Utica Shale Progress
Q: How is the Utica Shale development progressing, and what are key learnings?
A: Management is very happy with Utica results to date. Southern wells (White Rhino) are meeting expectations, with performance benefiting from strategic mineral ownership enhancing returns by avoiding royalties. Northern wells show consistently strong and repeatable results. They're investing at the right pace to continue learning and optimizing, with tighter spacing tests at 700 feet showing strong results. However, they acknowledge the need for longer production history before ramping up to full development.

Oil Macro Outlook
Q: What's your view on U.S. shale production and oil market outlook?
A: Global demand is increasing year-over-year, aligned with expectations. U.S. crude supply is expected to grow by 300,000 to 400,000 barrels per day, with total liquids growth of 500,000 barrels per day annually. In the Lower 48, production is projected to be relatively flat from December to December. Industry consolidation and discipline are driving moderate U.S. growth, which is expected to continue into 2025 and beyond. The U.S. faces steep decline rates due to a shift to unconventional resources, requiring new barrels to fill the gap before adding growth.

Natural Gas Strategy
Q: Will you maintain an oil-weighted focus given current gas prices?
A: Inventory levels are above the 5-year average, keeping natural gas prices below average. They foresee the inventory overhang continuing into 2025 but expect to reduce inventories assuming a normal winter, due to increased LNG and electricity demand. While not prepared to discuss 2025 plans, they are actively managing their Dorado program to align with demand. They have low operating costs of $1 per Mcf in Dorado, providing confidence and flexibility.

Artificial Lift Technology
Q: How is your artificial lift technology impacting production?
A: The company's proprietary artificial lift technology optimizes gas lift, plunger lift, and rod pump operations across their portfolio. It monitors and adjusts gas injection rates in real-time using algorithms, maximizing production and minimizing downtime. This technology has contributed to better base production, leading to increased guidance this quarter.

Gas Marketing and International Exposure
Q: How are you increasing gas exposure to international markets?
A: They've entered into gas sales agreements providing pricing diversification, including international exposure. From 2020 to 2023, exposing 140 MMcf per day to JKM pricing added over $1 billion in revenue uplift. This exposure will increase to approximately 720 MMcf per day in 2025 and 2026 as Corpus Christi's Stage 3 comes online. They also secured a Brent-linked gas sales agreement, aiming to expose more gas to diverse international markets.

Service Costs Outlook
Q: What are you seeing in service costs and supply chain?
A: Since mid-last year, standard rig and frac prices have decreased by 15% to 20%. Support services like coiled tubing and wireline costs are down 15%, and workover rigs reduced by 10%. Reductions have slowed recently with stabilized rig counts. High-spec services, which they primarily use, have relatively stable pricing expected through the rest of the year.

Dorado Activity Management
Q: How are you managing Dorado activity amid weak gas prices?
A: They plan to maintain the one-rig program in Dorado with no changes this year. Investment timing is managed primarily on the completion side, pushing some wells into the second half due to flexibility. They've seen a 13% improvement in drilled footage per day, aiming to build on operational efficiencies.

Marketing Organization and Realizations
Q: How does your marketing organization achieve high product realizations?
A: Their marketing team is integrated with division operations, focusing on netback pricing and accessing premium markets. They maintain flexibility with multiple markets and control through firm capacity from wellhead to sales points. By investing strategically and minimizing long-term commitments, they add value and strengthen netbacks.

Utica Well Performance and Spacing
Q: Are Utica wells improving, and how is spacing evolving?
A: Wells are meeting internal expectations across the 445,000 net acre position. Performance varies due to geology, with different spacing and type curves in different areas. Recent tests at tighter spacing (700 feet vs. 1,000 feet) show consistently strong results. They need at least 6 to 9 months more production data to determine optimal spacing.

Artificial Lift Technology Differentiation
Q: How is your artificial lift technology different from competitors'?
A: Their technology is integrated within EOG's systems, providing real-time data on production, pressures, flow rates, and temperatures. It ties directly into centralized control rooms monitoring production 24/7, allowing for immediate adjustments and minimizing downtime. This integration sets them apart from third-party systems, improving base production and reducing decline rates by decreasing downtime percentages.