Latest news with #EncinoAcquisitionPartners
Globe and Mail
5 days ago
- Business
- Globe and Mail
This Terrific Dividend Stock Is Spending $5.6 Billion to Add Even More Fuel to Its Dividend Growth Engine
EOG Resources (NYSE: EOG) has an excellent record of paying dividends. The oil and gas producer has delivered 27 years of sustainable and growing dividends. While the company hasn't increased its payout every single year since its initial public offering, it has never reduced its payment, which is a rarity in the oil patch. Further, it has grown its payout twice as fast as its peers since 2019. On top of that, EOG has paid several special dividends in recent years. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue » The oil stock recently added a lot more fuel to its dividend growth engine. It's buying Encino Acquisition Partners in a $5.6 billion deal that's so accretive that EOG is boosting its dividend payment by another 5%. That will further increase its already attractive yield of over 3.5%, more than double the S&P 500 's (SNPINDEX: ^GSPC)1.3% dividend yield. Here's a closer look at the deal and why dividend investors should consider adding EOG Resources' high-octane payout to their income portfolio. Adding more low-cost oil and gas to its portfolio EOG Resources is one of the country's largest oil and gas producers. It has a multi-basin portfolio loaded with low-cost resources. The company estimates that it currently has over 10 billion barrels of oil equivalent (BOE) resources that it can tap into in the coming years. The oil and gas producer has largely built its resource portfolio via organic exploration. Unlike others in the oil patch, EOG Resources prefers not to make corporate acquisitions because those tend to be more expensive. However, it will pounce on a deal when the right opportunity arises. That recently happened. The company has agreed to buy Encino Acquisition Partners for $5.6 billion. Encino holds over 675,000 net acres in the Utica Shale play of Ohio. That deal significantly increases EOG's position in the play, which will have a combined 1.1 million net acres with an estimated 2 billion BOE of undeveloped net resources after the transaction closes. That will give the company a third foundational resource position alongside its assets in the Delaware Basin and Eagle Ford Shale in Texas. EOG Resources expects the deal to be immediately accretive to its financial metrics. It sees the acquisition boosting its cash flow from operations and free cash flow by 9%. Given the largely undeveloped acreage, the deal should enhance the company's ability to grow its production in the coming years. A rock-solid, dividend-paying machine EOG Resources is using its strong balance sheet to fund this deal. It's utilizing $2.1 billion of cash on hand and plans to issue $3.5 billion of new debt. The company has spent the past several years building a fortress balance sheet. It ended the first quarter with $6.6 billion in cash and only $4.7 billion in debt. After closing the deal and adjusting for a recent $500 million debt repayment at maturity and a $275 million bolt-on acquisition in the Eagle Ford, EOG will have $3.7 billion in cash against $7.7 billion of debt. That's still a very strong financial position. Even if oil prices fell to $45 per barrel, EOG's leverage ratio would be less than 1 times. As mentioned, the deal is so accretive to the company's cash flow that EOG Resources is bumping its dividend payment by another 5% per share. That's on top of the 7% raise the company provided investors earlier this year. The company's dividend payment should continue growing in the future. EOG's top priority for its cash flow is to pay a sustainable and regular dividend. Dividends are the company's primary mode of returning cash to shareholders (over share repurchases). It aims to pay a competitive dividend compared to its peer group and the broader market. EOG's other cash flow priorities are to maintain a strong balance sheet (which it will have after closing this deal), invest capital to grow its business (targeting 5% production growth this year before factoring in the Encino deal), and return additional cash to shareholders. Given the strength of its balance sheet, EOG has the capacity to return over 100% of its annual free cash flow to shareholders. It does that through special dividends and opportunistic share repurchases. EOG has focused more on repurchasing its shares ($800 million in repurchases in the first quarter) due to its currently attractive share price (down 20% from its 52-week high). Those repurchases help steadily reduce its shares outstanding (down 6% over the past three years), which enhances its ability to increase its dividends per share. A well-oiled dividend growth stock EOG Resources has an excellent record of paying dividends. It should have plenty of fuel to continue growing its high-yielding payout, especially after buying Encino. Because of that, it's a great dividend stock to consider adding to your income portfolio right now. Should you invest $1,000 in EOG Resources right now? Before you buy stock in EOG Resources, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and EOG Resources wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $651,049!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $828,224!* Now, it's worth noting Stock Advisor 's total average return is979% — a market-crushing outperformance compared to171%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of May 19, 2025
Yahoo
5 days ago
- Business
- Yahoo
This Terrific Dividend Stock Is Spending $5.6 Billion to Add Even More Fuel to Its Dividend Growth Engine
EOG Resources has delivered more than a quarter-century of dividend stability and growth. The oil company has grown its payout twice as fast as its peers in recent years. Its recent acquisition will give it even more fuel to grow its dividend. 10 stocks we like better than EOG Resources › EOG Resources (NYSE: EOG) has an excellent record of paying dividends. The oil and gas producer has delivered 27 years of sustainable and growing dividends. While the company hasn't increased its payout every single year since its initial public offering, it has never reduced its payment, which is a rarity in the oil patch. Further, it has grown its payout twice as fast as its peers since 2019. On top of that, EOG has paid several special dividends in recent years. The oil stock recently added a lot more fuel to its dividend growth engine. It's buying Encino Acquisition Partners in a $5.6 billion deal that's so accretive that EOG is boosting its dividend payment by another 5%. That will further increase its already attractive yield of over 3.5%, more than double the S&P 500's (SNPINDEX: ^GSPC) 1.3% dividend yield. Here's a closer look at the deal and why dividend investors should consider adding EOG Resources' high-octane payout to their income portfolio. EOG Resources is one of the country's largest oil and gas producers. It has a multi-basin portfolio loaded with low-cost resources. The company estimates that it currently has over 10 billion barrels of oil equivalent (BOE) resources that it can tap into in the coming years. The oil and gas producer has largely built its resource portfolio via organic exploration. Unlike others in the oil patch, EOG Resources prefers not to make corporate acquisitions because those tend to be more expensive. However, it will pounce on a deal when the right opportunity arises. That recently happened. The company has agreed to buy Encino Acquisition Partners for $5.6 billion. Encino holds over 675,000 net acres in the Utica Shale play of Ohio. That deal significantly increases EOG's position in the play, which will have a combined 1.1 million net acres with an estimated 2 billion BOE of undeveloped net resources after the transaction closes. That will give the company a third foundational resource position alongside its assets in the Delaware Basin and Eagle Ford Shale in Texas. EOG Resources expects the deal to be immediately accretive to its financial metrics. It sees the acquisition boosting its cash flow from operations and free cash flow by 9%. Given the largely undeveloped acreage, the deal should enhance the company's ability to grow its production in the coming years. EOG Resources is using its strong balance sheet to fund this deal. It's utilizing $2.1 billion of cash on hand and plans to issue $3.5 billion of new debt. The company has spent the past several years building a fortress balance sheet. It ended the first quarter with $6.6 billion in cash and only $4.7 billion in debt. After closing the deal and adjusting for a recent $500 million debt repayment at maturity and a $275 million bolt-on acquisition in the Eagle Ford, EOG will have $3.7 billion in cash against $7.7 billion of debt. That's still a very strong financial position. Even if oil prices fell to $45 per barrel, EOG's leverage ratio would be less than 1 times. As mentioned, the deal is so accretive to the company's cash flow that EOG Resources is bumping its dividend payment by another 5% per share. That's on top of the 7% raise the company provided investors earlier this year. The company's dividend payment should continue growing in the future. EOG's top priority for its cash flow is to pay a sustainable and regular dividend. Dividends are the company's primary mode of returning cash to shareholders (over share repurchases). It aims to pay a competitive dividend compared to its peer group and the broader market. EOG's other cash flow priorities are to maintain a strong balance sheet (which it will have after closing this deal), invest capital to grow its business (targeting 5% production growth this year before factoring in the Encino deal), and return additional cash to shareholders. Given the strength of its balance sheet, EOG has the capacity to return over 100% of its annual free cash flow to shareholders. It does that through special dividends and opportunistic share repurchases. EOG has focused more on repurchasing its shares ($800 million in repurchases in the first quarter) due to its currently attractive share price (down 20% from its 52-week high). Those repurchases help steadily reduce its shares outstanding (down 6% over the past three years), which enhances its ability to increase its dividends per share. EOG Resources has an excellent record of paying dividends. It should have plenty of fuel to continue growing its high-yielding payout, especially after buying Encino. Because of that, it's a great dividend stock to consider adding to your income portfolio right now. Before you buy stock in EOG Resources, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and EOG Resources wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $651,049!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $828,224!* Now, it's worth noting Stock Advisor's total average return is 979% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Matt DiLallo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends EOG Resources. The Motley Fool has a disclosure policy. This Terrific Dividend Stock Is Spending $5.6 Billion to Add Even More Fuel to Its Dividend Growth Engine was originally published by The Motley Fool Fehler beim Abrufen der Daten Melden Sie sich an, um Ihr Portfolio aufzurufen. Fehler beim Abrufen der Daten Fehler beim Abrufen der Daten Fehler beim Abrufen der Daten Fehler beim Abrufen der Daten
Reuters
6 days ago
- Business
- Reuters
EOG Resources to buy Encino Acquisition Partners for $5.6 billion
May 30 (Reuters) - U.S. energy producer EOG Resources (EOG.N), opens new tab said on Friday it has signed a definitive agreement with Canada Pension Plan Investment Board and Encino Energy to acquire Encino Acquisition Partners for $5.6 billion.
Yahoo
06-02-2025
- Business
- Yahoo
Encino's owner mulls $7 billion sale, IPO of energy producer, sources say
By David French (Reuters) -Canadian pension fund CPP Investments is weighing strategic options, including a sale or initial public offering, for Encino Acquisition Partners that could value the U.S. oil and natural gas producer at as much as $7 billion, including debt, people familiar with the matter said. The deliberations come as the energy industry is anticipating tailwinds from the administration of President Donald Trump, which has put forward an economic agenda tailored to boost fossil-fuel production, as it speeds up permits for energy projects and rolls back environmental protections. Moreover, the booming demand for artificial intelligence and data centers is expected to drive a jump in U.S. power demand, which in turn is likely to boost the need for natural gas to fuel power generation. Houston, Texas-based Encino, which is majority-owned by CPP, is in the early stages of evaluating options and is working on selecting investment banks to lead the review process, the sources said, requesting anonymity as the matter is confidential. A deal is expected to happen later this year, the sources said, cautioning that Encino's plans are subject to market conditions. Encino and CPP declined to comment. Encino operates in the Utica shale basin of Ohio and is one of the largest privately owned oil and gas exploration and production companies in the United States. It was formed in 2017 as a partnership to buy and develop U.S. oil and gas assets. Under the terms of the agreement, CPP Investments invested $1 billion in the venture, while oil and gas producer Encino Energy agreed to operate the acquired assets. A year later, Encino Acquisition Partners bought Chesapeake Energy's Ohio assets for $2 billion. CPP Investments said in April 2024 it would invest another $300 million in the business to help accelerate the development of the company's assets. In January, Infinity Natural Resources raised $265 million from its IPO and the company's shares jumped on their debut in New York. The positive market reaction to the natural gas producer's stock market launch helped accelerate Encino's decision to explore its options, one of the sources said.
Zawya
05-02-2025
- Business
- Zawya
Encino's owner mulls $7bln sale, IPO of energy producer, sources say
Canadian pension fund CPP Investments is weighing strategic options, including a sale or initial public offering, for Encino Acquisition Partners that could value the U.S. oil and natural gas producer at as much as $7 billion, including debt, people familiar with the matter said. The deliberations come as the energy industry is anticipating tailwinds from the administration of President Donald Trump, which has put forward an economic agenda tailored to boost fossil-fuel production, as it speeds up permits for energy projects and rolls back environmental protections. Moreover, the booming demand for artificial intelligence and data centers is expected to drive a jump in U.S. power demand, which in turn is likely to boost the need for natural gas to fuel power generation. Houston, Texas-based Encino, which is majority-owned by CPP, is in the early stages of evaluating options and is working on selecting investment banks to lead the review process, the sources said, requesting anonymity as the matter is confidential. A deal is expected to happen later this year, the sources said, cautioning that Encino's plans are subject to market conditions. Encino and CPP declined to comment. Encino operates in the Utica shale basin of Ohio and is one of the largest privately owned oil and gas exploration and production companies in the United States. It was formed in 2017 as a partnership to buy and develop U.S. oil and gas assets. Under the terms of the agreement, CPP Investments invested $1 billion in the venture, while oil and gas producer Encino Energy agreed to operate the acquired assets. A year later, Encino Acquisition Partners bought Chesapeake Energy's Ohio assets for $2 billion. CPP Investments said in April 2024 it would invest another $300 million in the business to help accelerate the development of the company's assets. In January, Infinity Natural Resources raised $265 million from its IPO and the company's shares jumped on their debut in New York. The positive market reaction to the natural gas producer's stock market launch helped accelerate Encino's decision to explore its options, one of the sources said.
