Cimarex Energy (CIMXP) 5 Nov 192019 Q3 Earnings call transcript

Good morning, and welcome to the Cimarex Energy Company Third Quarter 2019 Earnings Release Conference Call. All participants will be in listen-only mode. [Operator Instructions] I would now like to turn the conference over to Karen Acierno, Vice President of Investor Relations. Please go ahead.

Thanks, Gary. everyone. morning, Good third our conference call. Welcome quarter to XXXX our updated presentation and afternoon, was on to presentation posted website we call yesterday today. An our may reference that

number will Just differ to what forward-looking our a from could discussion discussed. as statements, actual reminder, materially a of we results actions cause contain

XX, forward-looking year our our all later news today, with XXXX, available on is release ended will and the should read associated statements which filed You in XX-K be the for latest December disclosures on have factors will our our XX-Q, those also risk business. our

our remarks on John are Cimarex’s CFO, our begin COO, will questions. costs. including overview here We Albi, Jorden. Lambuth, and to you update well prepared Exploration, operations, from Tom our of Burford, CEO, any will Joe Mark production an answer then help And and with EVP

we limit if that hour we'd more so back you that we and queue one free in follow-up. to the allotted get like. Feel your the like for have always can the call question and yourself questions ask during one you accommodate As to to of

that, call I'll turn Tom. to with over So the

details. discuss focus call Albi, Thank thank us operational the all will provide you a this will who followed on and our briefly quarterly morning. breakdown for you, on highlights our by our I Joe joining to and Karen, COO, detailed more

third a solid quarter in a had environment. Cimarex macro challenging

range. of oil guidance continue. growth midpoint Our projected growing oil the Permian Total grew oil sequentially. is X% production in came with X% our oil sequentially Permian above to

all they online as projects growth, sooner find are our wells as come online are to on ready. cases plan sequential bring continuous that we we we While than planned. In soon ready occasionally

natural count exit expect of guidance liquid. full-year for incremental commodity the the $XX challenging unchanged, and guidance headwinds, borrowings. We prices well and mid-point, we natural to while these lowered without headwind, In at to particularly continue spite, keeping gas a gas our production be our million year capital by

our pleased we to to be to are of continue dividend, which returning the form time. we cash intend over Furthermore, to shareholders in grow

deliver to continued returns. We fully excellent, burdened

have midstream As ourselves basis, facilities, and measure in on G&A. land, completion which the a burdened science, all includes we drilling we fully described past,

cost the past few investment Our return. and robust resulted well and improvements in productivity have for years repeatable

Our to in six current prices or they five years are returns ago. also more drops resilient commodity were than

flat effect we all by years, As stress prior XXXX lasted tested returns at total each and flows XXXX, an have our future end program modeling for of of the in the SEC XXXX prices if the QX cash example, as three forever.

low basis, Even with program total a forward prices returns these on are robust. go our

this performance robust, planning repeatable, job a our has better and future. price confidence commodity doing defendable knowledge Our become swings. of against investment and better With we're

put from benefit work to continue also we've that We understanding in the resource science into play development. tremendous

this Our program still continue We but our surprise development in space was almost entirely a to development gain have point. confidence two, at decision. in operational and we or

way. along make nature is the progress. to also We mistake continue of two the a or This

our of and capital elements cost laser lease all are We structure, operating on expenses. focused expenditures

is into environment. gas cash in WTI XXXX to $X.XX plan NYMEX $XX we look As, a our generate oil, free

and flexible. or not the service expiration at burdened disciplined, lease current right undue our We're for and remain will environment. by pace issues business We cautious contracts grow the can

discuss our operations Now, I’ll more turn it over in to detail. Joe to

I'll guidance and today. you third our a then service for all touch Tom. our call fourth with on quarter usual and up I'll full-year joining you, few And costs. and items, production production, thank finish comments our Thank quarter on LOE

QX. our achieved another continued with jump nice QX as during production far strong As go we in production volumes execution,

range of the and Our Company at QX record and day, above BOEs XXX,XXX our XXX,XXX respectively. XXXX up to a top X% in production came XXX,XXX per guidance and XXXX third QX for posting quarter XX% end net X% equivalent over of

growth forecasted Permian was strong by and higher continued than driven NGL beat quarter recoveries guidance The production during the

On production. posted the company oil another record side, for we

volume day, guidance by and in oil up beating at oil over of day of QX and putting XX,XXX our midpoint per Our barrels the a and postings. respective X% XX% came X,XXX QX XXXX QX us XXXX barrels

X% Although volume Permian increase XXXX the Permian over we mid-continent, at XX% over both QX and day production saw XXXX. the QX XX,XXX increases Permian the quarter barrels to in oil our drove quarter oil with and a the up QX

posting accounts XX% for our oil the now the Permian With production. of total company

our capital year full guidance. gears Shifting and production to

our gains and through the mentioned, $X.X to billion. at million lowered X% $X.X midpoint of or to XXXX As E&D issued previously cost we've $XX year It's savings, efficiency full guidance. our Tom billion capital guidance down

kept said, XX forecasted our completion our QX net That we've net completion wells. year our our equivalent count full to With at updated net scheduling, projects model from surrounding range slightly revised have XXX,XXX we extent any from QX. QX due rejection to to XXX,XXX uncertainties just BOEs occur primarily ethane that down may the with day, of the per during volume midpoint

of flat online QX that's and side, XX,XXX of XX.X our byproduct a XX.X day QX a with barrels XX.X projected to comparing in QX, in QX. to the a that XX,XXX online On we wells in the and range oil modeling the during net we're to had coming midpoint virtually

oil increasing BOEs our equivalent our strong up from both to the quarters, X% XXX,XXX for per we're past midpoint That's guidance net production. at to XXX,XXX oil year full guidance with full production our and guidance equivalent ranges We year execution our So net day or day. three over range that for the bumped of oil of call XXX range day XX,XXX our full guidance, the with last barrels a quoted a last guidance approximately X% the call. and to We've of by our midpoint from XX,XXX year we raised oil production. barrels per

BOE range strong represented a equivalent and posting from our quarter per QX X% per and $X.XX X% $X.XX was $X.XX above lifting of our for $X.XX per XXXX low call of average $X.XX end drop slightly that guidance at the quoted to year-to-date our just costs to of Jumping full we put BOE. last year of we've down costs, from had lifting OpEx, of a barrel, our QX our

With the cost midpoint $X.XX range last our lifting posting, range to quoted $X.XX to lowering from guidance tightened that $X.XX our we of per a the call. full by per BOE year BOE, we've

lastly some completion drilling and on And comments costs.

With and both the XX% design, earlier call slowdown in completion our frac industry on in focus this call, we're from completion XX% activity, XX% service continued by translates cost to our the rates from which dropped completion Current AFEs XX% to and we've to day drop AFEs from cost a to year. reductions last and drilling X% down seeing drilling X% on last sides. reductions with are

That have our we've the our A realized generic Wolfcamp $XXX,XXX to quarter. estimate this $XX.X such, drops County from to X-mile from call, last our is from and logistics. our as late million, year earlier example, million down well Reeves last again dropped frac As estimate Wolfcamp total $X.X down sizable on and projected range $X.X facility in costs our an year. In design AFE cost reductions during depending program, million million $X.X

ranges. through we've at wells of low projects, this an million, the less before gains Our in $XX.X than development put these million talked about County end range $X.X $XXX,XXX our drilling of running well we are as about Culberson efficiency our to range derived AFE that with costs average shallower Wolfcamp development well, multi-well A total

efficiencies service AFEs the reductions, our reduced have improved Mid-Continent, in our Woodford design, in refined and Meramec both And and cost combined programs. operating completion our our

quoted from our million million current million this earlier For from $X.X $X from early to in running and is example, down That's X-mile last AFE the million call, that $X Meramec XXXX. we $X.X $XX cost million. year

mentioned, in foot operation our particularly per well and realized So laterals, our at XXXX $X,XXX to side statistics. Permian is Through cost estimated made cost efficiencies, program Tom cost as total strides reductions up tremendous cost we've drilling total in is well on showing really it metric $X,XXX. by lateral and longer structure, our the

Now includes same XX% and reduction XXXX. it that necessary estimate to online, cost, and we saw implies flow-back stimulation, over that this costs metric a drilling, facility bring well all in

strong raised our ramp, year oil had resulting XX% We growth net and promised production speaks ranges midpoint of for and So XX% in forecasted way. both QX. respectively. on and the oil equivalent we and full with with oil the guidance production net the year-over-year along great production we net equivalent volumes We've and of closing, executed a equivalent

Our is strong. structure cost

well place the beginning to $X,XXX the all cylinders on XXXX that from down from and per cost BOE. we our Permian of we're on in per was the X% with the to XX% put our we've down full levels. total activity QX average cost positioned significantly We're lateral the and lifting of production by plan deliver total year. QX and the executing guidance in at capital, well $X,XXX metric lowered well our costs midpoint We've Our $X.XX year lowered range, foot

So I'll for Q&A. it open with that, up

We the question question-and-answer go ahead. from Gabe will now begin with comes first [Operator Our session. Daoud Cowen. Instructions] Please

good all prepared for you terms growth I kind you of assumed year? on then guess, of I level activity everyone. high for production wondering corporate what framework prices oil range crews Hey, on the the overall guess, could whether morning a see rigs, give, XXXX. remarks of sense Appreciate that give that's if do or And in and turn-in-lines. Permian oil next just us you the levels

Yes. Yes. is this Hi, Mark. Gabe,

in count seeing increase the forecasting for on want of don't we'd running. times. For in And plan the plans the in XXXX, we cycle from Permian, cycle the our turn-in-lines Recurring and rigs scenarios turn-in-lines we're have detail rig actually we in still working to eight that a with lot the improved we're that on in give some with of have current our we time have XXXX compressed the our lot plans a XXXX. – the

at growth focused on growth XXXX. good activity the and different we're that XXXX, we're into and into on seeing scenarios forecasting are a XXXX pace we're So that’s we Permian working activity, oil

that I of had if guess Mark. and spend in the the this just think that Thanks for then I some year? in guess year a maximize free think next exploration that could you Understood. flow budget was follow-up, to And comes of just spend a you this Thanks the year. exploration Do cash budget I and you way budget even maybe guys. guess, I out as quantify number as

a did we effort, early Lambuth. we're spend, this again, exploration have John land entrant, costs are in XXXX. usually have money very to low. regards much entry When extremely thus do not some Yes, that is but We our it's

the capital framework. So it don't you see really overall even within

too it's our So needs think and much the for one something worry terms of year. I in following about – plans to not capital

as a percentage very from fully-burdened on metric, total We the focus we've That's that Cimarex. of our returns that our watched track a with of closely, capital. inception

there. room I'm amount going that and find that exploration. hoping should We plenty tremendous for love we're things to we haven't of we budgeted have some

Thanks Tom. Thanks everyone. Great.

question next from The J.P. ahead. Please with Jayaram go is Arun Morgan.

Tom, conversations And an around good you if general Mexico was could your tweets evident Yes, September? wondering your you election federal acreage comment position with has have early we just since had morning. been any that year. I which thoughts with associated risk of governor and the around risk of New in thoughts some approach as

Pardon try please. and reconnect. we put I'm with lost have to me. speaker on may appears the One connection main moment line. and going It call that the hold

Pardon operator. me. This the is conference

We location with ahead. going as backend go main the join have in reconnected Arun question to I'm well. for and Please his speaker

Tom, can you me? hear

can. you. Thank I

on federal hear not, it? could you I if question restate my Did Okay. acreage,

the Yes. lost please We No, you connection, can we restate? but not. did

do Cimarex’s thoughts your about officials position state you Okay, that in election the governor federal Tom, or get Permian go-forward great. approach a with to conversations on federal New basis? as the around we – you the your Mexico potential acreage had pardon Have year. wanted any in risk think how me, on risk and I

Well, governor. engaged the a issue I Arun lot this has governor of Cimarex but and have certainly, not questions with the personally there, discussed such. been with

I four mean, get how think as you a bit the We're about back primary that watch you'll the season that think extreme. I primary in always season, democratic and years or go debates, risk. if some Republican observation. make in I the and the either floated Here's ideas a are

I We to mean, certainly we've very been New that. are Mexico. on exposed forthcoming

We be a don't there going fracking think on ban on federal that lands. is to

We are nicely well. positioned for Texas as

to But a be are imagine the just federal stream of of with Mexico's door situation royalties move New cannot adjust were be New revenue to it state federal way I total around flexibility government discussion saying we've on close that the prepared But our either where that to. to in we by Mexico. if there got program. huge part plenty a places even some or would will that, of I'll such and So close happen

in Great. to my free cash yields was on end you to next band, still different year back XX a based more of program would that the highlighted And at follow-up, would XX. Slide of lower or is going program just oil flow the you've some growing I wondering from question, that a Tom, XXXX Gabe’s resemble forecast? XX, maintenance initial anticipate

oil grow all scenarios. under We No. those

Great. lot, Tom. Thanks a

The question Dingmann Neal from ahead. Please next is SunTrust. with go

Good morning.

pertaining just county? your was It a detailed on to, be fully most question for similar. just area focus of bit talk can I'm to XXXX know understand be the plans Culberson. out yet. talk little just First in wondering, had the about a by bit just don't looks I Maybe I Delaware like continued XXXX little would about you have if relatively you

Lea healthy We're with very level development with of agreement of portfolio. projects relatively really across be will also But Eddy getting our I to Chevron. be always table We've acreage County, that a joint going acreage our we in activity County. say, a we Well, to lot to lot active activity. have projects a Culberson lot like the has in of it and in would similar. we're County in the to Reeves going We're after brought resolute of addition

Thanks Okay, and Tom. just follow-up. then one

Just have had midstream. budget detailed look about like Again, don't knowing $XX for you a for XXXX, while XXXX. million you for

bit? think Just will say continue you down on be or spend non-D&C average same I do start the would about to just trickle to a that will the for,

to we programs. as XXXX, focus costs that into our slightly Well, on and or tied have to infrastructure this trying the maybe then on be XX midstream and capitalize is to going that move year our any be we below anticipated to minimize would development associated be

you Thank good. Pretty all.

is question Stifel. next with from The Mike Please Scialla go ahead

everybody could projected grow provide $XX with say on keep fourth morning a still quarter. oil. need maintenance the good to flow the capital see case that level rate? I just yield you you to flat, congrats said to spend X% Tom, free you quarter cash Hey, and oil that the you that want your with if

that if calculated Yes, don't know I'm that Mark. fresh. going – bounce We we've pass to I to

we know right into calculated working And it, at in currently fresh. on oil. even now, We're plan growth XXXX which looking in haven't we’re a Yes. a have associated but yield XXXX, allocating our our we a there. we're that Mike, is we’re allocation, capital nearly I anticipate working does that of we're with – to that. portion the going greater capital But talking that Permian, scenario X% we solely don't have don't maintenance and under as XX% is

gas and of scenarios the steady down, D&C again It budgeting slightly XX down through this and year. with basically type flat that we're of yield oil – kind the type to and Some that that of derives slide capital. XXX working on steady anticipating NYMEX with it's running of that and that price these as holding capital, – and

No problem.

in Waha mentioned a that's dollar. with is we're the price you XXX the thinking assume earlier impact price still Okay. current flat. looking price online. Gulf your using is kind what does Coast Even about Express XXXX or prepared plans the I How so at I for that does you're had of because the then it? And guess your that gas your below remarks,

received actual we to those the bring Well, we because always, are that's quote price index our but marker, that wellhead. the NYMEX back that prices at

for you in accounting touch want our basis we're that? go-forward all only on So to those Mark, of differentials plans.

that's Yes, right, Mike.

different think XXXX around Friday. strip or price – XXX for its cases current is right it learn we XXX, Mike, So even I the flat forward last

curve a extent, areas using. flat close it differential. strip keep But the the from flat we price adjust market from on – fairly in those case the case, to it's based prices the a forward we're differentials fortunately to we realized NYMEX the price reduced to So local where of the

So all we differential. bake fully bake those in –

cash our for pricing So all incorporates fully flow the products. local

Yes, for right. and That's NGL. gas

Thank you.

Please go with Tuohy Campbell Jeffrey from is question next Brothers. The ahead.

morning potentially would becomes XXXX cash to operational more Since of quarter did make entire trailed second second of quarter. you in us was illustrated of if the level-loaded then meaningful Good generation. to you year? Slide year free prefer throughout on contained free the the XXXX a the half XXXX the congratulations And in half. you're off the timelines. going X I plan that and or generation as cash somewhere wondering follow XXXX activity

Well, I'll these there and eight rigs start Mark this were And business. love Ideally, the but certain structure platform, projects, level-loaded development if this wells a is off comment. bring and then is across with we let these when online. would just we running our to it

to generate in a smooth even make our have making operations account to is returns cadence. to these want outstanding invested online. single try We goal for to good the clear, field more to downside try But bringing returns just to and out I stress a are production primary those attempt field for sure tests that every on we capital, incurred cost that be

Yes, The good is not that development with of a and decisions behave these on this always primary and want touch we'd doesn’t driver. that? for smooth consequence world the timing to but be way Mark, to projects. even love a you production

Tom. Yes, absolutely,

pace And number is in into our drilling the cadence drilling is operational operational don't quarter Just that echo much what in wells on size completing varied or for brought of of are cadence we’re drilling and drilling different our by is on our wells, production we per a activities what our particular wells. in more I quarter of you're we're pads and the see consistent. focused saying be can completed laterals fact any development development. of that The

will that interest working vary even the any somewhat pad. we're that on on, productivity well this vary we the areas depending quarter. quarter again, drilling the net that completion is have on, The the areas that then of a can we well of we're in the and brought since bringing these And be size per timing bring

operational and wells than focused quarter our and again, what online more are lateral operations quarterly production more the - our be can We cadence the on erratic well brought of definitely cadence represent. drilled per feet look underlying

And on focused smooth could Yes. in other ours. laser that could opening it but costs, that make as We're remarks, done, said getting I it. you enough one costs, my of And water is I to be want a out on mobilization costs. pad focus comment. significant involve to need

so that broken record are other considerations lot a here. there – sound of a but like And we are

are returns to on that? by driven want Joe, capital. We on invested you comment

do. Yes, example I talking as cadence completion of that about. and Tom use an year I wanted to this were both this Mark

year projects you I'm If we net range gross projects on six wells had project average, per multi-well and were over talk the was wells gross and anywhere – were one every and going quarter. projects total two four only to basis for In multi-well wells those from QX, the seven of wells projects. had per about there we wells Permian. multi-well there look two the to four and back QX, in that In two for project the that five on a

XX in into five two as XX these of So And brought are projects on wells. we on projects QX, go QX on in XX six projects QX, brought these bringing wells, wells.

statements, the byproduct As that's I in my mentioned flat of our in production oil here really QX. opening

completion and we're cadence of some to semblance growth. have that production So our going always

are doing up color what annualized I thing points was fair and rather free on hung appreciate then to cash the thought is than sequential. it your end have and to I ask. up you on we really an question should think fair basis But getting I probably

of structure some a we sometimes call chips so and it really it's this, the We question. question. get topic. leave fair returns out a there. it was fair on cost on spreading morning convinced welcome I'll in we non-ideal better just this just that that is look fall a details out, was by this question. early a totally this that And program further, way. lower But I ironing the a at It’s And just I

Okay.

on Slide or just term As in-house view since XX, Cimarex’s very still them these illustrates wondering, gas you're the is gathering water cost XX longer and an system. systems advantaged on management you and Slide I mentioned, the to my could for have focused assets was follow-up structure. control references costs two cost it you keep guys sell

valuable a this of That's because in a us over is term is that continue a gathering when a tell of really We've we've but versus water gas work active We trade-off quarter I question the to something done subject monetization monetize options, increased and is very explore cash quick you system. last as on system a valuable it between hit the expenses. have to a very that pertinent calls, an and we very operating gathering have will investigation. this. discussed lot prior longer of certainly you

by multiples, surprised were today's decision. obvious even an I at not anything, it's If

real for them, the structure for now, perpetuity You operational and tremendous a Gathering provides that we've think realized both cash can us with in higher it asset around. sell cost which one lowest you're ours. cost that water gas going take got the structures pay is We system, flexibility. of costs. to of operating We

active So although, made me me say a assets. pay will choice. this these continue have an that not to every healthy we argument. commitment day. argument It's we we now conversations type have now, at pay I monetize later or that, to Cimarex. it's It's for But a on explore

Okay, quarter. great. the congratulations color. that I again, And on appreciate

Thank you.

go next question Noel from Palmer. is The Coker Please ahead. Parks with

of questions. there's piece the – do fluctuate that and gas Culberson whole industry had. about course, of sort while and you out around sort Good of the piece for equation? a the and of thinking that of for couple NGL. thinking, it the just about How morning. consider sensitive demand Thinking that Culberson economics products had of the economics there, processing I a also and uncertainty with to issues the County the also County part has Just takeaway NGL the

outlets that takeaway see system for don't we with takeaway. multiple Well, processing. of in We've got uncertainty

outlets and on very we group And marketing we've for gatherers, able tremendous processing. We've been job this, asset from because our have transporters. or standpoint control interruptions do multiple that when had but comment a had outlets. operations gathering redirect flow done Joe our let we adeptly occasional multiple with have processors that and I’ll a We to

returns and dominant dominant were Oil phase, but of component, County. County economics this current is stronger And, see pricing. environment, just revenue NGLs it's gas gas we and better just us. at pricing making kind of the even NGL Culberson to wish can we're upside make we we supremely revenue Culberson in if phase the see hostile I now, attractive of If, only recovery are of price going to get kind with the to pricing. any

of we premier of our economics low our counties demonstrate I operating deliver nature think question in those reservoir the system. one the because appreciated. is Culberson cost Not Culberson basin of and oil as low I that production, for cumulative because slide, County that at I economics but we of oil wide your – only mean, of a the County under operating costs are the appreciate

So we're pretty pleased with that asset.

Joe, that? on you to want comment

As processors far Crown gathering, we takeaway have far four an gas in hit the prior on is to large five question. system to right as offload or kind of the point as value into head A goes, a any which different Triple time. the can it at Tom as example leads the for infrastructure

of majority adequate the in gas not capacity near processing our the see gas to in the basins We Delaware term. but handle only

the concern, facilities we're sales who of have as pipe owners the basin. NGL production out linking to those our far As of takeaways

oil think residue of secured side, signed we've same the talked average committed takeaway presentation first All doing XXXX we’ve through side, of and XX% sales quarter, the you'll through XX% And the gas, or we've WhiteWater committed to I XXXX earnings gas on of committed our got get on see And to of the remainder a sold the gas On our the that side, be while we on basin. the that's pipe thing. can as purchasers to we're on over a to get us the we’re our about also the who which to secured gas out WAHA. oils to in is XXX% Whistler. we've purchasers.

we're, getting all base about and that that and thinking it's So out of product long-term basin. getting

seen was Woodford Great. or so? And curious few other Meramec the the over change you past environment question, in Thanks. my any just significant leasing in I have the months

This the much whole activity it's say that is Well lot as certainly fair acreage. within and I stack in yes, then think one's competition a incremental of John. not looking terms there's play to for less if

day. So slowed that thanks, yes, that in down pace definitely current

properties. One to in a of cash flow. change only their number own operator non-operated with because tasked cash their of within our their flow flow, cash discipline because sticking There within of participate of to I've observed so that that operators competitors many interest, are living a are living lot is looking find operators are to sell they're that they have the

we've in good at interest Delaware basin in pick years. additional opportunities and up some some seen in that of to haven't Anadarko in we costs quite frankly projects the had pretty So, the our

that aware an consent on things people Terrific. you're just there or issue? And just that you you going actively be might those to are clarify, approaching as see are people

just we're it It get are to they out runs Mainly make looking it's operating the the they gamut. that that wells of an aware we at offer. make if something

alluded at perspective. operators we stay the they through where as pooling. there Tom getting to within budget, It to, varies out get is from Sometimes is a are a that quite non-op it but who it poolings few

out interests. picking the additional of in well very gone we've some So

actively attuned this they function, statement players equity non-operated aside opportunity come interest is soliciting out how of if are and equity participate. markets equity up interesting Private pick private this and the to free will of want don't the woodwork has an As number a private subject. highly operators to on relationships of where this

our change that's We in So a few this. market But it's a this little years have seen there's ago. a business. for it's, developing wouldn't

Great. Thanks lot. a

The is Please Venker from Drew next Stanley. question with Morgan go ahead.

about NPV harsh Good important of is talked I have how backdrop of spacing as in your clearly you about at an and XXXX, price lot the kind it's NPV you cash spacing into downhole as current as and rates of about said, good talk free return that and a given talked understanding probably another But this aspect. you morning. versus maximizing of you point. especially commodity Tom, well play geometries anybody. optimization flow as might returns you've Can think

Well, it have see of trade-off We've we I And spacing day. natural rate every at this love discussions and we the question and every appreciate as these day. that we talked length We about value. interplay decision it a about talking present a between and live Drew. net because return

In and a spacing will this it we production. to discussion to operating bring where to fact, that group had we non-economic made money on spend a I our morning another one not on clear project

least I'll we purpose. on do it won't say At

And these projects really point an and over when should spacing down so important your you and where studying break stop is understanding is element.

we our So our seek having a having tightly coarsely and our we seek by of spaced this. confidence are the fits be wasteful reservoir all. both area wells one to And from I've And waste to that. reservoir. by wasteful approach It they I'll from to of say too too be not sides It not wells spaced. changes our to science team behind It's area. in understanding in a not in tremendous size changes just

I We're confident better. saying getting as mistakes. effort and we this leads I yet opening that perfect make are remarks, that and subject in John really my am in said continuously on we not

John? on this, comment You want to

of Well, Tom our our the a emphasize Reeves size all. follow to Wolfcamp spacing what up, acreage so spacing. in thoughts, to there's we're to variations Culberson Lea level a up a and proper within one see section good fits definitely on with the on We fill it we that even across dynamics but just to understanding as we And, able very many come as from not said, in adjust have there, it. basis would I

have So, very for to in we terms feel do I about currently development what it able and in XXXX, we'll good planned be appropriate spacing the projects of

XXXX for of follow-up then detail point range thinking $XX at a the Thanks if does $XX spacing? bias that XXXX to being XX end-up was generally you're that, this price we for of just end using wider point if out starting lower we're you as as at and if laid the comparison, towards to you're, spacing? conversely, you if tighter And a just

punitive the only We've price will change that at that going spacing that run file our see also but interest so us spacing I is net that $XX not not I oil at quoted we've commodity just to decisions. and it's making experience on models boundary or different be pricing not even price a that say can those over really within and $XX looked would the you revenue

Thanks Tom.

Betty Suisse. go Credit from is with Jiang next Please The ahead. question

have Good on morning. I cost. questions two

progress on There this just has by First XX% cost tremendous CapEx. cutting year-on-year. year been well the Permian a

X,XXX X,XXX Just are to to there foot to that per that flow outlook? even as understand cost levers wanting look out move reflected preliminary additional any XXXX. the of And to there in we lower free are being cash

completion contractors lines seen for the our we've the pushing on laying this We're recent drop how our looking and of is become that we into A some side. as efficiencies constantly result Hi, systems. a efficient. of hard at and optimize reductions lot to flow service wells more Betty, to Joe. has and cost midstream come midstream the the combine efforts can of more We're

that a As completion and strategy our to produce to drill battery of a fill our type an at more wells we're example, we could design looking apply battery so optimize costs. into potentially

strong by So be that company environment right to a and order hey his you, for are you it's X, really price me this is now in us reduce emphasis performer. hard to relevant top costs will for in that we tell a I but give can around it it

So our it's focus.

hand, to there's current being is better have into cost from we that far of use AFE even of further not for that. and assumptions XXXX forecasted Betty our current it kind practice there potential the as in typical on as kind make improvements structure to Yes, – though our

within lateral want costs. join our costs vary and We focus. That Cimarex me foot here. to Let the a cost basin. focus range is for think the a fairly good and geographic the over said on chorus We report operates fairly basin wide transparently significantly the across will our

averaging that number $X,XXX a basin in projects up. and some that drilling challenges and in in with we're more Culberson little that average some have County pressure the where all little are foot. have that a that projects And We you deep development more a below completion

mile shown and have one that projects some as average deck. have to to one our portfolio, also But our we're going longer in in discourage wells bringing forward laterals on although We certainly want outstanding longer don't I teams mile returns. our from

that going of a average to report to average, structure. but within so, And a continue lot there's know, transparent we're you

it. Got

LOE historically guys production expect is more similarly going other your Permian production oil that's LOE room And ease, been you Now, should that. then production Thank on a helpful the you growing the item costs for do that forward of the we per but upward on unit has bit in put year, as this to the LOEs mean I come basis? the out by Mid-Con? down evolve So there declining color. typically on oilier seeing cost, growth really for pressure think not gas to how case you on

This Joe is again.

This in reduction and LOE overall our on over I resolute the expense was quarter down even we live. were board coming saw to QX a result the tail assets, on nice of of LOE. up but side, with work that's our absolute a converting end we

a of wells to there's So live. lot

expenses work variables lot then So, over costs the of and the category as slide the that there's into that number they've well. day a operate got got you've to LOE because in to day wells that

the disposal. achieved now, remain going majority have the been are to going same salt is reductions on emphasis or focus the That's forward. bigger where is on and going Our our cost of to we water it's items we’re SWD be

of take them. We’re advantage going be to to able

to systems and That's for forward. the popping going to cost that going that it the And efficiencies can although infrastructure our time up, and comes fracs us SWD fracs. same incur wells head those that's play. be focus to the dispose optionality from up item charges kind that to been so and a that's where keeps where in provide and of The coming using our add water optimization at electrical of that not we're where having into sounds to small its have for swing like is a water use we're the that us, to allow

highlight some expense are Permian In to barrel our I'll Yes. on, barrel. spend. close County, that per we’re we’re lease this production cents expense per Betty, the per $X.XX, equivalent. $X reported total in only operating County just add $X.XX quarter barrel Culberson a kind about we of on barrel on In production

of blending we have a even growing Permian very Permian expect Anadarko, structure look still into a we rapidly. As XXXX the to the with cost competitive more

it. Got

Now this helpful. really is

The from ahead. Brian next question Please is Downey Citi go Group. with

for Thanks taking question. morning. the Good

versus And one that quick me. wanted correct. had just for tried you a believe e-frac an maybe that using uptime on size small any you of conventional or – curious have if continue to comments any a plans future available. stage when color cost-saving to provide could you recently Just was completion, confirm them efficiencies, sample I on that realized I any and

the it. Yes, we on wells trial all did finalized we associated finish and completion with two not costs one just have

we are may main to be to in distant cost or in the to me that into we ourselves not from any tried tell more learn electrical we’re utilize that with provider may for that for realm, Transition the the So to our We associated it that how in Triple fracs may that of we and want and better an we would savings you infrastructure emissions early efficiencies benefit because emission be working standpoint. we But particular – kind with in have with see service operation. the infrastructure future. also have not to able achieved see Crown cut we but to near tremendous only

Now.

you using I are plan going the infrastructure the be would the within forward? or you're that So field electric does what using mean the guess gas still field or

see case that from In fuel our the tried able cost off transmission at grid own using end to to we was power that and frac going frac. the believe being our economic lower lines we're a true the source that could the own substantially, forward, provide coming where, new is but do the what CMG, we this we where our seeing not really benefit

that's County County and equipment where a distribution at electrical power a probably have hard. Culberson and this source electrification own go it our in mobile. stationary that’s more than studying like Reeves plant makes used our will to field, systems that's the We're around own power just towing probably rather sense oil others many We have problem ultimately and

we we looking some We're long We lot have solutions that about like a it. study The to know they so and range simpler team things look it. hard, less a digging for us. it convinced into in want understanding direction we the long-term becomes more that we're and we to just more But hard as And more and learn complex. at that go we're a is this problem. work many

the color. That's helpful. everyone. I appreciate Thanks

ahead. is The Kumar go with Nitin next question Wells from Fargo. Please

Good morning for my question. and thank you taking

XX, seems quick happened one. acres. slight a looking latest about acreage us at Slide understand drop in County I was of to presentation Just on a help be there? Could what XX,XXX the you it Reeves your

our County map an Reeves XX. that don't actually few off the that exploration ago. far of acre on It's on We embarked at look that never have. any a map, upon we you locations if Yes. County was carry we acreage the currently, play south there's some the in years slide

And some We let of and expire make expire. it couldn't economic it to was we due there. wells just

You want to add to that, John?

payment. a We couldn't make

it your cost So to suffice Permian but Mid-Con get as program? why, how talked two clearly the in I say a meet far it the having optionality kind is the question you've past competing capital didn't the I of Tom, at the and today threshold. you're look the I favoring within guess for initial about it broader and guidance, basins,

our easily or put and that be could that in capital we heads next there opportunities year Well, compete the Mid-Con more of XX% up. would

it for comment the Midcontinent. the on term. longer hard that at John? are and John like beef-up today's in looking and That just accomplish zones asset we and want competitive said, past, let's to Do in areas what have and you new we'd asset We an team compete Midcontinent that, growth of his new in to work pull and landing a, a can in have we from environment. are are in the that see lot we've discussed as standpoint things back

is more The only add we're thing just depth it what is to I'd that is inventory. for looking

it. more to there's sustainability So

we positions are would just beyond we're So our across have. to and an that we call a bring in And maybe looking opportunities compete lot we're for maybe looking those then have acres someone advantage at things get opportunities where reasonable looking not earlier and now we that at there a and capital. a think putting furthermore, as of just effort that existing where because forth are for to said

So kind the base. with of Anadarko that's right now where at we're

Gentlemen. you. Thank

conference any Tom This Jorden would question-and-answer to to remarks. the over back closing I for concludes session. our turn like

Yes, and your forward great We've I participating. laid for had for you telephone everybody and our what patience updating thoughtful with out to with our questions executing a today on to We're thank progress probing. looking future on appreciate interruption. thank Also, I want of we've calls. you lot the

So thank you again.

concluded. The for conference Thank attending you is now presentation. today's

You may disconnect. now