ConocoPhillips (COP) 3 Aug 232023 Q2 Earnings call transcript

Welcome to the Second Quarter 2023 ConocoPhillips Earnings Conference Call. My name is Liz, and I will be your operator for today. [Operator Instructions].

I will now turn the call over to Phil Gresh, Vice President, Investor Relations. Sir, you may begin.

welcome call. to and XXXX second Liz, conference earnings you, to our everyone quarter Thank

Vice call Global Andy are CEO; President, XX team Nick and President, the with Senior the Executive Macklon, Development. will including which Senior President of Adviser will Kirk XX; On Executive call today President Will Corporate Vice off the remarks, Olds, Bill Vice kick Ryan questions. and leadership the to Lower of Financial Lower of and Senior Lance, Executive Operations; team, be President ConocoPhillips and Vice and O'Brien, Vice Planning Operations; Chairman Officer; Bill Ryan available assets and President after your opening Technology; the and CEO; and Johnson, Vice Giraud, Chief Leach, several Tim Planning, Bullock, members Dominic for of Sustainability Strategy,

A few reminders. quick

materials presentation, website. find First, supplemental release, we today's published financial the slide and on along a can you Investor with which Relations

during noted Second, results to filings. will due statements forward-looking and differ may expectations. making factors on be current today's our based periodic Actual release in SEC call, in this we

be make and corresponding financial the non-GAAP We GAAP to today's on in measures. to measure Reconciliations reference will our some website. can found release nearest

So with over call that, I will to Ryan. turn the

make even Analyst was and our out again that would and plan, another we that you and hosted where busy to you, plan this we quarter we financial ConocoPhillips. better, laid to working Investor committed York everyone It April, you XX-year our done quarter. and conference strategic New thank we City we've keep to the call. certainly Thank XXXX quarter Phil, joining Meeting our earnings second In in for and

interest intensity remaining price barrel We Surmont capital fourth executed to environment, decline an that expect incremental in in free well. In $XX a to close to we per the we WTI approach the cash current flow expect the and very is long $X quarter. XX% low the assets low know from billion XX% of life, which purchase additional Surmont, we agreement XXXX.

early cash production since in debottlenecking our the first further XXXX, to improve see XXX, facility expect potential our We new flows. from at XXXX and path first we Pad

regasification of confirm Asia. to progressing FID Mexico. since million both we our the at America, our Arthur, agreements North we acquisition LNG project of also tonnes X.X can a global LNG been total per offtake the joint and the in are executed we in tonnes in And strategy. And of Port We on our at North a offtake X.X In interest the progress field for Saguaro have it's annum per annum German West in Germany, continue Europe LNG. finalized million months And quarter, secured few of opportunities Qatar we venture. we the South while of capacity only placement further at Coast

Now shifting the quarter. to

straight XX unchanged. our commodity continued again, quarter. guidance volatile, raised production While midpoint This second for guidance had Once performance. strong of efficiency underlying and improvements record deliver achieved capital were we capital year year to Lower as global and full prices our continued the was through full remains the ConocoPhillips production we

deliver proposition. returns-focused on to continue our We value

And buybacks through and the return billion year-to-date, to well funding capital while shorter $XX did $X.X have growth We of organic we that across opportunities the distributed billion and we entire achieve track planned longer-term dividends XXXX. our putting on portfolio. this see us for

cash durable to base to and diversified our get come. decades flow competitive conclusion, and And in asset our continues deep better. better generate to positioned and we are So and well returns for

to call in more performance detail. the Now over me to our quarter turn cover Bill let second

was result which XX in adjusted Alaska quarter in transitory Diving crude. Ryan. share we gas headwinds second natural attribute we primarily generated performance, Lower Thanks, that We this $X.XX consensus, per and below price into recognize to earnings. capture

the second of previous pricing $XX full and CFO expect at published our billion strip in price capture guidance consistent on based half, $XX Now to we for WTI be year normalize year our full and sensitivities. with

We production. representing XXX,XXX successfully in X,XXX,XXX to underlying And wells oil across across from portfolio. well new Lower the turnarounds and set was relative record of in Ford XXX,XXX a including X% base. XXX,XXX asset with strong Permian, year-on-year, Moving growth performance quarter, our year-over-year production another production equivalent oil record, second the the per to per grew entire equivalent averaging Eagle Qatar. XX the Bakken. XX and online Norway Planned from underlying of completed from barrels also execution day, and producing X,XXX,XXX X% expectations barrels were with the day, Lower our solid

to flows. Moving cash

in year Second prior $XXX was of received distributions And WTI $X.X an average quarter barrel. at This million. of $XX proceeds, the to related CFO million disposition. primarily per billion includes APLNG a second quarter, also price we $XXX in

Second quarter included which $XXX for long-cycle $X.X projects. capital were million expenditures billion,

through expect Now billion half. to first the Port have down in step the a for to LNG $X.X capital million lead $XXX of Arthur year, in funded the overall for we half, the second planned now which we

a capital in to as guidance We full our year. half second we the down $XX.X expect see no range to billion, narrowed Lower to to a the also in billion step result, the midpoint. have with capital change of $XX.X year And XX

XXXX. fourth and per via in returns track us Regarding billion to in capital has of $XX our quarter. shareholders And share on capital, ordinary target was payments. second which billion total buybacks return VROC we dividends of deliver $X.X in to announced billion and This VROC billion share, of for in the $X.XX $X.X $X.X returned a quarter we

of We Turning forecast of which billion includes seasonal Alaska equivalent range planned Europe. barrels in turnaround, the to per be in a to guidance. production oil quarter XX,XXX third barrels $X.XX to X.XX million and primarily of day, day

production year our guidance. midpoint full of have also We increased the

day equivalent full midpoint Our million $X.X million barrels to prior to the $X.XX year up million billion from X.X per day X.X is new of of range XX,XXX barrels previously. per oil

billion and $X.X the For $XXX the distributions expect quarter year. for APLNG, in we third full of million

with our we by adjusted and guidance year, Consistent full operating respectively. million raised DD&A $X.X have production $X.X cost guidance billion, year each our billion for $XXX and to the our higher

APLNG. corporate closed excludes also income. cost by lowered due as to have interest but as a announced We not impact acquisitions $XXX Surmont million finally, our And guidance from higher guidance $XXX reminder, million all such and to any

guidance. So to to our wrap solid our We're quarter. year in another leading operational had in full confident we up, production outlook, increase

strategic and billion this year. portfolio, We shareholders continue across we return $XX the progress initiatives our to expect to to

turn our I'll to the prepared operator concludes it back remarks. Q&A. over start to that the Now

Instructions]. [Operator

Our first Sachs. question comes from Neil Mehta with Goldman

on build to X Want Slide here on realizations. price

and gas As little weaker you mentioned, Lower in a XX Alaska.

of the color moving and some in mentioned it's had provide your stuff transitory, direction there? in QX. Can is You little more a you

Neil. absolutely, Yes,

second as the challenging on rates. we levels some along I that XX already capture normal And differentials with the more price on Alaska remain here for punchline billion at I'll we're noted, year at and gas in was as And give we provided gas and quarter obviously, $XX mentioned, XX seeing bit each, year, you published particularly rest strip and on returning to our it's crude elastic the a in pricing and sensitivities. you $XX Lower but is of the details Henry So quarter. crude. And differentials the of framework beginning year, based our Hub WTI CFO of reference $X comfortable full third with our that the Lower

gas. But XX let me start with Lower

expectation Hub. of quarter we our Our year rate to slides that that be and quarter, expected a Henry you roughly probably we of volatile for first the in XX% to capture as XX certainly that. capture capture second our couple that the And That's laid ago. compares was XX% from quarter-to-quarter of XX% this out show I Lower down are full which seeing recall, said we quarters year,

second rate some Bakken was relative XX% year half the the mostly which driven for in the really of quarter-to-quarter seeing as what Now by well we the that first absence the we're still of change. strength in differentials Permian quarter, in and quarter SoCal the Hub Henry saw the as wide explains first to in

ranges. Permian the a most. pipeline better debottleling more Clearly, some at third bit the back what with looking Now narrowed normal improvements and story matters ahead, looking But additional well. quarter, SoCal's That's differentials and as to takeaway disk. have here That's Permian is

With is levels. cargoes, they But as you were Now crude, a now, was see the second right screen to priced ConocoPhillips. in a unique Alaska to second quarter our more related. the of first on one's in some Brent A&S to back quarter this slipped that's the more bit trading timing discount to Capture premium largely at XX% historic XXX% quarter, and from can rates Brent. on to A&S towards when

remain this rates, So full we I'd and the constructive and all recent by on encouraged year we're pull Neil. our of activities, and capture in year, our half we it out when pretty say and we're estimates second at the look confident together,

been Really strong appreciate a row in XXX,XXX come a quarters has small above It's oil The X crude that. bump Lower guide. barrels. follow-up production in here where is XX in

Lower production momentum the So just is curious thoughts it the portfolio year? XX? on bump driver of it Or in over course was just of throughout the on and the your the the

It's Neil. production performance. pretty pleased Yes. with Thanks, We're Dominic Yes. here.

little everything Lower it perform XX is it's Nick really certainly, We're out think a minute. even talk I that a a bit more, that in and board. seeing to standing across and -- will the well. is But

quarter yes, that's that we've row. So a in second you're the right, increased

of is actually the XX,XXX Our year, production equivalent up of the were guidance interesting increase XX% since oil. that beginning what's and about BOEs

underlying to expected be year, And XX. X% so to that to be and X% Lower year the our in would X% this full growth X% is

product a mix now focus is the Now lot there on in of sector. right

So expect year our mix say over we that consistent just to be product also. the let me

which will the the but So quarter-to-quarter work get noise mix. basis. basins, we the Lower depending online and oil those average on over product brought from are ball out mix can the to year BOE some across growth of on particular numbers in pads that a our XX, really And both consistent

our if compared year, you XXXX half of had XX, in we've second So XX% for around Lower consistent to half very example, this mix first look product oil. at

the we're driving So yes, I XX Permian and said, the with is production Like really low pleased that. the progress.

to do Nick, So about you that? a talk little want bit

Dominic. Thanks, Yes. Yes.

for driver on main range there the that XX. for top are reasons X the Lower probably of end So

First, wells and kind therefore, then QX performance. we activity late well of of and strong accelerating XQ, had modest accelerations online some

improved accelerations Now of I drilling mentioned that and resulting the efficiency. completion was

in at So wells. accelerating Investor efficiencies Meeting, mentioned continue to as realize improved therefore, XXXX, some I the we of Analyst the and

So that's point #X.

well look that the across the if then we're performance, seeing strong And you overall at board.

as our XXXX exceeding curves certain we're in or type So at performance either areas well.

So mentioned, very that's, encouraging as Dominic

that's efficiency completion point I a a making points on out the and will of large couple difference. drilling

to in realize rig program, in troubleshoot across continue some rigs new frac, That's And remote the in high-grade Neil, across for We and example, the to the then drive the entire can Drilling we're efficiency. ROP. Permian real-time efficiency. practices technology have down simul to XX Lower well. side, resulting Permian improve Intelligence fleet where we then continue real-time in where, Ford can XX% we monitoring And the out Group, frac, we operational continue improvement on to across rigs as our and rig efficiency fracking improvements, drive Eagle the best share XX/X then and optimize we testing

So very encouraging.

question Evercore ISI. line with Richardson next the comes of from Steve Our

a offtake if these of I have looking you could agreement. bit was the Mexico-Pacific a Conceivably, of at you types wondering little about deals. lot talk --

was for how more I you? bit would love path about FID project And this broader also, of what a the to and strategy. the it timing and you do hear little right sort fits the in see there? that why So to

piece we what at confidence perspective business. Well, lay turn to a think to of maybe, from we that of we're the of Steve, as game out and to I'll strategy the Bill the Saguaro transition LNG good just broader we project level, kind expand and take a specifically wanted over on looking side, itself. some our really a high But for then try energy in at

out set that. to do couple we years So go a of ago

the it's with I consistent think Qatari volumes.

Port getting the on now course, Of to the FID Saguaro opportunity, and West Arthur and then specifically Coast.

see we side Europe the some the specifically trying trying both become as to Port offtake on coming the -- that but, to Arthur Bill But the can LNG bigger service I to all available, -- can more at opportunities inside service in importantly, the of company taking in more a business up Bill have demand on talk and of equity they and build out more Saguaro growing side Asia. project. about it's

sure. Yes,

talked supply we basis. AIM, on progress Steve. a we're pretty market up excellent as and we're those And both really fronts, at originating on building competitive both So making stair-step our our focused highly on

So our of XX% tons as offtake And our X.X supports Qatar. leaves of business. several perspective, Ryan continuing million-ton forward from progress million LNG for that's LNG are That mentioned, and with X we've Port how SPAs in regas secured That Asian putting Arthur to market. in LNG happy with Germany. our that with there. make developing with we we've pleased into we're right Europe, advancing And offtake discussions been Really moving progressing and buyers. commercial excellent

interested facility you'll in pretty the That's against a particular of million nicely. Coast obviously our AIM, successful And supportive pending Asia. we at And on tons optimization volumes really that it perspective, Pacific. thrilled some West It by It's supply of adds to to are offtake Mexico. offtake creates recall, Coast of X.X that mentioned very Canal. LNG our adding from the adding be Port portfolio. This It into we Panama diversity offtake Mexico from excellent complement really does FID avoids Arthur options. into But our backdrop, we're opportunities. West

the You very ConocoPhillips, to backing from probably addition credible in Permian. strong and it dedicated a it's counterparties got supports from noticed pipeline

So provides basin, using from I for think And Waha which also helpful pricing. that's technology. further ConocoPhilips' takeaway always appreciated. cascade optionality is optimized is It it the

reasons So at like quite capacity Saguaro. having there's few a we why

think to for of the an it kind that we're is so fits point and this our an -- There mentioned is of see Now I to has offtake. Ryan supply. quite agreement. equity simply already demand important and laddering note And is is that most really we build-out can It strong nicely market one. offtake component as not this LNG,

you quickly a Bill, was but on about up you I been wondering and That's little wondering exercised, Surmont. funding It's follow that of latest and could thoughts since thinking could I how you're give Bill, great color, just if Ryan. your if transaction on while it. us

Yes, I'm to. happy

And strategic we with distribution thinking projects talked second these we're of So provides just a cash how short-term AIM, billion cash investments as and additional little about to start XX% let acquisition ended supports $X We and It me interest. context investments. in longer-cycle mid- the the and quarter over our in commitments. at flexibility. that some our really shareholder our of with overall balances

the be our expect And pretty when cash we are look now. and sources Surmont that of going to forward with at right the remainder current our the year ending balanced, organic strip, for uses what we're would we flattish seeing be Steve, and that absent

Now long-life to resource because debt as ideal cash great and a it's these is about flows. of a asset. Ryan think assets its really got mentioned, one with funding of It's long-dated Surmont base,

well your match assets your with liabilities You this. something pretty can and like

the will a for that for the but So specifically, of to for a majority it's funding we Surmont Surmont. it's likely and use transaction bit tactical, debt

the CFO Ryan said that CFO pointing $X by up wrap from Surmont. next right to seeing at incremental in starting just $XX. working That's pricing increase see out, now. his we're interest in approach of We I'll billion strong incremental then that year And XX% remarks that

we're with So with and acquisition funding quite Surmont quite plans. our the happy comfortable

Our comes of next Leggate with the question of from line America. Doug Bank

product But terrific wonder that follow ask slightly productivity, I a you. I the to introduced about for I on you've question this production the different well performance Dom, to raise want way. the up if it probably is today. performance, want

are can as Conoco you your assets? position big to about, the to and productivity want any could been Your the if position between -- there's formula it talking a your towards whether whatever, some you differences that. osmosis magic and compare operated of Conoco's and if is contrast Permian, production. partner And any around obviously or the comment I sauce wondering say, XX% area you don't Permian in the I'm in JV in to maybe see I legacy beneficiary the should off operated ownership well the charts, you the but specific or call has

is a stab. this Nick. Doug, Yes, I'll take

Is you're you're with? versus I where non-operated the split. going looking operated that think at

Exactly right. Basically, yes.

Yes, yes, yes.

And the So from you top performance a but as non-operated. well has OXY we also that look look had just the as well, strong that when at component. large and XX, That's if wells, the second have range out other you of Lower contributing mentioned, a both on operated obviously, big OXY a performance. in between performance a number has that roughly but of we strong end to partners are quarter Delaware, but I accelerating component, take split JV

JV the do and there's assets your between productivity the or notable Maybe difference and say you a legacy no?

look benchmarking. constantly, We at Doug, all

that the to XX. but bit in roughly framework. positions I'd in operated and have really our great than non-operated in of receive meet out from less We resource, a barrels in got always core, stacking difference the we we're is completion little we're line. say our general, and in of fairly that we ballots There's XX And evaluate positions. So Delaware. spacing less We design, obviously, the aligned. positions legacy billion averaging than the XX, the in position cost

deal flow for billion Great. $X you're follow-up probably is Ryan, you. Surmont. of Again, on you congratulations my cash that. for from Fantastic guys. adding

even very clearly cover the dividend the still we X yet, yields sector evolved LNG Analyst ordinary since Day. of prices. oil you But have at that You've in low the portfolio the very, lowest can

of portfolio or cash I'm a thoughts dividend, ordinary increase to share I we which, ratable you the wondering to free power some for. on get frankly, more your think if whether higher that better again translates a So just in could ask recognition you of

Doug. Thanks,

particular free $XX to flow this that recognize potential we're that's on your sure. acquiring Look, I tenacity, point. to get at $XX our some credit messenger even for for cash at we assets consistent price. mid-cycle significant a been you yes, You've give

I our to significant the flow foremost, shareholders. shouldn't of I'd back you ConocoPhillips' and a question thing cash commitment say, our guess giving is first Doug, amount to

So this prices. averaged the year, probably XX%. last X, X XX% closer to outlook we've for We're depending on years, your

a and on flow. giving free foremost, back not be amount So that's again, CFO, first going our And significant we're cash competitive to of shareholders. cash to

going constant as generating and even cash out more a come we the APLNG of Now to we're activity. Surmont point, your free flow price, to at be

is value dividend really rate long framework that I what intend we Our see the time, top grow do changed. able to we being a base that. on of we at that hasn't a the lot to what -- Look, we want something said is want over over that go term, quartile and

back mid-cycle, We set And don't mid-cycle. to price, may then mid-cycle the you want so argue framework differ around set our a of tier when caught are that shares argue price, we our buy framework above get but to and our mid-cycle or around cycles we introduced price. try address some to in pro-cyclically. as mid-cycle up with well We through $XX and third a VROC you'd prices well we a

yield our competitive. I cash think So is

and improvements commodity afford framework bit cost doesn't more, raise prices. the may to more put I lot base the sort top-tier credit more dividend. volatile annually We the into lot just a think as but a credit well dividend can we we're amount that your gives watching But on the and point obviously we base we company. a outlined pretty the if a is focused that get us of fixed think are we the in growing of

just remind in month people, just I'd a XXs. back ago, WTI So was the

that upside the set look at the a and We So has rewards higher. torque prices we through the again. the recognizes that much a works X-tiered the that We'll it are to when like and framework. the we're to know we shareholders framework company mid-cycle, set trying framework

the of we'll cash as year we you As go last But significant look we've our at at our the at, we'll done a amount XXXX trading, flow this X, to us channels X commodity years. delivering are can where shares shareholders set to finish prices we'll and count the appropriately. are over look into our on back and where try

of line Margolin next Wolfe comes from the question Research. with Sam Our

know I in is this a There is want capital maybe ask payment. of on Willow that if 'XX. less to than Apologies Arthur focus life Port the to over the anything spend about step-up natural project there's if if capital can because I see but creates Willow just we should at about for XXXX But shape little a early, the development be tailwind cycle and should Willow. a I wanted different in

Sam. here. Thanks, Dominic It's

to hasn't range about how us April. talked it at So to XX%, about is an what prices and AIM any -- We depending had the inflation been framework for in really but since long-term and back a change oil be capital trending. we've we on bit early talking showed there expected there was

is talked to back $XX that about we Given around is that end at higher in range expect as forward we'd anticipating, there WTI about back to the that the and have be frankly, curve we of been April.

So a similar capital this year next level year. to for

a performing or we're I a looking about growth do of other as little want. company do we how is bit the But plan. Well, about. growth on the talk and of focused we of year, relatively this course, thinking on we what in That's an one dimension returns, things flat, amount is of always need of think do Lower it's much one outcome a always we're returns at Lower add well We're that's the of one we XX, keep do next very year things capital. XX activity. of I'll

capital, just will the is cycle off next spend as yes, year LNG over up. In terms Willow picks longer the from rolling of years be this -- few

$X the our to flat billion, average around expect We next pretty for here. longer-cycle few years capital

year. next said, pretty are that like that. you So the direction good a on sense early, it's would where that at I heads you gives of terms but give in our pointers general of It's for probably the

So...

AIM. Mexico the a North integrates evacuation It follow-up Lower and those Understood. got your their even your these marketing I sort maybe the which you about team agreement, from with factor And realizations or through America on of with and you Pacific, supply because if your you've for talked and some particularly are Port and your evaluated on of gas. point now -- your wonder Arthur, with separately. bit of respect the quite is a for on this if to of is of totally thinking positions projects XX impact phasing -- And development Permian about NPV a of

Yes. it's I and we investments in of gas. directly, mean helpful don't demand those but really North relate all obviously specifically for terms American

our think So certainly about overall the value that's in as of equation we minds, LNG in America. North

question Stanley. Our comes line Devin of next the from with McDermott Morgan

So Sam build the to just on I you inflation what was asking made some deflation of on comments wanted or trends. about,

plays was and wondering some had of to I outlook that internationally. the in half bit earlier the pockets a investor back costs You at U.S. the other multiyear you some shale 'XX some year. little into baked seeing could seen On portfolio, net a about benchmarks how meeting if and comment. in guidance We've the still your this across XXXX deflation basis then into you're signs can talk extent in the the of trends you here rising

again Yes. here. Devin. Dominic Thanks,

we're else closely incredibly everybody the with So obviously, something industry. watching in

we the this an in say, would company however, the basis. areas still think second to some overall last seeing deflation going out digits XX mid-single expect I the half. capital annual in Lower I on of average year year versus we our inflation in are

commodities, rates think price-related certainly, on sand oil by and seen I gas obviously and basin. before, price seen relief fuel tubulars, significant any mean, driven have proppant. chemicals the But about just we're things. little I softened material we've to said We've and bit, Rig as some in reductions a that's talk and some seeing. a we've bit what

compete basins. see some with in So you're high-performance rigs oilier starting and to the come

we rates is down to say -- frac day And are So some see some basins. are of some seeing would in I coming down there. examples come think spread that we rates I beginning

So all positive. looking that's

It's Activity as high picking internationally years. many and for up. probably offshore as been it's is

we seeing labor So rates there. on pressure are some

half. the have deflation second second the and part annual midpoint. an of that's narrowed seeing overall, that. big we to in So into first half, reflected billion that's it. lower all we're half for for rate $XX.X reason the some the capital $XX a watching a we certainly important on billion But guidance see our part of That's run billion, to that $XX.X still And capital going

-- with turning certainly, here moving inflation deflation and we're but So seeing again. into corner the

wanted separately come I strategy. to And back the LNG to Great. then

additional other was One that brownfield opportunities other at process and about you projects, about thinking at U.S. meeting of Can a Port talked economics at the you that Arthur. just with seen trains get investor the that can Gulf had about compelling you're of appetite the on Coast bit facility? little how further the expansion we've some added. expansion And commercialization there talk taking Conoco's for further very offtake

Yes, We bit this is Bill. talked about a this at AIM.

have has When some right pretty equity, there. happy of level we project. the secured the we equity now that So unique we reasons for as taking LNG, pretty in with we think that about options for that we're the Arthur Port it took

there it look some equity. would we And so -- forward, additional as why pretty reasons unique have make have take to be we to

that have investment mentioned for are we we're pretty our phases, continue to the future in phase, Now benefit on our positive so structured and as agreements that. first

some options point think in to kind expecting As should I you spend that. know, at this time. evaluating your we've got certainly not in you options. of we're that capital additional mind that have predefined there on We're But

Our with the John next of question Royall JPMorgan. from line comes

hear me? you Can

Yes, we can.

Okay.

a earnings rate big tax up like XQ. in corporate took step segment on the your Sorry. looks It

was impacted blended overall stepped on just XQ. to just speak you So the I rate down the rate corporate. a hoping tax think bit it could And I then in

that as bit moving and just should little expect tax color on rate. what of a helpful maybe with just we So would well the forward be

This story. income this pretax a is is really Yes, Bill. just mix

to from to rates. for effective moved mid- compares last our year to That estimated tax to when guidance down the some And income mix lower higher tax a that relative all sometime tax we've EU last XXs It's seen given driven shift reduction of to the jurisdictions. Our you really time we our pretax this last in annualized talk I provided Norway, has tax rate the by on XX% annual effective reflects year. jurisdictions of to upper to year. recently the prices in largely forecast gas

level, flow tax at these see of as as of why obviously, noncash first our full so rate adjustment quarter changes. year. matching was create XX.X% this quarterly and when They So right you they that versus catch-up our quarter puts XX% noise second expectation that's XX%. year-to-date a tax they And through our happen, rate some current

that's flow adjustment, through going other segment. noncash to that the and Now corporate

that see our supplementary on can disclosures. You

You can corporate swing in a segment. positive it's quarter-on-quarter see million $XX that

straightforward. -- It's Now mix pretty that's just a really story. so

Now tax, think half flow positive bottom income second saw the is deferred statement just quarter-on-quarter I That of talked was cash line statements the when about a was But because lower. about. that adjustment you of on for tax a bit for the year, tailwind the our you that's annualized year. effective reasonable the $XXX And at quarter, is the of tax good rate rate current XX% tailwind book run run also for for a about of second remainder deferred rate tax million prices. the commodity the the the

but you in there's do, if run pretty discrete up. point And this obviously, Now rate know, a good some lot often it's move items as a can that come at that around time. they

on Great. helpful. is then And That's really question next my production. Bakken

the think Or somewhere above stickiness You to were that be high in And to to What is kbd the as Bakken should XQ? thinking plateauing driver XXs about kind about? used XQ. we there? that mid- in any well the strength we of strength XXX was of there over up

this is Yes. John, Nick. Yes,

assets Like that little the just You extremely portfolio, performing of in you're we have rigs look the a other crew and it's quarter-to-quarter. see to strong. from our at operational bit going lumpiness performance Bakken, from in frac is

of think can you And Bakken plateau. at

a would the asset. several good decade. $XXX,XXX competitive, I barrels and for overall long-term the and opportunities in will a XXX,XXX presentation, So give you It's like Ford supply, continue we inventory and to is through years asset. day the view. that increase That low to We looking good of find the to for cost Eagle sustaining a essentially number. Bakken you AIM we talked about production where refer

question Roger comes from the line Fargo. next with Read Our of Wells

just but on opportunities the in It broke I deal front the acquisition with call. some and in Roger -- come Mexico. around back I'll on Surmont only the here the had to I'm off, you've investment wanted here the Anyway, assume

at, curious, was it, M&A incremental those? on comparing to dollar. just where versus those organic look the returns, looking of you are How how So Thinking the opportunity, let's as put the opportunities I opportunity what your call right, sort are you X?

that it the well organic performing business. what and in is. delivering the delivering looks opportunities talked as rest as the compelling focus We're because has XX Lower to the Right that think about Andy side just resource pretty focused compelling got of organic company towards Roger, the most the now allocation just stuff executing is But capital for the the of I and we're the for side, on right base opportunity to and of be of we're the pretty it's our efficiencies Nick but now, Yes. our world. around company. our that

what you around partners in know some assets kind said, that is our because these catch what with you a of -- make we done hoop, when strategic -- the never our clearly and decisions, which what's has of and rebounds these doing bit at clearly doing. little you and hang Surmont is at But is done or is APLNG our different partner partner

up financial we balance and that's to we the come they -- we that well, on inorganic strength match cash how we opportunities. the of number the fund know around opportunities to when cost with really So we've tried ability available. and to do described sheet framework of kind want ago of these these projects we're assets of supply why the you in And we a organic consistent that with have years to

those know never themselves. as opportunities going when we kind that's your for and present and partner just We never we can you they You of to quite vis-a-vis when know those have very when assets the makes the a deal they Surmont for made. get well be it competitive, -- want talked when APLNG, And we about, do. all matter, that that we're decisions over know

our those and pay direction, want strategic importantly. that different made we're that's the be when We we and present attention what mostly side like, those to everything to going everything. And And -- with partners so to when that we in portfolio, can afford be we themselves. to bring go there. pay -- to was know execute together, we decisions the we of on opportunities firepower both more a in We market. really we want to had We have But opportunistic to we can X watch And able those and what focused advantage. it organic was the on and and that the APLNG Surmont. but know

to want we advantage take of that. So

Coast to to question this is Absolutely. on it presumably What Just just with West as to or the get fruition? LNG takeaway to of in project Mexico. make the from order what pipelines capacity a be And agreement there, Permian? bring need route then the to on go the follow-up situation might constructed the

Roger, is Bill. Yes, this

points. X So

that agreement. investment. First the It's offtake is up, million X.X Saguaro, tons equity from an not an

to think So the for about important Commission out, And detailed that's the releases agreement Basin the from of Pacific they've XX-year to Federal Mexico. clear. in a one Permian July specific you then I in Mexico including via CFE. That's the delivered that several gas really a I'd answer, with pipeline, pipelines Mexico announced had with Pacific but supply that Mexico CFE's Electric in to operator natural sure just for direct it's the make question press

helpful that differentials is information the pricing course, And you Waha for that's overall. the takeaway that. And of so best on source from for of Permian and

Piper Our line next Sandler. Ryan Todd comes question of with from the

a -- agreements. the missed one offtake, least for offtake on second. that out on I there now. it. question question offtake a Is I Saguaro at Sorry, got you've Maybe agreement follow-up broader cut there LNG

to million relative How You've got in appropriate which -- offtake Or when global either you've a to gas terms in point Port pretty U.S. are basis the the Is you the thinking a offtake in a on in there size at tons the in agreements interest kind or how equity you look of should about -- portfolio? there good balance Is got to at -- much relative agreements? of relative from Arthur. U.S. gas X we feel like production feels agreements? see do offtake at LNG. this portfolio expect partially in you versus look additional you your

Yes. That's a interesting question. really

out, So about we as of this think as latter we've laid building up fashion. kind a in

to with AIM in very progress where even in LNG you have just You We at secure. April. that since the offtake have we're comfortable with that placement market the feel

West pretty you're But you kind a as should confident So our to being here. seeing that's volumes Coast why with us develop of that expect ladder.

get So We that. demand ahead out do strong skis. of you don't on your see pretty

critical we're think to over getting close I mass time. pretty But here

I we're comfortable we're right now. where at think So with pretty

on now. We a Coast, West more dated those things continue to but capacity longer of are out time for look the lot in right

on would permitting what maybe there I'm apologize, I the that I regarding Alaska, timing said first And prepared any update if missed here. dictate at legal comments and Great. the then issues or -- the Willow? not particularly But on of minute -- sure you something comments. this latest like on outstanding

is This Andy.

the for the front, recall, project. challenging were approval on So X the you government's lawsuits federal the that I'll legal ask had we as

last we agreed pleased in the main expect schedule to see probably been a that a we that update So and has spoke is November. now, ruling we're on since

is we agencies believe communicated BOM, third on that cooperating the prior scope previously all the that this, of process what's have the requirements. and satisfied And we As rulings a given the narrow. conducted being challenged legal the

of as we forward in kind looking to plan for the court very we're XXXX now start our ruling November winter for much So season.

of comes question next Lloyd Jefferies. from the line Byrne Our with

a take quick some about Willow. inflation long to The on you seem that come and and FID cycle -- questions have -- down. and whether could couple comments important peak deflation that I costs just cycle would long like talked then have of development then maybe you

you to cost I I it's expect costs update project. But... So Or a have wondering guess understand do And a there. down? where you whether come X-year

Andy it's again. Lloyd,

those it. have So into individual on contract. XXXX. guess contracts, contracts sort as inflation. a of hard is it it Willow not down deflation is linked and are we That And can longer-term inflation is when But and little I do was to through indices. with a frame important a move turnkey it project, entering agreed to comment terms up to

couple the probably that couple same seen seen things inflation a of as the other haven't Lower So last just over I'd in Alaska, we the in we've is years. kind of mention of XX

range, that in So as we holds. I AIM, still said in the think capital terms of

be really capital That $X.X CapEx $X range in the changed production. hasn't billion. to expect We from first to the the to billion

those some our of has also estimates. all And got emphasizing, it's into factor worth Willow like projects, inflation

the of So -- we kind of really typical of we This we understand inflation kind And activity well. do XX. the lot sort is the sort this Alaska. that a have, project same of of we haven't is in having seen lower activity

billion what So I production. of billion is thinking AIM to is terms good the that estimate at in CapEx a think $X.X our of $X to first the we still provided

a any answered changes the whether Okay. exercise know of then few to It on Great. rofer like anything me the in like and on it a you or thinking the is timing into but a of fell any portfolio. change And just lot forward, I strategic Surmont. lapse back wondering kind I'm feels other going if you I capital it was Montney elsewhere go the just let gives flexibility decisions that. questions But it. the of project.

you intensity low said, like we As a that things about Surmont, of Surmont, one the really it's asset. capital

change So a terms of projects. that to it really allocating providing much cash doesn't capital us It's more lot in other just flow.

with of consider outlined we long cycle I at another the it the we capital low and plan other how asset projects, doesn't So the intensity. really change AIM, benefit we have think

comes Syme Citi. with question next from the line of Our Alastair

again. compare costs sorry, they in it last a X the together. together over XX, I back on cost how wonder all if on you've opportunities you how wonder taken put you fiscal, of the I -- once supply about months talk just LNG on could comes XX basis about

you If look...

Go ahead, Bill.

sure. Yes,

picked we you So look at if up. the projects,

supply. our those. So in for really with those Those of we've are quite very projects Qatar, long compete of a pursued cost nice time. well that We're happy period on

low-risk Port Arthur an And expect how talked cash about flow returns an component. it integrated equity is to basis on investment. with equity that extensively. mid-teens really low talked that We've about steady on but then not returns we've and Arthur, overall Port we'd Saguaro pretty

supply cost inherent about how of it of still thinking with there's market in position? associated terms Although an you're the

sure. Yes,

into you're on what it's to So compare on Panama other the when Gulf side to your quite We particularly because of portfolio. supply that that your the that to competitive because down Coast West you Coast, is think Canal. LNG Saguaro cost comes the

deliveries, of location It's supply if very acquisition competitive. it's into of a for very quite nice competitive so you an think LNG. for terms particularly fits And cost in Asia and

reason for obviously, the then of avoiding liquefaction And some believe at and to NPL our fee Canal, the Port a and premium liquefaction and the Asian very, add, -- competitive look is places Alastair, yes, the we at is Panama costs Arthur for would choosing it through buyers. fee we I what a very

I XX to CapEx XXXX Or And related Okay. sort just you're And activity of evaluating about deflation what what well think behind you tanking the sort you're that. you're seeing? I is a hinted on Dominic, my it that productivity? it to sitting question on Lower seeing of follow-up, something probably at Is is was levels. of wondering

efficient Yes, the the growth machine Lower think to very a really relatively at at even it's see we Lower it's performance from as year, XX think well. running of the looking levels. about very XX about returns, are this that we Alastair. likely mean got we I I mean, doing flat We've

see flat will at levels. We anticipate even growth, maintaining activity we

-- we we're how and much saying do is So and macro growth overall and just on looking at so the just looking appropriate. think saying

just So considering. we're that that's something

fine-tuning that as decisions XXXX. made think just yet. on any haven't case that about yes, of it's we But a We

So...

Josh line comes Silverstein question UBS. from of This with the

the option do Mexico and why between the have So at in first the the equity projects agreement I cost offtake the with in, well. What potential and as guys you key Azul differences well, X Mexico versus project? one think, as Pacific Costa are

Yes.

to rates the the we're accretive think I looking It's in And tariff. at. the we're very as with getting right key now. now, today, based right timing location take is FID. good marketing that a is available be in and Mexico money ready a Pacific a the issue It's tariff difference on would competitive that

and is have do project the for through It's options in yet taking Phase But Coast. X. That more a our ready Costa on for an timing Energias Port issue Arthur we think consider start not it. FID, of to option to interest West Azul, time a on there's when West they up, dated. So Coast bit it's longer go ECA, we that's or

basins? putting Atlantic together your And it. discuss both maybe the the portfolio, as differences Got guys see then you to and see you to the or between And both are key risks some have Pacific you like exposure are trying optimize you sides. of you

Yes.

the So certainly, together, we're a as portfolio put we at looking portfolio diversified offtake. of

at We money considering facilities developing in opportunities now. right and into that FOB Asia, some are deliberate Europe. are the developing we're pro-acement long-term actively sales We're into the

about longer-term a a be that basis in optimize thinking chain. we'll across using organization commercial mix dates portfolio. our are and a also And shorter- to time as We of these value horizon with

doing market and formats So through are time yes, looking variety both horizons. of and Asian we out building and a European at actively that

Thank you today's concludes conference. for you. participating. this Thank and gentlemen, Ladies

now You may disconnect.