Devon Energy (DVN) 2 Aug 232023 Q2 Earnings call transcript

Ladies and gentlemen, welcome to Devon Energy’s Second Quarter Earnings Conference Call. [Operator Instructions] This call is being recorded. I’d now like to turn the call over to Mr. Scott Coody, Vice President of Investor Relations. Sir, you may begin.

you for thank the us and today. call morning to joining everyone on Good issued release our an cover we night, Last earnings for remainder XXXX. second the our and the quarter for and outlook of results that presentation make Throughout to presentation remarks these the prepared found be references slides the our we can support on earnings today, and call will to our website.

from Gaspar, Officer; Ritenour, the call law. members the our senior risks our statements that estimates results SEC risk a could CEO; plans, Clay language U.S. securities subject materially Muncrief, Please materials. our other today President are actual Jeff forecasts and in Officer; Financial Rick on our and forward-looking note are take These our forward-looking cautionary factors me of Operating statements. joining management of uncertainties and filings assumptions, to today provided Also few team. and cause Chief earnings under Chief will are and differ and our comments that Comments to include

over will With that, the to turn Rick. I call

the share benefits and throughout business portfolio, framework. model, disciplined our we of the of after have Delaware-focused our you, solid as to here and defined The the We another the build attractive of momentum asset efficiency of growth everyone taking can all on us. this to continued capabilities quarter quarter as Pleasure return be the quarter. execution per join Thank appreciate consistently time demonstrates be and Devon’s one morning. our second cash to business delivered quarter our team’s fronts execution Scott. quality performance the operational strengthen

to in industry few compelling unveiled impressive showcasing value ago. capitalization record and pro The buybacks, creation. just reduction we a Since value $XX Xx framework chart these value cumulative deployed track very of bolt-on the share visual this of years success, actions from dividends Slide late have our on provides X Devon’s of we forma first XXXX, towards billion market The nearly acquisitions. equates the accretive debt of a

from our diversified to-date, allocate see to the cycle. framework can across designed flexibility actions through you to have carefully flow results we financial cash the return avenues As multiple free our optimize be nimble to with cash

rewarded performance, Importantly, the execution highest market with in our over been stock this by entire of any has the S&P disciplined achieving this equity return the period. XXX

record set a of midpoint this new through guidance basis operating let’s Now, X% all-time volumes our with a surpassed in trends day quarter us growing by high oil averaging Beginning some for a detail. and on did expectations barrels oil company go quarter. This by quarter. in past great and highlights second the production, the greater job, result team XXX,XXX production for per the year-over-year

that strategic activity assets Additionally, effort we enhance growth result includes an selectively by Delaware the was in equity driver this the volume and several our years was infrastructure in from midstream through this record-setting E&P key that of operations. in have to an core the A result taken higher have Basin. completion invested supported stakes

crew frac few to temporary times, originally we than consistently benefits wells more and quarter, were XX leveraging the due to the online gains. cycle a Delaware was fourth able By in of efficiency which planned a we bring improving new

in depth B our this excellent from Wolfcamp Importantly, the that resource a in success included of well the appraisal and productivity batch quality area. wells Delaware the was and of strengthens

portfolio. that diversified successful asset Eagle projects test base across advanced We across in it interesting our also confidence Ford handful redevelopment currently a in the and exist our upside reinforces other of resource had a that appraisal the our

Slide upcoming operational momentum expect in per to X, in good quarter. with levels the the of to our volumes seen visual upcoming barrels the quarter, second A higher activity profile with third XXX,XXX to day of on grow ahead, strengthen range to quarter. production a Looking oil this continue XXX,XXX we of completion can expected to be

due on our touch into and brought touched and I record-setting topic strong earlier, level, expectations a I execution quarter. at per very that drilled day and growth but the feet several time completed the spending later, the and As basin we’ve that both to drilling to will capital trajectory completion operational to metrics to have teams drive proud year-to-date. from am we spend cover forward the set this of ahead this activity achieved Clay extremely company share records contributing was

cost refreshed. months also service resulted from addition In in cost and beginning category. is is improved gas-focused deflation – the are of to natural by our business benefit contracts over few driven companies in activity and efficiencies, resulting services deflation private to This availability our from past every virtually as producers operating strong reduced

that cost environment, date Although to the rig miscellaneous services pressure this very is observed end this in a will rates, of positively our to dynamic other we enter structure begin year. of most the downward impact drilling we’ve the and fuel areas as tubulars,

in cost price future. anticipate also a our which pumping, pressure We movement near category very is with largest

While for XXXX what say our firm continue. still for our somewhat premature is, outlook expectations it’s should to what set deflationary and trends

year we gradually next over for fixed that cash quarter free out We quarters. paid have consecutive million had the $XXX returns. well for so. now cash dividend flow peak another savings the we of a variable through costs returned generated, potential structure as plus our have from We through XX our or improvements model With business meaningful flow shareholders which pricing cost to great our

nearly We X over steady per buyback offers this dividends the between and We attractive an also and shares yield through balance growth cycle. believe X investors combination have of the an the powerful that in months. active buyback million past share the of program resulted repurchase

XX. Now moving to Slide

we associated a we share the With production meeting to objectives plan. our us our are the capital year. growth places has on rate track deliver X% to year-to-date, well approximately have XXXX our progress The per for on made that the business with way momentum established of

to delivering employed capital activity at self-funded this price greater Importantly, today at where than WTI a fund XX% approximately on prices. required or of is half returns growth and today’s the commodity we are $XX is

again, it to our next well. outlook once is sets up as of business a firm While in early us XXXX provide year. strong guidance trajectory The for for too

on fundamentals, Given invest plan we our our in of that costs we current at form see service will lower the levels any market that to and shareholders improvements will capacity accrue to sustain from value productive continue higher over broader another disciplined differentiated year positions flow us returns market. returns to pursuit capital versus generation. cash to free of the cash competitive volume and invested highly deliver of This

call I’ll operational our to highlights. Clay to the over that, And now with cover Clay? now turn

good Rick, and you, Thank morning, everyone.

second quarter second at of we level and our a that building results operating Our demonstrated business as into performing the momentum head year. the half is high

to our As that positive results Basin. to our success, plan is brief as franchise underpinned to well on, results more a second will asset the provide positive contribute capital this contributor I appraisal Delaware touched catalysts, improving over quarter overview profile balance this by and so some and efficiency costs improving most second and quarter cycle financial results Rick the significantly the from into of trajectory as faster XXXX. service significant once operating across production the times, upcoming Devon’s again, year Today, We highlight of in our assets

this program run more was deployed XX X, see XX% As basin, you capital rigs. consistent of a prolific activity than our to us can Slide allowing to of on

to well. first XXX,XXX With more crew production the the day of in of to as the than quarter, the in wells compared is completion to first per able fourth to BOE were grew volume the and quarter. third work XX XX% year, completion underpin growth quarter expected in up Delaware online half place second we elevated activity This the our

to with results acreage about landing position, some we project quarter results of New particularly year XX-well appraisal do XX% into benches. talked a the to an While we our is Wolfcamp highlight The labor. the the XX% important We’ve deeper I would the multiple work the development was exciting capital key visibility like in appraisal successfully pad this from our codeveloped in had each to fruits zones Mexico. of past Eddy from our with within great you project Mule budget. that This County, across B the Wolfcamp provide example of Mule

results B zones landing average are than wells oil to trend on initial X X BOE of XX% equivalent. Wolfcamp from X,XXX with day targeting oil exceed these well barrels recoveries per million the greater The Per cut.

foot per deeper Importantly, Wolfcamp, some best we to drilling and basis Wolfcamp the going in economic locations completions our year, basin. times these B highly in these continued expected the past laterals expectations Draw XX% efficiencies capital and advancing team also the commercial enhance on productivity below appraisal framework Wolfcamp release de-risk across are pushing results competitive Furthermore, on progress The the our allocation of forward. by for area. Delaware drilling to within highly days. a XX be about Cotton XXX improved the approximately make X-mile over our spud while operations In locations

also XXXX. X,XXX the conjunction progress as record deflation than team our environmental higher to the in X% across of feet accomplished operational Averaging to have been into a head we pace has safety great trends efficiencies our compared even with a and with XXXX. an day resources to planning with of steadily more focus and positioning times Completion business and has cycle even and coupled work done in cost our decreasing year-to-date improved, quarter, more by efficient execution service expectation. completion per be The improvements entire drive are this our broader

X-rig achieved the This high concentrated by resource and in in play. placed to X% drove for XX well to stage appraisal which a productivity our activity quarter. the growth was Eagle the a during Moving mix this wells next strong increase productivity acquired margin gross program activity This the prolific quarter. development versus the driven designed refine in margin of was Torrance Ford, – balanced of previous this County recently resulted in development online acreage from

the expectations, average volatile an oil exceeded quarter in rate of per highly oil window Our of cuts. impressive top XX% by a LP was day, of with project pre-drill play This the in BOE theme X-well development pad. XX-day that X,XXX developed pay a Butler charged the pad reaching headlined

the from development XXX quality inventory roughly County tested BOE appraisal returns, package On our X,XXX rates commercial XX-Day infill Torrance foot the in This project in [indiscernible] and front, depth initial me was day, this excuse The section. of success ranging the in key XXX – that per unit. the the per quarter highly to adds XXX spacing, averaged a play. wells resulting wells in of XX and from

Also, spacing release in time drilling this company which was performance record the we broke included days. X.X per of averaging bud of feet a history over tighter our rig company day, adding XXXX commerciality fastest to where the only

we exists results upside development operating to allocate as a the achieved convictions of look to have XXXX and deepens we beyond, positive Eagle optimize As and for further across that activity points crop other resource and that the future data entire year-to-date capital this field. in served the our valuable Ford

for in uptime. the production improve of Moving was driven mitigate quarter-over-quarter growth artificial to BOE and activity. of larger the and consisted volumes and well in second modifications Williston, a producers, by some on designed new improved adjustments up to began mobility to to size techniques of change rebound to times per to shift existing production quarter XX,XXX growing sand higher successful techniques This profit completion well X% day. These to and lift the completion weather,

on pads deployed With techniques. flow-back favorable results the that two have these

as that we the confidence the progress productivity wells high improve year. will have see We throughout

for inventory, come. opportunities providing reinvestment than to producing more across deploy to Looking wells steady identified in hundreds years in remaining at refract the and significant multiple now field, of wells us play optionality XXX the this we have

X-well since can this spacing, our Turning appraise the the key repeatable any program and commercial that of continue later Basin, for the this to so not and River substantial optimize the last year. over focus, test we methodically resource in a our Powder three-mile team Converse development. to Niobrara, observing County. understanding With with future has made we the our this to progress XXXX refine objective we results, the is Furthermore, per section results plan significant year, X-well acreage to of degradation are establishing laterals from portion across of

that encouraged that County. evident extend Campbell leasehold of provide net these coming also rates flow for are into activity resource on updates tests appraisal our been potential River But the the in in Basin providing brought position quarters. more portion Niobrara we is Powder early online has in Devon acreage acre will XXX,XXX important northern lastly, from the it position future. catalysts the recently the could I our And the by

half we've we production the a program our in ramp approximately carry funded runway of rates Today, successfully in the execution and we have operational agreement XX current several the drilling with Basin, our anticipate carrier of have well below initial open by utilized exceeding the completion we're Anadarko And was the joint Dow drill from volumes the of us grew and the months. pre Dow, well driven only sufficient day. expanding will X,XXX by in pace support provide demonstrated XX XX% with flow Lastly, quarter, activity venture, to in from previous next from costs coming from XXX activity the scope remaining BOE superb, up we the expectations partnership as for place carry the per to past. wells consistently to this

towards wells we end. plan bring of on new weighted XX remainder year the For to XXXX,

results I’m and momentum half summary, the are built review. over during the asset I'll the our the each have teams that, Jeff? of that efficiency that In with And strong heading second turn financial Jeff for of of capital quarter ‘XX. the call to delivering the into we proud

the of us capture second quarter guidance Thanks, compress and drivers volumes our second with the Clay. key the for into driver rest few today key was of to provide Beginning our outlook online efficiency more of time results insights financial some than that year. leading A a gains midpoint days exceeding I'll planned. production. cycle times, my spend covering quarter

well. activity is benefits to half the for the track higher and Delaware to quarter as drive in – the from The expected in first year volumes completion volume Looking leaves the volumes ahead. of upcoming third our oil us of higher on the meet full targets year

the saw capabilities returns every oil resulting is half additional curve of in flow the weakness NGLs to for across for year, in We driven of front, This both On of expect frack the XX% XXXX. better With budget waiting activity annual flow we've realizations. our for and temporary fourth translate the year crew cash crew price by realizations higher of this capital the the year-to-date. company. price a completion to a of Basin. a the strength oil This us million uplift improved recently pricing lower Delaware second markets XXX profile oil remained due in capital year. is first and near to full should we We're with temporary invested released, expect guidance the the trend $X impact remain spinning and as and WTI quarter. for in into the in second the benchmark experience spending half positive second capital in natural our strength confident WTI, into year Despite gas do quarter, levels we which providing portfolio. the in also of for strong again generation the second in our half we head did the cash once NGL the the seeing we second gas meaningful with in about range realizations Regional pricing half in

expenses, right line level for the Moving expectations were in field to our costs with quarter. operating

expect half However, joint by minor XXXX per unit venture we a executed in cost in of water the second Delaware uptick handling driven in Basin. our recently do the

Our JV and new disposal to enhance us water operational provides significant multiple options. flexibility scale

requirements In addition, midstream capital our the lowers material the JV in area. future

over distributions incremental could time, value We cost future. forward equity to asset stake in some provide the choose this operating asset at level. by point in offsetting our the will monetizing at us forward, bring JV Looking the the also

cash disciplined results of for the we we've the Furthermore, of to generated operating our strategy. we line, $X.X capital flow with of straight reinvestment XXth were bottom low variety fund during able flow quarter. a program, rates quarter. durability generate the Combined delivered the our across cash showcasing the these to free billion market to Cutting business conditions

free end of September. this $X.XX board was the priority was the our shareholders. to the at return A use capital funding plus quarter paid With dividend distribution the This of flow, will key declaring payout share. our in the cash variable per of be fixed a of with our cash excess of our top

dividends, of be see value to addition continue our stock. equity also In in and to buyers active our we great

an total stock, year-to-date bringing quarter, repurchased the our million. to During additional we approximately million of $XXX $XXX

we of repurchase time. With share pace our place, on we end in X% by next important the over for year. outstanding compound to have are tool of investors opportunistic to remain for us authorization the buybacks approximately growth shares These per a critically

of Subsequent generating, the additional step to debt resides $XXX quarter this With I’d billion our to opportunities financial of We exited a And our at leverage remarks round and pare have like took brief we retiring debt on Xx prepared target net XXXX low and XXXX less. update morning, coming our a maturity. mid-cycle to we leverage the strong below $X.X ratio in or to my quarter maturities debt-to-EBITDA as improving our cash due out next financial a X.Xx. of with by end, flow liquidity in investment-grade and of million give well position our position. well. down is will This business

that, call With now for I’ll to some turn comments. the closing back Rick

disciplined efficiency contribute half improving well two, and a strong second and results underpinned job. highly results deeper by to advantaged this resource committed four, messages framework quarter. free to this deeply demonstrates like by with that financial of Number redevelopment to today remainder that commitment a designed our Jeff. commercial into are this the per through number to positive cycle year. appraisal the avenues upside Foundational conviction as in resource and carefully Thank strengthen the to test our head over cash productivity resource and disciplined high will of to is of quarter of turn the into higher our a flow year this out shareholder production times, portfolio. Number is execution key value optimize multiple from in Wolfcamp the you, continued three, from Ford pursuit is to trajectory better share capital in that this the was business growth. creation we to by This the Eagle over cash faster costs reiterating our service base remarks. XXXX. one, across flexibility the allocate our positive our volume value Number building second Good momentum our four I our close our adds prepared level we performing evidenced has And across cycle. would base, and at

And that, call I’ll over Q&A. with we now back Scott the Scott? get turn to into as

Thanks, Rick.

Q&A. We and limit operator, This to question allows your open will call more will today. get now Please a on With that, question. yourself we call to our to the of take to the one follow-up. us questions first

Thank you.

now Our from Neil, Goldman first open. question from is your comes Mehta Neil line Sachs.

Thanks so much. Yes.

the of The is half first for question the production just on year. the back profile

over you centered done consensus half of morning focused As for you pushback the below this guys indicated, back are been being But on around has the we’ve little bit some a volume. of volumes value the year.

So conservatism this maybe areas out that your potentially could you on where thoughts way Thanks. the some model upside? on there that surprise the is whether thoughts and in

feel little reiterate, the on That’s D&C quicker Clay. moving a you great bit question. little Neil, a guide year a a is well bit our production basis, certainly, I thanks with our front, forward. full Hi, per productivity. in on lumpiness the that of pulled for the good activity, just get things want accelerated little about we but the This of to

of third some get – that So we quarter forward. volume we pulled

as frac third. maintain we’ve the from role Delaware back guide, So our fleet to in year that seen full but the four a of we always pull we kind

again, new, real been So once full good what but feel nothing with unplanned, showing consistent we’ve about the year guide. nothing and

what in follow-up the a on contracts There That’s just, Delaware. little modest great. should talk how guide LOE bit can of about little background bit it a it? Alright. is bump And the this the then in water is handling we is, you up the a and think about in

the to bring we’ve our level. that. to before. basis, as about costs to the asset the joint Happy Yes, on we we’re do is distributions opposed operating Neil, excited will mentioned cost at scale what we’re which multiple we basin to stake be to the a remarks, in that Yes, receiving prepared that, as flexibility in options see. offset the go-forward going and going got to a higher more venture, It I little LOE Jeff. in that’s going does to disposal handling had bring my But than water equity is that this we’re going the that additional have with

us So – the monetize think also and point also opportunity that the with in position the equity future. at great as I mentioned we a in remarks, provides it asset prepared to some

to So about the it really excited flexibility operationally. us gives

Basin. is move As Clay got fair water in attest, there a will we out of amount to Delaware certainly the

So we to scale, positive capital real also over had we the flexibility would certainly us helps of think, on as the water have it be of next couple pretty look spend I’ll a helps this and efficiency to us. add, years. a for otherwise infrastructure front that amount you it additional because is out material capital eliminate going us to on

Thanks guys. Alright, much. so

you. Thank

open. from question is Mizuho. comes Nitin Nitin, now Our your line from next Kumar

imply gave for the of bit little XXXX a completions activity of as slower in activity the you you. morning. of bit speak half. first to bit Hi, to you’ve of It’s and an acceleration good than a you I’m terms the wondering, team, little that glad guidance half what of we Rick, does use baseline different of a And it Rick, levels? could cadence said little mentioned kind for XXXX. in year, when into a just the had second

we consistency. think the to we we for is do Nitin, most what thing important is you us I’ll tell like like

just the been fact consistent from things on we’ve some you to production. acceleration. through time at look have while time about Clay mentioned for we And think like do you pretty that lumpiness to our a As on basis. an quarter-over-quarter, annual

assessment that do think sorts could all changes, people and I that. You you But could at know things important we on sure year-over-year my that that a get you growth and watch be to most some perspective, that – look thing, per lean I you and from of in to let’s to just I like interest that? share make for a on the share we things that would profile, And on to have But like quarterly else Clay, want is look want Nitin, anything working repurchases basis. let’s basis. work, us, year-over-year, add let’s have there

Yes, Rick, in expect run your we question was, rate. should that

the remember that of Just year that are fourth crew essentially the DUCs frac half front in we consuming period. in

them Delaware look crew let today’s through pause pick crews up doing we would that in speed, Just X back that say them when to opportunities would will you fully up and that the DUCs. in, then the run half them optimized if on optimize. spot up we’re of them year, essentially the to get at in again we world, running in we fully And this a to what then in for Basin, we is January. second world, have. drop crew frac put about months, and generating we’re I will we’re pick bring three really trying And case, fourth as in

related as that but tick to capital see you’ll up crew. the certainly up, production well You’ll see tick

at annual our talked an lumpiness the you of see love like the we exacerbate Rick pan line. basis and does that program. look So a you straight But to talk again, really consistency have about. I’d out about, when that

so. some a and the Rick I we’ve – has here guess Clay. changed color, the bit. the shape hands my Delaware or in for assets Thanks change is private The Basin months Great. little last X seen for follow-up, of

new the Devon years and business talked of about You’ve initiated previously X that to the importance scale ago. model that

just you you pay? any for you market consolidation So what role M&A that here? going is forward? might the Do on thoughts think And the see room

great Nitin, a question. that’s

I consistently. think about this we’ve talked fairly

it’s As to continue think, far as a, going consolidation, to happen. I

of is you out I we’re going there, but one because think as inventory. getting they of portfolios, lot they the are companies, for a companies’ companies of start companies there across light to many many not smaller those looking looking and on are start options

that that Some in those seen that that fast was it quite many of pretty they going companies that very they you’re inventory, also future. to inheriting. an for to – were us, but to very, take And we’re like grew recently the they decline challenge would appetite consolidations was really to companies in they disciplined, the see go impressive really fast performance. were that their honestly, of we’ve we going the It – be rate production, and how just of private be referring how are going exhibited through you on had where haven’t steep

You have be gets thoughtful to very, to tricky. very and be it

creative the transaction. I in think sector. will those our altogether that some and those it interesting creativity say I just of pretty had Now But there were companies some and some pretty with represents bringing two solutions some three companies to make

think you’re to going consolidation. see to I continue

I as a and and to time, see to sense, it makes because it’s those Devon, I reasons. company. happen think there’ll And companies stronger a of consolidate, disciplined, make and you’ll be to be that such very try continue we of over believe, just think going that and will opportunistic ton I to numerous sure we be for be stronger, make going beneficiaries that will and the build more we’re durable moves companies

– but so you’re on. And spot

continue. going to in think industry is our I consolidation

Thanks the Rick. answer, Great. for

Thanks, Nitin.

you. Thank

question comes from line next Our now open. is Gruber your from Scott, Citigroup. Scott

a well going Ford. in Good the does Eagle forward? those you’re How the about to how that Yes. basin, new returns on compare influence, in do that wells seeing refrac Curious how the the program and morning. you prosecute

is Clay. This Scott. question, the for Thanks Yes.

that about work excited the date. We’re seen we’ve to really

wells right refrac to still on in the what’s We in learning have prosecute tests those. what’s go about techniques and the XX and we’re right to go

being so wells results. XX I would XX refracs we’re say the for very And encouraged and about only in

the inventory Validus on refracs upside, in the we now we acquisition the we’re of would both really and returns, the redevelopment we’re should we and the have ones getting underwritten in refracs. about did, approach, And had. about prosecute about a up more in how had zero today. I a to certainly that think them. material note, those, encouraged think We’re when better basis, compete say right But that seeing I you variety really with heads-up drilling up you do wells end you the in you acquisition price. heads

So on regular what early certainly, derisked certainly investment return, about more and quantity an to top we but part I too and our overall a annual will good say the basis. it’s become of tell today, of feel of would really the an half exact opportunities we’ve on

but in the the step unrelated up. Williston seeing color. Anadarko oil Just the Anadarko and those on an going to gas higher? anything some driven a follow-up, notice the was feed you in on did least production the by And on that the ratio numbers, our by there and at production versus the step gas of led color I Was gas the basins largely base just be Williston. Are quarter Appreciate gas great. that

Yes. Thanks Basin certainly for gassier that. The option. Anadarko our is

right of We a have running room now. lot

in the on Very well. And look bit meter importantly, good the cut company, direction it. down job relative through part of numbers to that’s gas mix. higher the certainly getting gas to be challenges. in the we’ve our rest around flaring wells of to the to sold the continue portfolio, not that’s rather there even little the Happy as We’re But right than Williston. line, our without especially that the we’re in that done more certainly a heading of portion a flaring. and developing gassier report Williston, focused of a we liquids-rich When

that through on very really I come to is increase focused also our from. the equation, think but of where objective, that we’re the a the is oil contributors in side gas, getting which the always that’s revenues the bigger sold really high meter, getting

Appreciate the color. Thank you.

Thank you.

from from comes question next line Our open. Arun, JPMorgan. Arun is now your Jayaram

Yes. Good morning.

Good morning, Arun.

call a, sounds Rick. did it’s at aren’t frac plan. it, we your CapEx. morning, Good would XXXX commentary billion some fourth maybe you read or a of yet would crew but that, quarter. soft If million $X.X look know more you I ‘XX CapEx be around called second guidance, ready $X.X billion. XXXX, annualize It on to want early get your partial If a your XXXX about need specific like to $XXX on to guys execute provide half I we that

of just thoughts. if the just call the it, we should about billion get be in kind So kind those to of But $X.X wanted range. to are say mid, wanted some elements preliminary again, CapEx I thinking

Yes. I appreciate that, Arun.

good I think year. lot to agree therefore, things back. those count, around things what’s I to get on really similar price, we’re a just material pretty as for point. to completely a hold number giving count, deflation, inflation, I’m count, going of impacts, fleet how rig hold on your back I of as far logic rig on going a next have same the therefore, starting There there directionally, happening But and in commodity frac as going you activity think is think with.

for realizations Great. relatively seen the And maybe I wanted on is This NGLs. in low in that called row third we’ve kind Jeff, follow-up for zero gas my Basin. Williston a Jeff. natural quarter the to and of

wondering going forward? if just was impact this I provide be you could you there? to on going to going persistent a is And what’s So

I this the Yes, Yes, appreciate question. Jeff. Arun, is

But you, that a we at look wild to Clay me, and earlier, deducts you of to you’ve particularly we the up volatility As mentioned there, particular realization mix. the have. the the realizations I some move the the you’re Williston, some production Williston, excuse where there not got the in real the tell would challenge, when a obviously obviously, the going lion’s have just – from share in see given can those in is be that gas standpoint. constraints infrastructure gas given

consistent some our you’re it’s in so point also margins the be going of out, would see see other things, clean that grand there. basins. you the oil the usually – as given we pretty well to from as I’d not in of and it’s a barrels And it’s as not scheme immaterial aware,

lot, enough, Fair a thanks Jeff.

Thank you.

Neal Our Truist. next open. question from from is comes now Dingmann your Neal, line

have view specifically. what or your this And upside year on Delaware Basin year? the could know, could what also production. it’s early success Clay, I don’t that in for guys, you to Thanks My recent time. mean it drive too Maybe, the to benefits. total maybe the, the Wolfcamp on you is have maybe will B might appraisal you then question, first later how next think I wondering just what say – might But that benefits speak on

benefits those year, earlier forward your the view this course, of some on touched How You’ve this wells you but appraisal of in comments. of bringing not the the others.

into calls, the Yes, about front towards we’re deeper when out understanding line is, some most work. opportunity talked they XX% so on and this up We the de-risk pretty B. what to directed several dollars it’s of this dig to of today, after fundamental that exciting. several compete near-term so it’s do XX% of important the of the and we investing And aren’t see assessment mean, efficient, certainly I the with stuff important capital opportunities. to Neal, first question but what these even to reps the the portfolio that we the jump best in around that around really is we

in to it’s these just very specifically And and we accretive B are Draw, zones. valuable. in so specifically really Cotton want something These share

baked full we that they inventory but already a on the in are they standpoint. Now risk to, numbers baked disclosure, into are guide

on net-net able de-risk value real to those. we as So them, and being is creation there us, prosecute to

was The second opportunities forward. question the moving around

ahead the in running. The little crews of year a that’s just frac running pace. So – are all just there, They pace. rigs just little we bit the are Delaware same just of ahead of a crews, they deal have bit front Basin, half for four XX the running completion

August. so run pull then to September through were and able in than crew we off And to accomplish release was that July back that it And fourth October. to accomplish. on everything that needed we originally We toggle we to that and slated finally

cost on So a you creation basis. and savings the imagine value the can well per well

Now quarterly can always overall, numbers pull forward. it see. as trying you value kind with of But little to monkeys bit, that we’re our a

cycle line to bottom about manifest how the full then does cost, drive how per we to And it thinking continue that? do We’re well of the company.

the That combining just plan Jeff, this while on all one last you for target strong your you about makes think how going sense. program? with all capital shareholder forward, net debt Jeff, just to aggressively And do allocation, return maybe do

appreciate Yes. the question. I

one, you framework material as been going pretty forward, are remarks, to expect mentioned has in you day going opening his see our I a – think consistent our change Rick in as shouldn’t from that approach.

We are to be going pretty balanced.

from it’s the prices is higher the saw dividends. generation. well and the variable year, a cash buyback, We working this this great balance back, as buybacks that variable our much dividend which free pull when had in between example stock significant seen you last you to framework leaned year much how flow you when on well. and more year-to-date, the me is XX-XX, been us about with of And seen As stock have you have

on, framework the lower of a where focus year to are on are And we flow, prices and stock significant generate the look generate then projecting we the variable cash forward, Going expect, from we excess going of in as balance year, we standpoint, obviously, free here should build cash, the cash the cash and we to higher balance half of the basis. opportunistic free we in the spend are an going capital the half remainder are back. buybacks cash to the given we a this back with our flow that oil and back

Very good. Thank you.

you. Thank

America. is Leggate next now of have We from Doug, Bank your line our question comes open. from Doug

I your mind. don’t have couple last number the wondering that, different am how seen of over oil you I One anticipate it’s peers. that I obviously if allocating have been one and It’s is of when going How at follow-up, this your mix particularly, do years, capital you you capital guess intensity. is you you as a but And to areas, on is if about look think a it oil up portfolio are versus and obviously across got spend But your seems in I little your please. you a trend Anadarko optimize to we operating have the two down just mix have trend? on production. guess between I dropped now below XX%. Permian. that mix, bit

pretty the consistent is this I Doug, view be a say mix year-over-year oil to Jeff. of basis. on we Yes. that would the

We generate we are focused really in the returns our rate of on that and play. return

We frankly as oil know, and in the particularly or oil focus the product certainly, all are to higher-margin today, been, Delaware. has is our gas. agnostic, we But

going that share our the investment. reduces we think – I efficiency those competitive would it’s most Dow margins pretty bulk forward That’s with the be all the have into oil-weighted. obviously a that capture helps Delaware that without activity portfolio. capital-efficient to it we our come to of move So, JV that a our is And surprise returns in call the we But and anybody beyond, on doubt to you, as with the where Basin, capital our from. the makes it’s tell not today, asset from XXXX expect and we lion’s broader Anadarko capital we would of and and standpoint

look, peers, When on your basis I what there. Everyone what I per guess get think. at XX%. Jeff with a well-trodden to BOE you up and understands is realize going opinion there, will obviously, But I to this intensity morning Okay. is, reported else another look But capital your what’s peers observation that my about just has cost follow-up, see share large we a gone want path. that. I that of you at on up everything take inflation and and U.S. this the look your about is simplistically is XX%. on one on an

if half first For it a take about spend in was your $XX example, last I BOE. year, the of

about and year, BOE of production is First up it’s a obviously $XX half this small.

to or should tell what’s else we can is wondering you in there try is understand and address us and just at think about example, what am going transitory, capital I So, the for talked that there there? looking you on? changed what Is you if infrastructure be that in

I big That’s lot Yes. into know, things. Without a of of year teams driver mix in of did inflation talked a us this Doug, it’s and has certainly roll-off structure of another of of contract think a protecting us our way, doubt, I in timing the that hit you great we way of part its a and about early to year. relates job the last worked to our one also the very is cost peers. relative inflation started it the all disproportionately the of of and The different back hit that. half thought that our that the would from contracts the as categories, have the cycle. a our I things us Said as say,

now So, standpoint. those we last the an have XXXX, into early the rolled inflation year. from year contracts of our a price And think worked higher of this a about of through off as fall environment lot part and way

response my Ford. asset as question, a as in standpoint great from But see Delaware previous the And away and relative in the of the returns we in not they really the have acquisitions are moving in Obviously, mix assets, efficiency base capital made mix the capital-efficient you asset the we from certainly more I with Delaware. Validus certainly driver really is you Eagle that to seen some some others change. and what Bakken to as mentioned The the big our great RimRock, in of are efficient capital for so that. a a to shifts

we that will efficiency. have feel So, versus driving basis we of peers. as sit, and say, pretty competitive And you capital improve top-tier to companies mix absolute good do you a screen the I through relative all way all as at has of all space. efficiency I sit. way year reasons going which to into and That change just next to But on, really our the our you where that productivity an in things basis, on together, expect pointed the to on are company our capital earlier, on moving earlier, capital work about that capital out some really the when you asset you that’s the really, we back a rate really we we as when look add to this see is for we look at we still as the material is for And expect we the mentioned work and the change into you challenge what good step focused mentioned been that we think that been where really of against future feel company, think forward. only we as and year. are back half deflation look and Clay some we we efficiency base an basis, and our rate seeing of our efficiency put you though, relative about absolute of

it. Okay. Jeff. Thanks for Appreciate the answer,

you. Thank

comes question next open. now from Our your Matthew from Portillo is TPH. Matthew, line

in start have results Good you to off Bakken. you for improvement that’s show faced completion morning faced in back well all. little the into headwinds may some some the I the challenges XXXX? change the technical first a that know Could the the of that and start a design start maybe the to around has a half you you on in bit maybe more made an half that impact heading Clay, guys some year. question asset more bit and that to

to Happy the it, for Thanks Matt. question. do

the mature is all As I maybe think about the Williston, most plays. the of it resource oil certainly

some with These really Certainly, look we talk will We we time of of we for I and in, the those is bringing RimRock like. depletion. From with crosscut a but relatively specifically the faced also what things challenges nature wells challenges wells a a standpoint, innings both. surface are really are these about the surface standpoint, the subsurface unique. of acquisition, wells one the standpoint, acquired faced, the first late learning some really from from

we seen pressure – those completing the to then lateral. through have essentially throughout have drilled depletion so and those have and a wells challenge. a then And and verge depletion we back producing essentially Producing unique been relatively those have

We haven’t seen else. anywhere

earlier. We about talked gotten I some solution, have have

surface get in you those be have place, place, the More is to getting I fundamentally think the important the don’t we you and then getting to of challenges wells. proppant producing that them proppant allowing on are doing stay unloaded once really the wells well which on able producing side, consistently, in to artificial lift.

in some or have then challenges reaching in additional operational pretty having environment, to surface of these uniquely the was else the to tight has adding workover trying we What still and that rig very pulling back You it cost flowing we something complications. to really quarter faced sand and don’t a for opportunity of in stand off the challenging. workover were line rig, been do first of

dealing and now well back more able have I challenges. gotten several what for a Williston are lot to of think delivering same wells in mill, have will forward. really these for the not we some some last of we recipe the that our It’s to with going have the really of we results. been inventory good run A years go good

the quarter first standpoint, have an I challenging the the direction we weather. yes, by outlook first we quarter, forward. response in are headed, from from had the going feel team, especially operational about the and the So good was compounded

Perfect. Anadarko And you then quite for the potential just a of your the prepared partnership. remarks, mentioned and as a follow-up, in in seeing success a further expansion bit of the Basin

continue is at curious, pursue looking from partners to are Dow, you a may that with standpoint? Just to or you development bringing that potentially progress other asset the something in

with cherish very partnership. this love our when we – it pleased love a partnerships, Dow We it’s mutual been has we win-win. and

We have portfolio. Basin the as in compete well. our allowed It’s Anadarko to pretty rigorous

are the a objective. we Certainly, has to the be knowledge very would it with that, pursue expanding basin, look, so certainly, them. And good Dow of easiest

them, something partnerships would this regularly for would other have talking how it’s work we Dow, but with are We around us. this how work company, the for about

may haven’t We point. we pursuing additional just up scope the beyond I that, current that an at would some mention, on any have end decisions runway but thought made we

Thank you.

Thank you, Matthew.

from We question Scott line now have is your open. from comes Hanold our next Scott, RBC.

about am you maturity of and little bit that of opportunity. some exploration is appears overall I if had maturation and of other wondering Does just to some just all inventory. depth refrac your there that point thoughts with kind Thanks. It a And drilling like of more you like do the a when assets? have? primary a Yes. you you you that and and like think have runway on the more the of more there exploration reason economics today, give have of just much do or is us of to how a sort, of of little sense kind development

Hey also really what we but already our are about explore, continue to it’s own. Rick. assess runway, compelled good to We Scott, we to continue feel to

commentary consolidation You around opportunities. have heard comments, several

I the think we team this hand. have first, understand to it’s opportunities management in what let’s incumbent upon already

how had You is B, have on that feel not a good in or out you those are in we had your of that, you about a excuse but because We thing, really and we great Wolfcamp inventory you execute heard really the there. where think do are and either to when about talk and better the and Delaware, and returns. me, Clay risk or – that find potential some activities. your risk honestly, offsets it they possess can your phenomenal you are that’s we and resource are. – really, good. we a position a the And assessment in to you out adds about only feel you That’s executing really the That’s go you off expectations and at, That’s meet these thing. good implication the XXX,XXX-acre that good. that what quite basis, I inventory continue these say you un-risk risk And pulling exceed with good. that your shale When on than

the as Delaware, which We some it’s so which that is continue we bullish the have And we Eagle see Ford, opportunities really nice are whether we there. opportunities the whether we the Bakken, it’s in see which these opportunities on, in in upon to consolidating have current feel versus it’s really compare what going good and incumbent that, think holding buying to our what assess position about to this it. on team But out contrast and executing more, more. is acreage I continue we we

it’s So, just real to business. – our fundamental

think Eagle question mean to of high hear. core other these I from you the Williston – these Basin you So, of right? already Anadarko trend sort to of other Delaware about lot PRB, capital best move that a Yes. prolific efficiency and it’s is good efficiency players drilled? Ford on trend or and stuff some have and zones more capital to some kind I relative the or like that’s very as of the to the a And even

Right.

think going see. what that’s are I you to

Basin. whether are think in it’s just have think seen it lot I in about basins. of seeing you And you Midland – maturation the these a if you

seen several and but you to We are have the are seen the bringing be it that every evolve people go to start you Bakken. to resource not highest year until continuing going in to What their you you Basin, new returns. Midland for in years where have on, – tend

We is Ford. it the seen can there basins. in But you Eagle have I many these tell of

we We In with are resources see restimulation we more have. about potential about and some up learned just excited other cases, spacing. the in the that tighter areas. the space some new we the XXX basins the are in been there years mature of technology, until is either our last and that’s over business a found. history But time We over plays change intervals will is

just real you in – I play so are time. that think you seeing out And are

excited seeing. continuing about we to but – we are We are are what

down but Ford, in we that what it’s across what places coming remarks, in some that’s answers are are our of seeing Delaware Anadarko, really the Eagle hopefully, in the it’s about work whether other our and just we not whether our excited So, – in only have. assessment Powder, restimulation we prepared the

relative fixed us your what dividend, on on Okay. I where fixed spend the thoughts bit have the quickly Jeff, you time, just dividend, And But color. and you buybacks little of that some that the a added of on you or about remind X.X% something the one feel – stronger or appreciate variables. or I Do like to that, effect. obviously, peers? it be? see your, want think good S&P to to E&P to would you about to it’s

question. I No, am asked absolutely. you the glad Yes.

the on growing we work focused dividend future. absolutely fixed the as are We into

more relates should to the I a and in cash obviously, framework, It’s certainly year-over-year as to the framework. mentioned you get only priority so we in grow the sheet. plan strength as and base our It’s our obviously, our confident, more yes, lean balance it fixed expect And it dividend basis us and game on one falls – the financial earlier. behind, return should have and it and

into So, absolutely to that see us expect the future. grow

Thanks.

you, Thank Scott.

now have open. our Scotiabank. from Paul We comes line question next your Cheng is from Paul,

Good please. you. Thank Two morning. questions,

do refrac First, Bakken looked what talked and the about and case. minimum the think portfolio, and spread. early, be current but have of gas you and long the Thank in same the Henry you think into Bakken Eagle that the mentioned you and within need and WTI opportunity can And certainly Clay, in your is Hub kind for I hold order most you. may Ford, able redevelopment, you redevelopment to those which to refrac for at The the still redevelopment opportunity going is you it’s know already refrac production how you what is price you I about work? in mature, talk question, Eagle, back

Yes.

Eagle finding So, in is basins. it’s in a tackle benefits which very we in with space in low Ford the the are The develop. the I will trying those. some able having permeability, are wells not tight, is of some Williston, to in there to Starting initially challenges notoriously is than we reservoir see What a and Ford. later challenge very different Eagle other being life that redevelopment rock

from We early model are and the scenario. kind going little a of because basins Williston the on unique fairly There restimulate standpoint, that best it do it’s these fair were it’s bit a having wells. to is same in a It’s not to and more wells the to bit from the comes able in are different. we refracs, that a be go different industry’s completion When completions, complete a inferior it’s and many some understanding the massively opportunity in of being so under-stimulated. development Ford. these some there more of to also of how little do reservoir not other to standpoint, mature how really Eagle amount

a say, So, The very refracs, in that. don’t a kind opportunity good Ford, the I would different there. of Eagle you costs the I many therein we for which very is for asked have number lies about are drilling solid a that today, competitive pretty very at, of top looking half what are opportunities of return. with we those are the – breakeven very,

of refining later to price the dependent. will work So, bucket. lot refracs do in it do opportunities back certainly put where potentially a how still in is a commodity Those these role commodity and come is be I date. out line again of many at will play even on that price There would we certainly how figure and trifracs, you a

would a it’s $X Henry long a Ford. just Rick. pretty I those good going when the down of mind, restem as some in to Paul, and you Hub, are north I that Eagle $XX you In opportunities think are returns. say $XX about world, have as my

with pleased are that. We

in of One that. assessment of are are we think question we But at capital – the We and think X had XX years, on years. with it’s leaning add, future, said, needs of when us. capital when XX our for is. allocate the I next people holds recall, years, only doing some percentage I just about years, not previous it about focused that’s know what budget really will important I it’s are a It to efficiency, on need we assessment was And everybody do of also the like we future. the the the to really time certain really quarter, it’s amount not to fair. a work, things small around It’s XX say capital being That next hyper a excited work.

Thank you.

Alright. of It further like good And at looks any top the please to reach don’t team you at hesitate the a time. today. interest hour. any Relations everyone. if out Investor have everyone’s in the appreciate day Have we to are Devon I questions,

call. gentlemen, for and this Ladies concludes joining. today’s you Thank Thank you.

your disconnect now may lines. You