President and Chief Operating Officer at EOG Resources
Thanks, Ezra. Once again, EOG delivered outstanding results in the third quarter. We exceeded midpoint of production guidance, while capital expenditures beat forecasted targets. I'd like to thank our employees for their perseverance and execution to beat the expectations. Realized oil and natural gas prices also beat their target benchmarks in the third quarter. Our marketing teams are doing an excellent job executing our long-term strategy of diversifying across multiple transportation outlets and sales points. This strategy is also enabling the company to navigate the recent bottlenecks, transporting natural gas out of the Permian. We hold a significant transport position with the ability to move up to one Bcf a day out of the basin. In total, less than 5% of our domestic gas production is exposed to Waha pricing in the Permian. In fact, we anticipate fourth quarter realized prices to remain strong for both natural gas and crude oil sales overall. Our crude oil and natural gas export capacity is serving us well in this regard. In the fourth quarter, we expect to sell over 250,000 barrels of crude oil per day at Brent length prices and 140,000 MMBtu per day of natural gas at JKM-linked prices, both on a gross basis.
Year-to-date through September, export-based pricing of crude oil and natural gas has added nearly $700 million of revenue uplift compared to the alternative domestic sales. One of the major topics of the year continues to be the inflation story. The price pressure we are seeing on steel, fuel and labor continues to be persistent. Our employees are maintaining their focus on finding ways to mitigate inflation through innovation and efficiencies in our operations. Through their efforts, we now expect our average well cost to increase a modest 7% as compared to last year. As a result, we have narrowed our full year capital guidance to $4.5 billion to $4.7 billion. Given the elevated and persistent inflation pressures we have experienced this year, I am proud of our employees' efforts to mitigate a majority of this impact to our capital plan. We continue to evaluate and shape our plans for 2023. Production growth and infrastructure investments will remain guided by capital discipline. We expect low single-digit oil growth similar to this year. We currently forecast oil equivalent growth, including gas and liquids, at a low double-digit rate, somewhat higher than this year, largely driven by increased activity in our highly productive Dorado dry gas play.
Once again, we plan to leverage our activity across multiple basins to secure services and manage cost pressures. Our initial plan includes a modest increase in activity, utilizing on the order of 28 to 30 drilling rigs, including one offshore rig in Trinidad. This would be accompanied by eight to 10 frac fleets. This would represent a slight increase of two to three rigs and one to two frac fleets over 2022 activity levels. We are seeing opportunities in different basins to lock in services at favorable rates for next year and currently expect to secure 50% to 60% of our well cost by the start of the year. This is within our typical range and compares with 50% of costs secured for the start of 2022. All in all, we expect higher capex in 2023, driven by four key factors. First, we are assuming that persistent inflation pressure continues. With the cost of materials and services increasing, our initial 2023 budget is likely to reflect another 10% well cost increase, on top of the 7% increase we expect this year. We will continue to work to identify additional savings and efficiency improvements to offset the impact of inflation, just as we did this year. Second, we see several opportunities to advance development of particular assets in our portfolio in areas that are less exposed to the most severe inflation and supply chain pressures.
The increase in activity in emerging plays like Dorado, the Powder River Basin and the Utica Combo are examples. Third, we expect to accelerate some infrastructure projects to take advantage of market opportunities. In Dorado, we've begun construction of a new 36-inch gas pipeline from the field to the Agua Dulce sales point near Corpus Christi, Texas. This will ensure long-term takeaway, fully capture the value chain from the wellhead to the market center and aligns with our focus on being a low-cost operator. Fourth, we plan to continue to progress our investments in environmental projects, including expansion of our carbon capture and storage or CCS projects. Our first CCS project is progressing, and we expect to begin injecting CO2 early next year. This is yet another step toward our goal of being among the lowest-cost, highest-return and lowest-emission producers of oil and natural gas. We recently released our latest sustainability report for 2021, which highlights our progress.
We achieved our near-term 2025 methane emissions percentage target of 0.06% last year, an 85% reduction from 2017 levels. We captured 99.8% of natural gas produced at the wellhead, meeting our 2021 gas capture target. We discussed our latest initiative to further reduce methane emissions through our continuous leak detection system named iSense. We improved our safety performance with lower total recordable and lost time incident rates, and we reduced our freshwater intensity rate by 55% since 2020. We are proud of our employees' progress on our sustainability goals, but we still see tremendous opportunities for continued improvements. Altogether, infrastructure spending, including environmental projects, typically amounts to 15% to 20% of our capex budget. This year is running right about the midpoint of that range, whereas next year, we expect it to be towards the higher end of that range. We continue to develop our 2023 plans as we approach the new year and provide a more detailed complete outlook in February.
Now here's Tim to discuss our financials.