v3.26.1
Acquisitions and Divestitures
 3 Months Ended
Mar. 31, 2026
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
Acquisitions and Divestitures Acquisitions and Divestitures
In January 2026, EOG signed a purchase and sale agreement for the sale of its entire interest and related fixed assets in the northern Midland Basin for $165 million. The transaction closed on February 18, 2026.
Encino Acquisition. On August 1, 2025, EOG acquired all of the outstanding equity interest in Encino, an independent oil and gas exploration and production company with operations in the Utica play, for cash consideration of $4,471 million and the assumption of Encino's senior notes in an aggregate principal amount of $1,200 million. The cash consideration included $392 million to repay Encino's revolving credit facility. In connection with the completion of the acquisition, EOG repaid and redeemed Encino's senior notes in full, utilizing aggregate cash of approximately $1,292 million (inclusive of applicable redemption premiums and accrued and unpaid interest). In connection with the acquisition, EOG issued $3,500 million of Senior Notes.

The assets of Encino principally include producing wells and developed and undeveloped acreage in the Utica play.

In connection with this transaction, EOG incurred acquisition-related costs in 2025 of approximately $58 million, of which $52 million were recorded as General and Administrative Expense and $6.5 million were recorded as Interest Expense.

EOG accounted for this transaction as a business combination under FASB Topic ASC 805 using the acquisition method with EOG as the acquirer. Under the acquisition method, the consideration transferred is allocated to the identifiable assets acquired and liabilities assumed based on their estimated fair values, with any excess of the consideration transferred over the estimated fair value of the identifiable net assets acquired recorded as goodwill. EOG did not record goodwill in connection with this transaction.

Certain data necessary to complete the purchase price allocation is preliminary including the valuations of oil and gas properties and the calculation of deferred taxes based upon the underlying tax basis of assets acquired and liabilities assumed. EOG believes the estimates used are reasonable, but are subject to change as additional information becomes available. Fair value measurements were applied to the acquired assets and liabilities. These measurements may be adjusted up to one year from the acquisition date if new information becomes available regarding facts and circumstances that existed as of such date.
The fair value measurements of Oil and Gas Properties and Asset Retirement Obligations are based on inputs that are not observable in the market and therefore represent Level 3 inputs as defined by ASC 820. The fair values of Proved Oil and Gas Properties and the majority of Unproved Oil and Gas Properties were measured using the Income Approach. Significant inputs to the valuation of Proved and Unproved Oil and Gas Properties included EOG's estimate of future crude oil, NGLs and natural gas prices, anticipated production from reserves, a weighted average cost of capital rate, and risk adjustment factors for proved undeveloped, probable and possible reserves. The valuation of a portion of the Unproved Oil and Gas Properties were valued using the Market Approach using prices per acre of comparable transactions as inputs. These inputs required significant judgments, assumptions and estimates by management at the time of the valuation, are the most sensitive and may be subject to change. The senior notes assumed were measured using observable market prices. The fair values of working capital items were determined to be equivalent to the carrying value as they are short-term in nature.

The following table summarizes the preliminary allocation of the consideration to the fair values of the assets acquired and liabilities assumed (in millions):

Total Consideration$4,471 
 
Fair Value of Assets Acquired:
Cash and Cash Equivalents$20 
Accounts Receivable, Net323 
Inventories9 
Assets from Price Risk Management Activities (1)
26 
Other Current Assets23 
Oil and Gas Properties (Successful Efforts Method)6,718 
Other Property, Plant and Equipment52 
Other Assets68 
Amount Attributable to Assets Acquired$7,239 
 
Fair Value of Liabilities Assumed:
Accounts Payable$622 
Accrued Taxes Payable22 
Liabilities from Price Risk Management Activities (2)
15 
Current Portion of Operating Lease Liabilities23 
Other Current Liabilities47 
Senior Notes1,266 
Asset Retirement Obligations52 
Other Liabilities72 
Deferred Income Taxes649 
Amount Attributable to Liabilities Assumed$2,768 
 
Net Assets Acquired and Liabilities Assumed
$4,471 
(1)Within Other Current Assets on the Condensed Consolidated Balance Sheet.
(2)Within Other Current Liabilities on the Condensed Consolidated Balance Sheet.
The following table details unaudited supplemental pro forma financial information for Encino as if EOG had completed the acquisition on January 1, 2025 (in millions):

Three Months Ended March 31, 2025
Operating Revenues and Other$6,259 
Net Income1,411