One of these purchases was the result of our decision to revamp the Fund’s energy exposure to reduce its oil service component and introduce exposure to high-quality exploration and production. As a result, we purchased EOG Resources (EOG, Financial), which we believe is one of the best positioned U.S. energy companies. The key to EOG’s story is the company’s management team. It has focused intensely on capital productivity and, as a result, has made EOG a true low-cost producer. It has also allocated the company’s capital effectively, giving EOG a strong balance sheet. This should enable the company to survive—and even benefit from—the currently stressed oil and gas environment. Even including the EOG purchase, however, it is worth noting that the energy sector remains a mere 1% weight in the portfolio.
From David Herro (Trades, Portfolio)'s Oakmark Global Fund first-quarter 2020 shareholder commentary.
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