Ring Energy (REI) 3 Nov 232023 Q3 Earnings call transcript

Good morning, and welcome to the Ring Energy Third Quarter 2023 Earnings Conference Call. [Operator Instructions] I will now turn the call over to Al Petrie, Investor Relations for Ring Energy.

Thank you, Operator, and good morning, everyone. We appreciate your interest in Ring Energy. We'll begin our call with comments from Paul McKinney, our Chairman of the Board and CEO, who will provide an overview of key matters for the third quarter and our outlook. call Financial Travis our Officer, the VP Ring's financial turn Chief and who then over Thomas, to Executive results. We'll will review we Dyes, for Baghdati, Operations; will the available the Strategy; for then return Marinos session some Executive of and comments Paul and are Engineering Q&A Alex Corporate with call today of call VP Steve joining questions.Also before up the us Executive Brooks, also Human presentation making Legal, call, on we Resources, VP closing the Land, note open of of would quarter corporate that will forward-looking posted Marketing.I earnings course VP meaning the on federal third a be Executive within the company conference have laws. and securities website.During statements of XXXX and this our that company guarantees projected Investors assurance give those differ forward-looking performance, and developments not the results those that materially forward-looking from were statements statements.Finally, future can are actual forward-looking proved of or correct. may statements no such the are in cautioned Energy future Ring as new or of or update result a statements, to information, any obligation forward-looking or revise whether otherwise. any events, disclaims intention you place should on reliance statements. Accordingly, undue forward-looking not These yesterday's and our press with described are in and the release SEC. risks filings other in our be the can found These documents Investors website, section in of www.ringenergy.com. or incorrect, to of certain financial should actual Should non-GAAP conference or one also prove more references includes these results assumptions materially.This underlying materialize, risks call may vary measures. directly the non-GAAP comparable is Reconciliations are on recorded. conference to a in most measure release.Finally, being of these as yesterday's this reminder, financial the measures contained GAAP earnings and the our CEO. call I over would to Chairman turn now McKinney, like to Paul

and setting the It from amazing their efforts interest and focused several closing up discussed and to events for financial significant outlook of prices despite unanticipated positive today, are the next. one XXXX in second our are Realized downtime considerably third industry squarely how joining of record-tying encouraged the conditions Thanks, Ring we Al, see Overall, welcome everyone we change quarter, quarter by thank the you our great the in and our for into improved mood oil us affecting the Acquisition results, for quarter sales. can today.As your we is Energy. third the on integration our successfully in progress Founders call, business. operations and making on another quarter on were reporting earnings quarter us

continue targeted development the we program. of addition, XXXX In our execution

And Founders down Next, diligent we our that finally, continued remain completed efficiencies timeline. the balance the efforts generate the free the Acquisition.Addressing on drive diligence was to closed first, on our and acquisition agreed of business. funding details debt quarter, throughout due to pay further in the to cost solid cashflow we for to of Founders our exclusive the we used the final Acquisition

with Founders We integrating and on to look assets on efforts the our proven excited by reminder, the In assets rock the in similar having afforded zones opportunities track, remain forward our the beginning performance. year.As next development remain operations. existing CBP addition, are about of plans last to into the the stacked early of high acquisition our pay year, these a we acreage assets acquired part quality

we working develop interest the As transaction.During XXX%.Additionally, the drilling Platform, Crane drilling program XXXX wells, horizontal we the we applying and unconventional third working development completed newest expertise continued and interest conventional wells wells with the a our working other done the in a intend and CBP, interest undeveloped XXX%. within successful to a of each to the our County X-mile technologies of interest vertical afforded our XX%, by XXX% one leverage with assets, of other a the of of X working locations our have in with horizontal Basin and successfully in drilled completion we with X Shelf, optimally Northwest X.X-mile all and inventory Central the extensive the X acreage with the quarter, of with

pricing million quarter, in was tied posted the the with from Lastly, generation, of These to the October, these wells higher also with XXXX months and brought we of year's interest oil substantial the quarter, drilled second was third equivalent quarter and sequential increase each cashflow in XX,XXX was third and adjusted in of we sales of working but barrels EBITDA began short adjusted wells expectations. of volumes it from over which completion of while for majority day, that including in so felt the the higher of the quarter completion $XX.X and EBITDA first a X benefit incurred quarter contributing process production the continued sold the horizontal X this quarter we were strong by we X-mile realized highlighted was record completed from XX% on than XXXX, fourth XX%. the per capital online and Shelf, Northwest drilling X in second will increase our quarter.Our all an products.During during third the wells

generating million by that the achieve I'm of of August increased straight adjusted spending XX,XXX quarter detail oil that we position $X.X gas, to the million.On a from or by $X.X spending of later.We million was incurred is positive to of million to battery. was basis, range our XX,XXX $XX at several day per downtime exit of was our more we we guidance the NGL accrual certain quarter and per interest in third report back EBITDA at volumes which cashflow. quarter adjusted of that a shut million day. quarter expected of third-party $XX.X at cashflow adjusted temporary Founders driven happy facilities years downtime our closing during from gas that This capital spent our events marked rate, natural gas was that $X.X and of our capital equivalent guidance battery affected natural will the the early quarter, compared by NGL sales.Additionally, oil of us levels the of million. August. fourth million generated second was consecutive guidance sales barrels XX,XXX free Driving evidenced natural tank our X excess and which cash oil, discuss our sales third XXth $XX.X up of associated equivalent in production free places increased an in barrels unanticipated solid sales offset due $XXX,XXX which as higher XXth to $XX X fire higher decrease during While the of to projects materially to level benefited weeks to the in and quarter, processing we end high on well in planned, activity Acquisition expense provided of as

asset for million the another while position our debt continued our paydown The positive $XX improving to liquidity, wells over production good set during up in the rest full and higher for total online for we drilled quarter, benefiting the September increased generate our credit X program our continues to X increasing the non-core guidance to program to commitment assets $X.X was and borrowed $XX the emphasizes to the at to net our the in between targeting us spending million end net wells asset the $XX help $XXX Acquisition, drill to sale to million.Consistent asset and buyer associated quarter to On X million were turning to from the capital wells X We We we the wells Platform for horizontal period. from horizontal pricing sale, X sale XXth Central wells place placed and XXth $XX spending outstanding Travis, the million our Basin to our long-term third on New X position Mexico cash I'd than these Texas debt. with the proceeds quarter quarter, for complete a the is with coming sheet, wells wells.As ensure the production for were of outlay the of pay anticipate third completed operating complete that Delaware that to million vertical Founders to $XX net with a from further due Mexico now point, assets pleased sale of Basin environment we and our the up stepped of fourth Northwest building to new that focus in and of quarter. operated borrowings start quarter previously to This company year.We X of updated discuss deliver of core the initial fund year. only the and online X mentioned our our early New year and better a like second wells and in outlook consistent Acquisition.We During vertical for example we proceeds New developing quarter X the our significant of second the fourth full balance the total brings Basin quarter for in our and facility sale Founders non-core $XXX our are of and to stockholders.Also reminder, products September to a and completion the online this Delaware use clear on Shelf activity. our the the guidance Mexico our from X for returns difference million spending total closed reflects a and on success.Before private drilling million. capital down the

capital focused X well drilling to capital will combination have online flexibility between and and is capital in prices $XX infrastructure Our wells changes to that XX is horizontal fourth development oil program X placing barrel.As and A the drilling we quarter leasing targeted upgrades, respond workovers. in $XX past, efficient funds X wells, capital prices other range underpins costs, conditions. our on completion spending X non-operated with capital that includes X program to wells.Additionally, for our market spending primary our spending the balanced and commodity as program per designed assumption WTI completing and and vertical a to and to of plans workovers, as

We capital of We to and from the fourth continue be volumes additional barrels of volumes sale up fourth XX,XXX New to expected asset XX% XX,XXX the per to sales volumes reduced anticipate expect Mexico oil. from stepped of sales equivalent program. spending quarter the quarter day, despite oil

rate Additionally, outlook.So oil in over that, with Travis. more quarter our third production detail. over our XX,XXX in call our the turn to will increases to results our day discuss exit I equivalent confidence of financial barrels of fourth quarter per Travis

less Paul. Thanks, we record-tying there great morning, a was with than Technically, a had EBITDA. And variance. Overall, quarter good everyone. $X,XXX

paper to was make our a reminder penny every clips save great So and count. it

Our price from was the up $X realized quarter. second oil

and was projects getting to CapEx last workovers capital production So resume course, the catch our up LOE of that higher were This LOE third work deferred quarter a the the the back of that online in scheduling contributed tricky. gave us bit license to quarter. XXXX.Of and spend

So issues along the higher let's price pleased that bit forecast. But environment, Paul takeaway volumes we lower we deferred a online into with that EBITDA on with and the volumes a compared were knowledge with very these at dive to numbers. the the the record the results.So were fire and gas mentioned, back are

$X.XX $XX.XX million oil, per third was XX,XXX $XX.XX gas, the of day. negative Argus quarter, gas, XX% crude crude, pricing the X.X $XX.XX approximately per per natural due quarter $X.XX third pricing $X.XX or without from futures Boe $X.XX third $X.XX barrel barrel This a XXXX $XX.XX sold compared average mostly that per of NYMEX a NGLs X.X differential on and per WTI, total we or and average of the improvement versus for barrel million per the $X.XX Mcf of quarter per was NYMEX pricing oil for negative for XXX,XXX a natural per of from gas per for differential X.X per During the quarter. a barrels barrel Bcf to of CMA barrels that Realized Mcf price than natural the quarter, BOE second for barrel second calculator. increased a average higher quarter Boe. WTI of NGLs, futures negative WTS the Boe.Our roll almost Mcf was $X.XX $X per This price per barrel was negative was those increased from second second Argus the a quarter.Our to

and quarter. $XX.X second quarter.LOE realized the the closing quarter. quarter third increased quarter LOE second transaction increase WTI for of per to second slightly quarter.Keep per non-core well $XX.XX mind, quarter $XX.X Partially the volumes of third lower versus second result LOE of the million Our sale the was quarter third higher XX% third higher New quarterly $XX.X assets On quarter of was due quarter. in the XX% for the an third for unanticipated of third above Boe for sequential related increase XXXX Basin the deferred averaged due increase date the was on projects quarter the given disposition including a during million, the XXXX primarily quarter, the for was in to per $XX temporary Boe price combined XXth. activity, for discussed.Contributing our million operated Boe and downtime from guidance our second versus the minimal the of to absolute LOE workover of second Boe which a September the second count expense for absolute assets $XX.XX in from the million LOE Delaware overall LOE $XX Founders basis, for was Mexico the NGL per a compared impact or sequential non-core the The $XX.XX Acquisition to had quarter. up sales to in the previously to offsetting XX% revenue the from was

of $X As million per per with months Basin during the properties. higher rate the our tax second both a Boe such, $XX per profile was quarter.As full forward at were the Mexico Delaware which $X.XX excludes to remaining the to steady for quarter. DD&A taxes Boe.SG&A, On $X.X from approximately or per listing share-based from Boe increased assets cost Boe for DD&A per $XX.X was a fourth quarter million $XX.XX X million look and had $X.XX X%. Boe we cost reminder, or per seeing compared a $X.XX basis, compensation, for the second quarter Production second a Boe of than New the versus $X.XX core million versus sequentially XXXX. reduction $XX.XX

interest per in an good oil per the month prices to Excluding about includes quarter $XX.X gain with higher note which $X.XX million transaction-related second $X.XX $X.XX compared for the We was versus due to interest I Boe XXth, for expense on in quarter tax income for to third our is third the third per increase $XX.X XXXX, amortization.Due $X.X contracts million second a Boe XX% $XXX,XXX costs, year-over-year.Interest the versus for a thing, second in benefit million rate million the non-cash Boe SG&A recorded substantially of would day since the quarter $X.X quarter. June sharp period. X that $XX.X the an quarter increase million and the also second and loss per the quarter a a was decrease is expense of in XXXX. in $X.X versus derivative quarter benefit million of of additional

the the of tax As million allowance third loss a a period.During $X.X quarter, of release per net we our valuation $X.XX was reminder, level in driver quarter share. second the of a the diluted reported significant or the benefit during

$X.XX was in compared net investment of metrics, pay of XXXX. Delaware XX% Mexico initiatives per and XXXX net of income We EBITDA further debt. flows after-tax estimated growing Paul share-based cash program per reduction impact used assets that the XXXX share.Turning flow This business.As discussed, or non-cash we including is a $XX.X the of million million second $XXX,XXX operating diluted for of in non-core costs.Our $X.X grow and further income million adjusted recent our adjusted sale per the our quarter operated forward income Paul net compensation with look to second our continue discussed, the unrealized hedges, our million $XX.X New disposition from million we for items, $XX.X second or to execute losses $X.XX to to of to was another generated transaction $X.X and Excluding our as approximate adjusted increase proceeds to pre-tax diluted inconsistent level third XXXX an assets quarterly on net quarter as we million cash quarter XXXX received $X.XX of quarter or record and for down development share. the share, expense, of $XX approximately diluted

XXth, Founders of net we as we note of $XXX a debt result, a $XXX.X $XXX million drawn $XX.X of of letters that the of have recognize million, debt of on net remaining X.XXx.Essentially, was available current neutral result due on we had Acquisition payment month $XX like million the September the company. borrowing we This would transaction, focused is our increased the excluding the third closing million, to Founders ratio the position and quarter for With paydown next deferred on liquidity key leverage While the increase Founders a of due the of we credit by a cash, to the had ratio payment. evidenced quarter was million all million.As Acquisition, deferred excluding with were I the our base reduction $XXX.X priority credit. our million, borrowings facility. for estimated Combined of X.XXx. for of the a with for leverage our leverage $XX

down discussed Acquisition balance to debt better quickly we sheet term, previously, debt the the believe more in while near we As over positioned added we long our Founders are to the pay term.

midpoint capital the of for to prices, pay commodity of our and impact of spending, level sales or estimated of guidance. barrels other XX% quarter realized fourth hedged, our oil the and debt approximately currently the cadence XXX,XXX quarterly hedge the course, down.Moving based have approximately position, of we considerations timing Of on of XXXX, oil

of gas sales based on of hedged, We million cubic also the or feet our have natural midpoint. XX% gas estimated natural XXX

which positions, Paul? of release average presentations, I that, with to price the earnings his turn for please will our type.So, a include our For back for comments. hedge Paul each see and quarterly contract closing breakout it

the Thank accelerate year strategic including increase metrics.In to believe the you, have acquisitions the the sheet the and per placed locations over return our of With inventory of key further of successful our to transactions, focused from stronger production, past Founders our highly heights, are pay operating spending collective efforts the drilling the They to of allocation low-risk, -- is share transactions other costs, flow high-rate fourth with flow, accretive maximizing assets adjusted XXXX of position to debt. take we capital strengthen ability and the X also reserves, and integration these company the ongoing program.Complementing Travis. given squarely pay We addition, XXXX, goal improved on in balance debt. new to the the completion on focus a cash growth flexibility. the primary quarter attributes capital accretive us respect and our free our Acquisition our our reducing free efficient down down cash generation and of our

our projects. free stockholders.Speaking our We our long-term believe high-rate with peers. to stock remain spending value down We when and capital improving will excess disciplined return drive for lagging performance cash our will of targeting for re-completion by disappointed to prioritizing compared we price on stockholders, our debt pay flow are drilling value

that stock and price yet We oftentimes peer-leading are delivering our competitive performance. not has returns, reflected

course as our industry our success have investigate what the believe our urgency, benefits for should with will acquisitions, well-positioned to to associated in said control.Wrapping staying competitive the better believe continuing pricing strategy our from of and XXXX the production resolve, potential are to our consistently spending with sense address past, fourth our causes potential and manage to program. and are to within value-focused believe I and in and those and stockholders.We causes, company we quarter the continued We proven up, the sustainable returns commitment the and uncertainties recent the capital be we generate of our the our prepares continued environment, our with risks we we

we a Operator? for this turn call questions. believe strong for will We that, also year the over be shareholders.With to will XXXX operator

first our here from with And Instructions] [Operator Grampp Jeff come question Global. will Alliance

exposure estimate quarter, do too the maybe for impacted by the at in plants you out kind have what curtailment On being you versus that the and events any the it if production that was processing fire? the the guys of greedy on of risk downtime could ballpark break

I do. and but it gas the percentage, events ahead the details over than the go But remember I'll these facilities. don't were then associated substantial. was And of the with was begin downtime little knows -- turn a over far but XX% pretty then it I'll He processing to and this, It really Yes, itself, Marinos. compression better I fire

XX%.

Yes, don't ahead specifically? address was a Why XX%. and go this it you little more so

total on from the XXX XXX estimated was overall the sales. Yes, But about our volume they're of not a are that again, based day, volumes. They're because about, these production was prior. numbers Boes about

the That's XXX correct? day quarter, Boe a is for

For the the quarter, Paul. you, for Equivalent Thank quarter. yes.

we XX tuned to it up about days, yes. So by

call, for a the then and So mention basically weather-related. about had And We the XXX battery the XXX of plant. was was for then in fire, we that breakdown. that of that's gas couple the of to XXX but didn't other

think my QX kind guys commentary, I of that I edit that guys just about to the number or or but that yet, not trying that's maintenance a fair out relative you for guys guide front-run good guys ultimately CapEx numbers, a here, to follow-up, haven't is looking that at might you're maintenance put to provided, guide, guess ahead? things a so kind to run-rate range And that 'XX it trying for think you you of you how CapEx looking QX just certainly know number

Yes.

And a question. so good that's

currently are trying capital merits those for and spending various spending and levels. capital with the We understand to XXXX evaluating different consequences associated levels different

and said debt. I've reducing record, squarely on reiterate focused sound but of I I me like oftentimes, couple broken that are Let we a know a things our

why times, the the close spending forecasting higher necessary for we're we spending for levels.But fourth a and and little at function levels capital but to rate on what our production maintenance, is the might make up spending -- capital and reason as the product stepped of pretty these think up we our of that's of so recent so prices are that part because true be looking to debt in reason try we why I fell to, short that our I what quarter capital direct And our little and less that true a for capital fourth paydown close that's than is, But quarter spending is are our that. we guidance but yes, levels, than the maintenance know levels just think a capital are capital that, to that. spending probably so it's

And Paul, if I becoming may are emissions, not in tied that say one and more thing includes tied too, maintenance the ESG-related of XX facility us some to things better necessarily million of cetera. to et to XX terms upgrades million operator but a in terms

future our the I our organizations, they're in going focused coming up to we the Yes. When very other not way. for as look industry. disclose with will reports, not with company, emissions that than public like people a responsibility we on note, doing. company, can there, we projects more the that company placing so that a I'm capital meeting, believe our things we're our more the we're don't kind getting traded what ESG, capital on of our believe that preventing on emissions, of seriously are doing with that afford this in regard out primarily these to a believe others the on a just as go EPA we're and recognize opportunity take step but that. ahead to probably an size really benefits regard.And spills.We're and publicly just spending many We only unseen, sustainability that And our that we at associated as expand also just and company to industry as oil are bit spending this take on little requirements because associated but pressure

Agreed. the Thanks And insight, time. appreciate the guys. for Yes.

Neal here Truist. with will Our come question next from Dingmann

sort a see deals I what have the recent I now now D&C I'm given rolled and for continue operations, the Paul, a was about, of would talk you combining see job great talk we just in, side, call from with just Founders you, And more or with efficiencies tucked of might done question then to really, in, you wondering as could of how you wondering could now efficiencies a just Founders wetting about combination? the guys result. incremental

going to think might actually, well, about address over Yes, the it Founders in then Marinos. Acquisition. as to very excited then Alex The but very and good. Again, chime we're initially, want I'll thing getting to I'm And very turn it believe disposal. we are there we when in handling handle acquisition that with that first improvements recognized that a costs on water significant I associated that operating better made reducing are we

very launch be our equal our there. drilling on of in economics that are some we way And those are best have costs, very to so of we we're handled Founders We time a associated them competitive. quite progress the of regard, excited campaigns change the operating have believe are and prepared bit the of been inventory. acquired Matter reduce will that the that fact, making. is drilling the of And our in the spending assets.We we've water about investments we since out once finish we some the to those investments,

And so we you'll once handle see get a money operations. to share, be there that we spending Any on will Marinos? more want the you

the about of what of the pretty the first XXXX. frac One all procuring that and paid last companies, for we a casing we'll we actually quarter need drilling time the No, general, half same reduction Neal, the and specifically first it's costs last completion procured quarter, think casing casing price quarter year, the we for our in and We've completion costs. have Paul. the seen in in good costs, thing, on

I that just the we're throughout benefits Founders So about and excited are those see the going not entire think that. we're assets, company, that to

moving of a because that from we're So seeing into right earlier maintenance cost the the that's that answering on benefits the kind now. on number question too, goes of

Yes. more one And, Neal, let me add is Alex. thing. This

So, bring pumps. some just fruit asset lowering we found in, some low-hanging again, we as this by

XXXX. part the of on the continue into doing So We'll going we've asset. arrested decline that,

the for a some start just the and blocking shows other Paul and optimize thing, basis you of as if we one is relative what that's thing the reference it the was bring talking capital as year, on infrastructure also XX, in So about. Slide deploying we that type you investment tackling asset.The the next

versus really see oil, in lot how over brings of oil CBP verticals well. oil a our like higher some so investments content, per can more investments XX% other You on meaning Founders

So you see that should in to able be XXXX.

I've operations guys. Great question Travis, to and remain free Paul, stable forward. a could we nicely. cash quite ramp then, like you just flow continue for looks your And as going to got, efficient maybe continue be as details, on looks it or if prices think, like

You have debt debt's remarks, Maybe shareholder about how always return. deals accretive mentioned I a so priority. more versus just prepared maybe think about versus in talk you know

Yes, is their shareholders e-mails classic question good. the And all this. very send get I opinions with all get and the that time. we this that us

friend. And so, debt yes, our not just in general, is

is interest than higher considerably Our expense. expense our G&A

to debt. during any interest their so, And we're times experiencing, of it behooves company rates like high reduce

kind, through balance has on respect the we we're why reason more focused it.So, to but to debt, on taking now willing acquisition of to be be would an sheet with still improving. some that's more it debt So, on take

the accretive the of ratio to these versus properties words, other them manner. improve going buy have we debt debt. up collateral pursue has that in the we're to backing And in So, if an to

that the but ratio leverage will by am more there to is Travis, and we if pursue want actually occur balance regard. I sheet doing to were strengthen on so the reduce take in say? something or it more yes, so, you willing to And debt,

debt. a return evaluating sort it's our up, spent? constantly Is capital far, guys looking we're really Where's opportunities we're come And Is cost those just consider paying for of it on into often step at: share anything's question giving dollar right always it not the shareholder on the are further, are we the And too best a or buybacks coming? on No, would and Is table. getting it the well. at dividends? look and I that thinking debt? looking for you things still But when buybacks? share those as just now, things think And does the taking look, and it but down of focus any are dividends at

take we Yes, If do a today, debt. would little a bit stock away from buyback paying more. just that to proceeds were down

And additional to back. forget, barrels get So, you real don't adding production. debt stock essentially, you're of buy don't

you if production use you credibly those to down. cash or proceeds that funds and assets, buy So, flow to get pay help the

about focus metrics would you accretive that our be but that on to of acquisitions, many So now has totally the on as clearly all acquisitions up result as been can. we're

future those we've from the ratio, the successful strengthen You to ability that. to has do down flow cash being accelerate time, debt.And pay assets same leverage your able been our but at in to

shareholder. and health for over and profitability you on our grow debt energy of believe that's increased we is to from you're going on these per out going continue. the way to it's company down As of and course, remaining only has overall company, the your your pay prices. also the metrics But focused dependent time, see, ever debt-adjusted And, share to ability dig way the

Paul, Travis I think Yes. that. nailed and you

be and going think to it's of cost great. I it's capital,

in have of to with. going to cash amount free decide to a ramp do You're what

So, guys. thanks,

next Our Instructions] come from Noel [Operator Tuohy. Parks with question will

inventory with where wild of side been to recently. sort these have return the instead the macro uncertainty, there having might Or a far your the also we we horizontals? stages next to some keep it So, real entering down and of and I be as of capital that shift has into be make to pretty think increased thinking, seem going say, easier year, prices judicious pullback generally to added are reactivity. some did of differential in is different proactive just where the getting vertical get company I'm with difference? activity is one inventory enough just vertical we cycles as have horizontal cards now, geopolitical we new just also just really a And if, there not

you did months, look our capital program. this our in last XX we prices when curtail Yes. I see in were year can mean, that of if exiting back history last some year, and the actually lower earlier spending you

plans As oil mindset $XX between I earlier $XX. alluded to are remain prices will with and the our that budget

as the spending and $XX, requirements. you tighten approach up fall you will If we capital $XX, below even

We will returns. those the only focus that absolute best on have

mix. a Founders, now wells.Typically returning our do with But some have the our that. in with investments wells do wells past, horizontal Northwest were we those in And with best the the We vertical vertical so horizontal have that Shelf. wells, the compete especially those of some compete will handsomely

focus assured, environment. price a low rest so And will in we

strategy investments. on maximizing will be We debt a from flow cash going well of leverage to until continue aspects X, on because our to ratio forward free we is those below our focus will going highest focused those be we're the generation active, down return to but

So that's I to go. question, your just the answer Noel? Did way

year-over-year have far one certainly in Absolutely. was more or have And either just in in thinking service everyone's Absolutely. say with as fairly sort days? we stable and these you higher about, level of sounds trending I is that the activity environment is your my or one the system region if a would prices. that again, other other changes lower with materials. Do just other cost it's the now, you services the direction sense as volatility And operators, encouraging or of right

similar talked on of shareholder. quite all Everyone a real think mindset I I CEOs, returns to the are is spend. us capital of right And focused in disciplined We're few to very very now. our a

another of be And on on we're spending can't of or real capital focused depend of different perhaps of with So this And shareholders. go dividends and wild of their fell your They're on real good increase of returns the reason the services rates that'll That's is what a completing wells.It's the many back either anything capital a And though and you to Europe, that gas on pullback we're I'm for at which why if focusing return to and CEO everybody disciplined. prices I delivering steel, end the environment.So disciplined or discipline. reason of you. a in for rate than of part also it some is scale, some you're spending. through we historically reduced go wasn't on in here the because a capital rig we not natural debt demand the opportunities for everybody's and don't steel seeing everybody energy higher the prices, their steel the return costs even seeing something.But buyback kind telling know our lot focused tell availability the And highest why our they you they're which on have. focused stock drilling manufacturers to in that through size making the of would is of and our allowed areas. kind other the

in that the think I that pullback the pullback primary cause yes, so, is now for or and with wells. of drilling we've associated costs the the discipline slight the seen And completing some our

Paul our to like any I'd over this conference closing for session. And concludes remarks. turn question-and-answer the back to McKinney

support weekend. a your our to and Joe. you, look on keeping Directors, and and call. everyone for again management the of in of of appraised in participating progress. day of interest great we to Board have your thank great the want a Ring have the forward continued Thank team you company, for Thank today's We and And behalf and everyone listening I appreciate

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

lines. your disconnect now may You