EOG Lifts Third-Quarter Tax Outlook After Oil Price Jump
The company now expects third-quarter current tax expense of $835 million to $935 million, up from the $545 million to $645 million range it issued in August.
EOG Resources (EOG) raised its third-quarter 2026 current tax expense outlook after crude oil prices ran higher than the company had assumed when it issued that guidance with second-quarter results on August 4, 2026.
The oil and gas producer now expects third-quarter current tax expense of $835 million to $935 million, compared with the $545 million to $645 million range it had forecast. It attributed the shift to higher crude oil prices realized in the third quarter and anticipated for the full year as a result of the ongoing conflict in the Middle East, versus its expectations at the time of the August guidance.
EOG said it was not updating or confirming any other ranges for the third quarter or full year 2026 included in the guidance issued on August 4.
For the quarter ended September 30, 2026, U.S. New York Mercantile Exchange West Texas Intermediate crude oil averaged $85.68 a barrel, and NYMEX natural gas at Henry Hub averaged $2.95 per million British thermal units. The company said its actual realizations for crude oil and natural gas differ from those NYMEX prices because of delivery location, quality, and appropriate revenue adjustments. Realizations for natural gas liquids are influenced by the components extracted, including ethane, propane, butane, and natural gasoline, and the respective market pricing for each.
During the third quarter of 2026, EOG received net cash of $40 million from settlements of Financial Commodity Derivative Contracts. There was no cash received related to the Brent Linked Gas Sales Contract, a 10-year natural gas sales agreement linked to Brent crude oil prices, as deliveries are expected to commence in January 2027.
The company said it enters into financial price swap, option, swaption, collar, and basis swap contracts, collectively Financial Commodity Derivative Contracts, with the objective of enhancing the certainty of future revenues and cash flows. It accounts for those contracts, and for the Brent Linked Gas Sales Contract, using the mark-to-market accounting method.
EOG’s Current Report on Form 8-K may include forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, including statements regarding future financial position, operations, performance, business strategy, goals, returns, budgets, reserves, production, capital expenditures, operating costs and asset sales, future commodity prices, and management’s plans for future operations. The company said it believes the expectations reflected in those statements are reasonable and based on reasonable assumptions, and that no assurance can be given that those assumptions are accurate or will prove correct, or that the results will be achieved in full or at all, or on the expected timelines.
Those statements are subject to business, economic, and competitive uncertainties and contingencies and may be affected by known and unknown risks, events, or circumstances, many of which could be outside the company’s control. EOG directed readers to “Information Regarding Forward-Looking Statements” on pages 53 and 54 of its Annual Report on Form 10-K for the fiscal year ended December 31, 2025, and to “Risk Factors” on pages 15 through 28 of that report, as well as to updates in subsequent filings with the SEC.
The tax-expense revision is the only change the company made to the ranges it had already published. Other third-quarter and full-year 2026 figures issued on August 4 were left as they stood. The Middle East conflict, the company said, is the reason crude prices realized in the third quarter and expected for the rest of 2026 exceeded the levels it had built into that August outlook.
WTI’s $85.68 average for the quarter ended September 30 and Henry Hub’s $2.95 average sit against the company’s stated view that actual crude and natural gas realizations will not match NYMEX because of basis, quality, and revenue adjustments. NGL realizations, it said, depend on the mix of ethane, propane, butane, and natural gasoline extracted and on market prices for those components.
Derivative settlements supplied $40 million of net cash in the third quarter. The Brent Linked Gas Sales Contract produced no cash in the period because deliveries were not scheduled to start until January 2027. Both the financial commodity contracts and that Brent-linked agreement are carried under mark-to-market accounting.
EOG said it uses those contracts to enhance the certainty of future revenues and cash flows. The company did not update any other third-quarter or full-year 2026 ranges from the August 4 guidance.