Qep Resources (QEP) 26 Apr 182018 Q1 Earnings call transcript

Greetings, and welcome to the QEP Resources First Quarter 2018 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. Kent. William sir. ahead, go Please

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

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

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

XXX,XXX reported is barrels Crude from Bcf of production our volumes comprised X.X total increase. oil were X X.X up X% gas which XX.XX of about Haynesville in increased XXX,XXX that for ignoring revised quarter. Williston was as quarter down financial year. were The barrels oil the quarter million fourth compares the were guidance last and the were Boes of from our Basin we down the which quarter quarter. equivalent, Thank million didn't than for refracs was quarter that quarter in and year. $XXX the and volumes oil XXXX down levels. XX.X fourth XXX,XXX as first Boes everyone. EBITDA $XXX contribution reported XXX,XXX first we operating barrels million last XXX,XXX XXXX. of volumes was Williston X.XX barrels you, quarter Will, in were XXX,XXX to Adjusted barrels, oil XX.X Oil million quarter the barrels, $XXX of of fourth higher fourth fourth XXXX. the our equivalent good was production Yesterday, first full the in XX% significant about XXXX. than morning, in up NGL fourth Production from quarter the million first a we lower gas production the million first year in the the results of for the and the of quarter of to quarter, first X% We've Bcf, future Bcf barrels, fourth midpoint Basin. were X.X quarter, lower quarter decrease midpoint of or in Bcf of the for about year last We've from barrel acquisitions XX.X Bcf, our increase. XXX the XXXX the about impact than volumes production, of million from volumes in barrels Basin completed also in Natural up barrels. have the a the a Permian divestitures is XXX,XXX such million,

barrels quarter X.X we million per in is the expenses Basin, $X.XX quarter. somewhat $X.XX costs, a million, the by Combined $XX.X transportation higher offset outflow was an of midpoint lease price, or per of of Boe. Overall, $X.XX basis, first to NGL the netted fourth a per quarter. in X.X production in fourth which in the guidance which than QEP quarter barrels. Energy's $X.XX quarter fourth to our $X.XX realized per fourth in than barrels, million XXXX. than lease historical operating of Boe $XX.XX includes was last the increased guidance due the The $XX.X lowered Boe averaged of quarter the a the – in quarter, million the per a fourth We XXX,XXX per midpoint the net XXXX. million and outflow XX.X oil the we higher quarter equivalent settlement of have our per expenses of transportation $X.XX higher however, in equivalent against commodity loss per fuel million of in Basin. On by Permian first the $XX.XX fourth Boe quarter The crude $XX.XX Transportation expense about Boe in Mcf, million barrel. $X.XX Boe, the derivatives than $X.XX quarter, decreased expense X% in realized $XX.X prices $XX.XX Boe. we of expenses the decrease which which resulting Boe that NGL million in including field-level $XXX field-level which and which was per and revenues per $X.XX Derivative that the of down were oil were of year from unit oil that compared price Field-level transportation XX% prices per settlements average and the the per barrel, to that to account quarter, Boe quarter, reflects ago. revenues, Williston $X.XX fourth equivalent was weighted gas expense transport $XXX operating expenses from in a realized that first down fourth power lower of were were per recovered Boe, in some total lower million about fuel revenue up was fourth higher quarter workover than the were price for XX% prices an in in the first higher field-level the quarter higher which Boe, quarter. $XXX than Recall was crude and we year field-level were X% from natural were realized in about per

G&A in from G&A and of lease Our range the for the for netted $X transportation guidance were fourth from services; is to year up items, expenses including expenses program. increased estimate Boe. expenses million we retention Recall are severance million, original $X.X our are for including the midpoint for that $XX.X And $X.X reflective unusual that basis. with a the in million first and included of our $XX.X the driven per $XX accruing initial various operating million for guidance about We our retention million of severance; services unchanged quarter, for a that our XXXX we in in professional full million on expenses in number by we'll suggested outside outside program revenue full paid incurred transportation XXXX we quarter, the update of million guidance, divestitures. for as we by quarter. $XX guidance we year our progress an the $X.X for of $XX the and make had monthly G&A

Williston the the and the an of of quarter expenditures $XXX For the first to of our which the was Basin; was quarter, to $XX fourth we directed the derivative on Permian $XXX.X loss $XX which million net million DD&A were expense, to contributing from of to portfolio unrealized reported of up on million, million; Capital our $XX and slightly accrual was first basis million in quarter loss Haynesville. $XX million loss $XXX.X Basin; million XXXX.

the our With most we're acquisitions which sheet, the the we and had the Chuck. a at billion. which $X.X $X.X in $X.XXX credit $XXX Ranch follow our quarter, were on facility. level the acquisitions the to the first million also was associated reported end assets year's turn quarter. excluding million, of give about was addition, over acquisition increased now $XX CapEx billion; Robertson acquisition. of to in $X.X with billion Total capital In quarter, approximately capturing of expenditures, the were We shareholder in Permian will that's $XX and Basin for senior our balance regard debt guidance how spend efficiency million call and total color reflecting capital divestiture gains last revolving notes, we on of activity increased driving equity the were for you in drawn more moment. I'll billion, of XXXX the by our Chuck on

financial has move give you discussed providing Good strategic update I'll progress morning, on everyone. more late-February. on we already our operational Q&A. little Since spend I'll minutes could an the operations results, few around our in a then and quarter a first announced initiatives Richard color on we that and to

maintain manage a February, to significant the are Uinta for operating strategic As we divesture an us return Williston financial company. in five, recall initiatives that board we Since directors in that growth assist February pure-play are to advisors transition funding to address Basin to packages oil leverage the certain a significant of program. open. approved designed as drive near completion, on development our continue for QEP repurchase share the term to crude debt our one, to rooms are to; operating progress. discount we designed These the those rapidly basin down announcement assets; significant of and underlying company; our shareholders you the initiatives Permian recast of core and our four, announced through late value by of in Basin; and margins improve value level by appropriate Permian costs our our production through address data price portfolio; and three, two, higher and the made of in assets the driving drilling, share the assets transportation in Permian early now engaged We've margin oil to focusing our two

We are in strong and Uinta basin the both seeing packages. Williston interest

We going process also you'll upstream non-Permian underway year. expected collectively of rooms the assets the proceeds we the The of of data we as anticipate of next sales execution Work year. purchase for remaining not sale sales individually. to As from the assets including be of market and on on the the us get closing assets a our quarter, reminder, discuss these half sale and preparing Valley Q&A we're update from these is midstream Haynesville/Cotton second to second the or will last intend agreements. on discussed these assets, in half which the in announcement the in assets, either the of well

of provide – each As the as sale assets, new occur period Basin size company. address as of Keep organization will mind as services each transition these the closing and pure-play likely changes to Permian not instantaneously we'll G&A, to oil transition sale, some a owners with simultaneously for the and sell of we the we structure that will at we time. closing in the

the As we the head we with certain incur related count. severance sales associated of costs reduction process, progress with also will

shares common price purchase average stock of Finally, program $X.XX and million repurchase of we share. initiated retiring a to buying back weighted approximately per at share our QEP X.X date

QEP's of on You summary of of assets initiatives we through can strategic and investor yesterday. X the that in summary operations late see current X posted February, our presentation a Permian announced deck a was and slides

the with to let's first We're from both very and quarter Now, operational turn the pleased first financial perspective. a from quarter our results. results

On front, of each one the and and averaged the operations rigs completion one quarter. in two completion the in crews the we rig and during Basin and crew Williston Haynesville Permian six

of operations we continue to You X. quarter can of summary on at Mustang slide a the stride Permian key some In improve during as first our on our the the hit tank-style see development Springs. accomplishments Basin,

quarter (XX:XX:XX) delivering day, to in drill XX% end the achieved the wells efficiencies which total a of new completion measured lateral operational on more spud were total depth normalized depth drilling barrels we've basis, we net and Basin than by front. XX,XXX drive in production reduction of first and as both originally addition the a per to reaching seven forecasted of of XXXX, equivalent quarterly oil able resulted to on times Since depth record In from the a quarter. we Permian

which the productivity first completion by away front, of Permian. two at of X,XXX Permian wells million over for the in well forecasted. all put This we we These increase XX during driven the pounds production originally On a of Springs, in more the being quarter. on than incredible XXX stages deliveries completed two the together us was proppant the XX the crews in in quarter, total put frac during working Mustang crews

over As on us May, a we the already four for gains, of result the while one putting the we've another quarter of production leaving in in and rig Permian rig efficiency ran from remainder to dropped first drop the XXXX, that wells plan we with drilling the the average in year. rigs for drilling on six XXX

we've As our of the forecasted increased a delivery XXXX, and forecast production quarterly result, with along capital investment. our remainder well total for

to maximize drilling results the individual are XX,XXX Permian that on horizontal yesterday. had moves. drilled, At efficiency capital We efficiency we shared with which wells advanced by do horizons. XX together economic Basin, simultaneously part We us The to of and in interference can nine produced We the were drilling but set, completion absolutely we had offset is date, Midland and convinced allowing recycle gas. depth to can casing completion in and recovery the at the downtime can approach in deliver of With to end stacked process of our is of and by of in-field which wells. core and surface rigs. over the wells guidance our and ability We have the set production development, gains rig hydrocarbons, risk total and assets development the eight revised assets maximize first we facilitated efficiency we performance in present. We drilling within shut wells producing of facilities the we're right confident and maximize the XXXX the with and quarter also being in accompanied tank-style of through can release operated source, net of oil the that crew had Basin water develop no to only associated acre following. dispose frac minimizing by multiple of rig ultimate had drilling out gross minimize of of under

and were our waiting we wells at had wall. fully call they on what We awaiting completed which So production, completion wells were of case first we that depth. pressure nine six drilled undergoing part in that had were had We completion. total were wells XX tank-style

that spread target test an designed well During a wells the half-mile X is quarter, high-density mile, we over unit, per XX completed ultimate to of XX wide density with horizons. wells

day online the And came additional of XX January density throughout none at than were wells these put of high the better wells the all reached rest in these wells quarter, are completions the target tank-style of of first our or late end the had The and peak online horizons. in very line quarter. but by in expectations of for performing wells rate, this the

our performance fluid we when amount clean-up oil frac volume expect due non-tank-style we as compared a of assets. water to a number the of wells three As to development of or dispose in large in a handle, them single source, four individual wells ability reminder, or in groups and well we delayed of Recently, rates pumped completed development in complete these about tank-style to and received questions approach. Basin peak of wells, the our suppressed Permian

handling traditional cover we methods. our savings flow-back currently significant our to wells. As part a have into we operate system in half of flow-back recycling for believe and frac produced about future constructed, and frac own water that cost approach, plans, water of sufficient designed, over capacity providing and our supply tank-style facilities includes use recycling wells, and produced we've development water disposal while operations, water produced and our development We're we water water

currently disposal of produced system anticipation water future expanding our volumes. water In addition, in we're

and developed gas reminder, about order future are well As our also are and drilling a also questions casing producing We've with water oil to number in takeaway below targeted operations. horizons a disposal the disposal potential Basin the horizons of wells of corrosion creation Permian had deepest shallow challenges. associated issues in avoid that hazards

footprint, need at sites, Our to focus which acquisition tank of truck crude We has a and develop gathering in been the Permian, approach eliminate multifaceted. to start thus infill us individual to oil. efforts contiguous our deliberate is well with allowing batteries the acreage a systems

for to Basin this acreage, Midland service our physical midstream ensure Basin further our hold oil Basin. of flow end aligning buyers. our along moving or for gives we work creditworthy outside value quality of market Cushing hubs where us neat to oil also we counter-parties major To to unblended large Gulf excellent with oil, but our assurance at only Basin our value providers markets the Coast, crude do exposure crude quality by receive Midland We to assurance our who from focus maximize away high or our pipe barrel of crude. the we a Permian with delivery Midland capacity also the which firm the not flow markets on by barrels, to and Moving ourselves purchasers high by

We also protect local as margins that financial basis our through against Midland other such swap derivative transactions Cushing. Basin markets

presentation. our basis of on investor You swaps can summary current of current a XX see our slide

takeaway gas, similar and a who natural raw redeliver gather and process the capacity both gas. of Investor basin NGL through hold X follow field to it operations. multiple and reserve or Permian on provide that downstream the buyers deck approach, our then Relations additional Basin For – gas our it physical we we the drain Slides in firm pipes details who we on residue XX reserve in ourselves

seven we all we the Basin, end We to well At quarter, and the drilled. briefly wells well on were and all of Williston had completed were with Antelope results. had to seven production, to and Turning the two returned operated operated total to strong during the all refracked South operations depth was that quarter, that one had gross South wells and sales being on one wells and of undergoing were wells put completed. be at gross waiting at waiting fully those We that completion and Antelope. be first

new XX wells QEP on we put for first gross assets. You drill horizontal to quarter. Williston our details Haynesville, the can more production on slide see operated two XX In the during

peak a results. X,XXX foot XX-hour day of XX.X peak had million a well first second and a very million both XX-hour feet from impressive rate gas cubic lateral, of per IP foot from cubic X,XXX day feet at XX.X IP a of a the The lateral rate

refrac an we these the and gas newly seven of first during wells, well that to first with day successful from program had those compared incremental continued wells. two rig returning million a we wells XX.X sales per At highly end the average the In production the active had total of increase one cubic our of quarter, per progress. Haynesville to drilled to quarter, completing the feet of wells production volumes pre-refrac in in addition

on we entire XX very can summary, activity. the with We've posted and strategic details we the on first February, and significant additional believe in made Stacy, see line quarter. across we progress our early Basin announced that assets initiatives efficiency our our slides create we operational In open questions. You for for and for we're shareholders can the pleased and gains the for pure-play highly company great extremely continued which results Permian With Haynesville also unlock oil that, the future. strong portfolio value during will XX competitive a

Thank you.

now conducting will question-and-answer a session. We be

comes Dingmann from question Please ahead. first with SunTrust Our Neal Humphrey. Robinson go

that you Morning. about terms rigs, more the wanted and broad Chuck, – or now just going four efficiencies have maybe four check and able year. of kind Andrews with you just tackling you'll I cadence that some maybe for are and the on in the (XX:XX:XX) How ahead rest of see of going tackle other Chuck, the you can what's cadence to the into areas? the just Martin that talk that versus in I'm rigs. how the you

we put frac to over completion and the stride There's year. four Sure, ultimately the summarizes how that of you the past in fourth stages that it's we'll that in production. quarter. a per efficiency a not be rigs four utilizing step the In is number forecast there, frac The remarks, XXX the from our wells release, average several can in production second, in quarter, wells guidance we change table our leading think delivering over in give the that of the hit put good actually earnings our on we the Neal, Permian efficiency. really ultimate crews reduction really frac a to month, and determines that – number two been we've many as the in is force third first driving efficiencies, quarters crew And that's morning. on rig the wells mentioned our which my prepared plan I sense of we quarterly during industry per our crew there's and included

you to when rest your Very or the And you the double with contracts (XX:XX:XX) have did foresee it does the sort is infrastructure check, that the at like that you're besides just some good. talking then, dips of hedges, some year? of correct like sound basis the takeaway sound of do wanted there vendors, about end how

the on Neal number hold outside are creditworthy large drain crude that don't refineries firm in sell loading water for ourselves, who purchasers to gas. crude are firm regional only board basin, oil, capacity of for to firm to We who many we we take or their capacity counterparties but and cases basin look strategy basin been of the not also access hold on out capacity who and a hold end-users years, that on that's oil ship the that the our facilities pipes pipes on Ultimately, redelivery. oil, for of oil the refineries

Yeah. be Thanks. Chuck. It to seems certainly Thanks, working.

Thanks, Neal.

Thank you.

Daoud question comes from Please next with JPMorgan. ahead. go Our Gabe

into you a just XX count XQ XXXX? about efficiency rig then forward Good about Could about line mean guys. number? Should what for quarter, moving per kind the similar it morning, little up. and at in cadence think X, as follow of we expect Hey. terms talk a as of a bit turn-in to the the gains Maybe staying

Good morning, Gabe.

number conservative think the get on wells being of I we're online. can we we think

the what going we the We frac an online. and as gains individual – this mid-XXXXs crew. in continued and we productivity – to front, we what individual continue or the as happening cadence, on operational of rig changes not reminds of little is in an It's it perfect in conservative the expect the our guidance continue significant at drill made only both or times, me ultimately that of resulted to Permian what's in productivity completion happened on improvements to step Pinedale drilling relative see our a put to we a completion but little be soft to also

In rigs fact, here we our year, can we as continue drive frac think and to we crew to as probably drop four efficiency. the through we completion down one operations and go perfect

well I you is wells rig we're because math So, efficiency. the on per and part It's up delivered delivered what do making leading wouldn't hung of and think also, industry individual prosecute the we're of acreage and significant normal tank-style frac crew I compact per progress development, get the development we're as around wells sort but inside moves footprint the frac on in rig up minimizing we it's benefit a minimizing rig operations, crews to again, where contiguous and tank. and rig down of continue

Chuck, the helpful. guess of year. tanks this can of color you what on the assume Thanks any I give that's really in productivity and some you budget And more recent then, for

wells Is quarter were there the maybe the XX think on point cleaning pad on that up. I that any Thomas last update can still you to?

Sure.

XX,XXX half tall, there's are of cube X,XXX rock in well mostly is XX a half the it's miles wells, foot in wells mile mile those the have a roughly peak The is So, Thomas X,XXX And basically – feet those on XX wells wide, of a day And IP recent roughly – mentioned across a wells, were long. and I my the two zones. that a – barrels wide, pad on yet foot as remarks, X,XXX XXX prepared wells hit XXX most not all XX and of laterals, They're the rates. foot bores in that. average set wells.

per across because acreage, testing highest what is which of those of in things put density wells the be which the think potential we're XX is large expected, And ground. what a we our mile. cleanup So, the we delayed fluid volume we would seeing of couple of one, wells there, that's

a you give receiving and about is around to little more color each barrels mostly water wells of sand. those and frac of just So, that, fluid XXX,XXX

barrels rock, water mile And million that X that's mile half of tall by wide of in long. miles half cube so that X.X

the of we're rock clean-up longer think issues as the eliminating a recovery think we're you ultimately, you and So, the developing inside – rock well are to that oil. parent/child back And maximizing block tank, interference But times acreage. stimulated observe, a we the try significantly the well maximizing or infill by come we if of we're that volume, result.

So, are cleanup protracted. times the

to having water The or volume relative the we've two to longer see suppressed the the recover, a longer single other term that on we online seen need large shallower, total that to What because these total volume of a of thing volume three fluid. total that IPs fluid, other frac wells and well or recover is flatter, fluid aren't in is been we'll frac decline. wells have wells

more on wells don't this develop we we at this performance, with them, well set, more as group performance set blocks, So, of show to these history these get cumulative history enough point point. on but just you data or a individual we'll well share you have we at data meaningful meaningful statistically

Thanks, a buyback, the rest in work the to XQ, we just for bit on the guys. how to finally, then can just you then, the talk capital program And should little maybe decision about Chuck. Thanks, put XXXX? think about Understood. and of

Yeah. Hey, Gabe, it's Richard.

second through where at be was expectation stock we be after had to regard of the with to those looking we sales in the the the it proceeds got et half what going program asset price driven was first thought was the sufficient all purchases. forward. year will by and liquidity cetera, The of think quarter, going I our to just divestitures, make

lot, everyone. Thanks Great. a

Thanks.

you. Thank

question go next Brian with & Rice comes Company. Please ahead. Johnson Our from Corales

morning, you? guys. How Good are

Brian. Morning,

Brian. morning, Good

fair what based similar time you've to I that going saw to the want I you could correctly. sure I on quarter – heard every just is seen, we make frac the Chuck, efficiency in we quarter, be first that to guess forward completing say? wells more

see going are efficient. more and not as guidance doubling can think show we become and to with more and be one wells we in the less table, do that slightly it's Well, we the crew potentially frac I what crew frac guidance and in is crew or frac accomplish go ability think efficiency mean, just second the what to we I It's number of more to more. more you'll eliminate per the Brian.

Okay. XX full that on rig a And are wells, program, is normal with that guess waiting the the I is normal, that completion, wells level?

but that things of would the to the accompany our slightly if encourage would It's release, a development. our you've XX it's cartoon the inflated, in got tank-style in do turn cartoon the slide that one release, you to of you I the and that slides slides accompany

four panels, earnings for of and and individual the snapshot, individual you to yet counts pressure our we from six eight in the wall then, maybe we'll progress fracked, either table actually well the come to page being in wells but and at minimum rigs. a in development under rigs were And wall. at those a a down on between wells With drilled. a producing progress be well so similar end, each on number that are included or of each being of you fracked, as fracked, But the directionally, being in be and the some are waiting at targets either pressure pressure in the rigs. or that's The there two, will drilling get of gives tank-style as completion and be in then, XX we many in progress a the likely that that can that need have panel can four of somewhere wells each now but that X, the of is waiting you go fill of not in of panels not wells go the and how least inventory in the and TD whether number on or wells – you wall, case, it some sense wells some process release absolute fracked, or five yet wells will quarter will in think each in one that that then, the of completion columns of

So, the the progress rather pressure you're wells less drilling completion and to place the wall than where in side. on see side is on likely

Okay, that's helpful.

sense. makes That

growth kind – going have that you that at on those look then, a maintain is that's are again No, on as enough one levels? should there. completion Is or firm is How you see that wells we for lot to not Bakken. of the completed And XQ get something Bakken the waiting of helpful. I production to itself? guess

production Well, day XX million net XX,XXX of the in plus feet just making gas. Bakken, of oil of were we a turnaround wet cubic we'll oil, see Yesterday, roughly a out volumes. another barrels that's

So, quarter, them flowing turned of completed and around – we the stages wells those as in seven quarter-end, number wells have described. being to back There's that volume there, late production and we've a at the completed to continue we've of come the well, and on out being fairly and on. of in new refracs put we we drilled various continued

an seen result uplift we've production that in So, volumes a of as activity.

right, Appreciate helpful. guys. Thanks, it. All that's

Thanks.

Thank you.

go Jaffray. Our with from ahead. Piper Please next Kashy comes question Harrison

for Good and everyone, thanks questions. morning, taking my

tank-style So, Chuck, efficiencies. given completions is making it forward the progress looks the like improving on the team

So, congratulations on the the that relative wells. front. I wells of to you was could orphan parent on wondering comment if these productivity

relative life XX%, do the specifically, to So, over to orphans of how expect sense we be course it parent? the same parent? to as these trying you performance a you XX%? the how orphan well trends an get to over time, that time. Just think of a its Do have should of productivity expect well Over the about

or are essence wells wells; They tank-style all children think parents of generation. don't our you being and depending and is child you – of a that about completed all generations on Kashy. create generation all parent drilled simultaneously. two it, are a They're of how the Well, completion

it and then, reasons. that's lowers the the is the of around from So hydrocarbon then removed wells, of complete certain well being child absorbs sinks drill done well parent shut-ins fracking it that into creation if quantity when well. a the parent go well, of the also the and well. fracking reservoir, well. And a you that associated that child It lot mechanical pressure of a pressure parent with while child interference, parent parent avoids the in and it into – well serves the energy sponge you by avoids One, – drill a as for third, the – and fracked child avoids of the stimulating number wells,

there So, of block that they're simultaneously completions generation, that of all the a completed, no all are wells create the a even are you horizons. maximize of the result in from each to is essence block same in pressure of recovery in rock tank-style hydrocarbon stimulation or sinks both the which pressure should and cube, vertically, the well holes in target of well and laterally

job When non-tank completion. style do didn't the that. parent well, great I to I explaining Apologies. a the I was referring if of use meant you

saying, a of parent/child at the tank at compare are of old certain so over to you looking how productivity and a of the well each a style of parent completion? you on a if I block just look style time, was the completions, would you if did the performance non-tank period So,

I actually contained well based density. little to we've yesterday, in that slides density is shows XX, higher pilots we think the out our deterioration that very a have proof-of-concept is Kashy. the seen in put it on So, versus that's what in see lower And data individual slide great performance in place

stimulated XX. micro-seismic rock that and eight or as shown sinks, think a actually So, horizon XX we versus more well simultaneously versus relationships or in in actually we've to evenly uplift when well we've a all volume a fracking XX described performance earlier, versus and result a versus pressure gone several an wells, instances, XX slide and wells reflection that's of tank-style on in single direct wells also density, as wells creating well in instances, of these a target seen lower from development, some parent/child the that's developed in spacing completion unit some I

could density where, through, at helpful fit you or just your Got it. assumptions That's value was or at just is assuming what I point I'm density illustrate to on XX, prices. wondering helpful. found the into change us maximized. prices oil then walk that how higher if I equation. what oil slide with it lower And would

does oil or density – oil certain just tomorrow? $XX $XXX affect a And got what's like to and I'm rapidly price of ability we that, how the section, saying if adjust the so, the oil

oil to to the the to to so change their takes changed Obviously, shift curve $X a get little are and It in unit, to a at the we lower shift of a But left, will adjustments but depending The make reservoir right that is will present oil ground on forward This Obviously, to obviously change that the permits peaks, after if less it's results happen. the losing ground difficult drilling that locations. the it, peak directional XX, the easier spacing. value a relatively not would present it's on the fly. a in net prices, be the reasonable prices a curve drill, gaining right drilled you add a it's cartoon. probably slide more kind wells. the those in in hole couple while of hard well and that's can for thing and to them to that wells is a un-drill graph it's spacing bottom prices. what value on on guess density in at lateral or the or which right. unit higher obviously and subtract would economic on depending adjust, basically oil move correct, It's maximum easy at where wells or we There's the to to of recoveries, count but at the But the look which no you're length. scale whatever do, as or going

collision, not don't thing planning difficult to to cetera, sure do. create et make real to well have do a with we We but some it's issues

family would family per so, should One the that spacing per first one that be unit XX concept. are quarter it on wells mention roughly is on is wells in next we've to of I coming test things wells unit spacing put The this density. or so of is, XX so density, of the half well XX

maximize the to early we're develop part, the is hit value to what of any on we're wells unit. move that the economic do believe one present dropping these right the to given determine is trying we so density graph, is recovery the So, that of to peak rigs forward them. watch maximize reason as we which we that have in on And is time and in oil four to things or optimal to

that's and it, very Got helpful.

for one me, question. and one Just following just up on last an earlier

know XXXX, rigs it's saying – to I we sales. put to the As you to were harder think relative wells look about at that getting

into capital would million we just And in spend, in I CapEx XXXX. you so, should the $XXX pretty similar XXXX, then think for terms wells just in to so many be of and how (XX:XX:XX) we back XXXX Permian guys XXXX about just guess, think the

Yeah.

I reasonable of beginning of this labor, a Today, one proppant, We're I that probably had the we what's are increase point, Obviously, that's costs. be guidance are – happening stave and The well proppant to potentially faster inflationary been We wells that's across fracked now. XXX% at that's to getting hoped it's as both any in address a our we're for think off in local we're completion proppant, way sourced at at our our locally we with a delayed. haven't we we being is – but hoping think teams for it's do of to and well to quarter Kash, with by XXXX. Basin pressure continuing is of inflation. the reasonable inflation off assumption down. and both drilling maintain busy, and second it's a the them can't get yet way signs is, and incredible very another hopefully, stretched, head fuel, on third manpower XXXX, And drive around given – and inflation. that's drilling/completion side But putting at stave infrastructure seeing to the pressure inflation Permian the asset cost, are obviously, maybe it's supplies. front, operating and think our use thing, optimize the to

noticed a side? there. mentioned Got you. your on And wasn't follow-up pressure pumping the I items, pumping pressure seeing lot comment on inflation, just a on You you but anything are of

I'd rather details there. not into get

All right. Thank you.

Thank you.

go with Our comes from Derrick ahead. Stifel. next Please Whitfield question

start. Good strong morning congrats a all on and

Thanks.

your timing comment Chuck, example, or expected of turn-in Permian each some it risk on than conservative. is of your backend quarters you've with Could periods and your fourth the might lines guide the in call quarter? third assumed you the look and guidance? the are weighted cleanup longer For at factors

big that we in – of the close anybody's are So, been drilled block been cleanups. our think XX estimates conservative we've density they're wells the of that very are we've drilled – we in highest this wells together hope, basin. Obviously,

And so, have time. estimate really cleanup to we don't guidepost a

driving record operationally, way as taken and conservative working think there. been year. completion but that's proves our for forecast pace the rest drilling sometimes given current along We've their track used I to we've conservative We hope of and to we conservative, and the on the that the surprises well. this that for we efficiencies, although both have team that be So, you cadence have hope

are direction must Got to it. cost is perhaps then, you you quite feel below-ground if industry the could once? development and comment well delta of on guys benefits elaborate makes the benefits my a at with per while vindicated sense. the follow basis, the the on, development with accommodate tank-style on production on clear, any, above-ground more to That regard And is fulfill headed concepts,

X of in it slide a tank-style infrastructure, whether Sure. any away. or be have, talks and other mile position, wide one We a of have actually of if have to the block benefits, acreage X that's because realizable, starts our having fragmented The with miles X just all infrastructure long, I slides acreage deck. a the the you you and the because unit, and got you then have XX you've benefits another development of a contiguous couple surface are benefits, you none mile can't surface it afford think develop about if

oil ourselves, fracking amount into sourced we're produced sourcing back recycle that obviously, to for trying and that our as also also So, a site water not able reduction that our fracking, well facilities, thousand water, another gathering to save we back a well. gas cost, hope because then, roughly developed. over $XXX,XXX, flow then went as our long-term, barrel as I system that the and gas on slide XX a it individual XX think disposal we value result a into regional just to water here, only we neat of barrel gather couple on of south. and we the keep maximize the in but improvements on water continue – able what the our see of XX% of facilities oil water centralized to well we've but reduction infrastructure. water the high been about our to a able able in that cost, XX% gathering maximize like, a but decrease system And disposal there's crude the we'll quality and shows you – about XX% And then we're XX% being of as we that use we disposal develop facilities We've to been hundred our and oil drop our to result cost, centralized in our oil or own we've oil themselves. that a build API And think with in be gravity great that slide about put because, looks Basin a unblended, Midland transportation we

becoming trucking, to firm that capacity oil streams to is the gas the them NGL, So, or and as off-takers is gathering all system. operate not right hold development going more of control having eliminates eliminates and the able basin, which tank it issue. the drain build, whether truck to individual own And hydrocarbon wells, an them the concentrated footprint, forward. move in batteries own to our individual piped. be the It in we we which keep more then, water. think We're It's traffic oil, watch pipes utilize and roads strategy being or and basin, redeliver who pure on

maybe try pad? three to pen think If what the the the uplift? add try were follow-on to simplify we in to a And would well it, below to NPV per if this uplift, so well paper NPV I be calculate comparison about to to to way If uplift the ground to assuming could four and one to put that. were just it no you

we'll in great We'll that, significant. a it's I forward. question. going that. But do haven't our it That's materials done include and

Very good. Thanks for taking my questions.

Pickering. from go with ahead. Tudor, Our Lambujon next question comes Jeoffrey Please

morning. for questions. taking Good Thanks my

the regarding the of purchase mix interest The is first gas Permian in and just oil release. the in one additional

off Just that throughout that's mentioned kind bolting nature, on the from was was year. of if continue what of you're finishing deal XXXX wondering left one-off to the kind if in planning or

sense get opportunity a Just there. trying set for the to

Richard. the call Yeah. associated Those fall. the, what Hey, were Jeoffrey, transaction and we family friends Robertson the it's are Ranch last acquisitions that with

and $XX closed of the friends family and just in the that that about. sort of probably discontinuation $XX another didn't continuation, talked and will second of those we were remainder the of was it's quarter. out pieces the that, close acquisitions million be number that There'll million a there that quarter, in So, and get

of addition to continuing block can to that acreage acreage, we XX,XXX in endeavor. foot we're that quite our trades and plus that being to do maximize to number also trading laterals we're the drill, In up successful

some will And on wells in So, map going a year. Springs, those wells of that will higher you than should shape we we interest anticipated, more should and/or change expect have in this that the that originally had we our working the as Mustang increase as done our have planned of of for this result forward. even increase rest trades acreage lateral it's the possible of that we've that the length some interest we of year drill wells

curious that performance those like on are also from has got in And Seeing recent on those and newer how the so and continued any January, slides tracking. as you curious how latest data it refracs production's just on been. I then, there Williston thoughts refracs performance appreciate that. wells, the the and through just looks

very show the XX% that the IP. virgin above to the to And all the So, well refracs. of at encouraging. well prior of we performing original approval They similar on so very from see, performance, or that IPs average what they they're undertaking declines to XX% sort forecasted declines all are we are in all of had

Thank you.

comes Gail go Nicholson Our next ahead. with Please from question KLR Group.

Middle, was your and the remarks I'm you that, Sprayberry, in what Wolfcamp Lower believe I prepared five XX that did step? morning. horizons. B, well said guys Good pad tested A on that you assuming with you

in wells determined Dean, some coring, what we've a But target. which a originally frac we barrier. the from thought further potential got might was is We've be

And so wellbores we some placed the Dean. in

be by the potentially One performance of there. we and to Sprayberry the zones upper Dean, think the things a of seem Wolfcamp the the Dean, Shale we've the observed is and the influenced of contributor that that's both part to outside that

So, we the in wanted to place directly wellbores Dean. some

targets in We we'll you quarters. also coming on additional and are those evaluating update

fields And two you guys wells you were this great. you online, quarter. you those? then, brought and kind provide the Okay, in bit targeting, on what switching more saw did what of wells Uinta, going Can here, to just two little those you color vertical a

stack Sure, together wells. vertical they targeting Mesaverde units, XX,XXX I preserve those sands, were don't which acres. federal to were acres, the know, They comprise, are drilled XX,XXX

are in acreage And we drill basically obligation were you wells there. are Uinta the to they we that that So, one to our assets unit preserve the as had know, of and assets upside the currently we place sure see we tremendous that tremendous make a marketing, buyer gas for asset. and that wanted so to we Basin Uinta across preserve potential that

you. Great. Thank

Heikkinen Our next Please Kevin with Advisors. comes go MacCurdy question from Energy ahead.

missed for Hey, oil Gulf linked your on good sales one sorry this, follow-up Midland? much I quantify can but of you earlier, how prices contracts and takeaway guys, just to if from or the versus morning me. Coast To Cushing are

I the percentage. have don't

the basis the I'd as place Gulf time, it's Midland over change that we've rest and of for well. then, half for of will think you – XX% year hedges probably XX% I of going in the year, year. the second that And remind and forward rest Coast got XX% the that protect

changes it does get time, more say the it towards you Midland? When over weighted

opposite. the it's No,

that's Thanks. helpful Okay, guys.

to would I you. to Chuck over closing Thank turn for the like floor comments.

Midwest, dialing our road in the QEP. you team week to and on we for with in visiting everyone next day. a will you be for Thank in shareholders. Management your the Have today, interest forward and thank good look

you teleconference. today's This your concludes Thank participation. for

You at your time. this lines disconnect may