EOG Resources, Inc. (EOG) Cash Flow Statement

The OCF/NI ratio has consistently exceeded 1.5 over the past ten quarters, with a notable spike to 3.73 in 2025Q4 when net income was depressed by non-cash items. This suggests that reported earnings understate the company's cash-generating ability, as D&A and working capital adjustments typically add back significant non-cash charges. The 2026Q2 ratio of 1.71, while lower than the 2025Q4 peak, remains healthy and indicates that earnings are well-supported by actual cash flows.

The FCF trajectory shows a clear inflection point in 2026Q2, driven by a combination of higher commodity prices and disciplined capital spending. The FCF margin of 33.5% is the highest in the ten-quarter period, surpassing the previous peak of 35.6% in 2024Q3. This improvement suggests that EOG is not only benefiting from price recovery but also maintaining cost discipline, as CapEx as a percentage of revenue declined to 20.7% from 24.3% in the prior quarter.

The CapEx intensity has been on a downward trend over the past year, with the CapEx/Revenue ratio falling from 31.5% in 2024Q1 to 20.7% in 2026Q2. This suggests that EOG is prioritizing free cash flow generation over aggressive production growth, consistent with its 'returns-over-growth' philosophy. The absolute CapEx level has remained relatively stable around $1.5-1.8B per quarter, implying that the company is maintaining its drilling program while benefiting from lower service costs and efficiency gains.

The working capital line items have been volatile, with negative changes in several quarters (e.g., -$454M in 2025Q2) and positive in others (e.g., +$600M in 2024Q3). This volatility is typical for E&P companies, as changes in oil and gas prices affect the value of receivables and payables. The 2026Q2 negative change of -$88M is modest, suggesting that the company is managing its working capital efficiently despite the price swings. Investors should monitor this line for any signs of deteriorating collection cycles or inventory build-up.

The combination of dividends and buybacks has consistently exceeded CapEx in recent quarters, with 2026Q2 seeing $540M in dividends and $1.3B in buybacks. This indicates that EOG is returning a significant portion of its cash flow to shareholders, a strategy that has been well-received by the market. The buyback activity has been particularly aggressive, with quarterly repurchases ranging from $418M to $1.3B, suggesting management's confidence in the company's intrinsic value. However, the sustainability of this pace depends on continued commodity price strength.