Steve Richardson

Steve Richardson asked about EOG's decision to increase activity in Dorado compared to oilier basins, considering the natural gas macro environment, and how the play fits into EOG's strategy. He also inquired about changes to EOG's LNG take contracts for 2026 and 2027. Additionally, he asked about EOG's rationale for returning over 100% of free cash flow to shareholders for the second consecutive year and the company's view on the buyback lever.

Answer

Ezra Yacob, Chairman and CEO, highlighted Dorado's low breakeven of $1.40 per Mcf and its strategic location near Gulf Coast premium markets. He detailed increased LNG exposure, with additional tranches linked to JKM or Henry Hub coming online in 2026 and a Brent-linked contract in 2027. He explained that Dorado, as a dedicated gas play, services different market needs than liquids plays, particularly for long-term contracts. Ann Janssen, Chief Financial Officer, stated EOG's commitment to returning 90-100% of annual free cash flow, primarily through opportunistic buybacks, given the strong balance sheet and dynamic market conditions.

Steve Richardson inquired about EOG's strategy for increasing activity in Dorado compared to oilier basins, considering the natural gas macro, and changes to LNG take contracts in 2026-2027. He also asked about the company's approach to returning over 100% of free cash flow to shareholders and the rationale behind the buyback lever.

Answer

Chairman and CEO Ezra Yacob highlighted Dorado's low-cost gas supply and strategic location, detailing increased LNG exposure for 2026 and 2027. CFO Ann Janssen affirmed the commitment to returning significant cash to shareholders, emphasizing opportunistic buybacks and a pristine balance sheet as key drivers for value creation.

Steve Richardson asked about the strategic benefits of the Wood River and Borger (WRB) acquisition beyond the attractive price and synergy targets, specifically inquiring about organic growth opportunities enabled by 100% ownership.

Answer

Chairman and CEO Mark Lashier highlighted the acquisition as a key part of Phillips 66's strategy to focus on the Mid-Continent Central Corridor. Refining executive Rich Harbison detailed how full ownership unlocks flexibility in crude processing and product slates, allowing optimization of Wood River, Borger, and Ponca City as an interconnected regional system. Marketing and Commercial executive Brian Mandell mentioned 30+ ongoing commercial synergy initiatives, including butane blending optimization and proprietary pipeline incentives. EVP and CFO Kevin Mitchell clarified the capital expenditure impact, noting a net addition of $150 million for WRB in the 2025 capital budget, with benefits expected relatively near-term and capital-efficient.

Steve Richardson asked about the strategic benefits and organic growth opportunities arising from Phillips 66's 100% ownership of the Wood River and Borger Refineries (WRB), and the associated capital expenditure implications.

Answer

Mark Lashier, Chairman and CEO, emphasized the strategic alignment with the Mid-Continent Central Corridor. Richard Harbison, EVP of Refining, detailed increased crude processing flexibility, product slate optionality, and the ability to operate WRB and Ponca City as an integrated regional system. Brian Mandell, EVP of Marketing and Commercial, provided examples of commercial synergy initiatives. Kevin Mitchell, EVP and CFO, clarified the capital budget impact, noting a net addition of $150 million for WRB in 2025, with many benefits being capital-efficient and near-term.