Pioneer Natural Resources (PXD) 7 May 192019 Q1 Earnings call transcript

Welcome to Pioneer Natural Resources, First Quarter Conference Call.

Joining us today will be Scott Sheffield, President and Chief Executive Officer; Rich Dealy, Executive Vice President and Chief Financial Officer; Joey Hall, Executive Vice President at Permian Operations; and Neal Shah, 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 June 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 public Pioneer's news X risks slide Page These and filings in of made Exchange Pioneer's in with Securities Commission. time, Pioneer's would like Vice this to to Relations, opening Investor over Shah. Neal call At remarks, President, for turn I the ahead, sir. go Please

Thank thank Anna. you, morning us. everyone Good and joining you for

today's After and for the to Scott you. update in call. quarter will his Permian outlook return a commitments for your basin, transportation year. After will Coast. on we Permian review agenda the will then basis benefits Thank Scott our Gulf low-cost open Scott, that, will commentary. review horizontal strong begin for the questions. on will discussing Rich brief Joey then including review well with of our our strong and initiatives will value. oil our specifically briefly and firm the the me acreage. performance you performance up recap remarks, the results best-in-class then progress the concludes our by Further, benefits of the to call and in first the Scott our strong Scott enhance comment solid shareholder production our our execution, positive of will remainder Let many

turn to Scott. that, it I will So with over

this going Chairman Neal. Non-Executive like to and what Thompson, of it's take investors. spend get are when interviewing the Ken But this to I and since it. couple to since directors but thinking Non-Executive people listening I the our outside came saying. It definitely have updated slide great listen days and already. that you, changed impressed annual quarters with allow and I quarter, the years out it's are over meetings. gone, directors not great continue but the and did the practice, what me investor you been Thank we're and the our have invite is have has XXX share tour, to a among I the an company can spent XXX have to holder assets. they practice I some several probably something presentation think I that do and did Chairman And morning. Ken first Good I investors back Neal in importance entire of will at really been it outside where employees last The a of to on and slide, There has with X.X first meeting that

prices. strip that $XXX the now I of achieving for here speak think over points flow is the cash free estimated based 'XX is the as million several company key we on

the move already several to so In company be over will improved Also, XXX% that dividend, the and approved the capital key has midpoint about that is has Long-term addition the regard to we over But company move has of the our intent to yield, drivers August, toward officially efficiency, million from company achieved peers primary the and to $XXX increase. the goal 'XX dividend. a in toward Board our late it improving we've in 'XX. to X% next years. -- record is increased -- semiannually. of are September, date focus moved Also, be

A that’s full up of XXXX savings the to $XX savings. are including capital million sand G&A, but remember $XXX midstream break-down G&A sand in which gel all if of $XXX reductions, to million of $XXX million for year about up facilities. -- and another focused achieving on targeting now And We we're million. we're $XXX achieving you another not million then

the So $XXX we to that's million. other get how

you focus of forward, main the put per it about $X.X over you $X.X wells company and look we $XXX that the total at here million about going company a when team be forward. this a it's million, So company about will year key In regard ROCE, regard about focuses less it's per year. pop for at in little to forward, million it's well look to when so of But it's XXX management year, per XXX assuming of well the savings. and going the a ago the going bit it one

are results years on next $XX XXXX. XX% the targeting to the leading based We within at in We're hit flat. pure Brent five

share. already at we're next the If I buying then an started back shares, Eagle of the reasons; I steam the for practice over Ford negotiations; In in of G&A per restructuring, quickly. five to you $XXX getting XX% average the I which have wish look has bought after one, back shares, it the were strip restricted negotiations pricing, a was some price targeting company two and regard buying company years. by started could full fairly returned, in

to buy able So high shares not after return. we were

those shares. to at future continue back get we it, in when to prices buying look seriously type We especially will

Going next on the to execution. solid page

will to three seven the we both which I with the fourth ago, X% in is balance horizontal the Permian about the from think a all lowest the in Coast. we're six, independents is probably the great one crude still below left able sheet still best Permian. of and and public years from the The that talk We LOE export among fact had industry and increase the to project BOEs be the the at about on have the more started main U.S. we end quarter, point probably are Gulf from we've did top oil uplift, on fact slide Rich on a dollars,

'XX slide, to Going next the outlook.

period. thing capital quarter first track. that is over on for is the most in the capital the first think is the important here I in first for time the This company time two years the under-spent over billion, a capital before rest budget the $X.X will year go and $X.X XXXX. We're down two-year the of between obviously the within into committed XXX% we the spend to trend billion time and

Three-Way On the did XX the returned bit it. more will XX $X.XX hedges by we we little billion on cash since $XX call flow, talk Brent. Rich But some by a estimated more I about them Collars, Three-Way, put

-- So we're XX% I mean up hedged to for XXXX. XX%

achieving million but the from million efficiency, savings sand 'XX, in more $XXX $XXX XXXX. over Next We're the already one the slide savings $XXX probably again up up summarized first again, it a slides, another million to little we've I've in midstream and going summarized achieved primarily between on from million of slide year important looking 'XX year going 'XX and million in improving in full-year And savings of I've made G&A facilities, savings. gel $XXX capital side. already a it on to but a to it's on completion $XXX at the a up facilities to in

structure, the which the employees first to talent and the retire. Going We've we XX% that the U.S. reorganization over and was younger the had the And all we've We an all after going over were something that committee, team assets organization the with years. the allow over six committee. that to Simply, managed management into was now world, The dealing female the officers of the reports more getting back into had production. XX% a to so company we over with we're simply listening promoted the to management asked persons had is several our weekly thing in I'm structure last X, the the functional, on we committee did, up simple very management functional less proud capital. organization, their And on basically flatten XXs, managers, organization. to is bringing early adding focus main the of. going a Slide

of out business. of the over found on last capital years focused One were things the not two but the side they the I

job, already doing that shown quarter, a great to and the And in so focusing, have started we in something now capital. on the it's we're as focusing company's regard first

the as delivery business. that on So on the of capital, side is focusing just production important as

direction things, it's to four about add strategic that. critical these execution. we essentially have capital the to through Execution, Going are slide,

buy shares able opportunity. forward cash with flow several as be going then the that And as both cash on competitive best during as and up time just years, to those to 'XX, free over balance These the see and deliver to we've we 'XX, continue to drill have on execute the build like and last You production that share flow use build free on repurchases. balance capital. business, an to or had we sheet opportunistic cycle sheet. the are we downturns will 'XX, focusing frames. have continue dividend the we Obviously, cheap we'll will in we Again,

you a the the our thing If over especially we time over next the several know frame. to strongly $X.XX will notice have million million It's focus, but or believe years. no removed let rock X commitment you the BOEs I that just million deliver just one longer to with a

dated Slide through just accelerating bit water assessing little G&A facilities X, expense, about and return and inventory. specific the monetization strengthening next is of our midstream, talk more cash a contents. value on of preposition, is Obviously, this long on flow our our a I'll Going optimizing be to value about build table focus capital. infrastructure

improving Next per slide BOE. structure G&A on cost of

from the middle top quartile peers we to bit the see little moved lump. can the above the You of

per long-term I get goal And takes to interesting G&A two up $X. about at yesterday. looked also years million BOE, probably three The $XXX report the BOE. below $X So our next per is to

out put the with sheet that interest. who have the all Jim We we those companies. balance the and cash yesterday. G&A a the XX XX best Tom you cash he I report out know If put was among and best public G&A. interesting have not companies that remember, basically Parkman, Petrie, took He report did partners an showing

put in we're leading room over companies half are interest. will the Targa-operated mentioned the processing the both interest leading merge monetizing years. G&A. items will go that's next one the probably and to we gas one. And a peer G&A the infrastructure. for or data together, Midland that In bankrupt or assets, number a our several up cash Now, you two drivers number either interesting, their their we're What's over regard XX opening he be they XX% high peer on When cash shortly too

X.X going see targeting EBITDA that into can $XXX and and estimates about see is on up what We're evaluating our a water field you XXX% make And plants. to $XXX we It's million there. in been. can a our the new you share regard and savings to current have what's the your proceeds we're two take available will day. as about XXXX You in own of just Capital Then building budget, throughput we're bcf about can year year out In regard are mentioned be. a sure. there. I've we facilities, million to not infrastructure, already, spending

has water There to are deals going infrastructure. are just there. been divest We done opportunities. some evaluating out interesting We're to the being that

We drops capital reducing down are gets million. to million below $XXX $XXX down year be that a million that and going significantly to year, $XX next

next So probably at two over on three be we've $XXX years. years, million spending end next the the the over day, the infrastructure two and will the water of the essentially been that disappearing to

have of it's so that something not on. peers our did a to And lot spend

million. sale We mentioned you of of regard the a in Ford, Ford. a while reports, So $XX current prices somewhere And surprised Eagle several we'll future not million Eagle potentially -- to Eagle Pioneer but last syndrome look and years. about really a like saw. did using commodity at proceeds the I'm Ford assets, the from great analyst $XXX as read $XXX we lot in and commodity inside up of receive yesterday. WTI looked I this this is at of coming between the to up that we're to this comments divest way famous the receiving error. the closed a rounding million rounding A the opportunity between error $XX, achieve over simple at I'm to as returns taken on I've to $XXX look for contingent -- it that we prices. an

and that's MVCs, to company activity upon all we that million need be and somewhere million accelerating soon starting $XXX they $XXX dependent will for be up activity. to drilling sell and deduct You The will drilling fairly the between that.

positive a it's so net the company. for And

high look a We about very margin When $XX moving very operating are tables, a in boe it's the low property. margin per back of you cost $XX. about to

big very value a as dated it of to at long plus move Accelerating out look Pioneer. we So this inventory. asset of

weak. you middle basin. amount a Since entire all some. probably in we cash starting the very X/X/XX, of market substantial to know, play locations of the have back the come it has We're most throughout As of been see

a will looking are discipline, Permian it or we end on the on to but DrillCo Return XXXX. capital acre. between end on is and about are XX, Number over our I interesting, They the got what's recent the our XXXX. transactions. over we're cost -- averaged addition, of great deliver high-return structure. in out And $XXX Oxy due This on place flow. this per XX,XXX are probably some capital growth. back acreage Again, of acre. fact and of we're We by free expect won't seen We last that what range. last two turn first sheet. and sale. have It per at that production. we I the already few analysts per average Chevron looks backing something the between emphasize in acre. Permian capital three Still go tour Joey. looking to all focused weeks. get XXs do monetize on will average expect especially over year I've we have that are able years Delaware. Slide we to of acreage we XXs, value. better like per obviously seen three they organic didn't the as probably these enhancing that something significant by And at detail And that the in close we In we at for acquired our obviously, XX,XXX to on cash XX feel that that it's support focused in mention the get acre. before low-risk We're like shareholder But wells slides they're between from the and midstream be balance and fact XX,XXX just lowest the We'll time, most somewhere to at the Delaware acreage players I improvement. asset on We to sitting have most won't some of inventory basin basin cost again, returns. also among offering They're somewhere to have investor I with XX,XXX a XX standpoint. more slide the and paying this have and that a slides And is premiums Anadarko the reports used XX,XXX to it

to part starting we We we Next of feet. the the in went back our early XXX the about relationship. did have performance and XXX slide, We XXXX the then. probably since 'XX. the go Mainland and did in asked been Upton about Basin northern there a see the this Counties parent-child we since down Midland realized on play get see spaced And drilled in of interference can wells main to in less down wells. lot we Martin, of Upton you feet in first or that down County We've or

out So of essentially will in number long not time inventory. -- footprint, Pioneer locations they're with It our because forced down inventory. our a of we before space, to lot be running have of runs of out our like a peers we're

Next oil Slide production. XX, delivering best-in-class

on this key the Permian see we slide oil info the of can basis. the best mix. oil peers is on stream in of have You that the one drilling any a a using mix two information Basin It's

production the is paying pact. you the companies. interesting Anadarko, XX,XXX just just company the are the something of Delaware, companies of This are among what's with the -- itself all middle below. but Anadarko at if look And to All factoid companies an including that involved you of the in we acre all for in recent three XX,XXX per announcement that in those three listed look our of all at interesting oil leading when peers are

to now an it turn an factoid. update. over to So just I'm give Joey interesting operations going you Hall

off to Slide going starting to Thanks XX. on morning I'm Scott, good be everybody,

updated our Midland had Stackberry Martin we quarter, now last on So And very County. County. encouraging second our results third test Stackberry we've the well from in from Central in tests strong result similar you

drilled as outperforming have this currently same Here are pad wells project. one previously The we five XX%. wells and on completed the in about by wells drilled area

development process. to going in So we've more continue And but ability DX we Glasscock to can well we Wolfcamp the appraisal Western our that's And thing success implement obviously continue full results. advanced D in XXXX beyond. popped Wolfcamp County here performance deliver will. projects and our We've our process course had in we'll the completion demonstrates forward continued appraisal Wolfcamp D large-scale another great strategies this pad in We that most is of well as important also mode. strong our also

in So XX in on total, we brought QX. wells

into worth it Rich. Going going it Permian for larger execution. the so pads, team noting QX, all-in-all we of another quarter over will more now turn to and on bring continue to is solid to I'm And

over Thanks from good move had Slide going our once our eight get This the related for see flow cash I'm were to uplift incremental oil price going Brent transportation we Joey quarter million can pricing. did to Coast, of per added $XXX to quarter. again quarter a dollars during the that we Gulf where margin the and morning, and increase barrel by or oil cover to you firm significant this XX

to going the oil Europe. barrels we first day of roughly that roughly XX% about XX% to which of During per or to Coast, Asia Gulf exported XXX,XXX and the XX% XX% quarter, we've our with moved of

second to Midland our differentials And and a volumes firm are we quarter barrels XXX,XXX forecasting second based $XX by in Brent million. forecasted growth. transportation quarter forecasted XXX,XXX $XXX over per production uplift Longer-term, do from the is between increase pricing, transportation day. with which transportation in May consistent our the firm Our end million firm our of XXXX, barrel on of increased

we have And Express a to fourth price feet moved to move today, Coast. about we our off Gulf in cubic once ship price price it it a Gulf on gas markets volumes Waha quarter, Coast And higher SoCal about that, index. of to zero with a west try the XXX we'll And products the As gas in other million a Waha, to of price move well. as index. reminder, our XX% comes of will index. a We'll re-price we on day channel basically out

position As Scott added have basically we XXXX with towards derivative to and XX% production and X% we about of a to higher. our have for for more production Three-Ways. commodity longer position Brent prices. provide or our XX% oil. We mentioned, X to hedge XXXX XXXX And continue depending of term, $XX our on XXXX now the Those be prices covered target

So few with that, Scott for closing to I'll turn comments. it back

already you, key has the through slides Thank business. Again, the of gone the Rich. last a on through one focus just company cost side but the gone you really we've see

we I probably the people assets. balance know have think best most sheet. that the We've had best

need and has facilities the since one be regard focus And the of in been returned. number to to costs completion drilling Now, G&A and we of one key costs. just best I've to achieve one that's

So I'm up we'll stop questions. there. going open to for And it

[Operator Instructions]. you Thank

from question now a JPMorgan. Jayaram Arun with We will take

you press in no The on your CEO get with return angle clearly Shale your back M&A long-term, reins and the Oxy, the release the perspective situation February. your roll took to commitment of Anadarko. there's to stated to suggesting Chevron back light in wanted M&A when I Scott, as

can board your if see the how M&A? give on thinks to about wondering us Just you thoughts

stock up I tour, told cheap. of the I've sale company. restructuring. through my to The our It's back was moved Obviously, obviously lot didn’t come a investors on

when probably was the Chevron EBITDA. are that trading lost They quickly. company stocks in I think -- first has industry the And look you they obviously to deal all at surprised and a taken reports, all make at to very the go announcement. cheap. out. perception was the a able Anadarko lot My the I energy be was were a is When Anadarko low

it, don’t is five of going Now, the now to next Oxy one two I personally be up years, obviously. that is over lot there a over next to paying for think M&A the years.

start happen. the think running will inventory. of think out a may But consolidation. will I I majors there Things wave definitely be don't of

the and what's get and better They and think in earlier, of mentioned I companies G&A sheets, better be focused focus consolidate and are interest. go on. balance As structure what's to going going to cost they lot have that's a the and smaller companies get I Permian a on to working the and go

have And did housekeeping question, perhaps my follow-up, you. I for a Rich,

Eagle understand will for you guidance. Just to retained how flow Ford MVCs through the the other the We cash did trying the note the transaction? that flow statement? lower accounting and statement expense how will your through income But go did just MVCs

transaction we'll million month So estimate Eagle of those we're we But we MVCs yes, $XX sheet. guidance our that's that buyer with share starting the -- will our to quarter, one we the in already are going close of the future the the of have bring on second May, deficiency in balance to included $XX fees Ford in once million.

the And on of will and will And lower so our we think how be make an more MVCs and like an it know then debt. balance to drill that us. those to much drill. somewhat going it's they sheet, future estimate, bring don't the But we're we because estimate of

of those, we each and those the were delivered. quarter will an So the basis we exact typically of that paid subsequent for after will annual those know share our be make volumes in on payments first year

just be statement run then capital it'll of that, and month it impact balance the through -- how a sheet changes. quarter that's be income will and working one one after will more So

flow going that… the line like expense it's interest item that through if trade Will to

reduction we of -- after through flow balance liability loss. will then And the will it be a initially through go No, gain on the our a sheet. take that charge that, just it still will

go won't it the P&L. to So, through

question next from Brian take our Singer. now will We

with emphasized that and you've well you as halls management that managerial Scott, employees changes you that about wasn't in talk doing to what that some meetings and committee the town made. you of these emphasizing are you're the goals how budget that capital in the incentive your put year your Can the deck and building mentioned slide are the also as deliver results being progresses previously? that And step-downs you implies here? such to the near-term the XXXX you structure the longer-term, as

think really -- big with when there out X.XX with the Tim was I nothing change the wrong it. million came

mentioned remember my fact, barrels quarter call in last million in In 'XX. I the

So Tim the came the out interviews was less all the on was in more early of side company capital X.XX obviously the barrels. probably last 'XX. side. inside And achieving focus production the million the focus and years through two And on XX%

is capital to And so important production. as change big the as this is create

And drilling drilling the accountable. will accountable will person for accountable theirs. drilling be over person be over facilities his -- person completions held will so that held will be The held held person for be The each over capital.

to the moving up to individual over the those are we each executive so And people. and accountability

to in the also, those on It driver focus that's tied into the will in all side of compensation key So the probably compensation individuals. the accountability. way regard -- be to each of regard

production -- and million drives dividends significantly the you of us down to company increase course what cash is driver. which leading that's when which and on allows up mentioned to on of to completion will back employed, $XXX drilling, take G&A to facilities it that key on allow capital So peer of and driving the out as dividends out give drives free is I And capital -- the be the continue happens flow, that side it shareholders. capital G&A side, return drives increase what and

number divestitures is decade, follow of your years think my you regarding series level talk resource And advantage capital And the of the the then made Can over you you the question. production in on was as you participated of Permian impacts or what and that talking reserves. see about? larger how as wondering response different or structure the I are to the -- and recognize DrillCos? in of attractiveness monetization do I the some Pioneer Pioneer's in just companies you the a of you long even longer-term. But up the then structures why see consider the last of And the over M&A play of to you

dead combination First are probably probably the versus just levered. a bit, equity starting been companies like market go since X/X/XX. to. back the open little being to market equity to private capital that's still as They a of of And -- all, cash to The do reduced companies they the can't market we're come DrillCos. consolidated, markets there. used cash It's cash has being are a

And so exit no private there's mechanism for now equity companies.

on the nothing you've happening your that Pioneer's. acreage in cash months so know of Endeavor I that regard. being for is had now transaction. were status a and total the six change. hoping it, be going don't We And about transaction will first its close by But it's

up when paying for. and cash the there's are people XX,XXX, of Anadarko acre you'll have per I've so a that out, reports you until both out seen And are really XX,XXX Oxy not putting some market between somewhere -- Chevron back XX,XXX, African assets put

So that's I've that seen. probably closest thing the

today pay structures appropriate value probably DrillCo the can of those potential assets. the So structure that only the us

XXXX, And so it at start probably very rigs the very, affect XX% sure make to maybe one executing. to start increase, goals two capital going year of probably little of well. with the with typical zero end and doesn't this We the us would

roughly would And year We a production it as timeframe. in four add that the payout well. three get to after It carried. growth then would will certain It would payout cut returns.

acreage. And and not so it's just another to raise lose capital way

per probably Upton quality and -- Northern value it referring to was is the up so drilling that that has County but acreage County. that acreage today, of the assets type we Midland drill I if better Martin, Our acre about more we in are today worth XX,XXX

to And value the cash it's best would monetize definitely we go cash through a structure. If the close way somebody the us route. DrillCo so pay would that in to

drill only on the focused that's we're reason co the structures. So

what Brian, question, last you… did Your

reserves life strength? would the dated was that’s a impact those Do it you long see whether value. longer reserve Yes, the larger monetizing Pioneer company as some attractiveness longer-term of

I it would get and that what don't price it structure be acquirer will a for right -- a acreage accept. to that pick I see if buys thought for DrillCos think some essentially we I because Pioneer. has that see it company DrillCo they to mean, doing better don't affect the will it here the it I any shareholders as won't would think the XX there up strength, us gave on years. us don't upside. potential they on XX board get I some was that about to

payout said, So hold asset after to XX-XX as years for another years. get that they get four the I after three, upside they'll anyway,

next We'll with now question Freeman Raymond take John our from James.

front, the quarters that million obviously, progress et just million G&A $XXX not already works. much just already the like show you've with junior pretty percentage numbers front the And we I G&A of of take a promotions, et before a see the high the cetera. the achieved. on But to how were officers made the On $XXX in much several target, yet lot you've already been of the way realized it'll asked that retire, probably of of severance up the payments curious just severance because achieved? the do how work. the of feel way has that I'm you may cetera It it

Xst. went been have effect All go will already. mention The through been chosen fact, forgot to has June savings G&A timing by the In organization it. when managers chosen, those the on I the into I already

place a team going we And new separation throughout we're through is the did, involuntary. and we had in program management the first place. was already voluntary the that's in the So thing then organization,

point people can't specific but by be at completed this to June numbers time, Xst. in in any everything will I So you regard give

see for so And third savings quarter. the the you'll

see going the savings to see only you're of the give quarter, the quarter when So second we out one into but month guidance. third going run for you'll rate actual

that just just heard deal. you then Ford follow-up Scott, want I to the my And question, make Eagle I correctly, on sure

$XXX bottom $XX you end million So roughly. on end then $XXX the range on said the the future the of did payments, $XX? was was million contingency at based top was you say potential oil of And range the

bottom the million But current $XX not and give $XX, $XX. was The proceeds $XXX price $XXX estimated is I will $XX to it you did give between million I WTI less end of from to using be a -- range. and

Jeanine with question We Wai now take our next will Barclays. from

sales free indicates magnitude previously can by are a give cash XX% mid-teens gearing down? term you competitive acceleration that other of question release to growth of rate? new through was versus the For operational longer mentioned example, with flow achieving you're there that that answer. your your the into Or to your remarks? was compress mid-teens by wondering efficiencies profile the you of dividend, a that sense savings how any a associated that besides hard maybe $XXX and in million you that much the just adjusting generation to prepared factored timeline accelerating facility adjusting But at And as something I So us CAGR. you're

had company already XX% XX% The come with production growth. out to

toward down they that. so had already started And moving

rate to rate. growth we're long-term, the changing XX% a production just mid-teens So growth

years, some some may And XX% we to have XX% we years XX%. to have may XX%, so

adding taking we year on XX% fleets, rigs, just and off. off every rigs adding fleets So taking hit based can't

so savings we're And what the million of additional on is now. $XXX focused

So and in completion year on and is our And the million then $XXX focused mostly what we're achieved gone savings combining assets now the side ProPetro with steps the from took $XXX already I've that next with we've over. we last them. from million

Bank next will We our take from now Doug of question America. with Leggate

for This Leggate. is John on Doug

question regarding first business. is Our the water

your gave of an well pursue divesting both already the did us the the you and to impact of years. -- to if how you CapEx production But potential path do about did several cost? how business, over change going the we you think idea is next If plan

point, significantly, the John, down is will Midland water was water first capital early My here we coming the 'XX. plant completing

So XXXX will down coming substantially year, year. the it's But from number this one. be last

Number here gathering been water $X and over for have close issue, not item two, billion over it's and deals couple see there lines. Pioneer years. been $X has period solar going We have been DC done disposal time. has to disposal into you'll primarily saltwater forward, a on to go be So, We into of some the capital going out long billion out probably there water that infrastructure. wells. the disappear next put line a just probably into

don't was lose one to so do infrastructure, I to to the one and is goes talk we of We this trade also And to divest on control want my thing expense things that investors about water don't dollars. tour want operating our in significantly. up

and doing probably much So, in probably the other we or turn we regard largest to do we is bringing Midland recycling do, third-party not. And Basin. operators But largest we're we are and disposal adding the focused organization since business third-party water in monetize system revenue going on pretty it revenues. to system, a new have water what start infrastructure be into we dominate the one largest to the careful on it are system, we the third-party from thing

at So that as we're strategy. looking a new

XX cash dollars is going heard And people XX being not XX flow, to if deals understanding of paying going to story, -- so increase trade just the but focus to expense. to and I've paid times some we're are start our different operating XX that's

the said back your then to remarks got year. opening saw question, second levels you earlier we we And it in the the in

from special look that? above base you at Which do shares. to think back the you cash you potential buying your raise you with on at basis, are look you and open incremental opportunistic How about balance keep do what the about on I do also flow with plan, proceeds buybacks You'd it divestitures? think question dividends? back an sheet,

system build got we're Vittoria flow. that's on ProPetro that the free my cash long-term discussed tour with listening with investors. and I our a point think going shares, of to good Obviously, first Yes, building sheet. balance sheet we balance and flow cash was free was up we And we on all, got got that the

downturns, wells. said And stock. best downturns, I drilling be that the next time secondly best downturns in during the -- time for As over I've capital buying XX the XX the the that's mentioned to seven save to some And years. to need shown you because career, those to there's going others be downturns my be is and history has

And down like We so option it, rigs. independents rigs. XX can it an us most XX we're do. five of before downturn have running XX rigs the instead cut XX, opportunity. to gives We rigs keep can gives would were If an running up but it shutting during

and that's in higher back dips buying price to so will then are Pioneer point one shares like where low And the peer Too -- share price of in buy back it's time. my at it groups shares thing our many an at and not historically opportunity too that's has, opinion, but that do.

We next take will our from Sankey with now Paul question Mizuho.

and Scott, more you little much So are get? could you acreage bit you can do think you a about talking the planning? what how talk proceeds about that you're

talked a we its It's acre the that per and it's an structure, proceeds, in worth DrillCo in the be going down with about lot somewhere Paul. We to joint math it's today, southern A venture between XX,XXX going us, XX,XXX worth if acreage type on of to Sinochem XX,XXX drill by acre. area through our portion.

in approval regard. we'll to that their So get have

the cash think don't market is there. that I so And

in rigs we talking get year. a in generally lot to we on would put already, And will acreage the with drill, by XX of type We're to start to end that already. structure. year timeframe. mentioned XX the it's I've hope But the private about to As equity it place of off that two DrillCo we

And about cheap. addressed see you're the the the of where you inherent obviously again, expect buyback a you value talk you could further would buying Thank for? some you stock you've little about undervalued as sell versus the could forward of And continue of be balance that about and think between for to back think taking then talk I to route for you talking. where to waiting get you more talked about get up? company we you what the bit the But to been value you. you that could as stock growth this stock? talk the But might price you is? ranges mean example it You've to

NAV can out our values, give don't you but -- We just or point. I

the amount know have. we of acreage You

paying You that between acre. XX,XXX and XX,XXX Oxy are and know Chevron somewhere both per

that based you worth price is do acreage deck. the of mostly So all on on can what math our

up during And so focus our cash as the began, I mentioned, the position. continue downturn to has build

we as shares and we the So for said, cycle through cheap. the the can and live downturns I drill can downturns -- buyback that

I think stock $X.XX is the cheap. at

there's about concern talk finally, And Thanks. there's to about Can cuts. some your gas worry then whether been anything you just about?

analysis a looked engineering and the data. an what I No, I think based lot the on ex-reservoir at of -- involved come back was happened, and of in heavily I've

oil slide Midland cut Permian regard both You and the can we're see basin leading entire the with on that's our in to that company Delaware.

the no it's is And it so gas going to And essentially will over a time, ratio issues. plus. there are increase, continue and oil

all. So it oil cut has not affected at the

now from next Deckelbaum with question We'll David take Cowen. our

earlier. Just wanted to follow comments up on some

in not selling timing So I the you 'XX? goes at time yourself now? just market not the out to on appropriate, just water the evaluating that just Midland business. not believe perhaps understand your ongoing for be that right belief build plant is online that I it's amenable know the hedged the given Is Or it this you that

neither. it's No,

salt I've three water Over seen seen infrastructure I've or created. the years, two companies water last funds couple being do of deals. disposal

really our If third-party the there. number. water. million a to in our do management down. and But And them time, a to out make team too also, going is our decision. goal increase let wanted system. revenues don't the capital we what's and to decide and big of because understand I the to capital $XXX myself to midstream is It's focus anything, into do board at both have monetize, our is on we inform and my know same to goal So we all

it. have Our peers don’t

And million they're to $X per so our can't the And were through divided and $XXX peers. the to drilling, through it and of were lot going taking adding it a a of the million gains million arrangement. well by shareholders efficiencies. year wells our $X.X processing we versus and you It's see plant long-term see it our take efficiency through also the per to number

down. come going And to the by water like is said so ahead and go end of year and best the I it's to you moving the midstream, evaluate the

just XX to operating and type And dollars But going we're of come so flow, different willing story. increase to is someone and if some times expense. along that's take a not cash trade

So it's only about learning.

you'd Have DrillCos? opportunity the before of willing long inventory into to be that dated articulated put size you the for

is opportunity not The I any regard with. I to as But XX,XXX in program. to executing acre probably on range take start off main risk want said, do in the to the

at and you're why between looking deal somewhere so add it's $XXX per get successful rig $XXX if with overtime. rig it to And that's then at could we private We per million typical a doing year, spends started equity. million deals. essentially it then so two million $XXX looking $XXX rig and type we're And to million

Johnson take now from next will our question Charles Rice. Meade with We

feel business? see happens you pieces pretty you're to moves you're simplify made guys really And You about, it's a Or streamline with the there? simplify that Ford why further on other that water any or rapid I assets series that's the to think -- talking water business. I are so focused assets there what line the of structure. But your the you midstream sale. close Eagle see your mean opportunities you finish like do or to

focusing keeping lower if that that by last turn that sure think I two facilities the midstream sale we are and center our water our year, compared as goal the of on focusing is it everybody items. it making we really and the -- expense a worth peer it I the can and the profit And to on end into think operating group. convince it's keep long-term does to

focus. really that's the else We're that So have. doing we anything not

is into some at other or outspend the that an little point, if I Does some a the Or think that way Scott, cycle down, we get that, I drill just mentioned your interpret and guys And to that your there back the ability another explore through do you downturn. back intention being couple drill if of you mode? -- oil would back want balance strong should the then, context of what able went a we And means. in to go bit through going cycle? to mean twice prices to sheet

going and XX% the over to is several goal you next take to years. have late already one production there 'XX year. or the in small be two focus last can there, No, down grows -- the we one in see one growth know we had we But on late a is where our

a think I to -- regard with in cash helping changed capital it's down. need entire I'm we the the growth And the free mindset of hopeful attitude big flow more back to U.S. this OPEC, investor plus, so actually it's bring Shale

just investors, the And would all don’t year, this several at rigs I was input any see getting -- company told if so we on they sell the tour we by this stock. that added

So investors I would like the to see that too. capital discipline by

demand real situation. it's with supply the helping So

now will Simmons our We with Energy. next take Ryan from Todd question

would water Maybe or running you on business, have capacity one potentially much volumes up How the investments? Midland you XXXX. third-party the business follow-up mentioned first and additional excess would on a plant require and the focus water third-party capital once in in adding revenue

XXX,XXX now, Right moving per day. we'll about barrels think I

are be ourselves. using that all we going so to And

so we increase to offload to have be And throughput able actually to would water.

Rich, Joey do any have or you So, comments?

XXX,XXX in I only is barrels and day per that would The have flows. thing say ebbs

And in we formulated so contracts. how accretive we'd be our

not areas affect downtimes maybe and of opportunity built our operations. that And take drilling points when we in active also different as So advantage it's infrastructure. in we of can where not we're

the have to in areas. opportunity those We deliver will

opportunity. but there of, So, quite haven’t I think details through it's worked a business model certainly we the is

to adjacent adjacent. basically And clearly all capital existing acreage, for connected so to minimal the its areas to then our

year? talk with peer is terms in right about positioning on right and about the follow-up -- versus dividend peers should longer-term. that Should think do a market? think move yield And mentioned broader the yourselves E&Ps later the investors, we at as in dividend expect you as the a this to yield. maybe you in comments, of we midpoint I E&Ps broader then you on in think do what think talked X% the having your Is your then the the that market of your you comp group that And is large-cap you what

stated increase in question first a I think record late approve that the will dividend already be I The September. and August, date the Board

happens the the midpoint be question. first that answered already of as to this I've is S&P percent also peers XXX. same So the the of midpoint Long-term,

a So, long long-term goal. that's

the So that S&P the midpoint peers stock if combined to the we with a mid-teens everybody has will midpoint growing get that be hone. of the and XXX, it to of

will We Bob from with next take Bernstein now Research. our Brackett question

dried cash private you the free best flow. G&A If and the consolidating and Midland? equity if the and cash consider and Pioneer expense can't if markets Would exit and has interest up are technology

our that would to optimize really is us there no No, portfolio. opportunities allow

And answer no. the is so,

XXXX's ends year now Follow employed Where you do was up and that return is be long-term? capital where would -- a think think year you X%. from this on up it

five I've years I'd at Bob, price XX answered and that, Brent price flat above say to up XX%. strip up will be a but mid-teens, be already XX% within will

concludes today's closing the or question-and-answer I over back turn Mr. session. would That remarks. to conference to Sheffield, you like any additional for

Again, the the side. side thanks. Look next to out talking be road the sell the next buy forward quarter of more to and several we'll over on and weeks

all your comments. you. Thank appreciate we again, So

your And does for participation. again, you today's that once conclude We conference. thank all

You may now disconnect.