Revenue at EOG sinks by $900M in 2Q

EOG Resources says it will improve efficiency to allow it to produce oil at lower prices after it lost more than $900 million dollars in the second quarter.

The Houston independent on Friday said it lost $909 million during the quarter, during which the industry sought to overcome the economic effects of the coronavirus. EOG made $848 million in the second quarter of 2019. Revenue declined more than 80 percent to $1.1 billion from $4.7 billion in the same period a year earlier.

“EOG generated positive free cash flow in the second quarter, made possible by our ability to quickly reduce activity and cut operating costs in all of our operating areas in response to historically low oil prices,” CEO Bill Thomas said in a statement. “The sustainable improvements we are making across the company will support improved capital efficiency in the future, enabling EOG to maintain production at lower oil prices.”

Energy has become the worst performing sector of the U.S. stock market after the global pandemic slashed demand and sent prices for petroleum products plummeting, forcing companies to cut spending, halt drilling and lay off thousands of employees.

EOG responded to the oil bust by slowing drilling activity and lowering operating costs and capital spending. The company delayed production from most new

wells and halted production on lower-margin wells.

As a result EOG produced 331,100 barrels of crude per day during the second quarter, down 27 percent from

the same period last year. Natural gas liquids production was 23 percent lower and natural gas volumes were 15 percent lower.

As crude prices recovered, climbing above $40 a barrel, EOG began to restart production in June and expects almost all of its closed

wells to return to production before the end of the third quarter.

The company expects about 25,000 barrels per day of oil to remain in the ground during the third quarter.