Diamondback Energy (FANG) 8 Nov 222022 Q3 Earnings call transcript

Hello, and thank you for standing by. Welcome to the Diamondback Energy Third Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there’ll be a question-and-answer session. [Operator Instructions] It is now my pleasure to introduce Vice President of Investor Relations, Adam Lawlis.

Andrew. you, Thank welcome Call. and Energy Quarter Third Good to Conference XXXX morning, Diamondback

During an Diamondback will which we and Kaes our today, call and President reference Stice, and found CFO; Diamondback's Van't Hof, Travis Wesson, can on updated website. are Representing COO. today Danny Chairman CEO; be presentation, investor

you those indicated company's are from performance the of forward-looking operations, results these call, conference certain of and this to condition, Information due materially We may filings be factors make statements results differ could company's forward-looking objectives, that factors. financial future that statements in During variety participants relating businesses. the the caution to actual the found a SEC. in with concerning can these plans,

certain appropriate earnings with Stice. In to measures. non-GAAP I'll addition, yesterday we GAAP over can our in The turn the will release found issued now Travis be afternoon. to reference call measures reconciliations the make

not And I Americans, one our Diamondback's done on Adam. elect greatest you, take to advantage off before of we you've prepared of with time encourage my to freedom take you as busy have to Thank of so. privileges today we want execution. this Please our to please start call. morning, our if vote, Welcome the schedules to A earnings third go ourselves quarter your Diamondback, our representatives. we remarks already each pride

the and Permian Our commitment continue has in the position the Basin success operator being through us cycle. to cost lowest to will for

operating generated barrels approximately exception. cash quarter, in XXX,XXX produced day the we and In oil The was billion of flow. no third quarter over $X.X per

flow nearly billion. to our free within Our CapEx $X.X again was guidance of cash range, once leading

contiguous has then, we acquisition, net year-end providing large, Basin. locations, room position XXX of development acquisition projected of the towards where continuous totaling of in feel the a a opportunistic $XXX assets our announced, to XX% of capital this from is at $XXX cash flow down financial return nearly and least increased million, up at a improvement was an ensuring per the dividends of buyback jump-starting approximately free we repurchase of that XX% share went announced our over used program. shares flow debt. million previously. $XXX return would of capital approximately a non-core proceeds sale balance a closed share. of or with we've least assets our acquisition conjunction over The back our with drilling repurchasing million decade Basin, at runway of of accretive long metrics bought opportunities. inventory outstanding on the previously sheet. and total primarily $XXX to to billion $X X would while Since At non-core $X.XX nearly beginning We per sell announced With we nearly commitment at to back of company assets date, shareholders, high-quality the pending with return our remaining we share. least all FireBird we by our phase. price spent In As of quarter, X% expect investment-grade of have last XXXX, shares the that To the when we Delaware million at million stated program with our cash pay $XXX Midland XX%, share our our we on $XXX authorization, program, a in $X.X since we and well immediately we relevant FireBird right In we million year and September October, Energy, billion balance run average one-rig initiated

shareholders. Rattler with know best machine In portfolio, divestitures, United continue We place. our know States for our in certain assets strategic low-cost inventory in pursue unrealized within closing, including sale of our we some We have our we the operational the of to the business. value will generating

We to come. co-developing optimize seeing targets. learned over XXXX, have primary began through our development a the well unique our result, in and In ability XX months. decades we've bit the and for significant Since then, we past repeatable improvement to as spacing, how the generate returns to material patterns are drill productivity

great concerns In wells levels, XXXX back primarily down in fact, our one-off our our at of while well economics performance -- the targeting line. significant which components potential and the inventory, we to to material this having were parent-child year performance when and zones, withstand is leading

well are positioned Fortunately, future. for the we

on the slow rigs end We at the close expect transaction the development that pace asset on to one. and FireBird to three of November from

our with performing have secured well. equipment from to Halliburton, the including working the and and the and cost-effective most for we we've next that e-fleet efficient providers service year, of two are We in place in ensure simul-frac the already field which is personnel crews first

move momentum XXXX same come deliver expect expect we this of operational you've into provide the we results will Diamondback. All to to operational as from

XXXX the this meaningful of pro growth but and we and we be oil deliver able we'll to year by the standalone next to maintaining activity forma scale FireBird uniquely to be giving shareholders. one rig. detailed quality believe for production create generate us that today, While not levels in guidance won't our our our additional the It's for easy inventory position plus current results environment, value low differentiated operate size, single-digit

my company, around me you women a that deserve are privilege almost today. remains $XX up to please of It At excellence, yourself, The do. that success. you. open all we've It's me growing individual years phone. dedication is credit be of billion your this people the all Before for XX the address I that for employees much questions, million want for our to get represent too best you Diamondback just from to very Operator, line men your a celebrated to credit. Thank $XXX cap version our sometimes the you, and morning the your for It's and pursuit open the desire Diamondback, the on market that questions. responsible the I integrity success. to as Diamondback of public for

question Certainly. And our Truist. [Operator first the Dingmann comes Neal with from line Instructions] of

Thanks. to the specifically, Travis I'm discuss and when all still are there this you of a there wondering, at when think It that I part my is leading. advantage on assets Slide went you've take could just you question team. Good think, in included developmental that, the are X, I'm did. me of second And others perm, just continue I still to first that of Travis, you are your you you you before have on lot co-development, an of all have develop, mentioned, is strategy, much if sort wondering the looking morning believe just going to do really, will you the that all to or process it's parts pretty you peers. I'm margins FireBird, over and all over seems gone you

if So some that you at are when I'm pack. wondering, as things are of looking doing you're still the that sort leading there just think Slide X

This Kaes. question. good Neal, Yeah, is

co-development. we XXXX, when earnings generally, had of call made to the end I shift we this tough think at a obviously

talk done we of And capital learned as just really think moving Midland our Basin. the from to teams a as more think good very, generally, I that job very have I well quickly the each overall but intra-zonal And is result here years. spacing the within given to spacing these each last only that zone, other. not over the couple assets on the of zones better

So nothing going to there. is change

we larger some some we'll pads, and area is I going have fact, end in up have even of think in that doing virgin the right sale in in a way we're rock And Robertson ways, kicking to off prior that given keep real of co-developing. we now. Ranch amount

on question, to cost, biggest other advantage and cultural from well costs other the have – We're bottom. a costs generally focused this the we a very the inflationary on are company very on down thing that's top at think I focused keeping – as on environment. in Diamondback, certainly

advantage, position. cheap, zones make can a bring that and I And right? B There's co-develop going development. I if north returns structure low upside, at testament FireBird, for that, sense opportunities central FireBird we to looking compete in them lot we the like Wolfcamp the at particularly stuff Lower us an that that think cost up of we're in the to Spraberry a capital. into drill the the for think gives

to a off do else? the then And you the more all you or it that capital obviously, or you any buybacks scenario move. question, I Yeah, payout second about XX% something nice the encouraging. growth well, versus to on turn turn is? back stock Then that's all maybe allocation, mean, my you Travis, return I'd call for do it it topic and capital shareholder really see Kaes, I where sounds guess, your and on and How feel allocation. you had would

when every volatility we'll we've in we've opportunity opportunity buy quarter, had back. that Look, the the And aggressively. presents to do that so seen itself, market the shares

think flow in we the any prefer those But flow. lot flexibility the cash to of guys with cash shares And to how that key gets long-only ability return get that's generate back. back. I free to of those the that our the repurchase then prosecuted. cash conversations believe questions I opportunities maintaining to is, we'll again, certainly will free is have that say our on focus and what A of the shareholders.

flow that. significantly able ever non-core be it's is asset our giving certainly cash free to company cash a the back feel to debt history. to the to to change position in And free equity generation sales a than our it debt no to restrictive through do in or then and our amount has sheet is And Yeah. going balance probably cash be structure reduce been while we holders, XX% better that of we're of flow, still

it's back that, company our after company feel this we cash equity company. high-growth matured generally, for their a to from to So a high-returning get has time holders

agree. would Yeah, I

for guys. Your total itself. speaks return certainly shareholder Thanks,

Thanks, Neal.

Neil with you. from comes the Goldman Thank question next Sachs. our line of Mehta And

years team, pass Good XX that morning, Yeah. congrats very on by and fast.

well year? activity? first levels early moving spending parts So, is my the from here, any here And about next talk XXXX we capital from bridge your XXXX on all as question thoughts inflation ranging and done to

question, Good Neil. Yes.

capital have of out think that billion would way perspective. $X.X we are to the on if we're from that next make well towel is number an costs up our kind going XX% I pre going not that to XX% spend coming gone efficiency assume do ways. on up going the that we're in to we two I things I'll Diamondback probably some well year, while it had on year, lay to today this But Based FireBird. keep decision ready ahead to costs. throw from

And sense. is to I rate on XX% run in somewhere another current scenarios, million think think $XXX off $XXX of deal a of at for that well Diamondback basically way makes below FireBird, million of costs. pre-FireBird CapEx about it say, that is we then in I capital, today would both the adding increase ran

costs the So put those that we that flow well cash that are free capital numbers deal. through current in running for

So that's thinking we're about it. how

are us cost that and I been $XXX there our that can't we think way. really of control Casing for some foot, is here. Basin, the that a for huge certainly, -- a casing on could now has headwind number is Midland things fixed massive a go industry. a

Okay. look point. US is that's a for growth. outlook you starting your Travis, clarity, And a a little then And for but just question we'll on helpful shale for more then

the I last flat the production profile have how by several participants think industry of over looked been has number US months. surprised here a

your on that is a shale lack also asset thoughts maturity? is expectations bottlenecks, of we're function of And it curious maturity? of or so relative growth service to function seeing a on the And

Neal, of in unpack the that question, to above. lot all but it's I really A think

maturation. is there asset think I

supply are think I certainly, chain growth. limiting also constraints

companies, think demonstrating that growth. a we've commitment the for versus I shareholder public continued been all discipline returns to on

challenged of from growth close X.X the all try into day. still think very to Yes, trailing allocating barrels to a every to assets in efficient to said, those grow, here? Do that we of But constraints that's weigh US to shale That efficiency. we're going see a topical people forward. we'll million month, do. have growth the think of those going I they're mentioned I continue of but grow are more probably hit Permian, to X.X somewhere prices I continuing other at But into be they're out production to to out here factors million records some that muted into going higher future. to capital if be we the commodity assume some production impediments

headwinds So shareholders. those well also create as for

guys. Thanks,

Arun Thank you. question And the with from JPMorgan. our line next comes of Jayaram

little a Travis, which about your bit was or could co-development you you gentlemen. if in I morning, Kaes wondering Good the talk shifted evolution strategy, XXXX. of

to your also compare most levels. to and if pad well completing how in has you now believe Diamondback's you of number could per relative of contrast how development the XXXX your productivity maybe wondered I how returned highlighted see you because you're looks many highlighted to Midland You maybe like Basin? peers, the zones

what Yeah, do on from do do analysis not Arun, I'll certainly Diamondback to and more a what a lot competitor lot We on to basin. what learn competitors and is focus doing. of in the our

the a but finding and have well completing So generally, of analytics tells way. certainly has well to more close zone spacing two years. per And reserve to here pad and how and maybe I and bring good bore may fairly we looks stayed expect wells for not together continue trend we're tighter, We our inter-lateral and IRR is. oil higher foot, co-developing a per zone. last spacing the per have striking some commodity a and the ways, zones that into highest per little generally, prices our that head here one wells couple between are NPV. team data at as consistent the spacing, or that wells equation economic a balance as But how many even and us zones these nearest more math In

particularly for gone So And the the Basin and very done, up of we've credit poorly at for what's side. a what accordingly. few solid think Midland to development, gone in we're team set looking years what's now I adjusting well,

Great, maybe quick my great. And just then follow-up.

Martin sense develop As have we you and Guidon how early the started of the type a to should bought couple basis of next Martin now from Central have in years? the go-forward of a assets County, can some in on guys give of trending? mix you wells And QEP expect you been what over County us

We're we two performance of Yeah. I be block mean, wells said to here landing some the looked County performance pad develop And get proving basically in And did not back zones, started in and lion's probably years. Spraberry Northwest we'll shallower and it's until performance. operational to rate to to go block. Martin have the aggressively when we though, just certainly, by due three-rig we the that, these that to up bigger. well to I'm four sale very, in early and very run of the there very that's think in drilled XX-well outdone better some three or share and of with the good of a Middle expectations. year up certainly that should we adjustments There's since to good Not XXXX, drive in Robertson the deal, a I then. seen on targets, up coming relative this results probably deals prior proud the spacing has out say getting portion and continue very main on that in

lot. Great. Thanks a

Thank from Derrick Stifel. line Whitfield of our you. with next the comes question And

Good all. morning

Derrick. morning good Hey,

with time? the maintenance. views exposure guys you recent over you to limited to on that the in XXXX the driven weakness understanding how have ingress plan was and few to your speak And Travis, next exposure years? over Waha by Could macro your really gas mitigate you

But really next that. as I'll takeaway we pipes Yeah. on certainly major I tight. get be of specifics into some some year, until let Certainly, probably give going well it's be is Kaes to going the well to talked of on. gas think XXXX most

we some Coast. directly get – think committed particularly Waha, not to making Waha gas And the go do side. to are against Gulf do pipes help that opportunistic these the of the hedging, sure that but doesn't to only we've goes we we on So –

you today, Yeah. but certainly to goes to we then while these big million I mean, right away. going tight other XXXX, gets full but think of be going as Waha, think are until XXX two-third And of pipeline. when third comes to some be the there on hedged back then, going gas Whistler they're to the basically, and next pockets exposure it's year, Gulf hedged that's because about our of on, been expansion, from back. weakness a the think all And there's I actually expansions, pipe XXXX, be the easing a Matterhorn yeah, in in half of the day year now Coast

Terrific. And I wanted your my follow-up, to on as focus operational efficiency.

the improvements to experienced crews. to last would couple years, the most you've the Given efficiency really dilution expect over efficiency in D&C returns metrics of to due the ply of experienced diminishing law and of

pull least levers in to the you at improve operational you're to look are efficiency? As guys hoping what forward your time, maintain or

question. good a Yeah,

I is cost just the perspective biggest thing the one year to Halliburton are us two e-fleets that's help next and has think up. going picking from started one that a

bit years, generally, business. on So foot position. of for our on we our that, gas horsepower more fueling mine charged the with that get just we Martin that's some to anywhere diesel, mobile money of I right? Waha to depending we're margin think piece savings On that less. Waha we're of mine on not side, the $XX little next top a spending fleet and from offset of that $XX first right make a particular County of the or cheap could be And going on mini price opened couple of is. what be They

that while TD we're still drilling in we So area. we're than faster to year, last I wells in best generally, think class not were

other to up here. pieces as time equation heats of work inflation the it's on Now, cost the

them. even or inexperienced lot Derrick, you activities And experienced increase our the individual of follow Permian of perform but as supervision the call right levels supervisors conversations job impacts see in I don't those there's about to green a this the job that has hands, activity the when make safely, sure But always that least of the Yeah. we only not of because to line efficiently. it's thinking, Basin

to actually supervisors prosecute companies, almost not service transfers safely. our can make plans hands, to transfers the oversight our provide sure they it our they efficiently to So to field within operations organization experienced and and the effectively,

time. Great, update. Thanks for your

Thank you, Derrick.

Thank comes Deckelbaum next And from the with of our line you. Cowen. question David

today. for Thanks, taking my everyone question

David. welcome, You’re Good morning.

of isn't I wanted program, your on asset million the I some on follow-up non-core PDP. Rattler just highlighted morning. bulk that remarks, assets. divestiture to of already you in think the us. give Travis, non-core for about you feel remaining $XXX that the achieved the some Diamondback million $XXX And Good kind little about as the getting of prepared a Should like of more scope representing us we credit detail targets? could bit asset?

mean all X, system But and see a X at business pipeline David, I value, a at trades E&P Yeah. gathering times. trades internally, right? to an or X we really, it's generally, that times XX

valuation our So it's not think make a it given getting we're the good businesses any at our particularly of now, some buying for logical volumes renewed so kind for with mode to in look Rattler sense we years. the I it sell, the and of at. to invested alongside in five they're harvest of over us, where JVs which in upstream business, And what credit that those might contributing us last focus is to on

but us monetize time. to to won't expect wins, of appropriately could there are some certainly you those our JVs try were to certain and sitting projects, over on I So, big commit

a one I like when Midland. color Midland expect I on continued how putting Midland Martin we well how me. the productivity -- towards guess out, guess in mix second into and but allocate from overall X, that talked long with well the is rig long foot lot guess look to the is activity have you're think that going Maybe virgin and obviously, I and benefiting this I you basis you you'll grading these Ranch. Robertson those. levels the continue areas for about one on Also intense slide you high-grading improving? or good sort to be I highlighted as within be appreciate rock like XXXX, know of on think a Basin. on I just where FireBird, does at this there. seems high productivity guys about into With mix highlight we productivity, guys per that, with perhaps it's some luck a we well of sustained improvements productivity are per might this Midland maintains Martin more

think for that have than XXXX I it's longer be around while, well-timed which we're mean to a I in We see benefiting deals the today, Yes. is think today. certainly market from I right? that going can important, two

projects is allocate to and best zones I the our first. capital think job generally, to returning

both decade, and cost low us And we be the low up, and forever. to definitely business goes to that's up a built an ourselves at won't to to the curve this think which of cost that is curve So, able that to be likely And I end shale inventory the maintain But this keep as over I we've next at what on. the happen structure able longer. have end curve. the cost keep think is job inventory of cost we structure our cost keeps that the

Thank you, guys. that. Appreciate

Thanks, David.

And Thank question line comes Lambujon our from the of Jeoffrey with you. TPH. next

and thanks for Good guys, my questions. taking morning,

Good morning, Jeoffrey.

locations based terms what potential this implications you've of upside the might to, asset position? bit in of for wanted spoken results there speak on the sort across any acreage. on there deck couple from a are small to the the contemplate an inventory in that particular, are to maybe a inventory. thoughts a acreage, I productivity, FireBird highlighted but some little on saw get also me on on of could If if on how bit that inventory I that distributed in these secondly, you Just your just you some results? point standpoint? you to And

the rig When a one game of of the We few allocate we our great people, the prospect the that for deck, deal. years capital big said lot plan that in on announced got away, like been and but haven't is call Yes, deal, competes Jeoff you we we on to can basically a question. that's with first prospect, northern X the see for this. northern slide to which right

well the upside what Central I in paid well we think LSE results co-development. Spraberry Lower underwrote into promising bring across But, generally, recent the block, for. looked that in pretty Wolfcamp today. the in A the recent that's prospect of six and results We would across co-developing

test time trade. some that's kind to have development, of of that before kind field underwritten out We full but the the upside of

Got it. Thanks, guys.

Thank you Jeof,

you. line Thank our Barclays. Jeanine next Wai the And from question comes of with

Hi, for Dan good taking question my morning and Kaes. Thanks Travis,

Jeanine. Good morning,

First, drilled, lower just to going updated XXX question, that guidance number year? before, maybe at Can little what's momentum lower next now? the wells versus impacts talk that back I to the And XXXX bit for operational how into guide. about for year a driving XXX now The it's XXX really you think.

Jeanine, operational have into those because our next issues. year say interrupts Yes. to it's not momentum it I won't job

We extra rigs the a where today of big are ahead follows. intermediate running couple rig to large of pads get these

what do see is here you operational So momentum. us I to we and That's what that's message expect to nothing best. from do, the think

-- would this couple and year. a ran less I the thought rig than wells probably than in expected originally completed we year, we for Just the we of Delaware more probably just one say, we

the we're we completing the less complete. equation, probably So the went on other into XX -- expected year wells side to of than

momentum and is XXXX. certainly your feels into going good good capital very looking efficiency So

is number for be question commentary for but growth or oil quick should Definitely, one. like single-digit it's prepared for on Great. XXXX, on month. about days we a talked for these we're I like and low day what you In only XXX in XQ, baseline FireBird E&P. second out just you housekeeping Wonderful. using only our a have Maybe since year-over-year What remarks Okay. for your basis. a assuming that's adjusted FANG, stand Thank sure not legacy to we quite assume a clarity.

housekeeping a that. on just Thank you. question So

question. Good Yes.

a XX,XXX XXX, not of of of net I barrels release flat. little a a The changing. that XXXX in is XXX,XXX and keep We've to FireBird XXXX FANG, saying bit for went couple day barrels year. we're oil business number pre this into base of of we that single-digit day that we a then points kind that, But of take oil and from going percentage think outperformed we did perspective. nothing's add growth. the level, expected low top out on should FireBird as that can you same our basically, and the Diamondback that complete FireBird at spit And changed XX here wells of

that what transparent expect you numbers. hit to and these think us be do, You

Great. Thanks, gentlemen.

Thank you, Jeanine.

our And the line from KeyBanc Rezvan of you. question Thank comes Tim next Markets. with Capital

morning, good folks. Hi,

of been Some have my addressed. questions

either or I one. Obviously, talking curious I'll just talk could you today. And just election think door So you a if about about the bit ask I'm day opened if Diamondback any provide industry your of perceived trade can be these context Biden helpful. oil about any had would in the administration And the DC groups have you any with in discussions shortages US?

some federal have the peers organizations equity those of both of Yes, industry White of trade administration. a part current invested is the all we clear Diamondback. in certainly we APC of. a alongside sweat not that that trade our the the API, with At in level, specifically House into lean inside But yes, provide strategies aggressively Diamondback organizations and so lot to

will be that That's of results and how it's important continue the elections turn advocacy – our that and of a out our advocacy. today. for think the of we So dynamic regardless shareholders arm, part to

the I anybody do listening of then sort the group domestic And you believe is producers? guess is, follow-up Okay. do to see the you that of

I for our can has so We D.C. it rhetoric pray morally continue only seems like lead elect the and up that send of industry. our at these will the Washington, ethically our state in part open we excellent do the like going to that that's level that locally this representatives, industry said, navigate to Yeah, pointed people citizens to turned Diamondback decidedly elections. certainly again can And federal against we very both the rhetoric people. difficult or and continue do the addressed a to is and through being to at as advocacy,

Okay. the Thank appreciate you. I comments.

You bet. Thanks, Tim.

Thank you.

Our Doug with America. Bank Leggate next of question is

Abbott questions. taking for morning. is thank This Doug for Leggate. you Good our Again, John

John. Hey,

Midland the that a XX% year, a capital overall is Our percentage the a of this first over horizon. would look to would what Approximately CapEx? question or point sort on you multiyear better Del, anticipate larger is Delaware your you of At and become allocation. to your CapEx of XX% the

Honestly, our for quite that frankly, we a look long at steady time. inventory keep all XX-XX of

the any don't there where Basin ways, notch, some going I XX-XX we're some to I and out Midland curves posted change acquisition, that's plans proved there's on think more to completed slide FireBird probably be the it. Delaware. that with focused. will In top that wells So And our to we be Midland, closer X is think certainly

then And second question cash our it. sustainable flow. is on Appreciate free

So, are laterals. year foot drilling you're wells over the XX,XXX this

at slide, inventory it's I laterals two-thirds Looking of than your about think is is while XX,XXX one-third that. foot your less the about

So how about flow? do horizon, think over you a free sustain cash ability to your multiyear

I of production have of lower time. can't we other think ahead a up have long lengths. a have reduce done At maintain of longer hand, allowing we amount the I efficiency you get lateral to if decline you trades significant for a acreage, block to us. some we're lateral to on think naturally, generally, development going capital point, But our period

capital look And can development. at years. very far look So inventory, few for good we as Diamondback's as efficiency see, the total it quarter, next for we things every total

questions. my Appreciate it, taking Thanks for guys.

John. Thanks

Thank you, John.

Charles Thank you. of comes Rice. And next question our line the Johnson from with Meade

Kaes the of and Travis, morning the Diamondback rest Good group.

Charles. morning, Good Hi.

question back to asset. FireBird like a ask to the I'd Travis,

understanding that the you're up or But prospect, there. the think you prospectivity can to platform some is, this Central view starting the, I give West? particularly Basin us East on the on prospect I even your -- guys onto or West You changes of western and along -- And my Limelight it to the how approach central side get of guess, laid North-South-axis. out

So, on are that should or on, something down any we way a puzzles -- near or is working you're that project there side, in thinking its the be future, promising the that line? is for about

with think there's it's promising. for prospects. some but West the good of some nearby, prospectivity, side I West further anything that on early LS There some kind certainly results Yeah, our and two-mile the did certainly Barnett are question. We certainly including upside buffer didn't look in -- results Woodford Limelight near-term. time don't untapped underwrite

play be costs work day, underwrite we're at is decade it the to on expect and develop. of right next lot technology we when into to will certainly get us which that's And now, attention. prospective it. a all But going getting the unvalued end drilling So investors out, upside, the our that of what to

and block, work X think F And Kaes two you'll see are moved I early laid good that East of development we'll scenario on our start of Phase we've that development slide as drilling, labeled central Charles, X strategy, what the our as as West. like. and but out examples are E wells that kind And to look

our Central then we'll platform. Basin But While start the and very X we complete on of to akin as is prospect get you are the you didn't those out, and be will really which East up we're get before the side West up, results promising. central our the to pointed to before work them. the excited Phase Spanish development, the about Trail And wells, to North, you way

Guys that. before. Kaes, that case. heard you've is deal just you this, I of But and when something was think Travis say then or was anyway, maybe on like listening that's a don't in following something I maybe one good and ever answered, more up underwritten think word, like side underwritten, expecting if I on Western FireBird detail. you

you kind is or this whether about should think we of mode as think new this guys. a pattern a I for

XX% to different of piece, As your cash fund XX% a of then it. shareholders. committing we like at return free business look not deal. cash was That I the component -- to -- leaves And the piece to was pieces smaller available a you're where a it But good equity it portion -- the big guys deal, you at future FireBird A&D. of cash looks look any the return

the should wrong guys? and is the So iteration? something about retaining going of is you less thinking be that chunk that you're or be equity -- as is to Is A&D, meaningful cash is a that for we future

random generally, not in the a think Martin certainly that blocks do available. are there's XXX,XXX, Midland A&D County basin, middle right? XX,XXX of in County acre ton there's -- the I of left Well, or to not It

as evolving continues. over in Permian consolidation of So years certainly the couple A&D the is next

long-term up the because is. levering balance to on company of wanted up business XX to upside to very they're this have where a -- to the the more be hopefully, think non-equity It's on And So was in I not that in used take way I we're XX% this guys. it think grow get sheet shareholders. meaningful believed hard upside. But looking to fund put -- sheet we at right that we've a on way cash the even equity that versus asset under years. execute proven not deals focused and an equity so And stock and we're commitment returns these the deal, balance to out to it's work to the sellers deals. the development in XX-XX in with not position generally, happy X% makes had for giving Diamondback's the the They deals early last and microscope, right? its

that Appreciate Thanks Kaes. for it. details,

Charles. Thanks,

Leo comes And of from you. with Partners. Mariani question Thank the line MKM next our

mainly Hi, that I of quarters kind Certainly, assume quarter that's of noticed back fourth inflation. few the up been bit guys. to into a has I trending kind I the wanted and CapEx guidance. last in CapEx. little into jump

any been color have to you your I where on pace about know so, sort some in other starting think to point? and you you levels more provide provide can Are up? sense they're of maybe bit this locked talked budget And you any that? a your go tubulars at activity pretty ease around now? flattish. items major starting XXXX right continuing have rising portions any the inflation if not details as I to Can just of are quickly, of that little you

Yes, went looking Leo, to kind fleets fleets and us I of a say things We the where in locked not why this year I is, up. we're question. about. two because couple come of, this guidance versus will good have would today officially frac everything to do think some just XXXX give that talked we

sand a with our contract provider. of All local a locked with in is large

bet continue are efficiencies. we're last because running this next them I our You know, time that the you -- roll XX rolling rigs, rigs year XX on while of running And basis. rigs different X-month and today, a this of rigs we time cost to we're

keep So there's us to well do. on or going pushing costs you'd lot them to the scenes a up, from going stopped down behind and what expect that's

Okay. you if a base guys That's just of, would year-over-year mean, -- sort the helpful. right, to in and in too But flattish is, FireBird, I clarification question. I thinking on level know specifics And I exact it's for heard I ask add early XXXX. activity basically then wanted essentially. just

this next is So for operated year? the intact FireBird year, relatively for plan

That's right.

them I to net we're on more drop of of rigs think forecasted couple going cash free and production. a to generate down that day rig, drop a FireBird, rigs one for three barrels little hit business a XX,XXX business. from that We

I think we'll XX wells around there. complete

at So you the base to from out FireBird the can today XXXX. laid plus early production year this look Diamondback business that we get basically take wells from XX plus an

guys. Okay, Thanks,

Leo. Thanks,

questions. showing I'm Thank you. no And further

Travis I'll Stice, hand the over closing call remarks. that, for So to with back CEO, any

in everyone for you Thank today's call. to again participate

the information If using contact got any us provided. you've questions, please

Thank gentlemen, you and this now call. conference and may today's participating, disconnect. you for concludes Ladies