EOG Resources reports $24 million net cash payment for derivative settlements in Q2

Investing.com

Published Jul 09, 2025 05:05PM ET

EOG Resources reports $24 million net cash payment for derivative settlements in Q2

EOG Resources Inc. (NYSE:EOG), a leading energy company with a market capitalization of $66.5 billion and an impressive "GREAT" financial health rating from InvestingPro , reported Wednesday that it paid a net cash amount of $24 million during the second quarter of 2025 to settle financial commodity derivative contracts. The company, which maintains strong cash flows and a healthy 1.87 current ratio, disclosed the information in a press release statement filed with the Securities and Exchange Commission.

The filing stated that EOG uses various financial instruments, including price swaps, options, swaptions, collars, and basis swap contracts, to manage price risk and enhance certainty of future revenues and cash flows. These contracts are accounted for using the mark-to-market method. According to InvestingPro , this prudent risk management approach has contributed to EOG's consistently low price volatility and strong cash flow coverage of interest payments, making it an attractive option for investors seeking stability in the volatile energy sector.

EOG also noted that it maintains a 10-year natural gas sales agreement linked to Brent crude oil prices, which is similarly accounted for on a mark-to-market basis. No cash was received from this Brent-linked contract during the quarter, as deliveries under the agreement are scheduled to begin in January 2027.

For the quarter ended June 30, 2025, the average price for West Texas Intermediate crude oil on the New York Mercantile Exchange was $63.71 per barrel. NYMEX natural gas at Henry Hub averaged $3.44 per million British thermal units. EOG indicated that its actual realized prices for crude oil and natural gas differ from these benchmarks due to factors such as delivery location, product quality, and revenue adjustments. Realizations for natural gas liquids are based on the market pricing of individual components, including ethane, propane, butane, and natural gasoline.

The company’s filing also included standard cautionary statements regarding forward-looking information and potential risks that could affect future results.

All information is based on a press release statement filed with the SEC. With a current dividend yield of 3.29% and 36 consecutive years of dividend payments, EOG demonstrates strong fundamentals and shareholder commitment. For detailed analysis and additional insights, including 8 more exclusive ProTips, access the comprehensive Pro Research Report available on InvestingPro .

In other recent news, EOG Resources has completed a $3.5 billion debt offering, issuing senior unsecured notes across multiple maturities. These notes include $500 million due in 2028, $1.25 billion due in 2032, $1.25 billion due in 2036, and $500 million due in 2055. Meanwhile, Roth/MKM downgraded EOG Resources from Buy to Neutral, citing concerns over global oil prices and EOG's shorter inventory life compared to its peers. The firm also expressed concerns about EOG's focus on higher-cost plays and riskier international explorations. In contrast, UBS has reiterated its Buy rating, maintaining a $140.00 price target, and expressed confidence in EOG's strategic direction and ability to handle fluctuating oil prices. UBS expects EOG's second-quarter production to hit the high end of its guidance range. Stephens initiated coverage with an Equal Weight rating, noting EOG's strong balance sheet and projected free cash flow of approximately $4 billion. Stephens also highlighted EOG's increased dividend and potential for share repurchases.

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