Ezra Yacob
Chief Executive Officer at EOG Resources
Thanks Tim. Good morning, everyone. Yesterday, we declared a third special dividend for the year, demonstrating our commitment to deliver long-term shareholder value through our cash return strategy. The $1.50 dividend is supported by another outstanding quarter. We posted adjusted earnings of $2.74 per share, and nearly $1.3 billion of free cash flow. So far this year, we have declared $4.30 per share of special dividends. Combined with our peer-leading annualized regular dividend of $3 per share, we are on pace to pay out a minimum of 60% of annual free cash flow.
What continues to differentiate EOG, is our people and our assets. We have cultivated an inventory of premium and double premium wells, that provide a 20-year runway for the company through our focus on organic exploration, supported by a decentralized organizational structure. Our multi-basin portfolio is predominantly the result of having seven North American and one international cross-functional exploration teams, that work independently but collaborate on shared learnings. Our role here in Houston, beyond capital allocation, is to facilitate those shared learnings across all eight teams. The result is a robust exploration pipeline, that continues to both improve the quality of and expand our more than 20-year inventory of premium and double premium wells.
Our portfolio includes the Delaware Basin, which remains the largest area of activity in the company, and is delivering exceptional returns. After more than a decade of high-return drilling, our Eagle Ford asset continues to deliver top-tier results, while operating at a steady pace. And our emerging South Texas Dorado dry natural gas play and Powder River Basin Mowry and Niobrara Combo plays are contributing to EOG's success today and laying the groundwork for years of future high-return investment.
In addition, we have tested our Mowry and Niobrara plays in the Northern Powder River Basin. Our initial results have demonstrated the untapped potential of this oilier part of the basin as a complement to the outstanding performance in the southern part of the basin. EOG is current multi-basin portfolio, offering exposure to both geographic and product diversity, alongside several other prospects in our exploration pipeline, while continue to expand EOG's premium inventory and provide through-the-cycle value creation.
Disciplined reinvestment within any given play depends on where we are in the development lifecycle of that play. Our multi-basin portfolio of high-return assets all competitive against our premium hurdle rate provides invaluable flexibility to invest at the pace that allows each play to get better. It also allows us to plan around basin level market dynamics impacting services and infrastructure to minimize inflation and bottlenecks. We are able to optimize reinvestment across our total portfolio to add reserves at lower finding costs, lower the overall cost base of the company and continue to improve EOG's companywide capital efficiency.
This quarter, we are highlighting iSense, our continuous methane monitoring system that we piloted in the Delaware Basin and are now deploying in our most active development areas. iSense is yet another example of how EOG's decentralized model not only fosters innovation across eight teams, but also compounds, the impact of innovation, by taking ideas borne in one operating area and expanding them across multiple basins. from the latest and information technology-driven solutions to reduce emissions, to innovation focused on drilling and completions operations, to procurement of casing and sand, EOG is unique in its ability to leverage its culture and operating structure to get incrementally better every year.
The tremendous inventory and cost improvements we've made over the last several years, provides high confidence in the low breakevens and operational flexibility of our business. This confidence in our business, along with the strength of our industry-leading balance sheet, [Technical Issues] this quarter to terminate a significant portion of our oil and natural gas hedges. Going forward, we expect to hedge significantly less than the 20% to 20% of volumes we typically hedged in prior years.
The current operating environment is challenging, given the volatility of commodity prices and inflation headwinds. Through it all, our employees have remained focused on execution and have improved the business. Our second quarter performance is proof of that. We delivered more oil for less capital, and in the face of a unique inflationary environment, our forecast for capital expenditure this year remains unchanged.
EOG's consistent execution, low-cost structure, reduced hedge position and transparent cash return strategy based on a regular dividend that we have never suspended or cut, that has grown 21 of the last 24 years, and is now competitive with the broader market puts EOG and its strongest position ever to deliver significant value to shareholders through the cycle.
Here's Billy with an operational update and early look at 2023.