, however, the U.S.
EOG periodically conducts regulatory assessments of these disposal facilities to monitor compliance with applicable regulations. 10 The regulation of hydraulic fracturing is primarily conducted at the state and local level through permitting and other compliance requirements. In April 2012, however, the U.S.
Several fields in the SECC, Modified U(a), Modified U(b) and 4(a) Blocks, Banyan Field and Sercan Area have been developed and are producing natural gas and crude oil and condensate, with the exception of the Modified U(b) Block in which EOG ceased to have an interest in the production of natural gas and crude oil and condensate in the fourth quarter of 2022.
Several fields in the SECC, Modified U(a) Block, 4(a) Block, Banyan Field and Sercan Area have been developed and are producing natural gas and crude oil and condensate.
EOG also maintains an active exploration program designed to extend fields and add new trends and resource plays to its already broad portfolio. 1 The following is a summary of wellhead volume statistics and net well completions for the year ended December 31, 2022, total net acres at December 31, 2022, and expected net well completions planned for 2023 for certain areas of EOG's United States operations. 2022 2023 Area of Operation Crude Oil & Condensate Volumes (MBbld) (1) Natural Gas Liquids Volumes (MBbld) (1) Natural Gas Volumes (MMcfd) (1) Total Net Acres (in thousands) Net Well Completions Expected Net Well Completions Delaware Basin 277.0 138.8 764 395 358 365 South Texas 133.3 32.7 336 1,139 125 185 Rocky Mountain 42.1 13.7 135 764 31 55 Other Areas 8.3 12.5 80 1,184 19 20 Total 460.7 197.7 1,315 3,482 533 625 (1) Thousand barrels per day or million cubic feet per day, as applicable.
EOG also maintains an active exploration program designed to extend fields and add new trends and resource plays to its already broad portfolio. 1 The following is a summary of wellhead volume statistics and net well completions for the year ended December 31, 2023, total net acres at December 31, 2023, and expected net well completions planned for 2024 for certain areas of EOG's United States operations. 2023 2024 Area of Operation Crude Oil & Condensate Volumes (MBbld) (1) Natural Gas Liquids Volumes (MBbld) (1) Natural Gas Volumes (MMcfd) (1) Total Net Acres (in thousands) Net Well Completions Expected Net Well Completions Delaware Basin 301.9 164.0 890 395 370 360 South Texas 126.0 32.4 436 1,155 200 170 Rocky Mountain 39.4 15.3 149 801 54 40 Other Areas 7.9 12.1 76 1,015 16 30 Total 475.2 223.8 1,551 3,366 640 600 (1) Thousand barrels per day or million cubic feet per day, as applicable.
Such rules and regulations, among other things, require permits for the drilling of wells, regulate the spacing of wells, prevent the waste of natural gas through restrictions on flaring, require surety bonds for various exploration and production operations and regulate the calculation and disbursement of royalty payments (for federal and state leases), production taxes and ad valorem taxes.
Such rules and regulations, among other things, require permits for the drilling of wells, regulate the spacing of wells, prevent the waste of natural gas through restrictions on flaring, require surety bonds for various exploration and production operations and regulate the calculation and disbursement of royalty payments (for federal and state leases), production taxes and ad valorem taxes. 7 A portion of EOG's oil and gas leases in New Mexico, North Dakota, Utah and Wyoming, as well as in other areas, are granted by the federal government and administered by the Bureau of Land Management (BLM) and/or the Bureau of Indian Affairs (BIA), both federal agencies.
Such federal, state and local permitting and disclosure requirements, operating restrictions, conditions or prohibitions could lead to operational delays and increased operating and compliance costs and, moreover, could delay or effectively prevent the development of crude oil and natural gas from formations which would not be economically viable without the use of hydraulic fracturing. 10 Compliance with laws and regulations relating to hydraulic fracturing and other aspects of our operations increases EOG's overall cost of business, but has not had, to date, a material adverse effect on EOG's operations, financial condition, results of operations or capital expenditures (for environmental control facilities or otherwise).
Such federal, state and local permitting and disclosure requirements, operating restrictions, conditions or prohibitions could lead to operational delays and increased operating and compliance costs and, moreover, could delay or effectively prevent the development of crude oil and natural gas from formations which would not be economically viable without the use of hydraulic fracturing.
In 2023, the pricing mechanism for such production is expected to remain the same. At December 31, 2022, EOG was not committed to deliver fixed quantities of NGLs in 2023.
At December 31, 2023, EOG was not committed to deliver fixed quantities of NGLs in 2024.
For a summary of EOG's financial commodity derivative contracts for the year ended December 31, 2022, see Note 12 to Consolidated Financial Statements. 11 Risk Management. EOG engages in price risk management activities from time to time. These activities are intended to manage EOG's exposure to fluctuations in prices of crude oil, NGLs and natural gas.
Risk Management. EOG engages in price risk management activities from time to time. These activities are intended to manage EOG's exposure to fluctuations in prices of 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's operations are all crude oil and natural gas exploration and production related. For information regarding the risks associated with EOG's domestic and foreign operations, see ITEM 1A, Risk Factors.
EOG's operations are all crude oil and natural gas exploration and production related. For information regarding the risks associated with EOG's domestic and foreign operations, see ITEM 1A, Risk Factors. EOG is focused on being among the lowest-cost, highest-return and lowest-emissions producers, playing a significant role in the long-term future of energy.
EOG does not currently expect such annual methane emissions charges to have a material impact on its financial condition, results of operations, capital expenditures or operations. In addition to the U.S. EPA's rule requiring annual reporting of GHG emissions from covered facilities (which is amended from time to time and under which EOG reports), the U.S.
The charge will be levied annually based on emissions reported under the U.S. EPA's GHG reporting program. The U.S. EPA published proposed regulations specific to the calculation of such annual charge in January 2024. EOG does not currently expect such annual methane emissions charges to have a material impact on its financial condition, results of operations, capital expenditures or operations.
In 2022, EOG completed 103 net wells in the Eagle Ford play, and 22 net wells in the Dorado gas play. In 2023, EOG expects to complete approximately 155 net Eagle Ford play wells and 30 net Dorado wells. Activity in the Rocky Mountain area in 2022 was focused on the Wyoming Powder River Basin.
In 2024, EOG expects to complete approximately 145 net Eagle Ford play wells and 25 net Dorado wells, as well as completing major infrastructure projects to connect the Dorado gas play to the Agua Dulce gas market near Corpus Christi, Texas. Activity in the Rocky Mountain area in 2023 was focused on the Wyoming Powder River Basin.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThere would be many variables and uncertainties associated with any future outbreak or pandemic, including the duration and severity of the outbreak; the emergence, contagiousness and threat of new and different strains of the virus; the development, availability, acceptance, and effectiveness of treatments or vaccines; the extent of travel restrictions, business closures and other measures imposed by governmental authorities; disruptions in the supply chain; a prolonged delay in the resumption of operations by one or more contractual parties; an increasingly competitive labor market due to a sustained labor shortage or increased turnover caused by the outbreak/pandemic; increased logistics costs; additional operating costs due to remote working arrangements, adherence to social distancing guidelines, and other related challenges; increased risk of cyberattacks on information technology systems used in remote working arrangements; increased privacy-related risks due to processing health-related personal information; absence of employees due to illness; the impact of the pandemic on EOG's customers and contractual counterparties; and other factors that may be currently unknown or considered immaterial, to fully assess the potential impact on our business, financial condition and results of operations.
Biggest changeThere would be many variables and uncertainties associated with any future outbreak or pandemic, including (but not limited to) the duration and severity of the outbreak; the extent of travel restrictions, business closures and other measures imposed by governmental authorities; increased risk of cyberattacks on information technology systems used in remote working arrangements; absence of employees due to illness; the impact of the pandemic on EOG's customers and contractual counterparties; and other factors that may be currently unknown or considered immaterial, to fully assess the potential impact on our business, financial condition and results of operations.
In addition, weakness and/or volatility in domestic and global financial markets or economic conditions or a depressed commodity price environment may increase the interest rates that lenders and commercial paper investors require us to pay or adversely affect our ability to finance our capital expenditures through equity or debt offerings or other borrowings.
In addition, weakness and/or volatility in domestic and global financial markets or economic conditions or a depressed commodity price environment may increase the interest rates that lenders and commercial paper investors require us to pay or adversely affect our ability to finance our capital expenditures through debt or equity offerings or other borrowings.
Similarly, a reduction in our cash flows (for example, as a result of lower crude oil, natural gas and/or NGLs prices or unanticipated well shut-ins) and the corresponding adverse effect on our financial condition and results of operations may also increase the interest rates that lenders and commercial paper investors require us to pay.
Similarly, a reduction in our cash flows (for example, as a result of lower crude oil, NGLs and/or natural gas prices or unanticipated well shut-ins) and the corresponding adverse effect on our financial condition and results of operations may also increase the interest rates that lenders and commercial paper investors require us to pay.
Among the interrelated factors that can or could cause these price fluctuations are: • domestic and worldwide supplies of, and consumer and industrial/commercial demand for, crude oil, NGLs and natural gas; • domestic and international drilling activity; • the actions of other crude oil producing and exporting nations, including the Organization of Petroleum Exporting Countries; • worldwide economic conditions, geopolitical factors and political conditions, including, but not limited to, the imposition of tariffs or trade or other economic sanctions, political instability or armed conflict in oil and gas producing regions; • the duration and economic and financial impact of epidemics, pandemics or other public health issues, such as the COVID-19 pandemic; • the availability, proximity and capacity of appropriate transportation, gathering, processing, compression, storage, refining and export facilities; • the price and availability of, and demand for, competing energy sources, including alternative energy sources; • the effect of worldwide energy conservation measures, alternative fuel requirements and climate change-related legislation, policies, initiatives and developments; • technological advances and consumer and industrial/commercial behavior, preferences and attitudes, in each case affecting energy generation, transmission, storage and consumption; • the nature and extent of governmental regulation, including environmental and other climate change-related regulation, regulation of financial derivative transactions and hedging activities, tax laws and regulations and laws and regulations with respect to the import and export of crude oil, NGLs, and natural gas and related commodities; • the level and effect of trading in commodity futures markets, including trading by commodity price speculators and others; and • natural disasters, weather conditions and changes in weather patterns.
Among the interrelated factors that can or could cause these price fluctuations are: • domestic and worldwide supplies of, and consumer and industrial/commercial demand for, crude oil, NGLs and natural gas; • domestic and international drilling activity; • the actions of other crude oil producing and exporting nations, including the Organization of Petroleum Exporting Countries; • worldwide economic conditions, geopolitical factors and political conditions, including, but not limited to, the imposition of tariffs or trade or other economic sanctions, political instability or armed conflict in oil and gas producing regions; • the duration and economic and financial impact of epidemics, pandemics or other public health issues, such as the COVID-19 pandemic; • the availability, proximity and capacity of appropriate transportation, gathering, processing, compression, storage, refining, liquefaction and export facilities; • the price and availability of, and demand for, competing energy sources, including alternative energy sources; • the effect of worldwide energy conservation measures, alternative fuel requirements and climate change-related legislation, policies, initiatives and developments; • technological advances and consumer and industrial/commercial behavior, preferences and attitudes, in each case affecting energy generation, transmission, storage and consumption; • the nature and extent of governmental regulation, including environmental and other climate change-related regulation, regulation of financial derivative transactions and hedging activities, tax laws and regulations and laws and regulations with respect to the import and export of crude oil, NGLs, and natural gas and related commodities; • the level and effect of trading in commodity futures markets, including trading by commodity price speculators and others; and • natural disasters, weather conditions and changes in weather patterns.
Furthermore, if a customer is unable to satisfy its contractual obligation to purchase crude oil, natural gas or related commodities from us, we may be unable to sell such production to another customer on terms we consider acceptable, if at all, due to the geographic location of such production; the availability, proximity and capacity of appropriate gathering, processing, compression, storage, transportation, export and refining facilities; or market or other factors and conditions.
Furthermore, if a customer is unable to satisfy its contractual obligation to purchase crude oil, natural gas or related commodities from us, we may be unable to sell such production to another customer on terms we consider acceptable, if at all, due to the geographic location of such production; the availability, proximity and capacity of appropriate gathering, processing, compression, storage, transportation, export, liquefaction and refining facilities; or market or other factors and conditions.
A portion of our crude oil, NGLs and natural gas production may be interrupted, or shut in, from time to time for various reasons, including, but not limited to, as a result of accidents, weather conditions, the unavailability of gathering, processing, compression, storage, transportation, refining or export facilities or equipment or field labor issues, or intentionally as a result of market conditions such as crude oil, NGLs or natural gas prices that we deem uneconomic.
A portion of our crude oil, NGLs and natural gas production may be interrupted, or shut in, from time to time for various reasons, including, but not limited to, as a result of accidents, weather conditions, the unavailability of gathering, processing, compression, storage, transportation, refining, liquefaction or export facilities or equipment or field labor issues, or intentionally as a result of market conditions such as crude oil, NGLs or natural gas prices that we deem uneconomic.
If any of these security breaches were to occur, we could suffer disruptions to our normal operations, including our drilling, completion, production and corporate functions, which could materially and adversely affect us in a variety of ways, including, but not limited to, the following: • unauthorized access to, and release of, our business data, reserves information, strategic information or other sensitive or proprietary information, which could have a material and adverse effect on our ability to compete for oil and gas resources, or reduce our competitive advantage over other companies; • data corruption, communication interruption, or other operational disruptions during our drilling activities, which could result in our failure to reach the intended target or a drilling incident; • data corruption or operational disruptions of our production-related infrastructure, which could result in loss of production or accidental discharges; 24 • unauthorized access to, and release of, personal information of our royalty owners, employees and vendors, which could expose us to allegations that we did not sufficiently protect such information; • a cybersecurity attack on a vendor or service provider, which could result in supply chain disruptions and could delay or halt our operations; • a cybersecurity attack on third-party gathering, transportation, processing, fractionation, refining or export facilities, which could result in reduced demand for our production or delay or prevent us from transporting and marketing our production, in either case resulting in a loss of revenues; • a cybersecurity attack involving commodities exchanges or financial institutions could slow or halt commodities trading, thus preventing us from marketing our production or engaging in hedging activities, resulting in a loss of revenues; • a deliberate corruption of our financial or operating data could result in events of non-compliance which could then lead to regulatory fines or penalties; • a cybersecurity attack on a communications network or power grid, which could cause operational disruptions resulting in a loss of revenues; and • a cybersecurity attack on our automated and surveillance systems, which could cause a loss of production and potential environmental hazards.
If any of these security breaches were to occur, we could suffer disruptions to our normal operations, including our drilling, completion, production and corporate functions, which could materially and adversely affect us in a variety of ways, including, but not limited to, the following: 26 • unauthorized access to, and release of, our business data, reserves information, strategic information or other sensitive or proprietary information, which could have a material and adverse effect on our ability to compete for oil and gas resources, or reduce our competitive advantage over other companies; • data corruption, communication interruption, or other operational disruptions during our drilling activities, which could result in our failure to reach the intended target or a drilling incident; • data corruption or operational disruptions of our production-related infrastructure, which could result in loss of production or accidental discharges; • unauthorized access to, and release of, personal information of our royalty owners, employees and vendors, which could expose us to allegations that we did not sufficiently protect such information; • a cybersecurity attack on a vendor or service provider, which could result in supply chain disruptions and could delay or halt our operations; • a cybersecurity attack on third-party gathering, transportation, processing, fractionation, refining, liquefaction or export facilities, which could result in reduced demand for our production or delay or prevent us from transporting and marketing our production, in either case resulting in a loss of revenues; • a cybersecurity attack involving commodities exchanges or financial institutions could slow or halt commodities trading, thus preventing us from marketing our production or engaging in hedging activities, resulting in a loss of revenues; • a deliberate corruption of our financial or operating data could result in events of non-compliance which could then lead to regulatory fines or penalties; • a cybersecurity attack on a communications network or power grid, which could cause operational disruptions resulting in a loss of revenues; and • a cybersecurity attack on our automated and surveillance systems, which could cause a loss of production and potential environmental hazards.
Further, strategic targets, such as energy-related assets, may be at a greater risk of terrorist attacks or cybersecurity attacks than other targets in the United States. Moreover, external digital technologies control nearly all of the crude oil and natural gas distribution and refining systems in the U.S. and abroad, which are necessary to transport and market our production.
Further, strategic targets, such as energy-related assets, may be at a greater risk of terrorist attacks or cybersecurity attacks than other targets in the United States. Moreover, external digital technologies control nearly all of the crude oil and natural gas distribution systems in the U.S. and abroad, which are necessary to transport and market our production.
In addition, lack of financing, construction and permitting delays, permitting costs and regulatory or other constraints could limit or delay the construction, manufacture or other acquisition of new gathering, processing, compression, storage, transportation, refining and export facilities and equipment by third parties or us, and we may experience delays or increased costs in accessing the pipelines, gathering systems or transportation systems necessary to transport our production to points of sale or delivery.
In addition, lack of financing, construction and permitting delays, permitting costs and regulatory or other constraints could limit or delay the construction, manufacture or other acquisition of new gathering, processing, compression, storage, transportation, refining, liquefaction and export facilities and equipment by third parties or us, and we may experience delays or increased costs in accessing the pipelines, gathering systems or transportation systems necessary to transport our production to points of sale or delivery.
Although we perform reviews of properties to be acquired in a manner that we believe is duly diligent and consistent with industry practices, reviews of records and properties may not necessarily reveal existing or potential issues (such as title or environmental issues), nor may they permit us to become sufficiently familiar with the properties in order to fully assess their deficiencies and potential.
Although we perform reviews of properties to be acquired in a manner that we believe is duly diligent and consistent with industry practices, reviews of records and properties may not necessarily reveal existing or potential issues (such as title defects or environmental issues), nor may they permit us to become sufficiently familiar with the properties in order to fully assess their deficiencies and potential.
Any significant change in market or other conditions affecting gathering, processing, compression, storage, transportation, refining and export facilities and equipment or the availability of these facilities and equipment, including due to our failure or inability to obtain access to these facilities and equipment on terms acceptable to us or at all, could materially and adversely affect our business and, in turn, our financial condition and results of operations.
Any significant change in market or other conditions affecting gathering, processing, compression, storage, transportation, refining, liquefaction and export facilities and equipment or the availability of these facilities and equipment, including due to our failure or inability to obtain access to these facilities and equipment on terms acceptable to us or at all, could materially and adversely affect our business and, in turn, our financial condition and results of operations.
As an oil and gas producer, we face various security threats, including (i) cybersecurity threats to gain unauthorized access to, or control of, our sensitive information or to render our data or systems corrupted or unusable; (ii) threats to the security of our facilities and infrastructure or to the security of third-party facilities and infrastructure, such as gathering, transportation, processing, fractionation, refining and export facilities; and (iii) threats from terrorist acts.
As an oil and gas producer, we face various security threats, including (i) cybersecurity threats to gain unauthorized access to, or control of, our sensitive information or to render our data or systems corrupted or unusable; (ii) threats to the security of our facilities and infrastructure or to the security of third-party facilities and infrastructure, such as gathering, transportation, processing, fractionation, refining, liquefaction and export facilities; and (iii) threats from terrorist acts.
Such reserve write-downs and asset impairments can materially and adversely affect our results of operations and financial position and, in turn, the trading price of our common stock. 14 Our cost-mitigation initiatives and actions may not offset, largely or at all, the impacts of inflationary pressures on our operating costs and capital expenditures.
Such reserve write-downs and asset impairments can materially and adversely affect our results of operations and financial position and, in turn, the trading price of our common stock. Our cost-mitigation initiatives and actions may not offset, largely or at all, the impacts of inflationary pressures on our operating costs and capital expenditures.
Maintaining our production of crude oil, NGLs and natural gas at, or increasing our production from, current levels, is, therefore, highly dependent upon our level of success in acquiring or finding additional reserves, which may be adversely impacted by bans or restrictions on drilling.
Maintaining our production of crude oil, NGLs and natural gas at, or increasing our production from, current levels, is, therefore, highly dependent upon our level of success in acquiring or finding additional reserves, which may be adversely impacted by bans or restrictions on leasing and/or drilling.
The sale of our crude oil, NGLs and natural gas production depends on a number of factors beyond our control, including the availability, proximity and capacity of, and costs associated with, gathering, processing, compression, storage, transportation, refining and export facilities and equipment owned by third parties.
The sale of our crude oil, NGLs and natural gas production depends on a number of factors beyond our control, including the availability, proximity and capacity of, and costs associated with, gathering, processing, compression, storage, transportation, refining, liquefaction and export facilities and equipment owned by third parties.
Our failure to recover our investment in wells, increases in the costs of our drilling operations or those of our third-party operators, and/or curtailments, delays or cancellations of our drilling operations or those of our third-party operators, in each case, due to any of the above factors or other factors, may materially and adversely affect our business, financial condition and results of operations.
Our failure to recover our investment in wells, increases in the costs of our drilling and completions operations or those of our third-party operators, and/or curtailments, delays or cancellations of our drilling and completions operations or those of our third-party operators, in each case, due to any of the above factors or other factors, may materially and adversely affect our business, financial condition and results of operations.
As a result, the trading price of our common stock may be materially and adversely affected. Lower commodity prices can also reduce the amount of crude oil, NGLs and natural gas that we can produce economically.
As a result, the trading price of our common stock may be materially and adversely affected. 15 Lower commodity prices can also reduce the amount of crude oil, NGLs and natural gas that we can produce economically.
If a substantial amount of our production is interrupted or shut in, our cash flows and, in turn, our financial condition and results of operations could be materially and adversely affected. Our operations are substantially dependent upon the availability of water.
If a substantial amount of our production is interrupted or shut in, our cash flows and, in turn, our financial condition and results of operations could be materially and adversely affected. 20 Our operations are substantially dependent upon the availability of water.
Further, in the event of a future outbreak or pandemic, we may experience disruptions to commodities markets, equipment supply chains and the availability of our workforce, which could materially and adversely affect our ability to conduct our business and operations.
In the event of a future outbreak or pandemic, we may experience disruptions to commodities markets, equipment supply chains and the availability of our workforce, which could materially and adversely affect our ability to conduct our business and operations.
Specifically, we often are uncertain as to the future cost or timing of drilling, completing and operating wells, and our drilling operations and those of our third-party operators may be curtailed, delayed or canceled, the cost of such operations may increase and/or our results of operations and cash flows from such operations may be impacted, as a result of a variety of factors, including: • unexpected drilling conditions; • leasehold title problems; • pressure or irregularities in formations; • equipment failures or accidents; • adverse weather conditions, such as winter storms, flooding, tropical storms and hurricanes, and changes in weather patterns; • compliance with, or changes in (including the adoption of new), environmental, health and safety laws and regulations relating to air emissions, hydraulic fracturing, access to and use of water, disposal or other discharge (e.g., into injection wells) of produced water, drilling fluids and other wastes, laws and regulations imposing conditions or restrictions on drilling and completion operations and on the transportation of crude oil, NGLs and natural gas, and other laws and regulations, such as tax laws and regulations; • the availability and timely issuance of required federal, state, tribal and other permits and licenses, which may be adversely affected by (among other things) bans or restrictions on drilling, government shutdowns or other suspensions of, or delays in, government services; 17 • the availability of, costs associated with and terms of contractual arrangements for properties, including mineral licenses and leases, pipelines, crude oil hauling trucks and qualified drivers and facilities and equipment to gather, process, compress, store, transport, market and export crude oil, NGLs and natural gas and related commodities; and • the costs of, or shortages or delays in the availability of, drilling rigs, hydraulic fracturing services, pressure pumping equipment and supplies, tubular materials, water, sand, disposal facilities, qualified personnel and other necessary facilities, equipment, materials, supplies and services.
Specifically, we often are uncertain as to the future cost or timing of drilling, completing and operating wells, and our drilling and completions operations and those of our third-party operators may be curtailed, delayed or canceled, the cost of such operations may increase and/or our results of operations and cash flows from such operations may be impacted, as a result of a variety of factors, including: • unexpected drilling conditions; • leasehold title problems; • pressure or irregularities in formations; • equipment failures or accidents; • adverse weather conditions, such as winter storms, flooding, tropical storms and hurricanes, and changes in weather patterns, which may be exacerbated by climate change; • compliance with, or changes in (including the adoption of new), environmental, health and safety laws and regulations relating to air emissions, hydraulic fracturing, access to and use of water, disposal or other discharge (e.g., into injection wells) of produced water, drilling fluids and other wastes, laws and regulations imposing conditions or restrictions on drilling and completion operations and on the transportation of crude oil, NGLs and natural gas, and other laws and regulations, such as tax laws and regulations; • the availability and timely issuance of required federal, state, tribal and other permits and licenses, which may be adversely affected by (among other things) bans or restrictions on drilling, government shutdowns or other suspensions of, or delays in, government services; • the availability of, costs associated with, and terms of contractual arrangements for properties, including mineral licenses and leases, pipelines, crude oil hauling trucks and qualified drivers and facilities and equipment to gather, process, compress, store, transport, market and export crude oil, NGLs and natural gas and related commodities; and • the costs of, or shortages or delays in the availability of, drilling rigs, hydraulic fracturing services, pressure pumping equipment and supplies, tubular materials, water, sand, disposal facilities, qualified personnel and other necessary facilities, equipment, materials, supplies and services.
In particular, in certain newer plays, the capacity of gathering, processing, compression, storage, transportation, refining and export facilities and equipment may not be sufficient to accommodate potential production from existing and new wells.
In particular, in certain newer plays, the capacity of gathering, processing, compression, storage, transportation, refining. liquefaction and export facilities and equipment may not be sufficient to accommodate potential production from existing and new wells.
The realization of any of these factors could materially and adversely affect our business, financial condition and results of operations. Unfavorable currency exchange rate fluctuations could materially and adversely affect our results of operations. The reporting currency for our financial statements is the U.S. dollar.
The realization of any of these factors could materially and adversely affect our business, financial condition and results of operations. Unfavorable currency exchange rate fluctuations could materially and adversely affect our results of operations. The reporting currency for our consolidated financial statements is the U.S. dollar.
We expect to continue to pay dividends to our stockholders; however, our Board may reduce our dividend or cease declaring dividends at any time, including if it determines that our current or forecasted future cash flows provided by our operating activities (after deducting our capital expenditures and other commitments) are not sufficient to pay our desired levels of dividends to our stockholders or to pay dividends to our stockholders at all.
We expect to continue to pay dividends to our stockholders; however, our Board may reduce our dividends or cease declaring dividends at any time, including if it determines that our current or forecasted future cash flows provided by our operating activities (after deducting our capital expenditures and other commitments requiring cash) are not sufficient to pay our desired levels of dividends to our stockholders or to pay dividends to our stockholders at all.
It is possible that the Paris Agreement and subsequent domestic and international regulations and government policies related to climate change and GHG emissions will have adverse effects on the market for crude oil, NGLs and natural gas as well as adverse effects on the business and operations of companies engaged in the exploration for, and production of, crude oil, NGLs and natural gas.
It is possible that the Paris Agreement, the related UAE Consensus, and subsequent domestic and international regulations and government policies related to climate change and GHG emissions will have adverse effects on the market for crude oil, NGLs and natural gas as well as adverse effects on the business and operations of companies engaged in the exploration for, and production of, crude oil, NGLs and natural gas.
These translations could result in changes to our results of operations from period to period. For the fiscal year ended December 31, 2022, EOG had no net operating revenues related to operations of our foreign subsidiaries whose functional currency was not the U.S. dollar.
These translations could result in changes to our results of operations from period to period. For the fiscal year ended December 31, 2023, EOG had no net operating revenues related to operations of our foreign subsidiaries whose functional currency was not the U.S. dollar.
We will continue to monitor and assess any proposed or enacted tax law changes to determine the impact on our business, results of operations and financial condition and take appropriate actions, where necessary. Risks Related to Our International Operations We operate in other countries and, as a result, are subject to certain political, economic and other risks.
We will continue to monitor and assess any proposed or enacted tax law changes to determine the impact on our business, cash flows, results of operations and financial condition and take appropriate actions, where necessary. Risks Related to Our International Operations We operate in other countries and, as a result, are subject to certain political, economic, competitive and other risks.
Such extreme weather events and changes in weather patterns may materially and adversely affect our business and, in turn, our financial condition and results of operations. 26 ITEM 1B. Unresolved Staff Comments Not applicable.
Such extreme weather events and changes in weather patterns may materially and adversely affect our business and, in turn, our financial condition and results of operations. 28 ITEM 1B. Unresolved Staff Comments Not applicable.
In addition, an acquisition may have a material and adverse effect on our business and results of operations, particularly during the periods in which the operations of the acquired properties are being integrated into our ongoing operations or if we are unable to effectively integrate the acquired properties into our ongoing operations.
In addition, an acquisition may have a material and adverse effect on our financial condition and results of operations, particularly during the periods in which the operations of the acquired properties are being integrated into our ongoing operations or if we are unable to effectively integrate the acquired properties into our ongoing operations.
Our crude oil, NGLs and natural gas operations and supporting activities and operations are subject to all of the risks associated with exploring and drilling for, and producing, gathering, processing, compressing, storing, transporting and exporting crude oil, NGLs and natural gas, including the risks of: • well blowouts and cratering; • loss of well control; • crude oil spills, natural gas leaks, formation water (i.e., produced water) spills and pipeline ruptures; • pipe failures and casing collapses; • uncontrollable flows of crude oil, natural gas, formation water or drilling fluids; • releases of chemicals, wastes or pollutants; • adverse weather events, such as winter storms, flooding, tropical storms and hurricanes, and other natural disasters; • fires and explosions; • terrorism, vandalism and physical, electronic and cybersecurity breaches; • formations with abnormal or unexpected pressures; • leaks or spills in connection with, or associated with, the gathering, processing, compression, storage, transportation and export of crude oil, NGLs and natural gas; and • malfunctions of, or damage to, gathering, processing, compression, storage, transportation and export facilities and equipment and other facilities and equipment utilized in support of our crude oil and natural gas operations.
Our crude oil, NGLs and natural gas operations and supporting activities and operations are subject to all of the risks associated with exploring and drilling for, and producing, gathering, processing, compressing, storing, transporting and exporting crude oil, NGLs and natural gas, including the risks of: • well blowouts and cratering; • loss of well control; • crude oil spills, natural gas leaks, formation water (i.e., produced water) spills and pipeline ruptures; • pipe failures and casing collapses; • uncontrollable flows of crude oil, natural gas, formation water or drilling fluids; • releases of chemicals, wastes or pollutants; • adverse weather events, such as winter storms, flooding, tropical storms and hurricanes, and other natural disasters, which may be exacerbated by climate change; • fires and explosions; • terrorism, vandalism and physical, electronic and cybersecurity breaches; • formations with abnormal or unexpected pressures; 19 • leaks or spills in connection with, or associated with, the gathering, processing, compression, storage, transportation and export of crude oil, NGLs and natural gas; and • malfunctions of, or damage to, gathering, processing, compression, storage, transportation and export facilities and equipment and other facilities and equipment utilized in support of our crude oil and natural gas operations.
See the risk factor above for a discussion of the impact of commodity prices (including fluctuations in commodity prices) on our financial condition, cash flows and results of operations.
See the risk factors above for a discussion of the impact of commodity prices (including fluctuations in commodity prices) on our financial condition, cash flows and results of operations.
We intend to finance our capital expenditures primarily through our cash flows from operations and cash on hand and, to a lesser extent and if and as necessary, commercial paper borrowings, bank borrowings, borrowings under our revolving credit facility and public and private equity and debt offerings.
We intend to finance our capital expenditures primarily through our cash flows from operations and cash on hand and, if and as necessary, commercial paper borrowings, bank borrowings, borrowings under our revolving credit facility and public and private debt and equity offerings.
These facilities and equipment may be temporarily unavailable to us due to market conditions, regulatory reasons, mechanical reasons or other factors or conditions, and may not be available to us in the future on terms we consider acceptable, if at all.
These facilities and equipment may be temporarily unavailable to us due to market conditions, supply chain disruptions, regulatory reasons, mechanical reasons or other factors or conditions, and may not be available to us in the future on terms we consider acceptable, if at all.
The above-described factors and the volatility of commodity prices make it difficult to predict crude oil, NGLs and natural gas prices in 2023 and thereafter.
The above-described factors and the volatility of commodity prices make it difficult to predict crude oil, NGLs and natural gas prices in 2024 and thereafter.
Our exploration, exploitation and development activities and equipment could be adversely affected by extreme weather events, such as winter storms, flooding and tropical storms and hurricanes in the Gulf of Mexico, which may cause a loss of production from temporary cessation of activity or damaged facilities and equipment.
Our exploration, exploitation and development activities and equipment could be adversely affected by extreme weather events, such as winter storms, flooding and tropical storms and hurricanes, which may cause a loss of production from temporary cessation of activity or damaged facilities and equipment.
To the extent that we engage in hedging activities to protect ourselves against commodity price declines, we may be prevented from fully realizing the benefits of increases in crude oil, NGLs and natural gas prices above the prices established by our hedging contracts. A portion of our forecasted production for 2023 is subject to fluctuating market prices.
To the extent that we engage in hedging activities to protect ourselves against commodity price declines, we may be prevented from fully realizing the benefits of increases in crude oil, NGLs and natural gas prices above the prices established by our hedging contracts. Further, a majority of our forecasted production for 2024 is subject to fluctuating market prices.
Tax laws and regulations applicable to crude oil and natural gas exploration and production companies may change over time, and such changes could materially and adversely affect our cash flows, results of operations and financial condition.
Tax laws and regulations, including those applicable specifically to crude oil and natural gas exploration and production companies, may change over time, and such changes could materially and adversely affect our business, cash flows, results of operations and financial condition.
A material reduction in capital available to the oil and gas sector could make it more difficult (e.g., due to a lack of investor interest in our equity or debt securities) and/or more costly (e.g., due to higher interest rates on our debt securities or other borrowings) to secure funding for our operations, which, in turn, could adversely affect our ability to successfully carry out our business strategy and have a material and adverse effect on our business, financial condition and operations. 15 Reserve estimates depend on many interpretations and assumptions.
A material reduction in capital available to the oil and gas sector could make it more difficult (e.g., due to a lack of investor interest in our debt or equity securities) and/or more costly (e.g., due to higher interest rates on our debt securities or other borrowings) to secure funding for our operations, which, in turn, could adversely affect our ability to successfully carry out our business strategy and have a material and adverse effect on our business, financial condition and operations.
Any significant inaccuracies in these interpretations and assumptions could cause the reported quantities of our reserves to be materially misstated. Estimating quantities of crude oil, NGLs and natural gas reserves and future net cash flows from such reserves is a complex, inexact process.
Reserve estimates depend on many interpretations and assumptions. Any significant inaccuracies in these interpretations and assumptions could cause the reported quantities of our reserves to be materially misstated. Estimating quantities of crude oil, NGLs and natural gas reserves and future net cash flows from such reserves is a complex, inexact process.
For further discussion of the potential impact of such availability-related risks on our financial condition and results of operations, see the discussion in the section above entitled "Risks Related to our Operations." 20 Further, climate change-related developments may result in negative perceptions of the oil and gas industry and, in turn, reputational risks associated with the exploration for, and production of, hydrocarbons.
For further discussion of the potential impact of such availability-related risks on our financial condition and results of operations, see the discussion in the section above entitled "Risks Related to our Operations." Further, climate change-related developments (such as extensive climate-related disclosure requirements as referenced above) may result in negative perceptions of the oil and gas industry and, in turn, reputational risks associated with the exploration for, and production of, hydrocarbons.
We are unable to predict the timing, scope and effect of any proposed or enacted tax law changes, but any such changes (if enacted) could materially and adversely affect our business, results of operations and financial condition.
We are unable to predict the timing, scope and effect of any proposed or enacted tax law changes, but any such changes (if enacted) may materially and adversely affect our business.
In the future, we may not be able to maintain or obtain insurance of the type and amount we desire at reasonable rates. As a result of market conditions, premiums, retentions and deductibles for our insurance policies will change over time and could escalate.
In the future, we may not be able to maintain or obtain insurance of the type and amount we desire at reasonable rates. As a result of market conditions, premiums, retentions and deductibles for our insurance policies will change over time and could escalate. In addition, some forms of insurance may become unavailable or unavailable on economically acceptable terms.
In addition, our larger competitors may have a competitive advantage when responding to factors that affect demand for crude oil, NGLs and natural gas, such as changing worldwide prices and levels of production and the cost and availability of alternative fuels. We also face competition from competing energy sources, such as renewable energy sources.
In addition, our larger competitors may have a competitive advantage when responding to factors that affect demand for crude oil, NGLs and natural gas, such as changing worldwide prices and levels of production and the cost and availability of alternative fuels.
Restrictions on our ability to obtain water may have a material and adverse effect on our financial condition, results of operations and cash flows. Water is an essential component of our operations, both during the drilling and hydraulic fracturing processes.
Restrictions or limitations on our ability to obtain water may have a material and adverse effect on our financial condition, results of operations and cash flows. Water is an essential component of our operations, both during drilling operations and completions operations.
If we are unable to obtain water to use in its operations from local sources, it may need to be obtained from new sources and transported to drilling sites, resulting in increased costs, which could have a material adverse effect on our financial condition, results of operations and cash flows.
If we are unable to obtain water to use in our operations from local sources, we may need to obtain water from sources that are more distant from our drilling sites, resulting in increased costs, which could have a material adverse effect on our financial condition, results of operations and cash flows.
From time to time, legislation has been proposed that, if enacted into law, would make significant changes to U.S. federal income tax laws applicable to crude oil and natural gas exploration and production companies, such as with respect to the intangible drilling and development costs deduction and bonus tax depreciation.
From time to time, legislation has been proposed that, if enacted into law, would make significant changes to U.S. federal and state income tax laws, including laws specifically applicable to crude oil and natural gas exploration and production companies - such as eliminating the immediate deduction for intangible drilling and development costs.
Beginning in the second half of 2021 and continuing throughout 2022, we, similar to other companies in our industry, experienced inflationary pressures on our operating costs and capital expenditures - namely the costs of fuel, steel (i.e., wellbore tubulars and facilities manufactured using steel), labor and drilling and completion services.
Beginning in the second half of 2021 and continuing, to a lesser degree, through the first three months of 2023, we, similar to other companies in our industry, experienced inflationary pressures on our operating costs and capital expenditures - namely the costs of fuel, steel (i.e., wellbore tubulars and facilities manufactured using steel), labor and drilling and completion services.
Further, investor and regulatory focus on ESG matters continues to increase. If our ESG-related initiatives, targets and ambitions do not meet our investors' or other stakeholders' evolving expectations and standards, investment in our stock may be viewed as less attractive and our reputation and contractual, employment and other business relationships may be adversely impacted.
If our ESG-related initiatives, targets and ambitions do not meet our investors' or other stakeholders' evolving expectations and standards, investment in our stock may be viewed as less attractive and our reputation and contractual, employment and other business relationships may be adversely impacted.
To the extent we are unsuccessful in acquiring or finding additional reserves, our future cash flows and results of operations and, in turn, the trading price of our common stock could be materially and adversely affected. Our ability to declare and pay dividends is subject to certain considerations.
To the extent we are unsuccessful in acquiring or finding additional reserves, our future cash flows and results of operations and, in turn, the trading price of our common stock could be materially and adversely affected.
Dividends are authorized and determined by our Board of Directors (Board) in its sole discretion and depend upon a number of factors, including: • cash available for dividends; • our results of operations and anticipated future results of operations; • our financial condition, especially in relation to the anticipated future capital expenditures and other commitments required to conduct our operations and carry out our business strategy; • our operating expenses; • the levels of dividends paid by comparable companies; and • other factors our Board deems relevant.
Regular and special dividends on our common stock are authorized and determined by our Board in its sole discretion and depend upon a number of factors, including: • cash available for dividends; • our results of operations and anticipated future results of operations; 17 • our financial condition, especially in relation to the anticipated future capital expenditures and other commitments required to conduct our operations and carry out our business strategy; • our operating costs; • any contractual restrictions or statutory/legal restrictions; • the levels of dividends paid by comparable companies; and • other factors our Board deems relevant.
These risks include, among other risks: • increases in taxes and governmental royalties; • changes in laws and policies governing the operations of foreign-based companies; • loss of revenue, loss of or damage to equipment, property and other assets and interruption of operations as a result of expropriation, nationalization, acts of terrorism, war, civil unrest and other political risks; • unilateral or forced renegotiation, modification or nullification of existing contracts with governmental entities; 23 • difficulties enforcing our rights against a governmental agency because of the doctrine of sovereign immunity and foreign sovereignty over international operations; and • currency restrictions or exchange rate fluctuations.
These risks include, among other risks: • increases in taxes and governmental royalties; 25 • additional and potentially unfamiliar laws and policies governing the operations of foreign-based companies and changes in such laws and policies; • loss of revenue, loss of or damage to equipment, property and other assets and interruption of operations as a result of expropriation, nationalization, acts of terrorism, war, civil unrest and other political risks; • unilateral or forced renegotiation, modification or nullification of existing contracts with governmental entities; • difficulties enforcing our rights against a governmental agency because of the doctrine of sovereign immunity and foreign sovereignty over international operations; • competition from companies that have established strategic long-term positions or have strong governmental relationships in the foreign jurisdictions in which we operate; and • currency restrictions or exchange rate fluctuations.
Accordingly, substantial and extended declines in commodity prices can materially and adversely affect the amount of cash flows we have available for our capital expenditures and operating expenses; the terms on which we can access the credit and capital markets; our results of operations; and our financial condition, including (but not limited to) our ability to pay dividends on our common stock.
Accordingly, substantial and extended declines in commodity prices can materially and adversely affect the amount of cash flows we have available for our capital expenditures and operating costs; the terms on which we can access the credit and capital markets; our results of operations; and our financial condition, including (but not limited to) our ability to pay regular and special dividends on our common stock or repurchase shares of our common stock under the share repurchase authorization established by our Board of Directors (Board).
Additionally, the continuing and evolving threat of cybersecurity attacks has resulted in evolving legal and compliance matters, including increased regulatory focus on prevention, which could require us to expend significant additional resources to meet such requirements. Outbreaks of communicable diseases can adversely affect our business, financial condition and results of operations.
Additionally, the continuing and evolving threat of cybersecurity attacks has resulted in evolving legal and compliance matters, including increased regulatory focus on prevention and new disclosure requirements recently enacted by the SEC with respect to material cybersecurity incidents and cybersecurity risk management, strategy and governance, which could require us to expend significant additional resources to meet such requirements. 27 Outbreaks of communicable diseases can adversely affect our business, financial condition and results of operations.
Risks Related to ESG/Sustainability, Regulatory and Legal Matters Developments and concerns related to climate change may have a material and adverse effect on us. Governmental and regulatory bodies, investors, consumers, industry and other stakeholders have been increasingly focused on climate change matters in recent years.
We also face competition from competing energy sources, such as renewable energy sources. 21 Risks Related to ESG/Sustainability, Regulatory and Legal Matters Developments and concerns related to climate change may have a material and adverse effect on us. Governmental and regulatory bodies, investors, consumers, industry and other stakeholders have been increasingly focused on climate change matters in recent years.
If we are ultimately unable to hedge additional production volumes for 2023 and beyond, we may be materially and adversely impacted by any declines in commodity prices, which may result in lower net cash provided by our operating activities.
To the extent we do not hedge our production volumes for 2024 and beyond, we may be materially and adversely impacted by any declines in commodity prices, which may result in lower net cash provided by our operating activities.
Specifically, certain financial institutions (including certain investment advisors and sovereign wealth, pension and endowment funds), in response to concerns related to climate change and the requests and other influence of environmental groups and similar stakeholders, have elected to shift some or all of their investments away from oil and gas-related sectors, and additional financial institutions and other investors may elect to do likewise in the future.
Specifically, certain financial institutions (including certain investment advisors and sovereign wealth, pension and endowment funds), in response to concerns related to climate change and the requests and other influence of environmental groups and similar stakeholders, have elected to shift some or all of their investments and financing away from oil and gas-related sectors; such trend may be accelerated by the extensive climate-related disclosure requirements discussed below.
EPA) has issued regulations relating to hydraulic fracturing and there have been various other proposals to regulate hydraulic fracturing at the federal level. 21 Any new requirements, restrictions, conditions or prohibitions could lead to operational delays and increased operating and compliance costs and, further, could delay or effectively prevent the development of crude oil and natural gas from formations which would not be economically viable without the use of hydraulic fracturing.
Any new requirements, restrictions, conditions or prohibitions could lead to operational delays and increased operating and compliance costs and, further, could delay or effectively prevent the development of crude oil and natural gas from formations which would not be economically viable without the use of hydraulic fracturing.
Such rules, regulations, policies and legislation may affect, among other things, (i) permitting for oil and gas drilling on state, tribal and federal lands, (ii) the leasing of state, tribal and federal lands for oil and gas development, (iii) the regulation of greenhouse gas (GHG) emissions and/or other climate change-related matters associated with oil and gas operations, (iv) the use of hydraulic fracturing on state, tribal and federal lands, (v) the calculation of royalty payments in respect of oil and gas production from state, tribal and federal lands (including, but not limited to, an increase in applicable royalty percentages), (vi) U.S. federal income tax laws applicable to oil and gas exploration and production companies and (vii) the use of financial derivative instruments to hedge the financial impact of fluctuations in crude oil, NGLs and natural gas prices.
Such rules, regulations, policies and legislation may affect, among other things, (i) permitting for oil and gas drilling on state, tribal and federal lands, (ii) the leasing of state, tribal and federal lands for oil and gas development, (iii) the regulation and disclosure of greenhouse gas (GHG) emissions and/or other climate change-related matters associated with oil and gas operations, (iv) the use of hydraulic fracturing on state, tribal and federal lands, (v) the calculation of royalty payments in respect of oil and gas production from state, tribal and federal lands (including, but not limited to, an increase in applicable royalty percentages), (vi) U.S. federal income tax laws applicable to oil and gas exploration and production companies and (vii) the use of financial derivative instruments to hedge the financial impact of fluctuations in crude oil, NGLs and natural gas prices. 22 Further, such regulatory, legislative and policy changes may, among other things, result in additional permitting and disclosure requirements, additional operating restrictions and/or the imposition of various conditions and restrictions on drilling and completion operations or other aspects of our business, any of which could lead to operational delays, increased operating and compliance costs and/or other impacts on our business and operations and could materially and adversely affect our business, results of operations, financial condition and capital expenditures.
These limitations and our dependence on the operator and third-party working interest owners for these projects could cause us to incur unexpected future costs, lower production and materially and adversely affect our financial condition and results of operations. 19 If we acquire crude oil, NGLs and natural gas properties, our failure to fully identify existing and potential issues, to accurately estimate reserves, production rates or costs, or to effectively integrate the acquired properties into our operations could materially and adversely affect our business, financial condition and results of operations.
If we acquire crude oil, NGLs and natural gas properties, our failure to fully identify existing and potential issues, to accurately estimate reserves, production rates or costs, or to effectively integrate the acquired properties into our operations could materially and adversely affect our business, financial condition and results of operations.
In addition, some forms of insurance may become unavailable or unavailable on economically acceptable terms. 18 Our ability to sell and deliver our crude oil, NGLs and natural gas production could be materially and adversely affected if adequate gathering, processing, compression, storage, transportation, refining and export facilities and equipment are unavailable.
Our ability to sell and deliver our crude oil, NGLs and natural gas production could be materially and adversely affected if adequate gathering, processing, compression, storage, transportation, refining, liquefaction and export facilities and equipment are unavailable.
EPA's new source performance standards applicable to emissions of volatile organic compounds from new, modified and reconstructed crude oil and natural gas wells and equipment located at natural gas production gathering and booster stations and gas processing plants. Our operations will also be subject to the methane emissions charges, once published by the U.S.
EPA’s new source performance standards applicable to emissions of volatile organic compounds from new, modified and reconstructed crude oil and natural gas wells and equipment located at natural gas production gathering and booster stations and gas processing plants, as well as the U.S. EPA’s final new methane rules announced in December 2023.
We cannot provide any assurance that our current credit ratings will remain in effect for any given period of time or that our credit ratings will be raised in the future, nor can we provide any assurance that any of our credit ratings will not be lowered.
We cannot provide any assurance that our current credit ratings will remain in effect for any given period of time or that our credit ratings will be raised in the future, nor can we provide any assurance that any of our credit ratings will not be lowered. 16 In addition, companies in the oil and gas sector may be exposed to increasing reputational risks and, in turn, certain financial risks.
Such inflationary pressures on our operating and capital costs, which we currently expect to continue in 2023, have impacted our cash flows and results of operations. We have undertaken, and plan to continue with, certain initiatives and actions (such as agreements with service providers to secure the costs and availability of services) to mitigate such inflationary pressures.
We have undertaken, and plan to continue with, certain initiatives and actions (such as agreements with service providers to secure the costs and availability of services) to mitigate any such inflationary pressures.
Such initiatives, targets and ambitions are also subject to business, regulatory, economic and competitive uncertainties and contingencies, and required advancements in technology. Also, our continuing efforts to research, establish, accomplish and accurately report on our emissions and other ESG-related initiatives, targets and ambitions may create additional operational risks and expenses and expose us to reputational, legal and other risks.
Also, our continuing efforts to research, establish, accomplish and accurately report on our emissions and other ESG-related initiatives, targets and ambitions may create additional operational risks and expenses and expose us to reputational, legal and other risks. 24 Further, investor and regulatory focus on ESG matters continues to increase.
Further, our reliance on technology has increased due to the increased use of personal devices, remote communications and other work-from-home practices adopted in response to the COVID-19 pandemic.
Further, our reliance on technology has increased due to the increased use of personal devices and remote communications.
Our public disclosures and other statements related to these initiatives, targets and ambitions reflect our plans and expectations at the time such disclosures and statements are made and are not a guarantee the initiatives will be successfully developed, implemented and carried out or that the targets or ambitions will be achieved or achieved on the anticipated timelines. 22 Our ability to achieve our ESG-related targets and ambitions is subject to numerous factors and conditions, some of which are outside of our control and include evolving government regulation, the pace of changes in technology, the successful development and deployment of existing or new technologies and business solutions on a commercial scale, the availability, timing and cost of necessary equipment, goods, services and personnel, and the availability of requisite financing and federal and state incentive programs.
Our ability to achieve our ESG-related targets and ambitions is subject to numerous factors and conditions, some of which are outside of our control and include evolving government regulation, potential revisions to emissions estimates as measurement technologies advance or due to changes in protocol or methodologies, the pace of changes in technology, the successful development and deployment of existing or new technologies and business solutions on a commercial scale, the availability, timing and cost of necessary equipment, goods, services and personnel, and the availability of requisite financing and federal and state incentive programs.
The inability of our customers and other contractual counterparties to pay amounts owed to us and to otherwise satisfy their contractual obligations to us may materially and adversely affect our business, financial condition, results of operations and cash flows.
The inability of our customers and other contractual counterparties to pay amounts owed to us and to otherwise satisfy their contractual obligations to us may materially and adversely affect our business, financial condition, results of operations and cash flows. 18 Risks Related to our Operations Drilling crude oil and natural gas wells is a high-risk activity and subjects us to a variety of risks that we cannot control.
Risks Related to our Operations Drilling crude oil and natural gas wells is a high-risk activity and subjects us to a variety of risks that we cannot control. Drilling crude oil and natural gas wells, including development wells, involves numerous risks, including the risk that we may not encounter commercially productive crude oil, NGLs and/or natural gas reserves.
Drilling crude oil and natural gas wells, including development wells, involves numerous risks, including the risk that we may not encounter commercially productive crude oil, NGLs and/or natural gas reserves. As a result, we may not recover all or any portion of our investment in new wells.
Limitations or restrictions on our ability to secure sufficient amounts of water (including limitations resulting from natural causes such as drought) could materially and adversely impact our operations.
Limitations or restrictions on our ability to secure sufficient amounts of water (including limitations resulting from natural causes such as drought) could materially and adversely impact our operations. Further, severe drought conditions can result in local authorities taking steps to restrict the use of water in their jurisdiction for drilling and completions in order to protect the local water supply.
As a result, fewer financial institutions and other investors may be willing to invest in, and provide capital to, companies in the oil and gas sector.
Further, additional financial institutions and other investors may elect to do likewise in the future or may impose more stringent conditions with respect to investments in, and financing of, oil and gas-related sectors. As a result, fewer financial institutions and other investors may be willing to invest in, and provide capital to, companies in the oil and gas sector.
The Paris Agreement went into effect in November 2016 and to which the United States formally rejoined in February 2021. The United States has established an economy-wide target of reducing its net GHG emissions by 50-52 percent below 2005 levels by 2030 and achieving net zero GHG emissions economy-wide by no later than 2050.
The United States has established an economy-wide target of reducing its net GHG emissions by 50-52 percent below 2005 levels by 2030 and achieving net zero GHG emissions economy-wide by no later than 2050. In December 2023, the first global stocktake, also known as the “UAE Consensus,” was issued at the United Nations Climate Change Conference.
EPA, imposed under the Inflation Reduction Act of 2022. At the international level, in December 2015, the U.S. participated in the 21st Conference of the Parties of the United Nations Framework Convention on Climate Change in Paris, France. The Paris Agreement (adopted at the conference) calls for nations to undertake efforts with respect to global temperatures and GHG emissions.
Further, our operations are subject to the proposed methane “Waste Emissions Charge” rule, published in January 2024 as part of the Methane Emissions Reduction Program implemented under the Inflation Reduction Act of 2022. 23 At the international level, in December 2015, the U.S. participated in the 21st Conference of the Parties of the United Nations Framework Convention on Climate Change in Paris, France.
The elimination of certain U.S. federal income tax deductions, as well as any other changes to, or the imposition of new, federal, state, local or non-U.S. taxes (including the imposition of, or increases in, production, severance or similar taxes), could materially and adversely affect our cash flows, results of operations and financial condition.
The elimination or postponement of certain U.S. federal income tax deductions currently available to crude oil and natural gas exploration and production companies, as well as any other changes to, or the imposition of new, U.S. federal, state, local or non-U.S.
Any reduction in the amount of dividends we pay to stockholders could have an adverse effect on the trading price of our common stock. 16 Our hedging activities may prevent us from fully benefiting from increases in crude oil, NGLs and natural gas prices and may expose us to other risks, including counterparty risk.
Our hedging activities may prevent us from fully benefiting from increases in crude oil, NGLs and natural gas prices and may expose us to other risks, including counterparty risk, and our future production may not be sufficiently protected from any declines in commodity prices by our existing or future hedging arrangements.
While these specific changes were not included in the Tax Cuts and Jobs Act signed into law in December 2017, no accurate prediction can be made as to whether any such legislative changes or similar or other tax law changes will be proposed in the future and, if enacted, what the specific provisions or the effective date of any such legislation would be.
Further, no accurate prediction can be made as to (i) what the specific provisions or the effective date of any such enacted legislation would be or (ii) in the case of a global minimum tax or similar tax, which countries or other jurisdictions would participate and enact applicable legislation.
Removed
In addition, companies in the oil and gas sector may be exposed to increasing reputational risks and, in turn, certain financial risks.
Added
Such inflationary pressures on our operating costs and capital expenditures impacted our cash flows and results of operations during these periods.
Removed
As a result, we may not recover all or any portion of our investment in new wells.
Added
While such inflationary pressures diminished in 2023, the market for such materials, services and labor continues to fluctuate and, as a result, the timing and impact of any price changes on our future operating costs and capital expenditures is uncertain.
Removed
Further, severe drought conditions can result in local authorities taking steps to restrict the use of water in their jurisdiction for drilling and hydraulic fracturing in order to protect the local water supply.
Added
Our ability to declare and pay regular or special dividends on our common stock and repurchase shares of our common stock is subject to certain considerations.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe following tables set forth the results of the gross crude oil and natural gas wells completed for the years ended December 31, 2022, 2021 and 2020: Gross Development Wells Completed Gross Exploratory Wells Completed Crude Oil Natural Gas Dry Hole Total Crude Oil Natural Gas Dry Hole Total 2022 United States 462 133 11 606 3 — 8 11 Trinidad — — — — — 2 1 3 Total 462 133 11 606 3 2 9 14 2021 United States 474 72 5 551 10 1 1 12 Trinidad — — — — — — — — Oman — — — — — — 3 3 Total 474 72 5 551 10 1 4 15 2020 United States 580 13 15 608 3 — 4 7 Trinidad — — — — — 3 — 3 Total 580 13 15 608 3 3 4 10 28 The following tables set forth the results of the net crude oil and natural gas wells completed for the years ended December 31, 2022, 2021 and 2020: Net Development Wells Completed Net Exploratory Wells Completed Crude Oil Natural Gas Dry Hole Total Crude Oil Natural Gas Dry Hole Total 2022 United States 395 117 10 522 3 — 8 11 Trinidad — — — — — 2 1 3 Total 395 117 10 522 3 2 9 14 2021 United States 434 66 4 504 10 1 1 12 Trinidad — — — — — — — — Oman — — — — — — 3 3 Total 434 66 4 504 10 1 4 15 2020 United States 516 12 15 543 2 — 3 5 Trinidad — — — — — 2 — 2 Total 516 12 15 543 2 2 3 7 EOG participated in the drilling of wells that were in the process of being drilled or completed at the end of the period as set out in the table below for the years ended December 31, 2022, 2021 and 2020: Wells in Progress at End of Period 2022 2021 2020 Gross Net Gross Net Gross Net United States 251 213 191 167 155 147 Trinidad 1 1 1 1 1 1 China — — — — 3 3 Oman — — — — 1 1 Total 252 214 192 168 160 152 Included in the previous table of wells in progress at the end of the period were wells which had been drilled, but were not completed (DUCs).
Biggest changeThe following tables set forth the results of the gross crude oil and natural gas wells completed for the years ended December 31, 2023, 2022 and 2021: Gross Development Wells Completed Gross Exploratory Wells Completed Crude Oil Natural Gas Dry Hole Total Crude Oil Natural Gas Dry Hole Total 2023 United States 595 152 2 749 9 7 — 16 Trinidad — 2 — 2 — 1 — 1 Total 595 154 2 751 9 8 — 17 2022 United States 462 133 11 606 3 — 8 11 Trinidad — — — — — 2 1 3 Total 462 133 11 606 3 2 9 14 2021 United States 474 72 5 551 10 1 1 12 Trinidad — — — — — — — — Oman — — — — — — 3 3 Total 474 72 5 551 10 1 4 15 31 The following tables set forth the results of the net crude oil and natural gas wells completed for the years ended December 31, 2023, 2022 and 2021: Net Development Wells Completed Net Exploratory Wells Completed Crude Oil Natural Gas Dry Hole Total Crude Oil Natural Gas Dry Hole Total 2023 United States 490 135 2 627 7 6 — 13 Trinidad — 2 — 2 — 1 — 1 Total 490 137 2 629 7 7 — 14 2022 United States 395 117 10 522 3 — 8 11 Trinidad — — — — — 2 1 3 Total 395 117 10 522 3 2 9 14 2021 United States 434 66 4 504 10 1 1 12 Trinidad — — — — — — — — Oman — — — — — — 3 3 Total 434 66 4 504 10 1 4 15 EOG participated in the drilling of wells that were in the process of being drilled or completed at the end of the period as set out in the table below for the years ended December 31, 2023, 2022 and 2021: Wells in Progress at End of Period 2023 2022 2021 Gross Net Gross Net Gross Net United States 254 212 251 213 191 167 Trinidad 3 3 1 1 1 1 Total 257 215 252 214 192 168 Included in the previous table of wells in progress at the end of the period were wells which had been drilled, but were not completed (DUCs).
For related discussion, see ITEM 1A, Risk Factors. EOG's estimates of reserves filed with other federal agencies are consistent with the information set forth in "Supplemental Information to Consolidated Financial Statements." Acreage. The following table summarizes EOG's gross and net developed and undeveloped acreage at December 31, 2022 (in thousands of acres).
For related discussion, see ITEM 1A, Risk Factors. EOG's estimates of reserves filed with other federal agencies are consistent with the information set forth in "Supplemental Information to Consolidated Financial Statements." Acreage. The following table summarizes EOG's gross and net developed and undeveloped acreage at December 31, 2023 (in thousands of acres).
Approximately 0.1 million net acres will expire in 2023, 0.1 million net acres will expire in 2024 and 1.0 million acres will expire in 2025 if production is not established or we take no other action to extend the terms of the leases or obtain concessions.
Approximately 0.1 million net acres will expire in 2024, 0.1 million net acres will expire in 2025 and 1.1 million net acres will expire in 2026 if production is not established or we take no other action to extend the terms of the leases or obtain concessions.
As of December 31, 2022, there were no proved undeveloped reserves (PUDs) associated with undeveloped leases on which drilling was planned after the expiration dates of such leases.
As of December 31, 2023, there were no proved undeveloped reserves (PUDs) associated with undeveloped leases on which drilling was planned after the expiration dates of such leases.
In order to effectively manage its capital expenditures and to provide flexibility in managing its drilling rig and well completion schedules, EOG, from time to time, will have an inventory of DUCs. At December 31, 2022, there were approximately 88 MMBoe of net PUDs associated with EOG's inventory of DUCs.
In order to effectively manage its capital expenditures and to provide flexibility in managing its drilling rig and well completion schedules, EOG, from time to time, will have an inventory of DUCs. At December 31, 2023, there were approximately 134 MMBoe of net PUDs associated with EOG's inventory of DUCs.
Gross crude oil and natural gas wells include 143 wells with multiple completions. Drilling and Acquisition Activities .
Gross crude oil and natural gas wells include 58 wells with multiple completions. Drilling and Acquisition Activities .
EOG's other property, plant and equipment primarily includes gathering, transportation and processing infrastructure assets and buildings which support EOG's exploration and production activities. EOG does not own drilling rigs, hydraulic fracturing equipment or rail cars. All of EOG's drilling and completion activities are conducted on a contractual basis with independent drilling contractors and other third-party service contractors.
EOG's other property, plant and equipment primarily includes gathering, transportation and processing infrastructure assets, carbon capture and storage assets and buildings. EOG does not own drilling rigs, hydraulic fracturing equipment or rail cars. All of EOG's drilling and completion activities are conducted on a contractual basis with independent drilling contractors and other third-party service contractors.
During the years ended December 31, 2022, 2021 and 2020, EOG expended $5.2 billion, $4.0 billion and $3.7 billion, respectively, for exploratory and development drilling, facilities and acquisition of leases and producing properties, including asset retirement costs of $298 million, $127 million and $117 million, respectively.
During the years ended December 31, 2023, 2022 and 2021, EOG expended $6.0 billion, $5.2 billion and $4.0 billion, respectively, for exploratory and development drilling, facilities and acquisition of leases and producing properties, including asset retirement costs of $257 million, $298 million and $127 million, respectively.
Drilled Uncompleted Wells at End of Period 2022 2021 2020 Gross Net Gross Net Gross Net United States 122 98 121 105 89 86 China — — — — 3 3 Total 122 98 121 105 92 89 29 EOG acquired wells as set forth in the following table (excluding the acquisition of additional interests in 74, 5 and 8 net wells in which EOG previously owned an interest for the years ended December 31, 2022, 2021 and 2020, respectively) for the years ended December 31, 2022, 2021 and 2020: Gross Acquired Wells Net Acquired Wells Crude Oil Natural Gas Total Crude Oil Natural Gas Total 2022 United States 25 5 30 19 1 20 Total 25 5 30 19 1 20 2021 United States 2 14 16 1 13 14 Total 2 14 16 1 13 14 2020 United States 80 3 83 70 3 73 Total 80 3 83 70 3 73 Other Property, Plant and Equipment.
Drilled Uncompleted Wells at End of Period 2023 2022 2021 Gross Net Gross Net Gross Net United States 156 132 122 98 121 105 Trinidad 1 1 — — — — Total 157 133 122 98 121 105 32 EOG acquired wells as set forth in the following table (excluding the acquisition of additional interests in 4, 74 and 5 net wells in which EOG previously owned an interest for the years ended December 31, 2023, 2022 and 2021, respectively) for the years ended December 31, 2023, 2022 and 2021: Gross Acquired Wells Net Acquired Wells Crude Oil Natural Gas Total Crude Oil Natural Gas Total 2023 United States 5 — 5 5 — 5 Total 5 — 5 5 — 5 2022 United States 25 5 30 19 1 20 Total 25 5 30 19 1 20 2021 United States 2 14 16 1 13 14 Total 2 14 16 1 13 14 Other Property, Plant and Equipment.
Included in our undeveloped acreage is non-producing acreage within such larger producing leases. 27 The agreement governing the acreage associated with our exploration program in offshore Australia is set to expire at various dates through 2025 depending on EOG's decision to move forward with its defined work program or unless EOG is either granted a production license or an extension of the permit.
The agreement governing the acreage associated with our exploration program in offshore Australia is set to expire at various dates through 2026 depending on EOG's decision to move forward with its defined work program or unless EOG is either granted a production license or an extension of the permit. Productive Well Summary .
Developed Undeveloped Total Gross Net Gross Net Gross Net United States 2,062 1,630 2,753 1,852 4,815 3,482 Trinidad 77 65 216 125 293 190 Australia — — 1,009 1,009 1,009 1,009 Total 2,139 1,695 3,978 2,986 6,117 4,681 Most of our undeveloped oil and gas leases, particularly in the United States, are subject to lease expiration if initial wells are not drilled within a specified period, generally between three to five years.
Developed Undeveloped Total Gross Net Gross Net Gross Net United States 1,869 1,500 2,747 1,866 4,616 3,366 Trinidad 77 65 238 139 315 204 Australia — — 1,009 1,009 1,009 1,009 Total 1,946 1,565 3,994 3,014 5,940 4,579 30 Most of our undeveloped oil and gas leases, particularly in the United States, are subject to lease expiration if initial wells are not drilled within a specified period, generally between three to five years.
In the fourth quarter of 2022, EOG applied for a one-year extension of the permit. Productive Well Summary . The following table represents EOG's gross and net productive wells at December 31, 2022, including 2,530 wells in which we hold a royalty interest.
The following table represents EOG's gross and net productive wells at December 31, 2023, including 2,868 wells in which we hold a royalty interest.
Crude Oil Natural Gas Total Gross Net Gross Net Gross Net United States 8,918 6,369 3,579 1,805 12,497 8,174 Trinidad 2 2 35 29 37 31 Total (1) 8,920 6,371 3,614 1,834 12,534 8,205 (1) EOG operated 9,039 gross and 8,053 net producing crude oil and natural gas wells at December 31, 2022.
Crude Oil Natural Gas Total Gross Net Gross Net Gross Net United States 9,475 6,652 3,595 1,772 13,070 8,424 Trinidad 2 2 38 32 40 34 Total (1) 9,477 6,654 3,633 1,804 13,110 8,458 (1) EOG operated 9,304 gross and 8,291 net producing crude oil and natural gas wells at December 31, 2023.
Added
Included in our undeveloped acreage is non-producing acreage within such larger producing leases.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+1 added−0 removed2 unchanged
Biggest changePursuant to this item, EOG uses a threshold of $1 million for purposes of determining whether disclosure of any such proceedings is required; EOG believes proceedings under this threshold are not material to EOG's business and financial condition. Applying this threshold, there are no environmental proceedings to disclose for the quarter and year ended December 31, 2022.
Biggest changePursuant to this item, EOG uses a threshold of $1 million for purposes of determining whether disclosure of any such proceedings is required; EOG believes proceedings under this threshold are not material to EOG's business and financial condition (the choice of this threshold does not imply that matters with potential monetary sanctions in excess of $1 million are necessarily material to EOG's business or financial condition).
Added
Applying this threshold, there are no environmental proceedings to disclose for the quarter and year ended December 31, 2023.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe following table sets forth, for the periods indicated, EOG's share repurchase activity: Period (a) Total Number of Shares Purchased (1) (b) Average Price Paid per Share (c) Total Number of Shares or Value of Shares Purchased as Part of Publicly Announced Plans or Programs (d) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2) October 1, 2022 - October 31, 2022 76,033 $ 128.00 — $ 5,000,000,000 November 1, 2022 - November 30, 2022 86,759 145.63 — $ 5,000,000,000 December 1, 2022 - December 31, 2022 4,793 133.85 — $ 5,000,000,000 Total 167,585 137.30 (1) The 167,585 total shares for the quarter ended December 31, 2022, and the 996,588 total shares for the full year 2022, consist solely of shares that were withheld by or returned to EOG (i) in satisfaction of tax withholding obligations that arose upon the exercise of employee stock options or stock-settled stock appreciation rights or the vesting of restricted stock, restricted stock unit or performance unit grants or (ii) in payment of the exercise price of employee stock options.
Biggest changeAlso includes 82,707 total shares that were withheld by or returned to EOG during the quarter ended December 31, 2023, at an average price of $127.66 per share, (i) in satisfaction of tax withholding obligations that arose upon the exercise of employee stock options or stock-settled stock appreciation rights or the vesting of restricted stock, restricted stock unit or performance unit grants or (ii) in payment of the exercise price of employee stock options (such shares do not count against the November 2021 Authorization).
EOG expects to continue to pay dividends to its stockholders; however, EOG's Board may reduce the dividend or cease declaring dividends at any time, including if it determines that EOG's current or forecasted future cash flows provided by its operating activities (after deducting capital expenditures and other commitments) are not sufficient to pay EOG's desired levels of dividends to its stockholders or to pay dividends to its stockholders at all.
EOG expects to continue to pay dividends to its stockholders; however, EOG's Board may reduce the dividend or cease declaring dividends at any time, including if it determines that EOG's current or forecasted future cash flows provided by its operating activities (after deducting capital expenditures and other commitments requiring cash) are not sufficient to pay EOG's desired levels of dividends to its stockholders or to pay dividends to its stockholders at all.
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.
(3) 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 performance graph shown below compares the cumulative five-year total return to stockholders on EOG's common stock as compared to the cumulative five-year total returns on the Standard and Poor's 500 Index (S&P 500) and the Standard and Poor's 500 Oil & Gas Exploration & Production Index (S&P O&G E&P).
The performance graph shown below compares the cumulative five-year total return to stockholders of EOG's common stock as compared to the cumulative five-year total returns of the Standard and Poor's 500 Index (S&P 500) and the Standard and Poor's 500 Oil & Gas Exploration & Production Index (S&P O&G E&P).
The comparison was prepared based upon the following assumptions: 1. $100 was invested on December 31, 2017 in each of the following: common stock of EOG, the S&P 500 and the S&P O&G E&P. 2. Dividends are reinvested.
The comparison was prepared based upon the following assumptions: 1. $100 was invested on December 31, 2018 in each of the following: common stock of EOG, the S&P 500 and the S&P O&G E&P. 2. Dividends are reinvested.
ITEM 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities EOG's common stock is traded on the New York Stock Exchange under the ticker symbol "EOG." As of February 16, 2023, there were approximately 2,800 record holders and approximately 1,075,000 beneficial owners of EOG's common stock.
ITEM 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities EOG's common stock is traded on the New York Stock Exchange under the ticker symbol "EOG." As of February 15, 2024, there were approximately 3,000 record holders and approximately 1,093,000 beneficial owners of EOG's common stock.
EOG did not repurchase any shares under the November 2021 Authorization during the fourth quarter of 2022. 31 Comparative Stock Performance The following performance graph and related information shall not be deemed "soliciting material" or to be "filed" with the United States Securities and Exchange Commission, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933, as amended, or Securities Exchange Act of 1934, as amended, except to the extent that EOG specifically requests that such information be treated as "soliciting material" or specifically incorporates such information by reference into such a filing.
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. 34 Comparative Stock Performance The following performance graph and related information shall not be deemed "soliciting material" or to be "filed" with the United States Securities and Exchange Commission, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933, as amended, or Securities Exchange Act of 1934, as amended, except to the extent that EOG specifically requests that such information be treated as "soliciting material" or specifically incorporates such information by reference into such a filing.
These shares do not count against the November 2021 Authorization (as defined and further discussed below). (2) Effective November 4, 2021, the Board established a new share repurchase authorization to allow for the repurchase by EOG of up to $5 billion of its common stock (November 2021 Authorization).
(2) Effective November 4, 2021, EOG's Board of Directors (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).
The timing and amount of repurchases, if any, will be at the discretion of EOG's management and will depend on a variety of factors, including the then-trading price of EOG's common stock, corporate and regulatory requirements, and other market and economic conditions. Repurchased shares will be held as treasury shares and will be available for general corporate purposes.
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, other market and economic conditions, the availability of cash to effect repurchases and EOG's anticipated future capital expenditures and other commitments requiring cash.
Comparison of Five-Year Cumulative Total Returns EOG, S&P 500 and S&P O&G E&P (Performance Results Through December 31, 2022) 2017 2018 2019 2020 2021 2022 EOG $ 100.00 $ 81.33 $ 79.03 $ 48.50 $ 91.51 $ 143.55 S&P 500 $ 100.00 $ 95.62 $ 125.72 $ 148.85 $ 191.58 $ 156.88 S&P O&G E&P $ 100.00 $ 80.50 $ 90.17 $ 58.24 $ 108.95 $ 172.69 32 ITEM 6.
Comparison of Five-Year Cumulative Total Returns EOG, S&P 500 and S&P O&G E&P (Performance Results Through December 31, 2023) 2018 2019 2020 2021 2022 2023 EOG $ 100.00 $ 97.18 $ 59.63 $ 112.52 $ 176.50 $ 172.96 S&P 500 $ 100.00 $ 131.49 $ 155.68 $ 200.37 $ 164.08 $ 207.21 S&P O&G E&P $ 100.00 $ 112.02 $ 72.35 $ 135.35 $ 214.52 $ 214.60 35 ITEM 6.
Removed
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.
Added
The following table sets forth, for the periods indicated, EOG's share repurchase activity: Period (a) Total Number of Shares Purchased (1) (b) Average Price Paid per Share (c) Total Number of Shares or Value of Shares Purchased as Part of Publicly Announced Plans or Programs (2) (d) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (3) October 1, 2023 - October 31, 2023 59,602 $ 129.19 $ — $ 4,328,867,620 November 1, 2023 - November 30, 2023 1,198,980 122.96 145,760,313 4,183,107,307 December 1, 2023 - December 31, 2023 1,269,005 122.49 154,239,583 4,028,867,724 Total 2,527,587 122.87 299,999,896 (1) Includes 2,444,880 shares repurchased during the quarter ended December 31, 2023, at an average price of $122.71 per share (inclusive of commissions and transaction fees), pursuant to the November 2021 Authorization (as defined and further discussed below); such repurchases count against the November 2021 Authorization.
Added
The share repurchases during December 2023 were made pursuant to a Rule 10b5-1 trading plan entered into by EOG on December 1, 2023 (prior to the opening of trading on such day).
Added
As of the date of this filing, (i) EOG has repurchased an aggregate 8,648,918 shares at a total cost of $971,132,276 (inclusive of commissions and transaction fees) under the November 2021 Authorization and (ii) an additional $4,028,867,724 of shares may be purchased under the November 2021 Authorization.
Added
Repurchased shares are held as treasury shares and are available for general corporate purposes.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

3 edited+0 added−0 removed0 unchanged
Biggest changeOther Information 54 ITEM 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 55 PART III ITEM 10. Directors, Executive Officers and Corporate Governance 56 ITEM 11. Executive Compensation 56 ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 56 ITEM 13. Certain Relationships and Related Transactions, and Director Independence 57 ITEM 14.
Biggest changeOther Information 53 ITEM 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 53 PART III ITEM 10. Directors, Executive Officers and Corporate Governance 54 ITEM 11. Executive Compensation 54 ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 54 ITEM 13. Certain Relationships and Related Transactions, and Director Independence 56 ITEM 14.
Principal Accounting Fees and Services 58 PART IV ITEM 15. Exhibit and Financial Statement Schedules 58 ITEM 16. Form 10-K Summary 58 SIGNATURES (i) PART I
Principal Accounting Fees and Services 56 PART IV ITEM 15. Exhibit and Financial Statement Schedules 56 ITEM 16. Form 10-K Summary 56 SIGNATURES (i) PART I
ITEM 6. Reserved 33 ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 33 ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk 54 ITEM 8. Financial Statements and Supplementary Data 54 ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 54 ITEM 9A. Controls and Procedures 54 ITEM 9B.
ITEM 6. Reserved 36 ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 36 ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk 53 ITEM 8. Financial Statements and Supplementary Data 53 ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 53 ITEM 9A. Controls and Procedures 53 ITEM 9B.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeNatural Gas Basis Swap Contracts Contracts Sold Period Settlement Index Volume (MMBtud in thousands) Weighted Average Price Differential ($/MMBtu) January - December 2022 (closed) NYMEX Henry Hub HSC Differential (1) 210 $ 0.01 January - February 2023 (closed) NYMEX Henry Hub HSC Differential 135 0.01 March - 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. 47 Financing EOG's debt-to-total capitalization ratio was 17% at December 31, 2022, compared to 19% at December 31, 2021.
Biggest changeCrude 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) NYMEX WTI 95 $ 67.90 6 $ 102.26 April - May 2023 (closed) NYMEX WTI 91 67.63 2 98.15 June 2023 (closed) 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 - December 2023 (closed) NYMEX Henry Hub 300 $ 3.36 January - February 2024 (closed) NYMEX Henry Hub 725 3.07 March - December 2024 NYMEX Henry Hub 725 3.07 January - December 2025 NYMEX Henry Hub 725 3.07 46 Natural Gas Basis Swap Contracts Contracts Sold Period Settlement Index Volume (MMBtud in thousands) Weighted Average Price Differential ($/MMBtu) January - December 2023 (closed) NYMEX Henry Hub HSC Differential (1) 135 $ 0.01 January - February 2024 (closed) NYMEX Henry Hub HSC Differential 10 0.00 March - 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.
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 of the drilling and completion services it utilizes as part of its 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.
All statements, other than statements of historical facts, including, among others, statements and projections regarding EOG's future financial position, operations, performance, business strategy, goals, returns and rates of return, budgets, reserves, levels of production, capital expenditures, costs and asset sales, statements regarding future commodity prices and statements regarding the plans and objectives of EOG's management for future operations, are forward‐looking statements.
All statements, other than statements of historical facts, including, among others, statements and projections regarding EOG's future financial position, operations, performance, business strategy, goals, returns and rates of return, budgets, reserves, levels of production, capital expenditures, operating costs and asset sales, statements regarding future commodity prices and statements regarding the plans and objectives of EOG's management for future operations, are forward‐looking statements.
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 and capital costs, cash flows and results of 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 and capital expenditures, 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 been able to largely offset such impacts.
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.
Holding all other factors constant, if reserves are revised upward or downward, earnings will increase or decrease, respectively. 50 Depreciation, depletion and amortization of the cost of proved oil and gas properties is calculated using the unit-of-production method.
Holding all other factors constant, if reserves are revised upward or downward, earnings will increase or decrease, respectively. Depreciation, depletion and amortization of the cost of proved oil and gas properties is calculated using the unit-of-production method.
See "Operating Revenues and Other" above for a discussion of production volumes. 39 Lease and well expenses include expenses for EOG-operated properties, as well as expenses billed to EOG from other operators where EOG is not the operator of a property.
See "Operating Revenues and Other" above for a discussion of production volumes. Lease and well expenses include expenses for EOG-operated properties, as well as expenses billed to EOG from other operators where EOG is not the operator of a property.
Important factors that could cause EOG's actual results to differ materially from the expectations reflected in EOG's forward-looking statements include, among others: • the timing, extent and duration of changes in prices for, supplies of, and demand for, crude oil and condensate, natural gas liquids (NGLs), natural gas and related commodities; • the extent to which EOG is successful in its efforts to acquire or discover additional reserves; • the extent to which EOG is successful in its efforts to (i) economically develop its acreage in, (ii) produce reserves and achieve anticipated production levels and rates of return from, (iii) decrease or otherwise control its drilling, completion and operating costs and capital expenditures related to, and (iv) maximize reserve recovery from, its existing and future crude oil and natural gas exploration and development projects and associated potential and existing drilling locations; • the success of EOG's cost-mitigation initiatives and actions in offsetting the impact of inflationary pressures on EOG's operating costs and capital expenditures; • the extent to which EOG is successful in its efforts to market its production of crude oil and condensate, NGLs and natural gas; • security threats, including cybersecurity threats and disruptions to our business and operations from breaches of our information technology systems, physical breaches of our facilities and other infrastructure or breaches of the information technology systems, facilities and infrastructure of third parties with which we transact business; • the availability, proximity and capacity of, and costs associated with, appropriate gathering, processing, compression, storage, transportation, refining, and export facilities; • the availability, cost, terms and timing of issuance or execution of mineral licenses and leases and governmental and other permits and rights-of-way, and EOG's ability to retain mineral licenses and leases; • the impact of, and changes in, government policies, laws and regulations, including climate change-related regulations, policies and initiatives (for example, with respect to air emissions); tax laws and regulations (including, but not limited to, carbon tax and emissions-related legislation); environmental, health and safety laws and regulations relating to disposal of produced water, drilling fluids and other wastes, hydraulic fracturing and access to and use of water; laws and regulations affecting the leasing of acreage and permitting for oil and gas drilling and the calculation of royalty payments in respect of oil and gas production; laws and regulations imposing additional permitting and disclosure requirements, additional operating restrictions and conditions or restrictions on drilling and completion operations and on the transportation of crude oil, NGLs and natural gas; laws and regulations with respect to financial derivatives and hedging activities; and laws and regulations with respect to the import and export of crude oil, natural gas and related commodities; 52 • the impact of climate change-related policies and initiatives at the corporate and/or investor community levels and other potential developments related to climate change, such as (but not limited to) changes in consumer and industrial/commercial behavior, preferences and attitudes with respect to the generation and consumption of energy; increased availability of, and increased consumer and industrial/commercial demand for, competing energy sources (including alternative energy sources); technological advances with respect to the generation, transmission, storage and consumption of energy; alternative fuel requirements; energy conservation measures and emissions-related legislation; decreased demand for, and availability of, services and facilities related to the exploration for, and production of, crude oil, NGLs and natural gas; and negative perceptions of the oil and gas industry and, in turn, reputational risks associated with the exploration for, and production of, crude oil, NGLs and natural gas; • continuing political and social concerns relating to climate change and the greater potential for shareholder activism, governmental inquiries and enforcement actions and litigation and the resulting expenses and potential disruption to EOG's day-to-day operations; • the extent to which EOG is able to successfully and economically develop, implement and carry out its emissions and other ESG-related initiatives and achieve its related targets ad initiatives; • EOG's ability to effectively integrate acquired crude oil and natural gas properties into its operations, identify and resolve existing and potential issues with respect to such properties and accurately estimate reserves, production, drilling, completion and operating costs and capital expenditures with respect to such properties; • the extent to which EOG's third-party-operated crude oil and natural gas properties are operated successfully, economically and in compliance with applicable laws and regulations; • competition in the oil and gas exploration and production industry for the acquisition of licenses, leases and properties; • the availability and cost of, and competition in the oil and gas exploration and production industry for, employees, labor and other personnel, facilities, equipment, materials (such as water, sand, fuel and tubulars) and services; • the accuracy of reserve estimates, which by their nature involve the exercise of professional judgment and may therefore be imprecise; • weather, including its impact on crude oil and natural gas demand, and weather-related delays in drilling and in the installation and operation (by EOG or third parties) of production, gathering, processing, refining, compression, storage, transportation, and export facilities; • the ability of EOG's customers and other contractual counterparties to satisfy their obligations to EOG and, related thereto, to access the credit and capital markets to obtain financing needed to satisfy their obligations to EOG; • EOG's ability to access the commercial paper market and other credit and capital markets to obtain financing on terms it deems acceptable, if at all, and to otherwise satisfy its capital expenditure requirements; • the extent to which EOG is successful in its completion of planned asset dispositions; • the extent and effect of any hedging activities engaged in by EOG; • the timing and extent of changes in foreign currency exchange rates, interest rates, inflation rates, global and domestic financial market conditions and global and domestic general economic conditions; • the duration and economic and financial impact of epidemics, pandemics or other public health issues; • geopolitical factors and political conditions and developments around the world (such as the imposition of tariffs or trade or other economic sanctions, political instability and armed conflict), including in the areas in which EOG operates; • the extent to which EOG incurs uninsured losses and liabilities or losses and liabilities in excess of its insurance coverage; • acts of war and terrorism and responses to these acts; and • the other factors described under ITEM 1A, Risk Factors of this Annual Report on Form 10-K and any updates to those factors set forth in EOG's subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K.
Important factors that could cause EOG's actual results to differ materially from the expectations reflected in EOG's forward-looking statements include, among others: • the timing, extent and duration of changes in prices for, supplies of, and demand for, crude oil and condensate, natural gas liquids (NGLs), natural gas and related commodities; • the extent to which EOG is successful in its efforts to acquire or discover additional reserves; • the extent to which EOG is successful in its efforts to (i) economically develop its acreage in, (ii) produce reserves and achieve anticipated production levels and rates of return from, (iii) decrease or otherwise control its drilling, completion and operating costs and capital expenditures related to, and (iv) maximize reserve recovery from, its existing and future crude oil and natural gas exploration and development projects and associated potential and existing drilling locations; • the success of EOG's cost-mitigation initiatives and actions in offsetting the impact of inflationary pressures on EOG's operating costs and capital expenditures; • the extent to which EOG is successful in its efforts to market its production of crude oil and condensate, NGLs and natural gas; • security threats, including cybersecurity threats and disruptions to our business and operations from breaches of our information technology systems, physical breaches of our facilities and other infrastructure or breaches of the information technology systems, facilities and infrastructure of third parties with which we transact business, and enhanced regulatory focus on prevention and disclosure requirements relating to cyber incidents; • the availability, proximity and capacity of, and costs associated with, appropriate gathering, processing, compression, storage, transportation, refining, liquefaction and export facilities; • the availability, cost, terms and timing of issuance or execution of mineral licenses and leases and governmental and other permits and rights-of-way, and EOG's ability to retain mineral licenses and leases; • the impact of, and changes in, government policies, laws and regulations, including climate change-related regulations, policies and initiatives (for example, with respect to air emissions); tax laws and regulations (including, but not limited to, carbon tax and emissions-related legislation); environmental, health and safety laws and regulations relating to disposal of produced water, drilling fluids and other wastes, hydraulic fracturing and access to and use of water; laws and regulations affecting the leasing of acreage and permitting for oil and gas drilling and the calculation of royalty payments in respect of oil and gas production; laws and regulations imposing additional permitting and disclosure requirements, additional operating restrictions and conditions or restrictions on drilling and completion operations and on the transportation of crude oil, NGLs and natural gas; laws and regulations with respect to financial derivatives and hedging activities; and laws and regulations with respect to the import and export of crude oil, natural gas and related commodities; 51 • the impact of climate change-related policies and initiatives at the corporate and/or investor community levels and other potential developments related to climate change, such as (but not limited to) changes in consumer and industrial/commercial behavior, preferences and attitudes with respect to the generation and consumption of energy; increased availability of, and increased consumer and industrial/commercial demand for, competing energy sources (including alternative energy sources); technological advances with respect to the generation, transmission, storage and consumption of energy; alternative fuel requirements; energy conservation measures and emissions-related legislation; decreased demand for, and availability of, services and facilities related to the exploration for, and production of, crude oil, NGLs and natural gas; and negative perceptions of the oil and gas industry and, in turn, reputational risks associated with the exploration for, and production of, crude oil, NGLs and natural gas; • continuing political and social concerns relating to climate change and the greater potential for shareholder activism, governmental inquiries and enforcement actions and litigation and the resulting expenses and potential disruption to EOG's day-to-day operations; • the extent to which EOG is able to successfully and economically develop, implement and carry out its emissions and other ESG-related initiatives and achieve its related targets, ambitions and initiatives; • EOG's ability to effectively integrate acquired crude oil and natural gas properties into its operations, identify and resolve existing and potential issues with respect to such properties and accurately estimate reserves, production, drilling, completion and operating costs and capital expenditures with respect to such properties; • the extent to which EOG's third-party-operated crude oil and natural gas properties are operated successfully, economically and in compliance with applicable laws and regulations; • competition in the oil and gas exploration and production industry for the acquisition of licenses, leases and properties; • the availability and cost of, and competition in the oil and gas exploration and production industry for, employees, labor and other personnel, facilities, equipment, materials (such as water, sand, fuel and tubulars) and services; • the accuracy of reserve estimates, which by their nature involve the exercise of professional judgment and may therefore be imprecise; • weather, including its impact on crude oil and natural gas demand, and weather-related delays in drilling and in the installation and operation (by EOG or third parties) of production, gathering, processing, refining, liquefaction, compression, storage, transportation, and export facilities; • the ability of EOG's customers and other contractual counterparties to satisfy their obligations to EOG and, related thereto, to access the credit and capital markets to obtain financing needed to satisfy their obligations to EOG; • EOG's ability to access the commercial paper market and other credit and capital markets to obtain financing on terms it deems acceptable, if at all, and to otherwise satisfy its capital expenditure requirements; • the extent to which EOG is successful in its completion of planned asset dispositions; • the extent and effect of any hedging activities engaged in by EOG; • the timing and extent of changes in foreign currency exchange rates, interest rates, inflation rates, global and domestic financial market conditions and global and domestic general economic conditions; • the duration and economic and financial impact of epidemics, pandemics or other public health issues; • geopolitical factors and political conditions and developments around the world (such as the imposition of tariffs or trade or other economic sanctions, political instability and armed conflicts), including in the areas in which EOG operates; • the extent to which EOG incurs uninsured losses and liabilities or losses and liabilities in excess of its insurance coverage; • acts of war and terrorism and responses to these acts; and • the other factors described under ITEM 1A, Risk Factors of this Annual Report on Form 10-K and any updates to those factors set forth in EOG's subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K.
The Board also declared on such date a special dividend on the common stock of $1.00 per share to be paid on March 30, 2023, to stockholders of record as of March 16, 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.
As a result of the many uncertainties associated with the world economic and political environment, worldwide supplies of, and demand for, crude oil and condensate, NGLs and natural gas, the availabilities of other energy supplies and the relative competitive relationships of the various energy sources in the view of consumers, EOG is unable to predict what changes may occur in crude oil and condensate, NGLs, natural gas, ammonia and methanol prices in the future.
As a result of the many uncertainties associated with the world economic and political environment, worldwide supplies of, and demand for, crude oil and condensate, NGLs and natural gas, the availability of other energy supplies and the relative competitive relationships of the various energy sources in the view of consumers, EOG is unable to predict what changes may occur in crude oil and condensate, NGLs, natural gas, ammonia and methanol prices in the future.
Accordingly, you should not place any undue reliance on any of EOG's forward-looking statements. EOG's forward-looking statements speak only as of the date made, and EOG undertakes no obligation, other than as required by applicable law, to update or revise its forward-looking statements, whether as a result of new information, subsequent events, anticipated or unanticipated circumstances or otherwise. 53
Accordingly, you should not place any undue reliance on any of EOG's forward-looking statements. EOG's forward-looking statements speak only as of the date made, and EOG undertakes no obligation, other than as required by applicable law, to update or revise its forward-looking statements, whether as a result of new information, subsequent events, anticipated or unanticipated circumstances or otherwise. 52
For information regarding EOG's crude oil, NGLs and natural gas financial commodity derivative contracts through February 16, 2023, see "Financial Commodity Derivative Transactions" above. Capital. EOG plans to continue to focus a substantial portion of its exploration and development expenditures in its major producing areas in the United States.
For information regarding EOG's crude oil, NGLs and natural gas financial commodity derivative contracts through February 16, 2024, see "Financial Commodity Derivative Transactions" above. Capital. EOG plans to continue to focus a substantial portion of its exploration and development expenditures in its major producing areas in the United States.
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, partially 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 costs savings for the sand utilized in its well completion operations.
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.
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. Operations Several important developments have occurred since January 1, 2022. United States.
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. Operations Several important developments have occurred since January 1, 2023. United States.
(2) Amounts exclude transportation and storage service commitments that meet the definition of a lease. Amounts shown are based on current transportation and storage rates and the foreign currency exchange rates used to convert Canadian dollars into United States dollars at December 31, 2022.
(2) Amounts exclude transportation and storage service commitments that meet the definition of a lease. Amounts shown are based on current transportation and storage rates and the foreign currency exchange rates used to convert Canadian dollars into United States dollars at December 31, 2023.
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 year ended December 31, 2022, the average U.S.
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 year ended December 31, 2023, the average U.S.
During the five years ended December 31, 2022, WTI crude oil spot prices have fluctuated from approximately $(36.98) per barrel to $123.64 per barrel, and Henry Hub natural gas spot prices have ranged from approximately $1.33 per MMBtu to $23.86 per MMBtu.
During the five years ended December 31, 2023, WTI crude oil spot prices have fluctuated from approximately $(36.98) per barrel to $123.64 per barrel, and Henry Hub natural gas spot prices have ranged from approximately $1.33 per MMBtu to $23.86 per MMBtu.
In particular, statements, express or implied, concerning EOG's future financial or operating results and returns or EOG's ability to replace or increase reserves, increase production, generate returns and rates of return, replace or increase drilling locations, reduce or otherwise control drilling, completion and operating costs and capital expenditures, generate cash flows, pay down or refinance indebtedness, achieve, reach or otherwise meet initiatives, plans, goals, ambitions or targets with respect to emissions, other environmental matters, safety matters or other ESG (environmental/social/governance) matters, or pay and/or increase dividends are forward‐looking statements.
In particular, statements, express or implied, concerning EOG's future financial or operating results and returns or EOG's ability to replace or increase reserves, increase production, generate returns and rates of return, replace or increase drilling locations, reduce or otherwise control drilling, completion and operating costs and capital expenditures, generate cash flows, pay down or refinance indebtedness, achieve, reach or otherwise meet initiatives, plans, goals, ambitions or targets with respect to emissions, other environmental matters, safety matters or other ESG (environmental/social/governance) matters, pay and/or increase regular and/or special dividends or repurchase shares are forward‐looking statements.
On May 5, 2022, EOG announced the addition of quantitative guidance to 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.
In May 2022, EOG announced the addition of quantitative guidance to 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.
In 2023, EOG expects to continue to focus on mitigating inflationary pressure on operating costs through efficiency improvements. Cash Requirements. Certain of EOG's capital expenditures and operating expenses are subject to contracts with minimum commitments, including those that meet the definition of a lease under ASC "Leases (Topic 842)".
In 2024, EOG expects to continue to focus on mitigating inflationary pressure on operating costs through efficiency improvements. Cash Requirements. Certain of EOG's capital expenditures and operating costs are subject to contracts with minimum commitments, including those that meet the definition of a lease under ASC "Leases (Topic 842)".
Including the impact of EOG's natural gas financial derivative contracts and based on EOG's tax position and the portion of EOG's anticipated natural gas volumes for 2023 for which prices have not been determined under long-term marketing contracts, EOG's price sensitivity for each $0.10 per Mcf increase or decrease in wellhead natural gas price is approximately $35 million for net income and $44 million for pretax cash flows from operating activities.
Including the impact of EOG's natural gas financial derivative contracts and based on EOG's tax position and the portion of EOG's anticipated natural gas volumes for 2024 for which prices have not been determined under long-term marketing contracts, EOG's price sensitivity for each $0.10 per Mcf increase or decrease in wellhead natural gas price is approximately $27 million for net income and $35 million for pretax cash flows from operating activities.
While changes in interest rates affect the fair value of EOG's senior notes, such changes do not expose EOG to material fluctuations in earnings or cash flow. During 2022, EOG funded its capital program and operations primarily by utilizing cash provided by operating activities and cash on hand.
While changes in interest rates affect the fair value of EOG's senior notes, such changes do not expose EOG to material fluctuations in earnings or cash flow. During 2023, EOG funded its capital program and operations by utilizing cash provided by operating activities and cash on hand.
ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 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.
ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 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 of America (United States) with proved reserves in the United States and the Republic of Trinidad and Tobago (Trinidad).
The market price of crude oil and condensate, NGLs and natural gas in 2023 will impact the amount of cash generated from EOG's operating activities, which will in turn impact EOG's financial position.
The market price of crude oil and condensate, NGLs and natural gas in 2024 will impact the amount of cash generated from EOG's operating activities, which will in turn impact EOG's financial position.
EOG has placed an emphasis on applying its horizontal drilling and completion expertise to unconventional crude oil and natural gas plays. In 2022, EOG continued to focus on increasing drilling, completion and operating efficiencies, to improve well performance and, as is further discussed above, to partially mitigate inflationary pressures on its operating and capital costs.
EOG has placed an emphasis on applying its horizontal drilling and completion expertise to unconventional crude oil and natural gas plays. In 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 costs and capital expenditures.
During 2022, 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. See ITEM 1, Business - Exploration and Production for further discussion regarding EOG's 2022 United States operations. 34 Trinidad.
During 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. See ITEM 1, Business - Exploration and Production for further discussion regarding EOG's 2023 United States operations. 37 Trinidad.
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 17% at December 31, 2022 and 19% at December 31, 2021.
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 12% at December 31, 2023 and 17% at December 31, 2022.
On February 23, 2023, the Board declared a quarterly cash dividend on the common stock of $0.825 per share to be paid on April 28, 2023, to stockholders of record as of April 14, 2023.
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.
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 75% of EOG's United States production during both 2022 and 2021.
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 2023 and 2022, respectively.
In particular, EOG will be focused on United States drilling activity in its Delaware Basin, Eagle Ford play, Rocky Mountain area and Dorado gas play where it generates its highest rates-of-return.
In particular, EOG will be focused on United States drilling activity in its Delaware Basin, Eagle Ford play, Dorado gas play and Utica play where it generates its highest rates-of-return.
EOG has significant flexibility with respect to financing alternatives, including borrowings under its commercial paper program, bank borrowings, borrowings under its $2.0 billion senior unsecured revolving credit facility and equity and debt offerings. Operations. In 2023, crude oil and total crude oil equivalent production are expected to increase from 2022 levels.
EOG has significant flexibility with respect to financing alternatives, including borrowings under its commercial paper program, bank borrowings, borrowings under its $1.9 billion senior unsecured revolving credit facility and equity and debt offerings. Operations. In 2024, crude oil and total crude oil equivalent production are expected to increase from 2023 levels.
(2) Other International includes EOG's China and Canada operations. The China operations were sold in the second quarter of 2021. (3) Dollars per barrel or per thousand cubic feet, as applicable. Excludes the impact of financial commodity derivative instruments (see Note 12 to Consolidated Financial Statements).
(2) Other International includes EOG's China and Canada operations. The China operations were sold in the second quarter of 2021. EOG is continuing the process of exiting its Canada operations. (3) Dollars per barrel or per thousand cubic feet, as applicable. Excludes the impact of financial commodity derivative instruments (see Note 12 to Consolidated Financial Statements).
Changes to these factors may cause EOG's composite DD&A rate and expense to fluctuate from period to period. DD&A of the cost of other property, plant and equipment is generally calculated using the straight-line depreciation method over the useful lives of the assets. DD&A expenses in 2022 decreased $109 million to $3,542 million from $3,651 million in 2021.
Changes to these factors may cause EOG's composite DD&A rate and expense to fluctuate from period to period. DD&A of the cost of other property, plant and equipment is generally calculated using the straight-line depreciation method over the useful lives of the assets. 42 DD&A expenses in 2023 decreased $50 million to $3,492 million from $3,542 million in 2022.
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. 33 Such inflationary pressures on EOG's operating and capital costs have, in turn, impacted its cash flows and results of operations.
Such inflationary pressures 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.
On November 3, 2022, the Board (i) increased the quarterly cash dividend on the common stock from the previous $0.75 per share to $0.825 per share, effective beginning with the dividend paid on January 31, 2023, to stockholders of record as of January 17, 2023, and (ii) declared a special cash dividend on the common stock of $1.50 per share, paid on December 30, 2022, to stockholders of record as of December 15, 2022.
On November 2, 2023, the Board (i) increased the quarterly cash dividend on the common stock from the previous $0.825 per share to $0.91 per share, effective beginning with the dividend paid on January 31, 2024, to stockholders of record as of January 17, 2024, and (ii) declared a special cash dividend on the common stock of $1.50 per share, paid on December 29, 2023, to stockholders of record as of December 15, 2023.
Further, such inflationary pressures and the factors contributing to such inflationary pressures (described above) are not expected to impact EOG's liquidity, capital resources, cash requirements or financial position or its ability to conduct its day-to-day drilling, completion and production operations.
Further, such inflationary pressures and the factors contributing to such inflationary pressures (described above) have not, to date, impacted EOG's liquidity, capital resources, cash requirements or financial position or its ability to conduct its day-to-day drilling, completion and production operations.
During 2022, net proved crude oil and condensate and natural gas liquids (NGLs) reserves increased by 429 million barrels (MMBbl), and net proved natural gas reserves increased by 369 billion cubic feet or 62 MMBoe, in each case from December 31, 2021. Recent Developments Commodity Prices. Prices for crude oil and condensate, NGLs and natural gas have historically been volatile.
During 2023, net proved crude oil and condensate and natural gas liquids (NGLs) reserves increased by 204 million barrels (MMBbl), and net proved natural gas reserves increased by 339 billion cubic feet or 57 MMBoe, in each case from December 31, 2022. Recent Developments Commodity Prices. Prices for crude oil and condensate, NGLs and natural gas have historically been volatile.
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 group.
Lease rentals are expensed as incurred. 49 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 group.
In 2023, EOG anticipates the following cash requirements under these commitments (in millions): Finance Leases (1) $ 37 Operating Leases (1) 323 Leases Effective, Not Commenced (1) 111 Transportation and Storage Service Commitments (2) (3) 832 Purchase and Service Obligations (3) 529 Total Cash Requirements $ 1,832 (1) For more information on contracts that meet the definition of a lease under ASC "Leases (Topic 842)," see Note 18 to Consolidated Financial Statements.
In 2024, EOG anticipates the following cash requirements under these commitments (in millions): Finance Leases (1) $ 37 Operating Leases (1) 363 Leases Effective, Not Commenced (1) 55 Transportation and Storage Service Commitments (2) (3) 878 Purchase and Service Obligations (3) 873 Total Cash Requirements $ 2,206 (1) For more information on contracts that meet the definition of a lease under ASC "Leases (Topic 842)," see Note 18 to Consolidated Financial Statements.
The primary uses of cash were funds used in operations; exploration and development expenditures; dividend payments to stockholders; net repayment of debt; net cash paid for settlements of financial commodity derivative contracts; other property, plant and equipment expenditures; and net collateral posted for financial commodity derivative contracts. 2022 compared to 2021.
The primary uses of cash were funds used in operations; exploration and development expenditures; dividend payments to stockholders; net cash paid for settlements of financial commodity derivative contracts; repayment of debt; other property, plant and equipment expenditures; and purchases of treasury stock.
Several fields in the South East Coast Consortium Block, Modified U(a) Block, Block 4(a), Modified U(b) Block, 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), with the exception of the Modified U(b) Block in which the company ceased to have an interest in the production of natural gas and crude oil and condensate in the fourth quarter of 2022.
Several fields in the South East Coast Consortium (SECC) 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.
Transportation costs include transportation fees, storage and terminal fees, the cost of compression (the cost of compressing natural gas to meet pipeline pressure requirements), the cost of dehydration (the cost associated with removing water from natural gas to meet pipeline requirements), gathering fees and fuel costs.
Transportation costs include transportation fees, storage and terminal fees, the cost of compression (the cost of compressing natural gas to meet pipeline pressure requirements), the cost of dehydration (the cost associated with removing water from natural gas to meet pipeline requirements), gathering fees and fuel costs. Transportation costs also include operating and maintenance expenses associated with EOG-owned transportation assets.
While EOG maintains a $2.0 billion revolving credit facility to back its commercial paper program, there were no borrowings outstanding at any time during 2022 and the amount outstanding at year-end was zero.
While EOG maintains a $1.9 billion senior unsecured revolving credit facility to back its commercial paper program, there were no borrowings outstanding at any time during 2023 and the amount outstanding at year-end was zero.
Revenues from the sales of crude oil and condensate and NGLs in 2022 were approximately 83% of total wellhead revenues compared to 84% in 2021. During 2022, EOG recognized net losses on the mark-to-market of financial commodity derivative contracts of $3,982 million compared to net losses of $1,152 million in 2021.
Revenues from the sales of crude oil and condensate and NGLs in 2023 were 90% of total wellhead revenues compared to 83% in 2022. During 2023, EOG recognized net gains on the mark-to-market of financial commodity derivative contracts of $818 million compared to net losses of $3,982 million in 2022.
If the unproved properties are determined to be productive, the appropriate related costs are transferred to proved oil and gas properties. Lease rentals are expensed as incurred.
If the unproved properties are determined to be productive, the appropriate related costs are transferred to proved oil and gas properties.
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.
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.
EOG recognized net gains on asset dispositions of $74 million in 2022 compared to net gains on asset dispositions of $17 million in 2021. 36 Wellhead volume and price statistics for the years ended December 31, 2022, 2021 and 2020 were as follows: Year Ended December 31 2022 2021 2020 Crude Oil and Condensate Volumes (MBbld) (1) United States 460.7 443.4 408.1 Trinidad 0.6 1.5 1.0 Other International (2) — 0.1 0.1 Total 461.3 445.0 409.2 Average Crude Oil and Condensate Prices ($/Bbl) (3) United States $ 97.22 $ 68.54 $ 38.65 Trinidad 86.16 56.26 30.20 Other International (2) — 42.36 43.08 Composite 97.21 68.50 38.63 Natural Gas Liquids Volumes (MBbld) (1) United States 197.7 144.5 136.0 Other International (2) — — — Total 197.7 144.5 136.0 Average Natural Gas Liquids Prices ($/Bbl) (3) United States $ 36.70 $ 34.35 $ 13.41 Other International (2) — — — Composite 36.70 34.35 13.41 Natural Gas Volumes (MMcfd) (1) United States 1,315 1,210 1,040 Trinidad 180 217 180 Other International (2) — 9 32 Total 1,495 1,436 1,252 Average Natural Gas Prices ($/Mcf) (3) United States $ 7.27 $ 4.88 $ 1.61 Trinidad 4.43 (5) 3.40 2.57 Other International (2) — 5.67 4.66 Composite 6.93 4.66 1.83 Crude Oil Equivalent Volumes (MBoed) (4) United States 877.5 789.6 717.5 Trinidad 30.7 37.7 30.9 Other International (2) — 1.6 5.4 Total 908.2 828.9 753.8 Total MMBoe (4) 331.5 302.5 275.9 (1) Thousand barrels per day or million cubic feet per day, as applicable.
EOG recognized net gains on asset dispositions of $95 million in 2023 compared to net gains on asset dispositions of $74 million in 2022. 39 Wellhead volume and price statistics for the years ended December 31, 2023, 2022 and 2021 were as follows: Year Ended December 31 2023 2022 2021 Crude Oil and Condensate Volumes (MBbld) (1) United States 475.2 460.7 443.4 Trinidad 0.6 0.6 1.5 Other International (2) — — 0.1 Total 475.8 461.3 445.0 Average Crude Oil and Condensate Prices ($/Bbl) (3) United States $ 79.18 $ 97.22 $ 68.54 Trinidad 68.58 86.16 56.26 Other International (2) — — 42.36 Composite 79.17 97.21 68.50 Natural Gas Liquids Volumes (MBbld) (1) United States 223.8 197.7 144.5 Total 223.8 197.7 144.5 Average Natural Gas Liquids Prices ($/Bbl) (3) United States $ 23.07 $ 36.70 $ 34.35 Composite 23.07 36.70 34.35 Natural Gas Volumes (MMcfd) (1) United States 1,551 1,315 1,210 Trinidad 160 180 217 Other International (2) — — 9 Total 1,711 1,495 1,436 Average Natural Gas Prices ($/Mcf) (3) United States $ 2.70 $ 7.27 $ 4.88 Trinidad 3.65 4.43 (5) 3.40 Other International (2) — — 5.67 Composite 2.79 6.93 4.66 Crude Oil Equivalent Volumes (MBoed) (4) United States 957.5 877.5 789.6 Trinidad 27.3 30.7 37.7 Other International (2) — — 1.6 Total 984.8 908.2 828.9 Total MMBoe (4) 359.4 331.5 302.5 (1) Thousand barrels per day or million cubic feet per day, as applicable.
Crude oil volumes are presented in MBbld and prices are presented in $/Bbl. Natural gas volumes are presented in MMBtu per day (MMBtud) and prices are presented in dollars per MMBtu ($/MMBtu).
Natural gas volumes are presented in MMBtu per day (MMBtud) and prices are presented in dollars per MMBtu ($/MMBtu).
During 2021, EOG recognized net losses on the mark-to-market of financial commodity derivative contracts of $1,152 million, which included net cash paid for settlements of crude oil, NGLs and natural gas financial derivative contracts of $638 million.
During 2023, EOG recognized net gains on the mark-to-market of financial commodity derivative contracts of $818 million, which included net cash paid for settlements of crude oil, NGLs and natural gas financial derivative contracts of $112 million.
DD&A expenses associated with oil and gas properties in 2022 were $117 million lower than in 2021 primarily due to lower unit rates in the United States ($472 million) and lower production in Trinidad ($15 million), partially offset by an increase in production in the United States ($375 million).
DD&A expenses associated with oil and gas properties in 2023 were $64 million lower than in 2022 primarily due to lower unit rates in the United States ($373 million), partially offset by an increase in production in the United States ($299 million).
Cash provided by financing activities in 2021 included proceeds from stock options exercised and employee stock purchase plan activity ($19 million). 44 Total Expenditures The table below sets out components of total expenditures for the years ended December 31, 2022, 2021 and 2020 (in millions): 2022 2021 2020 Expenditure Category Capital Exploration and Development Drilling $ 3,675 $ 2,864 $ 2,664 Facilities 411 405 347 Leasehold Acquisitions (1) 186 215 265 Property Acquisitions (2) 419 100 135 Capitalized Interest 36 33 31 Subtotal 4,727 3,617 3,442 Exploration Costs 159 154 146 Dry Hole Costs 45 71 13 Exploration and Development Expenditures 4,931 3,842 3,601 Asset Retirement Costs 298 127 117 Total Exploration and Development Expenditures 5,229 3,969 3,718 Other Property, Plant and Equipment (3) 381 286 395 Total Expenditures $ 5,610 $ 4,255 $ 4,113 (1) Leasehold acquisitions included $127 million, $45 million and $197 million related to non-cash property exchanges in 2022, 2021 and 2020, respectively.
Cash provided by financing activities in 2023 included proceeds from stock options exercised and employee stock purchase plan activity ($20 million). 44 Total Expenditures The table below sets out components of total expenditures for the years ended December 31, 2023, 2022 and 2021 (in millions): 2023 2022 2021 Expenditure Category Capital Exploration and Development Drilling (1) $ 4,803 $ 3,675 $ 2,864 Facilities 520 411 405 Leasehold Acquisitions (2) 207 186 215 Property Acquisitions (3) 16 419 100 Capitalized Interest 33 36 33 Subtotal 5,579 4,727 3,617 Exploration Costs 181 159 154 Dry Hole Costs 1 45 71 Exploration and Development Expenditures 5,761 4,931 3,842 Asset Retirement Costs 257 298 127 Total Exploration and Development Expenditures 6,018 5,229 3,969 Other Property, Plant and Equipment (4) 800 381 286 Total Expenditures $ 6,818 $ 5,610 $ 4,255 (1) Exploration and development drilling included $90 million related to non-cash development drilling in 2023.
On September 29, 2022, the Board declared a quarterly cash dividend on the common stock of $0.75 per share paid on October 31, 2022, to stockholders of record as of October 17, 2022.
On August 3, 2023, the Board declared a quarterly cash dividend on the common stock of $0.825 per share paid on October 31, 2023, to stockholders of record as of October 17, 2023.
The increase in production was primarily due to increased production of associated natural gas from the Permian Basin and higher deliveries in the Dorado gas play, partially offset by lower natural gas volumes due to the sale of certain legacy natural gas assets in the Rocky Mountain area in the first quarter of 2022, lower natural gas volumes in Trinidad and decreased production of associated natural gas from the Eagle Ford play.
The increase in production was primarily due to increased production of associated natural gas from the Permian Basin and higher deliveries in the Dorado gas play, partially offset by lower natural gas deliveries in Trinidad and decreased production of associated natural gas from the Eagle Ford play.
When circumstances indicate that a proved property may be impaired, EOG compares expected undiscounted future cash flows at a DD&A group level to the unamortized capitalized cost of the group.
Unproved properties with individually significant acquisition costs are reviewed individually for impairment. When circumstances indicate that a proved property may be impaired, EOG compares expected undiscounted future cash flows at a DD&A group level to the unamortized capitalized cost of the group.
In the Republic of Trinidad and Tobago (Trinidad), EOG continues to deliver natural gas under existing supply contracts.
In Trinidad, EOG continues to deliver natural gas under existing supply contracts.
As of February 16, 2023, the average 2023 NYMEX crude oil and natural gas prices were $75.99 per barrel and $3.05 per MMBtu, respectively, representing a decrease of 19% for crude oil and a decrease of 54% for natural gas from the average NYMEX prices in 2022.
As of February 16, 2024, the average 2024 NYMEX crude oil and natural gas prices were $75.81 per barrel and $2.28 per MMBtu, respectively, representing a decrease of 2% for crude oil and a decrease of 17% for natural gas from the average NYMEX prices in 2023.
Inflation Considerations; Availability of Materials, Labor & Services. Beginning in the second half of 2021 and continuing throughout 2022, 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.
Beginning in the second half of 2021 and continuing, to a lesser degree, through the first three months of 2023, EOG, similar to other companies in its industry, experienced inflationary pressures on its operating costs and capital expenditures - namely the costs of fuel, steel (i.e., wellbore tubulars and facilities manufactured using steel), labor and drilling and completion services.
The 2020 exploration and development expenditures of $3,601 million included $2,905 million in development drilling and facilities, $530 million in exploration, $135 million in property acquisitions and $31 million in capitalized interest. The level of exploration and development expenditures, including acquisitions, will vary in future periods depending on energy market conditions and other economic factors.
The 2021 exploration and development expenditures of $3,842 million included $3,172 million in development drilling and facilities, $537 million in exploration, $100 million in property acquisitions and $33 million in capitalized interest. The level of exploration and development expenditures, including acquisitions, will vary in future periods depending on energy market conditions and other economic factors.
EOG's composite average wellhead NGLs price increased 7% to $36.70 per barrel in 2022 compared to $34.35 per barrel in 2021. NGLs production in 2022 increased 37% to 198 MBbld as compared to 145 MBbld in 2021. The increased production was primarily in the Permian Basin.
EOG's composite average wellhead NGLs price decreased 37% to $23.07 per barrel in 2023 compared to $36.70 per barrel in 2022. NGLs production in 2023 increased 13% to 224 MBbld as compared to 198 MBbld in 2022. The increased production was primarily in the Permian Basin.
During 2022, EOG funded $5.3 billion ($153 million of which was non-cash) in exploration and development and other property, plant and equipment expenditures (excluding asset retirement obligations) and paid $5.1 billion in dividends to common stockholders, primarily by utilizing net cash provided from its operating activities.
During 2023, EOG funded $6.6 billion ($195 million of which was non-cash) in exploration and development and other property, plant and equipment expenditures (excluding asset retirement obligations), paid $3.4 billion in dividends to common stockholders, repaid the 2023 Notes and paid $1.0 billion to repurchase shares of common stock, primarily by utilizing net cash provided by its operating activities and cash on hand.
Depreciation, Depletion and Amortization for Oil and Gas Properties The quantities of estimated proved oil and gas reserves are a significant component of EOG's calculation of depreciation, depletion and amortization expense, and revisions in such estimates may alter the rate of future expense.
For related discussion, see ITEM 1A, Risk Factors, and "Supplemental Information to Consolidated Financial Statements." Depreciation, Depletion and Amortization for Oil and Gas Properties The quantities of estimated proved oil and gas reserves are a significant component of EOG's calculation of depreciation, depletion and amortization expense, and revisions in such estimates may alter the rate of future expense.
Net cash used in investing activities of $5,056 million in 2022 increased by $1,637 million from $3,419 million in 2021 primarily due to an increase in additions to oil and gas properties ($981 million), net cash used in working capital associated with investing activities in 2022 ($375 million) compared to net cash provided by working capital associated with investing activities in 2021 ($200 million); an increase in additions to other property, plant and equipment ($169 million); and an increase in other investing activities ($30 million), partially offset by an increase in proceeds from the sales of assets ($118 million).
Net cash used in investing activities of $6,340 million in 2023 increased by $1,284 million from $5,056 million in 2022 primarily due to an increase in additions to oil and gas properties ($766 million); an increase in additions to other property, plant and equipment ($419 million) and a decrease in proceeds from the sales of assets ($209 million); partially offset by a decrease in net cash used in working capital associated with investing activities ($80 million) and a decrease in other investing activities ($30 million).
On May 5, 2022, the Board declared a quarterly cash dividend on the common stock of $0.75 per share paid on July 29, 2022, to stockholders of record as of July 15, 2022.
On May 4, 2023, the Board declared a quarterly cash dividend on the common stock of $0.825 per share paid on July 31, 2023, to stockholders of record as of July 17, 2023.
See Note 6 to Consolidated Financial Statements. 51 Information Regarding Forward-Looking Statements This Annual Report on Form 10-K includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
See Notes 13 and 14 to Consolidated Financial Statements for further disclosures of impairments of oil and gas properties and other assets. 50 Information Regarding Forward-Looking Statements This Annual Report on Form 10-K includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
The following table presents the costs per barrel of oil equivalent (Boe) for the years ended December 31, 2022 and 2021: 2022 2021 Lease and Well $ 4.02 $ 3.75 Transportation Costs 2.91 2.85 Gathering and Processing Costs 1.87 1.85 Depreciation, Depletion and Amortization (DD&A) - Oil and Gas Properties 10.21 11.58 Other Property, Plant and Equipment 0.48 0.49 General and Administrative (G&A) 1.72 1.69 Net Interest Expense 0.54 0.59 Total (1) $ 21.75 $ 22.80 (1) Total excludes exploration costs, dry hole costs, impairments, marketing costs and taxes other than income.
The following table presents the costs per barrel of oil equivalent (Boe) for the years ended December 31, 2023 and 2022: 2023 2022 Lease and Well $ 4.05 $ 4.02 Transportation Costs 2.66 2.91 Gathering and Processing Costs 1.84 1.87 Depreciation, Depletion and Amortization (DD&A) - Oil and Gas Properties 9.24 10.21 Other Property, Plant and Equipment 0.48 0.48 General and Administrative (G&A) 1.78 1.72 Interest Expense, Net 0.41 0.54 Total (1) $ 20.46 $ 21.75 (1) Total excludes exploration costs, dry hole costs, impairments, marketing costs and taxes other than income. 41 The primary factors impacting the cost components of per-unit rates of lease and well, transportation costs, gathering and processing costs, DD&A, G&A and interest expense, net for 2023 compared to 2022 are set forth below.
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.
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.
New York Mercantile Exchange (NYMEX) crude oil and natural gas prices were $94.23 per barrel and $6.64 per million British thermal units (MMBtu), respectively, representing increases of 39% and 72%, respectively, from the average NYMEX prices for the year ended December 31, 2021.
New York Mercantile Exchange (NYMEX) crude oil and natural gas prices were $77.61 per barrel and $2.74 per million British thermal units (MMBtu), respectively, representing decreases of 18% and 59%, respectively, from the average NYMEX prices for the year ended December 31, 2022.
Transportation costs of $966 million in 2022 increased $103 million from $863 million in 2021 primarily due to increased transportation costs related to production from the Permian Basin ($98 million), the Eagle Ford play ($10 million) and the Dorado gas play ($7 million), partially offset by decreased transportation costs related to production from the Rocky Mountain area ($8 million).
Transportation costs of $957 million in 2023 decreased $9 million from $966 million in 2022 primarily due to decreased transportation costs related to production from the Eagle Ford play ($37 million) and the Rocky Mountain area ($6 million), partially offset by increased transportation costs related to production from the Permian Basin ($20 million), the Dorado gas play ($9 million) and the Mid-Continent area ($5 million).
Transportation costs represent costs associated with the delivery of hydrocarbon products from the lease or an aggregation point on EOG's gathering system to a downstream point of sale.
Lease and well expenses increased in the United States primarily due to increased operating activities resulting from increased production. Transportation costs represent costs associated with the delivery of hydrocarbon products from the lease or an aggregation point on EOG's gathering system to a downstream point of sale.
The increased production was primarily in the Permian Basin, partially offset by decreased production in the Eagle Ford play and the Rocky Mountain area. NGLs revenues in 2022 increased $836 million, or 46%, to $2,648 million from $1,812 million in 2021 primarily due to an increase in production ($666 million) and a higher composite average wellhead NGLs price ($170 million).
The increased production was primarily in the Permian Basin, partially offset by decreased production in the Eagle Ford play. NGLs revenues in 2023 decreased $764 million, or 29%, to $1,884 million from $2,648 million in 2022 primarily due to a lower composite average wellhead NGLs price ($1,117 million), partially offset by an increase in production ($353 million).
EOG's composite average wellhead natural gas price increased 49% to $6.93 per Mcf in 2022 compared to $4.66 per Mcf in 2021. Natural gas deliveries in 2022 increased 4% to 1,495 MMcfd as compared to 1,436 MMcfd in 2021.
EOG's composite average wellhead natural gas price decreased 60% to $2.79 per Mcf in 2023 compared to $6.93 per Mcf in 2022. Natural gas deliveries in 2023 increased 14% to 1,711 MMcfd as compared to 1,495 MMcfd in 2022.
Cash requirements to settle the liability for unrecognized tax benefits, EOG's pension and postretirement benefit obligations and the liability for dismantlement, abandonment and asset retirement obligations (see Notes 6, 7, and 15, respectively, to Consolidated Financial Statements) are excluded because they are subject to estimates and the timing of settlement is unknown.
Cash requirements to settle the liability for any unrecognized tax benefits, EOG's pension and postretirement benefit obligations and the liability for dismantlement, abandonment and asset retirement obligations (see Notes 6, 7, and 15, respectively, to Consolidated Financial Statements) are excluded because they are subject to estimates and the timing of settlement is unknown. 48 EOG expects to fund its exploration, development and exploitation activities and other cash requirements, both in 2024 and in future years, primarily from internally generated cash flows and cash on hand.
When it fits EOG's strategy, EOG will make acquisitions that bolster existing drilling programs or offer incremental exploration and/or production opportunities. Cash Return Framework.
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. 38 Cash Return Framework.
EOG's composite wellhead crude oil and condensate price for 2022 increased 42% to $97.21 per barrel compared to $68.50 per barrel in 2021. Wellhead crude oil and condensate production in 2022 increased 4% to 461 MBbld as compared to 445 MBbld in 2021.
EOG's composite wellhead crude oil and condensate price for 2023 decreased 19% to $79.17 per barrel compared to $97.21 per barrel in 2022. Wellhead crude oil and condensate production in 2023 increased 3% to 476 MBbld as compared to 461 MBbld in 2022.
Including the impact of EOG's crude oil and NGLs financial derivative contracts (exclusive of basis swaps) and based on EOG's tax position, EOG's price sensitivity in 2023 for each $1.00 per barrel increase or decrease in wellhead crude oil and condensate price, combined with the estimated change in NGLs price, is approximately $137 million for net income and $175 million for pretax cash flows from operating activities.
See ITEM 1A, Risk Factors for additional discussion of the impact of commodity prices (including fluctuations in commodity prices) on our financial condition, cash flows and results of operations. 47 Based on EOG's tax position, EOG's price sensitivity in 2024 for each $1.00 per barrel increase or decrease in wellhead crude oil and condensate price, combined with the estimated change in NGLs price, is approximately $151 million for net income and $193 million for pretax cash flows from operating activities.
In 2023, EOG has $1.25 billion of senior notes maturing, which are expected to be repaid with cash on hand. Additionally, in 2023, EOG expects to pay interest of $175 million on senior notes. For more information on EOG's current and long-term debt, see Note 2 to Consolidated Financial Statements.
In 2024, EOG has no senior notes maturing and EOG expects to pay interest of $158 million on senior notes. For more information on EOG's current and long-term debt, see Note 2 to Consolidated Financial Statements.
Unproved properties with acquisition costs that are not individually significant are aggregated, and the portion of such costs estimated to be nonproductive is amortized over the remaining lease term. Unproved properties with individually significant acquisition costs are reviewed individually for impairment.
Impairments include: amortization of unproved oil and gas property costs as well as impairments of proved oil and gas properties; other property, plant and equipment; and other assets. Unproved properties with acquisition costs that are not individually significant are aggregated, and the portion of such costs estimated to be nonproductive is amortized over the remaining lease term.
On February 24, 2022, EOG's Board of Directors (Board) declared a quarterly cash dividend on the common stock of $0.75 per share paid on April 29, 2022, to stockholders of record as of April 15, 2022.
On February 22, 2024, the Board declared a quarterly cash dividend on the common stock of $0.91 per share to be paid on April 30, 2024, to stockholders of record as of April 16, 2024.
Lease and well expenses of $1,331 million in 2022 increased $196 million from $1,135 million in 2021 primarily due to higher operating and maintenance costs in the United States ($172 million) and higher workovers expenditures in the United States ($27 million). Lease and well expenses increased in the United States primarily due to increased operating activities resulting from increased production.
Lease and well expenses of $1,454 million in 2023 increased $123 million from $1,331 million in 2022 primarily due to higher operating and maintenance costs in the United States ($65 million) and in Trinidad ($8 million), higher lease and well administrative expenses in the United States ($43 million), and higher workovers expenditures in the United States ($8 million).
Gathering and processing costs increased $100 million to $559 million in 2021 compared to $459 million in 2020 primarily due to increased gathering and processing fees related to production from the Permian Basin ($51 million) and the Rocky Mountain area ($10 million), increased operating costs in the Permian Basin ($26 million) and the Rocky Mountain area ($7 million) and increased administrative expenses in the United States ($15 million); partially offset by decreased gathering and processing fees in the Eagle Ford play ($5 million).
Gathering and processing costs increased $42 million to $663 million in 2023 compared to $621 million in 2022 primarily due to increased gathering and processing fees related to production from the Permian Basin ($33 million) and increased operating and maintenance expenses related to production from the Rocky Mountain area ($14 million) and the Permian Basin ($10 million), partially offset by decreased operating and maintenance expenses related to production from the Eagle Ford play ($14 million) and decreased gathering and processing fees related to production from the Rocky Mountain area ($13 million).

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeQuantitative and Qualitative Disclosures About Market Risk The information required by this Item is incorporated by reference from Item 7 of this report, specifically the information set forth under the captions "Financial Commodity Derivative Transactions," "Financing," "Foreign Currency Exchange Rate Risk" and "Outlook" in "Management's Discussion and Analysis of Financial Condition and Results of Operations - Capital Resources and Liquidity."
Biggest changeITEM 7A. Quantitative and Qualitative Disclosures About Market Risk The information required by this Item is incorporated by reference from Item 7 of this report, specifically the information set forth under the captions "Financial Commodity Derivative Transactions," "Financing" and "Outlook" in "Management's Discussion and Analysis of Financial Condition and Results of Operations - Capital Resources and Liquidity."

Other EOG 10-K year-over-year comparisons