Qep Resources (QEP) 30 Apr 202020 Q1 Earnings call transcript

Greetings, and welcome to the QEP Resources First Quarter 2020 Conference Call. [Operator Instructions] Please note this conference is being recorded.

I will now turn the conference over to our host, William Kent, Director of Investor Relations. Thank you.

You may begin.

good and Diego, you, morning, everyone. Thank for first quarter you joining us Resources QEP the for XXXX today Thank results call. conference Executive today President Vice me President Financial on line and Officer; Chief Officer are Chief Bill Joe of Energy. With Treasurer; Buese, Tim the and Redman, Cutt,

to contain a If you've tables materials. financial along with qepres.com, with presentation already, of with our to our please our not copies go earnings slide supporting done website, so obtain release which results,

use and certain to referred flow. will measures and today’s including EBITDA, in is we In are the conference cash which non-GAAP to measure filings. GAAP in the EBITDA, call, reconciled free comparable measures These our SEC earnings adjusted most SEC as release earnings release filings, and

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

I'll that, now Tim. call turn to With over the

and everybody, you joining and call Thank morning for you, today. thank good the Will, to

focused this of firm overview delivering I'll holding begin have taken these update the to value address environment are actions with an over through and to followed our quarter on the of unprecedented operation we January XXXX, we've first current volume of an by principle times. performance. Since

our In when a announced one and discuss suspend lay first turn plans update, rig $XX quarter effective X. I'll to position. barrel, fracking financial my in performance mid-March on provide update to May call operations to the our hit the we down over Permian Bill to and WTI an Following liquidity

immediately would build necessary the released. second operations and leaves in This that The it us to with in fracking drop continue prices dock to operating refrac following be in and XXXX rig suspended Permian the notify to counts Basin. Williston the Permian week, one suspended rig the we program. operations also We the action the execute

in operations Disco pad holding complete May. drilling The which in second will operation. is is least late drilling This program rig located a the Williston

two to plan our complete lease six wells activities being been July, operated During of the All other we the Williston to meet suspended. drilled obligations. in have

shipment Finally, well strategy of that have independent hedge LOE we positions our have a and increased developed is lower and EBITDA. detailed

are price the we to prepared general, plus field the to the is transportation In expense. once in equal LOE wells netbacks the variable shutting

account and technical significant considerations to avoid to to loss We into acreage. impacts have EURs avoid any taken of leasehold obligations

environment We and given the have anticipated price prepared started months, take more in wells we significant few action during the are necessary. if shutting next to

in in XX.XX County production on have completed We until startup financial run XX understand improve. free of delayed wells DSU We flow. the Line impact numerous of curtailments cash to prices models also the

of million year a at significant the we $XX most prices We shut is average impact and hedges reduction, time approximately production. the to at to May Given to flow expected cover impacted LOE improvement July experience added in - have now per of the transportation period the recently and additional that free our expense, the remainder $XX.XX. variable month, for cash price a is when barrel significantly hedge XX as position not and the drops, demand. hedge hedged We drops, of through an barrels price to

to the ability recover. I for mind project been not most Although it current able help critically to operational of be markets perform during first to to begin front investors, important believe is once have our may understand what do to performance quarter we achieve

in guidance on are operational very We the with all categories. performance or in the and pleased quarter ahead the original are of

completions Drilling in XX-well the operations the were Permian. fracking spending Line complete operations DSU in County and XXXX before for

development are aspects this of all with very pleased We project.

Slide from of benches, performance. deck, expectations, peer see X exceeding can average significantly you exceeding X in our production and As and IR most rates [indiscernible] were cumulative

C-benches. shown QEP’s oil previous X on Slide performing coming the experience rates. is take producing evaluating zones along from quickly, is and tight was producing The dewater as the outperformance benches before with well at Line budget curve performance. curve in while Wolfcamp to operator The primarily significant deeper the time expected shallower based The tank B the tank on with oil County Sprayberry offset

now rates middle were Sprayberry The and helping the hitting peak B-bench dewater expected, and Sprayberry expected to tank. than lower after is wells their better performing the

wells X day, IR a day, of to XX-day This XX-day X made limited barrels average rate have deck. modifications with day for performance XX greater positive days. our a fracture X with strong additional is the X,XXX have and greater we exceeding that affirmation barrels a X,XXX zones wells discussed Slide the additional on average XX than at wells entry X,XXX a than We barrels

Reduced cluster improve has efficiency. most fewer perforations and spacing smaller cluster in friction, higher a with and importantly, perforation along resulted

completions also and improve and to team drilling continues efficiency. Our cost on both

remains $XXX Slide you our over the X,XXX an a feet IR foot deck, As per from delivered XXXX X most drilled completed - in DSU peer-leading. day, and of cost lateral and see recent which can wells of fracked

first drilled production the the have while in of In prepared from the and quarter, Williston, out production. refracked wells for the is two sustained well second we being

important of is IR investors might results by demonstrated on current encouraged acreage high-quality but Basin once We develop back to overwhelmed Slide in QEP’s for balance. concerns to results in these comes ability efficiently that our market the by be are We position our the the Midland the understand the other in understand XX it deck. critically as market,

budget to mind that deployed We have million the was by $XXX quarter. in of and loaded XXXX our million. we front-end lowered capital the keep Please in original $XXX down first capital plan XX%, have

quarters price does further support free not than third million XXXX second shut-in and resuming price in - range fracking scenarios. $XXX that time. a and during the flow at is and at expected operations have more to flexibility drilling plan fourth spend the of deliver of have lower significantly in retained recovery We if and This to cash lowered quarter’s spending

In continuing period we low our adjusted allow generate to significant free a to while plans price to flow. of through us have navigate summary, cash

Our recent development demonstrates a ability to activity be of while our low-cost acreage results. in outstanding County core Line well developer delivering

to We normal. unprecedented move returning positioned are and in reduction to this to forward well gradually look we demand things through

on over I’ll Bill first the position. liquidity the to with now turn quarter call along results discuss information our to financial

good Thank you, everyone. morning Tim and

quarter XXXX guidance before update details Q&A. for call few our first opening results and on next the the Over minutes, provide I'll some our up

quarter the to For the of XXXX, quarter of first loss million income in $XXX we million net XXXX. of $XXX fourth reported compared net a

asset net fourth portfolio first quarter, with driven to prices equivalent in In EBITDA, in unrealized modest gain net adjusted the the the income the quarter quarter, primarily compared the was $XXX the $XXX.X a decrease our production $XX the million of a of that end a $XXX.X $XXX liability we was million associated XXXX in at million commodity and the with first At compared derivatives Driving generated quarter generated net end by derivatives realized quarter. quarter. a fourth first of fourth from million position. the of of the million of decrease

combined than LOE the transportation was slightly to expense with more G&A million compared and down $XX quarter quarter. in a was down $XX the the million and total fourth Combined, first

for of contracts We XX oil enter bases excluding derivative quarter months million XXXX. hold barrels totaling continue we to currently commodity and into of nine the swaps during the contract the remaining

in and $XX outspend realized compared gas, LOE a we primarily and year approximately with $XX.X improvement and to gains for net decrease contracts activities a provided increase The average accrued front-end fixed by quarter, oil, $XX.XX million, on $XXX.X additional sales, decreases free of cash and partially is derivative offset expense, portfolio loaded, expected the in price the the quarter a cash the outspend flow operating Please During of first the of to the see our first barrel. improvement increase in by be per capital was NGL and XXXX. in an for with program of expenditures. The remaining in derivative our million, as details due generated capital an XX-Q G&A reported million

largely XXXX. first $XXX.X booked income the we CARES of million quarter, the to Act March receivable, tied tax In passed in was that

XXXX. a received $XX XXXX. we million The of of including million recall, refund million years, calendar in Act accelerate us had CARES credit refunds into originally over remaining million to $XX you AMT three and the XXXX allowed in additional an $XX.X refunds the next If year all AMT of credit AMT $XX forecasted credit

business midstream to XXXX AMT XXXX. receive $XXX we expect into our In tax during sale, net pay $XX CARES half to the tax year. additional in permits carry an total, expect loss addition, In with the credit of back receive conjunction now our million refunds we XXXX Act second when we this of creating that also approximately million to operating

our billion, Total shareholders’ no $X.X billion. With we revolving approximately $X.X and cash. approximately had gross $XX were outstanding balance was borrowings total of had our to the facility, credit was under total sheet, the assets approximately and first at quarter, regard billion. of $X end equity million debt We

by discounts of approximately first principal all of million During our XXXX reducing notes, quarter, $X.X $XX in XXXX million billion repurchased we our of $XXX million the outstanding notes million to growth total approximately outstanding. $XX our our notes, that debt $XX amount and a XXXX

IR Before notes, from moments $X.X a ranging in XX X, our X, the March shown to and XXXX maturities March capital on March with with our at through and from notes deck. discussing to XX, outstanding I senior structure moving coupons XXXX few guidance, we of to on Starting X.XX% slide had to ranging as billion spend X.XXX%. wanted XX liquidity

the to the a to any price The place all before liens at semiannually maturity interest contained and rank notes make-whole obligations. We covenants other amount at The events ability accrued require our things equally their with are on be existing plus can based other a our redemption paid limit interest. may default indentures notes of and redeem unsecured our or customary govern unsecured among notes time that that on assets.

Our borrowing semiannual provides facility notes. contains the restrictions. are which for revolving prohibit repurchase we’re customary to our not a refinancing base loan covenants credit not and important for ability short-term is utilize credit our redetermination the that note and rates XXXX subject facility $X.XX September borrowings provides facility interest of to borrowing is not to of and does and in of It matures billion. The secured, senior is commitments

and The we incur ratio cap to financial covenants that that EBITDA or and the adjusted available under funded X.XX net total funded reserves may can therefore which value under our are present debt leverage XX%, a the three by ratio limit The not funded to which of value be the ratio may X.X amount coverage of covenants net may debt not present amount financial ratio debt contains drawn. limit net times. debt exceed of exceed times approved must agreement PV-X a exceed

to year We delivered and - by present required by calculation present our average to value subset The early calculation be an is calculated to Group report price prior-year-end value the a each Bank of the April reserve March. bank the deck and is group of commodity the provided Group. bank X in delivered using Bank

a XXXX. the X, financial to due Pv-X to we The respect case and covenants be Bank XXXX. And our most value to the time April delivered three through the indebtedness, the April of this of is ratio be ability additional to to next as of is X, calculation the expect is the Group restrictive incur present remainder with

We under credit are currently the agreement. covenants in compliance with all

made of the to million over liquidity covenant as of Pv-X On the quarter exited $XXX with the total incremental first cash $XX $XXX defined up agreement. million allowable credit pursuant million of liquidity in we and front, indebtedness approximately that of

slide about IR details You on of the more can deck. position XX find our liquidity

next the expected the interest We million of March believe cash $XXX the X, flow, generation months. and be refunds to expenditures, repayment over due free will expense, that AMT our notes XXXX of on operations, and XX sufficient capital the credit of cash hand, fund

expect have to credit that borrowings facility to In any arise during additional address our time frame. needs addition, may that access we under to liquidity

debt our the front, options liability On we to regarding management continue evaluate our structure.

conversations we in remain other specific to about don't investors today, regarding a Group, and our their constructive and we Bank views have structure going our monitoring capital market closely discuss plan While engaged bondholders, the with are forward.

look stakeholders may is important theirs. it our And facility notes, of look securities, I discussed plan debt strategy earlier, on of our forward different than future a to As different than calls. for our all makes a structured remember credit are senior that as on and the our to substantially our sense We both result, you majority peers. that updating

in voluntary briefly curtailments guidance company's notice. yesterday's as longer to stated market XXXX investment given next and ongoing no and until guidance, been uncertainty, on gains volatility and further months, both potential the Moving involuntary guidance the aside should release, few for upon capital be suspended from previous has the further continued relied over

have In divestiture guidance original XX% the total activity, will $XXX XXXX capital our budget. of capital capital scaled light acquisition be conditions, from Basin Permian million XX% back infrastructure. of program our The approximately and including market we now the our guidance of is allocated approximately by excluding for midstream midpoint investment

the be for million with assuming to on of our recovery. balance Tim Please updated original we the price earnings in release see As spend mentioned details guidance. fourth necessary bulk our so that guidance the based see earlier, on of the our currently spent was to year a plan XXXX $XXX front-end we forecasted few for approximately the loaded, additional plan quarter

With that back turn call I will over to now Tim. the

Bill. straight go Q&A. we'll Thanks, into just And

Energy. question. Instructions] comes first Harrison Our [Operator state Please from your with Kashy Simmons question

to XXXX rate first provide Tim, was limited one think currently you just if a ability forward given was how but are strip? So, how production I the comment uncertain wondering I exit best curtailing? I the know of And, an highly much me, market, on could is one you Bill, just on guess wondering, either to at for about guidance for your

Yes.

two I'll start about of little And a bit questions and talking about with those separately. XXXX. off let then take kind me the So, XXXX

net pack, performed day. March, barrels doing and production and has XX,XXX entire peaked provided look about a So, we're how in up the a if everything business. XX,XXX chart on And, into built that saw the you around and to you barrels day XXXX plateaued really to we've DSU we in

on to a day. If that. you then I'll decline our we be the on more we Kashy, assume assume, shut-in, a outside color which - of barrels started little we on, that that would rate XX,XXX would go exit go And bit about put

our people capital your a XXXX. the out reduction guidance, to volumes. have certainly the have facing been and would reduction expected know It I in lot we we is XX% CapEx of were curious the what XX% have are XX% we shut-ins taken So, of If providing due for in higher would there. would about volume weren't shut-ins, without about our

XXXX outperformed. Our has

a And going so, we're bit to come in little higher.

think So, then a bit - shut-in. have day barrels many a have little in talk to consider shut-ins. Right about more I’ll now, we I a X,XXX minute.

So going a more some think But because lot into detail. what go I answer in a are shut-ins about. that be is curious a bit and people of asked to I'll long little going little expect this more we'd forward you’ve

all So, if does this XXXX. think you about what for mean

in by XXXX-XXXX good with forecast reduced I've a two-year about a So kind that had think production that's expected XX% production, lower if you and XXXX with assume to our carries when of we into that I in. XXXX, flat forward I updated ballpark a mentioned be we the capital think

those. a caveats November. But, of of price where again going start there's We've that course, in the assuming We're the can lot recovers in fourth on to level got quarter. that fracking we around

on an And so year the incline. we entered

barrel first the we however quarter. year however but XX,XXX exit - good. the So at the we pretty kind reducing on with rate look at entered day is an year increase - think you This the reduction last a to look shut-ins ended year that a we year of you

of the one market equal because entire turn complex remarks net well. variable transportation prepared for in is will in this consider And to we the is once the with. shutting of well, mentioned question So I as on is particular that to for more now shut-ins let things wrestling the any the the back that kind the me cost price

factors. considerations also But and account we're technical into at also leasehold taking looking

we XXXX the well. has of tank example it We to costs. instance, bubble That point. low would be also that their For an an and well the wells have is very, operating in very It the a offline. exemplary wouldn’t want over new take

one it to anyway. will so the be of last go And

production also to shut-in to return factoring wells We're periods. in cost after of kind extended

And barrel oil shut total at in you ranging and together so a from you that the and to depending at say our Williston XX% on from production; anticipate coming $XX of all differentials, a netbacks majority of the specific we’d wrap XX% in. about $XX same-price, that with $XX field Williston price about $X the shutting of we think,

of telling anomaly. of kind that bit May an is you by finish I'll a

sold on barrels And so individual an just this We’ve looking May. we're physical for basis. well the

we to we if replace pay to contracts, have to $X to so shouldn’t up fee and barrel be have those we to in to these a which our $XX satisfy have And shut a satisfy contracts.

we have to not. a and stays point, significant little able is, May. comes if in in in it to a a not we're would June, differentials get But bit, price we shut little anticipate, shut So, where prepared hopefully we're in roll as towards May, at consider we sustain it having the to but but this production, that, in bit, come

people's but answer, folks So, a an answer you a on number the - think it think really of phone I minds. that I to was guess questions I on gives long

in, Well, back, of helpful. you're a barrels that shut the that does talk rate, - there? some assuming that is production that’s exit very I'm when And day comes production some the of assuming does XX,XXX assumption you that about gets

mentioned are back. assume the it it lot delivering comes wells where movement a good take If I I of we of - EBITDA. doesn't all calculation Yes. on our

mid-XXs, in in quarter. anticipate it's we to in mid-XXs - And at prices activity would being look if bringing on. the be back encouraged certainly, wells of shape mid-XXs, to good out And forward And start so, in our kind saw the oscillating the we the if be strip, you those in if we'd we again. fourth

also The this our are individual operating shouldn't sorry, think above instrument, is every the transportation money, about at it. one want that, that the position. is We I a be this I - talking to doing the costs. producing independent some that one of an about should kind We the barrels I'm to thing we decision. hedge hedge financial add independent hedge want is and be thing know talking - of operators is to I we're should and looking we're In saving Absolutely, be oil. losing family - position.

Well, And that color sense. second guess in question, the then I certainly my thanks for balance for all makes sheet. Bill, the

nature Or to to you facility do the that to the the and And of to need secure issue Would to do, beyond? what and what trying lien and peers similar to then to third the if your a of transition lien, unsecured XXXX subordinated it? wanted third would need lien lien notes maturities you so, facility, in are notes have issue second first issue today second out capability given say or exist you some happen? take

And on a credit issue a facility facility. way as a point question, then, The the under other indentures have has of that Kashy. small. the as credit well course, would the under lien’s this a size but basket basket small good limit basket to limitation It's it's don't very ability. notes the answer - ability The is it we limited or a have

as and having bondholders, just We're to conversations So, path to the and Group, see I've forward. get mentioned, our we Bank have with - best creative. others and

question today. an could notes and to go today, billion that mean go it we couldn't second-lien like with $X.X as something stands I We out out example. issue happen. But your answer couldn't of

things We have structure. capital our in some to modify

Dingmann from SunTrust. comes Neal your question question. state next Please Our with

of the just I second do way anticipate of you - make shut-ins just sort and some do shut-ins of couple you Tim, add-ons a full of the cost on curtailments? you part material so think a want sort in to much color that, back? And of good on How versus then news view this. of

Yes.

return to different the categories. And we shut-ins We factored kind into production have cost four of priority hit the first, that about of to and in. I'll kind

the gas And off, not moving a parts. some and of wells, to easiest turn on of one our lift lot mechanical

on well. pump costs It a rod about wells, a of part well. pump average, $XX,XXX $XX,XXX we say, Our repair to of would about

And about that. we have so, think could four in one

ESPs And $XX,XXX get putting more be problematic. so, lot we're in a about to But well.

actually shutting of slow substantially replacement would in. before over we ESPs them an a work So, be A could ESP there our and $XXX,XXX.

we probably a on of as XX be hitting we go. in consider So, shut hitting barrels a with a now wells conservative be production. day. is DSU we're those XXXX considering right That probably just what curtailment X,XXX should at should level would that I that are in did

So, we for better a shut have quite there a bit in of oil waiting price. bit

about be We it the but to probably to smart lower fully three-month cost don’t go want back longer. bring with going shut that for like of to is we're a looks pay more We we we’re think it And longer it forever. it's period, us prepared about so, down And imbalance. this. to phenomenon kind if smart and in hope but this to and willing be this ESP same keep the we’re then

you follow-up docks sort of year. as the better sort of dock of of you of fracs Kashy production, see where towards take docks Got think do were all where sort then part kind that you do for the that on that where that the latter given the today one how And you then - of the it. part and do when about just you, be obviously would now for a that count. I'm just How and you on just the year? break wondering

Yes.

fracking. I of think shut think wells I we before we tracked down XXX XX

sense wells ago XX, another left about April then but another probably pretty a the good couple we just then And gives it rig that of you probably the is second were uncompleted. get you already month do November. notified there on had going for month on that count of where probably wells. we every as we're in And be drilling, wells if the to we that dock XX on of back to drills so, math a rig go so And couple a

also back get be to November, to to in busy a both able the the got the We've cash money we time. forecast up If at pick fracking cover rig second rig. in we'd flow that second in

an the number will on be. exact dock have don't count I So,

the that assures program. get but team At rig point, with continuous to a go technical in take if enough that’s up we November and started second the

Our next Whitfield, state Stifel. comes from question with your is question. open. Derrick line Derrick your Please Whitfield

for solely Perhaps Tim. at play? other factors Are to design cluster you space attributing the decrease condition supercharged reservoir are there or

No. Springs. in I that's mean we've typically seen what Mustang

We we have do where out back-to-back. wells able were a here go situation to and XX

were So kind we we and frac started the pressuring through you to as those that up program. the West all frac from the way and across, East influence were, first of getting wells going

tank So generally how is the to designed perform. that’s

produced. getting attribute our a We fracture perforations higher to a better and strategy better threshold me network performance of really the each around, venture and getting the let in

Slide the And so, XX% about that cluster X up getting find it’s from think at, when on and XX% to extraordinarily show if to encouraging, into that be in I we XXX%, look chart we now, you're average efficiency you efficiency. I cluster you remember, can't think and past the efficiency cluster

encouraged and that we’re a so and contribution you from quite lot You're breaking of that. rock the all by get

that’s want to eye really That’s important But also keep on thing. a XXXX. why an we DSU close

two three for months. or shut-in comfortable keeping that We’re

coming less start of pressure EUR. and after it offset the the feel out see impact the production we I you do could have comfortable could you think tank potentially because to that and

new we're to to those are a So check concern. get and an keeping a wells, where do so ability have point we on to shut-in This pressures that. it going us for do territory is we're eye we have but let on the

question, just decreased last that to the was Tim improvement efficiency, And are the clarify question, attributing spacing? cluster to my apologies. on that really due heart That or you that cost of

Yes.

perforation of So because that I’ll spacing say the But turn it the a to to specific. to fewer thing perforations the cluster leads I'll me it's more then technical group. But over Joe eventually. give combination he size it and of one little let and you Joe Redman turn

for the Yes. Thank you question, Tim.

efficiency perforations we're So think and we that when driving that up, in perforations how about and frac the stage. looking at key We look there. at that the kind of we cluster number variables of space some really

that for friction And throughout holes that high we get pipes. of a of the kind frac will we driving put so we're initiation number good ensure distribution perforation that of into

So we hole do of our and that a which with size, efficiency. to again, rate combination pump together that of, works holes all create number

the for talk could to over in as And switching your follow Thanks my then up detail the year-over-year? on Bakken, Great. that. you the behind to LOE drivers the improvement

back that as Joe well, I'll turn well. that to he’s driving because as

All Yes. you. right. Thank

been has area Our several areas actually LOE us in focus both of an for over last the months.

been and high I'd through see workover improvement most the that's to really the You’ll grade an program recent notice now, workovers. being we're kind extremely continue say effort there. of year-over-year on we expenditures with days, to In and quarter-over-quarter selective our

in-house. well of kind at vendors and cost and of continue of taken we contract labor ways with and hard also working things pretty we're with our a they're on as as us right now, lastly And look We've then forward. bring all kind suppliers working reductions to

So field-led definitely a team initiative those a effort us and costs for bring down. to

comes with Please Wolfe question. next state from Our Research. Josh your question Silverstein

further payments and made to On that first you the retirements maturities the [indiscernible] quarter. the then the debt of in

do down you to just go about for even drawing continuously par, be your market and revolver back if your note curious below would well million year on buying Just out will trading and cash $XXX flow those this just outlook curious over you I’m still the half back with in think the free and potentially the that?

I'll turn that to Bill.

the the on the consider. Obviously, mean, were I we is - question. fourth answer market, something going certainly in we notes there able purchase first opportunity there the know, to good some quarter is and forward, open table. is we that we mean again quarter whether on Josh, I it’s everything don’t but

everything my And and the remarks prepared of in table. I kind as answer again, in is the earlier, mentioned on

and table this guys cetera et plans we the discussing holders, everything's going bond banker, to everyone, with look discussions but forward, you point. on having our at We’re more with forward

right side, from up activity in do hit the just price or come pace you stay just you something mean probably and you there? then you somebody two already the do forward in of started got hope operational in at end can and best We go now Tim, the mentioned you months really in And the on XX one is Permian don't rig mid-XXs. that back activity from to the your here. comments oils One, And crude Does hey, a call in what's say, curve that the that in your XXXX. that thinking about things we how November, of we now? couple contracted when

good Josh, we're middle you again, a right the of imagine Those are of firefight now. kind can And in questions.

think we've a down a done of getting good I need. run to we job good rate

going - kind would of ago pricing let and have to at of going develops. me if cash said six mean no. scenarios, dollars We’re ask watch million the to XXX-plus I how see you we're might I XXXX we months deliver can

that going you I And a go outspend activity want couldn't into lock in but take don't up, position we we're in to the so, us to be cautious - make to XXXX. sure we'll large and back don't say

So we'll modifying that. keep

down the I available and suppliers, feel working our us. and frac and relationship doing with a Contracting fairly we crudes we're drilling equipment comfortable. on they’re on a mean, relationship the longstanding in that. good had and Halliburton small confident with operation unit rigs we're We've

Completions, quickly. can he our a of asked ready. notice and said we we Head standing probably going pretty bit that So, and Chris think question Drilling I to of and we're provide Longwell, weekly, get

none as the of as the in think, we we us hopefully things So, start slowing seeing real improve, effects see - down. going and know we to as happen people what’s shut I fracking of

But notice. short of back the right kind in quite I get a the I as obviously at to make I into a be And do and and as had anybody cyclical is after year it. a and down we us the as balance, think shut positioned program think has to back we practice we sure how retain comes pick well bit last people going equipment market we’ll think pretty poised up to helped about think

with next Gail question Our Stephens. Instructions] comes your Please question. state from [Operator Nicholson

curious. you of kind of talk XXXX, what you're market has guys the if the of locking you in hedge there seeing the so? hedges just you I the at was and liquidity from When anything do to in just look ease standpoint about choose guys changed can if there,

of a year. to yourself of not start liquidity. want We're to as you normal next It’s difference just locking what into matter as lot a do for seeing far

hedging industry, - I across down. - think activity industry’s the across over mean, obviously is the liquidity I

As of projected Josh you have the forward a the I in end strip. kind in price XXs the the try an strip the mentioned, of at is lock increasing when you just mean year, forward and to not encouraging in

operate come, in we’re on being have they sure we’re on am poised that. do bigger making I quickly move the We so And hedging honing fairly if able that and don't to we to hope opportunities.

a with prices being to have oil, to jump we about We're But don't That’s I certainly more smart believe expect little it's in. more. it in week. committee, talk something, But XXXX at point. about a on would if try have this on wait-and-see little a improved this locked we liquidity think we I active natural risk every we issue gas, that. the point, we've at We're bit pretty a in getting been

Williston the Permian can the question, versus a versus the just and talk LOE, And look varies? you fixed then - that component there or how fixed at is about high you the to LOE, variable costs just in further when in

to Joe distribution. Yes. I’ll talk over about the to that turn

for Yes. question. that Thanks

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Yes.

disposal, are of be costs. kind control tend that So direct water our just the ones operating in like they to direct

stable. pretty are those So

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questions time. Thank it Cutt turn further closing back this remarks. are you. to Tim at for There no I'll

for say. take do to through. everyone. sincerely I don’t opportunity I But don't Really, to our workforce. right. more to All Thanks good lot have reiterate just to what the want Thanks, question. thank went we a the I want

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with in checking regular on basis. We're very a everybody

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pull with good activity, take a also couple do they You to to can review action. in that We're execute to able ask a when quickly them days imagine fundamentally board the reduction we of matter plan business a of in and through.

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sign your So interest with for it. and off think I thanks again, that, we’ll and appreciate

Thank parties may you. good day. This conference. includes Have today's a All disconnect.