EOG Completes $5.7B Purchase of Encino Acquisition Partners

EOG Resources Inc has consummated its takeover of Encino Acquisition Partners (EAP) from the Canada Pension Plan (CPP) Investment Board and Encino Energy for $5.7 billion subject to post-closing adjustments.

“In the Utica, the integration of the Encino assets is proceeding exceptionally well, with continued incremental efficiency gains”, EOG chair and chief executive Ezra Yacob said in the company’s quarterly report.

The transaction involved the purchase of CPP’s 98 percent stake and Encino Energy’s two percent stake in EAP, which the two formed 2017, CPP said May 30 announcing the deal.

The acquisition grows EOG’s Utica shale position by 675,000 net acres to 1.1 million net acres with over two billion net barrels of oil equivalent undeveloped resources, Houston, Texas-based EOG said in a separate statement May 30. “Pro forma production totals 275,000 barrels of oil equivalent per day creating a leading producer in the Utica shale play”, EOG said then.

“The acquisition expands EOG’s core acreage in the volatile oil window, which averages 65 percent liquids production, by 235,000 net acres for a combined contiguous position of 485,000 net acres”, EOG said at the time.

“In the natural gas window, the acquisition adds 330,000 net acres along with existing natural gas production with firm transportation exposed to premium end markets.

“In the northern acreage, where the company has delivered outstanding well results, EOG increases its existing average working interest by more than 20 percent”.

EOG raised its regular dividend by five percent to $1.02 per share in light of the transaction.

“EOG expects to generate more than $150 million of synergies in the first year driven by lower capital, operating and debt financing costs”, the May statement said.

Yacob said then, “This acquisition combines large, premier acreage positions in the Utica, creating a third foundational play for EOG alongside our Delaware Basin and Eagle Ford assets”.

The acquisition increased EOG’s third quarter production to 1.3 million barrels of oil equivalent per day (MMboepd) from 1.13 MMboepd in Q2 and 1.08 MMboepd in Q3 2024. Q3 2025 output consisted of 534,500 bpd of crude and condensates with 1,600 bpd from Trinidad, 309,300 bpd of natural gas liquids, and 2.75 billion cubic feet per day of natural gas including 230 MMcfpd from Trinidad and four MMcfpd from Bahrain.

While output increased, revenue and net profit fell year-on-year to $5.85 billion and $1.471 billion ($2.7 per share) respectively as realized oil and gas prices in the U.S. dropped.

Net income adjusted for nonrecurring items was $1.472 billion or $2.71 per share, beating the Zacks Consensus Estimate of $2.43 per share.

Operating activities generated $3.11 billion in net cash, up from $2.03 billion for Q2 but down from $3.59 billion for Q3 2024. Free cash flow was $1.38 billion.

EOG paid $545 million in regular dividends and repurchased $440 million worth of shares in Q3 2025. It said it has $4 billion remaining in its authorized buyback program.

“As of quarter-end, we have committed to return 89 percent of our estimated annual free cash flow to shareholders, with the potential to return additional cash over the balance of the year”, Yacob said.

EOG ended Q3 2025 with $3.53 billion in cash and cash equivalents, while current assets totaled $7.82 billion.

Current liabilities stood at $4.82 billion including a $27 million current portion of long-term debt. EOG issued $3.5 billion of senior notes in conjunction with the EAP acquisition.

For the full year it expects to produce 1.21-1.23 MMboepd, consisting of 1.17-1.19 MMboepd from the U.S. and 37,800-41,500 boepd from Trinidad. Crude and condensate guidance is 519,800-523,400 bpd, including 518,700-521,900 bpd from the U.S. NGL production is projected to be 280,000-286,000 bpd. Natural gas production is expected to be 2.47-2.55 Bcfpd, including 2.25-2.31 Bcfpd from the U.S.

To contact the author, email jov.onsat@rigzone.com