EOG completed the acquisition of Encino Acquisition Partners, LLC on August 1, 2025, for approximately $4,484 million in cash and $1,200 million in assumed debt. This acquisition adds 675,000 core net acres in the Utica play, significantly expanding EOG's drilling inventory and future production potential (Note 12, Page 22; Note 8, Page 18).

EOG increased crude oil and condensate production by 3% (13.5 MBbld) in Q2 2025, NGL production grew 6% (13.6 MBbld), and natural gas production surged 19% (357 MMcfd) YoY. Total crude oil equivalent volumes (MMBoe) increased 8.3% to 103.2 million in Q2 2025, demonstrating strong organic growth from core plays like the Permian Basin and Utica (Page 28, 29).

Additions to oil and gas properties, excluding dry hole costs, increased to $1,690 million for Q2 2025 from $1,390 million in Q2 2024, and to $3,046 million for 6M 2025 from $2,925 million in 6M 2024. This reflects continued investment in exploration and development drilling, particularly in the Permian Basin and Utica, aligning with the strategy to enhance well performance (Page 13, 14, 15, 16, 36).

EOG's ongoing initiatives, including enhanced drilling motor programs and improved completion techniques, contributed to a slight decrease in total per-Boe operating costs (excluding exploration, dry hole, impairments, marketing, and taxes) to $20.74 in Q2 2025 from $20.81 in Q2 2024 (Page 29). This demonstrates effective cost management despite broader economic factors (MD&A, Page 24).

Management successfully repaid $500 million of 3.15% Senior Notes due 2025 upon maturity and issued $3.5 billion in new senior notes to finance the Encino acquisition. This demonstrates effective capital markets access and proactive debt management to support strategic growth initiatives (Note 8, Page 18).

EOG recognized net gains on mark-to-market financial commodity and other derivative contracts of $107 million in Q2 2025, a significant swing from net losses of $47 million in Q2 2024. This highlights management's use of derivatives to manage exposure to volatile commodity prices and stabilize cash flows (Page 3, 29; Note 10, Page 19-21).

Fluctuations in crude oil and NGL prices significantly impacted revenues and net income, with average crude oil prices decreasing 22% in Q2 2025 YoY to $64.82/Bbl. Management acknowledges that price volatility is expected to continue due to global supply/demand uncertainties and geopolitical factors, posing an ongoing risk to financial performance (MD&A, Page 23; Page 28).

The recent acquisition of Encino Acquisition Partners, LLC, while strategic, introduces integration risks. Management explicitly notes the potential for 'business disruptions resulting from the acquisition' and challenges in 'effectively integrating acquired crude oil and natural gas properties into its operations,' which could harm business operations (Forward-Looking Statements, Page 41).

Interest expense, net, increased by $15 million in Q2 2025 to $51 million and $29 million for 6M 2025 to $98 million YoY, primarily due to the issuance of $1 billion in Senior Notes in November 2024 and financing commitment costs related to the Encino acquisition. This increased debt burden could impact future profitability, especially in a rising interest rate environment (Page 3, 29, 30, 33, 34).

EOG's stated strategy to be among the 'highest return and lowest cost producers' is supported by its continued focus on drilling internally generated prospects and improving operational efficiencies. The slight decrease in total per-Boe costs (excluding certain items) to $20.74 in Q2 2025 from $20.81 in Q2 2024 indicates a disciplined approach to cost management (MD&A, Page 23; Page 29).

The company's diversified production mix of crude oil, NGLs, and natural gas, with strong growth in natural gas volumes (up 19% in Q2 2025) and prices (up 66% in Q2 2025), helps mitigate the impact of lower crude oil prices. This diversification enhances revenue stability and reduces reliance on any single commodity market, strengthening its competitive resilience (Page 28, 29).

The acquisition of Encino Acquisition Partners, LLC, adding 675,000 core net acres in the Utica play, demonstrates EOG's commitment to expanding its drilling inventory. This move secures future production opportunities and reinforces its position in key unconventional plays, providing a long-term competitive advantage in reserve replacement and growth (Note 12, Page 22).

EOG achieved a reduction in Lease and Well costs per Boe to $3.84 in Q2 2025 from $4.09 in Q2 2024, and DD&A for oil and gas properties per Boe decreased to $9.58 from $9.80. These improvements contributed to a slight overall decrease in total per-Boe operating costs, reflecting successful operational efficiency initiatives (Page 29).

Gathering, Processing and Transportation (GP&T) costs increased by $32 million to $455 million in Q2 2025 YoY, primarily due to increased production in the Permian Basin and Utica. While the per-Boe GP&T cost remained relatively stable ($4.41 vs $4.44), the absolute increase indicates higher activity levels and associated infrastructure utilization (Page 29, 30).

General and Administrative (G&A) expenses increased by $35 million to $186 million in Q2 2025 YoY, primarily due to $19 million in Encino acquisition-related costs and $15 million in employee-related costs. This increase, while impacting per-Boe G&A ($1.80 vs $1.58), is partially attributable to strategic growth initiatives and necessary administrative support (Page 29, 30).

EOG continues to invest in and implement advanced drilling and completion techniques, such as its downhole drilling motor program and enhanced completion methods. These initiatives have resulted in increased footage drilled and completed per day and reduced drilling times, which are crucial for maintaining its 'lowest cost producer' strategy and improving well performance (MD&A, Page 24).

The company's self-sourced sand program has provided supply certainty and operational efficiencies in well completion operations. This internal capability reduces reliance on external suppliers and enhances control over a critical input for hydraulic fracturing, contributing to cost mitigation and improved productivity (MD&A, Page 24).

Exploration costs for Q2 2025 increased $40 million to $74 million YoY, driven by geological and geophysical expenditures in the United Arab Emirates ($22 million), the United States ($8 million), and Trinidad ($6 million). This indicates a continued commitment to identifying new reserve potential and leveraging technological capabilities in diverse geographic areas (Page 30).

The Board increased the share repurchase authorization from $5 billion to $10 billion in November 2024. EOG repurchased $1.4 billion in common stock during the six months ended June 30, 2025, with $4.5 billion remaining available, demonstrating management's confidence in the company's valuation and commitment to returning capital to shareholders (Note 8, Page 18; Page 43).

EOG increased its quarterly cash dividend to $1.02 per share from $0.975 per share, declared on May 30, 2025. This increase aligns with the company's stated commitment to return a minimum of 70% of annual net cash provided by operating activities (before certain balance sheet-related changes, less total capital expenditures) to stockholders (Page 19, 26).

EOG repaid $500 million of Senior Notes due 2025 and issued $3.5 billion in new senior notes to finance the Encino acquisition. This proactive debt management ensures financial flexibility to pursue strategic growth opportunities while long-term debt decreased from $4,220 million at Dec 31, 2024, to $3,458 million at June 30, 2025 (Note 8, Page 18; Page 5).

EOG states that 'robust environmental stewardship practices and performance' are integral to its strategy, alongside efficient and safe operations. While specific quantitative ESG metrics are not detailed in this 10-Q, this qualitative statement indicates an ongoing commitment to responsible operations (MD&A, Page 23).

Management explicitly states it '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.' This indicates a proactive stance on understanding and adapting to evolving environmental regulations and risks (MD&A, Page 24; Forward-Looking Statements, Page 40).

The 10-Q does not introduce new material ESG initiatives or provide updated disclosures beyond general statements about environmental stewardship and monitoring climate change. While ESG is a stated focus, specific progress or new programs are not detailed in this quarterly report (MD&A, Page 23-24).

The market environment saw a significant decrease in average crude oil prices (down 22% in Q2 2025 YoY to $64.82/Bbl) while average natural gas prices surged (up 66% in Q2 2025 YoY to $2.96/Mcf). This volatility directly impacted EOG's revenue mix, leading to an overall revenue decline despite strong natural gas performance (MD&A, Page 23; Page 28).

EOG observed 'diminished inflationary pressures on its operating costs and capital expenditures' during 2024 and early 2025, with some price declines. However, management cautions that 'there can be no assurance that the inflationary pressures experienced by EOG in prior periods will not resume,' highlighting ongoing vigilance regarding market conditions (MD&A, Page 23).

The 'One Big Beautiful Bill Act,' signed July 4, 2025, permanently restored 100% bonus depreciation and full domestic research expensing. This legislative change is expected to reduce EOG's 2025 cash tax payments, providing a favorable regulatory environment for its U.S. operations (MD&A, Page 24).