Pioneer Natural Resources (PXD) 24 Feb 212020 Q4 Earnings call transcript

Welcome to Pioneer Natural Resources Fourth Quarter Conference Call.

Joining us today will be Scott Sheffield, Chief Executive Officer; Rich Dealy, President and Chief Operating Officer; Joey Hall, Executive Vice President of Operations; and Neal Shah, Senior Vice President and Chief Financial Officer. 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 Chief for Vice call Senior the and President turn Shah. At Pioneer's Neal time, Financial like opening Officer, to Please go ahead, sir.

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

be of call, financial our policy. variable in outlook, conference quarter results, our will initiation to strong detailing our today's the fourth our we addition discussing strong providing XXXX dividend and discussing position During

the Parsley questions. will synergies new targets We update end your achieving set open momentum, After we up at for and of goals will significant transaction through call the with and that, the also ESG are we year. our last include an on our

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

$XX later flow approximately we'll generate WTI. Currently, to cash the is up give $XX of significant return of We'll at flow and teams capital going We're due to of continued X. free have cash WTI. strip morning. all several strong CapEx shareholders, in $X which variable dividend we on, low approximately by We're at Good free returning operational dividend production, levels. base formalized improving start XX% very, free long-term flow slides. $XXX be efficiency Neal. very cash you, from off XXXX expected of to significantly We'll on you Slide generation about to billion generation some announcing examples had Thank structure, We strong shareholders. to million, the our driven improvements post

Parsley exceeding as So we bond high peer-leading to third G&A the And savings guidance, go are acquisition especially per corporate hope we that, additional interest deal, Synergies on second million. recent barrel $XX in driven by breakeven better previous achieve to beat expect we on into the from and savings $XXs range. a quarters.

synergies about million. the of expect $XXX We there

We our and will million environmentally 'XX, report. operational also talk our year expect to full responsible and our fourth run more with quarter synergy goals that, thereafter. new release of realize reduction focused give remain detail -- 'XX, We year-end during on emission benefiting the rate operations, announced about XXXX Rich comprehensive more fully $XXX by sustainability per with of

Going X. to Slide

in continued despite million both and execution to cash remain $XXX the our full oil upper ranges year. for oil for during averaging production We half production generated both total WT $XX fourth Our of and quarter strong, in flow price guidance free XXXX.

continuing XXXX lease on we're XX% They gain operating expenses. addition, to In levels. down were from

'XX. into Going setting going its to outlook. production robust obviously, strong E&Ps performance, X, continued year-on-year many Pioneer declines. a and 'XX Slide XXXX, trajectory up In experienced our of especially

flow As that. beat X, hope WTI. Slide free seen in billion the Again, to $X expecting is we to $XX, cash at on we're so about approximately generate strip $XX

across time. power for the XXXX without extended weather millions was week. the outlook winter Texas of Our by production harsh last left impacted encountered of That an state period

the XX to prior January storm X of production. announced With range approximately which barrels on X,XXX our production day oil XXXX total little $X.X billion oil of above outlook per basis, full year reflects amounts these CapEx X% the our Parsley to impacts 'XX, of Our and of to through and $X.X we're XX, in billion, excludes winter XXX,XXX also January impacts, production a to expecting XXX,XXX produce of close. includes days between from the which a

Our will efficiency capital of XXXX strong drive beyond. and growth current X%, trajectory sets a which production highly very approximately exit-to-exit up

And and capital over barrel. variable Slide about the framework price discuss $X billion more At for $XX a detail combined the billion maintenance about now $X low maintenance breakeven Going the you plan WTI. of cash the Top-tier of together. capital next our X, per with into look, is companies dividend free inventory several supports that's as flow, generates XXXX oil, both slides. $XX

to the the already, base a via a rest said allowing $XX return concurrently of I of As balance about a strengthening further year, while the and is variable, capital for our substantial for our sheet. strip shareholders

exploring XX about months. term, initiation been it to months. returns. to for We're with our enhances this shareholder talking long XX long-term X. dividend Going and policy, of both announce variable which happy our We've shareholders, We've term short significantly Slide been about for the

quarterly Pioneer's Specifically, strengthening shareholders with after up our payout To that the cash us, capital return presents and significant strong the stable be year. which term We up that we has will the XXXX proposition is a growing dividend XX% long the we variable 'XX attractive to cash to free post dividend, is encompasses returned think and shareholders. the to believe in paid, of expect further the of annual balance for a flow. for be following base XX% an out base critical base of value to dividend critical flow variable be will a dividend, remaining variable dividend paid strategy, sheet, free paired which been form one

In to mechanics 'XX we generate into assume to flow. of it's for make 'XX free going clear. do and the I'm $X billion sure go some 'XX, let's Now cash

left We're payable about of We XX-XX in split 'XX for billion. have $X.X 'XX. with a We're to going that base million. $XXX

be the and be debt It the million to split payments with the The will different into part variable be paid will of that $XXX reduction. quarter. go month $XXX $XXX will will equal for quarter million quarter. million each So X -- equally a of offset in

yield estimated want the based each on you plus The the checks we base X about the a variable. add is dividend price Pioneer. So current year shareholder stock X.X% when receive from

go away for million at now, And XXXX. XX-XX. variable current current the expect cash That equates left split billion to as base, the $X.X the you're dividend generate Right billion. $XXX $X strip, yield. reduction. we debt a stock about $XXX and we about Let's with flow. That's million price that a $X.X of free for to billion Take to X.X%

we as So 'XX, we and clear examples. is forward that hope in 'XX move those

X% on We've shareholders. generations rigs term. Going slide per XX% to value cash X our adding a the growth, At thesis. It before. flow this X, long-term X year supports flow, focused and current cash free remains creating to of same, for strip, Slide program to reinvestment significant remains the driving our long rate which XX% is delivers long-term approximately that annual had

free believe cash strategy during We Pioneer generate which expect to at capitalization. this 'XX all our is $XX positions a be billion leader approximately framework market sectors $XX 'XX this than XX% greater competitive and differentiated current flow across WTI, We in through of industry. to our within

it over turn now Rich. me to Let

Scott, and Permian Thanks, start the on with scale. X. the I'm good entity only size XXX% to combination with Slide And focused of Parsley, morning. going and we are

to a of zero land. XXX,XXX have net substantial the from You can a high-returning that with inventory see on exposure footprint acres, a federal about combined we And of basis, wells. math, importantly,

plan the fleets. to for and X average specifics X the on run We XX rigs XXXX plan. XX at frac Looking to drilling to

is the the move continuing our similar larger can Parsley from applied in chart you very can drive which sizes efficiencies are pads, Other XXXX towards to acreage XXXX, bar be XXXX the plan larger helps in to see and there, well development the pad compared position. lateral to length As and both mix we program. than in

of without many done our supply of and their been partners service As home of all would especially back impact employees, restore of so. week to have and our winter dealing employees, production broken this pipes. this production being online opportunity power to of have production in repairs The is and or take the with activities. our online, and for to the their They Scott we our storm approximately resume week own expect all from majority last barrels mentioned, a the team next did to and terrific XX,XXX having production completion them vast efforts company personal day. per like thank drilling see I oil job, while remaining chain and field portfolio back by

doing I for want most So personally to and it thank everyone importantly, safely. the hard for work,

Slide XX. to Turning

and You can mentioned, target Scott rate interest, on see, the Parsley post aggregate, synergy saved, initial $XXX this to we by coupon an of of lowered overall average debt are X%. completed increasing we $XX January, million. annually, basis, to million Pioneer's million $XX of $XXX our approximately Parsley from exceeding the our as In million annual In the refinancing refinancing, million. interest target $XXX

on G&A of $XXX the year, first the that. way our realize towards synergies we're and to We expect the in well million half of

the target adjacent achieve Midland optimizing of production a in recurring our process give by We're the given the year-end of a On XXXX. benefit in little in synergy operations To in operational which that field to million, on expect Basin. color $XXX XXXX, work will we progress. operations beginning the drive the

with We are water water at consolidating the improvements underway. few a systems tank looking disposal just we're and our supply further systems, of batteries, name chain capital initiatives to efficiency activities. associated And

Scott as XXXX well, our is compensation of incentives. these synergies part As achieving will discuss

which with synergies you If free our supports of you coupled cash model. the look wells, page, at the our inventory these right unmatched high-return side can of see flow when

XX, Turning controllable to costs. Slide

X% We costs see in which a them expect cash our another decreased comprised are to at average And cash X%. in now continuing were XXXX. mentioned low or to of of them being you These costs. cost here, can XXXX cash just our so interest, and we've reduce I controllable XX% decrease journey

approximately We to we we to our in component LOE expect industry-leading this stop BOE be horizontal continue then improve expect won't through thirdly, G&A, $X.XX trend to cash second time. is costs. around The per XXXX. here, And which and

turn that, to stop going I'm over with here Neal. to and it So

flow position, to our On a can peer group, resilience premier you low have financial us Pioneer's asset-based of XX, $XX barrel Pioneer's breakeven to within enabling below and strength. portfolio, WTI significant a to quality breakeven the the have reflects free low operational price Pioneer drive Slide reinvestment E&P positions and corporate rate cash underpinning only a This and the our generation. see

asset unmatched high-quality exposure has lands. to our base no federal addition, In

the breakeven best-in-class We it with earlier. that discussed refinancing an our and during less can that than Rich financial to continue our flexibility. of savings interest of it will With average capital while Pioneer witnessed strong Turning our sheet. our investment to right, financial the supports return X% coupon position to the And our strong framework, leverage trend that, significant the balance greater To Page value graphic Parsley's creating concurrently facilitated our an of while of for variable fortress well both million benefits to debt-to-EBITDA debt low XX. from sheet driving substantial average as our as dividends, to price $XXX of downturn to shareholders you through capital coupon the With in returning net I'll that XXXX. balance X.X%, operational providing Pioneer's than demonstrates turn was of synergies lower, over that and shareholders our bolstering base Joey. shareholders see

be costs. Thanks, and to committed best on And on demonstrate illustrates the and going facilities Neal, and they on drilling made also XXXX. XXXX, off completions right-hand good significant the the progress delivered our came promise. left side similar XX. reducing ever The morning the the in Slide year We to I'm in gains everybody. teams shows graph to our in starting chart on their

and to decrease XX% together the operation initial cost teams by our of partnered XXXX. facilities construction Our since

has on of improved importantly, our accomplished most been protecting without XXXX. safety been the and and These to all would All To compromising environment. companies. not by contrary, safety work have possible suppliers in without entire the this the collaboration metrics chain we our by introduced a the remarkable commitment this truly great year supply has our service team, Adding any the with measure. hard been and pandemic, complexities then of staff, and gains

have and gains engineers they often I our these driving improvements? possible, what's our of small a use we analytics in and on all staff solutions moving XX. science that hard to get have data very and but these effectively better so to make and technology worked make This subset certainly in used improve where leverage proud data of to technology. We're field performance. Slide did decisions expertise the partnership Now teams. with to represents set technology Their has us different examples to very allowed areas advanced to asked, extensive

performance, the we systems stimulation technologies performance reducing we Just performance. for can field has of environmental safety and reduce improving best left failures. emissions sensor compared our to performance will to time And put the the examples a create repairs. efficient I safe are ensure optimizing vast Scott. best-in-class performance. to envelope Pioneer Mobility few strings, cost compromising using detect of us have or Machine entire driving proppant environmental people need value in time keeping available hands our us the to to perform as creating execution our top on to deploying into footprint events time without us and to use progress and our we by to the allowed to the XXXX, in from I'll technologies Ultimately, Coming their of slide. our access deliverability and Congratulations allow uptime. analytics data now are while emission move and And our more the our turn and various peers. minimize that projects more fluid set right our the contributions jobs well push and learning drill predictive have demonstrating convenient to reduce digital teams our By team it real allowed when to to twins information in XXXX. to further to over they to remain applications safe, they back and committed our staff cycle and improve their reduce for

off Starting barrels. XX, Joey. you, Slide Thank low-emission developing on

of chart essentially a the have Basin at oil emissions It's think company, have actions This per interesting I majors, an one lowest worldwide. we Permian is found. taken the state-owned COX the in -- that the produced independents. that being lowest are we and as BOE companies, we all large

in world, barrels globally. associated operators over So intensity it's Pioneer's lowest barrels the one hydrocarbon is produced liquids per XX global million up emission largest the operations making COX the of day. of

desired to Our the low cost, be to Jumping barrels Slide continue around low XX. emissions world.

We going forward. compensation continue to our executive make changes in

we done, the year, first tie based of was any things on One myself, LTIP for last the CEO, we've did performance. this XXX% on

on all performance. it's based So

to No combined some and also We in the this. remove has the added that perform CEOs in We anything goals new XX% doing program S&P some and ROCE Pioneer the long forward. be now, goals. S&P XXX started ESG CROCI to our XXX. myself, We Right only So last We index year, that XX% did from average term. and now added last weighting company beginning group paid And for increased We've is goals And year. increased have the CEO, of peer to XXXX. into we're TSR HSE reserve we XX%. XX%. and any production about going

In work achieve we to that As our make do strategic, synergies he mentioned Parsley incentive we that annual in any Rich XX% number that. that strategic, do have on have to mentioned, regard. in

ESG on pillars ESG. great to of Going to of all focus Slide XX, strong Pioneer importance. hold continues

Scope intensity greenhouse the Parsley, very gas in both. X intensity compared on X.X% peers' methane incorporates It our of both reducing emissions emissions. Our X.X%. sustainability reduction last Scope of flaring was Inclusive goals strides a and and quarter new we reflects have and report released average of low significant to X

continue a We which reflects which live to workforce, community work. and we diverse promote in

open Finally, on #XX, committed dividend structure. the thank it with forward commencing value for Q&A. you. to our We'll last now shareholders, driving and Again, slide, we're our for finally variable looking to we're up

question from Freeman [Operator John Instructions]. we'll James. take And our first Raymond with

things. clarify policy. wanted detail, I to I make a all -- to extra on just appreciate variable the the Scott, sure dividend few just And

this to after 'XX first the So cash then XX% it base. to term, year, year's after flow up to when prior base. the flow but XX% think be And cash the like long -- of of basically will free up the free strategy we about distribute the

we are Just maybe kind about anything about really deciding XX% thinking should of to conclusion. to are that leverage there's are it's given all and sort if think year Obviously, coming if any XX%. of But be in low. how your that just between how how you you'll metrics already

Yes.

used I think, to the us John, first of all, flexibility. we give up word

year pay nature XX% simply our prices. the industry of all up this Our is commodity of for and of the do XX% to and beyond. because flow to 'XX free volatility of cash goal We and for along the

We is down -- debt XX% to better -- X.XX. intention after even intention than X-year at XX% but term. And years, our long over some period, goal. actually, time targets That's do at true point, make to look get I So this are essentially a debt-to-EBITDA point, and you our our the X. numbers didn't our get we if X

not not the We at as will balance XX%. me -- at point we're because have point, have a back no we or whether we have higher extreme continue point, firm reason buy reopen stock we're the some $XX. last the And long some sheet. a Board we buying annually at talk, believer doing firepower which lot think heard you if debt, of So you we at that, experienced But to go we term. stock had year, of could no at downturns like when

we'd at like current be go price. future a buy enough of to sheet stock any have able downturns to So balance great the into X/X to back to

to And to just We the great of better think over better balance industry. better volatility so time. have get our our it's balance you'll sheet and a sheet see due

So that I hope helps.

just That continuous second really Shah which of about acreage. of follow-up know to about does. of a the kind the leverage, kind think synergies, pretty additional synergy the on that let's on into in of talked sort think of take bit those Maybe different later on realize say, sort XXXX. infrastructure, occur whether how the those we And about the fully batteries, versus operational Neal of But which as year would may it's water to able I of tank quickly good realize. just sharing to details of then a you're some half some the

John. Yes,

the think the terms we'll side capture that contracts. capture I production best stuff field quickly, I we'll our quickly the optimization that are supply suppliers chain maximizing of think the in and our operational side in leveraging and are of just things terms just things

easier those think the I ones. are So

a talked connected we've water connecting systems disposal little have think I the integration we bit take the those capital longer. that batteries, the as budget, about systems, the will getting tank optimizing in and the

second more probably are those XXXX. So related into half and

that's kind and what of of timing comes of first So kind what of I really those think comes things the later.

next, And Brian Sachs. Singer Goldman up we'll from with hear

question My first report. to reserve is with regards the

upward had You and revisions in gas NGLs. substantial natural

going had I You the And any, oil. price area mix and the downward what drivers comment some And price. revisions what driving realize Pioneer's revisions the to wondered [indiscernible]? us there could if implications, for the are there adjustments the ratio I be if reserve you get forward beyond this. of as report may and in on of production

Brian. question. Yes, Great

prices as XXXX mentioned, down about on WTI. a pricing, to ones. know, as you to $XX think But which SEC WTI oil $XX oil clearly, guess was you I driver, XX% prices, the XXXX gas the from using start get NGL were I to and from I'll down and

we're So networks. negative our enhanced on just our the continue and a to completions look improve you really most for One When is at really revisions NGL, that's the coming from it's couple that revisions oil part. driving the on of things. gas fracture seeing positive

oil, NGLs NGL gas to as allow We've out and gas but more leading and reduced which added also that's more reserves. so improved only gas so line not therefore, to and infrastructure capacity, has recoveries from well. flow, seen wells, and better on to there, pressures And better the

$X. the moving of low strip kind that to you probably those that if out, in closer F&D $Xs, be So was

during think year. the of were of And that's the so background the reserve I what kind changes

I mix. think long terms terms thinking you're term, And in in of of long-term

still running growth been in right the we longer level. we've lower be to to range XX%, anticipate this term rate XX% call think it, I that, be oil. on that at -- And

announced a this months. exit, that it last Great. said about price -- and about rate year you have question something how oil And today. over it, few within -- X% of stick then The plan, just a that some I reducing think X% think asked above XXXX risk if you you of to flow When the about -- of X%, at to the my into an you threshold. where cash at reducing you've is thinking couple been lower free views increase up or the I torque between to had you're follow-up, And X% asking could said flexibility in up I potentially materially X%. wonder going growing when activity production and where than times the that's be versus Scott you think might above we're but

are 'XX long-term Brian, beyond and the we're committed X%. about I in of rate still -- to growth starting

may Some be or years, X%. X% we

be we'll back X%. we or too. X did in to to go extreme flexibility years, XXXX downturn, Some or into unless And have get we X% 'XX, we another the like growth,

we're Joey the grow we're to capital not we're dial if capital looks going into it -- like in going efficiencies, and achieve up. going we're achieving let so going to 'XX, growth team great continue to back XX% to to And turns If his X% it jump 'XX. and to rate out,

a Wai take we'll question with Jeanine Barclays. next, And from

the to response following I think on John's question. up just

Is I And at to are net think being getting the said you net that at net it and thinking X.XX? -- X You you X. think point about X.X, zero So it zero, to level? you not be at mentioned do Is getting debt under debt? or what how years. zero, levered? the And sorry, I company of consider

sheet balance the point at much in you three time, in so years, It downturns just in think mean XX flexibility. me, gives have to the seeing better this I it's to business. I best

choices one We like I choice. -- gave have

that may If debt. strong, continue X, Board extreme a in or variable year We a We dividend stock have cash back be for the flow high not free have though to X downturns. they even flexibility. can wants as buy our

Sticking great choices. back had so I we buy for even we and afraid more we to it sheet $XX. thought 'XX, many our -- at balance a were stock So you gives mean

how So to occur. we is going long no downturn the had idea

downturns So sheet, I've been I even an a have than just And better it's think balance CEO there. sheet. more better probably out any -- great I've I balance through just gone -- to

XX% have higher XX% does we XX% the also, XXX%. said, Board So the I up to XX% or the flexibility take or as to or

So we more balance so have -- you have many you better than sheet of a even choices debt-to-EBITDA X.XX. when

point So a I would debt we So... have don't time, at some eventually, target. have in stated -- to X prefer be my ideal target

And Okay. Options hedges. like We on are just good. that. follow-up is then my

some how -- factor net your hedging? Because does kind philosophy projections, we into going does I new line forward? debt having so fine a And know hedges risk with protection, balance companies see generally, for how your we're less hedges. are we But generally, walking better the less see kind that sheet of of And hedge Could protection. sheets here balance in respects.

protection. some sheet for So balance have because upside you reserves the that more

forward philosophy if wondering well. going just your evolving is hedge So as

It's XXX% The our we still evolving. spend CapEx. to big of change, used

we're spending flow cash only of our Now as CapEx. XX% to XX%

limit so But is a in the latest change. any the hedge. extreme tough liquidity Saudi to OPEC to less floors, the way volatility it's makes do may backwardation. in protect this it and because the engineered do the that And it just any collars. We rise, -- and going has may may protect market We enough that's base dividend. extreme And to We big market hedge to forward. in

of be strip, able a they $X side upside on So each each $XX, so used the side to you collar on do give you when very little or anymore. to

it's going So then the we'll the variable base. an And it's hedging. see extreme backwardation, something shareholder as really directly dividend lastly, long us is -- as do that's probably less into

guess, hedge direct variable a So on that dividend. what reflection it's if to to try we happens that

of I'm continue term, see out going probably or so same do And do less. backwardation to we're at see to we the market, guess, the the bit us time, may that's little more. spikes to you a But long going taken

remain going So we're opportunistic. to

JPMorgan. from comes question next our with Jayaram And Arun

of we're wondering you us XXXX was the Scott, highlighted. XQ. Rich, X% I on could -- based shaping given around that maybe just understand that rate, CapEx the disruptions X.XX and of oil help if exit production better that you weather some profile for And and the we had estimating,

wonder I through So the if walk just could progression. you

we more because said ramp I the going that good getting towards late higher fleet average Arun, last that, January. it think second production a when of as XXX the started the the of activity the period. just quarter, back ratable of I because through frac ballpark, fourth that you may and move think think the be look was rig it, pretty in first is in days in code. into just zip at the that about it exit that. starting I increase in rates but the to quarter year quarter aside rig weather Yes. and we'd do rate over slightly And were is, then to X-quarter that kind end setting time it to the impacts, I And your But it's be than capital, on we think takes

pretty would your I ratable year. capital the So throughout think is

QX perspective a -- ratable through ratable it's that or QX QX production. and think I from capital on really on So

Great. Great. And just my follow-up.

Parsley of in is conclusions of the the volumes you Any of the come of a little performance? that's thinking. delivered terms regarding light few was quarter. bit market of Parsley of a done the there in One there? Pioneer bit questions the a obviously Have postmortem were on weeks back as a kind But XQ you legacy X-K-ed fourth some what

One, it. Yes. of couple about things. X,XXX of acre, Big sold production A associated had their Tex they with barrels oil a day

get activity. of then up was just it reduced And it. quick one think was the the piece that on I piece frac back of activity So the just enough. started fleet other They didn't

in a quarter had the And in pops third relative limited so they number they had the to what of fourth quarter.

production it come didn't so was the just -- stay that level just given really at And decline.

And was -- nothing It's by it well fine. that's performance levels, so driven just really, really been but our activity. that, has assessment just activity the was

forecast, right? updated And it. into Got your it. that's Got all baked

Arun. correct, That's

And Charles with the next Johnson will question Rice. Meade from come

belaboring are But this obviously, to a go to half the like you are 'XX to Is XQ kind -- the X% weather downtime. on curve, year, X% you be the what not going have a of going apologize it's But to looks guys all of close there's in to big sequential quarterly of it back are showing I you shape really going of that the guys guys -- it growth. back. little And kind of bit. to for me XQ versus valid like internally? the production to again, comparison looking point be a because at bounce looks

It but a because got little just about the to me, XX%. Scott was of talked kind that think exit-to-exit seems I high

to it's directionally So right general, it be in I would in the place. But seem slide. mean,

And be it. kind to guys Delaware. as really new question, you the term, by either you That this seems a isn't a guys, seller. highlighted second -- to percentage one but allocation of for would -- it's my then That again, again not it or grow it's the CapEx new. Got X% needs like

term? going in your you the asset offer any thinking how on your of to to portfolio can play us longer kind So refresh Delaware is

Yes.

is of very it's there. higher reasons. number a think, is oil before, There a as talked I about Delaware that's Charles, attractive -- cut acreage for we've

and NRI high infrastructure a have We good over got we've there.

XXXX the program that So for outlined year. had is Parsley the by driven early X% in really, the really

looking be will program. we so that at And

Delaware. for economics in very run-up oil favorable the the Given are prices,

into we'll Midland And Delaware. reallocate from the look half the to at do over back XXXX, capital how so or year of we,

acreage hands we're move forward it and still forward. and a as So pleased on get get that chance our look to we to it extremely with developing

And Gruber with Citigroup. from our will come next question Scott

any roll the the Will First extra you Parsley, into captured LOE. full as XQ LOE? the so, early impact contribution question in half? Parsley any from as in second there how how Are think should And CapEx? have And LOE on XQ, then, in material on incremental those production off? on costs storm production XQ that's if integrate normalizes here we about not

Yes.

and on seeing you account that minor BOE, I adjust did that the LOE but repairs due about they're on our guidance the storm. the to things, first take into -- a grand we repairs think wells our if we're quarter, the of up look facilities scheme to for in just $X.XX at

our And into guidance we did range. factor that so quarter first

range. And if that give down you BOE per QX good for guidance beyond, that back range it a you and take will $X.XX and so the

Got and of of you. kind of CapEx incremental here process on thinking the made the we portion? And incremental above kind production be should any early the beyond that

don't think I think wouldn't we I No, anticipate any. so. that Scott,

here your completion just then And efficiency excited the and on deployment? have the a about you. peers to A leg technique and drive gains. about you few in talk simul-frac. Can technique here interest opportunity Got the your another of of gotten potential follow-up

goes this hit. as we before is year the more finished storm actually feather success Scott, And do right Great our plans there. the over into winter Joey. on operations then just first and We our simul-frac have time. to them

Okay. Any color efficiency D&C on the or on improvement savings side rates program? your of kind in first of

the we assessment all from the would I it pad perspective, a so that X-well But of Yes. we cost reduce have From about do a X/X. to side. by take just typical on we time the don't did a time -- completed course,

So significantly on amount reduced the of location. time

of will that. So were, savings at cost evaluate that continue what the a we'll to course, our then look we'll and evolve into continue to be which, operations. material, We'll get

we'll Doug America. of next, Leggate from Bank And hear with

way all, present. laid this morning out is of really think the I first you've pretty Scott,

congratulations his So consumers Shah has the got this. on framework fingerprints all that over

the guys, this really on about is out. a longer question things My congratulations, So laying of term. couple

the That's a X% wondering growth dividend that free question like to the spoke about terms what the view XXXX, And is, a [indiscernible]. I'm make because market of you us about in would just as expecting. the more rig changed talked cost? trajectory. of X-year to standpoint. that, think plus is as a beyond obviously, than activity I with probably for if means if can it's look want but capital then just wonder X% activity sure press spending. about talk from bit question. I could my cash more hasn't about wonder you you You've to second you my what I XX% that I -- and thinking Because, some that give a first

trajectory. X% and on the one questions, longer-term the on plus, two, two So

Yes, Doug.

when first already, I've part, we're talked about go again. plus, the over I'll The But X% second the we part, flexibility. leaving it but say just

can't get we exactly. X% So

be may Some X%, years, X%. we

X% be may we years, X%. or Some

go low goal flat X% growth. So be growth. I If really did of gave the our we examples average periods, is on last like we going to down production through oil prices to year, we're

to POP the go flexibility to rig based X%. be years, X% X% goal And flexibility have some may that cadence have But not exceed and we do some on or to X%. is cadence to X%. to years really so the But or have we

as I about asked the have couple think of analysts a stated, 'XX. so And -- already me

to capital closer So be production going capital we'll 'XX, and it we're In going reduce or to looks to X%. get too X% to going into XX% back 'XX, like growth. to hit efficient it X% we're

question. hope I that So answers your

the time In throw equal XX-year years. period, side. term, we that's target to or current regard that to period, by enough some will Brent. And long gave billion. $XX, cap our market $XX it's I time going So the current strip, X-year some out sell a really a basically cash flow X other WTI X% Over Over next is long $XX out at projections term. numbers seen $XX off free I've

$XX and of XX% that so And paying debt we'll variable be of a goes about actually as toward out reduction. that billion, XX%

be after about going going the I X over to I X-year reasons to that's comments debts almost period, for down next our why so years a actually And X the gave. made some time

also, examples to want stock more higher are year So I'd rather periods last back whether options like during It buy extreme regard in better sheet. at have cash obviously, that X, during cash could or of up as to debt flow. XX% we given the I a up year. And XXX% a towards the as higher increase to XX% our free that free gives down variable we amount we a pay flow XX%, much where also than to $XX, had gave our we balance us moves a optimism

trying the fluctuating obviously, market. give So to price hopefully, in options and Board various this flexibility, we're commodity

if -- Scott, maybe just maybe too trajectory missed I some that's along trying apologize, be I'm the rig to of get goes But or with detailed... trajectory a POP a nuance. to I that clear,

one Yes, of Okay. to that -- one said we're per earlier -- is we our term on rigs of I we're year. my -- long X in added going slides adding my that statements X to

you X the to X year term, long term rigs. long per can rigs So XX current XX adding figure to from

X%. [Indiscernible]

Neal. it. it, Got Go

change about a helpful, Does then. hedging guys. even follow-up such to oil robust quick think really maybe balance the the consensus, and just let's price philosophy your a That's not be hedging risk sheet, And growing do with upside Okay. you say, to there? how seems

flow We're spending XX% to cash our about XX% now. of Yes. only

we extreme the liquidity, CapEx great we before. market, of much So to have free needed backwardation. or on as get liquidity, don't We balance anymore. a upside to can't the protect market's sheet. the less as do Due need any collars volatility to The we in ways

So into probably probably see marketplace. less the if we'll any that we spikes, But you'll go do see for of reason. us hedging type

world is and still obviously. come driving opportunistic, to around that airlines So is get we strong. immunity. strong the we're herd to on But a believer also going strong, demand back both the once be I'm going market

the the OPEC+. confident shale So U.S. to OPEC a -- barrels assort longer into I'm Iranian is and -- that be can over going we to no and and that not time, marketplace threat

Securities. from Neal Dingmann Truist question will next our come And with

just you that maybe even around the Scott about or could with were on this. overall clear to Kind about base assuming that potential with to pretty been talking want growth. Neal, make just you production with a variable. just sure growth? of base I you've Could know about you other XX-year as flow you've variable. just -- the about talk you about that talk talked the the What growth dividend -- are the be -- I dividend specific sort what I conjunction and dividend Scott, growth? the the I'm of how -- what continue -- Could bit -- missed will with

Yes. -- increase It is our goal. year a every be will small

something So will that -- in expectations. something X% It X% X will be to minimal, it minimal. from be range is our --

thoughts just around thoughts this, the Or Rich you, production And about anything or and know Got Scott, then, the you outages you what it, us better around know, doesn't it. I I here think it. don't things often. there's or wondering the Joe, saw I'm that Have name to do you've to your the -- it's that doing about or that permanent going either, just forward. storm. on about experienced happen structural or infrastructure But it or will if that you all you are about started would I now or Got tank things battery, you sort of started to, could prevent Texas, don't if in with downtime quite just saw changes? think you know, obviously,

Yes.

such XX-year take about event, it. learned XXX-year think in look things to happen. be was whatever lessons I we'll you from event general, it what want or it. We capital-efficient at see a still and But

that. assess we'll so And

a lessons point, at changes make. I that that a we not nature don't would of freak from it the decisions it, learned. this So given substantial -- at see no definitely we But today, but that, say just we'll look would any

now. back is everything And online

week got rest next We've online probably vast get the of and XXX%. back Not the we'll it. majority so, or

next Whitfield come from Stifel. And question Derrick will with

for recently Perhaps a operation? offset Rich, your to direct Scott From pursue a this as emissions X investments Scope the offset could or carbon an company's perspective, means you direct in to similar peers from renewable committed emissions desire plan and/or to to ESG one on your comment projects. CCS to of through something

term. doing peers like targets like capture We're couple to we're have go have companies carbon and of XXXX. is general, our they also to on evaluating net ambitions a stated what -- assessed that and word by the ambitions In another long they -- Yes. company used X Oxy

also. that assessing we're So

everything -- regard better. the is on table assessing everything in better we're and -- So to get

with to they're and what stimulus focus see administration So to next. Biden have gets going does passed, climate we'll and -- the then the their on infrastructure climate upcoming after --

And have also. that evaluate so we'll to

that so everything the And is on regard. in table

X. perhaps for my Makes Joey. Slide And Referencing sense, Scott. for follow-up,

slide to pad from comment regard operations and with how feel and years progression lateral X where length, size limits can your you are on think to D&C the today X efficiency now? was about this As the you you of

pad. now to to and But of developments, very for Specifically, a wins expected win. to we continue in add so charts, in more then stack other more thing big so significant The comments per improvements. XXXX. that that's have, in From a more benefits done there consistency the And be my and having us continuing many when small, I look to have waterfall would wells improvements. incremental on continue that wins different never basically say said to that significant on would certainly, as increase. the that full project aren't say we've is the are be on what at technology that had. wouldn't my co-developments that perspective, average, expect size, efficiency pad big that for lots more size it's I up Simul-frac may I most and as But from I to would comments, part, perspective, gain I we'll I an achieve do XXXX of

work to it drive to to continue lower finished lower. and on relentlessly And certainly our we'll not at that journey. So structure cost we're continue

And hear with Bernstein Bob from Brackett next, Research. we'll

payout? when flow So the of Quick and the dividend little if timing one. quick free payout XQ cash what example? question, The from the maybe is in variable decision XXXX, XXXX, XQ we're is slower made decision question is a about that the of the sitting of on for

have in this early the when time. make those generally February, we the And Bob, Yes. we or discuss late that's point generally increasing meetings when would and Board in at -- decision that is our Scott. that's to dividend, We early mid-February. final January

So you're correct.

clear. Yes. That's

is buybacks. between the The variable and share trade-off dividend the second

make the internal sense. what and the thought would buybacks variable sitting expressed some to Or you in go dividend the say. last sense process At an back So use more are buy of valued let's is clearly shares shares point of sort that? that the where less eagerness year, decision? into you NAV -- makes middle to make Do point, to

variable would stock. XX.X% all, long would over back after over Well, pay months. -- talked they first dividend shareholders us I buying That's prefer I versus XX year. And long and stock the preferred term XXX to say of would buying year any term, last to they a that

know, top industry stock a the the of has the terrible you market. of record buying back at As track

that -- are people about maybe to now the were at stock so close of talking buying And at top the back market.

of And so that's the buy-in. kind a wrong

in sheet. back favor had And great at a if a sheet, dips. did didn't in balance enough you to of buy great so We is -- have it, chance last everybody can to those buy back balance year. afford we $XX We

the back dividend downturns generally that's as so not feelings focus -- So that's and on our during those then only back the and it Buy to long term. best variable buy long capital shares, term. the return way

from we'll next, question a Scotia Paul with up Bank. take Cheng And

cash you oil guys put in the into debt. when net gets just excess that to for some industry point free questions. temptation, thing think companies balance X the E&P sheet, the and some Anyway, on the have two team, the cash the the complement sheet, for net you just and -- on I to flow is at that to resist put the want all spend you and the right balance for Scott First,

lower great the with you First, that you growth now, rate have a targeting inventory guys backlog. are

the you take that... now second receive you that it make XX data The or develop inventory to sell form? other to joint royalty you monetize it and someone for may to that have of or from question either sense venture -- at some So it, you some get else look to does through is really long the trying to before it years

yes. Yes, Go ahead. no,

Go ahead, sorry. Scott,

two generally remember I can't I Okay. questions. --

it's So time. at question better give a to me one

first about long-dated question, -- it's we've the the policy same had. inventory, On the

there it done to to over last the X -- up, We where try be oil and our we acreage that will consistently could price we've Tier over the people approach and will X we've take with opportunities think like I us on more continue that years. have divest And time. moving

that wells at in got That's We've look extending when positive. we've have place. put that And doing we drilled arrangement, that. XXXX that. into Secondly, very like we're back we DrillCo would stated as a back, already. X at into things entered looking I And came

those we're question? some that looking and What's of are at, to the So examples continue your do second that. we'll

capacity, that The is will and number for probably -- of will is here Permian in second clearly excess be a that situation this maybe question takeaway years.

modify to way on So And how any your maybe that how those? deal there effort? Is take-or-pay that you your also, existing impact contracts? marketing with --

say Paul, really and -- to Yes, Coast Yes. move now. for contracts those things Rich. we are Gulf have our it's transportation the firm I'd

that capacity. lower roll roll the the with some number contract. transaction to we we'll have growth get plenty a arrangements we -- their we Parsley those a pipeline be with the able that Midland move couple of In years, barrels commitments. that of have in barrels off plus so And And those rate, off But Tank of is Farm. extra -- onto marketing can

in markets but our to concern be -- and given So new point, but better, on where have this see would a be far commitments that, what continue higher-priced and get there's our the Coast. honor export Gulf have. don't so long any taking we we'll that. ones no 'XX. And is get at I part but that volumes is, still and now of term, in -- higher we the would move hope clearly, those market XXXX being that on are the capacity Gulf where to Coast market differentials we've think the But to we'll negative prices on will on in mean, I with in to slightly continue the the been us yes, assess and to refinery terms able down Brent we'd the prices

turn over concludes remarks. that call session. Scott Q&A Sheffield the I'll for closing back our additional or And to

where summer, here visits everybody. U.S. get fall, can starting a in us we we'll the Again, chance immunity late among herd reach have as we summer, some thanks, actually of in Hopefully, early all

very Again, us. for again, look thank Thank forward in tuning we you. So to next much you quarter. to

today's concludes thank you this for And your call. We participation.

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