Diamondback Energy (FANG) 2 May 232023 Q1 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Diamondback Energy First Quarter 2023 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your first speaker today, Adam Lawlis, Vice President of Investor Relations. Please go ahead.

Gina. you, Thank welcome call. and Energy's quarter first Good to conference XXXX morning, Diamondback

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

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

to will release non-GAAP the found we reconciliations with can reference GAAP earnings in our addition, The make appropriate afternoon. measures. measures be yesterday certain issued In

to the I'll Stice. Travis turn call now over

conjunction last transparency useful. efficiency. press that and our find released that not in We we Adam, Adam also but shareholders, I to you release. increases only night that you, it Thank mentioned hope shareholder with directly believe a improves letter our

first move and if the Operator, So begin into you open with would right we'll questions. our question. line

the Instructions] Dingmann [Operator line comes first Our of question from Neal of Truist Securities.

now is open. line Your

format. First, top [indiscernible] the of it. thanks, costs. for Travis, for Danny, the on one Appreciate you that Travis new my or first questions service

have continued current how efficiencies the versus your Specifically, contracts you spot how about recently the are think long-term cost? environment? you to able just all operational mitigated And wondering quantify in

the in And think about I our needs steel, let is the raw is, steel, question in of But -- there's -- multiple we're kind of buying operational the going talk advance. it's year. through pressures. we've what I think I read half Neal, we Danny It's deflation, specific about really to steel materials. because most it's particularly inflationary like look back when the on that's it's efficiencies talk CapEx and that's diesel, offset the will the seen year-to-date, that sand, of quarters

cost down purposes So steel foot. that a $XX we know And the what for it's to future is. $XX already

we’re while then rigs last that's couple the rigs us And rig improved our to and and and rid we've look a about those it's rigs, And we're of to coming with crews what crew. well. the week. got entire a allows replace started seeing with them rig that two as not see CapEx spot -- we've do -- efficiencies we that with also involved as down talked And cost we've -- also then and e-fleet frac one we second simulfrac costs that are it's issue, at our associated got fleet lastly, necessarily got of

So efficiency we're foot to well. as there gains seeing $XX $XX a

So now decade plan commitment it to always we've Neal, of and be on got what's development here, the when out our been regardless, of has leader to prosecuting almost going with comes that. CapEx, demonstrating a low-cost our

that's what And shareholders in. some that have do to our Danny, that. near-term? for you continue anticipate color to be going we should So do we're comfortable additional

acquisitions the replacement additional drilling No, the the as of drilling as consumable coming kind efficiencies completion of leading we've to the that services down. as leading e-fleet fleet side, took I covered that side, on costs on side we're And edge Travis think fleets the end simulfrac as traditional seen side, on two everything the and two us well the the -- see just the that’s far we from the then with at year. additional over replacing zipper

shareholder like XX% that on or allocation And question Kaes, versus all specifically free to to return. more not on some it payout. see seems stick cash the do Kaes the that. for to that flow my the you determine of for plan give you or part me why opinion you capital your are shareholder is stock second how Thank you Great. pay mid then on plan Can sticking and is cycle, what still that? doing your return, peers price maybe just to you

still -- a Yes, of balance Neal, going mix. we XX% we program to good the upped and mix. to return to always the free sheet when a the we good of equity mix shareholders, back XX% cash believe shareholder We that's XX% was bought

when they in to balance max the to to think back a going XX% the equity last like go while of things continuing I have like number feels improve are couple well, years, sheet.

new are of return share in going models model time returns I south lot it than we count that's, should allocating when this be a to is downturn, the efficiently reducing potential things well even capital Really the at things business go capital buying the and more of a -- test back think, today. business based when shares, more when

flexible capital return since kept the a So beginning. of we've program

like we that. want that. think I to We keep

cash what QX we And sheet variable that allocated an out a don't buyback. doesn't why stock is your the when to also did to balance and significantly flexibility. the recognize that QX blow dividend want back in to maintain lot buy down We reason exact And is we quarter, the more matter. we stocks, in that's but

all. you it. Thank see to Glad

Neal. Thanks,

Thank question. for our you. One next moment

the line question Co. next of from Neil comes Mehta of Goldman & Our Sachs

now is open. line Your

new Yes. for Good the team. thanks morning, again, format. And

local built in is question And you what they first were guys some price mitigate gas pricing your soft protections place have like. realizations. gas just felt There's Obviously, to dynamics it negativity? the in pricing here? on on going out one-time to in order was quarter. curious But play around The views how

Yes, question. good Neil,

to There's lot to two the $XX wellhead the in it's true-up that us right? million for on from selling contracts payment things, gas relative kind weaker prices downstream. our a taking were I Really the that -- unhedged think certainly taking the comprised rights a of moved expectations. at between quarter realized that

it an the of for recognize intercompany I did So but presence gas hit that's quarter. issue, kind

What basin, periodic there's the which price from from against a points to physical of of this XXXX. think all we've be combination end Waha to a future protect gas exposure through then the year throughout Henry Hub the which weakness perspective loss we other done Houston in of We've hedging and And gets perspective Channel next. and gas of about our the our of of gas basin, is in Ship two-thirds hedged one-third and prices. our going

the and Henry probably side, in two-thirds $X third on protected have XXXX a collars with this year. with about we then year And our next of gas floor, wide a Hub of it

to Henry the Street we on guidance tried piece tailwind in the some prices has hedging basin. as in gas a realizations future us unhedged and weakened the think So give Hub at for general, both gas and I been

your Okay. you've Kaes. done that, in had you've them just a here months. that now Thanks And couple a then follow-up for acquisitions of that some for recent on the portfolio of

Just you're out any the and to efficiencies of new early realize productivity that update on how thoughts they're assets? able executing on

Martin that's as of is a Lario, question nearby I were we That production great existing we Yes, well. all knew in County. getting. would our generally, what asset say,

that's as advertised. So

to FireBird pushing XXX the locations end the there's without locations. day, better back deals the got. acquisition, that on I even be going we value of when years on acquisition one the think almost that's limit the in at of look We upside a few at we estimated

real tests become position some are been A where locations there's southern Wolfcamp part that Lower locations upside of we going co-developed develop and on And time. those the gives to us going we've are the the to of confidence well over the Spraberry that some that

going team, new ops the Second to area. into that, they're a

already the foot field. are lateral drilling completing days XX We new sub a or XX,XXX and on

and deals. everything both the So to because over better be will of one we acreage well of say, that geologic the with is perspective. FireBird prove generally, came would upside the time, going a deals those from amount did on I it of

guys. Thanks, Awesome.

Thank you, Neil.

Thank for our question. you. One moment next

comes next JPMorgan Securities the Arun Our of line question LLC. from of Jayaram

is open. line Your now

the We guys. morning, new do format. Good appreciate

really helpful. first So My on question that is was CapEx.

the half about implies XX% of CapEx spending XQ Your plus first or billion guidance $X.XX around actual the budget. in

about having in line costs. of talked some sight meaningful declines You service to

So $X.X the it, midpoint I your full year? you was confidence the wondering on of the describe of Kaes, for if could maybe billion range hitting, call

Yes.

does know versus How how CapEx on it's in rising a for price a basis. cash when that falling? account cash your accrual basis CapEx you service timing versus of -- environment And the I does influence

Yes. Good question, Arun.

count example relive had reduced quarter. to On want in QX for the the of -- X, our quarter, XX thing, or we we was from XXXX, cash and CapEx down the second XX to don't prime rig that I that while particular rigs pay to

disconnect big So and between there's cash accrued CapEx. a

we here, Now that's not issue faced the right.

which is, X on as at year. lower my are reduce of at half quarter $XX achievable things about through going million in the a very reduction rig run we rigs CapEx, margin are end three We like back rate by this the count of talking the our based mind, things: activity, to expected the in

that a and the lower of costs with raw two drilling completions fleets high line materials the fleets. drilling of simulfrac service grading those reduction because efficiencies the DC&E Second, the is [indiscernible] in down down and significant two reduction service on which a into side. of Travis side, in side the and Halliburton broke other because smaller to of And piece

that County out money that's And a water infrastructure lot lastly, its on nearing so half year. is slows the our midstream of back the whole in of the system Martin infrastructure. down We spent and connected generally building end, system midstream,

we are XX see the can that's for way side confident We on have. those to next that CapEx. our So the accrued coming we line of over what the feel numbers the and cash very based on we XX in that things days pay sight

my to And But opening be commitment CapEx that unchanged track certainly to what our to -- Yes. execution. we forward. remain in does. what commitment regardless efficiency record, to first Arun and just and is the our And anticipate our our shareholders low-cost question leader reiterate changed that's in going to the been hasn't of again it's comment

in follow-up, activity heard VNOM. you how for rights your positive have Midland remind are about some those Do a to lot, leasing implications Thanks us Travis. zones. perhaps structured? you zones obviously team, some Can Great. currently? we've and leases could the in have this industry My And Basin deeper

and was for if implications could So maybe about structured wondering I FANG's how VNOM? you positive leases are maybe talk

Basin. and we Woodford Limelight a for Basin Barnett the very have on Woodford exploring covered and now. Western our with - and some the time which size Eastern to long the have the We've one that's Midland to Barnett fits zone the over get is leases no coming cover we say a the really Wolfcamp There's a most attention of Midland leases would our all going in more to I Yes. lesser deeper lot on been years the of generally, the a extent, B, side play. now

is benefit that It it should large that minerals to say, this side Play basin, the We'll is of zone decade. seems going basin. the many and looking testing a more card at that generally, that end that's leasing to next our the and of into for throughout involved of front we rights in, unleased lot extend actual business along we're the and to of that decade, have owning seat into going is deeper other Barnett have Woodford they the that's in be the the something development of any a future those with other peers

lot. Great. Thanks a

Arun. you, Thank

next you. Thank for One our question. moment

Our of Citigroup. the Gruber Scott from comes question line of next

now open. line Your is

Yes, morning. good

lower here talking been largely Turning for especially have maintain the and characterization pumps pumps will market that crews pricing while of it's across back more broad the to is legacy the efficient rigs to fuel rates, equipment this see rates. about the pricing, in Is market developing crews, reductions more both highly a here? do rigs you'll see spectrum? companies you you in meaningful that and/or nat based and service going kit, the quality Or next-gen their where declines be gas the frac bifurcated see and kind service how

room the the on think pricing. them I frac contracts equipment, the with with have that's less on side, superspec higher global those real quality Certainly, e-fleet associated partially Scott, true.

think on efficiency the we more money generally, there that's save money why make So we or more side.

going side, to rig market in no your the On on that. think an a doubt generally, is going X, impact it's pricing. the quarter There's I about of have XX% away or just

lower. rates edge are leading So certainly

a proven in to past equipment it the do side, to rig with drill in when other Basin, around lot comes to than general think we've Midland the also places particularly it's on where easier less more the country. I the in

mentioned kept just the Got costs, for the it. of LOE then fixed in power. the to And range. then full We and turning low price the you year end at came operating contracts

and year, that natural the go course chemicals, can the gas operating should given outlook Just into any over things, you evolve and of color power costs? operating on how the provide cetera, for costs et other

the think had of I of because LOE. we power, of some dedicated feel good a that very Yes. not moving of areas Look, year about water still obviously, the to where but not range to is ourselves. mainly good start on We midpoint parties, to have activity our third we because because

a rate. that so And has little higher

the to And so future we on lower the a longer for say bit as in we to to spikes saw third-party in power would a expected generally, generally, QX received And we've keep trend lot expect some of generally a gas But LOE XX% about last the benefit summer. of areas side our of price terms of and LOE needs up should less exposed in big that lock that pads prices for QX, those locked little power are power. foreseeable developed. we in on I

Got color, the it. Kaes. Appreciate Thank you.

Scott. you, Thank

Thank our you. One moment question. next for

Our next of Deckelbaum Cowen. the David comes of line question from

Your now line open. is

Good my today. taking questions for morning, and team. Thanks Danny Travis, Kaes,

Sure. Good morning, David.

Morning.

moving longer-term the into towards mix, perspective, Just How you 'XX this and expectation made and we and you mix efficiency two two 'XX, simulfrac the headway to you some flattish e-fleets, that rig an progress about fleet and the assume we of sort between highlighted if the think count development? for using of year. from longer as term this benefits do second gains e-fleet all e-fleets

good Yes, question. David,

longer-term a, plan them more and think which for long-term kind guess, that sign and would 'XX, harder as the is have we a the I a market spot the around stick do are commitment. out into to right now with I of come is we to basically fleet some have more capacity underwrite additional e-fleets in XX-XX would probably 'XX mix. commitment a utilization. certainly our your looking We to little to up XXX% with e-fleets of simulfrac But committed to basis, flexibility e-fleets available for migrate

my Got just around then it. And question sales. second asset

out around the you did $XXX date so or million your you've target. already exceeded that You point

going articulating five the like see on in Could forward. also guys might is back on you sale or mostly investments a remaining high funds probability You asset midstream outstanding slide of highlight year? the place there the -- so side another you're that be we'll back, this source a that

I we place would that, high I on wouldn't good our divestitures a $X a today, midstream line target operated things of certainly on sale. works, pretty Yes. to We David. for billion few there's either side pretty assets some of it's going or to increased probability a have of be JV the the can't have up but guarantee if from $XXX million didn't that noncore sight. small happen the could in

that with very upstream. would towards So more $X I tailored feel versus billion it's midstream we say just comfortable still target.

the time for Thanks guys. it. Appreciate

you. Thank

next Thank question. you. One moment for our

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

open. is now line Your

mute on you're line. you're on if the Rod,

to move the next let's please. So question,

next moment our for question. One

the Our of MacCurdy next question line comes of Pickering from Energy Kevin Partners.

now open. Your line is

Hey, good morning.

release, of XQ given the XQ to 'XX and the activity what kind pictures is. or figure With out the CapEx 'XX you've

need next to As would starting CapEx activity maintenance add XQ year? activity a production we good good point? is kind a to CapEx you XXXX look into and keep is program, activity Or the of any flat potential

plan plan fully most That's sort simulfrac a crews we But and capital with if would is put can together. commit some to good had probably to today, today. the question, running we efficient efficient ready say, commit for XXXX Kevin. I I'm not to of

where to flat I production But this circling running is model, forward. of going generally spits rewarded out think, determined. last be without efficient much slight that whether that's been, capital and are this think output we levels too growth over years has kind with of things the couple activity be plan new changing the and growth to I Now letting business

only guys. Thanks Great. me. That’s the for question

you, Kevin. Thank

Kevin. Thanks,

next One you. for moment our Thank question.

Whitfield question from the comes of next Our of line Derrick Stifel.

now Your is line open.

the and strong all a congrats to morning start year. on Good

Derrick. you, Thank

Derrick. you, Thank

price projecting earlier of on fundamentals? on weakness, the elaborate in-basin with perhaps you Building question degree an you're tightness could on Waha

question. Yes, good Derrick,

the of large to as issue next was flat short. lot in think there's XXXX. see had extreme the and year, think three in back weakness. a very the -- generally, of half -- there few been I I of a on, some we capacity coming masked to at just a the in of the of year the and expansions coming going ahead Obviously, on processing are end of field pockets volatility expansions this date beginning field

tune that or going downstream that more the to processing capacity problem push pipes. day Now that's residue the on, a to downstream bcf is coming of the

it's control But all of the of to be Gulf come bit it's think going Coast. to downstream. be further molecules is, our expansions I when XXXX then not coming, pressure weakness generally, through that with more rights, bought most we and inherited for have periods pricing risk control Gulf will let's to take Ideally, that over pretty time getting physical worked the and relieved we'd molecules by weak a these for little of contracts our molecules hedging but and we've our from remove to So more deals everything on. come like taking improve have that and to Coast, our of kind our we

you as touch well speak does of XX, productivity XXXX think about a positive Slide I expectations productivity, acquisitions? the Lario that then and for well you for my to on been as relative couple project Referencing how to FireBird guys. over has wanted integration And of development Great. could follow-up, And you XXXX? the which years your next to

Yes. Good question.

and base better. XXXX multiple said good do a flat investors, little to guys. one for That's to I is probably times case, think the we we the

we of cost strong for XX duration well the the that, I day, FireBird low the Lario pace as going do XX we've shale think curve Midland inventory to the at particularly and next and only cost years, before, really job where on that is to curve, done At up. I And structure make have just would our we've be the had shale to cost start well a the end last of years. and ability the the to Basin are It's said the end do say we which in for to that year. the sure expect we for we've longer. for that enhance

Well done, guys.

think execution. that reiterate point of Kaes lead Derrick, just I commitment Diamondback's Yes, to and about efficiency maintaining that cost just It's exactly what to now couple and times made said. I've the a our about shareholders

added Thanks for the color, Travis.

Thank you. for question. next our moment One

from question next Capital the RBC Markets. comes of Scott Our Hanold line of

is open. line Your now

very Could had considerations Or see about there Hey, a cadence production a those I little thanks. bit you provide all going some of activity talk pads, forward? all have some having we larger you is color Does you on large developed? these mean the all forward. timing And pads to moving trajectory. smooth we some being lumpiness? about as will think some that need of create of

the in some the a there's team In to lot quarters to easy to we is in are internally, But a on best our business business. lower grow organically question, turn based that's surface, about smoothly numbers say what a of and right. would target higher, little job, is the the timing. Yes. little through going not XX This are grow general, going it the But and sales makes consistently externally, I wells -- to to Diamondback hit on be Good that's are a It's we beneath half our year. back Scott. fairly the think going general, operations quarter, does. certainly some consistently.

up. your then private some been like what's the coming if seeing what And looking M&A a And we are Like have the sales M&A private companies And of talk there level additional of all And on at some activity? in more about the opportunities? little of in obviously you equity side dropping talks interest Great. some bit. terms of rigs could it looks sales are Permian. in and

of XXXX much playing activity rapid And inventory, they production. down. a achieved the is as to see challenge by of right? there the depth softening, driven out their challenge last The inventory may commented we've of And secondary be beyond largely is this is I Yes, getting couple wells in pace cadence can increase how year. and And bringing think max that times laid both by now. of accelerated getting max rigs increase are about depth through was further you cadence independents certainly, those the the with

also from M&A their next try And out also public the an interesting So future. couple the some form small well, got to monetize. the figure there unclear, still got as I be to to over some is the private, cap way private that ones, flowing to need to be out that's are I companies years an it's unicorns relevant out you've in perspective, small to while as And entities, to these think then going going large be around always continue of catalyst exit figure time there's think -- too. a strategy you've just of

of in landscape. to interesting So I next going think the really the are M&A years couple be

Yes.

PDPs make less these enough there kind equities make -- interesting a you private is a some cheap of in to made can does buy all? you there and interest? them factor Or to of So down though lot through manage that if the of Does case burned their you have inventory believe that that do acreage? it be

and you do to your inventory balance sheet. Well, or and you you cash you life, M&A, to extend want you accretive don't do Scott, it that cash impact make sure want flow to your if flow want free correctly, when

or what up PDP going these acquisitions into calculus, doesn't think strategies seeing end you're doing to some but that's necessarily PDP with I divestitures. -- straight just that fit exit type So it's kind just of of

you. Thank enough. Fair

Scott. you, Thank

Thank our moment you. for question. One next

TPH. comes question from of Jeoffrey next Our Lambujon

now is line open. Your

questions. for Good my taking morning, everyone thanks and

Jeff. Hi,

about one continuing you year supplemental this NRI first Basin. additional the trend the there any large same year and how terms the Is think Midland surrounding less of on on there how high pads talked last release waiting of in is mix give of in terms that the just to of acreage can coming just you of in The Northern the about commentary to that the type the have or program and development where to mix compares to near-term? much type mix might that total going acreage that over that color

good say is mix question, would Yes, Jeff. to of undeveloped DSUs similar past. years the probably I

Now the quality of the XXXX location of those undeveloped this DSUs is probably than year a little bit in higher even.

of have the So this to at Martin on some it productivity our was productivity. sight of development to that, NRI or to kind high middle in Viper line pads County from level. certainly of X% on X% comment There's related we very a a and up large the year of

we benefit to And at the to growth high-end consolidated a total so drive is enterprise, report the development entity. because where that financials, the production organic going is

just across the to around side, improvements are a how from give on I over set the appreciate around for quarters? up, I layer guess, next of in appreciate the was how throughout Diamondback I you couple see improvements the timing you these will services then just some sense detail high-level course and the where of your contracts services the of hoping spectrum could specifically to just I certainly that that. maybe speak potential And Great. year. the

to contracts. X-month X Yes. say a is on of rolling I'd size, the rig everything kind

from -- is we we today. average our can that see down day see QX rate So QX

come our on side. going the way to to And continue so that's rig

we be pricing e-fleets as we on fleets, But $XX up On I or simulfrac of to are side simulfrac regardless a versus horsepower on will $XX side, in of some those the price say QX. two than foot efficiency move frac in fleet e-fleets two on more QX side. And the pretty our per saw other the would simulfrac the actual pricing. I up the the benefit locked spot frac horsepower. price saves a fleets the think generally, weakness

steel advance. to we earlier purchasing multiple addition in in about quarters talked that, Jeff,

seeing are the already steel XQ, we purchasing we XQ, are So that XQ our coming for down. costs

a And as is deflation it while or be $XX that cost additionally. a $XX not necessarily deflation, so it's cost as service much could foot a

you. guys. it Thank Appreciate

Thanks, Jeff.

moment question. One next you. for Thank our

Our of next James. question comes of John from Raymond the Freeman line

Your line open. now is

guys. Good morning,

Hey, John.

all again, gains year, first the you year is -- final given ahead You when just commentary like some with and quarter into bring are pump online? on the -- fourth just brakes you ahead plow with on first efficiency POPs similarly I those you the efficiency similar had decision make gains from it a the funnel quarter, the in don't likely would quarter, just but that of, all last you end running schedule four of efficiency word, and where you is a sort right more problem, to it's the big of towards class the wells you as all all if know, this but you now in a fracs go slowdown moved have maybe gains touch would where sort and Or do you fracability, the so spot in fourth that budget and is the of later intact? we up

I budget. No. highly hit to the we think incentivized Listen, are

years. high which flow, model, has free for think the growth to used cash and that of is the which incentivized I increase new couple mentality has mentality. part that's business for a of last It's working been been returns, worked the

be would class first So it problem. a

still early but be are We plan now. the year, would in that generally the

are little building bit think lower today. and if is DUCs, running nuance costs I than a that would rig rigs particularly keep we to only are to like they the

cost on great. That's then all appreciate really you've I the front. And color given service the detail and

obviously, you is sound you of potentially -- the XQ, maybe levels track it like have but down on seeing peak all So costs when are you're are 'XX. -- the but that basically things side, coming total does from year-end indicating versus from the are to gains you efficiency more by completed what importantly year-end lower simulfracs? the well on factor in 'XX Like cost it

not when would But row be we steel a I'm particularly, service a foot, a our foot. forecasting went we mean biggest the that's driver. in Yes. in a are is fair are quarters answer. not yes, steel I here. listen, capitulation a costs to say, $XXX $XX I total up in closer over see to for going to QX, nine steel -- costs

of that for savings. significant makes a I itself So in mean percentage the up

So below XXXX 'XX and because QX well the QX I QX generally, 'XX say, were yes, costs would QX highest. XXXX

it appreciate That’s great. I guys.

John, listen, we reemphasize, well. as just maximize business the efficiency run to to

greatest value And you of shareholder produce. efficiency that so rig side, product whether about completion in where it's the of because a Kaes that the business or made the on the don't are the you we driver that's we that the point control price side think

Travis. Thanks,

Thank you. next moment for question. One our

Our next Rezvan the Markets. of question of KeyBanc line Capital from comes Tim

Your line is now open.

Thank the wanted asset for my But you circle morning, I the you get Good back it good of a you I think Dave's number on pull folks. about questions I'm or won't sales. County. to billion give can levers sure on that Bloomberg on asset answer sales. highlights more question. to Pecos previously $X to taking story

Delaware good absolute think do Kaes, level debt bigger metric cap large understand, than as the or allocating in lot the is? it billion about terms you debt you what you're leverage of you to guess you a that think given wouldn't peers? why now? to kind target of to trying an go a not So yourselves $X capital And compare Do I of right

and important a above. our cash and the flow the number, Delaware good to produces Basin barrels of of free first to going question. bigger all. all But because I'm And that's we lot Yes, beat credit not lot still Tim, for overall to the important of ratings. flow the that, go want to It's that's cash forecast listen, a to of a second us.

So sold the what of Delaware is for paid the few And recurring acreage we we on think I upside. side. things small in theme the sold someone that have a

compete for PUDs not us I paid were some Glasscock upside PDP a Delaware sell not in than the deal as are someone of a pace has but didn't well just we only PDP. plan. years day, in for expecting. So going faster to sell the we they the deals been common pay in to XX end pay has PDP, the that, and for next think, the as of cheap pay County, At development they for theme to that for And

happens, has do that production look for more divesting what's But cash Delaware to today. and of in a at shareholders -- So then value lot that and Basin. right if we'll us at flow look generally, our the

back in And right debt ideal the either speakers]? in then for an debt to just or is, Okay. getting [multiple how leverage number terms in think do whether that what you number about world,

I apologize, reply forgot part I question. of that the Sorry, to to

next about think the And of obviously our and think about Not we with think we comfortable now it, only ratio, think of ways amount to feel duration XXXX. also absolute is in and I duration. leverage want over between but two right. which but that we debt maturity, I debt terms time, the -- less have we

reduce absolute to So use it I'd until won't like so that but to that flow, And Travis free we me XXXX. we when take have to debt. out going bother it are cash -- excess about

or debt years turn oil think leverage mind, $XX due would ideal no of an a I world, multiple in before debt at be, a a maturity. level with perfect for next in my price $XX

Okay. all Thanks. I had. That’s the appreciate I color.

Thanks, Tim.

One moment for question. our next

Our line Rice. comes Meade question of Johnson Charles from next of the

now is Your line open.

Good Travis, rest of and the day, Diamondback team there. to Kaes

Charles. Hey,

morning, Charles. Good

-- this wondering be you iteration maybe morning. a market be that is understood communication style, getting of how being [technical that -- traction But also that difficulty] there's your said like And or you more this also, either you some with format you that an well, Travis, shareholder efficient you're was thinking this story pick you're true think your this you. missing? does this not? I I that And the big or comments, like Travis, the is what up letter. the dissatisfaction also were the about the case do may to hoping of or you element mean, be element I if prepared I for your was for might it, that's format if the think on reflect feel maybe would in new as I but thing the on does

also place decade this No, thought based incredible put just a of we our trying We've didn't these on that that communication the paid well we prepared by industries sector could and in that the we have ahead shareholders. prepared got attention format we fix other oil transparency not of with remarks, lack like remarks. are really of know that. calls And communication We letter issue. and doing felt in the an earnings to the remove gas doing

release. in our night The And the spending quote truncated letter anybody more CEO communicate either what then too. have we to than would this didn't a other as have in Sunday shareholder could transcript we well, thing earnings we that is put preparing in traditionally

staff mean, more efficient lot I perspective, a there's there. from a So

it's communicate, So this because message the our the way no, need stock we we improve think price. or not understanding to did better that a we in to

allows also us so the to the shareholders, it the of directly side to is to talk and right? bit a a allows the lot little think to narrative Because of and sell this numbers -- directly our us control in story I behind shareholders. times, our

we want And, your the never appreciate not they durable to shift preference has least shift? back a all I recognize Insight but things of this buybacks? the one being durable buybacks to kind Or durable earlier a know in does other if all being at I But saw know addressed that that shift question buybacks. go equal, XQ, other I towards on is been in other the signal to change into equal, things are, in I I question. to that. thinking. the Kaes,

shares. our back preference been think I has always Listen, buy to

governor we we the or at than cheaper in fundamentally a our wanted looking market a back can NAV Are was Lario like back that's buy on what in ground? versus buying And are buying the FireBird. Now it shares for? deal oil what we we

So every NAV at at still presented is program. this day, And since buy our to we to of are quarter run end which buyback market going opportunities mid us the the started the deck, cycle back has we $XX oil. shares conservative a

have the governor on we be So QX of that. we price buybacks, but day, is to a our of on preference again, end going example are the at the and a was little perfect share bit what aggressive of

the cyclically high, share free we've our flow like oil past, higher a tried trying cash hasn't of for, goes of to which been in to are price that mindful has goes up created And do repurchases but we with so, is cycle Charles, known value. industry sins lot done and counter and not are be of oil prices

we've opportunity whether So not forms an $X worth or $XXX purchase recently calculus, of out, shares the billion at to back we in share. pointed had roughly perfect here other banking always may Kaes but the as crisis it's volatility, of a be

flexible and only like program, you we So shares. which return at feel mindful also the following in through are of being we being the method our repurchase commitment on of our not timing but

Thank you color. the Appreciate gentlemen.

Charles. Thanks,

Thank question. next you. our moment One for

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

is open. line now Your

Yes. Thank you. morning. Good

Good morning, Roger.

Hi, Roger.

in Let's we dig it deflation, service the into at could this point. I cost guess, call

I decline XX-XX, curious. something just of so We used being of think much drilling the like in to of lower you Can in or XX-XX, as well XX-XX, that being how was the costs whatever? doing is well. that bit as to much little haven't something efficiencies talk and a fourth using inflation. that us how you is a about cost quarter, rigs

efficiencies XX% Yes, I actual and costs. quarter a would say it's

to the Now service is piece raw materials equation. a the due of and the two-thirds third XX%, other third actual I to and -- that of would of the say is due

get And as approach about the how as simulfrac is like in day, applied sort helpful. stage, of from zipper per across had the changes Again, you want it, of trying any per the these thumb went all switch other entire complex. understand you some terms frac stages to then Okay. use do to Or think I of something to Yes, that? fleets? cost you the just you rule there was, follow-up to that's as they question of

you an will give $XX $XX the generally, fleet cheaper efficiencies. fleet a is a foot Danny estimates, to than fleet. cheaper can cost you simulfrac give and is said, I simulfrac conventional foot I the a a and than $XX to a $XX e-fleet

grid. simulfrac that just we pull with we off Yes. the they're an I powered or that fleets, towards mean on utilizing our generate power e-fleet electric location

required the efficiency comes the the of location. just data fleets, lower gap on hopeful really, from the diesel consumption stuff disparity savings execution of We kind ton location. e-fleet by the of So e-fleet kind will a but we being a to e-fleets the on we widen versus do of piece because see bit footage don't quantify of the but just and and have yet a simulfrac lateral time, more per fuel completed little efficient maintenance we on are between over the that, that that's of day think just R&M the

in of Danny, difference zipper per yield. between day and the simulfrac terms footage

depending mean traditional lateral I on simulfrac -- much can kind a about day zipper per Yes, so say do jobs twice we as the of fleet footage as fleet.

Yes.

summer. any just being risk the some very or to but everybody, have off? One, lower Is being LOEs better So you little during large your to interruptible differences. beginning predict locking risk in cost, with comments about your costs, accept those to of little outages, fixed of very, affect the just contracts? very on I get electricity a clarification turned able a there would mean I'm the cost not which your talking

market. in the a No. hedge It's just

it's So just physical a financial not a trade. hedge,

you. Thank Great.

moment Thank for our you. next One question.

question comes next the from Our of Leo of line Mariani ROTH MKM.

now is open. line Your

follow-up decline I I were wanted comments. are LOE to clarify to quickly XQ LOE. in on where just earlier like wanted in guys XQ of sounds barrel here It your just versus per expecting and XQ. you one you

make that right? I Just wanted sure to of sort heard

to midpoint of $X the it go $X from to expect up of midpoint to guidance we to $X.XX. No,

third-party water up going So handling. to due slightly

temporary rigs the you're just of viewing location be that here sort on is the part the somewhat wise are where year? Okay. in of going be to based And middle drilling

The completions higher acreage. acreage. where upon are it a The been is piece on would than Rattler [ph] third-party prior dedicated of of the piece just cost are. dedicated on completions Yes, dependent a have

Right.

And cash Okay. on then taxes. just

in below at Looking kind the quarter, guys of guidance. you first came

I far, here So guess, down. XQ, of prices quarter-to-date flat kind are commodity in to

per guidance. expecting are here guys cash in the You increase XQ kind taxes to of

of year the you of taxes bit how color plays I that of see little the terms Just get mean increasing out? to And in cash generally more maybe a throughout wanted year? do that kind are of cash taxes kind color But any just progresses? disappearing tax has to completely as cadence that shield your NOLs the disappears. other do that with in year -- around other

Yes.

that were commodity I even QX, in we quarter and if right that the had the only of Lario real think the prices QX is hard away. write-off some closed came versus that, assets that flat to with added that benefit got

All right.

maybe XQ sounds just and on the of it more shield is side tax M&A forward? it's now rate So like representative driven normal going a

fair. That's

you. Thank Okay.

Thank moment our One next question. for you.

comes final Paul Our Scotiabank. from of question Cheng

open. is now line Your

Good you. morning. Thank

Good morning, Paul.

to the that's my appreciation I Two just format, with great. questions, please. new think add want I

the increasing overall several in been First, years. you've activity the last Midland over your

stable two. So now it's that XX%, doing the steady we XX% to maybe years? sometime between you Should years start is the may over X this more [indiscernible] pretty the and assume for to several or next or next be X going

quarters a will is fair others. I higher Obviously, think yearly complete in over the the We next the very continue years, pads XX%, some want than XX% to Delaware. few multi-well estimate. be to

X which But So wells higher in mix. annual XX% of lateral feels when right footage like QX XXXX, on was an Delaware Delaware. the the like a QX have XX%, quarter was basis, you

question Okay. And you about talked that the the second is budget.

midpoint very feel You the comfortable of about year. the full

line the much the how or that talking budget, below you're that actually that of cost of How Or down. was sight you're other cost that budget? or be that in regionally is already of to your coming probability, into that reasonable Just the them the in going curious much is is -- midpoint about the building saving a words, budget? of

of of to seen of the the work we cost have good from to a activity a to do, from activity costs if perspective tailwind X sight commit well coming little We today, and ready peak I line but that don't have rigs very bit and some Paul. I'm we've an know certainly down. that a in

bit that and it's but little Now QX still I happen think early. will a QX, in in more

you deflation you rate, [indiscernible] of billion? half second your that much generally, is much budget? how into Can I how that, saving share us the mean, with Or have in $X the Okay. the your

modeled say we deflation here. service to saw if cost would that be more would what I we've upside

[Indiscernible]. Okay.

materials. raw not [Indiscernible]

Okay. [Indiscernible]. Thank you.

Paul. you, Thank

session. I Travis like remarks. it closing concludes to Thank for would over turn This CEO, Stice, you. Q&A now to our

for joining this morning. us you Thank

questions I questions based of this more format to this morning. think allow the amount we another on is benefit of new had

So, if follow-up great reach again earlier. just we you to a need, you that Thanks joining. us using the have Have for any additional that provided out numbers day.