How Is EOG Resources Likely To Grow Over The Next Two Years?
EOG Resources (NYSE: EOG) reported ~45% year-on-year (Y-o-Y) revenue growth in 2017 benefiting from both higher prices for its commodity offerings and higher sales volumes. We expect this trend to continue and anticipate a CAGR in revenue of 14% over the next two years, largely driven by its crude oil segment. We have provided a detailed analysis of our revenue estimate using our interactive dashboard.
The total revenue figure of $14.7 billion for year-ending 2019 is arrived at by summing total revenue from each individual segment of the company. We expect 2018 crude oil sales volume to increase at a CAGR of 11% over the next two years to reach a total volume of 151 million barrels in 2019. Crude oil prices are expected to grow at a CAGR of 8% and are expected to remain high due to a favorable pricing environment prevalent globally with the extension of oil production cuts by the Organization of Petroleum & Exporting Countries (OPEC) and non-OPEC allies. This leads to a net addition of $2.7 billion of revenue by the crude oil segment of the company over the next two years.
Natural gas sales volume is expected to grow at a CAGR of 6% to reach 455 bcf in 2019. Aforementioned macroeconomic factors are expected to extend support to natural gas prices, as well, due to which we expect natural gas prices to grow at a CAGR of 3% over the next 2 years. Thus, the natural gas segment is expected to add $175 million to the year ending total revenue of EOG Resources.
The natural gas & liquids (NGLs) segment is expected to contribute $229 million in revenue over the next two years and the gathering, processing, marketing and other revenue is expected to add an additional $346 million to the company’s total revenue over a period of the next two years.
Thus, by aggregating the above factors, we expect the company’s 2-year revenue to grow at a CAGR of 14%, reaching 14.7 billion over the next two years. In case you have a different assumption, you can make changes to our estimated figures to arrive at your own revenue estimate for the company.
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