EOG Resources’ Strategic Acquisition of Encino Acquisition Partners: A Transformative Move in the Utica Shale

Siebert Williams Shank & Co analyst Gabriele Sorbara has reiterated their bullish stance on EOG stock, giving a Buy rating today.

Gabriele Sorbara has given his Buy rating due to a combination of factors, primarily centered around EOG Resources’ strategic acquisition of Encino Acquisition Partners. This $5.6 billion transaction significantly enhances EOG’s scale and potential returns in the Utica shale, with anticipated synergies exceeding $150 million in the first year alone. The acquisition is expected to be accretive on key financial metrics such as DCFPS, EV/EBITDA, and FCF yield by 2026, with manageable leverage levels.
Furthermore, the acquisition positions EOG as a leading player in the Utica shale, adding substantial acreage and production capacity. The deal nearly doubles EOG’s presence in the volatile oil window and adds significant natural gas acreage, creating a third foundational asset for the company. Despite a muted initial investor response, Sorbara anticipates increased interest in EOG as it integrates the acquisition and executes on its expanded position. The raised price target to $152 reflects these positive expectations, alongside EOG’s commitment to returning at least 70% of free cash flow to shareholders annually.

In another report released today, Roth MKM also maintained a Buy rating on the stock with a $140.00 price target.

Based on the recent corporate insider activity of 96 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of EOG in relation to earlier this year.