Qep Resources (QEP) 8 Nov 182018 Q3 Earnings call transcript

Greetings and welcome to the QEP Resources Third Quarter 2018 Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation.

As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, William Kent, Director of Investor Relations. ahead. go Please

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

our qepres.com, done with and not go already, flow release, to adjusted with discretionary obtain tables expenditures. so including the of which the with processing the and comparable maps along costs, discretionary SEC website, and These you've and If to and materials. most to our is excess copies measures to we'll earnings call, GAAP EBITDA, filings, other measures adjusted non-GAAP please referred transportation conference of use cash as flow earnings EBITDA cash SEC in presentation, results, measures in contains which in supporting our financial today's reconciled filings. certain capital In release are release earnings slide our

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

Basin assets. PSA the we Williston morning, our Hey. Tuesday, Good everyone. sell signed On to

and activities. and the our some I'll third quarter cover highlight results then will Chuck discuss third transaction So, quickly the of operating quarter

we quarter were than realized of but were about XXXX. expense was were was higher On for $XXX the And oil per $XXX volumes expenses Boe, the from million which second Boe barrels XXXX. the was down third the the XX.X quarter. XX% Basin quarter. operating total XXXX. per were equivalent the of the $XXX our barrel. record third lower quarter equivalent, per unit the gas of now for compensation levels. barrels, good higher from quarter. per that down from second standpoint, was $X.XX quarter in X.X volumes a early produced third third production outside we from and from oil realized XX% our revised is was of second of X.X XXX Basin in second in the $X.XX Field-level about million, increase outflow our quarter Boe result oil XXX,XXX XXXX crude from increase $XX.X X.X a midpoint Boes expenses million increased were $X reflective includes our for Boe expenses the field-level year. than the down $X.XX Energy's million million about were quarter the by previous Transportation higher an the XX Bcf expenses, second our second per of $XX.X the was record Boe $XX.XX QEP. Boe midpoint of midpoint equivalent of oil resulting in X.X second is the XXX,XXX ago. the million quarter crude Bcf year, Crude and the X equivalent per up settlement which were in We third quarter. revenue, restructuring-related in compared was million, of our expenses, the million quarter $X.XX quarter an second $XXX Bcf the higher row for down prices gas equivalent guidance X% the million range in for quarter the increased outflow the $X lease in the as NGL quarter account professional an Derivative guidance. production weighted gas G&A price realized X.XX second barrels adjusted Basin divestiture. is full lower the second down million the oil $X.XX barrels quarter year per operating average We've in G&A the quarter, September. the from Boe is down the up which XX.X in Mcf, Oil $XX.X and in the was restructuring revenue, that per lease $X.XX of production million million. million per down comprised expense third of of basis, in Boe, guidance quarter. previous million of million of guidance NGL of in adjusted were $X.X in Uinta revised second that million expenses price, a per Boe down barrels, second Bcf were was was we to per second of $XXX per XX,XXX $XX.XX including XX% Combined loss in that the than transportation were XXX,XXX guidance of netted XX% since our the the Recall adjusted preceding quarter midpoint in and the such which was our full X.X Basin were per million Boe, a was revenues, net quarter while Reflective quarter. a than $X.XX from second which year lower were second Production Uinta natural million, barrels, million XXXX. and X Williston $XX.X of XXXX a lower were field-level expenses than $XX.XX in of in best field-level realized expense the million for higher Third field per third oil volumes quarter. to oil which incurred X% operating Basin barrel, are in in $X.XX Boe expense, against million guidance we reported Midpoint revenues and unit an operating X.X averaged second production compares about settlements in $X.XX that Bcf, were the a of is gas transportation from to which the quarter. which this that EBITDA than The and X barrels. barrels, Permian in XXX,XXX X.X that quarter. up have quarter up million absolute barrels about quarter, which volumes costs second about of $XX.X the quarter. including XXXX year quarter, netted quarter level down The or barrel of third for of million in from is from was is XXXX quarter for from transportation commodity barrels, but reflects we down prices which per the higher gas reflective Legal a barrels. the quarter, third volumes were quarter, $XX million of divestiture $XX.XX price the volumes production Bcf, down quarter, We second services success Included quarter. of expenses Uinta Bcf quarter year and NGL second derivatives, XX.X of quarter. second From $X NGL Natural we million than to million EBITDA compares to and in which while quarter, the slightly miscellaneous $X that closed we quarter. field, total the XXXX. our the the from $X.X additional lowered barrels, in $X.XX $XXX immediately the a than in $X the the combined This transportation transportation Adjusted in to Share-based XXX,XXX driving down Boes and was per than third QEP by for down guidance. G&A our quarter this volumes Boe, in per prices than full-year

For the third of the in we the net our to income income on Contributing related was million. to of sales closed various quarter. reported that million net $XX divestitures gain $X quarter,

was million, portfolio second by were and lower curves million accrual $X million $X in expenditures on was Williston Capital for prices. unrealized $XXX expense million and the million our to of quarter basis than which the DD&A in an forward $XXX the million to was Basin, addition, loss quarter, the on in derivative to quarter, $X Permian the the higher driven higher Basin, directed Haynesville. third commodity In $XX

the of was also credit Total million $XXX I'll billion debt the Basin the senior quarter, activity divestitures Haynesville, debt turn Williston year, at Chuck. put additional flow refrac divestiture the capital to excess the notes the quarter that proceeds from revolving on fourth during of the in equity $X.XXX production acquisition outside midpoint million $X full-year the the addition, the and in $X.XX of our of was under total wells and We activity additional A borrowed now million quarter. expenditures include our guidance regard of which $XXX With discretionary various billion. $X.X quarter. reported range XXXX sheet, facility. the is in In of and cash billion. to activity capital billion. end for to in for previous the now over and drove Permian was excluding increased we $X.X were acquisitions call our expenditures, million revised the Williston of of combination assets Basin, balance Shareholder approximately in the such guidance our were $XXX in operating reduction $X.X the from and billion, the in

Richard. we Basin In approved that QEP are late to pure-play that strategic Basin course, Williston assets announced Basin adjustments. Since closed designed market oil price assets. morning, Good directors subject to early proceeds cash and advisors transition we've to that board February, Uinta are, announcement, our on to our everyone. net $XXX in initiatives million Uinta the certain Thanks, that Permian company. September a of of We for post-closing engaged of

the also $XX.X million. to divestiture, for sold months nine noncore addition this net northern Uinta primarily of our through located assets, of approximately first region the in year, proceeds In we've cash

purchase and a saw, you to for agreement when purchase $X.XX purchaser, additional shares $X.XXX $XX plus approximately million we've the $XX period, XX shares we X.XX Vantage's announced million of of XX price just delivered We're sure consecutive price thresholds days stock, per delivered share five-year daily sell cash, up trading definitive subject that of price VWAP share consideration an to stock, I'm any of at our comprised of of million XX million of a daily that that As the the are consideration is the as billion met $XX yesterday, which which also price. Basin to consideration, the Williston exceeds $XX billion is for share into of common of price trading during of to entered the closing the share share per meets adjustments, be as X.XX of XX assets price if following time of days, transaction. exceeds when per tranche of or the a shares $XX the consecutive share equity the purchaser's exceeds entitled VWAP additional for would

limited and shareholders' XXXX is July transaction Additionally, regulatory approvals. year subject we that late is the The but the or not conditions, transaction effective first quarter. of to transaction the anticipate including quarter the approval of second should to close date in certain and next Vantage's the in X, early

who parties in in received, progress we response and to continue discussions. confidentiality an to Regarding inbound the we into data agreements that to provided multiple the we expressed entered we interested interest and assets, inquiries Haynesville,

a billion to As of net proceeds debt proceeds in continue core an our end $X.XXX become asset of repurchase billion $XX.X third definitive Permian Basin quarter and approximately we milestone agreement shareholders execution of million stock assets our the for we've To-date, use repurchased $X.XXX our share in applying oil XX. $X.XX cash operations, sell portfolio, Permian million of approximately debt asset X.X and cash path June program. ongoing per on our sales assets, of excess to our fund simplifying to shares a QEP Basin from as the Williston through total company. average we to The at we'll on from at another to buybacks. of a pure-play Basin assets, a our share By to price important development down is return sell to pay was share compared

this remind embarked Given to important you significant I why step, strategy. think on it's this we've

And organization to count we've our producer commodity the be. sense ideal our us our centered on as we'll to First, of March, asset Texas owners. a think we by additional chose which and costs Midland Permian portion makes Basin company Since the to the efforts. we We're and, that more – focus continue XX% reduced because close We number being and to commercial our Basin, crude think right-size is Permian on efforts northern for head is Martin to and our right to oil for around down Midland a the a place technical while sales streamlining properties drive of upon asset, County, it high-return specifically, focus the allows the commercial single a maximize reasons. the of efficiency. approximately Basin single-basin size, the our transition and technical we convinced new already rather, organization and

true province extremely post-processing with desirable the area oil. a oil sulfur, XX%, of XX is XX API production black highly to comprised First, crude about low gravity, typical

to drop X% well oil our in Most about stream area we're Permian an In in condensate then gas addition for it of of to focused condensate production total our crude XX% The averages gathering and basis. approximately out oil, annual a systems in thick per our reservoir about oil is of contains on our that stream. continuous amenable, multiple horizontal which of X,XXX-foot that barrels really are million from extremely unconventional interval well in method. square a tank-style lie targets that lateral estimated place development large long XXX amenable stacked, in in mile, using manufacturing contained pads relatively

that barrel we every lot our assets to We are we recovery northern located of in believe in structural acreage over horizontal help very folding, parts had oil the costs blocks surface barrels and facilitating of water X also pad-based production. for the of gathering oil allows We with while complexity. an faulting, a for also low length accurate oil exhibits produced placement contiguous approximately target of life not of development of laterals. lateral horizontal horizons simultaneous that increase the think area, Midland for a large highly lower the Permian, development of operating which not that water the multiple Our Also and relatively crude handling, assets. including allow subsurface. low in infrastructure, should other water/oil that a condensate maximize Basin and compared area shared targeted gas has and was configured lot of which and ratio There's in

in leverage X we concentrated down on wells current we've yesterday, our drive LOE. posted for demonstrated can slide costs website efficiency down our to that on and investor As to maximize new to see X and we drive you our that footprint can presentation

less obligation sinks orderly We efficiency allows well have minimal issues pressure which them creation orderly across interference to hold our and to inherent leases, entire in an us our drilling develop and of maximize development. fashion acreage in should block, parent/child minimize which acreage

infrastructure, right shareholder pipelines are Midland expanding an through via value including grid, of in electric the global path we In housing, County and Gulf strategic via oil execution our roads and the gas Basin network Finally, the that the we're infrastructure in access transmission to existing initiatives. maximize has power highways, northern Martin gathering, regional convinced right well-developed and place and markets are to of on Coast. we crude oil summary, an

our initiatives. our in the of progress slide these transaction, to divesture you attributes on X gives the initiatives. continued our we that deck just Haynesville/Cotton these closing on Basin assets, I on Valley of X key went acreage. the our progress the of summarizes Slide delivering Uinta Permian Williston well some our and on way sale With over noncore additional efforts, And strategic our are divestiture, announced on

to Now, We're pleased we with let turn third results the quarter. posted. very me strong the

the Basin our the transition Haynesville/Cotton concentrated during activity on Activity Valley included those the was Basin four rigs, continue assets quarter. company, to pure-play quarter. we our and drilling basin or during the As activity or a Permian crew, completion no oil in was one either Williston or completion there in the refrac

Permian, a the guidance of X. delivered updated our X quarter see of advance operations quarter can continue tank-style You summary slide team our third during to slide our In another our accomplishments on impressive they some key and development. on as the

total wells the delivering barrels in X the operations XX% edge Springs which to from release, lease cleaning frac than of was the production addition efficiencies quarter, of the still were record quarterly new a turned the line feet the we put efficiency of was reached quarter, we XX,XXX oil we to X,XXX wider, in X variable and and east XX-hour on of our result we during forecasted XX we XX Mustang while to more our completion production, gains, net IP as put remaining of lateral achieve corner well the Thanks and delivery the and oil quarter. In mentioned and honor new end all second as continued continue reached had front. operational XX front. we of barrels in three four the we're on up. production drilling we to day, constraints ongoing a tank have had equivalent crew the were gross of represent to per mile well we back Permian Permian to of in and Mustang by both last per average delivery Of well together increased working Western up The discrete block our XX productivity which drilling direct put equivalent of gains Basin wells start peak completed wells additional located was at production units, The pace which us. spacing during the setback of quarter our quarter, other densities the an Springs, at on that a XXX development our on for

the up full quarter, about the on approach in-basin utilization of utilization of acres the of individual second which right savings completed approximately yield of we're well During completion over sourced lateral proppant, tank-style a of development and our gains Midland efficiency to drilling at which wells product. end XX,XXX total XX% the the per core net to we from transition full in sourced convinced also The our quarter, a should facilitated $XXX,XXX compared to by is advance outer basin the on development, absolutely Basin. XX,XXX-foot

higher-LOE captured progress average and present. operated Springs, second of on new XX had the portfolio, our our And wells in driving our completion. down Springs wells an provided driven X, stages undergoing slide You of program. in in the well you release cleanup placed can completion wall that efficiency per XX lower-rate, pressure continuous slide were also our of expense by part lateral our equivalent can per X oil call the an XXXX that And our In equivalent XX barrels update into various XX-hour operations on quarter new development development of with gross X,XXX the remarkable X,XXX on At production barrels what And X,XXX and wells were wells our only wells feet, of and only in in achieved growth lateral construction wells XX-day we XXX feet the crews. oil no X,XXX Mustang see of X. continued set, equivalent flowback peak of peak of we infield acquired end in Permian per lateral which in day production, IPs X from of at cost wells, County Basin Basin, of through we an completed, from third surface the the feet. horizontal tank per yesterday, that plugged XX of how process XX-hour Permian per of barrels it of of had lower last and had efficiencies of XX-day fully improvements IP XXX IP we that lateral drilled. XXX day comprised rig were waiting XX, have were foot of were equivalent in the lateral being a length oil frac quarter. vertical end completion peak Line feet feet. we eight into reached see on The and drilling wells, IP X,XXX average oil, operating horizontal day that average an XXX on placed average we of translate and infrastructure. per average as the feet equip length operating on folded and X,XXX total oil on of acreage, barrels were Mustang about per production rate waiting our was of peak but an XX% of casing drill average XX complete lease per quarter At production

XX XX these the can wells our in information thing on in results slide Permian assets the on wanted You our draw locations summary to slides of I with deck. see your One along other attention. through to

it's a during the compared higher to any not quarter slight a of Their volumes late reservoir we in sales. a notice of capture result Permian August completed reflection gathering proportion higher performance. gas beginning gas is as increase of oil gas in tie-in might and on change slightly systems compression in direct gas our work and You relative

we some gas quarter. stabilize the and in from we're gas/oil should reporting used but in we going think this As rate variation fuel a still the levels may reminder, ratios capture around forward, see current gas

XX% improvements wells table in to last draw quarter release. than efficiency us year in continued With year yesterday's and oil of this of our turn year the a from foundation the more quarters now expect guidance summary, five we in end the production pleased outstanding nicely three the operational first we ongoing I'd to to set fourth in across quarter, year-over-year complete to gains should and that this results three more to assets particularly XXXX. we assets. the for Permian great wells and in XX% growth we to continuous strong cost lay deliver in results which the Thanks we're efficiency that Basin for that very the books, improvements posted of quarter, portfolio attention the the operations, our third very extremely included your and In from our core sales up we of with Permian anticipated

the committed strategy a oil remain initiatives announced of management the strategic that to February, Permian Basin in Regarding board QEP's becoming company. we and pure-play

that, quarter, on the Valley approximately the line With Basin of sell definitive end a agreement third our progress our our additional Williston of September, delivering of in to divestiture our those of entry to let's on closing assets, Basin assets divestiture, Uinta open and the through With $XX.X we initiatives. the the path noncore well asset questions. sale of Haynesville/Cotton million the for on Stacy, continued are

Thank you.

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

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

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

Kashy. morning, Good

and Chuck the and portfolio of you entering So, you're final the team, innings transformation the Richard, process.

a even balance cap. of have the your of market Haynesville finish cash down through probably still And could you your transaction shareholders the the up quite you'll sheet, with paying after and cash. to you line, flush remaining, bit debt Vantage Assuming right-size approve lot deal the of get a be XX% perhaps to Bakken

cash? strategy SMID at is, Or back QEP buying Are critical more the the for about my build mass And QEP. and for thinking about flow Are all aggressively or maybe perhaps, buying so, what's names to perhaps, shares? the step shareholders company looking Just names? merging we organization? final really, achieve next conclusion with on cash we are similar Permian all thinking with to and, post-transformation the to we equity the in other strategies to in scale that selling question a that other some taking for sum-of-the-parts the thoughts SMID what's distributing larger acreage

Kashy, impressive most a time. multipart the that's question, I received have Wow, long I that in think

of sort forward. the back start work and from Let's

as for cash, use with core proceeds, debt. So, Permian respect And think Basin and X about merit order of pay would pure-play we X.X fund I down Basin to – and appropriate times times SMID-cap the I in our of say of assets, sort the somewhere Permian side. prepared articulated think between ongoing when of the leverage of Richard my remarks, a operator, use development X it's high on I times

this then the share recall, substantial little initiate buyback our the a get you so, We've the And before course, board But – subject we to buyback. waiting as remainder, And meaningful you so. to we're can cash for do buy condition is right. remainder available February, of obviously on which bit share using the stock. is that, door having a math to of opportunistically back subtraction your program. marketing exercise authorized in to do is done cash and aggressive subject cash to in And but the

development sort we a Permian us play gives merit around reservoir core proceeds. position, Basin use to we very that's sort of of acreage, well-established of then, And order of portfolio have, So, the your of of the with you core derisked horizons acreage question differently think or acreage based we that feel a regard think runway. two-reservoir in subscale? about you like single little the do substantial don't opportunities other multiple-stacked than that Basin Permian so. think basin. Are in We a need to We on

I'm effective tell somewhat And our X acreage times different. numbers do to acreage reservoirs number are going are. what of not to So, acreage the the you

haven't buy additional to that But that acreage think quality need do felt of yourself. tomorrow. we scale, go and we sufficient can and don't inventory math have – to out sufficient as we You acreage

transactions things to As for of investment-grade companies, parts we're all arguments to those do, that operational our balance larger different for it's acreage, certainly we look, that's M&A something getting flexibility an to something and about maximize board the talk of the M&A bigger. are that around to. to efficiencies, open activity, And sheet, to move

covered I've there. missed think I questions any, So, help if me. all multiple But choice the I

No.

Chuck. the covered switching be challenging multiple questions, appears the choice on all exceedingly to tank-style year it's XXXX, And gears You yielding – maybe But bit from fronts. multiple a dividends. strategy, little XXXX,

You in Permian. the guys performing well have been extremely

just what And reservoir. tank-style a question the for of so, does terms recovery the factor on in of it

factors? if approach So, resource think say, completion you X% development does shale let's do what standard of tank-style the the resource in of recovery recovers, potential, terms

I more, should Well, in would we of inside place. the of think horizons we tank, number. capture the think would it's target to give effective oil but we in going horizons double do not. simultaneously Probably going of the single-zone that intuitively, more result all at the to it in oil Because Is be this more think the all you place it? which more? stimulated simultaneously we volume by development. developing by speculating rock think point we drainage the a But developing we're to doing that than Why of it's you wildly maximize

but laterally, the pressure by producing mean degrading creating dreaded only the by you the wells horizon risk parent/child The sinks That's connecting in development, above sterilizing run drilled horizon. section And significant is, sinks vertically significantly through of we what not the up horizons existing same overlying exist and ultimately sterilizing. parent/child below exist a also they single-zone or I and the underlying relationships pressure and with by relationship. other creating problem think that and

area to prospective feet part also that's of think of X,XXX simultaneously tank-style section. is horizons, across an entire harvest we the So, the in is development, which our vertical the oil about integral

there. last And I one in one can just if you. Got just sneak then

You're efficiency highlighted number the in on How move wells about as think the into the footage, frac showing year presentation lot per the a laterals seeing the the front per and completions as X,XXX efficiencies page we rig we deck. exceeding feet? we XXXX to as transition should of on of

X,XXX-foot our almost and of about was obviously, rather start things So, laterals. development as count, know, feet trying – about terms Springs on focused Kashy, to because talk well we're in lateral Mustang thinking you than initial focused was exclusively in things

them. we're feet adding X,XXX another Now, to

be we by on So, Martin go laterals western year over count the east drill across Andrews and the west will absolute as well lateral the during likely the Line feet part we acreage XX%, County come year XX%, we'll more down to XX,XXX-plus-foot into going Mustang drilling but Springs and of County. as from across on eastern back the acreage County work next

well So, dollars X,XXX process count. per to feet that's and not thought feet, and our obviously, Does drilled transition process lateral we're and, that planning on on starting forecasting help? based and the presented our why we costs absolute completed, and on statistics because

quarter. Yeah, And it me. that lot. a helps from on a Congratulations strong that's

Kashy. Thanks,

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

Good morning, quarter a all, and well. strong and congrats as update on

Derrick. Thanks,

in present? progress assess – step you've cost we're to assume all of like would as with time? and variables you that the generally County date development, optimization in locked to you've Chuck, feel the at at and this optimization differently, said back mode be made you both Line you tank-style reasonable do Or Mustang for it Springs

we're as at at we of what well continuous time applicable we're to that do maximizing, is we on think that the we sort driving – vertical to we're well along our optimizing Ranch, Line, well we the we've Mustang optimization, way of south we're Ranch. look increasing as trades section, call continue very we within over model the Mustang placement call testing Robertson County there Ranch think still the is morphing improving the to down geologic acreage Robertson I Robertson acquired we that because as and that which because well. Springs' acreage and And and there, the drilled or within densities working collection costs, and data targets. efficiency. the At But of Springs,

same able So, acreage just tank to using we've perfected ultimate that march we Springs. the should Mustang across be that at design

So, and on applicability very think Line, quickly the direct up is well acreage the the Springs along Mustang of to at we the Springs, catching to way County south. Mustang

put And in feet. you on of laterals good. Very XXXX have press as production the How your XXXX? into wells project release follow-up, of that noted does over XX,XXX my in XX%

to the footers actually latter going nearly and be year. some I the XX,XXX XX,XXX-footer believe part it's XXX%, in of

It's very guys. time, for Thanks helpful. your

Thank you.

Dingmann go question next ahead. comes SunTrust. Neal from with Please Our

to mentioned trying you a My is the little Congrats Bakken, in get sale, bit this. you morning. the Chuck. I'm sense question remarks. in just of Good the this activity prepared sell much until on a how

yesterday in and Vantage year. a few refracs, rig I mentioned possibly think then mentioned you a think next bringing I about had early

a how to trying of we should just envision it, I'm sense get So, how we should see until sale? activity the

to finalizing drilling also bringing not with we're their some been plans. and on on them only refracs. Obviously, talking and on about Roger in working additional doing started team timing to rig, but we've they'd his Well, get like

we've refracs. As four capital – about completion Richard done. done increase, in his is the mentioned actually comments work They're the

they'll more in shortly. out well we're a online think up built Antelope about got so stood We I We've refracs be to potentially But early a had first. stage be sometime coming as closing rig. year. that on And doing frac that already a of as up rig we the standing probably the next those side wells, would secure final summer. this talked the the rig over we've earlier of location year-end, South eastern built got drilling

So, is work already done. dirt

likely to year very early in it's more end or year. So, over likely come next

XXXX, know then right the back ability to got stock. closes Okay. And by I in I right, $X.XX sure sort want there it then because I to to – million then and billion know $XX had sure but million that make right, guess, was was got purchase make to the receive just price closes of the And I this I you in sure numbers just some if flow. – I've time cash $XX it's out I've it that make there. predated,

transaction there. walk was of date the X. Richard through effective July can So, you math And the

price net is we're quarter But cash that do billion expenses, so think minus getting the about And to get date's revenues minus $X.XX against capturing a flows, we we those first close to flows reduction capital. reimbursed for What late of as the it's cash Yeah. operating and again, run price. in CapEx. purchase the that we number,

spend $XX activity, the production well in quarter we we'll get if the capital So, first drilling million what reimbursed in revenue benefit in on the we'll of as the fourth uplift, we spend refrac also as on for side. but that quarter that enjoy

$X.XX that first rig described just Chuck refracs and with level quarter. the about the the activity think billion with in regard So, showing to up

you that's until I don't But benefit the that Richard of getting actual basically sale, get at, what was the is right? that

Yeah.

just proceeds I diminish the transaction. you you value net think if on at the kind of of closing, the focus

think date, is, a to billion X capture cash look date those July I the at effective and with close July right the flows. we X it $X.XXX way

So, net with QEP effect to of equity $XX $X.XXX the million is billion the the earn-out.

don't into bit maybe sort but transitioning a have talk for maybe looks that where full about then one bit. as know POPs obviously high last one, this a on And broader XXXX little like could. looks shows down between XXXX – come you've XXXX. there how XXXX, – I like XXXX yet, of second where the Richard, it number just slide you of Okay. I maybe at quarter, of quarter, out XX just in cadence since if just about to basis. sort down talk and looking It as were Could see it a XX you the you XX, going you

Chuck a times get give to X,XXX-foot completed of number because equal a guidance POPs, lateral lateral. a feels that trying away Neal, even question. as POP to or from is But about almost number veiled like of XX,XXX-foot me So, XXXX wells X we're the the on suggested, POP a thinking on

the in of So, level, production when are the yeah, And XXXX the into you the there We'll I activity you as increases. length give need XX% think comments with from to XXXX. growth down to about regard listen lateral quarter. get oil to POPs Chuck's going we XX% to guidance number first

of year, mind to from operate tanks, thinking in active well one in had swap tank. we as which a the to we first and this interval, of four-rig, half the We dropped discrete that XXXX, had more delivery, rigs on could we one as led to as a single to frac think get and the and completions keep Spraberrys of cadence two of year, of to XXXX's to we I this a up stabilized year. slingshot sort Wolfcamp front rate, rigs crew caught loading the sort And effect in run activity in completion in one a

around on you production. of a lateral than than feet I put going two year completed the as the think forward of a other guidance, rather more anything earlier cadence giving sort caveat about last half soft second is the gross without with quarters or cadence, So, the that appropriate wells made

lot. a Thanks, guys. helps That Okay.

Thank you.

comes Our Company. question with Oppenheimer Tim ahead. next Please from go & Rezvan

sort DC&E, in had or you're $XXX of up on the I XX% that Permian to spend think folks. are guideposts sort question million. morning, pick XXXX? we on XXXX lot you Good you've that because CapEx growth. of on Should there XXXX Hey. some for the a the Neal's hoping on to to outlook then we at kind XXXX, was of as baseline XX% look a with put around out If onetime that of items there on of

it's Tim, Well, Richard.

Sorry. that now, as water water that's well The freshwater well wells, – for buckets. rolls saltwater as source We $XXX DC&E freshwater million disposal spend infrastructure. that level into infrastructure fairly XXXX that – Permian the round substantial in rolls up expect Well, gathering side. spend as number for on don't present wells salt included a spend of the we

guidance, see to So, I as in think, you trying again as we much had don't that XXXX give spend quite we XXXX. in without infrastructure

Okay.

a about of And outlook how Shale, from about production you asset flat, helpful. on midstream keeping that your think That's a do side, thinking thoughts in you are of modest had especially Okay. kind as the mean, that? like EBITDA planned. decline you then, kind What on progress It the activity sale? towards no sounds sale Haynesville XQ. I

Well, none no activity had in quarter, the and we at planned. this the juncture, in quarter, third

offset had mentioned, have we in we Richard – we're participating proposals receiving interest operators from working are in. We number of which a a well that

get on But be will that And our the that help able to focus hope obviously, is some. now right the we across So, to finish line. transaction.

Okay. Thank you.

question next from Please Nelson Goldman ahead. Our go with Sachs. John comes

questions. those Good as morning, getting and done well? thank taking Congrats you transactions on for

you, Thank John.

we down is conservatism? be about anticipate quarter pointing as just or to I'm guidance because is NGL curious constraints that is, I'm in some sequentially XX%. more you fractionation the just view that should question downstream first My curious

gas capture, second than in sorry, When higher bump NGL in And third you NGLs do more we has the you sequentially. I'm a said have the quarter. a capture. to with guidance. raising guidance challenging were we recovered lot side have And actually quarter. third actually quarter John, hence, higher forecast. obviously, NGL down quarter-to-quarter we where little gas on to the Seasonality And were a you in the full-year basis, We're from NGL recovery. the is

volumes. I see rising So, question, but actually we think NGL maybe misunderstood I your

One some there's problems processors election have capacity just an and capacity, and in aware, as we cutting or you're – of are don't on in gas some we gas tightness NGLs, on in John, Belvieu fills back fractionation ethane ethane process the forecasting fractionation rejection of recovery, have, the that recovery them of as up. our

processing to would We I happen, that. agreements. for lot there's it's know we're – historically to sure what at of some So, don't we call, non-elective recovery of looked those, going volatility a trying on as ethane anticipate have if but look gas

helpful. That's

of say not you're kind guidance already you've seeing seeing those is because today? it's kind impacts just to some baked it fair necessarily you conservatism in of what practically or market, but so, seeing the today, you're are And that into

seen it, suspect but we haven't will. we We

is Permian across kind both That's Bakken, one more helpful. versus concentrated in of the other? that and it is And or

Bakken. That's about been It's the been we've capture. more in the where it's mostly In variability. gas the seen Permian,

building As I system Springs. during finish lot gas the in mentioned our continue we a tie-ins prepared Mustang remarks, summer as to my we gathering of in had out

capturing nothing's capture have quarter tied gas our a get bit the a reservoir, fair third we there. as the we're had Permian. the capture it's added quarter, rates the hammered more may tie-in obviously, And in the we in compression with that gas. just We're to flaring I fall point we Gas of were reasons wells went and so in as in So, rate that that back on home changed it, we in that's on going up fourth of some one more NGLs. we work and amount the why

don't to how So, exactly we're that's full a the bit not be know and down just days going little softness many and capturing volume. the uncertainty. of We

Williston So, there processors downstream trying delta seen to multiple for moving in we've reasons where But recovery some to ethane swing biggest some rejection I various been the has think, operational that reasons. we're anticipate. from times as, parts there's as the ethane well

the then, plan from to And a to you before, comment EBITDA cash also I'm if within optimal is to to of we just retirement bringing better to leverage the of question, optimal helpful. that back higher my times, some XXXX there anticipate do combination live times second asset is as gets straight run rate back trying That's to if kind it we're you think level. about bogey CapEx sale flow get levels, X.X what and is or of debt there's if redeploy the growth of getting proceeds to through the – or just kind some X to understand we're

Yeah, John.

choose the budgets deploy the closes, developed the we'll tasked without Clearly, can XXXX to that the their sale team inside as to guidance we Basin they sale assuming teams what hard for for think, cash to think have I is giving do inside flow. cash live XXXX, the with XXXX again, it and But I is and live cash, flow. planning to the we've Williston cash their guidance goal closes.

necessarily in can just to kind you should And how increasing if not variation not more in. lateral Perfect. as indicative POPs Certainly, net think sneak Would XXXX. we we ballpark to that feet year-on-year? the think give wanting understand about – as is care about being I and of one

that head, going obviously, because XX% have off growth. it's don't number sort of go XX%, I but forecasting top my to the production we're up of

exact wells more number lateral year. head, my going So, – we're productivity being constant, have I per in John. on foot to don't put the just next wells effective

Sorry.

Fair shot. done. Thanks, Bakken enough. on guys, congrats a deal and again, the getting Worth

Thanks.

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

guys. Hey,

there crew Permian, But another you acceleration would is thinking to ratio. options Just or about option? to rigs an the accelerate, need in have rig-to-frac impressive mean, you double your does that

That's the the frac done we've count to a to Obviously, is what efficiency. question. rig optimized great crew

rig, just anything still XX drilled throughout you the don't frac cased other hasn't than the move some you constantly incremental – If quarter We with really the an do of and for downtime It frac out crew. run have add front full days. the crew. in front the

longer we're with holes, there's being going of of probably a drilling because to drills absorbed when the laterals but quick. manufacture obviously, and lateral, most we're able – cushion that we're a lateral more little to So, drilling still bit there, relatively not longer get just

feeding thinking time. additional crew. logically not another rigs rig another and to It we're about X.X the two need full minimum probably to likely frac start keep takes So, rigs, to it's not a crew, frac of

that's challenges ramp ramping is up one up, able to exactly been the maintain to how we've the that completion of So, capture in efficiencies to-date. you

That's great color. Thanks, guys.

would floor like There I are to no questions. over the further turn to closing for Chuck comments.

Williston their new pathway today. conferences. articulated for We also very professionalism seeing these want accomplishments sold, assets a of us much at February of we I our state. efforts get Thank a our in and owners. assets you soon you to as interest in all and the along Thank in you with in thank assets into great our sale, transition some Basin Basin that for upcoming additional to definitive Basin We're Obviously, these for that the forward dialing significant assets to Uinta patience today. the Look back and certainly all the agreement we've in company. And investors sell in well – closing our our employees appreciate pure-play quarter that transitioned patience their to continue progress our divesture. and calling Haynesville Permian we on and to to to to becoming continued entry

teleconference. today's concludes This

your You you at may time. for this lines And thank disconnect your participation.