Pioneer Natural Resources (PXD) 7 Feb 182017 Q4 Earnings call transcript

Welcome to Pioneer Natural Resources' fourth quarter conference call.

Joining us today will be: Tim Dove, President and Chief Executive Officer; Joey Hall, Executive Vice President, Permian Operations; 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 X, through site replay XXXX. will archived of the be on the Internet March 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 Securities uncertainties on presentation and described Commission. are the public Pioneer's news X risks slide page These and filings in of made and Pioneer's in with the Exchange this over I to remarks, would Relations, for Vice call Senior the Investor President, turn At Pioneer's time Frank like opening Hopkins. to Please go ahead, sir.

financial tracking XXXX, achieving also how our on a the plan. we're Tim program. our in He'll well progress drilling remarks, discuss operating report and by Joey thank fourth briefly quarter Tim a He'll going Basin also followed for program. XX-year optimization you in will the for year. provide for to Annette, for you, regarding plans today's financial generated were and at agenda is After targets his also take Thank highlights up and joining quarter going the towards to last conference XXXX and our our strong Permian our fourth call. successful first. completion review performance I'm be look the call. resulting highlights for provide review horizontal Permian that and XXXX concludes good from operating is everyone, Basin, the XXXX which us the day, back He'll our of details

to questions. and capacity for from oil ability on our guidance open having the Gulf Gulf usual, to the the Lastly, call exports that, we're also receiving growing and quarter. we'll Rich will benefits after He'll financial financials the increasing the up for for And first and takeaway move the Midland oil you to update provide quarter your the Coast. cover fourth earnings as oil Coast

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

everybody. XXXX program. with divestiture welcome, to fourth diluted increase of metrics, the the drilling quite and capital cash to completion-level or they'll from regarding budget, of to quarter we But they this year-end And long-term about And matters buyback morning, important review results turning we've that flow quarter discussing were several XXXX seen We'll in per Frank, an fourth be high include call. later growth that returns. program, return also continuing our share. course our slide reflect X, what that our a planned production share first, And $X.XX campaign. I Pioneer's in results and some quarter and are coupled impressive results. $XXX XXXX other and million reported fourth Thanks, topics initiatives dividend our strong, our our reserves and is wanted disclosure, our income in do very

up importantly, fourth quarter, we per The the third BOE also total third X,XXX the XX% year increase ending which quarter compared finished more XX% was a about quarter. range saw XXX,XXX production BOE the barrels to our a a day, exceeded on up on substantially, versus growth substantially. basis up production also quarter. But off was oil production BOE Production substantially about up by a basis day. Importantly, guidance our at in

it BOE basis. grew fact, XX% production our on XX% year. year year oil up more significantly, year a on on about But In increased even about

for year up a very So being Pioneer. XXXX strong ended

XXXX, it our grew growth horizontal that was production Of focusing And program. driven Permian Permian drilling Basin oil course, Basin just the XX%. by on for

forward. being anticipate rates growth we strong going what of reflective it's So

very balance data. finding yesterday costs strong by fact, strong we've about and job turn a resource release XX% of mix oil year. bring Permian fullness we've X essentially, we our It's we operating press and horizontal the to prolific that's in into continue per of large and more a low-cost say Importantly, now due to financial BOE our lid the separately of on initiatives, to them the I'm slide and have energy to of That's in last going Permian also replacement time. and patch. production to entire fact reserve exceptionally wells done cost reduction further, the of good drilling also keeping focus strongest the economics Basin a resource. and We've tow. in in to but product in kept announced of compared on sheets highlights also in that in part one a cost in costs production reduced We

the ends those average, with We'll metrics. were later at cash if you Version billion production after some have have sheet look X.X+ debt these to on in date, very the with XX on to completions $X.X the of XXX we'll XX% wells XX% fourth a uplift hand balance that of slide on Our X.X+ about the year placed We about quarter. in strong Eight wells averaged fact which days. wells. cover

value Those significant rate a and about per continues to ability of IP BOE our We our data, trade BOE a well, the Permian to if in well Basin you upon on were makes pie to A represent, speed that successfully that just first Wolfcamp wells us our completions, then good in announced lateral in year. acreage being drills completed trades. regard incremental XX oil. with significant featuring the be potential XXX,XXX very the of bigger, a and Eagle X,XXX in substantial the included stead look from very during would of those discuss in sale ever That a last moment. billion just feet adder strong in in the fourth that to Basin. I'll Version from million We've intensity rates production development feet. in really early a $XX new one production over completion particular, resulted D course X.X cumulative quarter, Ford at puts the value also production the depending days added, that added of X about and billion the Ford driver of the well $X sense the and That's it best Midland Eagle higher Permian some the of value of of X.X that day We DUCs tremendous campaign. XX lateral

volumes and volumes as and into We have to Their been refining to Asia Gulf about the increasing of on size it exported the day amount selling barrels our production fourth and also the impact during export. be similar and will in that quarter. the increase will system a continue effect Coast Europe, results. oil the first appears We quarter of XX,XXX their we're to

incremental of in add the the differential and quarter, of fact it incremental associated Importantly, we've value flow the what export added Coast. because the Brent-WTI ship premium about to been experiencing cash we over $XX that It Gulf with also months. is that's the few million oil the does that last actually fourth could

non-Permian. plan all now I'm separate announced the to to X, in assets are to And essentially divest our of we that slide release XXXX. Going going a plans we to yesterday be press now for that also turning

assets been Permian in will So I of they've for Panhandle portfolio a everyone, also some southeastern want assets decades, our for the that player. in contributors to and been cases Basin have and part over our significant these company's years. the note success multiple decades, to the assets, our pure our in assets, Colorado, South result Texas. Raton West making in panhandle includes other Pioneer Eagle That assets Texas Ford of

our history. So we will go Certainly, therefore reported positive for of just we'll the reported And and, our operating It all revenue divestitures have Permian rate because our per to thanks increase out said, returns. believe reported our it on who part BOE, our completed, the increase that expense many though, once will are BOE, per that, outstanding many the on margins corporate focusing our steps taking be these be improving that Pioneer growth to further employees company growth rates. of reduce will been a fronts. a

And so a for the lot it does company.

these say, to open should later quarter, see be into the March. be a probably the lot through of some the end will quarter. are execute third of with. results rooms this time, potentially will simply there data It the to transactions we probably moving expect some early probably time take We to that need February But few in needless dealt a and, parts assets in second there's quarter and because

us with as execute bear just So this plan. we on

where That's allow I think important it going that's of one us to sale that about all most pure that's us to a I become, assets Basin our but And where actually public because will Permian pure be it focusing. only said, Midland of not only play. the also as this think makes are. play, is I important points the we're

more is basis, prices. of I oily the One a current on face of effects the of becomes the helps this percentage which in company commodity think

As north to the have are and four fourth the have that is quarter; the to plan back place count to operations, rigs since and we JV XX in rig continue in had going south area. the rig current with Wolfcamp and operating we the in in the

XXXX. north couple are be a to our of in that production-oriented get year flexibility, we rigs as mentioned they'll inventories sure and we fourth the the half we can in make the turned we in building into those which of the DUC more case As activities quarter, improve to second so

we're of in last number four-string second about the of the XXX of anticipate year, wells for of costs POPs about efforts that number our half the we'll reducing anticipating as of be Part the wells XX% program For in opposed reduce wells. XXX to We XXXX. year. to XX% be include the to to utilizing

will we're be of testing the be first to X.X+ of the year. being, going be XX. Those Version wells, half a time the additional total in anticipated to completed For

They drilling, based to to the and through order chance of be easily results the wells target once after on and of the year, them, and we wells, those zone, is remaining steps the area customized look we've we the campaign wells a part the we'll in see think the more this more have wells. evaluate involve results as X.X+ could optimize realizing next the utilizing what offset the the It on I completed completions. so the go had be we're on from situation wells completions to to spacing of vis-à-vis Version at more time have the customized. then

And forecast our so XXXX accordingly, being. reflects Version of be assuming remaining second that in the for terms numbers, we for you the But would time changes completions. exactly half. And and time mix what have stand our for built into we'll that the see see production in the X.X our we're how in what wells planning completion only being, by,

drilling program turn surrounding Now again And rate excellent the $XX detail And about of bit similar XX% plan. all Basin to of Permian $X. is, We production anticipate corresponds that compared based deliver going also the really to more XXXX. will the little but in I'm see a oil That XX%. to today. on XX% slide includes that costs, to to growth XXXX that's still to We results, seeing rates production XX% we're facilities very that IRRs strong BOE economics. importantly, growth; XX% and X,

at currently I So they or shown be on to where continue. rate a to capital of substantially over the were extent sense, able summarized we'll that plan prices we XX, is if to we slide as but program more achieve in have IRR here billion. our process strip in minute the detail commodity that maintained $X.X prices have that are

what between efficiency You neighborhood that When XX% be and the completions cost assuming see inflation. needs. you industry there optimization, our of the And vertical X%. to somewhere net taking now terms and up we XX% facing We're we right offset regarding about company. splits will the were then infrastructure integration, of I by other out to and would in being steps some can that will in internally do the net X% the drilling anticipate that end inflation of gains

case, The inflation it's we're $X.X the net-net, to very planning. billion. of $XX At course, not and any speak cash in $X of looks our in flow, robust. really So baking

have is to we'll as as that. divestitures, $XX. capital be well proceeds costs Of on cash were and capital program hand costs cash hope, flow our completion drilling if fund the basically and we The for from to achieve expected course, we breakeven asset to related

premiums still a the have with our gas enhanced remain by a in gas where the our for of effect into our current at prices We that and below for export markets, would XX% based into be are, on we are offset the where oil of Permian caps excess place fact the cap that a otherwise gas chance hedged, operations Gulf So about struck selling needs XX% the production. markets at oil oil, on And capital three-way to and current on collars be definitely great XXXX. extent. for that prices Coast commodity we well the actually we're to

Now to slide the with And from sheet I'm balance look you then the the we our that potential And on going debt end, to X. from proceeds financial current the company's clear our year, paying divestitures May this our strength. turn toward and forward, potential when very couple clear million you it's comes going for off is flexibility maturity, cash anticipate which in $XXX hand. a at

to increased in from $X.XX semi-annual quarter all effective financial we up remain And into standpoint. second end based debt to $X.XX, the a result, an company its of a has strong. the Our of statistics on the are dividend as coming very per-share excellent expected And quarter. from that, year here anticipate the first

X. compensation announced that from have would going and plans. and also year common And to to with April, goals compensation plans is based a tuned, a then going stock XX-year behind will encapsulates associated you'll for see to be I'm that our to awards we're now That what are perspective, slide now effect their of dilution in repurchase for stay initiate stock be our And we're in and but bigger XXXX. looking otherwise incorporate plan, have in the metrics slide two and you'll until We wait with associated to things vision. long-term incentive returns-based this XXXX. back to program employees at turn stepping our picture now per-share that that

driver. structure our important First and foremost, cost what's is most really the

that is structure. XXXX for basis. costs the cost clearly on G&A And burdened actual And in fully you structure on are if and very all left-hand This average. we're put horizontal interest to a our see which is that you here, sum $XX essentially on see can for those what we cost barrels in Our you BOE able production very Basin clearly graph industry-leading. Midland up, showing the Permian is can on

what XX-year prices a so our right low-cost drilling the our that basis show to is in the to that in model. generate than it's industry-leading. clear a and producer high-return, our on cash grow do why Basin. allows all low-cost with plan $XX costs, are very graphs. annual Permian and We flow, where us We oil to It's wells we're corporate it even prolific lower cash And oil because the grow returns in That's And where the set free in as substantially that works, starts. ROCE with fact that having flow annually, been essentially today. that our with to our they at are of start said,

on to production our breakeven annually on margin. cash as price the at oil an that In it we in flow price. were flow fact, if the basis us bring it high shows reduces wells free commodity incidentally, And, generating at cash XXXX be $XX price

all as is it So driller, reasonable any that the that a actually of then long-term high rate commodity is production. form in of consistent. the return the model kind price of at fact yields growth the What low-cost, of is output

it, to sake. to have work what's this going all is it's returns-based clear model. so because this not go we're supports is execute growth growth's We believe and that through a an is on for This going plan. inventory And this we

way as they significantly. the longer-term to is metrics, affects perspective see our financial think Going can to you from how this X, long-term about it improve to slide that the and plan a

left flow a over of top plan at in the see see on cash period on improvements you graph which And bottom flow $XX modeling increase $X, left the $XX instance, substantial again that, this in based an yields full at to the associated billion – cash of that – cash so significant is CAGR you you $XX over based If growth. $X and look consistent again importantly flow, is and returns. graph, for with the actually XX%,

high we we're corporate that metrics, rate our impact wells shows you from per expect time, those that's positively we as through ROCE continue return course, look our at of year. if return our that as drilling to you very wells drill Of increasing It X% in to to we're ROCE modeling, here. actuality, XX%. us shown X% X% actually actually and But internal adding

all $X, have on in there's based if our $XX in year. of that XXXX, this Again, the actuality, XX% excess extent reaches we So you actually and of look return so substantial upside prices that. to is at ROCE

with and capital mix. price, wells basis If through breakeven high-return this do which flow cash as needs oil flow right, numbers cash to at operations, see into cash production has of you you look those top and that prices exceeds the oil we for our flow our fall price gas breakeven the the our at our time add

they as fact, go as plan In $XX period. during the to low

suggests I very in our growth. wells, cost with drilling high productive self-funding. gives return that can words, of is that about we So rate and cash deliver other this It's that hope everybody model $XX, in confidence especially struck by structure summary, low-cost flow what at wells,

embark and provides XX-year focused what upon plan. In forward. indeed our fact, all X as employees And the next of it attractive free that's in we for cash story go an on generates years flow, as are this we

shown promised on a the it's capital this graph. The in earlier, capital of completion turning page out is program. breakdown is program. little as and because won't here it's detail So the year's But in billion I granularity go this more through bit to drilling $X.X this XX, a on left. laid well

pressure The at field so infrastructure vehicles, case. our well we addition, requirements estimated and on. capital have as rainbow water and the $X from on billion will a be program services, chart, related facilities, of pumping, $X.X currently for such our course, our cash funded, to other shown as In $XX flow, systems,

compares in Of seeing substantial cash $X.X flow between growth billion we're XXXX. to course, already XXXX that and XXXX, so

is Of our growth then, like of turning reflects to look would hand of rates. course, But It it hope pricing, on showing also only some of but divestitures. have slide XX and And our fund production rates. that can see to cash Permian course, to growth you our somewhat forecast. from program. that's divestitures we're what company our some the substantial But attributable to the Basin post we proceeds here

if at production. look quarter, terms quarter of First we you have of fourth the all, did excellent an in

However, you look we production into of had our as XX-day in first had in start, And box about we to the shown here, January. very second quarter got We shut X,XXX cold quarter if whole mostly, for slow the fracs did get period. lost the across out BOE that from a per day course, at this a quarter and delayed that's temperatures first due quarter in quarter. the because, to

XX% the oil our to in remaining we're robust well growth further of you for the towards That's this side look by to you temperature range situation. rate you and BOE XX%-plus as the as XXX,XXX growth XXXX, our can we the exhibiting if So avoid then is range oil But X,XXX able been per growth the growth rates growth, to freezing day each X numbers growth as and see XX-year doubt. plan, on overall of the look years XX% forward higher look particular would been on the rates. we But had year. BOE even you of those a no XXX,XXX BOE of see have in importantly, as for at rates

oil a a so exceeding XXXX same million BOE very of And X XXX,XXX that still in day have visibility in on day timeframe. per we over barrels target good

important up, to So taken strides entered as very are it Returns we XXXX. sum very robust. some we've

evidenced taken be our of as to positive think strong. very returning the that the sheet increase goal step And The to share pristine. shareholders, cash by is repurchases. I very company. production some divestitures a growth towards are things expected and the balance We've will for dividend announced hopefully, do

more pass update. on can to So Joey. it I'm with He details operational the and you Permian some going a that, give

nine earlier, half stress new mentioned Tim But comes important Tim delivering and on continue similar Pembrook start additional three plan we that strong XX% zero in number test design. evaluate But POP'd possible some do lowest did these the of as shown with of I'm months and in we X.X+ we our X.X+ the remains than And give in definitely POP completions. new we to have Version morning rest wells And completions Tim, mentioned, early-day X.X on in does as X.X+ The technologies. strong, good XX% all for in areas. XX of Thanks, to as ever to production do and performance going QX area first the because as it's not focused and to wells these update year. We recipes Well the to it large of history. in cost size continues wells an of now to Version X.X fit completion and remain everyone. six showing off stimulations slide QX. when progress, of this to results, were to one recipes, the XX the an uplifts also grow. completion to to compared on on wells more our the

at also at a continuing continue we progressing the that we're looking allows reduce also to and been fluid some but evolve plan XXXX, recently methods the doing systems on do safely sleeve Some wireline safe clusters increase diversion our effectively more lower-cost stimulating out potentially while to The be to here of all stage and southern months rapidly, required market new spacing second These X in X,XXX technology QX wells that about The lengths testing keeping now at did and are spaced while the continues again, things the and sand and wells to on look approaching two on of pumping of pounds that XX. operations to slide zone performed wells sliding work. we've working people pilot X-well X,XXX and were QX Martin horsepower. about in now additional represent per pounds County. pumping They're wells QX POP be our and moving We I'll did just on with Mill. were pads in foot. QX the stimulated X in at additional The Jo production. Jo feet. have both foot, to X,XXX wells QX Mill per

So the we'll what to larger be able see in does stimulations the Jo Mill. on difference

meaningful further is results of can us that D, you Wolfcamp just It's POP'd a obviously County. outperforming for encouraged I'm And are two period. our are early-time critical a discuss forward quite have conduct well You going couple here online evolved years in in by and the it's is We're since for couple as been these Mill. that D still Midland XX. we to But with typical to result to the challenges in in step Jo very always slides. we I'll Mill, pads phases volatility slide notice Wolfcamp Wolfcamp some this now results to a to a is the in considering tests artificial we POP'd recently lift XXXX looking significantly wells. there. This cleanup. over so move This for of as D It's previous face other only the the Jo a completions the well we're XX% going in months. time early that of well, XX of the prospective we our eastern typically two been see, acreage so will

long-term progress development to our as strategy, it's to time same to in as come Spraberry for the have on level we XX, now slide we Wolfcamp. understanding of intervals on developing the us the Moving

B here Lower County, to Wolfcamp we we're testing Spraberry to first of POP-ing will recently drilling our where we're completion going And XX Shale. well three be X-well pad and going Clearfork completed stacking, our going and Shale, in wells which between sequencing, As and spacing, the very Reagan Spraberry on POP shortly. to Mill, we're variables the be We're program, XXXX Middle hopefully a in pads part execute QX. also various Jo excited another

going I'm moving Now slide be XX. to to

We rigs are going staying be XX our XXXX. to at throughout

included our we've well there, see cost can estimated and EURs. You budgeted

mentioned, X.X As low very wells. our and our costs are remain returns especially Tim's already on operating strong,

can Spraberry mix Spraberry slight to see B Shale, previously. dissimilar not Lower our activity some incorporating as some shifts I You in Mill and Wolfcamp with in bottom Wolfcamp It's Jo mentioned conjunction XXXX, right. in too with Middle and A there and really the the

going and final to to slide. on I'm move slide Now XX my

our and discuss spending. infrastructure we integration Here vertical

We over are pad an highlighting reduces of be additional area of cellars. cost and and shutting simultaneous of QX in begin did for for first on spend develop and the acreage wells. below-grade XXXX. QX production the It completion, length Gas it during and XXXX. more two that XXXX plants XX-well reduces point lines. QX facilities further time startup in to the in without to needed for essence, our up in and reducing QX by will concept number surface We this XX% and In allows well operations flow starting and drilling, centralizing by processing includes capital slated two plants new the

on constructing produced plan water water to commence or reuse with do a to continue in on use subsystems freshwater XXXX. early Midland expanding construction by treatment we And facilities. startup the upgrade, plant minimizing focus late and XXXX We our wastewater

XXXX. execution Lastly, going I'm to our as looking and it Permian to to quarter we're the turn financial that, Rich successful really a and we're possible. to good as to in over we the year, executing highlights. going be are a great to sand Overall, sand for team discuss contracts cost of forward And now for sand marketing and get our result as of a Texas expansion Brady And mine. West low delaying

to we to or move either going start good our refineries. Basin down the and to to I'm export the Gulf Joey, morning. highlight Thanks, our arrangements slide where Coast for transportation Permian oil on sales XX,

about for the Coast. transporting currently fourth Basin oil growth or the XX% to of we're our Permian Our aim – quarter Gulf

Corpus Gulf If Coast, hubs and you export major Nederland, being out we're the are of summer XX, Houston really see Corpus look the of and this we're complete. places you'll in it, late the construction upper to Houston. the equally that moving add that when export Texas the along left that Today and Nederland exporting corner Christi, there three of plan Christi and the refinery slide facilities

that As add Tim sales, when Coast that million $XX we the a about are And about sales the fourth to mentioned, complete had, we March exports Currently, to and Gulf we we Gulf couple added in I that'll midyear to weeks. delivering barrels that increase barrels done day the quarter. you XX,XXX exported exported. exporting to incremental flow done can are similar looking And exports done About have a day during that about the we We can facilities one the of mentioned XXX,XXX related over earlier, first XXX,XXX and of cash a completed next to We've of to be March quarter February amount be do and January the in total expect quarter. the so, barrels in today. about sale Coast. sales. once XXX,XXX as are or be those

export to see refineries can markets, about oil So whichever it continue long Gulf term, it either Gulf so we to or or and the Coast, and the ourselves getting then sell exporting the the XX% highest of value. Coast our we to offers really to

to million $X.XX the $XXX That mentioned, to mark-to-market higher of the focusing end year and Tim primarily million we net XX compared derivative share. $X.XX due of prices per include end as $XXX slide to have share. earnings, attributable of more diluted oil or the of September. losses per non-cash stockholders income to Turning common did at That's or diluted on did

our – enacted down Jobs quarter the to our from or did is a hitting were records December. what also reduction liability was Act they today effectively, in deferred tax reduced what it big We in quarter. during benefited the obligations XX%, XX%, the And Cuts related in our booked tax future Tax and so a to our from that at benefit

So adjusting we're earnings share. of adjusted $X.XX $XXX for those per items, million at or

the our results side the of bottom of Then goals. we relative they can Looking you at the look Tim table at see, positive production as to within mentioned, were show at the you exceeded guidance, of items, rest guidance or the guidance. our when operations where on we

but also quarter, operational the financial excellent an Joey, and Tim quarter excellent from heard for you as company. overall, So

can quarterly Turning prices quarter about part as up the we prices And realizations, $XX.XX. similarly, looking oil Virtually saw down our break quarter our you see this NGL was XX% to at big to XX% we all slide a when up to of imagine, where you products $XX.XX. XX, were over results, increased NGL sales. strong price

Looking that was was product slightly gas at was at only it gas, the X%, lower down slightly quarter. for the so

see hedging slide, We from benefit, the can of the continue our that to bottom portfolio. at you

flow there, at hedging see from that So the of portfolio. our extra did we bringing can our each cash bottom you products

slide in another to to reduction which our was Turning is contributor quarter, the production significant XX, a costs.

So production were quarter on quarter, our costs X%. down

primarily If versus the is costs increasing you actually decline mentioned, prices, horizontal taxes, that related because our were commodity on. Tim were production we're the And which of XX% wells down exclude higher up from putting the low-cost QX. to as Permian production Basin

horizontal – wells. quarter, at the you look this related taxes to was to those related cost $X.XX If production quarter, the excluding

years, If you $X.XX. it's it look past over two at been under the

as add wells, more low-cost continue operating down to of those costs. drive those, our will So we

at position, $X.X and pristine I've excellent We quarters ended XX, prior on at hand. we've cash in as balance a year our Turning liquidity mentioned got to the liquidity. Tim billion noted It's of sheet. slide looking it,

about net Our was $XXX million. debt

facility. our due a plan, on have pay that completely May We balance we maturity come bonds to our off with unsecured credit given hand. cash And sheet,

guidance to make to Turning for couple is XX, slide quarter. a here, first the points this our

and our understands, include Just assets divestitures this until to includes continue guidance of will completed. the our assets, all guidance so everybody are our of all

forecasting we a to about to the weather for X,XXX a company tune BOEs the Tim the for quarter. January by XXX,XXX impacted of BOEs production. the As production day That of XXX,XXX day of are early was mentioned, total

in reflected to XXX,XXX put So that range. that's information. the guidance in BOEs first that day a We do time for XXX,XXX at Permian alone for here

going similar other did forward. low our to cost. here adds our two we DD&A the reflects they've during lower are in past. them. F&D the items The reserve a at range been of that XXXX where That note added I'll pretty for One, much we

XX%, our drilling that January XXXX. lastly, to on X, the here XX% And new that to change rate. So U.S. you But tax, drive became tax will to can big continue depletion that And effective only economy. Pioneer, it's and corporate rate, the tax really our down see not reflecting then effective America of a given well. NAV was specifically uplift it great while locations, the really for portfolio extensive as for our

stop why that, there I for call questions? don't the with So and open we'll up

We'll take your Piper first question from Dave Jaffray. Kistler from Simmons

results, on impressive XX-year the the for guys, added morning, Good color and plan. thanks

cash and flow and strip, which oil flow, pretty cost at to X, production your even forward outlined, is total the climbing specifically Looking the structure, growth expand looks with prices, breakeven free cash slides backwardated. trajectory substantially X at

Given that incremental flow to expect cash is as to returned generated, is it terms of basically initiated you cash And today, to flow we that cash expand? have or in that free how actions be us line shareholder-friendly the guys will flow of free shareholders? trying to should sight provide

Thanks, Dave.

$XX with free the increasing the we've that's face billions over situation as all, cash taken you share first on the over compensation. are returning commented this step that you virtue very to flow, to at look do time. we'll announcing for period, and in generating evaluate should that in modeling this the if by regarding case. back on What very repurchase mentioned of the First $X of be of buying that clear cash is seriously based basically substantial shareholders and towards what shares associated dollars we granted It's call, I from of a plan here creep plan in program employees long-term a dividend incentive and

in a next the we generation year. a decisions taking volatility forward. prices. time course, for and So we'll be may go of this set board level. model, We'll free be It we it's evaluating very make good the flow we cash be believe time. as with we're evaluating at of head But well as we'll next through that commodity the being, year, the first hopefully then And towards that step,

the infrastructure investments, about cost it's And way? way. on I factored a at you as positioned $XX cetera, to suspect stands the appreciate that operating can lower et as part or the drive details yet, structure the that additional obviously XX-year your then attractive about right levers now. But initiatives color. about looking the it at that barrel Permian, talk in the but like that go with to look it should plan? I thinking doesn't be Am lower in right I It of

think right. that's I

we'll I couple XXXX. there. build-out mentioned, think by there angles of XX% as the of One of a have our infrastructure about is, completed end are was

us a to reduce much then you to the years, more few begin spend we from over XX% ought With standpoint. how see infrastructure remaining an

high, to We that infrastructure $XXX XX-year in have baked into very in build-outs conservative too well may million our prove about that but to of way. planning a we want be be year model. That

sort in innovation from to Secondly, Those field we and what line all the all per productivity line serve standpoint we at levels. G&A importantly that, all and of completion is new production the improving utilization towards and costs also innovation. at reduce technology that well, productivity with then words, is we haven't you you're in these unlock to as think operations, in more technology secrets improving head the from baked probably fact optimize see continue should increase the of gains item, any When the improvement the on item. to other we technology, improvement BOE you're potentially cost the D&C done improvement. of I more even as But the to benefits, as should and

but is we're goals not so confidence achieving us gives that that baking doable. our in, it And more

Great, guys. much. Thanks the color, I appreciate so added

bet. You

next hear from Jayaram from Arun JPMorgan. We'll

on-the-ground morning. the really including targets growth your profile, will in get you Permian, I some sales. – asset Exxon, just as that Texas. outlines picture wanted it Good of the which I long-term PXD did macro from Tim, your was just Big the wondering industry to or face picture given raise just think West if despite micro growth you oil, on challenges the and thoughts some you the ambitious could discuss

Arun. Thanks,

I Chevron that. ours perspective growth think doability like to their about not they see of first the data, companies grow talk of rates. all, at Exxon their the as dissimilar want their ambitions And if are and the you to long-term to look and from we're encouraged of amounts

be able start mode significant. look standpoint you if That's why this are of that all make can some in man going growth, rigs, this we to from can to looking Permian current of infrastructure one it critical to to is sure to campaign going support forward. together frac to so I the going man think fleets, issues we're the drilling be coming sure at make process at the the of needs Basin personnel be of we companies are the needs a

for group people new to look just to And so a going effort what's support the drilling. development working to at get of need, and provide Strategic the do called to we Permian in CEOs be of build-out, the decades that, opportunities to infrastructure we're to among basin the Partnership over

Got the fleets integration, plan fleets between go-forward you, you basis? in got point, future and to build-out terms you. And invest a how of vertical that do of on just to company-owned the third-party

question. a That's great

we've through times were is, as of quickly fleets. paid beneficiary for reason say pumping XXXX When downturn, were lousy time when of to it reasons when in our the maintain the margins been XXX%-plus. And is RPMs investment owning really the we've in think make they that to equipment organization, keep we keep employees. are I the through our able really one the in active, doing we sure of when vertical strong, which of been to but comes our own integration margins I so all our have been we XXXX,

are to get ready coming the fleets seven And roll our of out so six where others given downturn, time scrambling with we're any people. to or in

pumping in fleet. So own there's tremendous value owning our

us fleet going can own control we can we do basic use We there buy-versus-lease today, if the Now them our outside that need sure own great fleets, decisions and know destiny, are that there lot as forward job a we there. done one a control said, third-party costs, we provider. we can are well. they're But just companies surrounding fantastic of when the we that as make the a wells these decisions. has ProPetro pumping and for are

two third-party more in someone as example fullness would that year next fleets. make. nine for two. we've decisions care is might up something our the fleets we're And point have us of would or of want to we'll some would in put certainly case, that to take we This renovating we to That considering At time, so and that bring the revamping that In time evaluate. to of us the fleets. have be model got in

of my investments Can question, peers? what the driving that? driving Tim, you horizontals is And Is differential LOE infrastructure the your you've it that talk the the on some side below pretty final LOE? versus about this $X on is made

LOE be this are to in The the not it personnel. be and to going going is. thing. costs chemicals They're going related to be kind electricity, as generally infrastructure LOE to is total they're much generally as and of

costs So remain have has chemical state that way. based we've down. tightness costs been relatively certainly in probably on Electricity an I component will Personnel are discussed something to drive increasing and labor think the earlier. the just of trying we're probably cheap Texas

of of around to move is of And that LOE forward. the them remotely remote basis an them then certain One telemetry completing and them, extent then operations and field. a total drilling don't have an running every we to on prolific involves count labor have side be So and would have surveillance I the productivity more as of single the BOE our think that's potentially and the is such wells, on this cost fixed the it would and we at, number need example, And reduce comes real producing course, there's more gains BOE the we that. looking we we opportunity people well make thing a to equation. every per day. component when to the going And reduce remote to in doing people we're lot single body

windshield outstanding So time. can really our work actually field versus with operations that just improving are employees field driving people on

a I it. on push it's focus can are ways of we there internally. assure you lot a big can So

Tim. Thanks lot, a

bet. You

hear We'll from Freeman John next James. from Raymond

to to to Is midyear really Good well much X.X+. assume and, of event? get a more goes morning, planning I just do plan said XXXX sense continue it's how I to a to to that's a flexibility into you're look of at lot X.X you completions, from there the that going is basically determine it trying perform I'm what evaluate budget. that forward, XXXX quite adjust When a like something which Tim, the and guys. in then something the point

results to the So not different the the design the even you continue push it of of in up to might if half a much year on back they year, as changing completion able the fly be look to the middle too as have. in strong

great a That's question.

prosecuting it, look John, think, at you this plan if we're now. already I

So we the second should quarter. be seeing results beginning probably in

pull it's decide really wells, you're in and right we add the right. in horsepower trigger, more making to to X.X+ and have we let's on say we lot the place. more style place in Once water, cases, of time acquisition involves exactly So sand, were if more a sure of that

just X.X+? So when that up effect we it could when to that would we would a of sure second exactly you're decision. be set It data what you ramped half It's be main have the But seriously to have make focus results. make I XXXX. on want think we full say the some right clearly

outlook Great. further for my and here. on you that, the designs were just could, the follow-up elaborate reduce of just you allows casing from of And reducing if do question, to And four-string the you then able the designs. percentage what four-string to the casing percentage then all potentially

actually lot done that. are we reasons of that a have There

First which there But there thing year, to that just is to and produced the one three-string those improve about casings. more that of was this use we We've think be can three-string three-string taking to is half we've some expect means and a that's we're understand up we to learning And too. so water do, XX% to away design. needs is, that basis months gone to the away the extent I done take areas on or XX% of other year battle. reevaluated otherwise needs One we our and of last water cheaper. which areas of are which can more where back get use modified to us we're about total or you the with reuse, it six from regarding all, lot going it water factors that that water from of our X% re-injected, is the last

in direction. looking we're So that

we're to, that active of from finally, other water are the in wells five in drilling so wells. areas, first the is areas caused formations which be we're certain active away The thing Ellenberger year issues have shallow impact deep doing to And more effect. we're us injecting disposal of some These the has the drilling reduce moving into going as our same water place. again, this

so the XX% is go do that. it's steps economic so to initiatives we do can taking simply in And to just interest reason because to our various we're and

Thanks, Tim, great quarter.

you, Thank sir.

Your Goldman next Sachs. caller, Singer from Brian

morning. good you, Thank

Hi, Brian.

you more what third-party on from you sand that? risks add Can the seeing your from around and sourcing advantage specifics mines do the local that mine, you're also see as versus then expanding Brady

Sure, Brian.

little it's I early us. bit all, think days for of first a

the it, its proximity our April. associated to Permian We to dune call sand, have basically it's because signed less area, contract. we there and said, you ground want the where the whatever first on taking first substantially have advantages the of crush of in with field, sand We'll are or probably is blast sand than in Simply the that our that Western in and deliveries be particular got mining simply cost that Brady the relative fact the mining sand it. to sitting of

of the just on it's simply a hand. So one matter cost

mostly is grain other principle to other small in words, relatively XX-XX-mesh or sand. thing is The XXX-mesh in this note sizes,

pilot are we So well testing we mesh sure finer to sands The various make in now the current that right results. feeling in any have of process degradation of the wouldn't projects and not protective just will But some be this as be coarser as to case. work XX-XX we've the grades. got the about. is XXX-mesh that something is well internally The would of

we rather there's it and going be have about might various on going like, it capital thing seems was that be lot production earlier, stated to to allow Brady is that's the a course, Of of wells. amount the of with put mines, the expansion are proceed different to substantial us put a we'd would then, as such to not suppliers that of extent that into

in our objective to think a cost point. by can We I this, lock fact for there's go And may work, reduce there the so this prosecute carrot that in make to so we low-cost us technical doing by sand. on is main our to be substantial able sure sand the through XX%

and little then Great, you issues And thank inflationary a bit the year the you talked earlier it's you as maybe profile just you. as this XXXX-XXXX plan issue, years? some broader see or no was over just of pressures? area. major and surrounding already on talk about Can labor risks about And the a in issue think your do you if XX issue, growth but place, minor that not the Permian

with years. sense They're as need compared well as are we're neighborhood sent that the in build the two nine and to needs issue. Midland-Odessa the for that area United And home issue have more as and think hopefully the area. a mean to this that they're to which costs will a are to today the groups new I the of people is style a we've workforce new to of in nine the repairs the in we in downturns a of Houston so who model. the since Florida as in Southwest, workforce in of And the going up ready think They're had certainly and particularly that's training. XX% by the need work. was And ready is, of unemployment last need The probably years, associated work style a labor case inflationary effects we're estimating to in the be basically fact out last bringing eight, got employees essentially this example. labor for going Accordingly, I I is in operational going bring new in near-term by to two what both the of of and to last year States to one gone advanced issues that longer-term rate first all, employee, short-term in safety the low year, relatively training. we've hurricanes in technologically new training, in going exacerbated of well fact through we've what's the

we in. of a have So coming employee new style

provide notwithstanding So Pioneer, it's to to make companies, and work. sure the Midland with and being to opportunities associated live going places behoove Odessa the we infrastructure and outstanding

very Great, thank much. you

from Hall Heikkinen We'll hear next from Energy Michael Advisors.

Thanks.

program, Just outlook, you've I current around of if you'll about I'm following guess on the some XXXX strip. some cash the long-term questions that free provide flow at thinking said the the

So if a about talking and around XXs flow to think given I run hundred year and way imply million from progression XXXX fair think billion potentially a of to type XXXX free guess, sensitivities to it? off upwards I $X linear, of look the that cash couple breakeven cash free prior rigs, you're XXXX, at is cash Is XXXX. rig flow, at about XXXX in free $XX in we a And about as count flow? given it that seems some by couple but dollars of dollars comments a a low

looks summarize answer your to I similar modeling our would just question being the yours. to

good that's to hear. Okay,

guess. I Congratulations

that I That's Wolfcamp slides. saw I I thinking easier didn't D, anticipated. missed I we the than thinking in cost Sorry the there? if about then it, but are how differences well about And think

well. are that And are. Yeah, wells at But we thing obviously so so regards and Michael, be to costs had haven't run, you to good have drilling slightly is B it'll much course, difficult, Wolfcamp we I the just the We've this cost the expensive drilling. more But them. one, only like. in than because still of because drilling see completions. would those. is non-issue drilling drilling, because really We're what with we expensive have what drilled progressing that the successfully our is a a got D more tell success been what But only you last looks more the Wolfcamp that Wolfcamp the established able been that the of benchmark looking as we've can recently just wells execute in in D

think to just way it's about Michael, the it, Yeah, deeper. is

yeah, be definition going by to more slightly expensive. So it's

pressure? okay. that depth that Right, with challenges assume Any I come higher completion and

one bit the second successfully the deployed is you I three our few on And more that on does deeper with We those first it we'll completion month in long-term a the foresee tell wells. or is well, require the things we what learned the here that wells next be with any Certainly can and outlook that, and a associated that we'll next but more we one, don't with pressure deploying so. little doing horsepower. on is be first challenges

have hit a D work your just and through You And way part program our we'll forward. see being of we big Wolfcamp our else. it shortly, stride we everything it on like going

guess from as the for perspective? all's fairway. defining think D you I Wolfcamp in acreage Wolfcamp the I of Okay. fairway on what's the said the And then of you D, XX% the key was What are attributes

Wolfcamp substantial like prosecute data every perspective. Well, course, just on D we the a we geologic single zone, of have, from

assess B, it's are And the of Wolfcamp that used prospectivity the to exactly with for so same we example. Wolfcamp the parameters evaluated D the as

So it's so and to place. hydrocarbons It the do like It do with to to It the things of content. on. porosity. in with has has has with lack clay pressure do

do where most wells. prospectivity, we where you moving have And actually is XX all example prospectivity advantage gives diagram drill going forward data eight be we that to is So because would leads even you therefore, of such we for different of prolific another a before those that. actually what the parameters use. we about There's have thermal is it we and be huge so can Venn and maturity to a us different parameters, and to basin, pinpoint geologic in optimization. that this the to And assess

All right, time. the great. Appreciate

bet. You

next Scott RBC Markets. Hanold come from Your question will from

a proceeds obviously you taking incremental my other drilling And allocating give and everything just you call for shareholder come you could do sense, those through, when about when how about look You I and Thanks those ask? type monetizations asset the at in initiatives? question. talked effectively Permian. but think Can do

by Well model. been a term substantial in certainly, mentioned divestitures Michael, for associated this just long because, with is us flow as opposed asset we a earlier free have bigger question as has longer-term to the amount cash generated the of

levers. have think all And evaluate I to so those we

market the Last the do at hand, If mean the past thing reduced one regarding situation efficiently in you making look by at but of we've want sense. do XX-year up are I want and we be in intact. inflationary accelerate having can the the what face said sense, that make diminishing and that we organization returns. faster the or to an the which model to to secondly, vision, on sure makes than the revving last thing operate margins is returns And is

we first so And to will alternative our as already we've always And with something up is notion as moved tweak returns. negatively bit be possibility that on shareholders. to But impact temper RPMs a want regarding ahead returning to don't to mentioned, one the that's little to faster the I the of step already the that a drilling. engine have cash we'll

get particularly and has stated many we generation been flow to As do something free model. that be we'll cash a when evaluating is times,

is sense So of when can and not this have this testing full with how of look could right. to going part by? effectively of all process? you're part you and that think question, goal to C a give figure to achieve is testing how come for can do when what targeting, doing, you the you the lot just is that. And And it in out the regards example, do that for Okay, of what that's and a you development Thanks last is the one in? delineation you Wolfcamp and you're think long

knowledge know, that Wolfcamp developing It our in the but done terms of how of First work, time, is B, lot zone. the short A campaign in of be and a of really we've all, through you Spraberry a seems the less it's as the laid Wolfcamp years of now. out, to years drilling

Jo the referred in few But think reason wouldn't our growth. in this. development we're Spraberry do Spraberry stacking, those. we us to contributor combination, But significant as make there's and terms that to Lower about spacing, the proper be allows want and talked next to and Joey no zones, that over Mill sure the the a that have on Middle So confidence the sequencing the optimizing years, we work of to and of so to

of now. doing look So important series that's XXXX what as exact at evaluate a year we exactly pads questions. fact is those in we're those right very to

are we one on as the of doing. Joey's of appraisals slides those So sets what we're referred to

in we off into understand a of done, optimal are development So appraisals scenario. once certain areas, more the then we head what's

slides, So And of then areas where in our particular, they three this actually really you'll those Clearfork are notice his the but he has This is Wolfcamp utilizing but D, three year. more zones, an development from it on mentioned so the far well, we in have the several we're higher-intensity outstanding first we appraisal. zone. Clearfork. we're also And well, completions

may Wolfcamp B, is the we're not to although campaign. of really that development a of product something drilling So ready to head that off be

Finally, on Wolfcamp C, for it's I think us. very prospective

and think to of look Upton the other down line, seriatim Pioneer in XXX It's wells, the once. basically you are out prove if the set essentially Wolfcamp of the we just has excellent some that Reagan they a locations there, things up got and they're bunch those down Parsley achieve C. I at work well, done at

get C So can some wells is Wolfcamp development we to happy we eventually very there We're learn will drilling. Parsley from in them. drilling so

way it's it at the I up set how look as the that's So future. for

All that, thanks. right. I appreciate

Bernstein. We'll move Brackett Bob next from to

year? to regions? follow coming testing on the Are or you appraisals are topic, this they D three Wolfcamp are counties this offsets popular appraisal other up Shackleford, To those or

so they're south. further Reagan County, down they're in No,

are them of three All in Reagan?

Yes, that's a three-well pad.

you. thank Great,

We'll from hear TPH. next from Matt Portillo

guys. morning, Good

net balance free about you appropriate moving think cash with model your business you you of model question to capital but position lot free hear your long generation? conversation think generation, forward thoughts cash your about sheet, term, this move around of and obviously given on follow-up allocation leverage the morning cash the around how and the a that business to the metrics and a a Just use balance sheet the into as start curious

main the is we've pristine balance through to think a had sheet. have time objective I

that clear that we today. I think it's have

I be the the of achieving preclude forecasters of been lower you connection us, for to not look today. than than future We this possibility proven good with it's at we're think prices. case hard in very can't the have prices fact oil it's and we've to oil rigs maybe

want flow model make are $XX, from And prepared below are free we shareholder-friendly that pretty make eventuality. so that sure To times generate has that if standpoint positioning us can to The our balance the good sheet we sheet because drill then prices utilize extent the balance hoard that cash excess for can we long-term can downturn. the is always in sure to of do cash we in and/or things. through we because prices at can $XX,

we I where the proved this thing at what will because don't the last someday then drill sure we in again want and achieve, have which opportunity we one then ever have last downturn, I'm you'll there be wells is we downturn. a think to that do where missing situation essence you're the is cheapest to costs in drill a to

the balance the so stead and make ups downs. good sheet And is all want for to sure we in

always balance will And an from keep main think sheet. that so I be to our objective strong standpoint, exceptionally

question Great, your infrastructure. around just and follow-up thank you much, very a midstream

an here beyond? You've business extremely particularly progress around processing, midstream integration you over and to do last assets forward. valuable the assets, How XXXX within of into invest you some gas of and that ownership of the going few asset vertical continue about the your model and base think as in built business years the

is created fact to just and question we the That's have want they those ability processing business, to we water wealth our But the allow because plan. is of our a services of achieve. execute great a because business, value reason gas business, ourselves because our our do have we pumping our business, us sure sand we what the to on make by

in are example, new that what partner, to on so make means, the ready to take in if considerable as Permian you supply, are sure to and the plants for want we considering and with our use time the invest volumes time Basin new growing. plants And an gas being, gas there processing Target, gas

can feel get that there And partner make owner equity with we're we so like, system, that to influence, the our have to an in these in extent sure we positive plants dealing in our we once have will in us production. be our sourcing time Midland fully business saving we for fullness of the our Similarly, water, in per well. it $XXX,XXX time, water all water some business, constructed and a

at some some time, might change point in So ownership. of consider we

we out and But being, example. already time we're is we've time, we point We're evaluate execute. into may we to have the we system. water as an that as making system. even we considering water be For our want can sales, this sure the further sure out alternatives the value the build building prosecute in make we'll other fact At that added. Eventually,

you. Thank

next We'll move from Tuohy Jeffrey Brothers. to Campbell

XXXX? any will and morning assets volume quarter. export is reduction Eagle congratulations Pioneer's Ford of My your the on potential selling question in first Good create

ones, No, and that Permian don't see condensate not so anticipate all The Basin I exporting don't we're we change. really changing. see that it slide you on volumes today I our any presented are because so

do heterogeneous be for in successful, Clearfork historical a had the Okay, it I Clearfork repeatable having geology. great. proves Thanks. reputation proves northern The acreage? early. imagine how you it's might if If it know But successful, your has

connection view it fortunately simply a answer would I'm be then I'm to a data, not with to a the just geologist, get able you get come geo well it, our We'll I can of But in from so us that team. I not answer and that an at when at say we'll going with drilled. geologic on look evaluate we let point. rest you question. our think

going Mill And look does more a point of Okay, co-producing you're be of this last like it's the very in on that's fair that testing. available to the you that with like area aerial this this does spot Spraberry that – my then this sweet question was look entire cover large a that and something Is can or tests to enough. Jo Mill show? to you have At deal, show it the XX. that Jo you extent of potentially could be time, regard slide

are Mill you at the the find entire the the you Spraberry position. in if basin, the across Middle and zones geologic look Lower across acreage, Jo the northern what ubiquitous will data and is, So especially acreage

Now of that certain others. there areas slightly better else, everything course, are are just like than

wide Wolfcamp entire And in out of completed that campaign ubiquitous area. to to touching fact, the So all because just south every and drilled case years where you start can a going essentially the to swath that tell around the that it's the But in in these northern acreage we place pads that the Spraberry zones fact be to prior in is reaching tell Wolfcamp, each probably Mill. XX acreage, X is those zones. the Jo to the single three objective vertical the is, our southern were it's the optimizing and reason can you of last are less in zones I because horizontal across were opportunity the well to

data question. answer that to be set So we have virtual to able a complete

I it. Okay, thank That's appreciate you. color, great

the Mr. or over remarks. our would back for session. like conclude to additional question-and-answer Tim conference Dove that any And to does I turn concluding

everybody, you, your for questions. and Thank your participation

Pioneer. it a for great was think quarter I

You will see us on the road.

the up seeing to opportunities looking months. at coming and here topics even couple forward will next various We further. discuss at be look energy conferences for these We to everybody

call. thanks So participating the for on

for you thank participation. We today's all your That does teleconference. conclude