Pioneer Natural Resources (PXD) 20 Feb 202019 Q4 Earnings call transcript

Welcome to Pioneer Natural Resources Fourth 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 of 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 & select At recorded. This being call is call A XX, 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 Neal for President, call Vice the Relations, Investor turn ahead, At Pioneer's go time Shah. like opening Please to sir.

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

for acreage sustainable you. XXXX review strong call. well solid focus for discuss driven well Scott and our Pioneer’s open up efficiency XXXX drivers first Joey horizontal will that, briefly the be Rich will position. call up remarks. will as well long-term discuss gains. flow, agenda cash his strong the best-in-class concludes year then some our execution After will your to questions. on from then then rate oil performance team. behind continued discuss gains legacy the benefits we as the me remarks, production, review our thoughtful Thank as the of full of return benefits strong will planning results, while the practices. impacts will with the our delivering and optimized return, from Scott introductory the He efficiency of After by Scott and quarter today's fourth Let as

I'll Scott. that, it with to turn So over

morning you, us. you and Thank joining Good for Neal. thank

you know, for an was year As excellent Pioneer. all XXXX

XXXX I'm to complete. Pioneer we initiatives those expect top report even number objectives performance. we to in returned Pioneer out now outline, When be happy in set to specific to now February we will return and 'XX, had better. are I we a to As of all place

we our and G&A to organization discipline. difficult transparency reporting one highly focused capital which providing of resulting flatten in greater across its We levels, the benefit our basin all decision, structure, reflecting strong intentional While visibility rightsize had be quartile. on and execution the a organized top company company reducing and

pleased During XXXX, our framework a would allocation have monetize little XXXX agreement that We non-core announce generate no Targa targets value. in assessed we no profile in gas interest to an options present in Basin related options capital with to Today, and to stronger cash we expired are consider inventory with or our reevaluated increase our and have Midland we system. place flow our returns. long-dated budget capital processing has to spinning

our a thoughtful signed forward JV net acres well resulted in approximately manner. monetization acreage inventory value noncore our for pulling that DrillCo approximately a Our X,XXX the in as as efforts $XXX Southern noncore in during shareholders agreement XXXX, million sale disciplined for and yielded of

strong the to significant achieve capital perseverance late in year our as Pioneer, under expense will hard to structure, program. the change, to back efficient drives Lastly, for year regard a we more I exciting to cost highest a our we returns, you are employees generated reduced optimized determination, fourth free still forward. the field reducing Thank facilities where that company cash, our making to Also, rate, XXXX evaluation, us growth operating great are now is see in capital our of update an all current an At year their Pioneer our XXXX. at returned to our for shareholders. the corporate water and still enabling system the cost. quarter in was progress drive increased materially expect work, level level, our and you lease of

EIA several only barrels happened last barrels XX,XXX week day with I've of over oil lowest barrels February, years. came per about early in U.S. day increase this milestone in talking This the been that Another a a in out XX,XXX is to three week. March. report Shale growth months. All month set and decline this shale last is and several barrels the basins a the months. growth I've Permian estimating is expected Permian in over except a February been are day, per about in the March, in about grow of of now, XX,XXX roughly Permian. to oil months the XXX,XXX day per

fourth $XXX we've into look million fourth you seen. think million over at XXXX, cash cost slide we half second first free of top XXXX, the the A our tremendous number and to I cash thing, X, quarter. When generated the we $XXX reduction just in Flipping of flow the free flow. of quarter generated getting have in

improvement more divestiture will it back We to But decrease full permanent LOE. in XX% compared in We're $X.XX year to what's given and XX% will important, up more about talk time in it. costs the share capital well the shareholders. increase our Joey XXXX. Again, XXX% increasing later, a per spend of talking 'XX about to our and to

Also in we're to We're continuing shares. to up about back $XXX addition, buy million.

in billion second we're $X.XX We now. place. authorization. have -- best our on we basin to Also the important So regard left in in were about very

to What's that? prices of probably, ROCE oil we place The free That's a focus in besides to in our with produced up about 'XX increase in our than drop in XX% WTI achieve employed. flow, in cash XXXX. X% that less the capital the of return important delivered with of of moved XX% one have up items is XX% to XXXX. That's 'XX. for X% And where We layered. most on X% and amazing gas first then

see the very top oil, million, oil guidance, sheet. production, to oil the end key high very, of top end on production XXX,XXX total free X, successful a Again, Going the above production strong Again, we end cash flow very $XXX of a fourth guidance. per production at number barrels quarter had the can slide the of keeping for obviously, above the of total also point And day. of XXXX. you balance summary

to slide of a you costs. it reducing million million number focus see estimates well. $X.X talk reduction to later. includes turn to can from full about We’ll Joey costs, on down Going on about That when key Again, C $XX.X F per over really XX% a each going X. & D, items you these well

sold flow back outlook, we've to natural of about case, XXX Slide X.X, again, oil the oil again, Capitol including XXX,XXX budget, premium gas. markets, obviously, and based XXX about to in sales XXXX we to cash flow that cash regards $XX using, production, are the of day, billion. strip, Brent to all number brings street of we're X, been on the what of rest case, almost per year. X price XXX,XXX for $XX talking has to WTI about is XX to sort about were in to $X.X This run the the a back current on the products

about and Balance improve midpoint will if year. the in And $XXX drop down talk going hedges of to oil, between And the we now expected down to growing see look the year. XX% oil you cash entire strong free WTI, Rich place. about the of to for we flow. sheet only in even of WTI $XX X.X a of are end with

same saying the roughly It's mix in per XX This be as we'll well X, we've two to regard number you operational midpoint, plan, to again, over last year. months XXX, number been about gives regard rig count, to about POPs. three saw Slide in the adding rigs XXXX. we the of

employed. out of what rate growth. a three free of protected or And on. is these new to these. items capital making flow, worked couple mid-teens them on accomplish trying cash of These rate execution, four growth depending been point We are the saying slides the to wide two net in -- have output. return regard the to that you're asset things a the the combination of value, we've are -- each we is investors a But growth all It's on key

can and regard this time come. ROCE how for in I think driver And we're to free we running cash a we a long is company the to that deliver the key today. inventory have great program flow

you growth $XX dividend part especially number most capital free about $XX environment $XXX Slide very, base to the billion in even at now even of and $X.X cash the and price. can dividend price a and benefit, capital increased shows million the capital, million see WTI of a flow able $XXX our low in growth with very WTI of have to when of X part this we're you pay for that is you XXXX. Maintenance

continue drive our price. to So down breakeven

to flow cash the what about recent with in get again, dividend stated we'll to sheet. long-term, a does our increase, we'll with way Obviously, at the to great discussing it's free have go. XXX. regard getting do where We're purchases, another talk close. continue base. increases Slide regard average number opportunistically. about Obviously, of XX, base up we've to to the have to balance share that been we further to still in continue to In going We're our S&P look

with $XX debt-to-EBITDA As of X.X shareholder we've we about in over months out been And entire last shareholders variable the lot down $XX and driving WTI be will as several to exploring see, Brent our the you year. we'll discuss for with a go price base a our the can then, and continue dividend. or

reason you think do I any commodity have high And consider to because everybody where we run up secondly, even that the prices. cutting introduced, so you not we been of a situation into want base. that's the type base knows fluctuating get

to to best the dividend that shareholders. and so, pay And out a create option is variable the

back ROCR, $XX just fact all billion to of shareholders. XXX% dividend this you we free the focused returned cost about paid to $XX. we've addition Again, Again, over so million, we to million the going to dividend to XXXX. shareholders. going forward emphasizing again, business. our combined side reemphasizing as two fact After together we've can buying see XX%, flow from $X.X increase Also, got back about price, see the the our that a oil and to XX% you that XX, number cash on from the what up in that's decrease in $XXX is in $XXX the prior stock of Slide can

acreage basis. tier Going returns to the Top slide low XX. by driven cost number

fact peer we to X% from the besides down here XXXX average point in at look that key to information see that went actually can average. you Credit XX% Suisse from up ROCE X% using X% in you when decreased, about As our

XXX,XXX our to the we're cost the XX. very of So move it the most and And fact lot in from have acres. pack X a our gaining with secondly, number above has little to structure, Tier on essentially XXXX, in that and fact of significantly investment starting do to peer Tier of we

this XX, seen number I Slide think, you've already.

I companies also large there's they think large acreage key point in a the couple look see emphasize here amount Basin that integrated is other the of move some that the points Midland on starting and Permian fact key that at you here certain only a the of when have. to greater mix to to

so there's will period we emphasize get too on. The at and infrastructure. has you the And I Delaware. Midland of Midland the been obvious to in long flaring lot when primarily slides, at moment slides Basin, and Midland benefits is slowing key there flaring a Basin. the the Delaware the why obviously, when we're the the at culprit Basin, It's we that's time the seeing Basin we And think another will to into more of that the look existing look ESG fact due the that, a point is biggest

acres. class two did we DrillCo regard nine in that will expire are probably footprint about make asset. up the that in Southern XX, Again, barrels wells, start acreage. fact in best taking JV that resource overtime a $XXX million, XX a the we billion deals statement comment over That to drill in signed of opening to in and in lease the a first will we our eventually acreage the about shortly my acreage have base, XXX,XXX world we that worked made and shows for slide number addition noncore in XXXX And

slide. coming Slide out it just XX, this of been the leased Wells we've everybody in We're point number shows $XX of percent of it pack years right, slide breakeven of Fargo, significantly you way this in again, Pioneer is Basin, than Permian and up acreage been little the developed, less has of the a the WTI. around, to developed very key with inventory has

I'm Joey. to now it going turn to over

on from Slide a Thank left the the last theme and this everybody. picking you, slide. I'm to continuing two Scott. quarters Good going starting be up of hand morning on XX, side

over Pioneer that percentage. a two right, production production. the And cumulative basis, see all best has oil also highest when gross on the have peers then string can moving You you the normalize XX-month little for to we

state that to is productive the the These drills simply production should lead highest facts, So two oil wells Pioneer in most in the the and best over returns combined has of the and basin margins mix basin. the time. course,

on our year, notably execution reducing already Now tremendous by most mentioned, moving Slide to by as a had costs our Scott XX, well XX%. teams

As you gains. can portion on large by driven significant savings the a these see of efficiency left, were

and completions significant mentioned, per since in facility achieved highlighted in feet XXXX of our improved have XXXX. Our Scott team XX% realize And and construction, and with although these not operations also in gains reductions also LOE. we've day both over reductions significant drilling as has and here, cost most coming

would team can the the up field and costs to in-basin And a Thank of year. great you leads my see right, congratulations year. to those supply our day executing increased combined wells. plan in returns. top as on team efficiency with management entire and Pioneer like analysts, well And previous organization for slide, improved best development geoscientists, especially course, building tier capital additionally, and to engineers, safely a on chain tremendous deliver productivity to oil offer the our out you lower continues by field every I to

turn now over I'll Rich. And

assets as to to there and this to to returns, that key attributes and shareholders. is Slide margin, we margins, the a strong returning Pioneer’s going improve know, capital Joey, generating and a on slide quarter strategies good Thanks, of you really to balance XX. I'm the morning. sheet highlight start And employed maintaining is improving strong

wells to as that the it see of we we This generated just our function strong protecting priced our received into percentage BOE the can Scott and a net Joey on relative derivatives, on is a price minute, moving cash per talked of our our our about, driven markets. It's products higher I incremental by share-leading also on oil in margin levels in EBITDA revenue interest peers You the that cost a will margins. that right talked produce talk focus sell about structure. more and the graph maximizing in that we reducing the that high higher wells our that by from about, we

is If benefit the about EBITDA an just cost you the just updated fourth four $XX per give look and third you higher at the view, the quarter, graph, the reflecting reduction a it basis, continued on for recalculated commodity prices to quarter company's our during of increased per efforts. BOE, quarter BOA

really low legacy XX. bases position Slide our high the to and of This revenue have acreage benefits Turning slide where interest. we net highlights

of that chart accomplish as growth benefit the chart net You the drilling of level incremental can must left, from much high having same the order activity interest. see revenue The on a to in the our how illustrates execute peers Pioneer.

also as you efficient high level for interest from higher report drilling it And our our and discussed. peers to Joey the think illustrates net to the faster acreage perspective, how growth better accomplish more margins across to In have then much returns our about inventory provides drill of revenue chart their same as inventory through when addition Pioneer. has growth, also a

the it Basin. West it the Waha Coast $X.XX, per gas higher-priced Coast our there $X.XX or of and selling of we near highlight sold flow. margins significant XX. our by uplift. cash all in in our Basin. With it where the gas to outside a our the focus significantly online, quarter, so Express Coast markets slide derivatives realizations selling during moving Permian coming resulted the if MCF selling realizations to improving off versus of versus This Permian In we we gas gas This Turning product to Gulf the Gulf Index the based being transport price the by price particular, fourth is flow Permian in being we’d protect our cash of to of improved using

production On Gulf barrels and it nearly transported the during of was the the exported quarter. all XX% day oil Coast side, a to XXX,XXX our we of

So strong protected that and derivative oil the oil page prices full our quarter side also we XXs. of right our production upside for the high of with see derivatives on first a production to you position XXXX, where XX% can the year XX% of at Brent $XX have with

about As XX, as a $XXX result only talked of our position, his about, strong and million. cash is variability between flow XX derivative Scott

So can volatility. see we're from oil you in that well-protected XXXX price

for progress. back I'll there over it on environmental discussion some turn to Scott stop and

see mission coming delivering in where closer Thanks, a pack recently. out to methane. shale including Rich. the McKinsey that can Slide regard low report leading published is report, was total This barrels, WoodMac of a you intensity XX, with to On oil is

where best peers where both look greenhouse fact one primarily within of This lead we're intensity. the reporting, intensity you at LDAR due have programs, When the of is lowest gas Slide we that also technology. the some that few flyovers our of to the and detection companies #XX, in doing emissions using level flyovers intensity Pioneer low methane as and low-level on

vapor captures VRU units. Our recovery

to be And our the every of what We’re we're to major all making that has XX% changes gas these going from horizontal forward wells. essentially XXXX. to are one first line compensation, to connected require XX% new we're ESG on in the in increasing regard in

in happy now -- Slide been in in XXXX. Number been York Looking to newspapers, you X, to the regard recently. X XX, New Times data it's some when regard the look obviously, to had we're of Pioneer Number we at several in including flaring, the at report

conference Pioneer #X, the UT recently on put by and less the largest we X%. first flaring was had and data Austin, probably the Energy Institute. Texas Columbia at flaring, At the Looking that largest down in was than in 'XX,

coming to all this. think And out. reporting And able have X%. both committed think to like of committed produce of to We a sharing we'd a get the it's among we be to of to below came producers. couple out State better would all Texas that all agencies New We're continue to I to to committed to and thirdly, practices Mexico. target. conference, interesting ideas like Pioneer and agreed, We're producers best important set percent in

you If are there's that below only really companies look, six X%.

and target will X% the up a company. pipelines help to is first within on you you doing when also companies time, and not of be out less of That shareholders could public that help. should It fact have of would And whatever the come another that shareholders equity CEO sell the private it's also are done or shareholders, to or regard they're two being either the would every to problem. conference and XXXX require period idea think that less, set X% especially certain end in solve business came X% new back interesting less. regard or the and in all not companies, of I or the companies, half if a help the shareholders bonds to in that

So the conference. some those of out ideas that coming are of interesting

important forward. it's Basin eye on think I that to the Permian black remove going

focused the going forward. from probably return in independent we on the company, Final on balance of the any tremendous of sheet XX, in inventory capital US. probably, any number of in And best already. the XXXX, returns, company Great, disciplines best have place, place slide capital again, turnaround

and there, it stop up for Q&A. to open going we'll I'm So

Instructions] take from Scott now with a Gruber [Operator Citi. We question will

think the So variable base how dividend. dividend, investigating a Scott, the where prudent the of possibility do think of you about you're

How will CapEx it. you flow it? think maintenance front percentage think flow, deck that say be framework cash You do cash above about the take of in where you percentage Do on to and of you about increase that would to continue great?

years, going going close to mentioned XXX the next we're amount want accessible you -- other on day, still $X to shareholders of cash and like But a the high. then that We've it? trying shareholders our and that forward flow. establish dividends. comments established talking that eventually it, be over last going percent. variable do do when want couple April, I and out did lot establish great we're deployment next discussed, those We'll several free we're company base at to two going with you and so free we've with said, to have slight the conferences, I months. in it. go What months have over three to industries be, March sufficient has, XX we to haven't the shareholders – from of flow we But looking in again still over that other do end dividends. a companies the base to at not of a at billion five and variable had studying talking look base. and a a in conference, got the in visiting cash of lot amount before, an around we our other And already then industries don't We've over with Barkley's S&P mean, Yeah, in up I and balance we've your of cash is them of you had our the and into and EMP sheet. have say, have to company that and a getting of most And increases have the base the the

a so dividend. toward And leads it variable

the -- we'll And a several any what's cash free have up next with dividend our over develop plan. to and year so have above in we come we'll stock first That's speak And we come be with you with significant as left the and weeks. everybody our with to visiting as over mechanics flow up base buybacks.

just and growing that, have other And that Scott, to important to we stable add to it's believe dividend. thing one Yes. a

or be base. of that’s think growth needs also kind slightly the we over time about S&P think that I XXX to underpinning better. the But on So consistent with

lead the So -- want and overtime, -- we base dividend. that's to where

on at you look deck, great follow-up. X XXXX. during progress Slide unrelated guys I costs well have in Great. made If the And

I XXX XXX. You guide average math year-on-year midpoint top divide If reduction? into efficiency an comparison? XXXX isn’t that at CapEx, core it’s 'XX. something simple to impacting your a showing gains showed around there your greater about the average. come Is the cost of I of like the well continued that's of Why around

Neil. Scott. It's Hey,

look in what XXXX also did capital year. year we the a what similar require XXXX, you towards again, we at program, includes and rig capital If did XXXX gas we guidance that potential end last for any to

So Also POPs. that's in to the that well. in as embedded there range encompasses somewhat range and correlates

So I'd that there's on at QX. that XXXX if a throughout correlation strong between to the say, look slightly over a QX efficiency us we gains you two. Also, experienced and accrue led based

as So run such there's the benefit higher. QX one-time would be somewhat a QX rate to

So, range leads of stand. where encapsulate those the factors, kind into currently if all three that we you

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

in visibility previously the that that you've well in with $X a X What significant how costs billion talked free here. assuming I'm that about shown Scott, you period. of reduction at I'm flow number. the cash see you under free curious price $X today you've curious cash year same cumulative billion deck? were just flow over

No. September, at since the changed, number announcement in hasn't The Barclays Conference. my Doug, really

still is little number about, the look, over. a it's So

time, once a timeframe. see that to get we bit demand couple it We’re flat the price next years, as flow, it's increase going year slowing 'XX, the much then will $XX And increase into essentially of billion market, years. the higher increasing 'XX. as coronavirus keeps that in I'm number through get to and significantly bullish, even free that more especially we're And over during shale with because XXXX that first of rounding $X and five off in significantly. the U.S. substantially. number more number out XXXX of over WTI a that deck we increase, little price optimistic its flat you issues. that's a The significantly growth Obviously, going cash go lower will in through

in things the your it is see about the noncore. invested leave lease for divestments, you initiatives us remarks volume, My bolt-on you you of potential through and a especially business as couple is prepared your to remind capital wonder additional the it of today? the additional up-to-date just just I could longer-dated under acreage. still for that, if bring DrillCo And say there. Thanks that for how as in just but mentioned could evaluation. Thanks. want I'll color. don't just the if I water you water what to follow-up from

In the water, stated to costs. regard to I not do as we before, trade want

balance and think that the companies cash most basically they’re operating and disposal for capital deals, in doing I of bringing or are up. they're trading deals, doing water they're -- are the sheet their costs going

so, just late why that's we costs. until make we're won't And and time don't decision to trade And we XXXX. want a more taking

So we increase don't costs. just trade want to We an see in costs. our LOE

look we'll they dispositions, to shareholders. an monetize forward when the continue inventory I similarly, to did to to pull effort But come to fruition. we Doug, XXXX, to have long terms be as to in value of noncore opportunities in data And in think to they'll that

on the nothing to So continue look it. at just docket, we'll

at point? how this you. Is you would or going appetite And deals there. acreage that? to how's characterize it quiet pretty I I he it for was Thank say leave

pretty it characterize I quiet.

nature. think, I the doing strategic you've activity acreage, doing locking deals here's level. They’re similarly What seen that are in people trades. up this

just so longer making And drill laterals.

JP Jayaram take question with from now will a Arun Morgan. We

longer I to elaborate call as if no you this incurring the details will agreement go target on forward financials you're that of going impact, I it, was CapEx. be the wondering Scott, could, and how perhaps

that on our Hey agreements Arun, working it's with for Targa We've Rich. non-content that number tackle of been we one. I'll recently months as a Scott mentioned completed.

going forward will plans. new done, the XXX% get revenue on still but fund capital the of existing cash that they'll they with the So our agreement XXX%. from flow retain on we'll plans, And

and So and that. been those will plants ownership future the take invested the show in will we that benefit showing have revenue existing our from LOE from Targa but that the in we continue past, ones

if year to decide be are to in it is in variable model just on of major question, And And call to shareholders. a you shift maybe what variable from addition implementation? follow-up going Scott, to timing path thinking what this Scott’s on evaluating this? dividend. are Great. this philosophical base type terms about views the dividend, the You're to your with you the your dividend did What a distribution here? of

maybe said I'm dividends like to, is that going plus talk prefer comment most maybe I the first to high share as of I've shareholders to thing, Well, Arun, to, that first we'll the talked XX% they and as say buybacks. XX% over

with So premise. I'm starting that

base industry major get high to as to we industry oil seen it. And can’t support want the we seeing are where companies. the as have refining too EMP don't we Secondly, with with

So an excess have our $XXX $X right that million times of year dividend five payout plus we're generating, alternative And now, roughly when years. I a leads to billion flow. think we is cash

$X So to that billion. $X.X what's billion, close

paying $X of So we're out billion billion. our dividend $X already with

So we $X billion under pay left to price have that scenario. out

about toward with do that of through pay And the put dividend. industries. And mechanics it question a it it. it, learning got be so when in And timing to we'll how variable how We've speaking and how next commodity other we're about in over the still much is leads fluctuating out? of the the that a and price several people weeks working other And to companies market.

question from Barclays. Jeanine comes Next Wai with

helpful. to well on the or firm think lockstep, been that a of barrels or past I has of your keep My Gulf WTI it's over been getting two guess, contract. I'm FT but if has grow where I not is I now credit agreements. My kind with your And relative the maybe question thinking time I'm to sure that's lease need to on narrowing kind color your I'm you've believe got spread XXX,XXX is not over transport would pace. supposed in is what about Coast. be Brent that it production, the some any Pioneer question over And you on spread that to day exactly breakeven FT agreements. would that But, so. years of

a at appetite from medium revisit So any long-term? incremental out the or on to check see there to take on I in is FTE to amount here the just wanted over you of if

to are does moving Gulf over million. get it. day forward day. we I where XXX,XXX getting Coast neutral to barrels can you over that pricing today, matches to of grow advantageous Jeanine, a barrels in Brent $XXX moving profile the priced FT. correct still a will That proposition, it’s growth higher but the long XXX,XXX markets, for that Yeah, kind we for that our Yet term time we it be breakeven it made a about year, think are for going

will I to to So think -- price the get higher time is still markets. there be advantageous

change to going we're think strategy. don't that I So

the $X in could in the in spikes that I Midland we're when price is price and see available are we day, it's between transaction. there with breakeven being think $X a we and making sure Brent future. to general, we But type differential a benefit

next We question will now take our with Heikkinen Advisors. from Hall Energy Michael

further set in I yourself I about all Thanks. appreciate bar and in time. at do there. about as initiatives looking kind the the of a in really we there? I'm XXXX you XXXX? XXXX of beyond? of just sort rolled curious for costs changes? improvements that What kind kind you How in Or really just further incremental system up think gains high efficiencies of pretty move place through from think are key the have And improvements can and you efficiency what

still across continue initiatives continuing the every doesn't and going said, out you year, where through gains on of about any taking not to measuring the fleets. expect year Airlines following year. of down, technology references being fly costs trying and that Southwest it's about on leverage and plane and kinds you to with we we're to see a we to And and go to as to our or relentless to the trying drive This we efforts is XX% focusing at We're we looking though, consistent But And of that that, whenever a shouldn't same. develops our those and the But basically pilot side, focus and effective to our move relentless in being that have XX% as we're focused said doing we rigs companies through going be any trajectory like having reasonable and efficiency cost to forward, ways field, the and manufacturing internal continue to what things. step one methodology, been duplicate that to that lane primarily even that's day. for continuing all are expect can expect get things KPIs Joey. to we a almost in it those slides improvement, drilling consistency would kind methodologies not gains Having we better that taking you service efficiency it what of our think understand see one shouldn't our as practices so mean on more all Yeah, pointed our on change. that do efficiency I you we're just similar I and think, as frac on. make the a across out focus we've and field,

to all several just the we those not So what this at probably but to still efforts combination it we of the would leads saw apple, is similar believe to have expect be that year reasonable. bites me

as And I mid-teens required to any guess -- helpful. maintain to year something talked rigs as or for or I and time that? gets evolution in late adds gross maybe rig the that three sustain sorry, in two and topic oil. Is think long beyond? wells, about two a the that then, plus over on you've to guess follow-up XXXX last time incremental similar rigs a about or three That's you muted a

cycle frankly, a when I use the POPs my with always you and know, to in improvement try change work one fleets equipment. cannot determine know Michael, But XX% and frac that the you to And performance. adds I like and of you do year, less as mentality. things on have stating communicate think, in obvious, amount same Yeah, to rig trying time we future focused proxies that team's

said -- So have XX% XX% a you equipment. or you like when you said, you need I have less like when improvement, that that implies

mentality on So and focus -- to for to still more I that growth though, difficult we'll rig that explain getting said our continue business us and the it's on of adds. our Having our kind that's more measure on be see per change based our would by efficiencies that be numbers current two to adds expectation which activity kind by you year those three should would but the increase, of the rig based day.

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

pad of similar well foot all pad. to average in little past, what around the the per XXXX, wells up moving size show the of XXX four kind spacing bit You'll Is kind characterized still spacing? you a to in that

we that's more not more about reflection spacing. a of developments. Yeah, John, really of whenever reflection doing talk sizes, well increasing It's a pad a stack

our not the spacing. answer is to in question well any short So imply does that your change

basically is for Wolfcamp same area, the well Our zones. spacing the XXX feet staying XXX, in

Okay. And wells of size up years? continues the then the to of kind Or of four subsequent in number? just pad kind is about pad the per anticipate sort follow-up, creep should we the right

We'll in No, would time. single last that year, would XX%. doing drive targets we that continue that think and to our increase kind see I that doing hone of as example and of we're we're in of XX% developments I you this we expect year development. A were that's zone amount down to is, increase down targets, that a our stock as the good co-developments

you'll per up of And creep pad so the see over time. wells number

Baird. We will now take a question from Joseph Allman with

all comments. Good the for morning and thanks

NGL natural about, do of forward? of you assets as not question those portfolio, assume close what do it's the do And but Do What gas you Waha and you to maximize my It’s is make zero? going you about assumptions gas prices your basically about the say, important. important assumptions NGLs. to make so prices? part So What most increases? value production

that natural gas. Waha, our Index. going virtually thing on Hub based West on exposed Gulf to now is all or It's Coast NYMEX either very a big of going the the little or and out think getting I is on have gas we Henry index Socal Joe, gas Yeah, out to

that So to subject really we've steps to sure make made we're Waha. not

low. until of I get think, at Waha bunch going be built as to more you pipes say, is a

at quarter think term on longer NGL, the make of moving look but What in hard are basin, it's we're our what's out I NGLs getting markets. priced focused So, amount happened into will and that with be at – demand we've and and back prices the They processed to I the it, get something expect international the given better Belvieu. oil. LNG Mont and fourth Mont just of weather in at that we on for had while. given And, done the quarter, or all quarter. weak it to the the sure like first higher a Belvieu fallen in liquids that we've the are good in for of were getting lack winter just fourth they've still in here NGL

years? bullishness the macro us kind then just couple next over you But, kind oil comments down view, That's give of growth. just into very of slowing follow-up. helpful. to several next Scott, made the your of your some related And as months about the of on could shale you of

Yes.

think, to WTI to up I was was coronavirus. OPEC $XX So $XX. I the mean, go and really had up Brent to into

coronavirus hit. So,

in peaking, five the months, and of get will stay fields there. that price on I'm Most little $XX non-OPEC $XX confident Very much, 'XX, that's is coming are in I on in and the summer into 'XX, price. fields Brent. 'XX, I'm bucks, too a another as coming be somewhere it 'XX, up that lot we that it doesn't Bullishness, to As should regard the but year. bullish up this why for hope non-OPEC more to go

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

sections, repeat anything -- you back, how wells. about a current I that? bit that the touched a in circumstances, whether few you said big to you else go or made was X offer are but the Is of think shouldn't little there we we comments for about And a look feel XX that look shouldn't the could sections? wanted I four DrillCo, it's getting we you’ve right

Yes, Charles. This is Rich.

– think need execute we would, to I it I would first.

part Southern our acreage, the and of DrillCo in this the they’ll quarter so, year. this And second and of start

get what see may one say And we'll And be I'd let's as that so, next. done, overtime. we and then just wait see

this then and then, And for Rich. that, Joey. perhaps for is Thanks Okay.

the to pads the we that then And up in of your pad roll those around up average same this mean? dispersion other anything should thing really Going truly In back representative show are beyond financials? pads as up or questions the to pads? maybe are Is -- for going and to bigger words, that’s X-well One, operations then be bumping two different look of on it. kind four there what on thing? the what's year, size percentage differently, the a that your through a

the a pads, on a But year-over-year. few relatively pads have are remember still that part, first pads X-well exact X-well percentages -- we still of So have average quite X-well pads. I X-well say, would I percentages. made significant portion. and can't up in the is we growing

I slowly think and X-well by for the be this year, followed pads pads. percentage and predominant then the X X-well will

down well in for costs. show an can our to up activity more opportunity put to on Of the how there's would we As so financials? course, one drive that continue location,

seem more is may is typical a One this cycle days. our time other the in subtle of aspects a bit of X-well pad about XXX that for little

increases fourth cycle course, that have your that time. whenever on, well you Of

a depending us pads opportunity development it's the the net doing also to timing the a dispersion and back it strategy bit helps little those pads goes on productivity. of throughout the well the year of development, our overall, noise production which with on, lumpier, some to production. that make So create positive bringing may the code But increased have and because in

And So great as we shows move does in the the downside times. that nothing, development certainty direction, being reap cycle but just slightly plan. longer our it it only in benefits

take a Scott RBC now Markets. Capital Hanold We will from with question

I non-consenting and you're the of guidance? now of came you give LOE to that And you that is gas you recovery, see guidance. that is your year, some going And really on part call on look all some through guess that forward below color be your are to at it stuff? cost us in grow what processing, of going And get. ebbs least your forward that flows target then? the how expectations that a at Could I'll this below Take in some that especially

lesser the part guidance into to it range the dependent processing is prices are gas driven of really out where on for by built we residue our That sit benefit contracts for POP extent natural most and most there because gas Yeah, production contracts. costs. a NGL

there the and over But why to ebbs with chart, forward bottom meaningfully of prices. years NGL going and change just we're won't the when the across don't I you flows forward gas with it look it tracking few because -- just going so the bringing next target's with gas that So plant one that's little and prices. lot other to commodity prices, bring expect the this plants, than NGL year, a gateway in on later and change going whole

on That's some is are the on processing NGLs gas NGL were I that new Again, Okay. peers. And on lot of these NGLs. your really getting attributed of appreciated. sticking, yields I price the plants? And relative guess, a better and your realizations strong, to guess, to

stuff have Definitely. seen the better in lot standpoint. kind to increase we new being but Gas, where because up. recovery priced across a processor ends tried higher other the that than of they've levels, recovery from We've NGLs levels sold are Waha also plants take a NGL the up our gas system that Obviously, than protection these

unfortunately, So, bit little and propane a first ethane quarter prices lower. are

to that in So we’re the we realizations first quarter. in quarter not had going quite have the the fourth

just relative the unique the in quarter explain way a guys fourth fourth sell why your Is of there or were some yours? there you Is Yeah. to how something guys strong to you peers? about quarter

enough about Nothing have unique peers or they it. the market out, familiar and not that don't, how reported I you I'm I can point

given size little have maybe can't really and we POP other a bit I contract. than scale, So speak our better

now question Goldman from Brian next will our take Singer Sachs. with We

as wanted too you and I when up then in big on CEO, the And to from cost costs the were picture, efficiencies here. well Pioneer’s topic back pick Scott, high noted the Permian of came you positioned on acreage? want Pioneer’s efficiencies. sufficiently competitive as view costs you costs And you improved of subsequently you size, Are now where do to the you well and lowered quality scale now? your be and based

a area. as data the definitely of we some we're of achieve most now, you but is seen peers. cost Delaware, Yeah, said, we're compare beating it's this peers some are Permian to companies Permian some higher from beating Basin. in know as other reductions. actually since can't than anticipate, the today. and And Brian. or Midland going Basin I really offset disclosures, especially Delaware companies to And I've better first still But Joey looking at the we're more competitive I the continue

don't adding in rate of years. the the year of rigs. plan, the day, get to we to be every a same two to think end three we're I show over So, rigs going at long-term next certain number growth the XX our

is on and longer-term mid-teens X. that And Slide then, you on points bring my growth the plan follow-up that out

ROCE and execution do How as upside on already the about in for key your from execution? and think about focused to in continue focus. team You one talked How is I about you as potential from risks free execution. the wanted short focus of XXXX trying And see on? long-term points, other growth? flow do perspective you you maximization mid-teens and to the cash the to which that are do you risks ask What an when and to grow an decently days, high the you downside

I the think we've taken the off table. risk

under-spending at on. that I $XXX one million and proven very the accountable. It's Everybody $XXX those So overspending everybody XXXX. held off mean, items all. I it We've has I of in it after risk XXXX, We've table. see is low million to focused me, taken in think

to further and billion I it free for we that dividends. to now, that's cash risk the also of right to in billion base and capital, And about as just make variable to even continue I $X free regard flow, We'll think buybacks spoken in billion at the So mostly potentially and point, $X.X dividend. allocate to don't cash flow a anymore. $X plus the that look -- a have

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

prevent the of the business? arbitrage, around your wanted or would financial to from variables follow-up you some Scott, monetizing on the market I considerations water that considerations just be would business. Outside of what

think, have done. sheet. high. sheet have debt. still balance is is that In of too the peers proceeds most I off start to They my reduce that their with, the And too balance opinion using they're much Well, the to

need for to that it So, we don't reason. do

it. So, multiple that we portion decide a of have we to sell what do

selling. gonna In rule probably fact, we're out

this. going it’s we think We're to – bring us. to I've I a this Then as partner, so the we entire and just continue said a decision important to year. long-term It's whether for question selling thing. roll we're of by already not on the in make or end out. too out it that build a It’s something going

… So

other follow-up my there's mix And now? and effort. some in. A just your all if started having for wells the in point provide Wolfcamp of contribution this is seeing the some just turn of that at At future away you made around from and greater Wolfcamp a from are the then can Is you you Wolfcamp color is a B year? consistent other what XX% any zones, B last year Wolfcamp over you that couple extent the to in headway that looks about guys if shift And of well B what some of years A development have delineation

returns. a they kind because A year this because returns. on prioritize Wolfcamp We make percentage as for Mills Spraberry our B focused co-development understanding number of that Wolfcamp up Wolfcamp year, continuing based we sure getting of the from continue and returns you'll returns the see Jo not we've That's And of returns to portfolio whenever Yeah, like that got shale, we Wolf that in camp the Jo point Mills have more equal together. the doing that we're of as shift We're those the time. other of this and similar primarily on year B portfolio. see focused every to a feel significant the small just to and fact Wolfcamp to A, major based David. But, And at part on last far looking strong focusing in. will each development got and maximize we're in our the year. start every strategy a lower and really on be deliver to portfolio and we we'd for B it is, on we'll to what We're short doing it B. can the bring perfected answer is

remarks. to and for And over answer for our or turn would like back question session that concludes closing the I Mr. to conference Sheffield additional today. any

on of and Thank you the several Thanks the you'll few and to the all you as much. again. lot get next forward a very get see months to weeks, all hopefully, out quarter, Look road. next we call over

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

may You now disconnect.