EOG Resources (NYSE:EOG | EOG Price Prediction) is the name every oil bull is screaming about as WTI crude spiked to $114.58 in early April 2026 and traders pile into upstream drillers to play the Iran war supply shock.
The EOG Trade Is a Sugar High
Geopolitical premium fades. It always does. And when it does, EOG holders get to relive the Q4 2025 income statement: GAAP net income collapsed to $701 million from $1.25 billion year over year, a 43.96% drop, with operating income down 40.77% YoY after the company absorbed $506 million in after-tax impairment charges on Barnett Shale and Woodford Oil Window assets. Realized crude prices fell from $71.66 to $59.54 per barrel in a single year and free cash flow dropped 30.04%. To top it off, total debt ballooned from $4.75 billion to $7.94 billion to fund the Encino deal, and Piper Sandler trimmed its price target citing a less constructive oil macro.
Now look at the chart. EOG is up 31.95% year to date and trading at $136.20, near the upper end of its 52-week range topping at $150.70. The forward multiple of 8x looks cheap only if you assume $110 crude is permanent. It is not.
The Better Trade: Kinder Morgan
Redirect your attention to Kinder Morgan (NYSE:KMI), the $73.7 billion fee-based pipeline giant that earns the same toll whether WTI prints $85 or $115. Long-term, fixed-fee take-or-pay infrastructure contracts insulate substantial cash flows, and three things make this the retirement-portfolio trade of the year.
1. A $10 billion contracted backlog. Approximately 90% is tied to natural gas infrastructure and nearly 60% supports power generation, with the $1.8 billion Trident Intrastate Pipeline in service Q1 2027 and the $3.5 billion South System Expansion 4 already locked down. Backlog grew by $912 million in Q4 alone.
2. The LNG and data center tailwind is structural. The EIA projects U.S. LNG export capacity will increase to 27.7 Bcf/d by 2030 from 14.9 Bcf/d in 2025. Kinder Morgan already has long-term contracts to move 8 Bcf/d to LNG facilities, growing to 12 Bcf/d by end of 2028. And roughly 70% of future data center power demand is in states served by KMI assets. Q4 transport volumes rose 9% YoY and gathering volumes jumped 19%.
3. Cash returns are real and growing. Adjusted EBITDA hit $2.27 billion in Q4 2025, up 10% YoY, free cash flow rose 18% to $0.9 billion, and S&P upgraded the senior unsecured rating to BBB+ in January 2026. Management guided 2026 dividends to $1.19 per share, up 2%, and the most recent quarterly payout already stepped up to $0.2975, ex-dividend May 4, 2026.
CEO Kim Dang summed it up plainly: “Led by record-setting performance in our Natural Gas Pipelines business segment, the company delivered its highest ever fourth quarter and full-year net income attributable to KMI and Adjusted EBITDA.”
The Bottom Line
EOG is a leveraged bet that geopolitics stays bad. Kinder Morgan gets paid either way, at a 3.48% dividend yield with a backlog stretching past 2029. Investors looking for a supply-shock hedge may want to research KMI alongside the upstream drillers everyone else is crowding into.
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