The shale producer now expects current tax expense of $835 million to $935 million, up from $545 million to $645 million, citing higher realized and expected crude prices tied to the Middle East conflict. It left the rest of its guidance unchanged.
EOG Resources told investors to expect a larger tax bill this quarter. The reason it gave is the oil price.
In a filing after Thursday's close, EOG raised its third-quarter guidance for current tax expense to $835 million to $935 million, from $545 million to $645 million. The company attributed the change to higher realized and expected crude prices resulting from the conflict in the Middle East. It said it was not updating any other guidance.
The size of the change
The midpoint rose to $885 million from $595 million, an increase of $290 million, or about 49%.
Current tax expense is the portion of income tax a company expects to pay in cash for the period, as opposed to deferred tax, which reflects timing differences. A higher current tax estimate means the company expects more taxable income in the period.
As a rough illustration only, at the 21% federal corporate rate, $290 million of tax corresponds to about $1.4 billion of additional taxable income. The actual relationship depends on state taxes, deductions and the timing of expenses, none of which the filing broke out.
The oil backdrop
Brent crude has averaged about $95 a barrel over the past 50 trading days, against about $92 over 200 days, and traded near $103 early Friday. U.S. crude traded at $90.52. Producers that sell into those prices are collecting more per barrel than they planned when they set guidance earlier in the year.
EOG shares rose 3.0% to $148.51 on Thursday, before the filing, as oil climbed. The stock is just below its 52-week high of $154.16.
A read-through for the sector
EOG is one of the largest U.S. oil producers, and its filing is an early signal of how much higher prices are flowing into third-quarter results across the industry, which begin arriving later this month.
The filing does not show whether production, costs or capital spending changed, since EOG left that guidance alone.
Opposing readings
One reading is that the filing points to a strong quarter. Taxes rise with profits, a 49% jump in the expected cash tax bill suggests earnings well above the plan, and EOG did not cut any operating guidance alongside it.
A second reading is that the gain may be front-loaded and temporary. The higher prices come from a conflict whose course is uncertain, oil has already eased since the president ruled out a strike on Iran before Nov 3, 2026, and a larger cash tax bill takes part of the windfall away.
What comes next
EOG's third-quarter results will show the realized price per barrel and how much of the increase reached cash flow and shareholder returns. Filings from other large producers over the coming weeks will show whether EOG's revision is typical.