EOG

EOG is a high-quality, low-cost independent E&P whose fundamentals remain genuinely strong even as the headline numbers slide. FY2025 revenue of $22.6B fell 4.5% and net income dropped 22.2% to $4.98B, but the MD&A makes clear this is commodity-driven, not structural: average NYMEX crude fell 14% to $64.78/bbl (partly offset by natural gas +51% to $3.43/MMBtu). The business itself is widening, not shrinking — proved reserves grew 766 MMBoe to 5,514 MMBoe, and the $5.7B Encino acquisition added 675,000 core net acres in the Utica. Operating margin of 28.2%, net margin of 22.0%, and 16.7% ROE are excellent for the sector, and $10.0B of operating cash flow comfortably funds the program.

The balance sheet is the swing factor this year. Long-term debt jumped 87.4% to $7.91B and cash fell 52.1% to $3.40B — both directly attributable to funding Encino ($5.7B incl. net debt) and $2.56B of buybacks. Even so, with $29.8B of equity, debt remains modest and management explicitly reiterates its strategy of a 'consistently below average debt-to-total capitalization ratio.' Current assets of $7.66B against $4.69B of current liabilities (1.6x) and a 3.1% lower share count from buybacks keep the capital structure healthy. This is a company adding low-cost inventory and returning cash, not one in distress.