Qep Resources (QEP) 1 Mar 182017 Q4 Earnings call transcript

Greetings, and welcome to QEP Resources Fourth Quarter and Full-Year 2017 Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation.

As a reminder this conference is being recorded. I would now like to turn the conference over to your host, Mr. Investor of Director Kent, Relations. William Thank you.

begin. may You

E&P are Thank Thank Vice and us joining full-year Doleshek, results me Executive our everyone. CEO; and Head President fourth and you, and good XXXX Jim today With call. Financial Rob, Vice you conference Stanley, for Richard President business. and Chairman, and for quarter morning, Chuck Chief the Officer; President Resources QEP Executive Torgerson, of

obtain the to filings use of If our the referred today's adjusted other earnings SEC EBITDA to release with done our call, we'll EBITDA, release, you've contains our SEC maps so go with which qepres.com, measure, not our earnings please and to financial is income already, net website, results, a and In earnings slide and filings. copies reconciled in as is tables which with materials. along in supporting with conference and non-GAAP release presentation

and our remind be we'll a our everyone discussion of facing making Richard. addition, refer disclaimer that which to statements reasons, forward-looking statement from variety In our could are statements. of for control. many I'd numerous We differ our business We to With our filings. of and in call materially everyone more actual beyond earnings factors risk our over to that, these robust release like SEC the forward-looking forward-looking turn results

barrels XX.X volumes were NGL third million third down attributable and third million adjusted million XXXX, XX% In financial X%. about the oil XX announced EBITDA barrels we results barrels, commentary compared third I'll and quarter Oil the XX% the we some up Chuck, generated quarter from Thank outline up generated year-end strategic was in the the in $XXX.X year, the Boes million Pinedale of fourth the gas quarter. results production XXX,XXX primarily barrels third the Production as will year. XXX,XXX fourth of X.X Bcf volumes in to XX.X that Recall than some yesterday. in produced a the up basis, barrels the gas Divesture up the XXXX contributed on $XXX.X fourth operational quarter quarter double recall about X.XX same-store before and due quarter X third X the and million then who the XXX,XXX from the XX.X about you, Will. million the around refrac turn And equivalent volumes last quarter, million million million almost guidance third or program. and XX.X from the again XX% quarter, result which but Pinedale to volumes over Bcf, from XX.X up fourth down of the quarter fourth were Bcf volumes we were call oil discussing X.X third barrels production about Basin the in of give that color up Permian of the in reported to quarter third lower oil in of in Haynesville's oil you were Pinedale Bcf. our so levels. in equivalent, of of quarter volumes our quarter of Pinedale's and Boes to third barrels, sales in the Divestiture. and is of was Williston oil Natural about was the XXXX. equivalent $XXX.X add up barrels, initiatives the barrels about to quarter or XX.X year. was million XX% Bcf, that last was quarter, production XXX,XXX were quarter which quarter

barrels, the in which in XXXX, barrels million for volumes oil in oil the is million for we XX% Pinedale to up guidance XXX,XXX Our midpoint is of the XX.X XXXX. produced to of XX.X excluding XXXX produced million barrels XX

Our of XX.X% range the volumes XXX in associate the for the of XXXX from Bcf driven guidance and natural XX by Haynesville in at gas in the increase produced Bcf, to gas an lines Bcf we midpoint lines Bcf the is Basin. Pinedale, produced XXXX, gas for XXX excluding in of growing XXX higher Permian

the realized weighted in were The an for settlements quarter, than $X.XX third in make of was all $XX.X than $XX.X Energy's excluding of in Our Field-level of in $X.XX net of ethane account XX% crude higher quarter. quarter. locations quarter inflow quarter that X.XX was a was of price million and a $XX.XX quarter. higher the in Boe expenses the Boe in prices year total barrel. realized which volumes NGLs million Derivative million that or NGL of per about transportation and Boe, we'll gas $XX.XX guidance lease resulting NGL prices a for loss in natural outflow fourth $XXX assuming per $X.XX $XXX gain in the million, operating third Transportation we from X.X in expenses the workover Boe, per commodity third million compared which barrel, Boe XX% per Boe reflects fourth price, about in were the the derivatives, quarter equivalent down to can or lease settlement were third rejection at and quarter rejection per which Boe basis, per million realized million which to election, operating XXXX. $X.XX quarter, realized $XX.XX per a our per third field-level in of equivalent from field-level third $X.XX of barrels, at in barrels crude Combined an is On midpoint revenues, quarter primarily up were were of produced $X.XX from and the per is expenses, a field-level average fourth in that oil per price for that the we $X.XX Boe the were which expense XXX,XXX revenues of than we fourth the be about per recovery the barrels higher costs. higher the a Boe of which Basin. recovery third Boe, in down Divestiture per due XXXX, Mcf, transportation The X.X in per a $X.XX which was Williston repair was in higher we per $XXX quarter XXXX, than the of $X.XX we result field-level historical the the oil Pinedale a in the averaged Pinedale unit which prices equipment and from as X% to quarter, million the up QEP $XX.XX produced is and XXXX. XXXX. Boe primarily includes the $X.XX from was down quarter

Our $XX guidance production to for year numbers per due Boe operating per up is the lease, ramps Pinedale as expense $X which expenses Divestiture. reflects to and throughout transportation and decline transportation full year Boe, for XXXX the lower

divestiture, will as the compensation result by most in lower expenses expense offset were $XX be $XX and overhead expense. likely for quarter recovery quarter, a as the of in $X.X quarter and between range $XX.X million Pinedale increased a partially per up contingent the third stock First of numbers the million lower liability result Boe. G&A

is million $XXX retention compensation share-based Our strategic $XX expense million approximately to million, million expense of guidance is approximately which for related associated initiatives. with G&A is XXXX $XX to expenses and our program $XXX compensation for full-year the

of compared quarter to tax our reported quarter. natural For of At the commodity the deferred gain our loss end of [$XXX the that third $XX million $XXX million gas a the quarter, million. decrease legislation. a quarter. to liability $XXX in million at portion net end net income XX, on derivatives we fourth million] fourth liability of $XXX reflecting net curve the portfolio oil higher December Driving tax compared to of derivatives of third net of liability portfolio, (sic) income at new for a forward $XXX the and a was of the was was the end Offsetting unrealized prices related the million

gas early Permian fourth E&P of the in was the CapEx expenses were $XX $XXX of quarter In in million third an CapEx extinguishment the accrual debt associated was from in and infrastructure. in properties million quarter. million on Basin $XX about $XXX was which midstream $XX our million, Basin about and in gas facility. an expenditures Williston for million. addition, million, of increase Haynesville from million $XX CapEx with Wyoming, about storage goodwill, expense, impairment $XX.X we included incurred and activities primarily basis million Capital $XX

Williston the to number rather the In overall planned; level December XX,XXX horizontal Basin. well Basin; numbers additional completing our Basin; million were Basin of the in $XXX including than we quarter addition, generally of Permian the and three planned of fourth of related Haynesville equipment delivery our the cost The related for midstream higher higher-than-forecasted performing in activity January; than significantly and the development quarter in refracs in Permian higher earlier we taking first acquisitions a in capital foot completion fourth Permian the activities reported for Acquisition. in reasons, than XXXX to well

the the be XXXX, Basin budget. capital in be divestiture spending the infrastructure, million for Permian of $X.XX we acquisition are forecasting For for Permian XX% about will allocated which midpoint midstream to Basin. $XX activity, excluding capital The billion, and primarily includes about XXXX

the earnings for Williston expect activity and Haynesville to and same our as As you release, of level first in Basin the quarter. fourth in the the one rig of saw head Permian Basin, the we the rig in have half one the year, in we in

quarter Permian spend proven of down equivalent reserves had million, million XXXX. about that So, XXX in at Recall infrastructure. about capital were year-end from the Pinedale proved Year-end which XXXX, expect includes of oil XXX barrels our be of of for million first $XX you equivalent, million should oil X% XXXX that reserves. barrels will year-end midstream the $XXX

Approximately So, was end proved of and the pre-tax sheet, $X.X excluding assets barrels Permian million approximately at XX% discoveries We and million equity resulted PV-XX of from barrels reserves under proved which and PV-XX year, was SEC $X.X balance barrels primarily were shareholders' the XX% oil outstanding XXX were the million equivalent $XX Total billion, positive $X.XX the SEC up XX.X or year. billion was of (XX:XX:XX) the our the last developed was $X.X Pinedale, higher of to reserves of of debt Basin. facility. revolving in of $X.X in equivalent billion. equivalent added were our of approximately credit proved debt were regards With equivalent billion. and reserves and XX total extensions Acquisitions reserves of The barrels of million XX.X had revisions prices was million equivalent. reserves about XX% billion, liquids.

of million we I'll quarter, used $XXX and $XX due now X.XXX% $XXX million retire our fourth the $XXX due our senior over XXXX the due to of notes the X.X% proceeds and of X.XXX% due notes and of During turn million issued call X.X% redeem million to XXXX. XXXX notes Chuck. notes XXXX senior our all

Good our morning, full-year XXXX released everyone. fourth quarter Yesterday, and we results.

to has designed also Permian a We a that and strategic to announced transition in discount several company share initiatives board asset QEP unanimously and reflected address to QEP's value significant to financial approved net our Basin price. pure-play

these I'd of this most Given reviewing additional context board's of giving to this initiatives, morning the and my them time around each spend the you like decisions. of importance

deck release and to ask XXXX add accomplishments for slide I quickly our I around a some that as of XXXX some challenges fourth you and QEP. results. I would to significant our quarter additional And want that details. Before unforeseen year was please for I color the yesterday refer do, accompanied do, full-year

through able of over tax-efficient During XX,XXX size the we acreage County, increase a our position Texas, X Tier year, also of Pinedale to the the in Anticline completing gas asset. acres divesture the acquisition Martin our in Basin natural Permian of were while

core drilling we advancing our our Permian In on design our in after and made development. We programs our refrac the and of progress the with in areas had the with successes the some year, great Haynesville. Basin, in tank-style also notable Williston programs the early in challenges

design, two-tank Wolfcamp the formation which and accompanying as the barrier we between on both Wolfcamp to the a single-tank the design, from Dean reservoirs a vertical transitioned to relied During original year, Spraberry and our act Spraberry.

largely refrac the design, wells. by right forward. wells program and producing and methodology using began tank-style behind we we were completing In is patterned from are on new migrated well As we to and recent migrated are results, with one. Williston that two multiple in believe as both experienced assets the going to tanks believe encouraged utilizing some those we frac producing which developing we that with We our and development our delays wells, was Permian also approach Haynesville we some that now, being wells interference, the experienced the the a Basin, our closely horizons drilled we us issues to successful after design we're

because obviously during a in impact spacing the Williston, has reminder, shut also volumes. new refracs completions, negative we have in on As which production and wells a during offset well of to these well

While by wells the early to refrac utilizing the look we're two results, we completed we're XXXX. Haynesville, also still program program, our the forward very completion techniques. in ongoing refrac our state-of-the-art we drill new In to continuing fine-tuning addition encouraged design, in and successfully

New a first, day subsequently to on XX turned And feet XX foot million lateral slightly results X,XXX Bcf XXXX. day. of and Eve IP look up XX.X earlier IP ongoing programs roughly gas and XX.X peak a today. very continuing strong and two gas cubic XX,XXX second IP refrac as the wells a of feet The that these we the cubic peak a That foot of an million from XX last Year's completed cleaned sales completed of We're roughly new to feet in had per turned equivalent sales And XX year was rate in to lateral, this of is over both in day. cubic a of program year. by producing cumulatively forward our we X close per to to encouraged by very well million

to the turn let's initiatives announced we yesterday. Now, important

pure-play a QEP's has earlier, transition designed series unanimously a Basin initiatives to mentioned strategic of financial and approved board to are I oil that Permian as company. QEP So,

path XXXX the margins drilling, a fifth, things: from we divesture of and to of to in assets feedback of to discount to a E&P diversified a are net Basin improve core leverage to to recast second, third, leading portfolio; Permian, first, as these portfolio. acquisitions non-core a increase assets; shareholders, significant first, significant increased successfully number will company; provinces, the of assets. XXXX, are think production we believe value despite XX% many oil and designed on operating transportation the in a from maintain the higher-margin why we of trades efforts, the operating value we we sixth, oil Basin, Permian the the companies, than assets we transition accelerate we deliberate two and core reducing of costs Questar and designed of Williston to spinoff almost Permian manage to repurchase our The significant our near-term last a share like stock Midcontinent Permian pure-play funding XX% growth and share we through discount to debt asset we've cash at as underlying company; to and gas-weighted percentage price our continue which our our development do appropriate a program. in price drive Through reserves doing So, and focusing production shareholders Basin by we in through our initiatives? number announced simplify asset underlying fourth, from completion, position; to through production plan Rockies, our and return in of crude of less our to Since will for to to by address the oil But on the our on in we'll address total oil a the proved liquids initiatives series been year. world-class a these then total responds the of yesterday,

a it? So, how are initiatives. outlined strategic couple of doing We we

advisor those Williston divesture assets, the will early engaged for to March say And of And our the I we'll our in make packages, to First, open bidders we've separate data have assets. we Berthold Williston there's advisors these assets. obviously, or South assist allow at of Uinta Basin when or Basin us expect April. and an in the there's both we on financial also present And late a assets. packages Antelope assets: three offers to first two obviously asset. Fort those to Uinta the two rooms and engaged divest one asset but as We'll

assets, to second in non-Permian of the market primarily remaining consist also We assets the half Haynesville/Cotton of Valley which intend XXXX. our

number announced also a financial We of initiatives.

and asset use to also First, to return operating proceeds to debt XXXX. repurchase. use properties significant expect we reduce plan neutrality, through reaches Permian shareholders occur which program fund from to in sales the of development cash We'll our until proceeds cash the flow to share we a to

$X.XX with share the over of authorized that of on timing revised that Second, that current the for billion program capital guidance. exact XXXX also billion, we our being the Permian of the investment the the unknown, the assumes then divestitures, capital board went capital investment two-thirds initial update for board we repurchase duration XXXX we year close our the on move assets Basin. assets program. of of we to just guidance the is And directed as and has authorized the budget through and for Obviously, closing approximately the Richard Since the XXXX. and will with you retain outlook you all $X.XXX

by we attention operations; deliver these we where and We costs of number continuing pure-play Permian simplified our can tank-style activity. on our operator, drilling undertaking objectives: accomplished first, why we as concentrated Basin we we our efforts our and are we So, believe production reduce growth, second, believe consistent completion assets core and Basin completion portfolio, a Permian streamlined a our we initiatives?

and the have share producing reduce that means our operating distribute, we water as drill abandon well to cost. as wells. We gas oil vertical to and wells surface source, gas believe higher-cost reclaim, from facilities and lift-related workover reduce And moved wells we of produced we can flowback of take developed to artificial dispose we of as as of more artificial also costs move and water. lift lift the We advantage

We also superior can increasing by generating oil at as total volumes, we level. the dramatically returns think expand percentage a operating production our thereby of margins corporate

wells and development XX,XXX production minimizing we net capital of develop assets Martin should and targets, moves, we shared and advance the of approximately the we facilities, which recovery multiple risk drilling As crew maximize simultaneously think and using acre wells. core rig setting completions, resource, minimize by sub-surface shut-ins while interference of maximize of can producing surface efficiency and all County tank-style utilizing frac

convinced executing financial value for the can strategic the by line we pure-play highly that shareholders I've company are oil and We creating we that unlock can now open the questions. Rob, With future. Permian significant a for initiatives while outlined, competitive our that Basin for

Thank you. a At this be time, answer-session. question-and conducting we'll

question from with is Our proceed Please with question. first your JPMorgan. Gabe Daoud

Hey. the Chuck, talk can that NOLs just we guess, just little about bit should everyone. we Good all I sales, proceeds think Maybe, that? any morning, offset a and leakage, tax the after-tax from and could about, how

going Good sale morning, Gabe. asset Look, sum individual the we're proceeds. speculate to on or not

the of et to a market that our market. Richard you cetera. as a in the whenever from in all our puts think shields, talk my and ground that financial assets of out, highly a put oil We've be I these stake assets career we the little maximum effective it business, feedback will let in got number and from desirable. bit go you about tax I clearly, expectation. And there'll a think gas describes robust we each advisors interest are the to

Hey, Gabe.

we'll year depletion we think, program virtually able be the all tax XXXX, of this through we'll that the joint combination those shield the the through on the into packages. shield that generate NOL/carry IDC two tax to of and gain So, forward

is flipping to to was do do So, year XXXX sale the no year assets. year exchange. great This to last with new a a the great

we shield confident that we'll gain So, be pretty all to able the feel sale. on

prioritize, term? credit metrics helpful. back And then, business first come trying just the from before That's pay the of Does longer use basis, pro I sales, the debt. forma on Richard. a what to Thanks, at guys maybe that we if guess, are asset buybacks? kind And proceeds you keep could

Yeah, Gabe.

balance to plug activities the from year. we're get operating any left, shape. clearly, to And cash down regard the then, shortfall in think, pay what's need going to to good our flow We're I revolver. sheet with going obviously, this we

repurchase multiple go-forward think or toward I talk we'd you times basis, of like can on that heard sort program. that And on us the number the what EBITDA. at like before is that a with of about geared do below the be to math share you've looks X debt rest the

Thanks, Richard.

Just from me. final one

maybe through an even kind like you're give the guide, and should flowing XXXX IP the budget, like For how an think just EUR about Permian, the curve for on that? can just sense what's using either us of what or of like basis, type the IP XX, we XX you

data I that. share a increase Well, on reservoir dramatic get with tank-style couple lot of quick we'll think development, these as pump wells, we more a in observations. seeing of start as production to in fluid A tank-style the information wells. more One, we volume in into these we're pressure

percentage they reservoirs. a of flow in a a you high or if they flow single also in any handful, a longer exhibit well cleanup drilled well than these just So, two wells, – would, reservoirs a even these of three and or but water single naturally,

see calibrated not production first within the in on, lot instances, of models after we peak days. to some be So, especially shallower need XX production think horizons, reaching folks' I XX a In peak days.

So, models that you're your it's take as I important, to calibrating think, into account.

Thanks, guys.

Gabe. Thanks,

proceed Kevin with Our with Please Heikkinen next question. your Maccurdy from question Energy Advisors. is

cash Hey. the comment assets Good of free cost by would are Permian-only assumptions end of just what the OpEx morning, that for the neutrality maybe driving guys. Any the on be XXXX? and outlook

Kevin. Sure,

LOE slide If combination number for I We that the OpEx, yesterday, both me get bear a a you about about sense a you the OpEx refer think thinking here, When gave actually for exact second. deck to trend. me I'm we with transportation. posted of let slide and the

to in a transport dramatic around for an LOE $X from You – can see in combined decline, forecasting about that $XX decline we're XXXX and XXXX. average third XXXX, for roughly a year XX% the of a

we that to we the wells gas as new think over but take expense of being to lifted about as will time, with place workover-related lift versus on decline average increasing ESPs. it down our percentage Now $X migrate year drive bring will we through and wells continue

below we when if talking we first entered Kevin, LOE the a And, down was a about Basin year $X With transport to we today, an just vertical we LOE were that barrel, to a XXXX, approaching sub-$XX we're costs, you we're operating up Permian basis. a recall, in regard where and barrel We're barrel wells. later. plus are on back drove that in a lot $XX of

absolutely expect So, be to better through number we a that the year.

you you. on XXXX, And and year? crews plan, XX imply to that compared for how operate in Got frac the efficiency that need what many to Permian completions does do last

acreage, crews move in We up our up good. a and we next is our because rigging it's multiple section nature tank-style rigging occasional of then a quite place third lot And an work testament frac rig wells, and crew, sit that two. time and think, on frac may half of development I contiguous down all down basically. to but spend the one pick and moving the and average again, the they efficiency we We'll efficiency to of

and contiguous down than that So, pumping tank-style are road. coupled the our our and position, and up driving rigging development, up acreage just down, our rather with crews rigging mean

Great. Thank you, guys.

Thank you.

proceed your Please with Our question. from with Mizuho question next is Rezvan Securities. Tim

response. confidence all first will $X.XX in lot in is people especially prior folks. say out big number you next ground. stake you to my in over of of inventory two A need a phrase or morning, a putting authorization price talk concerns board a guess used about why the Good the that ground the question, big that Can that some amid such you such I share the people there, in Chuck, more the kind billion years? stake very have, buy Hey. might one felt

Tim, question. great a that's

subject is and the and First, proceeds that said Richard's that's it's we conditions, billion available the ultimate yesterday, caveat already and I think asset a gave from it, release to $X.XX liquidity, market authorization, sales. the in

as Midland we've XX,XXX said, part the acreage room think prosecute than got the the returns. more a development currently peer-leading stock, opportunities, today is and attractive net those in to Permian production back of the running think we pure-play on most our core of company. Permian, drive being Now, that we we peer-leading a we have multi-year we become a When the And northern buying at program position growth assets to acquisition Basin. look adequate acquisition own

Okay.

Okay, fair. an of associated that's Haynesville, imagine that gas all which piece? is think about that's amount XXXX? on or the then a package, you with that about can you talk And EBITDA. included the is EBITDA decent have gathering I actually what generating there, separate And in for you

a potential the package we homegrown the gathering When think we future but Tim, we divestiture, have the there, it of our So, the to from upstream have offer again, buyer opportunity likely in operating would a and the I and about that own system do level think, majority the can the services your they it and owning majority reason asset, of wells separately behind is and growth. optionality upstream acquire assets. the potential provides buyers the they – recognize, midstream it well enhancement that the assets and combined expressed And both interest own potential because in the gathering also system returns present. and some

for for midstream XXXX, around That's As it's our the million forecast. asset. $XX for EBITDA

fair I to this And, assets Okay. keeping gas you're of selling last one marketplace. I confident versus asset Can E&Ps guess, you a on with this the if for a large and why why issue. very you could you're asset can why maybe big That's talk lot signaling get the about the I realize out that going you marketplace? you kind put Why to of maybe great. one are think sort now? in. price? is And back-half of sneak natural a There's then

assets Well, our recent designs, are quality are Tim, about the modern reflection a of enhanced when in the of that higher completion – couple I proppant triple of just stage which amount talked I look at of counts. our well results

is We only but the upstream, also perspective, think the markets asset present underlying natural opportunities reset opportunity attractive. does export are and asset position is I other to of from It's the relative most to economics, on what own in market. on very we're own gas the the a enhances to an which So, Haynesville performance it locational asset forward. midstream, seeing not And are the relative that the currently gas further the a think an itself, a going advantaged buyer the that unique in assets value. out

Okay. I appreciate you. Thank the responses.

is your SunTrust question with question. Humphrey. Please proceed Neal Robinson from Dingmann next Our with

would Chuck, Morning, maybe the just to would. on out of post leverage, clarification, sales, still that a flow And that is as positive sort and quick that, in there larger the have laid that just you Permian? on decrease development if cash or as change anything gentlemen. free rigs pads, Richard or you point? you question the anything sort the would running at plan of your become and plan continue and wait five far see Based or a like

Yeah. Neal. question, Great

I to decent pads rigs add or is pads individual probably our likely. wells sized more now, of are think all, First more not

the right company, cost of dependent activity the run case growth that. or commodity upon And of assumption five six price the forward. think adjusting base may for costs, prices, is Permian six we in appropriate look we current environment obviously, level five going rigs standalone at But is rigs. level we or Our and environment, current

other become that more yourselves sourcing pure vertical those things you some of you integration, doing? a the more see plays are already Okay. And company, standalone doing sand, all potentially once then do of

the we're Look, in of process locally sourcing already sand.

a and has only to but great water, which think, allowed gather very flexibility. also system oil our elegant operational not We to our have handle us to have, I gas, in-field

time in Beyond expect was to that, see embedded us soon, I any fracing business that the question. don't the if

Great Thanks, to hear. Chuck.

Our from question is Goldman next question. John with Please with proceed Sachs. Nelson your

is how Good ballpark, and PV-XX announcement, and thanks questions. morning, and for XXXX, year-end to billion PDP at Permian of the $X.X PUD? can Of congrats out much on break value you that taking attributable the my the

numbers Hey, John. typically those We break don't It's Richard. out.

with an without average Boe the producing you of on reserves, just of versus kind in if think ground per the between divided $X.XX you what's I did number pre-tax up by the differentiating come non-producing. math the

a you maybe XX% more reserves think calibrate the and if $X.XX worth reserves off you that that. of lower so, half reserves of can about versus say are value than and the are that of reserves, oil that intrinsically gas worth kind gas maybe And having oil

you a probably do without So, PV giving some number, around you looks number can like. what math that

to that, on that's clear PDP total? (XX:XX:XX) the or that's saying $X.XX be PV-XX And you're just the just

total pre-tax That's the proved number. divided PV-XX reserve the by

a Okay. generally PDP Is of split just for that there rough total?

XX%. we And number we the have think of lot was stuff. an onshore was the as behind-pipe don't belt company, a I reported

the not The PV-XX overall reserves? PDP,

We have don't that there. number out

in about Fair mentioned CapEx Okay. That's explicitly as that to helpful. enough. EBITDA with and you see on how much regards talked And had balancing the I guys release. -previously, just XXXX. didn't

just So, on by comment can you XXXX anticipate how outspending sales? flow you cash much pre-asset in

or what to interest. of minus targeted the carry recent us our I about number for is, be $XXX I then with the million last we EBITDA. million the $XXX is did think plus for was excess consensus know capital don't question year for costs refinancing And Yeah. most in XXXX but

gives you like. that that kind what So, the of of ballpark looks

John, we'll through capital obviously divest the obviously, change reset year and budget, the and the relative move outspend. it'll assets, And, as we forward

anchored that to was that that, consensus internal be model? clear So, the and with just estimates, so was to or

about same. it's the Yeah,

about open of plus thinking last the then, or wise, kind just thinking timeframe, for April, let and we I'll about these me, one should March Timing else July how And late or on. be somebody or up updates? be should if data minus hop Okay. rooms we

use kind of – from start to year's finish. was five-month sort Divestiture of that last a Pinedale model, you the If

July April. advisers announced the of were transaction end September. We closed in the and in the think engaged I

think you that September time from five if today, some early to So, timeframe. months where in the August are we you puts

And that's to close.

close. To

be announcement to a that? That or month prior two could

Yeah.

the give again, buyers So, your XX once sign days you to XX in to ducks all really his a typically PSA you row. get

July closed on on XX, months. transaction we again, two XX announced September the so then So, almost

very Very, somebody let else I'll Thanks hop helpful. again. on.

John. Thanks,

with your proceed Carrere with is Howard Our from question. next Weil. question Park Please

Congrats morning. announcement. Good the Hey. on

Thanks.

it's you say, the to back Haynesville, the a few for a of the for by wrapped question particularly And all of process, months, follow-on John's mention year-end? up you give process, the If divestiture do half have a year? of it on whole you kind the of sense there, timing can think

Well, the next conditions, year-end half of toward marketing year asset start in is look, of take a it's would first dependent our somewhat in I the be to on market or Haynesville the quarter if reasonable. elucidated, Richard you but think second plan the year. And timeline close same that

you. Got

in back little look down well or flat the a expect to moving What costs your even for presentation, the And inflation of cost XXXX? relatively you do bit. Okay.

pumping cost going this the with Company some afternoon But as at things some ongoing doing development we're – give friends tank-style will think to got and capital as to source our as the for cost us mentioned, the of at which increases. not two-thirds And I'm help baked on to a we reminder, I year. mode, since think inflation. will disposal, rate into capital year. doorstep also think be a inflation. in we're forecast mitigant about machine manufacturing, our we local operations. will result, the exact our the sand, We're our which mitigants some number, we've Service offset be We're the side, their because this Look, inflation a to have we starting Permian you we allocating just

first sand? when results the in-basin And get we should our with

the have get time we – be well, you meaningful quarter, by third so before It's will pumped, probably get enough going it'll it be flowback, to production.

last midstream Permian's gathering one me, assume kind that And stable now. for the then I the all Okay. and the of going for Great. with divestitures on

Yeah.

asset, partner. to We the that's in bring it term, the a through a things think makes thinking kinds need we're assumption. whether think own to are Those about. of reasonable I sense long

Great. Thanks. Congratulations.

Thank you.

from Whitfield Derrick question is next your Our question. with proceed Please Stifel. with

Good all. morning,

Derrick. morning, Good

Chuck, transition over development program. to the tank-style

think with of tank terms in execution that for right how the right what optimal what's of costs for balancing, does suggest reservoir facility with risk should as about what's vertical contemplate? style that development, you associated the and As many wells each

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answer. And those view Gen refracs? in have Great it. you of do on refrac Bakken, many Gen how given if inventory? you could X us a the of with me, X remind associated your refrac success available, PV-XX lastly, Got candidates per then for program and have you well And in uplift

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are attractive very these So, us. investments for

Thanks someone hop my questions. for taking else on. I'll let

Derrick. Thanks,

Group. is with Gail question proceed with Please KLR question. from Nicholson your next Our

Good and I because morning. that lift that is was or presentation, million cost lift, XXXX? the as know gas The of ESP, year-end artificial does facilities include in assuming the $X that that you have

It lift. gas assumes

at you we from guys the water progress and when then kind on XXXX XXXX recycling, of Great. beyond? progression of that and do Okay. And look see through how the usage

dependent goal the can highly of freshwater the maintain activity. completion brackish So, Gail, supplies. as we from flowback we supplies completion is our to recycle activity, much minimize as water current it's or If upon additional sourcing to water

So, we as water to over time. to system possible. up the much set reuse But system producer ultimately, be net able water becomes as the positive a

field gas, to the lift, bringing gas are Great. do And then in? question guys one back going just you last use you or

inside lift gas gas into gas introduce going wells lift of field from forward. We're our to Mustang having ESPs the using the enough gathering field the inside And system the at to gas transition was one of drivers Springs.

Okay. Great. you. Thank

Thanks, Gail.

next Please Jeoffrey with from Pickering, your Holt. Tudor, Lambujon proceed with question is question. Our

Good morning. my Thanks for taking questions.

year? what that over about supported helpful, Can on just Permian. plan then throughout years plans with The (XX:XX:XX) kind that to the you in production balancing on I a would runway in color big this first how infrastructure couple of place now, if infrastructure one is next think you'll build is and And what build-out also any too. growth the be remind of just us picture leave just you midstream

the development owning you That's your midstream of is of your front in-field can keep operating advantages one great own wave. question. in a infrastructure and of Obviously,

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to a the stands five in helpful. as what's max today? then in about long-term of far, good kind the that about as I not, so staying number rigs think know (XX:XX:XX) the six Permian, you That's years. rig Okay. And a if over it think for the Should next mentioned the position couple we terms of got to position you've maximum calendar

not six six more near or it. we on have more we more to growth. to we that to what's could really room five of it's rigs. a five add of think Certainly, assets rigs, appropriate But that add investment that's and commodity on today. rigs capital there's generate acceptable level And think around appropriate costs. rigs I question. about we It's rigs? think prices But the does that's highly run plenty Jeoff, on Could think term, to we the dependent

Thank All right. very you much.

Energy with from Our next Heikkinen proceed with Heikkinen is Please Advisors. David question your question.

guidance, think it your lot where Because guidance, and year. the you do and how matters at low Boe actually range it thinking a this the cost and guidance, if of would at Hey, guys. guidance about you're much Well, question. I end between appreciate would be? where your like end grow operating then of given the be; the per range, you high wide relatively expense

the up, the you things be basis, quite to especially because quarter make that Boe pop drive you decision – big but looks David, to put the range, what guidance And side, you the my breaks when year. do is like pretty them, if holding a purposely from Obviously, guidance and LOE really we have comment but bit. costs down on recurring, about plan the workover through that to back is can't the expense to it's straightforward, the are repairs around that mean, that labor acreage. the number it's a workovers and a stuff per move able heard on, that chemicals, like it first I expect range all

wide So, happen, don't will the range purposely of they're but that they we the is things know to because when know we going happen.

for wide. was range reason so that So, the the being

helps it. That clarify Thanks. Okay. Rich. Thanks,

with with Wells James Spicer your from Securities. Please is question question. Fargo next Our proceed

bank your think And you what do the if structure be redeem In in like, requirements, context regardless any, and of required Hi. strategic under triggered of of the terms to may looks bond Good then morning, to pro forma indentures speaking, capital be secondly, what may wondering do, the broadly you I'm mix? repositioning, everyone. what bonds?

regard James, structure, historical an capital always interesting think people's that's like. with Yeah. what balance of question to I because sheets the look

in going obviously, perspective, and target the we our the basis. level we're down, post-divestitures. Yeah, If may we management analysis book part and the you to approaching With below be do see that it's look come with indentures, just unusual do to sheet XX% to debt to debt-to-cap the at or may, regard to the we'll structure so capital strategy. times a look to debt today, and is not liability down of come really our the to the regard as on the deleveraging how transactions a that range debt-to-cap from what we our yeah, balance part's two unfold have mentioned there XX% contemplate XX% amount have going

Right.

(XX:XX:XX) just as to to regardless do your of whether to you requiring of want do, sense this triggered to down a at what So have in get bonds, terms may there's you to point, back targets? a -substantially leverage buy you

not that analysis level of we're James, to not the yet. we're Yeah,

most And investment, if them? you flex get those asset items much paydown, around fine. in have debt in how good expect? the words, guys look then, In these idea from that's between or if I'm have repurchase, get share you alternatives the more capital a less to you of in other secondly, of sales. Okay, than here which you the want to equation changes going or get sure and you What

Yeah.

good the think sheet just about I you repay think any very the what if going and and make we're position, plug market of we're sure to at the it's gap we're going revolver, at program. using about we proceeds still for a flow we'll a going cash an think that net lot between if think beginning going in value look valuation, of and we're talked asset balance repurchase there's about – share gaps, we Q&A, to aggressive to value

Okay. That's Thanks a it from lot. me.

James. Thanks,

session. like I'd Chuck gentlemen, closing to and comments. the to of end the reached for we've Ladies Stanley call question-and-answer back the turn

thank much in interest person. few in dialing Ladies we forward number conferences very for a in you look And you for be QEP. next gentlemen, today seeing over to We'll and weeks. of attending your and the

This conference. concludes today's

may we You you at participation. disconnect your time, thank this and lines for your