Pioneer Natural Resources (PXD) 2 Nov 172017 Q3 Earnings call transcript

Welcome to the Pioneer Natural Resources Third Quarter Conference Call.

Joining us today will be: Tim Dove, President and Chief Executive Officer; Joey Hall, Executive Vice President, Permian Operations; Ken Sheffield, Executive Vice President, Operations/Engineering/Facilities; Rich Dealy, Executive Vice President and Chief Financial Officer; and Frank Hopkins, Senior Vice President, Investor Relations. Pioneer has prepared PowerPoint slides to supplement their comments today. These slides can be accessed over the Internet at www.pxd.com. Again, the Internet site to access the slides related to today's call is www.pxd.com. Investors, Earnings select Webcasts. website, the then and select At recorded. This being call is call A XX, through site replay XXXX. will archived of the be on the Internet November The Litigation Reform made of XXXX. forward-looking Harbor company's of Act will the provisions Securities to Safe statements Private the comments today pursuant include These the materially in results future of to differ business Pioneer a statements. subject to actual statements of may risks cause the and from forward-looking number and prospects are uncertainties that periods release, and uncertainties on presentation and described are the filings Pioneer's news two risks slide page These and made in of with Exchange public Pioneer's the Securities Commission. time Pioneer's would like Senior this Hopkins. to to Investor opening President, over Frank Relations, call At remarks, Vice for turn I the Please sir. go ahead,

we're on line well guidance results excellent After program this in that the the the he'll year remainder us. today's Thanks, the And provide from for another He horizontal briefly up going will Ken summarize plans quarter for Jena. third of Good third remainder financials Tim that, everyone, call. then going for the thanks highlights the Rich the folks outlook the at open down strong the quarter also and to fourth day, first seeing provide questions is performance Joey discuss call looking of the joining going going the we're for After quarter the in year. agenda financial I'm review post Spraberry/Wolfcamp. have. strong things thoughts in and this provide some speaker. Pioneer year. latest the to for again review is any of Ford be our for quarter. will XXXX, may the drilling to XXXX the Spraberry/Wolfcamp and operating for lastly, continuing as the always, Shale He'll update also and you some Eagle and to our for quarter this He'll concludes of on we're remarks, his Tim our road. the will drilling area.

that, the with I'll turn over call Tim, you. to So

And first, hopefully a positive there, vindicate tough our all night of down but a at nonetheless, in helps city. know Frank. quarter Thanks, to least everybody to spirit for Houston. a went it there, I last shout-out through was third friends the powerful

for congratulations the level show third high at is of very Pioneer's So efficiency. that. quarter that results a company executing

production Our up substantially. horizontal is oil

down. represented far. excellent Our income right POPs schedule program And you've were quarter our an for had And diluted we our Ford that quarter and has income substantial amount $X.XX adjusted are, seen, low We at the were where had operating in gas from standpoint of the thus those successful on of million, very and Eagle considering share. oil commodity $XX our breakevens prices prices, We company. drilling that's even relatively of generation, realizing a costs as have income been generation. per today's about

third October Panhandle quarter is the we in. production price this news recall, our What's important and hurricane terms production Those by the production, processing increase also very and came That see were hurricanes you'll As said, to BOEs, as old in released is on both of third-party somewhat overall post dramatic downtime though preannounced XX. realizations. affected where the was we a our in did negatively it that's even West in facilities.

it been the issues. for range the had been at end would've not In top these fact, production of

to numbers substantial look XXXX's growth's particular, efficiency. increases costs if A to for up production XX% in is continue That's second. And you was And for XX% production high up costs. of $X.XX that down down that again for based see the producing about to at These low-cost in numbers. product sake, show Spraberry/Wolfcamp to campaign this oil They third the is It's from overall and were Importantly, efficiency down just is on substantially. you our This excellent compared been quarter. Permian can production show returns about compared growth growth quarter, a drilling second the the strong goes not in oil the fact results. fact, component BOE. about this production. growth on also really and Basin it the of per capital And our quarter very in wells quarter, $X.XX we've the that is, focus are horizontal operations, the fact of about fact, per It's of course. to growth to that operating BOE. very a able in this

point Hedging Turning a over million cover day of that of production slide XX quarter. now to the we and swaps XXXX's of where oil the of XX,XXX toward Combination derivatives part cubic go-forward of day an that XX% with over we derivatives be and quarter, have did continues feet to gas. for three-way the important continuing in add forecast oil barrels and highlights our end, strategy now, collars gas. to the XX% X and a our and of

The us a very forward, through look very player X. good low on slide will to $X.X in balance continue with sheet billion on time. have very puts we as position export downturns in a think possible that become cash protected commodity world prices debt we going I be as might liquid go strong in continues and that investments We've against So what of forward. markets shown very ratios hand. and continue And accordingly, to significant

including export our It's numbers year and South to possible, Korea compared WTI to as this well quarter of X.X quarter. The at X.X the during As have this barrels million third million that be world, last interestingly of shown cargoes next three through gone the various if Wales. that into could during areas number slide, quite the as and you quadruple expect our volumes internally, year. look exported in we Japan barrels really

barrels of fact, would exporting possible the In XXX,XXX day. end by it's be a XXXX, we

to having oil, say, let's value-adds is accordingly, the component bigger recent a not move of to be those accomplished out that's going to $X So the have per alternatives importantly to to moving plan of Really, a be when $X I'd compared to, exports need making we're significant most going of forward. sales more making this for that and oil are substantial WTI say strides $X. nearly incremental coming end. widened Basin our the sales bigger do they're just Brent-WTI barrel, been at And this and our though, with our going toward to domestic sales. we premium Permian all spread

Turning now X. to slide

significant this wells quarter. spudded from trend Spraberry/Wolfcamp a standpoint knowledge result our a terms the over That's X,XXX. done reached of ahead, we now these and well in course, that X,XXXth We fantastic in horizontal having we're all, of milestone of gaining way about First quarter. complete to the in how properly third and drill

going discussing by rigs and for been The with that will we'll adding just then that that the adding the would met in what plan original And flexibility added drilled, many count. will in And the order road to trigger the on improve operational of considering XXXX flexibility resulting to production fact flexibility. will we've be improve us As decided that first operational as to been two were half in our that analysts, on to later pull our and do, be in is DUCs year in well planned have we've uncompleted acceleration our yet in as later forward. investors of the rigs growth the give we course, but of XXXX. end, we the toward have

of competition being We're rigs It Eagle early. in and part they've So other addition fleets the place effect XX shale the much the essentially that needs rigs using of third-party Permian a XX it those is and on part South XXXX. Texas. those one much really for significantly adding a there's we're lead total fleets frac for North. was the it what that in $XX plan. the doing in higher to Ford not bringing in the Basin, two in to us of Texas longer-term in forecasts in come South rigs doesn't That fact we're having in growth fact capital related and our It these of add the million, That to is does will being the for in have XXXX.

And see that don't so if that's the the where in extent you our see surprised some inflationary It as we effects. wouldn't doesn't we're mostly I own well. us Permian be to fleets. operating affect really

quarter. we've drilling to gas. say, on four-string POPs That our of its And positive on from number of necessary the We XX. as – have capital goal wells for strong, XXX will based of XX% fourth our did that were this curves target and where and suffice see terms the the the it's from out rates probably production, The terms excellent We put forward. today wells. about you would to the continue look the even well. in a campaign be it during Version our to already they oil wells and put although Mill the all excellent expect our really quarter casing of XX to of reduced that returns planned and going be to Joey show in X.X for X.X. you successful going And POP $XX results. We But Version the at EUR's the still will XXXX. design put number our impact also been facilities if has going three-quarters production. implementation the very completed only on good look that are wells, results us and of get allocated is that to staggering compared we've were XX% of performance to and XX forward. in these. X.X+ that, continue for of is just very done needs show when couple completions return some And That in our we Jo were Again, And on those number $X XX, wells quarter have it's

will XXXX. strong even going So I the think stay exceedingly into returns

amount They've quarters. a uncovered were already couple on, wells – that were that what nine mean, we DUCs significant gas to results XX% to the the slide we see campaign have more basically the that terms from still new oil in that earlier based have were objective It and along we're early be results. drilling and be completing the their we're put and of campaign the positively Permian in prior longer look to year. we've October, DUCs November. we've XX XX'd drill good. Turning of in if be were spaced on wells really last earlier here part completions, now value was of the more prior new this encouraging. Recall to drills themselves. Basin the just wider couple future $X starting seven in have importantly, campaigns these see laterals, of Ford couple XX% the to are of intensity That's use production. Returns may $XX seen over inventory of them Eagle wells impact lines POP'd even their six. results. we the already new those the early mentioned outstanding wells. have in the POP'd seen and so I wells been than A this expected wells the drilled. means they're could in higher campaign I wells. last But a Nine And to their we've those The to XX

this that's So fourth Sunray been full the But money facility a Panhandle suffice gas plumbing the we'll plant. done. quarter re-piped those the to release, processing being of is we explained as can from on production the handling for wells had lose that. to call February. have did that of which more In to as this this have standpoint say, in This the you of We did and barrels of up from relates at has now has plant the and give It gas. plant spending gas it been we in a been but in took get redirected completed. It's quickly about The volumes some processed Spearman, standpoint to Texas. addition part field. coming now the recap how we were redirect to another Panhandle, that X,XXX the lot That's day some it work X,XXX production, the lost to a barrels hurricane. of impacted a a third We a day. and have at attributable third-party October already our fire West you West per of quarter in oil to volumes result a the total another of data

to slide seven. turning Now

this addition the for is the Ford the year. accounting Permian I the total the Our earlier, the of such the two capital Eagle incremental except is parties, in in third what which balance be for same, of for to cost completions remains essentially the for the also now rigs $X.XX estimated mentioned and that year billion from

having Importantly, the billion, $XX, about strong likely our today billion But at an with $X.X prices fourth flow I we at nonetheless, wherewithal oil cash year's for is think in have with $XX, this balance it's conservative based $X.X coming roughly conservative. a campaign. completed likely to forward that XXXX because $XX sheet on going I on good is after think quarter exceptionally that's enter

Turning to slide eight.

in way North rock price roughly terms breakeven X And for oil the in in all breakeven Basin graph gives it. this could lowest many then shale sell-side same that after of would per in the from million barrels the at a in U.S. a advantage snapshot our see when here a time the is to of This the the is the the will Pioneer's have essence, shows include us that slides. country. meet quarter, growth the barrel terms and benefit, as on shown $XX barrel on produce Permian slide lowest, of to this couple research, it's analysis represent per fourth goal, that march the our be growth. XXX,XXX both by at first to a acreage as And year plus the in fact and growth XXXX. On as and well fourth is sits Midland the breakeven rock distinct if on price companies in basically day overall to year, for goals, that completion in in the best different the in oil plan, nine slide essentially oil BOE then, not, it third-party all continue That's in In of of we'll nine quarter of oil of that business XX in one a lowest the that Pioneer's basins finish that Slide more in day, more comes importantly, it we to nine, at compared Midland supported XX-year We one long-term returns. where that the the of America. Basin target look years, is of as the to on you

you those it's us oil when execute down at that on of confidence Slide company, see out, gives longer-term brethren. of where a shakes And So our advantage data bottom broken to list, compared to this our long breakeven based XX. that our by the list is high plan again returns. E&P in can the

the high as grow high plus. that's our low plan. and rate among those shown forward drilling slides, we to the much don't of prior acreage, other significant a prior basically – at low very remains standpoint have nine in the executing next us As things, reflects and to two a very the the of We just acreage barrels and very couple to breakeven wells plus breakevens, thing intact, our will that. or return vision organic going so, growth. really already and our result that XX% is, numbers. allow where returns the important don't sitting this of acquire XX-year of the produce have very X product But million we're go slides, to within on cost acquire of on positives really have are We locations do underneath we leases And from to low have it that years accordingly,

our of vertical moves to talked protect forward. very and inflationary we've us think of depends level XXXX our enhancements, the fact a great course as that oil get to $XX going price. cash sense that significant to helps in us would in going at flow where to at execute and spending would of spending. our prices where important breakeven for are It's and I integration needless We a is equal actually price. A compared extent, integration we've if in it is are focused between $XX to This from for cash basically range, XXXX. flow-neutral that in cash in take contributor big a a in a going possible costs, in forward on terms our on a amount happens look to would we modeling, well to course very say, technology XXXX you breakeven what on could to to notwithstanding it's be about flow to an oil the cash flow goal $XX, positive the the been be upon based calculate point depending be plan past, the oil it high a us fact that that Vertical achieved that well. as we're

that to in that, direction. Incidentally, moving cash rapidly as to growth we overall we're overall related a the of higher It's flow rate is there. just price So than matter flow fact we're margins year. XX% to production owing the have get fact growth high about high wells and rate. cash to due they're of It's the rate oil. that mostly significant per It's return that the when drilling

We a derivatives XXXX have accomplished for in lot the program.

there like focus had going we this As in is and good balance heavy feel very forward. the support corporate a good to We've in I plan returns. always shape improving sheet we're said, position on

metrics that the many, we compensation points. related these cover to have many already You that we company should use realize inside exact

on also we so per we and balance and on have G&A, programs, reserve goals our ROCE NAV and metrics. costs, to For share, those And ROE instance, internally already per compensation on have share, F&D, all internally. replacements sheet related on annual operating our production

And metrics, per couple the the utilizing make metric April point metric those we the growth this those forward internally. XXXX. the to a going change fact return already probably is in really share proxy in so include at But filing of plan we're our only of is to and goals

So of in now a you'll us from a just standpoint which next form it's that filing, see codifying matter our year. do proxy the of

us. I third quarter an summarize, for to excellent think So quarter was the

as to at that, expect over comments with And going Our next we pride ourselves Joey quarter on and the level quarter. well. going years continue of forward I'm for execution performance nine reached that results pass his for Spraberry/Wolfcamp prosecute was and as this to over that PXD I for the to we on the it

Thanks, Tim, on going and here slide. punchline I'm Version I'll X.X XX my on results basically our slide good second. to morning be We're operating completions larger a just in XX. the up is to standard now cover everybody. picking completion. This rigs. remains

cost You can Combine that that $X lengths, see $X and of XX% our budgeted costs EURs. with to strong our operating IRRs of XX% lateral XX.X%. low and results in to well at

to are XX, for four from X-well Version of here, our Moving of showing wells X.X+ slide we XX our pads. results

length. these they the we spacing length, find the is the go X.X is significant stage all trying of XXX-foot water lever is XXX-foot because for believe performance. is impacting cluster point wells continue And length. Pembrook stage combined offsets be The QX, cluster these strong spacing one on not to shifted to of production results variables near our the collecting slide completed narrowing illustrates combinations, X-well longer production size now and each Wolfcamp one with completed the and because four to results proppant us of belief and with shifted. you at sleeves Pioneer's completed with reason and University and execute XX-foot pad. only on promising; fiber Spraberry interpreting on we'll the those well wells. length. these phase stage close that history optic lengths. wells just those And phase to wells, on fit South spot definitely I going also with cluster stage during start now and future. same to in second-tier it HUD which are if that the look XXX were six that which production our were We out noted can to three volumes cluster which assess to now XXX do the our optimal The drilling. on the their with the stage now, The are well Shale, and we're we're areas that successfully we're programs. believe a well and of on The sleeve we XX-foot here spacing around sleeves we Bs we with Lower economics and of in over sweet did XXX-foot interest spacing the to our I will stimulation evaluating so and see cluster and XXX% data evaluating wells in all We're doesn't XX-foot we future and our of compared spacing of have be were we where page, Other All completions, wells POP'd production completions data. so on test of and tests All sliding zones continue in points a results were worth in those the months' the with are cater

moving be I'll slide XX. to on now, So

be update. our forward The the part in significance of in they QX quick Mill looking these wells did of test, first wells. to those We Jo so a we're two new is real of Just the results going add wells our to represent two two that spacing acreage. Northern

wells other continued nine strong performance. The to exhibit

quarter the on my impacts the increase XXX,XXX results, to slide noted day, X% QX. XX moving per of last the Harvey despite ending Hurricane from a X,XXX per upper BOEs Strong in at over BOEs day, and left, slide. is Now production

for total the XX% expectation we to production to wells XX% our place XX As year. are to Tim mentioned, reiterating we And production. our did grow bringing over our online, XXXX XXX

into evaluate determine to they our we our fit QX, how optimization will completion and program. continue XXXX For tests

and great forward a South our line now strong he'll results are with XXXX. impressive some that, to over cover and looking bottom I'll turn quarter a Texas. so finish team to for Ken And overall, to it we Sheffield, Permian And from

good you, morning, everyone. Joey, and Thank

slide cumulative XX, about to to design averaging higher a well XX and XX% Ford. seen to ago ramping spacing, on spacing to new XX including tighter cluster million complete date the are from Turning the the significantly nine in increased the longer XX% X.X plan changes counter changes proppant POP'd next program The wells. and year, on during excellent effect of up The concentrations. the from increase year XXXX are new and completion wells, our expected barrels The and drilling drilled slide. testing recovery. POP IRRs summarized design changes expected results EURs and Pioneer's ranging Eagle to we is DUCs yield with design We've to the include on equivalent, laterals, the wells wells results

to of At intense production wells than charted cumulative Turning with XX than This charted and in chart production are early result POP'd POPs new recently Nine QX, to wells is in slide stronger planned from Eagle of results we from charted XX. XQ, completions results. program The have end the red part in and October. expected cumulative shows POP the the early laterals. to XXXX. the Ford times XXXX XX wells new of more most two drills two design the QX and longer orange showing in is blue. of QX in higher Average drilled POP'd in program two the upper left even is prior DUCs compared a in XXXX wells Average X more the online.

remaining future. it these over results. results We are turn to very forward pleased the closing plans results the integrating for now into the financial Rich review to to and date, with strong out to POPs Dealy I'll looking

did Thanks, reported $XX losses It Ken. common or Good of stockholders on $XXX morning, per net loss start to and where a include diluted share. non-cash attributable I'm $X.XX $X.XX of derivative slide diluted or per million we million mark-to-market going to XX, share.

a we you strong the if share. $XX Tim $X.XX for mentioned, really as that, for at earnings per had million So diluted quarter or adjust

the on where actual we guidance If guidance or the side the middle that positive items of our see relative the guidance are here. QX we you at page look the you'll listed of results, to within all show of

quarter So for overall, an company. exceptionally strong the

and to looking at realizations. XX price Turning slide

As you and both prices smaller of most up can prices to that a NGL ethane from butane extent. see, X% prices were quarter-over-quarter. and were oil prices coming up XX%, propane

And helped so our seeing do exclude the X% increase These the pricing that million were really results cash there. to per quarter quarter. came hedging Gas MCF. from during activity prices NGL realizations during of in $X.XX our receipts down $XX

slide, bottom of those see you include If look our you at the of the you pricing can hedging the impact if and to those results.

looking Turning to per XX, cost slide BOE. at production

were down that see costs quarter-over-quarter. in You total X% production

lower-cost if Spraberry/Wolfcamp primarily also Excluding costs production taxes, on horizontal production our at two And wells. is BOE you have The decline were sorry, our down per years, production averaged the Spraberry/Wolfcamp costs, X% our from increasing horizontal versus over $X.XX due taxes, QX, to past and XX% versus look excluding XXXX. production.

activity here higher with and repair were improving note of primarily really those result higher and economics, production. able back oil a we well is The other item costs. of during vertical wells associated and the were as put quarter, them to prices on workover They to

Turning at sheet liquidity. we Tim balance to liquidity and position, an strong slide to have mentioned, as our XX, looking excellent continue

the facility at net of $X.X completely capacity look credit million, you at of reflecting of and billion of great. debt $XXX there. billion $X.X as billion, unutilized our cash the quarter, on end Tim If are hand debt of ratios, And gross debt $X.X had we earlier, mentioned

middle in bond current next year. maturity plan page May schedule, can bonds the next of hand maturity on look is of is pay our those cash you the there, in to and with If the off at see in our you XXXX

did than we BOE, note quarter production, with daily The the continuing $XX.XX on in proved the per XX from two. $X.XX the increase also to BOE, an at gears our really are XXX,XXX that items rest I'll the we range reflecting this $XX.XX reserves adding other were production to We Turning where DD&A costs to of this drilling to production to from the up range cost. per $X.XX see to fourth and successful looking page additional prior decline lowered BOEs our and our day. slide with guidance, per lower and BOEs consistent really guidance quarters, from that program. you'll switching quarter, we're XXX,XXX rate

So I'll stop questions. the call with open and there, Jena, up we'll that, for

we'll from Jaffray. Thank our Simmons/Piper question first of you. Kistler take And Dave

Good morning, guys.

Dave. Hi,

your on $XX comment think Picking be were but up prices levels, to the would well would did the to cash flow-neutral? get Or knowing accelerate activity? you those event to bit the that in saying prices, cash redeploy a collars, I little to cash at goal flow-neutral. be $XX, of that you you're hit hedged, certain In we with flow event, neutrality

And think time stay a we on the steady result, we areas. I to efficiency. pat of as because to would if that for see I probably And plan $XX from running kind hit we're XXXX. based plan our expect one inefficient about diminishing XXXX objectives the some as you be overspending at in would I probably high we and been probably can think, you we talking it adding goals. think really of that beneficiary all of know, this a from with in Dave, $XX, inflation at will RPMs, XX-year see would our we that of not be is of think RPMs out we've keep we of keep some returns standpoint our – just degree I for And when rolled the the the operational standpoint at

bit are about the up little comment of place, Just get Okay, appreciate rigs that that's a With that. kind earlier, POP of potentially we trying to looking And adding back not building these sense kind to getting made, little incremental in POPs structure kind a larger a that XXXX. efficiency above and at a inventory. just whether beyond XXX for thinking year? or accelerating for you of

the is I next of XXXX haven't But thought of this in relation bringing the count we wells budgeting, the our I would standpoint think from just, very with current significantly the of terms Yeah, to other matters. XX is in in and dealings rigs doing, be work the we about the improving XXX XXX flexibility. be operational wells. of related as preliminary mentioned earlier, and will fact our board current build we're gotten and also far terms capital XXX earlier, yet course, of building POPing on DUC the in Also year. to that's Probably excess a range to relatively

the I XXXX. of numbers for come think neighborhood in that's So the will where probably out

less of delivery less flexibility that, past? kind cycle apologize. it that versus DUC And But the oriented just little more one of lumpy like one linear that a on follow-up to on kind activity, POPs a in build, ensuring on with I sounds oriented we've really of accelerate production seamless more seen – to get

right, that's think Dave. I

a of half in But should for mean, the rigs time I at, is get would've delays. look we're what had that eventually, say, XXXX. add be our our flexibility. operational no second of needless half frac you in on way, we which they the make sense, are And If the second increasing is ability way do is what to then, fleets, done adding rates and positive exactly to the added thought doing utilization of in basically XXXX to when affecting, production you our XXXX, sure the into them there being, they

it really the and half of growth production being the of culmination flexibility, it's a would I to one the the second say year early-stage then two, So number into will the priority, and XXXX. having contribute operational in secondly,

the Thanks Appreciate guys. much. so Okay. color

You bet.

from JPMorgan. And our next Jayaram from question Arun comes

Yeah. Mill, the fit was the on the and of through could future go plans the objectives a program Ford development could also just Jo delineation Tim, some Good thoughts Eagle if from of into wondering morning. standpoint. you I

really relative Ford as felt shorter those we the expect on really XXXX I on that drilling which Yeah, on we've and now was get think, I could sure Permian-style would economic campaign And had was basis, to proven than back actually as the down-spaced, laterals frac one wells is like. objectives by put with we got a far successful notwithstanding XXXX first main also, too of all, on determined as when a we old-style you we are we've our of wells. Eagle economic Ford, we delivered. that the economic mean more What frac, completing We to that. know, that, not make Eagle

So Ford, third could a The a and can condensate. economics we NGLs, is we Eagle an natural to addition sure how make of really in that that we third the area to know, third a is understand needed wells. it improve as you we gas where produce

to drilling, needed exactly an I to it that. and we've done we of economics be think So area the improve has

towards gives definitely improving. inventory clearly view drilling of our locations it So us the of a value

has comes encouraged planning. a that. over Mill, quite Jo relates plan it our the strong, significant Jo Jo place I'm results years, of it these when the that by as locations number a so forward be nine On because Mill next We've internally, going looks seen very where we'll large presentations drilling the Mill to to very development and

program believe, Great. And thinking the X.X the in my XXXX with like This a shifting wondering completions year, follow-up. beyond. I X.X+ the can more look and how program, if you're just was on to relative towards you're moving about how comment I Tim, XX-well Version X.X+. you and costs perhaps doing, Version

the X.X+ between say, compared well. increase of per first costs depending utilization, associated if will as the you and, let's Well, Version upon you look all, X, you the how – at much to Sure. sand add $XXX,XXX with $XXX,XXX

even the XX% you're looking of not probably So that's something from standpoint, cost. at well that

clearly results, excess from and So you X.X+ in well of also, (XX:XX) look standpoint X% at improvement. look or when really the they outstanding XX% that

any on X.X+ on to for relatively prove standard make is those out this said, what's I short going were if That not a a think eventually the history to bear may wells. that based that and wells decisions XX matter, So become to we're out. going XX

So make amount from to wells each significant we're thing economics. And our what has we we going to time, of remember, a we're X.X then time to same for sure to case XXXX. case, in you evaluating improving to do how right as utilizing the to knew We're through X.X, X.X now went taking X.X+ if accomplishing been came many here. when it complete

time see before but we standard, wells. we become more would X.X+ to to surprise me more there. It need X.X+ need the data can So wouldn't get go some that we some

your comments. for Thanks Great.

Our Bank America. of comes next of from question Doug Leggate

morning, Good Morning, Thanks. everybody. Tim.

Morning, Doug.

correct can you well XX, wants these sleeve that – process take it's hear running done? if talking one, go this the changes walk to versus there, you're wells? about. revisit Just you us I were Joey to the slide please. Tim, you sliding just How just I seeing in in you Did maybe design? your many the have I through designs comments you but XXX-stage differences that significant design Are can if about back I wonder prior thought what

drill and did to the done it thing it one, only and up had Lower sliding we've the clarify, XXX did each to whenever makes back To zones, two bit objectives. was a shallower, This sleeves. less difficult test. on out. wells, of Number Sure. one most for creates some three little pad Shale we the is – on why drill plugs more one Spraberry in outside The your pressured you're it in important efficient we lower

right eliminate sliding The with only new issue. all do how So you relatively thing entire technology. of is you if get can particular clusters you more it have that other care out if and the now that takes plugs you efficiently, to wellbore. challenge But can the obviously, it's figure is sleeves, it per

operational of So production cluster at kind for the important time instead because how five comes the six But most the or whenever essence, out sleeve, piece a you of at slow. seeing in is do us, time. one a it's sliding of a stimulating you're clusters piece

you effectively when get at cluster how stimulating eliminates using the individual only per stage, clusters that you each sliding your in sometimes people sleeves whole debate XXX% a this cluster debate you're multiple of stimulated So stimulating there's clusters and get into are effectively that time. because on one

So regarding associated also sleeves, strategy technologies these because could of we see evolving tubing, some that where this as use sliding the sliding with coil new that's don't one you have There's expand. to challenges long-term a interventionless sleeves.

there's work. room this us, more for it does test think improvement. strategy. one, cluster fits as this wanted But to Operationally, we is see long-term our we stimulation to we for how So see how into the determining, individual something

similarly for I realize may production compare the X you're a cost describing and as did not what how test, but as the to costs? comparable, reference, be with the Version just the

are month month early, you tell our and are I to so last very I these to – be it's they will too very early. tell. and So that wells. We indications or a X.X+ wells – it's to very just turned in But on half, early. it's again, again, preliminary appear comparable think early that the that performing

things wells full One a these of us longer learned so with for and early bit is takes higher just the water the it too that conclusion. we've the a to volumes little to really make performance that of understand it's

of the Version of if may. just X.X+? in breakeven is or you've given X.X+, Tim, terms follow-ups, that X.X a appreciate guidance I the that. the that Version I for Okay, I assume year, Version quick the couple the does had next

Doug, to now, is right defaulted doing X.X. we're Everything

earlier portfolio decline back drag really, a and, going Ford last I Eagle program. the one there. Spraberry/Wolfcamp still general is, I'll outside the of growth And term Okay. for from just question from guess, And ex-Permian to the is the the strong Permian, prognosis very the me on it the What Thanks. assets? the leave longer about

of really results. inventory Yeah, we've to you the it's been Thanks, going showing seen think comes that what their and on is look as economics. I campaign's at been doing to far, positive. dramatically Doug. we're is drilling recovery inventory. significant it actually it all take what encouragement signs And this Xx of And prior I these to essentially evaluating when impact We've so wells some the be if able

a in compare on get we basis how campaign Permian also after relative course, how wells weigh return the with Of of data those terms we have up returns. shaping to is the all

we their we see get as as assessments I of think with and some on to of we those the the these part We'll that something question in evaluate year. into fullness that program be next wells, seven will November completed watching here putting production. early make as the production

Do you plan in Eagle the any capital XXXX? Ford in

how for evaluations for of capital Well, whole that's addressing. well based just question the we're appear? will the part much on XXXX. how that's is the budget we our question spend results And The a

Thanks a lot guys.

You bet.

next Our John James. from Raymond comes question of Freeman

morning, Good guys.

John. Hi,

these slightly look at like it at realize Ford, uplift last had these the is like a getting X.X looking looks looks update XX% the on guidance. we Eagle higher sort at meaningfully using wider. wells but of productivity of kind I were lowered it's outperformance you IRRs are completions When MMBOE I EUR the longer the new And basically you're quarter same you still it It's the the given when online, cost, now, the looking like and doubling. and

the Just thoughts were when all you that type sort you using. of on curves reevaluate maybe might the

Yeah, hey, Frank. is John. This

I what think seeing. on to when we're you're spot at you it, look

we these we're wells mentioned. I think, yet. have that they have to referred a as of and when Ken, POP just And though, of don't were we on data to just fact, about Tim here, some about talking it, lot Ken as matter

X.X So being, MMBOE I up. But just time for could numbers EUR. we the time, assume think those go the over

just just with it these Ford, was the Eagle costs, well you – the follow-up, third-party frac And then where sticking I'm fleets mainly all the to the mentioned went. my on due additional fleets this obviously, would Okay. prices kind activating, of costs the still reconsider you if potentially the just are your or all if potentially of of table. where up consider, using given curious starting have all that's own off just

can that. I are refurbed. – fleet say, to seven should today, we need day, of not That be eight think and being we six nine, set depending utilized upon or we which I today the and I Certainly, to our have fleets, realizing consider whole number eight fleets. mean, said, among operate,

not those along the probably short in term. decision project, which any is refurbishing lines fleets, certainly await those would a be XXXX so to it's So going

guys. Thanks Great.

Evan question from of Our Calio Morgan Stanley. comes next

Hey, good morning guys.

Evan. Hi,

million Should to XXX your behind Also, mine mentioned back any wells you well behind? be Brady downside and range like POPs infrastructure infrastructure Yeah, in spend XXXX. any XXX to $XXX there? XXXX with you spend and POPs, as they CapEx end-loaded

count, of the the at look you number. estimate if an POP think this I is overall more of

of be completion. of to terms yet the the gotten order not year. granularity of of complicated have the in in into arranged out how are the rigs to are there, they're We course, how pads when that's mapped exactly And related matter the a going

So results have we'll fourth the that out when put color certainly for our more on quarter on views we towards XXXX.

detailed probably POP a fact, at schedule that pretty give we'll you time. In

of I look where number just when more of think you consideration So to at right the is that, thing. we're you now a give top-down we land trying the

top-down use So those from of you I a flat. are assume as kind time number, and can think that for it just standpoint, the just being,

midstream? And the

Yes.

the at as and sand to you additional are sand If West all, right now, Texas of we an situation our the evaluate look supply. that's postponing Brady of alternative the costs we expansion well – first as plant, been publicized

the spending money third-party plants one around one has coming two as Those place planned in, competitiveness evaluating for March demand processing. That a in Targa don't to on and the September. well. plant have go-forward other alternatives. we Brady in and capital today. XXXX, be its are expand We're need versus will to going we to said, So expansion other new these from standpoint roughly

that already of capital of in from amount We material field XXXX said, forward as than needs course other the and essentially other But with systems water have as capture anything of fact Targa. it XXXX. standpoint the the our as will infrastructure items, I'd they're regular have going the same did say, in our compression we in not really

so compared our be when to to million it roughly to going comes numbers flat the or material expenditures. other XXXX. overall That's $XXX about So at

low has question. peers jour know maximizing that's growth mature return longer your life just Great. at you maximizing picture plateau what second become versus thoughts versus the allows asset? portfolio, look relatively Thanks. inventory multi-decade returns deeper Maybe growth where it question a bigger barrels see shareholder Yet of stack, where corporate million a pits characteristic value of you is is when your outlook there I and to post And XX-year managing you really asset, a harmonize comes a X strategy this mean, most on the just distribution high down Maybe and and than and to du cash producer defining of risk growth asset the have at the price. where portfolios term you value. of do appreciated. more growth, I

As I getting cash mentioned flow earlier, to we're very heavily actually. free generation on focused

Our flow free generation. first get cash we'll goal on then and neutrality to is work

through our But to we're to price. the drilling probably say, next say. – it's on, work get but guess, of goals. have in I'd XX, forecast our us in is little I years years, what bit after So that's to XX XX we a nine, certainly And – hard XX to one But working hard needless whole we're information, year. we've our XX-year show this has this to period, years, discussed going over upon a to with we up as inventory. wells recall, X,XXX the Internally, XX,XXX-well over depending you be XX,XXX including locations

that continue standpoint from profile. move And we standpoint, of so from the can ahead a growth to

work who be inventory the as drill wells don't set years, want can what mentioned. You limit not might number a But I have you when operationally put certainly, show you from nine or said, next we very because that you standpoint. case, just the to the rigs and number efficiency in the so with economic to situation. to point issue over Others have that decide growth large of of to the to in it of – inventory our really an becomes at want maybe

So albeit probably through it point companies at XX. with But years overall and profile from XX situation. to to that Basin in larger that might some others at have because rate not like grow, be the of an that companies a lead ourselves in may Permian continuing could simply certain the you lower plateauing

will Permian what multiples of said, it today. Now at time Basin that is be that production

standpoint energy going of from and their picture. global oil United States importance a very it's the position of So to lead strong the exports in terms the in

very Right, thanks differentiated But comments. your for long-term outlook.

You bet.

Our next question Scott of comes RBC from Hanold Markets. Capital

Good Thanks. morning. Hi. Yeah.

Hi, Scott.

some with inventory, last a maybe that that's and for little of pay bit what maybe put such large to type with questioning. it And who if harvest could away? XX of inventory to right market are work of of operated other stuff, makes for made heresy inventory I actually sense is to XX, a consideration long years out If the company publicly a but the have you buyers to say add of this now willing it this to Hi. that such to on a good line right and the all to

I oil great just think of many, said, the Tier do would United business. drilled Basin, should of reticent decade or we're just, question and the accordingly, a probably after it's all business, are sales for Permian reasons of I business, States core to we is consider oil that as a that all the that's won't we've more. in and in a core the something today. the jewels gas One property. – many we And anything that it's for recent what the fact is done some have be the essentially time because we fact crown really locations particularly shale property, we have couple particular we the But said, is X as call oil the

that. to be So you've in careful consideration really of got

well location we C horizontally Wolfcamp And ourselves. well is, of the have we to – point even Midland are not second up, County. Realizing the of said, be first The we coming we've yet. in haven't drilled drilled also some the as Clearfork going zones our even drilling some

job Fortunately, locations Pioneer that. we doing Cs XXX delineate Parsley drilling great can by It up has so. Wolfcamp proves a and done let them to X,XXX

in on haven't some and deeper for it are of In the just the drilled zones. as standpoint more probably it's you in locations there. so deeper would and addition, well It's we some them – That see of deeper drilled Basin Barnett well from as gassy. productive Woodford, a productive, Delaware we Midland areas, so the the believe, in the example, Basin. the Haven't be, drilling, oil that –

said, don't since seriatim don't we zones So want be the put of even All may that a interests is we locations, where to of at locations, some ourselves top we assets or it where drilled in we haven't of know the position or own. list. not we convey in what these it the

to be me And where anything the to to to the significant on along this you're what we're said, to lines to done the technology saying. technology out think would to proven zones reason that potential be in were play also we to their technology of occurs that see would basin the I today. didn't remiss that be with to key as time. change. interest So convey unlocked hold is assets off And extent technology That if we have due be don't changes change, or that otherwise through change we

very in although free is a if free go So capital, the idea a elegant that's needed really not we as model. makes think cash cash actually and I I we sense the situation we're it think or flow-neutral flow-generating towards really

not it's front-burner, of top So that it mind, something let's way. put necessarily that's but

potential I cash time comment like understand would out obviously the just it zone response. you there over parse within to made prove I to response, you some – an up the as harvest And harvest cash asset? appreciate and so a one from is the that maybe of

into same competition in you're might the a possibility. zones effect the that's a an for That in upper the other same zones. zone and the to theoretically have to were drilling in sale of out inflationary and convey our essence, our also I you underneath bumping footprint, where such that. we areas other. situation on zones, done is said, really owns right? to each below other you issues, think you mean, where is I we've that that party It own going Sinochem Wolfcamp now, a and partners drill Yes, In It's a if come another bring drill continue same services. zone South and you to causes the other words, get someone in

that certainly without it's one but it's some peril. clear the of to alternatives, that's So not me

Okay.

little an give I you're then XX% update great. And And that wells you there? How you percentage seeing about now, that us follow-up, mentioned what are four-string. And some fast could think on a that's in improvement you're as Okay, bit as look like right just XXXX? if you'd progress more? the a could doing of down getting recent those do some it

answer Joey let I that Yes, okay. Scott. will question,

well. as as Yeah, the wells are some days. little completed four-string XX had Scott, We've going recently in

some Wolfcamp doing back we're able even benefit work that we're to with As us in some to drive slides, give design, start would and wells Shale to Jo portfolio four-string. that of – XXXX, communicated mix expectation that them those where is. be of see see My of just the can into through the past. XX%-XX% we forward, do Lower our look to working two we've go the of drill may Tim alluded Mill hit you now areas think like continue in rhythm as going are more you Number total that and the down would some still As as go When to what the – down. to in three-string I that based things. being we days. a up XX our details durations one, you to But some in the we've on earlier, simple don't portfolio it's Spraberry

continue progress the our back three-string to go the hope to look is also wherever for we four-string, opportunity but So to to can.

Appreciate it. Thanks.

our And Rice. next of comes from question Johnson Charles Meade

Good you and morning, to Tim, whole your there. team

Hi, Charles.

the we and if variability design. – explore that slide Version of completion that the this maybe perhaps in X.X the which go had a one could that lot back interesting to, about gives to stuff XX, it, suggestions of wanted I within thought slide I

they you that don't XX X.X+, X,XXX as with barrels the on results Pembroke of the on pounds those it, end if per the the As lower of as of go have that, look Version I higher to and looks intensity like the look X.X+ end like it Pembroke, the at actually pad, much uplift the foot.

of wonder other I and if thoughts dovetails parameters. you not to in what So of the on could that water, you but the comments the you kind think barrels spot perhaps it on sweet the preliminary what in your said prepared perhaps share there found Joey

per time Yes, if that foot that foot XXX test. that at XXX-barrel one, noteworthy we more by in a for that these things per before Pembroke Pembroke completion, standard a long Two barrels be mind you you oil. Charles, area in so wells particularly, is that's the we in, it just takes whatever one for is test to wells, a look for fact put cut And reason, keep of do things whenever in even should to number start the clean up. even particular water the that – produces long time to

more the time So we've understand to only for of telling And to but are us can just that you got completion days. nature that days' up take XXX like. to of others curve versus these bit nature not that XXX by it's as what a of the see, some the just and the going by area, looks worth you little predicting,

So let's just that wait and how out. plays see

that the we get optimal thing sand two that that that that get all dialed in water to perfectly, you made I of if question things is you've out, the do what it's is and think to The of dial with know there. ourselves in, comments then you once I back Because on gotten combined amount those water? other volumes. we we're deliver really asking that now you you can pointed starting amount can volume The water think very the we're noteworthy is, going

back we're reduce to right thought good know that tried believe we one very we and of We're XXXX, knew what amount the fashion reverse and we maximize going go and the We our now. we water actually sand. to in results, you trying amount tried we optimum is now, the amount of to we not of know the water. what If time was delivered with opposite sand in where be actually to

on mindset this forward. So that's going our

say, program-wide of can many helpful, of stumbles? back what Joey. two uncomplete we – your inventory impact about inventory perhaps efficient year year you So basis, those these kind unseen year? fact, Tim, the expect us to allow talk Spraberry/Wolfcamp And at a in avoid in That's of basis and program-wide to of you give you next variables get guess, then on really kind you kind work-in-process there. rig I of more do adds, kind drilled, the midpoint appreciate think this looking When when accelerating that's we the do I those, of going you're an how to of for level be in were And in on look a you. maybe idea XQ question – going at, or a the you and to wells

a That's achieve. what point with great right on Charles, question, we're and that's to trying

numbers, industry if That's look business has X,XXX at run uncompleted how of words, what other at very any a the That's – XXXX look well you ship one to In been XX idea is say, tremendously time show for but by I and to DUCs run we generally per we drilled XX there's an that rig. tight in X.X been. just you XX have mean efficient First today rigs. this That let's to a per XX tightly give you or if given Today, wells all, you Permian, wells. rig. at, operation. goes

have XX it expect has trying and DUCs cranking result a also that's any we avoid to to, or of let's rigs, get adding kind However, By we're up to couple of there's to if disruptive the go the other let's here. have going a range an certainly you a potential to which of number if option always be and up a we of, well to on our thing make have the it so, add just pads is as completion to then That's kind number would say, delays or of say, three-well you. of XX a frac fleets, eight spot to you out XX there, we're have DUCs. what delay seven sweet the another that's or the complete need rig to because to you units that kind sure

per wells That that slack number a about a basically the two efficient only kind talking ourselves we're we're which more an little us flexibility rest of to industry. the said, But of rig, way than gets standpoint. from it operational it's So giving about. is

helpful Thank Tim. it's and you, That makes sense detail.

You bet.

from question Michael Hall next Our Energy of Heikkinen Advisors. comes

morning. Thanks. Good

Michael. Hi,

that and if enough And how support I of could...? efficiency it, breakeven potential question To from it use and be a guess back XXXX in on you a capital standpoint do the deployment to gains so, from the continue forward designs the forward? is beyond, extent far X.X pull those further around you it I little bit wanted efficiency Version to the that as material new timeframe you could wells. at to look come something incremental maybe those think

would X.X. we margins, X.X+, I look it and from that that same we've by think that's to incidentally would definition, and to happen as cash forward right. that's Well, we If have exactly has happened to brings impact. neutrality our Anything gone what do our date flow X.X at improve going

up say, before, end really well, date, neighborhood but I production. this the and defaulting and get to we at into EURs what somewhere XXX,XXX early kick if X.X+ So in in later a to of in mentioned that XXXX, significant which let's is effect per you adds, XXX,XXX

incremented of those, the a day company. growth All our of rate, neutrality sudden, you've margins accelerate you doing And significantly. your you've the of incremented breakeven cash both in

exactly direction. went that we extent what to results the should that's the be, So

timeframe at yet? could have impact is sort premature? point Or that And maybe estimate attempted Okay. what of to have this you that

much early. but forecasting. those doing wells, can too not we with a and We we're details. there Like data, give be place XX see will level forward of actually want you earlier, to That's time mentioned as when more we to

Ford, would forward the updated of handicap the point? that we look it. of how portfolio, the Fair at well Panhandle the guess, think on of the Raton, declines should kind in about And on remaining declines as as expected on How us XXXX? those to you then or I declines the I business this guess, that gave enough, parts you number. XXXX Eagle kind

there. Well, you I have think Ford already Eagle in the number

plant see production XX. you XXX% think as flat. each can or look through have last very And this quarter, the West our earlier. of produced on X so come cubic day of specifically decline a from it operation to three referring if last feet a slide simply but methane, it's assess out Panhandle mean, is I'm areas roughly at within exhibited can years hard quarters, quarter each rate. it's materials all can basically couple the it's you generally, pretty you But Raton has look the has flat. of XX% to because million choppiness the that's actually I business over about and we prior back look you discussed of the you information see of there, time, been back we if so. I to

Ford doesn't Okay. slow pretty all? well? XX% down is fair And at then the though, Eagle That forward going as that

It's mean, the fundamental obviously I how but drill, that's that's much a rate. basic correct. of decline product you

think, be Okay. improve, can have breakeven front, a this time? $XX you guess, would on the in as last How at that on ROCE. how corporate of And you return I do a end that towards of one With just over look looks you in current my plan on low single-digit kind over that sort timeframe all world, the view I guess, year we have XXXX? years a would next type then you the much few

one, that answer Michael. Rich let I'll

Yeah, I or are generating the years, returns think over when will wells four five on double-digit next modeling the you the into and look it at these that go range.

but the years. our improvement, got year of cost the and see the five four basis because couple based it high generating base or over of on the rates next significant not but Permian, cost we're a So adding given should are wells low these in you we've depletion basis, percent a look per at starting historical high rates we pretty return

casing... $XX $XX, a basically that's And

right. That's Yeah.

Yeah.

That's super-helpful. Perfect. guys. Thanks Appreciate it.

And Brian Sachs. Goldman our next question of comes Singer from

you. morning. Good Thank

Hi, Brian.

from follow on a comments. points up couple to Wanted your

returns already any think Can corporate what's the lot existence you it whether just mentioned weighting already of today? in internally proxy management a is incentives I geared on any have per-share First more the the that you of management on growth. of if towards a the towards publication incentives, you a incentives are color and changing and incentives or those simply or add

of variable. we Internally, a great every question. course, that's look Yeah, at

right? so intertwined, and DD&A on as are touching your fact how – on. well. your rates them and debt and – It of your affects some is But ends – cost depends your up And numbers finding actually capital the spending

when year. you do these those of at a one as goals to is metric today. put a we So you to But which have The do not are lot return thing comes all we every look at the -if in it look intertwined. we'll our a incentives, have we proxy proxy

which of a November weightings the in topic because revamp adding we be and proxy. Committee, will our Development metric But But resolved had percentages. haven't there, that we undefined definition meeting. that's Compensation Leadership the Board yet return will We yet be the as with a in revamping by the will at

my then currently and using four-string And you. Thank Great. the follow-up wells back casing of is the the XX% to that number and falling.

and see Jo I area You it Lower just weighting to the shifts shallower was Spraberry Southern whether is Midland the a within and highlighted County? zones the simply or if just Mill any wanted was towards taking weighting. in greater Wolfcamp also there Martin

we going XXX% don't Brian, still Southern any as forward We three-string. see the that's in see Yeah, acreage. change

also, number area? And of you're that or in your wells drilling shift you mix are POP the Southern of changing

are four Southern planning to acreage. rigs we -- look still still we No, the run in

Great. Thank you.

Brian. Thanks,

this will session. question-and-answer concludes turn the closing additional call remarks. that for the And speakers or we any today's to time, At back

have speaking of set a forward the the you at And being in on for with call. least look and us at you it we thanks or on for great appreciate holidays everybody Thanks all all Pioneer, the participating February. We road we to and of on the hope call. from very

Thank This you your today's concludes for participation. call.

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