Marathon Oil (MRO) 3 Aug 232023 Q2 Earnings call transcript

Good morning, and welcome to the Marathon Oil Second Quarter 2023 Earnings Conference Call. [Operator Instructions].

I would now like to turn the conference over to Guy Baber, Vice President of Investor Relations. Please go ahead.

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

Tillman, Joining VP our Whitehead, me of VP Pat Development Operations. of CFO; Executive and call Mike and on are Strategy; Executive Chairman, and and CEO; today's President Dane VP Corporate Wagner, Lee Henderson, Executive

which differ to materially today's the call those refer actual will risks subject and in factors reminder, been statements in defined cause earnings presentation described I'll and also reconciled materials uncertainties a implied materials. risk SEC As our results cautionary or our forward-looking to from expressed as discussion, filings. statements. by We'll could the terms that the have contain press language in non-GAAP such included to reference everyone and as release certain well today's in

call of After will Lee I'll question-and-answer that, to and over session. with of Lee? completion the prepared rest the move provide remarks, these turn to So we'll a who team remarks the the today.

morning and our Thank call to good everyone listening you, today. Guy, to

while on quarter, of operational great and our I'm comprehensive and especially First, Well true grateful addition for expressing my on granted, for and your employees call I another kick core by We commitment values. another to to to framework all our in quarter such want to our thanks financial for our delivery for again safety off and execution to of environmental delivering excellence success. done our take objectives. against contractors don't staying

with you this I takeaways few want are There leave to all morning. a

increases driven distributions. catch-up cash trend the EG during our cash and oil operations, strong flow flow from our free from significant quarter a increase production. free by quarter, first First, in company million we production on fronts, and $XXX second cash all highlighted a with delivered by oil-equivalent delivered total of to quarter execution around and We cash sequential and strong very flow improving another

key Second takeaway.

peer capital and broader our continue returning group the our XXX shareholders. lead in S&P We to to

we million quarter, share million of top second shareholders, operations $XXX first repurchases. we've over to to from including line $XXX During cash shareholders, XX% half our with $XXX of Through returned our consistent representing our flow of returned XXXX, the million framework.

return the Our our first as framework cash cash bit differentiated not drill prioritize shareholders flow-driven the of our call to on capital non flow, and continues inflation.

of distribution E&P return XXXX half capital our an total and on annualized peer First space. double-digit yield basis in a shareholder the highest represents

and our on returning to significant count metrics. is capital growth by now and track XX% quarters, Our share. consistency production deliver in to we growth our are peer-leading X per commitment year-over-year the in share We've contributing just and reduced XX% last per outstanding share

key final takeaways and third Our morning. this

differentiated. forward remains and Our outlook compelling

track to cash flow business efficiency, peer are metrics benchmarks our share. XXXX the free of generation, capital We deliver distributions, growth a that breakeven high-quality E&P free per plan group production most: shareholder on that matter rate, and top cash at reinvestment flow the on

over with More equivalent track end sequential expect higher third our will the improving both second at total across flow the over first to and of we our third the guidance cash half free continued range. financial second or oil production fourth specifically, high With quarter XXXX, operational annual generation on plan Our quarters. half and company above activity drive year. improvement our of to the underlying capital and weighted remains business and of CapEx completion and lower half oil momentum spending our the production

production above equivalent that our year guidance. production oil annual the our midpoint ranges And unchanged, guidance full finally, remain of is trending to

XXXX. Looking to ahead

remain will our framework share too it's that to specific guidance, any While core success priorities rest assured unchanged. early and for

expectation Our be and flow the per we level peer group prioritizes growth. year another distributions lead shareholder maintenance on benefiting itself My as once the XXXX, from in case production and that will in uplift to deflation any maximizes share sustainable that debate cash free most as matter market. tailwind significant might is oil LNG well in of from market, present will our our from the that the a global of that the again increased EG exposure metrics financial added

With Dane, brief who will a that, turn provide it update. over to I'll financial

you, Thank and everyone. good morning, Lee,

for XX% was flow distributions a as free to quarter adjusted generated quarter to cash shareholder we shareholders. relative capital As million tremendous the back a we of returned million increase $XXX of us in mentioned, quarter. second That's and financial $XXX first

capital financial and the back driven our capital the cash long-term that our building to lower and of that to to normalized consistent and represents across representing higher third fourth measured quarters we second over shareholders, over the adjusted free to year, another consistent of to price remains our focused relative even $XXX significant CFO. not spending first Returning just years, year. our already XX% in step of track basis, journey. our quarters can marketplace. meaningful program. the the On expect successful quarter's in second production the Through level, first million XXXX the be flow we improve half of a expected in foundational returned improve expect shareholders shareholder the through to phasing X value we returns quarters, generation the of of XXXX a by further record Importantly, delivery our We're half proposition on the with cycle

annualized group. yield peer First basis, capital our of half and the return that's double-digit distribution translates an a to shareholder in highest on

metrics. returned share per We to XX% share billion our repurchased less current That's levels, X we've back capitalization in in attractive pure in market that approximately X $X.X now returned leading our remain almost billion the years. count, we've shareholders. XX% contributing of trailing growth at We driving than stock reduction quarters, of a confident. outstanding our to Over $X.X our

investors framework a peers, flow cash them Our advantaged offering on call of with cash capital flow-driven profile. return shareholder is return first providing differentiated and versus uniquely

yields Our the entire and in transparent, to S&P sector-leading one shareholder is strongest of clear XXX. distribution framework visibility providing the

expect we framework, base our shareholders. XX% raised year, dividend base a minimum this sustainability Keep later to and quarters, to of basically material and committed combination lowest This buyback one by this flow free that CFO quarter. is maintain another positioned or space. our sustainable mind to it full the objective to and our the program. competitive dividend deliver of expected with to continue repurchases. share post-dividend we've from last of against on returning our in We're XX less the top of a line dividend with For powerful share More unchanged the peer our be year, fully our raise to well consistent increase the the count reduction we're for cash funded and in focus breakevens

amount with we Additionally, $X.X repurchase share billion our significant to stock have a of authorization ample back of continue buying capacity outstanding.

peer-leading interest return in this through is and far by our our enhancement our so strength we're bonds flow initiatives rate. free important position favorable disciplined underpinned by million capital down The to and gross quality generation. shareholder out comes of and We This the reduction. to at maintain improve debt leadership balance $XXX that's $XXX plan debt do and of Our cash it exactly framework, of strong We and investment-grade both, what metrics balance and high-coupon our tax of efficiency our capital capital year sheet can sheet of a our proven durability is the are assets, our for remarketed our U.S. our already demonstrating. most leadership return million paid allocation sector. when

the maintaining deliver pre- free space, free we For flow cash the reinvestment cash lowest to enterprise among high-quality post-dividend full best year while all breakeven in the XXXX, efficiency, the on flow capital the a rate basis. yield best expect and and lowest E&P

execution brief it With our Mike that that's to of a provide outcomes. summary, delivering I'll sector-leading to turn update the XXXX over

Dane. today for remain full that the stated over XX% budget key to half the annual of plan. with year, track fully deliver our is on with we capital that and business our program, market, unchanged our capital and including production Thanks, of our key guidance. during spent to consistent commitments spending Starting year our remain fully just message the capital on program the our we My priorities first

quarter be with moderation We are of to tailwind well to positioned $XXX advantage $XXX the further million deflationary in half in the spending third a range, million in take quarter any year. and expect of capital fourth to expected second the the

models. annual assumption For guidance the the full your for midpoint of year a XXXX, remains our capital reasonable

level the industry-wide the XXXX the execution started year-to-date, wealth drilling of first raw see across dynamic. of guidance trends. remains activity. cost to consistent to our also the Eagle are capture cost to with equip, and a lines service pricing terms a of consistent and half year. expectations The started second general We entering was services trend pricing service materials improved equipment. quarter environment to see access of the and our environment, plateauing improved with lower In We've to year, We'll a end we had in outperformance during positive better and Permian. field-level has of an the can now most very to annual higher the been of and in To Bakken protect where point, with balance strong we efficiency continuing has sales that tracking where very execution Ford, and completion seeing while pricing excellence, our look number macro us

year full production capital opportunity have believe a production, will XXXX the our enhance more into be it won't capture on there for where our deflation in momentum market. impact this should XXXX, we also While material to

capital program environment. strengthening price The Turning a phasing driving commodity momentum of to strong into production production. our is

the sequential specifically, high a equivalent at our quarter to above third we and production into company modest oil guidance the of quarter. before annual decline range be or For expect total end fourth oil

XXXX, flow of even production higher of guidance of ranges on and underlying combination above year expected drive second midpoint guidance lower oil full free equivalent of over the basis. the further forward cash is For trending improvement year the capital reiterated our production spending to profile. half The we've to an our

gas EG integrated catch-up cast a our distribution. after in receiving business substantial to briefly Turning

distributions we over quarter the year. earnings second the half and relationship second between During expect cash normalize the of to

should somewhat be quarter evenly capital. and Third between of split dividends return distributions

XXXX, Hub at linkage. our be current This the financial in to contractual bit all on to increase Looking further longer X, ahead for in necessary forward for sold uplift Henry sourced global LNG sold from we suppliers highly the pricing milestones. arbitrage between market. market price EG cargoes back all no global We're exposure. trickled reliable to at uplift of significant be LNG LNG Hub drive company Henry pricing. an January beginning will competitive will and on a the the global LNG right in to It expect significant with track card And XXXX, realize continue is LNG the our expected financial with

advantage generated are new mitigate These about we capturing further any high to and although pricing. the a program a that plays, execution resource drilling on commercial X-well near-term LNG the maximize these take opportunities commercial uplift Alba, program. in with Alba of linked impact assessing To to infill cycle decline under EG. low is infill risk, LNG expected more molecules equity attractive risk-based XXXX from plan the Yet, terms, significant shorter unlikely it's our make U.S. global to capital at our should up targeting through spending are actively just confidence, compete base overall returns capital not opportunities

the with capacity. West enhance of phases the the into via life before the gas of most as we're HOA next and in extend By of government gas longer-term as truly partner the of hub cross-border stated our gas potential development The our the multiyear world-class focused with concept. the on well executed LNG consistent decade we further unique Chevron, to areas EG same and free prone mega we've the equally opportunities. one infrastructure our next flow cash expect outlook and [indiscernible] As well Africa, leveraging recently in EG

With turn to remarks. over that, will prepared I up Lee, wrap will it our who

Thank you, Mike.

reiterated have financial investment increased sponsorship, the with performance I for in deliver investor for other our to sector now, competitive market. years that must our alternatives attract we For company and

flow cash performance of the type more free E&P. not exactly and competitive, As that S&P, of the at measured capital, We've just but delivered by X years returns, return generation top. corporate less very and last over

free sustainable of top-tier with this: an share all advantaged underpinned balance an per profile growth, by sector-leading and return investment-grade sheet. is thesis investment generation one-line flow cash capital Our

this unconventional multiyear lead EG. by our trend For ahead again integrated that's change. a S&P portfolio business and is oil-weighted unique the a sustainable. delivery and XXXX, XXXX, anything most. to fully not both the global don't underpinned confidence If our that And and in well looking we're LNG My on U.S. and a to high-quality our complemented to peer X-year operational XXX positioned I expect by phenomenon. metrics continuation financial It's group of is matter pure-leading

To our am I I position want proud we how close, company. the to of reiterate way

driven, less. drive world we content needs. how our true not core it are those gas staying energy, values living We the oil to global we really but delivering transition results and gas the energy responsibly to is oil and about deliver And also more the world The needs and expansion all is and positioned have is to uniquely of an enjoy. economic energy results.

line With we the up that, can Q&A. open for

[Operator Instructions].

from of Jayaram Arun The first JPMorgan. question comes

Mike, just decline the, how should flow your higher Dan in mentioned Lee, second it, of you million in inflect this prices. $XXX year, cash and half the free output in oil given call

between balance perhaps debt return the balance. cash on half thoughts how equity So up the in building I holders, get your wanted and second you reduction to cash

around You've this been for cash operating year. in $XXX million

on balancing items. those thoughts just X So

Arun. value shareholders. be central might return it longer a shareholders. you operating a base We minimum going that Sure, flow capital XX% solid or conversation the we've to take that in unwavering, share it's of meeting a executing that really cash in first forward. anticipated return, and CFO thorough, cash form steady but the expect to continue for very of Yes, than record little been XX% this, minimum And exactly the and XXXX proposition track framework either our for half Yes. calls so is obviously, return of just to we a returned repurchases to and on I cover the to dividend.

in of class return. million at which the to really dividend, equated $XXX plus million share in repurchases $XXX [indiscernible] yield distribution top base That's is XX% of terms the

those of share Now is will and for X-plus forward. the of to reduction tax off top see going lion's balancing paid and returns U.S. We investors share continue feature shareholder certainly debt kind percent that, something of vehicle as coupon share repurchases repurchases on we debt us our $XXX be also a return with returns. million to for that preferred the of

trading stock free in at cash the is flow Our mid-teens. a yield

a and for base to my they're growth, comments. our value as be efficient drive I with continue per way referenced very So to prepared dividend, purchases real synergistic in share accretive, growing

billion have authorization of $X.X We repurchase outstanding.

eye-watering. since program, this share fourth of So growth that plenty driving of we the running XXXX And we're room when per there. quarter restarted XX% it's pretty

for of to year, So to return expect the continue we XX% the us flow operating to cash pay of balance look and down additional debt.

mistake, no priority. to the return XX% Now make the shareholders is top

be down will the priority to continue took to acquired second loan Ford start The Ensign Eagle when asset. out we term to the pay we that

both a couple to lot those debt continue serve we of to on started return have basis, reduction. the we to even quarters to to cash inflection third cash have in very over than we've We realize had expect that And flow free past second quarter. that significant we fourth a started price inflection the that quarter, shareholder going but a in the and more and of the we're normalized flow flexibility needs,

tailwind we're even now, flexibility. prices, the WTI particularly With right commodity provide more that's in going seeing to

bigger We go share on reduction more some can repurchases, combination on we of some faster and go debt likely those. or can

just on You the our course little asked a borrow negative. the big the to now. cost commercial right capital a flow of We're effective the mechanics which for compared bit, receipts, we the credit $XXX the comes company. established facility. We which of month, of actually is paper we're time operating the It month that that. credit that waiting the program, about need -- a balance. And when cash way around million actually facility is very for big to big made oil check for working a cash that's in XXth into managing

going hit that Over can And the where up expense time, so priority not may get now, that loan I and system. cash, -- I Right right think to it to out we're take exceed that. down us it's it's we don't comfortable be now. with term XX%, of build a for to we but interest

those Mike, maybe production TIL of from I'd a positive then the that a kind follow-up this for the is describe a to question is could My buy XX is you little couple variance if XXX. maybe the your Northern side. variances XQ. that love And bit is versus Eagle in a impacting Ford and maybe from light the from TIL maybe see of in X-parter. helpful. higher, Mike, any about was Delaware, the TILs, higher guidance in XXX quarter updated Does That's

Yes.

tracking capital to is the at cadence, much its the I'd program probably looking plan. wells Just very sales start

it So more of kind purely for to front-end that. loaded. expect of typical Kind us fully be to execute on we

We execution particularly space. an from are in seeing the some perspective, outperformance drilling

second I similar Looking Eagle in back, from story a in had think perspective. story and a then the think there. space. Similar And in performance, again, got our drilling we've similar story in the Ford, we've record quarter a I where drilling completion best-ever quarter Permian year-to-date,

encouraging is wells the probably I last got them year. were with about we're drilling XX% drilling think what's Eagle in acreage we've since faster than the what in there, our Ford Ensign they

going of putting of think kind on to about pressure in I together, fourth year, to I quarter. sales that but the all little it, So bit in think when you more how of so the it's combine wells that really the pressure a translate is

into it, if a quarter. So from we're probably fourth quarter few think wells the in about pulling you first the

impact not So for the well from could going potentially quarter run XXXX up into on production to set big a the first in or perspective, a have us and but capital there. XXXX,

think in branch we I Ford are extended highlighted specifically wells You asked County. Those Eagle Yes, Atascosa the performance. laterals. about well XX

area that's we've out execution that performance great room. be 'XX into the questions play production early Hopefully, portfolio that that of performance I 'XX some you the our future and expect got . great answered to We're big of those, and an that's going seeing running of had a part there. some and then in all

Yes. in you'd a we takeaway saw had to on pads finally, been generally are program, bit That top new was speaking of workover step our little lag the little of bit asked to went down. little We a now. there. one, sequentially on them. I had and And why a to, of think we Permian Arun, of a midstream just about bit just on a bit our some couple gas in of producers delayed workover we All rig was a large one on quarter. a that get then little resolved that down that's

really timing, no So of whatsoever. just question performance well a issues

from question UBS. Josh comes Silverstein next The of

You hundred talk about Can opportunity the comments the about some EG years? couple these field scope also there? Are there. of of the Just product the the X -- products or X on had over of line scope bit million other a before the dollar the a of investments? you developments, little some some opportunities infilling just for time of more

Yes.

interest to there value Alba with infill objective out stepping of the third-party will infrastructure. The really to You MTPA Yes, the obviously equity of course, molecules. on proposition also to the We Happy But of here, program extent first world-class drilling so. base program. do molecules The the do infill [indiscernible] load, this EG prefer maybe X.X bet, that of to feature, the are unique maximize our would all, that back, Josh. help continue is of some fully so aligned EG to of just course, in to offset that train. drive chain, of about AlpaPSC, remember, course, decline interest those Albin and and operator LNG got about seeing field. the ultimately working we're mitigate the way we're all through Alpha again, We've of are we've EG us the valuable the value interest from in molecules have XX% across the from XX% that both. extremely and, aligned And is unit. got in LNG, we

drilling These to program reentry, we would as And risk. are -- can be low over beauty production, about a get. a high very be jackup So of confidence the offshore you execution existing short would facilities, this is consider dry typically this the going in of world the this trees. is cycle

The be on of near see able wells term, to with here offshore a making our there, The economics, very that it's the It And work time. course, in don't risk-adjusted Alba could are a an just just we in but risks so again, a for assessing portfolio. we then target there's with is, this up doing 'XX very to accretive FID straightforward again, needle in opportunities we across track phased at time frame. from of we're to capital may an will us good our us, in notional late really couple to can those partners over ultimately, opportunities. position phase decision going billion-dollar sure we be subject big locations, EG with generating these rig that but working in the budget, compete they solid be a returns total will have believe a stay not our can quite alignment perspective, to even to asset. that spud strong for If relatively the material. the And X ensure say, budget, U.S. availability have frankly, mover to on now be good we're way

of seen lot volatility do there Are obviously, lot Got there's volatility of the sign. international contract that a you upside hedging in off, but contracts it. we've a can out? liquidity? is Is then rolls anything to And there of there -- also That's there take pricing. come Are TTF helpful. some guys and to as can a you

there, Just much can we've you there provide here. as seen we volatility as given that have anything

where financial we're from sensitivities, shown from way the think there's the LNG you as And cases, said, $XX there And liquefaction $XX, obtain commercial all XXXX. TTF. the ultimately be said EG. is to global between January to the terms our in be Josh, we LNG, think TTF, that Really, uplift comments, looking it's there's are will LNG out arbitrage and we're agreement, cargoes, suppliers. LNG into in in standpoint of we've we marketing. a through particularly But opening very the very as are uplift where to to And a the just ongoing We've sourced reliable on relative to are of I price Margin is good all matter, Hub market change some those Yes, news material that going long X, cargoes from come missed More the reality EG $XX that lifting show into sought for XXXX. that that. notional And that a is, Atlantic going after. I Henry occur what much today work in tried advanced going land. commercial to competitive LNG could Europe over the a be emphasize uplift I life is seeing we've as The agreements market would to buyers just in never us and for does going as cargo.

all volatility in a to out think so we're not of take the available to good And you full us. very referenced, position market price that's the advantage certainly that I maybe damp but

from comes The Hanold question from next Capital Scott RBC Markets.

well, with sticking what, for you sense, some since Could color be terms and going that discussions And flexibility that are just counterparties if us just how on counterparties those could, give with helpful. topic. on in a we're would us looking partners? give as I are your guess, guess I duration EG and of you on

a on And that I this in standpoint, terms from first in. process, would track of we're commercial laid all, a is Scott, say, that out. competitive the of we're milestones we Yes. right just milestone

And that X. now, process to, multiple value be ultimately process Scott. January LNG global drive that's right competitive now, deliver But come be and want buyers an so competitive clear. no counterparty in be. absolutely we'll we're a that again, we receiving I be most competitive the active think Right to will ongoing with pricing whoever tension question that There's what from will

stabilizing I counterparties? you Is for? you maybe showing for of able part And obviously, kind are have of about looking that duration what about to field. you're the duration Elba assets those the talked mean, that talk

go of comment I'll Yes. security to around reliability my and supply. back

is is So element in. that important an certainly, duration

Of Suffice solid be discussing. kind until complete the counterparties. runway those we for very course, to I don't that we of want of LNG to details. able believe that that some of far the into too terms cargoes to do say But we're provide competitive we'll currently though, get Scott, commercial discussion, a that

And -- a longer-term so at it we're be of looking contractual will relationship. certainly, kind

And a Okay. then little my is XXXX. follow-up on

year? that that of guess, the in level, about budget give you're can targeting coupled your a gave general, sticking efficient cost to CapEx of coming with clearly, maybe at the the you some few savings, relative the based you tidbits, that into of some year but sense this I spoke thinking service but high program, with us You tailwinds a potential you're maintenance how more program. on mean, to one, I XXX a you're

Well, day. remains of that back to me, of barrels kind But to production us let it's forecasting for XX,XXX course, means oil a few we're thoughts. a into oil of first to start going share be targeting early XXXX. of bit Yes. The per just a be maintenance that notional level, case all,

and allocation So capital this comments our until standpoint, pricing as look an take there. hit a change in even to are even real positioned surprises think, root I the believe, XXXX. of continue year. to no in impacts XXXX. that a well level, really I in assets at the wouldn't think of to trends materiality do pressure fact, I see the deflationary And take in sea Mike think those I not a terms we're half I we think us give mix second from market advantage to that in ahead expect of to, But some amongst downward the upon going opportunity I don't

I market of to supply is. well. it that's to continues for it the mean be market staying Now to the them on all as service side, subject be kind going where a and demand

bit do trend you encouraging early too right going I there? just of there. to now. a give quantification an Yes. Am So that see go a It's to I

of question comes Neal Truist Dingmann next Securities. The from

question do to X limits that going X. like this with milers such have do a is sort you wondering as and specifically, on I'm of they peers your in your see milers talking just upside the assessment? on the larger continue of wells, benefits opportunities And the the type X this versus to for from returns agree the if of number this? My of plays push see so, D&C all what and you about the and

been Springer inventory Mike. -- XX deck, run. is We've there. nevertheless, that in of We're basin I us a I'd assessment. of started proves this years. mile We've I response 'XX, the always the into I that's it's laterals from X-mile coming Ford the in limited online Oklahoma, Yes, of a we few the we if some that bit there, there. is also wells of we're the but in well having to drilled I Eagle And to and pads of we've that work last opportunities is those of over at in But now in more as What look potential probably a the that traded this up well couple And close with the more in allowed a mentioned included still opportunity a X,XXX at even that portfolio mean, opportunities milers at. expanded That's last Oklahoma, the as say year think the that earlier we've got brought look team amount plus a the progressed being predominantly But more for has lot us. open Ford, I us moment. the over I expect definitely Bakken. for for Neal, that. JV actually having quarter approach. expect acres even develop opportunity to focus drilling next of presents an area X a oily under Yes, more looking years. the and County Permian parts helpful. asset. there. could of as are the got years Team probably Bakken Eagle just I which of successful, set types potentially in most and I we think Atascosa single definitely, It's with few agree it done incredible Permian that We've

it the are I'd that yet, and actively seeing uplift, it's something the progressing. we're So characterize teams by definitely

than almost to great to seemed anticipating. the like a perm the just just D&C question, we you but for Bakken. I or then the up guys in regions, And more sort notably hear. in to read second be I'm the those, timing my just guide were bit a specifically it Or fell production. of into plan? little pick of I'm of wondering wondering, simultaneously, anything pretty regional each is continues definitely nice more That's on each good. of just guess, the on that? oil Very And I there's know it don't

I think you're strong execution quarter. in benefits, Bakken, seeing second in the there the

benefits through and volumes. into seen the You've read

X quarters we've base growing transitions X that would had a I think prolific translate We seeing of that of or well. we factors But from had few go but there. And some a bit simply ESPs to X mentioned, a as again, wells And we quarter little volumes work quarter. had we -- as was underperformance bit this there, contributing -- there, was Permian, that third outperformance gas lift. down into to mentioned, the that as over.

just the a more brought were were just out that coming for do there. it than weighted thing So timing just wells for was given normally some there of tie-ins the plan well few We on new was any little so at side patent five quarter but on. that that more better and gas we

perspective So in volume concerns the no there. and we yet contract nothing again from QX concerning

Doug question Lynch. Leggate of from of Bank next comes Merrill America The

cash if could the cash its give cash obviously slide look tax you, can Dan, AMT I at a when idea expect just common the transition pickup to wonder on cash full on tax I us like XX, can moving look you I guys an tax. given would slide piece that what delta if for you free deck, to you different been to flow decks at but

quantify tell me you Yes, let as but maybe specifically that what's not just happening.

it in reduction pre-tax of your the Federal pandemic get inflation in being new average There that taxable year impose So a the that. billion XXXX, if this XXXX. in not loss a In or taxes late not more. to are criteria to we average U.S. expect billion you loss, until $X that the below a sufficient certain three we XXXX, big would paying book alternative tax year when Income world be off was X roll with XX% AMT a meet here current if is rule in act you $X a was attributes tax XXXX when to came that criteria have taxable tax non-AMT income number minimum we are threshold, in above we primary

the to going we will we that and up rate in at capping credits sort conventional for that about we be and conferred a XX% end and starting that background continue tax decade. expect to rate of period a tax XXXX for So XX% In AMT NOLs we the time. U.S. attributes so at taxable expect our should in AMT be rate will are to of the

can At U.S. to looking XX% that that Hopefully we of and will foreign by get won't quantify that tax you its as you rate at it only price it. the generates rate [ph] well. tax XX% to kind apply doubled and own income, so [indiscernible] math are a pay outcome credit any AMT it

how heard M&A your you lead [indiscernible]. us the see lot running if I thinking really maybe sit along I you know it’s updated I portfolio a thanks we guess on wonder complicated REX thoughts haven't side issue. a follow-up just and could recently through landscape Dane, development that. [ph] is for about give my on

and from start me I ask as let well then well. support Pat may Yes,

look we approach shareholder. Ensign for at end we say as Now one resource as replenishment. the portfolio which inventory about you this acquisition a On really the acquisition large a kind like was spectrum talk of replenishment, multi-element our have win tremendous side when development of you the

that now have we you some look actually that continue of also all talk Mike activities resourced then and we and a have giving mentioned let how think industry would trades I think stay progressed our program we Delaware smaller Pat are of resource I are across more how But program us is Texas and to be I of which can we our developmental now dimensions talk extended an about redevelopment and self-help build Permian some from say extractive to the replenishment top in of to access well do base some I about bolt-ons the maybe what program kind but other so those a program that. and would focused will have more have that's the and REX the internal some on the bit laterals program. a we on as we maybe avenue since we particularly of kind the called work little trade originally REX is into

As this we we integrated has asset said primary our Permian have Delaware that our Oil REX project Play been into and within now fully Texas team.

no down has year talked longer well on we -- REX this expected a brought to. a pad it pad we quarter, last taking So as its performed as that well exactly bit and little we four

in in XXXX We online XXXX. that up -- will coming drill we another will pad bring

as definitely between so zones. this a and the NERAMAC the forward. not XxX, kind going of co-develop four now approach the seeing that's in are that news our Woodford and developmental we to foot The committed as pad is can be Woodford in we good are four the recent NERAMAC is developmental well XX,XXX still length in two plan communication those lateral to We any

to Our this as D&C in will development of we down part these to our mature so moving experience project project portfolio that we are of as try forward. real lot have I low is a formations two the trying kind of as now replicate to work cost got and in Oklahoma drive possible. the now this here just continue

I I looking D&C low down we get curve on focused really was -- now we as really get play and think this practical. say NERAMAC to do going learning Woodford how are just to its up cost at as the

has really development and did from see question want project moved what just for to that a capital it have more the to to moving that So allocation stuff REX to they to mode. quickly. development program around is to that's we I M&A is output real come and your compete want into back though exactly

lines. and would you going mentioned would sure say be criteria is from acquisition, for We I the raised on M&A think of anything the have sustainability flexibility just standpoint, high accretive compromise making I the those very addition obviously to are to it we be tough and Ensign, I the be would there I have overall the then today boxes metric financial to that's anything They of if and sheet bar hard check our Ensign kind think of that balance executive hits an damage and from meaning that to where we as one perspective saw it That's would we all the resourced we today that basins meaning worked of a in want to very logic so a not us that actually in filter successful what that course market been all successful accretive capital our accretive. the wouldn't would anything of our and It something confidence from establish. inventory into criteria a did return along have standpoint. it be that's financial needs to that such finally will in got accretive really to we that's absolutely we see like be do you don't look really portfolio. to we industrial why our to of tell

Permian Permian inventory say now it with the Thank a included you in life oil I now? question is leave play what in you. what the me the inventory, your there. Lee, will clarification Pardon would

there continuous say a acre probably based of kind across obviously position. that its recognizing XX,XXX nominal but generally variability some on We a Pat, play is spacing XxX doing the

really thinking on specific So we get will D&C learning it get now inventory. up we our rest enterprise into the several are XXX more of curve we and level that integrate and as on locations to right that

question Please next comes The go from ahead. TPH. Portillo Matt of

are the your assets low the the do return for profile in sliding down portfolio? are in I prices driven to some Oklahoma and the JV. wells those the in about around year. or that shift how in up tilt count of if We given broadly the follow was Oklahoma operationally [ph] XXXX that was speaking the think more slight expected commodity a rest if relative noticed of you just the curious Just the shift in

This Pat. is

Just capital It's up. a else's little that's just getting are bit we very there finishing and Oklahoma, on somebody lease really program trying been our lease the using focused program. to targeted that JV close retention around a maintain in to

strategic that [ph] in other including keeping work active some through advantage there. Just

to I we Matt. guided think wells I XX XX No, anything. there there's mean think earlier, I don't

range. be read I the just going end don't the at into I anything think I whole of to we're think to think there's through that.

across aptitude Perfect. forward. asset at going on or given what that base. a as NGLs for head of XXXX, incremental into point locations moment you own appetite and retention retaining could we And and company's I those for environment lease know inventory your is those then the on be gas your developing how versus are JVs and the this couple just kind JVs a a crude better follow-up at purposes, maybe market for the have strengthening

again. This is Pat

We're I and operated just satisfy not protect programs. our things to like on them that. approach to doing keep is to objectives. think to lease date targeted small or commitments operatorship, JVs achieve multiyear certain very strategic what trying We're large

and go inventory view bring So not you our to we'll top-tier of keep if small compete we'll is these go years, to that. on a doesn't will next ahead help few retain capital a that JV inventory us quality ones. and But And and we to it need and the the then lease, see you in partner execute people drill we current we in lesser there's opportunity ahead see that. got in for as an lens. through very that that to consume that, continue inventory JVs them to do Most

Paul The next question comes from of Cheng Scotiabank.

and that. first We opportunity currently, to that at of have that the of you? XX you I you some my notes will do addressed, backlog what that's Have me been that refrac the look competitors late, your for redevelopment to need that know, is for kind -- years, I economic? including that please -- opportunity just we're That's you joined those I I the is not guys let in detail -- say, Ford. transcript. order if those is big oil And gas if question. in so to your curious talking more already on that about apologize and has question that So that including assume XX and mentioned, how inventory price be Eagle

let Yes. details. first then Paul, let pass sum me a maybe I'll take Mike some and this of

all, our inventory, of terms do in First of we inventory. into refracs not put

these do a lot inventory because usually continues if redevelopment. be primary so them are So talk life, refrac I'll will. there's just primary about best when an is you area recovery we as synergy drill let many in there. development with But We've of opportunities, Mike to throw and in but when we had well. new the Eagle We wells, new It opportunities development, maybe and with again, have pursue. experience that the nearby Ford we

pulling those frankly, compete is infill as section. the that No, opportunities we're in the together you basis other our there looking capital section, we're primary all opportunities. look then, is we'll Yes, quite I the approach and Paul. the determine candidate in to with fun team head determined development, potential the our mean, is a of the refrac on a we'll hit at refrac candidates or heads-up a for And a have with refracs at there. -- nail have

we're and how think with give bunch sole new don't any just to do we're we given of exactly for infill refracs. to the program fracs They and this primary opportunities. and XX idea a you rest think are to mean point, year, that. year, probably I not enough will we and what of that's targeted refracs I opportunities less. competing in of kind Lee's a to they are profitable we got So that I think It's call XX assured, scale a do probably kind doing we've it. We're the in doing about

on they've basis we're heads-up your most of answered I pricing, capital a think to other compete got the probably there. that deploying. The questions

Yes.

just maybe value I would Paul, on having value placed activities. the point that -- as on the well Ensign conversation We and kind on were of new acquisition, that out, opportunity back we really recovery existed item maybe that primary and reflecting our full there. as refrac in XXX-plus based route The other redevelopment no we the PDP

a in which the wells, acquisition, recall there. out completion you most many early time, lot And back were completed XXX -- right? as technology there of of you've got of from So so generation which existing were

balance yet opportunities only Eagle list, Ford. to haven't of so because expect We bit area but the chance little time also that a legacy but the the the in primary a They're to had continue further in herd, not the of of absolutely quantify priority are within down we attractive. inside a in sign area

prioritizing at look So question going opportunities redevelopment within the and refrac forward. again, capital them it's a But allocation. just of

your of with international by natural a to engineering take of better but to Gulf second necessary the make off opportunity large I market gas the have a you supply portfolio tranche U.S. on I And it does to the market your have a XXXX, is done? trading for long-term also some agreement also already can to U.S. want other financial that or starting to back is post peers operator, exposure LNG signing some international that that into for you reserve is sizable when linked and further the the so on amount renegotiation gas market, commercial XXX% we the management know under your The standpoint, spot the maybe the question contract that you on to maybe know year go exposure fairly of opportunities. you volume next diversify that from on I for it that argue you sense EG the have you

our that. EG LNG first to we're heavily exposed gas Maybe with market. start exploring to on Pat. but always is realizations, I in the Paul, we I'll are U.S. I'll this your to ways take LNG. maximize second question mean linkage

nothing the there's So in U.S.

happen have U.S. to do and to that just significant don't future. see us on focused volume doing a near gas in in of have the that You that amount the

to we a of terms through will volumes level EG, of contract. In long-term certain a commit

much into come, have still as that negotiations we details into we'll want volumes, We to above will I the -- that how I to but of in on specific get extra there sell detail That's a spot we are have with that some expect capacity have progressed. that depends handle market. buyers terms too and coming. those will the the lot it

company a have just that ideal on something you mix or you clarify number Any contract, say contract can bigger, lock-in will the intention, Pat, and smaller? number I you can a the what might share? do to for spot that XX% XX% want be EG from something

specifics with of But to No, contract I the have share I the any be think don't you. bulk would will fixed.

Tillman for closing to remarks. questions like to at would are call time. turn I Lee there Seeing the that no further back over this

every proud in safely interest contractors concludes commitment and close than I'd ever. your Oil, for like of more for needs you achieve Do again Thank you, thanking day. the all each deliver be responsibly call. energy employees not their and and they and Marathon to and now what our that by Thank our the dedicated world

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