EOG Resources Inc. (NYSE:EOG)

Debt Ratios

The debt to equity ratio demonstrates a consistent downward trend from 0.51 in 2015 to 0.24 in 2019, indicating a reduction in the company’s reliance on debt relative to equity over the period. When including operating lease liabilities, the debt to equity ratio declines similarly but remains slightly higher, ending at 0.28 in 2019.

Debt to capital ratios decrease from 0.34 in 2015 to 0.19 in 2019, further reinforcing the trend of reduced total debt relative to capital. Inclusion of operating lease liabilities results in slightly higher ratios but follows the same downward trajectory, reaching 0.22 in 2019.

The debt to assets ratio falls steadily from 0.25 in 2015 to 0.14 in 2019. Including operating lease liabilities, the ratio remains marginally elevated but declines similarly, finishing at 0.16. This trend points to a lower proportion of assets being financed through debt over time.

Financial Leverage

Financial leverage ratios decrease from 2.08 in 2015 to 1.72 in 2019, suggesting a gradual reduction in the use of debt financing relative to equity. The decline in this ratio aligns with the observed reductions in debt ratios, reflecting a more conservative capital structure approach.

Interest and Fixed Charge Coverage

Interest coverage shows a substantial improvement from negative values in 2015 (-28.16) and 2016 (-4.53) to positive and increasing figures thereafter. By 2017, the ratio becomes positive at 3.41, further increasing to 18.31 in 2018 and 20.15 in 2019. This indicates significant enhancement in the company’s ability to meet interest obligations from operating earnings.

Fixed charge coverage follows a similar trajectory, transitioning from negative ratios in 2015 and 2016 (-13.84 and -2.21 respectively) to positive coverage beginning in 2017 at 2.39, peaking at 9.87 in 2018 before declining to 6.2 in 2019. Despite the decrease in the final year, coverage remains strong and positive, confirming improved capacity to cover fixed financial charges over time.

Summary

Overall, the data reveals a clear trend toward strengthening the financial position through reduced leverage and improved coverage of financial obligations. The steady decline in debt-related ratios coupled with rising interest and fixed charge coverage ratios suggests enhanced financial stability and creditworthiness during the analyzed period.

Total debt

The total debt exhibited a decreasing trend over the five-year period. Starting at approximately 6.66 billion USD at the end of 2015, the debt slightly increased by 2016 to around 6.99 billion USD. However, from 2017 onwards, there was a consistent reduction each year, with total debt falling to approximately 6.39 billion USD in 2017, then to 6.08 billion USD in 2018, and further down to about 5.17 billion USD by the end of 2019. This reflects a deliberate effort to lower leverage levels.

Stockholders’ equity

Stockholders’ equity showed a steady and notable upward trend throughout the period. Beginning at roughly 12.94 billion USD in 2015, equity increased every year, reaching approximately 13.98 billion USD in 2016 and continuing to grow to 16.28 billion USD in 2017. The upward momentum intensified in subsequent years, with equity rising to about 19.36 billion USD in 2018 and ultimately reaching around 21.64 billion USD in 2019. This indicates strengthening financial stability and retained earnings accumulation.

Debt to equity ratio

The debt to equity ratio consistently declined over the five years, starting at 0.51 in 2015 and decreasing slightly to 0.50 in 2016. The decline accelerated thereafter, with the ratio dropping to 0.39 in 2017, continuing downward to 0.31 in 2018, and reaching a low of 0.24 in 2019. This downward trajectory suggests improved capital structure management, reflecting reduced reliance on debt financing relative to equity.

Overall analysis

The data reveals a clear financial strengthening pattern marked by decreasing total debt levels, increasing stockholders’ equity, and a lowering debt to equity ratio. These trends collectively indicate a strategic focus on reducing financial leverage and enhancing equity positions, likely aimed at improving solvency and reducing financial risk over the observed period.

Total debt (including operating lease liability)

The total debt demonstrated a generally declining trend over the five-year period. Starting at approximately $6.66 billion in 2015, debt slightly increased in 2016 to about $6.99 billion but then steadily decreased through the following years, reaching approximately $5.97 billion by the end of 2019. This downward trend suggests a consistent reduction in the company’s leverage over the observed period.

Stockholders’ equity

Stockholders’ equity exhibited a continuous increase from 2015 to 2019. Beginning at around $12.94 billion in 2015, equity rose annually to reach approximately $21.64 billion in 2019. This substantial growth in equity indicates strengthened financial stability and enhanced shareholder value during the timeframe.

Debt to equity ratio (including operating lease liability)

The debt to equity ratio decreased steadily from 0.51 in 2015 to 0.28 in 2019. This downward movement reflects an improving financial structure with reduced reliance on debt financing relative to equity. It aligns with the declining total debt and increasing equity, indicating improved solvency and lower financial risk.

Total Debt

Total debt exhibited a decreasing trend over the five-year period. Starting at approximately 6.66 billion US dollars in 2015, it rose slightly in 2016 to nearly 6.99 billion but then consistently declined each subsequent year, reaching about 5.18 billion by the end of 2019. This suggests a strategic effort to reduce leverage on the balance sheet.

Total Capital

Total capital showed a steady increase throughout the period. The amount grew from 19.60 billion US dollars in 2015 to 26.82 billion in 2019. This continuous rise indicates ongoing capital expansion, possibly driven by asset growth or equity increases, supporting business development or investments.

Debt to Capital Ratio

The debt to capital ratio demonstrated a consistent downward trend, moving from 0.34 in 2015 to 0.19 at the end of 2019. This reduction reflects a declining reliance on debt financing relative to overall capital, enhancing the company's financial leverage position and potentially reducing financial risk.

Total Debt (including operating lease liability)

The total debt exhibited a generally declining trend over the analyzed period. Starting at approximately $6.66 billion at the end of 2015, it increased slightly in 2016 to nearly $6.99 billion. From 2017 onward, total debt decreased consistently each year, reaching approximately $5.97 billion by the end of 2019. This indicates a reduction in leverage over the period.

Total Capital (including operating lease liability)

Total capital showed a steady increase throughout the five-year span. Beginning at around $19.60 billion in 2015, it rose each year and culminated at approximately $27.62 billion in 2019. This growth suggests expanding resources, possibly through retained earnings, equity issues, or other capital inflows.

Debt to Capital Ratio (including operating lease liability)

The debt to capital ratio declined continuously from 0.34 in 2015 to 0.22 in 2019. This decreasing ratio reflects a reduced reliance on debt financing relative to total capital. The trend aligns with the decreasing total debt and increasing total capital, indicating improved capital structure strength and lower financial risk over time.

Total debt

The total debt exhibits a decreasing trend over the five-year period. Starting at approximately 6.66 billion USD in 2015, the debt peaked slightly in 2016 at about 6.99 billion USD, then steadily declined each subsequent year to reach approximately 5.18 billion USD by the end of 2019. This represents a significant reduction in total debt, indicating efforts toward deleveraging.

Total assets

Total assets consistently increased throughout the same timeframe. Beginning at roughly 27.0 billion USD in 2015, assets grew each year, reaching approximately 37.1 billion USD by the end of 2019. This steady asset growth suggests expansion or accumulation of resources and possibly investments in long-term assets.

Debt to assets ratio

The debt to assets ratio demonstrates a clear downward trajectory, moving from 0.25 in 2015 to 0.14 in 2019. This decline is a reflection of the simultaneous decrease in total debt and growth in total assets. The ratio indicates an improvement in the company's financial leverage position, suggesting reduced reliance on debt financing relative to its asset base.

Total debt (including operating lease liability)

The total debt exhibited a generally declining trend over the analyzed period. Starting at approximately 6.66 billion US dollars at the end of 2015, it increased slightly in 2016 to about 6.99 billion but then steadily decreased each year through 2019, reaching nearly 5.97 billion. This decline suggests a systematic effort to reduce debt burden or a shift in financing strategy over the five-year span.

Total assets

Total assets demonstrated a consistent upward trajectory throughout the years. From around 26.98 billion US dollars at the end of 2015, assets expanded annually, reaching approximately 37.12 billion by the end of 2019. This significant growth indicates an increase in the company’s asset base, potentially through acquisitions, capital investments, or appreciation of existing assets.

Debt to assets ratio (including operating lease liability)

The debt to assets ratio showed a clear downward trend, declining from 0.25 in 2015 to 0.16 in 2019. This reduction reflects the combined effect of decreasing total debt and increasing total assets. Such a decrease in leverage ratio typically signals improved solvency, suggesting the company has reduced its reliance on debt financing relative to its asset base, enhancing financial stability over the period analyzed.

The annual financial data reveals several notable trends over the five-year period ending December 31, 2019.

Total assets

Total assets exhibited a steady upward trajectory throughout the period, increasing from approximately $26.98 billion in 2015 to $37.12 billion in 2019. This consistent growth reflects an expansion in the company's asset base by about 37.5%, indicating ongoing investments or acquisitions contributing to asset accumulation.

Stockholders’ equity

Stockholders' equity also demonstrated a positive trend, rising from approximately $12.94 billion in 2015 to $21.64 billion in 2019. This represents a significant increase of nearly 67.3%, outpacing the growth rate of total assets. The increase in equity suggests retained earnings accumulation, capital infusions, or other equity-enhancing activities.

Financial leverage

Financial leverage, defined as the ratio of total assets to stockholders' equity, showed a declining pattern over the period. Starting at 2.08 in 2015, the leverage ratio slightly increased to 2.11 in 2016, but then decreased steadily to 1.72 by 2019. This indicates a reduction in reliance on debt financing relative to equity and implies a strengthening of the company’s capital structure through increasing equity proportions or decreasing liabilities.

Overall insights

The data suggest a strategic shift toward enhancing financial stability by building equity at a faster pace than assets, thus lowering leverage. The steady asset base growth combined with significant equity increases and reduced leverage indicates a potentially lower risk profile and improved solvency over the observed period.

Earnings Before Interest and Tax (EBIT)

The EBIT figures demonstrate a significant turnaround over the observed period. Initially, there was a substantial negative EBIT of approximately -6.68 billion US dollars at the end of 2015. This negative trend decreased sharply in 2016, with the EBIT improving to roughly -1.28 billion US dollars. From 2017 onward, EBIT became positive and exhibited consistent growth, reaching about 935.55 million in 2017, then rising strongly to 4.49 billion in 2018, before slightly declining to 3.73 billion in 2019. This progression indicates a recovery phase followed by sustained operational profitability.

Net Interest Expense

Net interest expense shows a gradual decline throughout the five-year span. Starting at 237.4 million US dollars in 2015, the expense increased slightly to 281.7 million in 2016 and slightly decreased to 274.4 million in 2017. Afterward, there is a clear downward trend, with net interest expenses reducing to 245.1 million in 2018 and 185.1 million by the end of 2019. This reduction in interest expenses could reflect improved debt management or lower borrowing costs.

Interest Coverage Ratio

The interest coverage ratio experienced a dramatic improvement, moving from deeply negative values in the first two years to positive and significantly higher ratios thereafter. Specifically, the ratio was -28.16 at the end of 2015, improving to -4.53 in 2016. In 2017, it became positive at 3.41, indicating that earnings sufficiently covered interest expenses. This positive trend continued, with ratios escalating to 18.31 in 2018 and 20.15 by 2019. The pattern denotes enhanced ability to meet interest obligations comfortably, corresponding with the turnaround in EBIT.

Earnings Before Fixed Charges and Tax

This measure exhibited significant volatility over the observed period. Starting with a substantial negative value in 2015, it improved sharply by 2017 to reach a positive figure, peaking in 2018. However, a slight decline occurred in 2019, though it remained positive and considerably higher than the initial years. This trend suggests a marked recovery and operational improvement after 2015.

Fixed Charges

Fixed charges remained relatively stable from 2015 through 2018, fluctuating within a narrow range. There was, however, a noticeable increase in 2019, rising significantly compared to previous years. This increase may indicate higher interest expenses or other fixed financial obligations incurred in the most recent year.

Fixed Charge Coverage Ratio

The fixed charge coverage ratio displayed a strong upward trend, moving from deep negative values in 2015 and 2016 to positive territory starting in 2017. It peaked in 2018 before experiencing a decline in 2019, though it remained comfortably above 1. This evolution indicates improving ability to cover fixed charges from earnings, reflecting enhanced financial health and reduced risk associated with fixed financial obligations.