Marathon Oil (MRO) 7 May 202020 Q1 Earnings call transcript

Good morning, and welcome to the MRO First Quarter Earnings Conference. My name is Brandon and I'll be your operator for today. At this time all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] Please note this conference is being recorded.

turn Relations. to now President Baber, will Investor of I it Guy over Vice And

begin may You sir.

after issued and at our for and results. morning Yesterday, Those joining Brandon, investor marathonoil.com. us close Thanks, thank our be this on you packet that documents the first slide can press website release, a to address everyone the presentation we quarter call. on found

Tillman, of Pat Senior years to our Executive the as VP me Executive of Chairman, and role successor and CEO Joining several are VP on Vice Development Executive Mitch's Whitehead, CFO; call last CEO; Little, recently Operations; Operations. of Corporate VP the of the Lee and President Mitch who our Wagner, Mike Executive today's VP Dane new after our Adviser Strategy; Henderson, serving and transitioned President and has to

will As such release the uncertainties actual included press could and cause and SEC always, the statements expressed in as risk as our cautionary today's presentation implied to risks differ filings. those call described subject everyone factors well to the to that I'll from refer in or to contain results language forward-looking materials materially statements. by

to With opening that, turn Lee, the who over I'll will his provide call remarks.

open call We will then and questions the to answers. your

to expertly one work job keep essential with field has at uncertain staff my our these their as U.S. to to during our on remains our Energy. Thanks, supplied Guy, want dedicated extending the number providers, remained infrastructure and out safety good contractors and thanks priority. by reiterate Throughout to everyone resilient the and crisis, and this morning call today. that made-in-America start health I employees times and their critical hard doing

our and been a powering energy clean affordable be eventual decade provide the powerful economic economic Our last critical industry will engine in unquestionably nation's recovery. for we U.S. the growth of has

our to service of the Little part to to an decades his company. tone Mitch has and end excellence assist year, a Mike the the our well orderly operations. supporting independent while I Mitch that as been to for my transition deliver to EG has execution environment. Henderson also consistently three operations and E&P, our extend pause of our an of leadership thanks through leadership as current leading and the integral transformation Mitch the business, at want we with for in of response macro will set our

working recently to and and continuity in stranger Mike's Mike no many Oil multiple the positions on held operations XXXX, in to integrity is including he on will responsibility the with commitment forward established wish has retirement, most and leadership Marathon under both you all and promotion for the our line toward since and his operations joining ensures Bakken I Mitch. strong look best to role. new as assets. safety, of I Oklahoma transitions he carry excellence Mike Mitch closely

The our current industry is are immense. facing challenges,

is of U.S. shutting unprecedented never global an extraordinary crisis economic we impact to particular oil demand seen. activity. supply confluence and demand global The are with which likes essentially experiencing the shocks We global have down in and of a health

current While is right real and supply is oil the the work direction, back to market currently commodity in healthy to the and to get are forces headed answer again. at only for the global world crisis work

this this improvement. sustained discipline. assured will demand the necessary unknown. price U.S. once and to shape of recover does it play will remain especially the any product recovery our for will for its Rest recover from capital discipline And although comes Marathon be part, Demand timing when exercising

ultimately demand on visibility the and storage sustainable return OPEC+ balance into stage consistent compliance as norm gain prices. and new set more for confidence Supply we come demand to withdrawals must more the in

state to current it's was free from before the – with evolving. on legitimate global cash that respect model the of demands reflect the investors E&P profitability, With shareholder I even our business flow pandemic industry, As and return. generation

was over quarters promises. funded for our companies; so all over operations sustainable to flow of for improvement, eight done multiple returns company to on had mandate we new And meaningful capital years energy consistently our our fully over from flow. returned cash against consistent free cash free investor the corporate cash from Our consecutive XX% of with however flow return period shareholders generation delivering delivery shareholders, that

$XXX of shareholders repurchase portfolio. program cash First returned with over again of a strong balance dividend million by on ended and exceptional this specifically, $XXX to across We continuation sheet. represented financials More our multi-basin our still the the via delivery. reported quarter execution our million we supported share differentiated and quarter

U.S. per down cost an of independent completed guidance. barrels was Average was production down average. of above per became E&P. barrels since from to of XX% unit XXX,XXX from costs well were XX% oil X,XXX lateral per the production end average the the lowest day oil quarterly we day foot XXXX U.S. high XXXX

cost The for improve $X.X below, and new per and reduce Eagle in tremendous a completion asset costs capital-efficient cost, setting in eight and as record stages Ford well quarter quarterly years day. the wells with delivering of the million efficiency, the a history a evidenced well The Bakken also accomplishment. most during team continued delivered by quarter to at capital completed or team nine the IP XXs

more current firing and adapting is remain focus operating only recognize future whether three. Our the our past. XX changed has also all this to execution is capital record improvement Everything if of rightfully and in this environment. has track imperative the continued operating and reality. are of in we we are accomplishments, This to shifted reduction expect in new we our on was we are expense the to proud cylinders our case, And a these or efficiency rigs even all rapidly while we and and

prioritize crisis and sheet the financial demands not that and of we our with for changed purpose our balance current success, flexibility. playbook respond sense a While principles our to have urgency

ample an waters, in truly cost improved are determined this will and We company a confident we structure we are that flexibility. uncharted financial with healthier emerge and from correction but

and We have macro decisive taken challenges. the in action to response immediate

response XXXX liquidity. our prudent capital been strong, our and lowering protecting our expenditure balance program, sheet structure cost Our has reducing but and

dictates returns the Our mindset an new make that near sense. term simply first not in market does investment oversupplied in already

a capital First and a budget. capital or reduction initial to we XXXX actual announced billion on a revised to in our ago of $X.X billion a XXXX capital comparison our few one XXXX $X.X words program spending. budget our less Approximately reduction relative XX% month revised

exercising ability reduce delivers and the solid have a Given chance, there spending costs, we the than have low efficiencies second protecting our less strong team through cycle. to XXXX. XXs execution our are from our is billion preserving program And we the budget, our revised we oil the the our price returns we for are importantly, in drive WTI while guided. value breakeven $X.X discipline, and half team, enterprise the outlined delivering With an of

supply across immediately capital a highlighted the completion run the oil This activity in will rate pause is extend global third second expect resets pain during by quarter, in This drilling minimal maximum quarter. our and fundamentals. for essentially period forward and pause which fourth demand that quarter the we

in resume three rigs for strip, crews current of with our the line transition in the in two the accounting to in largely capital prices and XX% frac and commodity this expect we Eagle concentrated to Bakken, forward allocation second activity investment year. XQ At Ford half of a with

Lower CapEx entire the our flow landscape. XX high-grading strongest the efficient generative are capital offer some We most returns to across of our cash opportunities that

reduce Given how to dynamic full is, oil are by lower to the the an increase With production to as conditions basis current we X% further environment will decline on continue approximately macro macro investment or levels, we flexibility effects. year curtailment underlying any our exclusive warrant. potential activity of our XXXX U.S. exercise expecting our

for be our XQ the production XXXX pause, XQ With profile. will trough the

will our improving trend by an by the be U.S. the volumes quarter led and Bakken. Eagle fourth However, Ford on

in success that XXXX enter as efficient, high-margin of with and exit Eagle a we us a provide core strong XXXX. Ford capital will We momentum increasing the for foundation with production from will Bakken

resource while allocation in provide us and improving we optionality the environment. capital going an on anywhere. the aren't hitting price Oklahoma are opportunities Delaware, And investment exploration returns those and commodity button important with They play capital in associated our pause Northern program,

Along we our are levels, investment structure. with also resetting resetting our cost

our objective enhance reduce our our Our and success in cash competitiveness, breakevens commodity flow for to more lower price environment. volatile is company position further a

initial More budget. XXXX approximately or cost our specifically, we reductions cash relative are driving $XXX to XX% of annualized million

which by in expect higher savings cost cash attributable approximately volumes. structure, fully a savings and this to fixed cost commodity sustained XX% with of these will And prices our year. realize production increased be the end We to these are even recovery savings of

as other U.S. myself, of corporate XX%. reduced our that and of in base production workforce with result G&A, employee have expense well expense, initiatives taxes. XX% reduction our base base production the our include actions Significant Director compensation by contractor and broad-based and shipping a are These by savings broad officers, reductions numerous Board as across handling reductions and for categories: measures salary U.S.

annualized comparison contribute in will G&A actions These expense XXXX. to to XX% reductions of

level of capital of realignment support retaining an such talent investment lower we essential recovery time. in to a company foundation Importantly, over of reflect our a capital reductions while efficient investment, resources a to are

And streamline flexibility the our of common taken suit also leveraging flatten team have model. more structure. teams recalibrate operation We our and and our functional this efficient new support to and to asset the followed have to opportunity operations strength organization,

perspective, line to barrel these per put price. in in straight annualized free total the ability enhance to recovery result To in our will breakeven cost efforts This to scenario. will reductions cash cash any flow taken a $X $X our improvement flow bottom generate oil into

we macroeconomic program. sheet, made the and both, our cash difficult the are decision the our flow enterprise, and demand outlook. our generation. easy liquidity and have the surrounding the reflects dividend quarterly of protecting of our prioritizing significant decision both share We an dramatic Behind not was actions repurchase price and uncertainty all strength This taken, temporarily balance supply oil to and foremost and weakness financial we the and the commodity one suspend first our

always that from have return sustainable must We free shareholder cash flow by supported stated business. be the

company. to are Returning financial capital objective uncertainty, prioritizing But amid for current shareholders we a strategic our strength liquidity. and macro our first remains our core

returning sustainable visibility flow we capital our cash and characterized and upon of generation. sight our normalizing We temporary resume to improved have into as to line ultimately, plan upon macroeconomic shareholders free conditions suspension to

majority second especially swaps day action and quarter barrel. peak XXX,XXX our taken oil, flow, two-way per We barrels the have a over during specifically, More our $XX to period of of have hedged floor also near-term floor, collars, of price this weighted average of hard at fixed near-term we cash oversupply. protect with specific with production physical a per

roll trade pricing from NYMEX during our of curve. the on majority sales the and the certain exposure hedged contango have helping in quarter, third of impact realized second insulate also We the forward contracts the

team marketing some of across modest cash opportunistically realizations quarter our quarter. during entered flow sales best the second amount price fixed the protecting Additionally, into the with various during our a basins, of

Given brief cash a our we the just word continue diligently our Rest the of monitor topic, production strategy. the curtail assured, returns. to level perhaps on some to maximize interest flow economically and in curtailment our to need

are by to as strategy, as exposure size, We and our advantaged different basins end multiple our contracting markets. our well

flow contract, production essentially of issues we regarding majority the With our have no term on baseload seen assurance.

for such, more primarily are defer decisions a voluntary production economic favorable into As decisions to environment. price curtailment us

cash due limited, $X costs to averaged Our the extremely is exposure across variable our barrel. which low below U.S. to per curtailment portfolio, economic

have second production. little quarter, thus far curtailed we very During

will We barrels for our on up average quarter. an market evaluated on to best ongoing be per leveraging curtail But the a oil of variable of XX,XXX have and cash the recognizing day flexibility to decisions the potentially available very data costs. low these basis, maximum

we that billion position over billion, intend end an million quarter credit remains it Total at including the undrawn way. amounted Our balance sheet ultimate liquidity liquidity and of $X.X facility. $X $XXX to strong of first keep and and to cash

and recent reviews until rated all maturities primary We XXXX. both credit remain Fitch agencies, have debt S&P. from November significant with three investment-grade We no of at

about capital reductions meaningful driving have cost the how significantly have With our we protecting reducing our business. flow balance measures sheet good our structure, our liquidity, cash and investment, very positioned we we taken, to feel

flow flow the $XX even be second price current the at a the oil barrel this cash fourth would And neutral per cash Over pricing we expect project strip year, of forward in half low range. during to free we breakeven quarter.

core we company down position a objective lower actions our commodity to cycle, guided underpinned portfolio a principles flow generation but collective capital we our not that recovery strength and world will a our sheet. for prices. and commitment eventual potentially of the only to well And commodity today's come for volatile have out to Our balance corporate strategy, returns committed return reality, cash the and free remain by multi-basin shareholders, the an the as in in more all sustainable first, on our focus to long of

Our forever global world, be will changed our society by and pandemic. is our the crisis sector that current the

We life, the U.S. paused that world's the a my have adult most never has at in health essentially of experienced least economies. crisis and global

Beyond return, the ultimately as well return focus before broad be for free and industry with ramifications ESG immediate was been as flow, and on gas socioeconomic the this and our renewed and health performance. crisis, a oil will shareholder Even evolving far cash welcomed impacts, reaching. sustainable have

affordable the to and we of best the and and oil workforce know is but design and require How recover, also energy so form accessible rapidly and recovery the that people require is in demand will very will unknown, returns critically gas. why reliable most our talented organizational important. is for our it an world The capacity

We on health the remains and we can safety contractors. focus one importantly, the have employees number our to control. and priority what And of chosen

to our We crisis is energy back get that current abandoning best work, solution world free independence. healthy believe U.S. the principles to created have to while the the market not and

looking but on allows for are looking in We equal us to for protecting Energy we American investing footing continue Security. and are energy and stability that in markets bailouts, compete

recovery was global it and XXXX pandemic crisis coming oil recovery we sector engine gas regulators out will financial weeks, few last was economic force the that and that as an the reminded for important government policymakers the well. from a numerous officials', Over be for of I've this and major

Thank to you will hand I to begin the the and now Q&A. operator over

you. Thank

Instructions] we ahead. We question-and-answer [Operator go Arun And session. Jayaram. Chase, have will now JPMorgan the from Please begin

good morning. So Lee,

morning, Arun. Good

of if wanted revelation as Bakken and talk wondering your maybe expectation I on Yeah, well the shaping could Eagle And see trajectory to up more both or the maybe margin on was elaborate how in Ford? a I the is you could you little bit volumes? U.S. about if profile

underlying a flexibility. we of environment going help we recognize some and I is do of part our have as to the Yes, we've bit color we're current the framework have think kind dynamic absolutely, Arun. as to to Well be first first just have we little in have production as that What of extremely year of that continue to on to incremental production in well responses tried wells all provide is to sales trajectory. and terms of an to guide people our been

Bakken. our Clearly, and the is strategy our high-grade capital Ford to Eagle the to

somewhat production of trough in as market have will value XXXX are expect our that just to we good on though, very third appropriate into We see the in right investing focused a profile. With volumes. pause an which activity our pricing, With oversupplied obviously now in very we and reasonable response a not the is view pause, that weak to XQ returns it's solution. don't quarter

to that with are CapEx through But point going in actually the quarter, the Eagle that, have the of year. from forward, second fourth wells pretty sales we're particularly to half Ford. the in But our ratable concentrated

very this improving exit Ford in our Eagle volumes Bakken. as that XXXX, fourth quarter, core capital-efficient trend again we the of So, strong view will an in see in the leveraging production production we is and base

about carefully the the of we curtailment. we work them feel discussion as to it that back very on that continuing around differentials good forward plan and basins interest look we margins Bakken the put of the reinvestment But and third as the two pertains level curve and in fourth into in of the watch terms we some the to to Eagle starting Ford, understand the In the we of quarter at as obviously, very today particularly then ongoing quarter.

a CEO, to really returning walk That's you've very you've been since follow-up helpful. And walked terms of in Lee, shareholders. my cash

XX% S&P back the better to key well CFO the to know I over E&P. position to relative versus objectives That mentioned of one of shareholders. was company You your said,

wondering where know cut support on this was that I done a bit is and factors maybe method more an thoughts cash oil provide shareholders? of to could CEO? see we that's returning could this you So, dividend if something Because resume you to price the could you've being it's since important little that really I you

Yeah. as in few I'll maybe a and ask jump Dane to then say things well.

and to had you returns. that's our earned track our that, going said always generate strong cash to governed by we spend of we we very know includes always return aren't been a that haven't to Arun a commitment record as But ability cash shareholder sustainable delivery predicated have of We've free shareholders. right, and on and that flow. You're money

temporarily repurchase in as balance it painful answer was uncertain very sheet dividend this And our absolutely and shareholders. strategy. program, environment both so all was for Nothing liquidity the the suspend right as share to changed the strength has current prioritizing in

point time better sustainable to should see have optionality cash flow you have expect that to like. with that flow generation objectives And we an flow, the free visibility We obviously use outcome. in cash obviously, start what we have we cash returns what simply with is and going seeing though for. And us a to start much on with sustainable free where being once volumetric a of that again free lot we look of

on point. I'll jump let that in maybe little Dane a bit And

borrowing pulling money We opening taken downturn want doesn't out want you suspension duration price do to to great Thanks that. financial like the giving dividends. be it of help and to pay Arun, obviously, not great dividend is we're ourselves of feel understand this Yeah. in Lee. But the levers really to with time decision lightly. to to said as flexibility. come position And this the we his comments, Lee a

a as suspension. this view temporary Definitely

make and As cash relates sight to trade-offs to a make we'll position look levels, leverage have activity cash capital back to some would we are flow, free time get to returning to world. we're normal We and of in And decisions. obviously, world line into a decisions being a we more in more over going shareholders. to make to forward the it those as those as normalized a get we're into

as and Henderson I welcome Mitch. wanted as a to just And give to to congrats, Mike well

again. thanks So

you, Thank Arun.

From Wells Kumar. ahead. go Fargo, we have Nitin Please

for up on Hi, I have and a curtailments peers the following the Lee, of curtailments guess good about thank Bakken. morning, in just talked update. you lot your the particularly

You've something sustain willingness do you're to doing indicated Bakken volumes bridge you Is wide Can but allowing not you there that about or us your seen to the right in the a help your operations so we've pricing? where pretty is strategy them particularly marketing now. gap?

level Yeah. means Obviously let's basin, cash at realized Well, for of -- just any curtailments. look about first that which the we is all driven. include and for that good And pricing that cost of first at that Sensibly obviously within talk high we take right all, the economic variable us a curtailment now decision us morning. course differentials. purely would of

respect but the that decision, make we flow. so be extent minimum a with cash to neutral a should is decision And hopefully that at that positive to it

impact side small. the volumes to should the the relatively of financial impact curtailment done setting correctly be So

say upfront. just I wanted So to that

as there the as well prices oil where basins watching Bakken, Eagle very market carefully. the the have clearly we the differentials key production, significant and our of both far, Thus Ford we are

We we obviously, our we June be it to continue will really that price low have it's And the generally speaking. economic as cost because choice variable But would but market choice watch that flexibility, discovery an have we at far our and those thus to, basins in hurdle clear make. barrels. we been our of able

To to thing just preserve of done want because a flow been do it flexibility. date we it from hasn't that cash But we haven't certainly much the right perspective. to

maybe on comments marketing maybe general general may just of the to flexibility, and to -- I terms few In offer a just that. our ask approach Pat

Sure Lee. Good morning, Nitin.

markets to you our multiple and we're times to MEH, that our us contract, dislocations. size LLS. strategy end term we're our over of this exposure some markets. is majority to maintain different marketing leverage flexibility basins move on is, spot by in different we exposure and I'll production XX% Brent remind overall one, The but purposely end to and pricing Just advantaged when we to provide our optionality like see for do

approach Cushing the we to again and Bakken, have Express DAPL, to where portfolio market. via there we're exposed a we've Pony via the Clearbrook MEH Rail, Specifically diversified via Brent

Although, the Lee move be mentioned of has barrels In price comments -- improving in quarter we a those sales as up, to as come did some termed net we able highest majority facts. around. turned And down been things we've his out in are fixed we some and opening of to basin have the our seen itself, bit. second supply the differentials our

right And so forward Bakken positive we're looking about now. the

gentlemen. was Thank have I cost That savings. very second the Great. around question you, is helpful. Lee, the

that piece targeting more -- them XX% Or from variable come in of quickly the XXXX? that back very that structure. not we're on are mentioned are appreciating that the Do to you expect our of vantage? there You of Any it? sticky sense cost of pieces fixed the

remarks, and by just unfolded, element to mean, to I the was are impacting every as some teams again mean the lever cost structure I a on business of of on our I exercise really a had we opening of this breakeven we we cost. aspects that the that important pull really key the made mean, of there get reminder our attack in -- wanted the really points available. were And work that. in perspective control I our my maybe we going as that great came some Yes. was crisis really to

us catalyzing us. event And a well. I time This for as record track a just, it's for was over been think,

end achieve able to annualized stated in the and about where consider that's that would what we of That's fixed into $XXX with forward of essentially we my XX% run annualized of XXXX, be be regardless expect at of is part reductions the find will would about I carry to volumes that pricing this cost As million cost us remarks, themselves. cash cost that rate and we we so savings year.

variable elements continue to move those So will around.

do though, we production XXXX. expense the we of the category. million was to An also still to in that of though, the the full until our expect We've G&A even $XXX element in already salary those of that an that of that expect end capture in and Obviously, about our element workforce of see of of we're the $XXX million We that savings value some expect reduction year, actions don't about talked some taking, broad category. actions at level. officer we're Board taking was

All annualized combined of to expense XX% of corporate about this that relative XXXX. savings contributed G&A to

reset and price savings significant run forward be and that's to G&A going environment. rate that our expect pretty in impacted obviously sustainable. So don't We future really a a on

those look So have what of irrespective that savings are we like. the recovery might

Great. your Thank you you, time. Lee. for Thank

Thank you.

Singer. Sachs, Goldman ahead. go Please we have Brian From

morning. Good you. Thank

Brian. Good morning,

about how declines measures you're have what three now of some to plays four your the excluding the that And on that? shale or And given production what And the trajectory across these given think your next shut-ins? well you the the through how available? over how plays? that on the that could impact And measures are rates of there? think we if mitigate And in about and trying taking base quarters kind you see major see both focus run then the decline you as to wanted of history breadth I assets there? you

is lot front to upon in going because are right so at probably in Yes investment that. not what are basin levels point dependent get those Brian. declines that of and were starting I'm of what your a a level the

see Eagle obviously two and are provided X% feel would is level in really to for other will the our in a large we basins of decline was only the those see have wedge reason essentially guidance things. the not say across nominally the at give a If in as all was year to you to the declines would declines concentrated view and going data, the go that to I growth what Bakken of you very dominating that activity at you say, base underlying I from what four of basins portfolio dissimilar one Ford. But look you're that least particularly, what But occurring general we players. industry industry just as we

of amplify little an bit some our dealt invested that recently right? it's just been recent protect us terms really does doing some what Mike our of In concept industry valuable Mitch a we But a with of actually has base this type teams barrels. in I that in has it least mode generally history. growth decline, the that of for mitigating mean, been the the haven't we have are let in. And mitigate I'll and asset and/or throw what maybe are things to help most at

Sure, Brian, this Mitch. is

tools allow wells that skill the now years there. wells resources real-time last making provide risk the in any to centers We've really set XXXX-plus at the of and we're started point at regularity automated multiple can additional that to right production We've basins or Ford that with large Eagle us across investment scheduling amount basin. prioritization made. deferred and Just with for footprint. visibility such supplemented and the we production our with on across our automatically reduce now now Lee divert about the of talked control really Certainly, the have picking digital up in that that the right expanded that that proximity remote centralized

in to very like ESP and required which millions stay the maintenance are front the performance lift transitions years track performance in develop ESP-driven on analytics detailed Coupling of that Bakken, us some wells algorithms our artificial solutions there. that there and other help largely with data but from leveraging that of digital or any data points

really additional I on. building digital base framework to of There's in foundation on could we're leverage lot investment go that the of optimization. on and tools now a been that production and top

M&A. valuations here And staunch And opportunities? that's of change a think down really and of Lee couple prices over up then that the how assets -- looking you've up years know then my have for some picture Great. relative there's helpful. doing lot next M&A. I back ramping with resource think do to you a and about at about to point it how avoider And exploration regards one higher bigger I follow-up Whether move been you to the any out come comes pretty assuming at wondered companies? M&A and is day

think organic and base. And basins. resource REx do it's small that to a Brian It's and course our well. selective as program then acquisitions. you we we've It's enhancement bolt-ons I things and mentioned very about scale want to portfolio always the uplift Yes, existing talked continue of in of to as enhance our

as But in it's not M&A spending make now It's something the inward as an strong this terms that's we're position. again good very not came much company focus exit We in time strong want and large-scale into uncertainty period to right And possible position. high very we to today. also very of on very volatility. crisis in a of this -- a just in

we in I production day-to-day control efficient our things capacity just on over that we run are. described that's the money the things that's efforts where we're operations Mitch how the optimizing mean that our we right spend where So, spending operations types it how time spend and now, of our have the we

in commodity capture. Those flow of continue that aspects in point stronger a the drive stability opportunities we to They're lost access see to and that sense. those back do gone we having to haven't as free resource away. get cash But time other not more to price

us just areas. patient flexibility to until we financials And give to be again pursue so continue have to the those our

you. Thank

Thanks Brian.

ahead. From we Dingmann. have SunTrust go Neal Please

and Delaware is I'm be just just would rates go a my bit. bit My forward? all Lee view -- I'm little and in you the on morning on just team. earlier you it a bit call slow this a Good decline you the rates you but hit a -- or less really wondering this more question if how your I a decline a just on talk more on rest looking a as down guess could is first on I that Bakken specifically improving the for thought Lee your base of that bit would perhaps

So all the wondering you I'm days. how declines base view just these

a more business. base now have that if to at Yes, level well, we the there's even observed and as say in Guy the we discussions base to have nothing out would anomalous right in in dialogue. in we get decline from to can decline our general want mature Neal basins. less guys I important quite just to basin-specific what clearly obviously our obviously, some reach And But you model basins high is mature

relatively position. of early As know Northern Delaware still you the in our we're development

we stage at instance in have the it's some wells operating bit XXXX for we're than of So, what Ford little say a Eagle development there. different

are assets bit these little a in of all So different point time.

so and production based you variability vintage a legacy And the decline the in underpins of on the will little their see base that them.

I like would that any we lot are your that it in just as it's in in answer I'm to investment avoid asset. because I'm difficult saying very that a today. there really question. to basins has on trying of nothing But the So, where anomalous asset's are preceding not and you say there's depends maturity observe a factors cycle straight-up those of give looked what and

Okay.

-- I of I'm will what conservation mentioned on be wondering just second going that assume appears on like And primary that it continue to case. to the cash one the for Thanks. That's last the just specifically you was -- Lee. Okay. I continues your part the financials be one question objectives. then

bringing otherwise prices already about of back cetera? cause in cause might very conservative staying you maybe bit order And would that to if already so last to would again you bit a Mid-Con potentially given you longer week back your you and of Bakken I'm as today Some back have a et some wondering curtail coming talked almost longer? nice just curtail have had a curtails this on. all success fully others than

point variable most little $X or of flowing than across kind is all have Yes. talk over about barrels cash question, economic across little maybe Dane starting bit less hand moment. curtailment how Well a -- all cash of and our we our a I'll barrels. first that the is cash just think we our are our $X on about cost average on just a of first portfolio. in -- -- U.S. start to conservation portfolio, But And

have impact online. our barrels cash those that would cash really Obviously, essence would in flowing keep on be to cash to that see to an you on that flow, So costs. below are negative flow Otherwise the those you -- absolutely drop realizations. have barrels impact want would And strategy

Now flexibility or we if you Again, then that tremendous described, kind consideration becoming we hedge it. a at will decisions. have it's bad we you give really are negative I because amount on set to Pat see mean But independent that a we of our place, just would as make in a different options. of should start election me barrels of basis. elect drag license decisions financial instruments our be on doesn't those flow unhedged take use And have destroy capital. to an and done cash the cash to

economic center. is that And is and curtailment so something front

drive negative place the have If to take territory, level. in We a basin see that into those at tools expect we us excursions should you action.

a maybe I'll going and that. just we say into let cash Dane forward about that and with how scale few So words of uses might cash

Yes, in billion. of Neil. really cash. $X.X perspective into a from Obviously, come with that this liquidity is million we good a $XXX position

that half would pretty cash we reduced good noted full we QX. we flow I forward price the Lee dramatic $X cash breakeven at $X just curve have free talked a levers forward by even the our is think curve. we'll which breakeven -- pulled say I in way. a barrel, flow the pretty free to And second at in for that close to be about

would very that be. will to curtailment drive if in a realizations we for So negative has Certainly, continue us certain significant been focus and areas see decisions. anticipated that

it think at just I So I'll leave that.

for guys. Thanks details good. Very the

Scott From RBC Please Hanold. we Markets, ahead. go Capital have

just to just But into have answer enter reducing $X. I I by line your XXXX. understand XQ guys a sort and you into questioning. breakeven want sustainability Thanks. that Yeah. important kind that bit of I And of it's about think shown that obviously to of more on elaborate little last around right, you talked

upper at that into of $XX barrel I'm we'll infer XXXX? when was looking like somewhere get XXs. what in in Does price before in I per look be to level? that XXXX know breakeven you as mid terms breakeven And somewhere the Marathon that range So the low in your does

Lee. just is me Scott, haven't detailed Yes. maybe we Yes done -- XXXX. this obviously, let business planning for

a something quarter about order And of carry going of we're of production activity have quarter still modest breakeven Bakken, but If activity the level into project we fourth so could this south think activity. me share And we bit and relatively do little corresponding a we let in in to just a Ford which and theoretical that we kind XXXX. expect that If essentially few Eagle thoughts that is a the $X less for U.S. of fourth the on a that. of exercise, for maybe billion is or kind those maintain look levels, that to a on $XX. oil probably bit of would that level

that well trying moving maybe capital just bit below deliver if XXXX. of and just maintenance quarter, capital in that it be you of again to we're $XX. program benchmark fourth we'd and in we we a little again range up promoting held relatively that to a just improving kind could that production that to billion So that frame flat that I'm I'm not $X extended from give

into great. to kind mean matter. looking of of keep I actually kind that' Yes. And was I'm going That's exactly for. diving the subject same what I

I of kind of clear industry guys at on how course does of how several rates long-term you how forward? the Does oil before it's are as look you focused the pretty been growth months well? obviously going flow last cash mentioned Considering volatility business? weeks and the and think that and hedge levels in what's at shareholder think with change I you that does over it's look very the and free that manage your returns. strategy here transpired As prices, fit on with sustainable policy your and change you And your into view the

we going is performance getting just of our to saying we pricing returns the maximize same and -- rate. our first financials we free from second possible We Yes. year flow growth optimize financial started growth at year. optimizing That then strategy doesn't The most sustainable on that which will first. decline, all the a just Well in a the have we And change like we an case this didn't start volatile first of lower mitigate be near-term efficient It's output. don't back do in shareholders. want saying thing the dislocation. on half is long-term believe our should standpoint, We probably more the to I strategy be rate forward. on and high-level cash you with the way how

We able to broader company drive, space, cash that make get moderated have means were yields, only not but of the and we're also sector going already on the flow gas only which not also, but, oil of that, free back continuing growth within more to a shareholders. the our amount S&P, we again, again, track. hands peer our into much to And, still thesis, we're and the an if investable within compete, the specifically, to

and you returns in basis; I a in lower capital rates the sustainment flow justify think cash on one, growth simply investment can't generating by a definition heavy the imply certainly, that near-term. cycle the two, really get Because, not it very you're future will and to to yet. free into declines

So that event-driven part of long This our an game the It's right that strategy for us. unchanged. is is now. in we're correction

We produce. expect an for with behind economic that be is the will to recovery And we that there be that going it. product demand recovery

into Pat bit side, that we repositioned a to flip the let him the and about going year, the On just what over we've forward? maybe and did year talk little how just coming kind at look of that in we how I'll maybe, broadly, might hedging

to hedging the we're the broadly, just I to investors our call allow downside, is but market, protect trying that, we're Sure. also but philosophy not upside. our say, in share trying to would one the

of three-way into So to $X barrels with year a value a collars, XX,XXX million with we had about came us. about put the $XXX spread which day

to and willing we we weren't up a secure occur, floor but to set give a significant there, As for we downturn look to look opportunities that premium through pay and saw the floor. we the year value

made announcement quarter. second However, few have OPEC+ weeks to an ago do opportunity for that an we did a when

Lee floor some we and mentioned ways in ways we of comments. his that into So monetized opening our two three that set

maximizing flow. is cash focus Our

on see And so and that third we And the have for value in at to value ways set three going trade significant now, is fourth a a of maximize unless for that those a market. floor we're cash to quarter. point, We this still ways haircut right the the not quarter opportunity take us helped and flow. three the better

dedicated continues opportunities if hedge to the on improve this And a find daily have at to we will. book basis. team we look We that a

and I, though drilling maybe, from that make we focused disciplined on gains our just still mean, license be financial other investment returns. I and said want it. financial destroy programs instruments just a thing to be the in take can to very returns. and space Financial and emphasize capital this once reiterate are I've one would not to hedges, instruments don't I the

us does make hedge take sense return that economic should not and the for have in in of capacity mean And on It you us from oversupplied reinvestment in from just expect environment. as U.S. current doesn't a more to Building disciplined more are side. near can't subpar we advantage certainly come be in term, investing capital standpoint. we to book, I the an the here look, financial simply the returns very the near-term particularly, our supply needs capacity but Returns down. market.

Appreciate all you. that. Thank

From Citigroup we ahead. have Scott Gruber. go Pleas

Yes. morning. Good

Good morning, Scott.

you three-rig in will beyond, So program? big the backlog in where you'll be? be it could normal and holiday above a and a considered DUCs that's looks how with DUC consuming some be At that XQ under the second year-end, half. you'll frac then And building be like have

however, our give level head exit the do, year it's and Ford some optionality Mike DUC third of Bakken, to Yes, inventory as will Eagle That comfortable up in with XXXX. through the as Scott, here. some quarter. into gradually and work We plan picks in some DUCs. us we a activity Hey, momentum of we'll the

the can those at in XXXX? price it? you And we talk should you. DUCs about oil to consume Got How you which think

an structure going justify returns standpoint, cost extremely it. costs. invest from the criteria about think foremost, yes, into well. the I some that I that things Scott, we're not to money fixed to Well, doing extent, We've addressed about our talked investment first some think, new of which until as talked is, low already and already our capacity variable in We've we're we've

flow be the investment, cash need of flow higher is least, So other financial can flexibility it returns; gets fund our we levels generation back to be needing decision you're to essence, that in kind portfolio. need the basic places. uplift to you'll of one, in But that probably returns, the business you'll continue creating to, through at of pushing used in help two, cash reinvested combination maintenance because beyond drive creating or amplify the be $XX our free whether return from free adequate that the on a economics range then says in you make level capital across plus going to to say corporate really

Appreciate Thank the color. you.

you. Thank

From Scotiabank, have Please go Paul Cheng. we ahead.

morning you. guys. Good Thank

Paul. morning, Good

going better. the Two increase at questions point Or is to drilling priority? that spending, back doing You're will -- the questions, Two that will you. at will to get Which shareholder be so thank going And first? that you distribution move to the how price the is completion? that point you restart some more and first?

but I flow would capital of modest that rebuild do a I to we our mentioned free flow that. the a in Dane. back it be that some certainly Yes. Hi. to not at flow, to first which cash to makes increase sense base. take EBITDA I'll This our will is cash our base cut get -- we would outspend earlier cash we as do options spending, extent that like

is that Beyond commodity option let we late any debt over until given it, years, maturities is volatility where while we've just and now since November the of maturities, end markets we this that's so probably thing on to in for guess haven't been talked I me XXXX. that about in we've past an about model five touch the this environment, that and say too. to have don't unexpected do kind seen leverage an talking the better movements, future a E&P lower a

So in debt these hedge historically X%. notional for utilize those the portion tax-free XXXX got treasury it's port we've rate low that million of $XXX And swaps XXXX, interest toolkit of value capacity, starting rates refinance tools XXXX, million. advantage by there's at we've in the but legging that can XXXX that XXXX nothing and for $XXX maturity in muni of pressing $XXX including with in interest of million some got We've kind associated sub a we're some our hold taken to and we capacity there, maturity. also we and debt into

flow the about maturities very there -- those could portion also in environment, for is for next -- refinance So to a think economically us. cash we And a of free deleveraging. ability

of then, shareholders is really model. to course, important our And return in

be what those be our think feel the some really things, too point in also thoughtful dividend firm we the be done downturn. these of reinstating rest right just makes combination. And don't are at but any case in risk exclusive. we'll think -- in another makes things I've So we and we'll certainly three at can is not rash sense. I -- put have assured talked and about mutually do sequence, They

always would had a gross That's a been always say, an reducing debt. Paul of jump of us. just kind for midterm Yes. could just objective if objective I also I just in our minute. we've internal for

debt the mindful really think has load. the crisis be current of I amplify probably to your need

expect not options. within And commodity you think of have flexibility. toward a to of on are But a I with drive reduction. These should we mean, mutually tend probably that lot somewhat Dane fully we're would agree more lot that I volatility. going we a emphasis of model a exclusive range-bound to bit that's have that I in little that debt

would a at options I think point. to And of into the staging drive I EBITDA. establishing we and investment think open all production our that start solid then again base up

-- I And it's and can will terms what then point or that to Delaware game? Eagle of at Ford the be first? or time in say is maybe back that Northern to market under into now go maybe condition assume what we China right Should that the the And you also perhaps that that start even Austin sequencing and the okay business? going in Permian when stack into Texas really you investing

Yes. Yes.

condition we trying that is need to So to that we're what different about money play attract sequence talking and understand first? in what going

original would was it of you Northern largely Yes. Yes, think XX% our driven what got by Bakken recall if Paul. No, Black original budget that views before was oil rewarded a is on and still XX% at returns. pricing allocation NGLs say and I've capital even were commodities. that our Oklahoma. Delaware of Ford, certainly I that gas our I that And our in saw more Eagle secondary that and reliance highest was product you And had on plan. essentially hence, like highly more Basins deficit. generated and the being

our it made Eagle As from first that a that kind efficiency Ford capital the the the of in obviously stop materialize has to continued standpoint. capital exists Bakken allocation

oil But secondary products strengthens instance response, look into as for also more into translates see environment, gas as that oil reevaluate pure Eagle see potentially certainly, like as forward we supply a than if we we that plays prices and as in supply places response a well normalized NGLs much impetus the gas Bakken if Delaware that they more with become and more then that certainly black would the we and Ford. an Oklahoma of and the have be to like competitive the Northern

to at think those product by that's all going relative change of our that be it's going the going but So forward. allocation we valuations do driven returns about be center to always capital allocation, how

we'll opportunities structural for will the So, the I'd our like some to broader in instance in maybe and other favor that clearly some that of portfolio. strengthening gas think see complex

you. Thank

you. Thank

Please time have more we question. Research, one We have for Josh From go Silverstein. Wolfe ahead.

the at quick just Maybe one to run see were this run international I couple next – Thanks. of up? And be would was would that wanted But end the pieces year? as I'll here. year land Yeah. expected backfill maintenance rate about know, The how annual where of EBITDA rate starts a and million a the quarterly moving discussed. where with you last there throw $XXX some in mitigation just look year.

Gulf in some cyclical plus that as got makes Henry then well we've Coast gas streams that for immune Methanol to the Josh EG question are produced not but Hub-linked Mitch. a then near up stream pressures rest of disclosing primary lastly, and recently from address LNG. in without experiencing revenue And in of cetera, sort Hey, a to LNG, equity your open is And well. we're I across we've product into Yeah. sold EG natures of color contracts and that pricing earnings. that natural markets, and confidential the the that is market, say same think markets fair condensate a it's We've four Trying certainly et got little sold of European line we've The bit gets got contract. meaningful to the seeing through lows business. as sold more liquids there. got Brent-linked the portion European reflected which it's

seen certainly, support and the the in expected strengthening see in forward U.S. the And are half Hub seeing suggesting the the winter. with and market, recent curve and next price through to continued gas there some of we're Henry oil year associated declines – that some in production back certainly and

in on enjoy With to we of course there equity also volumes to expect exposure would market first side. an half through contract and those structure, progressing the enjoy the according track So on if in certainly start to improvement is to earnings we XXXX. schedule flowing we'll still And that prices. of a the on LNG Alen project respect still ahead holds bit the

color for the guys. Thanks

We'll turn for remarks. back you. it Thank now closing Tillman Lee to

that you. today in and uncharted the affordable, have Thank you your Thank energy Oil. gets for economy continue navigating. the will back our adapted to largely of be waters people Marathon to these of They interest when accessible fulfill could of reliable, work. not proud mission dedication I world that it the we're delivering needs to need more our

And you. conference. for and Thank ladies today's Thank gentlemen, joining. you this concludes

now disconnect. may You