Ezra Yacob
Chairman and Chief Executive Officer at EOG Resources
Thanks Pearce. Good morning, everyone, and thank you for joining us. EOG is off to a great start in 2024, both delivering value directly to our shareholders and investing in future value creation. Primary drivers of that value are EOG's commitment to capital discipline, operational excellence and leading sustainability efforts, all underpinned by our unique culture. Strong first quarter execution from every operating team across our multi-basin portfolio has positioned the company to deliver exceptional returns. Production and total per unit cash operating costs beat targets driving strong financial performance during the quarter.
We earned $1.6 billion of adjusted net income and generated $1.2 billion of free cash flow. We paid out more than 100% of that free cash flow through our peer leading regular dividend and $750 million of share repurchases.
EOG's operational execution continues to translate into strong returns and cash flow generation. Our robust cash return to shareholders continues to demonstrate our confidence in the outlook and value of our business. Quarter after quarter, we have delivered outstanding operational performance in our core assets while also driving forward progress in our emerging plays.
We have built one of the deepest, highest return and most diverse multi-basin portfolios of inventory in the industry. The most recent addition to our portfolio is the Utica Combo Play, a textbook example of our differentiated approach. Capturing highly productive rock through our organic exploration and leasing efforts is the primary way of expanding our premium inventory, with a low cost of entry to drive healthy full-cycle returns. Adding reserves at lower finding and development costs drive down DD&A and lowers the overall cost basis of the company. The result is continuous improvement to EOG's company-wide capital efficiency.
Our track record of successful exploration, strong operational execution, and applied technology has positioned the company to create shareholder value through industry cycles. The oil macro environment remains dynamic, but is overall constructive, and we anticipate that certain drivers will limit oil prices to a relatively narrow band this year. In the first quarter, global demand performed as expected, and is on trend to increase throughout the year, led by a strong U.S. economy. And while U.S. production surprised to the upside in 2023, several developments have altered the U.S. supply outlook this year. Rig counts have remained flat over the past eight, nine months, and oil drilled but uncompleted or DUC inventory has been drawn down. Current activity levels combined with M&A in the public and private sectors should lead to more moderated U.S. growth this year.
Globally, spare capacity has kept inventory levels around the five-year average to start the year, and we forecast these barrels returning to the market throughout the second half of the year and aligned with growing demand. Overall, the result is a strong operating environment for a low cost and returns focused producer such as EOG.
And while we expect the natural gas market to remain soft through the end of this quarter, much like last year, we expect it to strengthen through the second half of the year and are managing our Dorado program to align with demand. Longer term, we expect an additional 10 Bcf to 12 Bcf a day of demand for LNG feed gas, and another 10 Bcf to 12 bcf per day of demand from several areas, including overall electrification, exports to Mexico, coal power plant retirements, and other industrial demand growth. So, the outlook for North American natural gas by the end of this decade is bullish, both for the industry and in particular for our Dorado dry gas play, which has advantaged access to the Gulf coast and pipeline infrastructure.
We look forward to participating in the emerging LNG demand through our diverse sales agreements that grow from 140,000 MMBtu per day today to 900,000 MMBtu per day over the next three years.
Through EOG's differentiated approach to organic exploration, the utilization of technology to improve operational efficiencies, vertical integration of certain parts of the supply chain and our diverse marketing strategy, EOG remains focused on being among the highest return, lowest cost and lowest emissions producers, offering sustainable value creation through the cycles.
Ann is up next to provide an update on our forecast and three-year scenario. Here's Ann.