EOG's Q2 2026 net income doubled to $2.72B ($5.15/share) as its realized oil price jumped 51% to $98/bbl and the Encino Utica deal lifted production 24%; free cash flow nearly tripled to $2.8B.
Revenue
$8.6B
+57.4% YoY
Net income
$2.7B
+102.5% YoY
Diluted EPS
$5.15
+109.3% YoY
Operating margin
40.9%
Overview
EOG Resources roughly doubled its profit in the second quarter of 2026. Net income was $2.72 billion ($5.15 per diluted share), up from $1.35 billion ($2.46) a year earlier. Two things drove it. The first was oil price: EOG sold its crude for an average of $98.15 a barrel, up 51% from $64.82, and its 10-Q attributes the higher prices to "the ongoing conflict in the Middle East." The second was volume: EOG produced 1.41 million barrels of oil equivalent per day (boe/d), up 24%, mostly because of the Encino acquisition in Ohio's Utica shale. Total operating revenue rose 57% to $8.62 billion.
(A barrel of oil equivalent puts oil, natural gas liquids and natural gas on one scale so production can be added up. EOG counts 6,000 cubic feet of gas as one barrel.)
Price did most of the work. EOG's 10-Q breaks the $1.93 billion rise in crude oil revenue into $1.67 billion from the higher price and $260 million from selling 9% more barrels.
Key metrics
Metric
Q2 2026
Q2 2025
YoY Change
Total operating revenues
$8,620M
$5,478M
+57.4%
Revenue from selling its own oil, NGLs and gas
$6,483M
$4,108M
+57.8%
Operating income
$3,528M
$1,747M
+101.9%
Operating margin
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Adjusted EPS (non-GAAP, from the earnings release)
$5.07
$2.32
+118.5%
Total production (MBoe/d)
1,410.4
1,134.1
+24.4%
Crude oil and condensate production (MBbl/d)
548.8
504.2
+8.8%
Realized crude oil price ($/bbl)
$98.15
$64.82
+51.4%
Free cash flow (non-GAAP, from the earnings release)
$2,799M
$973M
+187.7%
Operating margin is the share of revenue left after the costs of running the business, before interest and income tax. Adjusted EPS and free cash flow are EOG's own non-GAAP measures from its Q2 2026 supplemental data (8-K Exhibit 99.1, filed August 4, 2026). All other figures come from the 10-Q.
For the first six months, revenue was $15.54 billion (up 39% from $11.15 billion). Net income was $4.70 billion (up 68% from $2.81 billion), and diluted EPS was $8.84 against $5.11.
Production and prices: oil soared, gas didn't
Product
Q2 2026 volume
Q2 2025 volume
Q2 2026 price
Q2 2025 price
Crude oil and condensate
548.8 MBbl/d
504.2 MBbl/d
$98.15/bbl
$64.82/bbl
Natural gas liquids (NGLs)
346.8 MBbl/d
258.4 MBbl/d
$24.41/bbl
$22.70/bbl
Natural gas
3,089 MMcf/d
2,229 MMcf/d
$2.89/Mcf
$2.96/Mcf
Realized prices exclude hedging gains and losses. NGLs are liquids such as ethane and propane that are separated from natural gas.
Oil: The price jump happened within the quarter. EOG's composite oil price was $72.47 in Q1 2026 and $98.15 in Q2, while oil volumes were flat (548.5 to 548.8 MBbl/d). For the first half, the NYMEX benchmark oil price averaged $82.57, 22% higher than a year earlier. The 10-Q says EOG now expects higher full-year oil prices than it assumed at the start of 2026.
NGLs: Volumes rose 34%, "primarily from the Utica and Permian Basin," and the price rose 8%. NGL revenue grew 44% to $770 million.
Natural gas: Deliveries rose 39%, again mainly from the Utica and Permian. The composite price slipped 2% to $2.89 per thousand cubic feet (Mcf), so gas revenue grew 35% to $812 million, entirely from volume. EOG's US gas price also fell from $3.75/Mcf in Q1 2026 to $2.77 in Q2. The oil rally did not lift the gas side of the business.
The production mix is shifting toward gas. Oil and NGLs were 66% of EOG's US production in the first half of 2026, down from 70% a year earlier. Utica wells produce proportionally more gas and NGLs.
The Encino effect: how much of the growth was bought
EOG bought Encino, a Utica producer, on August 1, 2025. It paid $4.47 billion in cash and assumed $1.2 billion of Encino's notes, which it repaid. So Q2 2025 does not include Encino and Q2 2026 does, and the year-on-year volume growth is partly acquired rather than organic.
The 10-Q gives an unaudited "pro forma" view of Q2 2025 that restates it as if EOG had owned Encino from January 1, 2025. On that view, Q2 2025 revenue would have been $6,073 million and net income $1,684 million. Measured against those figures, Q2 2026 revenue is up about 42% and net income about 62%, compared with 57% and 102% on the reported basis. The underlying improvement is still large. About $595 million of the $3.14 billion reported revenue increase, roughly a fifth, reflects owning Encino rather than better results.
The acquisition also changed the cost structure:
Gathering, processing and transportation (GP&T) costs rose $221 million to $676 million. EOG attributes $219 million of that to higher Utica production. On a per-barrel basis, GP&T rose from $4.41 to $5.27 per boe, which is consistent with Utica gas and NGL volumes carrying higher processing and transport charges per barrel than the rest of the portfolio.
Interest expense rose $16 million to $67 million. This mainly reflects the $3.5 billion of senior notes EOG issued in July 2025 to pay for the deal, partly offset by $27 million more interest capitalized into projects. Total debt was $7.93 billion at June 30, 2026, against $4.24 billion a year earlier.
Per-unit costs: mostly lower, except transport
Cost per boe
Q2 2026
Q2 2025
Lease and well (running the wells)
$3.64
$3.84
Gathering, processing and transportation
$5.27
$4.41
DD&A, oil and gas properties
$9.27
$9.58
DD&A, other property
$0.54
$0.62
General and administrative
$1.66
$1.80
Interest expense, net
$0.52
$0.49
Total
$20.90
$20.74
DD&A (depreciation, depletion and amortization) is the non-cash charge that spreads the cost of drilling wells over the oil and gas they produce.
Costs per barrel were almost flat overall. Lease-and-well, DD&A and G&A costs per barrel all fell as production rose, and the extra GP&T cost of the Utica barrels roughly cancelled that out. Production taxes rose $130 million to $431 million because they are levied on sales value, but they fell as a share of production revenue, from 7.3% to 6.6%.
Derivatives: a small factor this quarter
EOG uses financial contracts ("derivatives") to lock in prices on part of its future natural gas and NGL sales. Its accounting marks these contracts to their current market value every quarter. When market prices move, a paper gain or loss runs through GAAP profit even though no cash has changed hands yet. That can make GAAP earnings swing independently of the underlying business.
In Q2 2026 that effect was small. EOG booked a $40 million mark-to-market gain, compared with a $107 million gain a year earlier. That included $11 million on a contract that ties future gas sales to Brent crude prices, which starts in 2027. Actual cash received from contracts that settled in the quarter was $45 million.
EOG's adjusted earnings replace the paper gain with the cash actually settled. They also remove a $58 million gain on asset sales. On that basis Q2 2026 net income was $2,683 million ($5.07 per share), $41 million below GAAP. Q2 2025 adjusted EPS was $2.32, so adjusted EPS grew 119%, slightly faster than the 109% GAAP growth. The year-ago quarter had a larger derivative gain flattering it. Either way, derivatives explain only a few cents per share. The oil price is what drove the quarter.
The hedge book is small and mostly covers gas. For August–December 2026, EOG has swaps on 450,000 MMBtu/day of gas at $3.79. The 10-Q lists no crude oil hedges, so EOG is keeping nearly all of its exposure to the higher oil price.
Cash flow, capital spending and shareholder returns
Cash measure
Q2 2026
Q2 2025
H1 2026
Net cash from operating activities (GAAP)
$4,669M
$2,032M
$7,635M
Adjusted cash flow from operations (non-GAAP)
$4,386M
$2,496M
$7,515M
Capital expenditures (non-GAAP)
$1,587M
$1,523M
$3,223M
Free cash flow (non-GAAP)
$2,799M
$973M
$4,292M
Dividends paid
$540M
$528M
$1,084M
Share repurchases (treasury stock purchased)
$1,299M
$602M
$1,717M
Quarterly cash-flow figures, adjusted cash flow, capital expenditures and free cash flow are from EOG's Q2 2026 earnings-release supplemental data (8-K Exhibit 99.1). H1 GAAP operating cash flow, dividends and buybacks match the 10-Q. Free cash flow is the cash the business generates after paying for new wells and equipment.
Capital spending barely moved (+4%) while operating cash flow roughly doubled, so nearly all of the higher oil price turned into free cash flow. EOG returned $1.84 billion in Q2: $540 million in dividends and $1.30 billion in buybacks. In the buybacks it repurchased 9.58 million shares at an average $135.13. The Board doubled the buyback authorization from $10 billion to $20 billion, effective May 20, 2026, and $11.65 billion remained available at June 30.
EOG has committed to return at least 70% of each year's free cash flow to shareholders, measured on its own definition. First-half returns of about $2.80 billion were roughly 65% of first-half non-GAAP free cash flow of $4.29 billion. The commitment is measured over the full year, but that leaves some ground to make up in the second half if prices hold. The rest of the cash went onto the balance sheet. Cash rose to $4.91 billion from $3.85 billion at the end of March, and net debt (debt minus cash) fell from $4.08 billion to $3.02 billion. Diluted shares averaged 529 million, down from 546 million a year earlier, which is part of why EPS grew faster than net income.
The quarterly dividend is $1.02 per share, and the Board declared the next one on August 4, 2026.
Takeaway: This quarter shows how exposed EOG is to the oil price. Oil volumes were flat from Q1, spending barely changed, and the hedge book covers almost no crude. So a jump from $72 to $98 per barrel went nearly straight to profit and free cash flow, which almost tripled year on year to $2.8 billion. The Encino deal added volume but mostly gas and NGLs, which are lower-value and costlier to move. That is why about a fifth of the revenue growth disappears on a pro forma basis, and why transport costs per barrel rose.
Guidance and outlook
The 10-Q gives this full-year 2026 guidance:
Capital expenditures of about $6.3–$6.7 billion. First-half spending was $3.22 billion (non-GAAP), which implies a second half of roughly $3.1–$3.5 billion, broadly the same pace.
Oil production up about 5%, and total production up about 14%, versus 2025. First-half oil output of 548.6 MBbl/d is already about 5% above the 2025 average of 521.9 MBbl/d. Q2 total production of 1,410.4 MBoe/d is about 15% above the 2025 average of 1,232.2 MBoe/d. The guidance mostly reflects holding current levels flat for the rest of the year, not new growth.
Price sensitivity: EOG estimates that each $1 per barrel change in oil (with the related NGL move) changes full-year 2026 net income by about $172 million. Each $0.10/Mcf change in gas changes it by about $60 million.
Our view: Second-half results depend mainly on whether oil stays near Q2's roughly $98. The 10-Q links that price to the Middle East conflict, and it could reverse as fast as it rose. On EOG's own sensitivity, a $20 per barrel fall sustained for a full year would take roughly $3.4 billion off net income. The things to watch:
Whether gas realizations recover from Q2's $2.77/Mcf in the US, since Utica production makes gas a larger share of volume.
Whether GP&T per boe stabilizes now that Encino has been in the numbers for a full year.
Whether EOG steps up buybacks to reach its 70% return commitment while free cash flow is this high.
From Q3 2026, Encino will be in both years' figures, so year-on-year growth rates will shrink sharply even if the business does not change.
EOG also started producing crude in the UAE in June 2026 (0.5 MBbl/d in Q2), which is too small to matter financially yet.