Magnolia Oil & Gas (MGY) 2 Nov 222022 Q3 Earnings call transcript

Good day, and welcome to the Magnolia Oil Third Quarter 2022 Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask question. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Brian Corales. ahead. go Please

and and Malice, everyone. to Welcome Thank third good quarter Oil Gas’ earnings Magnolia you, morning, conference call.

today’s within expressed in the actual results As other or risks and statements implied reminder, conference differ may certain to contains a cause that projections are forward-looking subject statements Securities materially the these Federal of to statements. uncertainties meaning Laws. These call and from those

Annual found available Report factors risk could results in that the with the website. on is SEC. conference Harbor Company’s X supplemental Form Additional full information on our with the the on to cause slide filed on XX-K Safe differ presentation of data call A can Slide be

as the Stavros. call section over the the Investors You the website now CEO, Company’s from Mr. conference Chris earnings download can third well quarter slides of Magnolia’s www.magnoliaoilgas.com. President and call XXXX turn I at to would as press release

thank Brian today. and Thanks joining recent emotions. some good most was us The and filled mixed with morning you for quarter

Steve’s steady our humbled his former the by and results operating performance. and Steve are financial grateful and his importantly continued saddened We passing incredibly for I’m Magnolia’s counsel, founder Deeply of CEO. leadership Chazen, and and recent strong guidance friendship. by

do put a don’t will in Magnolia’s to unnecessary, this for sound The way. transition principles the and their it. live always leaders organization I’m he the over model Steve very ahead. that remain not legacy is on deeply best saying it confident if simply must nature. to be applies And that myself ain’t business unchanged. Magnolia of original would that to are some will his in be tendency some human shareholders. Despite to And ago is While even they mark four feel fix business here objective on to loss, our Magnolia’s are for that of missed, There can years do promised you I an model broke, this. my expected during best in through of continue years founding to expect we I is established what largely significant come. Magnolia for is Magnolia’s remain days interest

our spending levels debt. cash free and And capital while of continue pre-tax growth significant discipline record will generating expect strong moderate We our around low annual continue. of margins maintaining we achieving to while production delivered prices quarterly very barrel. XX% pre-tax third Magnolia production of financial by oil and quarter margins strong record decline than the operating in more $XX in sequential a despite operating quarterly and per results driven and flow

with ending million share. of the and quarter by quarter, XXXX and $X.XX production both repurchases last nearly guidance. a roughly count at year-ago. than Stronger above compared XX% expected production quarter contrasted our of flow third key and was and Including XX% consensus share. slightly of while Third sequentially, and shares were regular result day Magnolia of adjusted the activity. EBITDAX reducing of $XXX than XX% year, during and free our our better period a diluted the grew to and was well to per million performance, financial quarter, well three period continued share beat during quarterly the non-op were same cash the per of quarter including X% per cash returned seen boe in spending efficiencies off earnings and estimates metrics third same for just dividend end X% of our We dividends, year-over-year high It higher Giddings getting’s of results primarily by while the production areas. XX% primarily the production the from the Relative in the many share represented that earlier on increased during XX% flow, the Magnolia’s by quarter. achieved a paid purchased beat share XX% cash. our period anticipated generated XX,XXX These

gain We of Giddings. continue efficiencies momentum progressing in the to

the of year XXXX inflationary total lower Excluding the drilled has XXXX raw for compared it compared service Giddings drilled development this materials drilling year’s XX% improved wells when day in that cost nearly and is to per Even to environment work, this per by our appraisal wells XX%, XXXX. stimulated foot despite is oilfield significant than costs. feet more double is and approximately levels,

of per million including million multiple directly have capital that the shortages our both drilling partnerships asset us helping Our or attributable cost. and of strong this experience. year, on and rates, some and costs faster our of well our about efficiencies laterals improvements through ability are to impacted about X% secure understanding us supply the savings and completion to Giddings about to has our million well and amounts despite saved X% with other total improved the the industry $X.X operating to $XX services. Said and Close way, captured pads longer to drilling vendors establish and been another cooperation for have XX that the products of

One around rigs operate vendors. message with to Giddings strategy to importantly continue This around job plan a capture additional terrific we we through consistent credit drill communicating can a with execute our we both and continues of a chain that allows closely year strive savings multi-well is will a area. working plan vendors, pads us a the maintain there a into that further supply two initiatives. them continue secure and is next ahead the sending with expects lowest much management to importance critical business done in for activity drilling of While to operating with in our crew rig Magnolia and plan. healthy cost, have this, completion our said believe development and to on one to goes be long way year. level I efforts and through to which next run would partnership they similar to teams our creating our continuously that

both wells areas, base, of XX% to and the Karnes at at approximately below efficiencies current reflecting of growth should This drill represent completion level of the our capital that of EBITDAX in production at some of in second would drilling year business we The well our exceeded product expected mix XX%. activity level second growth Giddings XXXX wells the are its Magnolia’s production Giddings. continued rig will our With consecutive growth provide prices. plan, the asset seeing This Giddings. be full-year appraisal of and a including and quality which

planning the quarter heading fourth provide should operating us for active with significant We program which a momentum very are into XXXX.

the through And during flexibility the and well our an the volatility quarter. of benefit latter be most allow to-date pad Giddings higher product both during come position and first largest our seen part levels Magnolia’s to third production eight to us of to than volume This is XXXX. with periods scheduled the to exit with half current ample of year quarter. the Our should online of financial and uncertainty. price navigate realized the provides strong economic during pad

and patiently Our free position enhance share opportunities seek attractive value capital allows also the of our the to allocate to manner us a per of cash company. disciplined strength flow in to

evaluating order We in of of full-year reduction result of and fulfill in growth XXXX continue our moderate rate a our next year plan to early annual after model consistent shares production our carry XX%. our annual revisit at dividend will results. to should outstanding investment out total growth least providing business to which our financial dividend proposition We

Magnolia’s improved focus over team. on candidate market on has Relations value its indicative manage to Selection as in over Officer. Finally, qualified at emphasis company’s and CFO. of I’m and communicate shareholders both to promoted position Brian strong talent as qualified announce the and the of a will other our Chief that generating since XXXX, an of I pleased Brian to role the Brian to Industrial the strategy, of internal uniquely Magnolia’s done excellent been CFO turn community make Financial job Corales, bench back serve our is strong the message to and of elevation Broad now has to helping well shaping Magnolia’s VP within as Financial Brian. Magnolia stakeholders. call time, stock

We will guidance Beginning for summary additional from the our to items which diluted slides generated execute before quarter production, refer in price third quarter provide financial our Thanks, per results. X, very our of quarter net which very for of for shows the had Also the it our income questions. a absence product realizations. some strong presentation earnings which million $X.XX. by to Chris. business share turn and again, and fourth of supported some third by was website. both GAAP on provided model quarter, demonstrated XXX and continue and turning hedges, review record we operating our found Once with Slide on as I over in Magnolia the total XXXX view our initial strong of

on associated per Overall Our day and third XX% adjusted basis of and facilities just grew in year-over-year total XX.XXXX drilling of the capital was million, quarter. XX% to with million, XXX EBITDAX. XXX and sequentially, for or a equivalent adjusted completions EBITDAX volumes was XX% quarter Company oil barrels our the production

XXX operations benefiting million the flow before Slide with of in items small flow third X, XXX capital cash million. quarterly XX on period other was at cash started capital working million by during Cash with changes the the chart we waterfall Looking quarter working changes from cash. and

acquisitions capital DNC XXX was Our incurred including million. land

purchased ended During cash million we balance our of million with XX quarter and the for million XXX quarter shares sheet. three on the

we repurchase open Since fully the repurchase of in After X.X quarter, the during quarter. total averaged share shares million by Looking shares in remaining our directed the count reduced million count repurchasing since outstanding our program, million market. at or time, We specifically have is have diluted XXXX. shares XX%. illustrates currently shares the during the our we reduction Slide XX towards weighted share average half authorization, three shares million which that the repurchasing under our second X, XXX.X in diluted this shares of our total progress began

X. $X.XX regular paid to declared will last be this Xst. Slide December quarterly week, on our dividend Turning We and

reducing achieving per dividend outstanding Our at company and the aligned supplement to share is by plan our least annual of shares growth and strategy production overall to is rate of X% achieve of our with annualized growth quarter. per XX% expected the moderate growth

our payment and revisit XXXX prices. will lower based on rate significantly recache oil dividend using year early our results next We

and net we sheet strong balance approximately of XXX quarter very with a Our ended remains the position million. cash

reflected callable million our in of XXX undrawn quarter and senior our do debt which ending facility. credit our Our mature of million Including is XXX until not notes XXX in third gross XXXX. are balance million now cash revolving

is greater liquidity billion. total Our X.X than

are XX X. on September convinced of Slide X shown and Our and sheet balance liquidity as

Turning to cost. have a our Slide the modest over prices X year, increase in only operating total the and in product costs unit margins. per and cash increase at income we Despite looking substantial past seen

revenue. XX% in increase line Our margin the or $X.XX F&D per half prices. year-ago levels. which operating from is rate quarter generally The cash our a this our the of cost, put production costs captured was our margins adjusted of was basis. $XX.XX barrel G&A total our of due to our related nominal about income Including to $X.XX are third cost in modest boe compared per a to than taxes, operating revenue income boe. third increase in is quarter to revenue of in $XX per compared boe increase total on XXXX, XX% increase an the including per the directly higher our increase per product of were DD&A operating $XX.XX increase is which boe Simply more per with barrel, Almost year-over-year of in

and pad higher fourth million is to to expect the including million of in the range equivalent activity operated number to expected estimate online latter quarter quarter, be due to-date approximately per have have part day. the our anticipated to that most capital wells at production largest of XXX quarter. the an well non We quarter D&C to we active during through op fourth with the of be Giddings. should high coming We of XXX XX,XXX XX,XXX completions barrels the

volumes benefit and price providing while closer Given half production year to Oil approximately than a expect the at quarter, to historical a first high-level the two be differentials our a higher levels during third production of differentials anticipated during Houston activity, seen exit Magellan during to also discount XXXX. to the the quarters. barrel the per our previous of tighter realizing East $X rate are to after we

oil approximately its is and unhedged levels. As which remains quarter gas reminder, for fourth natural quarter be a XXXX production. than for expected fourth diluted X% of to XXX million completely fully lower count is Magnolia share XXXX shares, all The of the

approximately We expect our be to XXXX full-year cash X%. rate

level year and level cap the spending to Looking generate to this XX% and operate plan XXXX, expected expect activities significant of XXXX, This price to two for is we below environment. one completion of at of free growth spinning to to We of and have production through next flow. rigs year. cash current drilling EBITDAX of approximately while a expect commodity well similar XXXX be our capital or crew operating levels, full-year generating activity when compared XX%

And in early are revisit financial will finalizing to your full-year take XXXX results. now dividend we ready after We our XXXX our questions.

to At momentarily assemble [Operator session. question-and-answer will this pause time, roster. begin We we will you. our the Thank now Instructions]

Leo comes from MKM. question Mariani Leo ahead. please go first from Our

I a healthy was of bit like again sounded XQ, just Obviously increase on a kind heavy wanted of to unusually here ask but seeing maybe capital. activity in quickly quarter. it an here that

of look that we we up be that it just for take being think we XXXX? than year, and quarter looks it probably kind into heavy? annualized for that end As less next like the won’t Tucson should because not assume fourth level You should

this our it. now what average, much XX%, look that probably XXXX, would that higher say we It of set probably what wouldn’t right least year. we think is is have approximately mean, XXXX to know you running make that certainly it. than we on way, is less heavier in be different if Leo, more should it what I a get cover thinking a you little going at been based to And just at full-year maybe I and today. on are capital, or I

that something slice you XXXX. not that that you think So the and way enough fourth adding On for is almost any for is unreasonable probably then for quarter that I it gets XXXX XX%.

Okay the know driven of that the but efficiencies, I that of appraisal and recent prepared out just the us foot somewhat down are well costs comments which any by some Giddings ask sense what lateral is seeing goes now your some to of in to you wanted helpful. have on costs of can for at update inflation, there, kind been bit little give And have either had kind offset there a a which here. Is kind then have Giddings? referred in there results you

year. could of are we cost, had Yes, per so probably areas of on other about Giddings, the we right. certainly talked little well to And so I an areas. active I appraisal, about as areas in pretty led program time. new we our that sort a running in XXXX. more Giddings improve for have roughly work development many have some this right understanding several times, frankly, is identifying order bit but perhaps, our around very into promising, and to these and that and we all is to foot. in of a are think expect promising it, appraisal And need continue extension we The now. lead we probably sort ultimately But of is about lateral XXXX looks That that can say to good, It

guys. thanks Okay,

Sure.

go Dingmann from next from Neal question Truist please Securities. ahead. Our Neal, comes

bittersweet is yourself. great certainly today, doing, how call say the great company well is is definitely just want by to Chris, it but it remarks

Giddings other It be little development the development corner to of on in broader. also Washington activity of County. maybe seems getting little continues program, of which to Turning the on kind that first question, my is a a most like bit bit

regions the the Will thinking plan. size sort to about so size? the pad continue wondering little if a development then XXXX broader in be you was I talk expanding mostly maybe just be that about and will you look bit on maybe about pad wondering of think just or you the as areas and able when at that So to, well,

will I as said Sure, mix in no it my a remarks. be

of do or mix rigs rig work, including core equal right it as a in the of now focus be second ongoing of dedicated it will more activity then and in One so, that sort will of maybe next year, the things, goes. see how will which for and area, largely I development think terms be to this we will year was appraisal just

recently, more eight On the wouldn’t mean, that would was we tell and size. pads five the well sort pad to three, exactly four, now pad have size, I and that a for anticipate but norm a regular us occasionally I wells, Up one see of you be doing well of basis off, that don’t to on drilling average I been so that more four pads. that

one see not. likely more might be that might You but larger,

maybe specifically. candor dibs. appreciated Steve’s And second Okay, discussing versus fair I buybacks capital allocation to enough. turn the then comments, on always my question

So would especially, look, has I but done your forward going discounted. is still Chris, well, hoping think to you quite think I hear how it stock think about it

you going just how forward? So about allocation wondering the think

Well, has it be going Neal, as to is it been. mix, a always

I going mean, such is I we on uncertain that terrible have got changes. And So economic thing environment. amount good are think of a balance a on the to this you significant not sheet. see don’t clearly, cash

You next to what is probably that that, relatively just accommodate continue. over quite know, a in sell the buying and and them, you sales of have, And our have them probably shares to I to or have worked to income helping out equity large very that that will done Fed it fine mean, holder has probably is, time. now, about to better try some private earning be The process, time thanks pays a is down as have plans we little we by over and regularly those have mix interest still not treasury we we for what different. bit going talked department.

are different is And good then feel that where just original, is I sequel of some the a and than usually, comment, mean, the but is our something turn sequel least fine of some so open we a maybe share market repurchases. or dividends some our for a it authorization at to companies that also is them is have as ways, say. different you dividend what E&P the like movie this would whether somewhat separate as out In And different is us. doesn’t I market, it way. hoping other open approach sort towards people

it like seen this have before. of the revenge sequel series company So minute will And I be the is as I you I and movie what this our a time, have feel just E&P it about philosophy. so. go a But this said different. another just certainly And just dividend you for called maybe back and five. part reminder, is to hope this time, dividends we remind

they that So for to around is the sustainable, secure us be in principles need other dividends safe. words and

out dividend to as real a to based our dividend a grow that paid on be execute has So earnings how business look plan. our generated when of we we are

a this of of out of reduction our growth, and the combination comes production So growth shares. outstanding

we a year payment payment annual of rate So semiannual we increase rate our $X.XX. quarterly to this moved earlier from XX% when announced to a dividend a

next rate plan good. think we when we look to that at we said, I our is year, XXXX revisit results. this full-year as early pretty And dividend

my often Steve a dividends be speak again, think would too. by the remember, Mrs. dividends wife Jason’s and will for mix you I likes way, it and, fondness about So

Maybe So, growth our would objective our just likes of growth, steady fairly me not to this be over off to them, grow you should business don’t dividend dividend shoes. I and annual expect of I and a But able keys recently, growth look, hastily and prudently to it, know. about time, really she someone successful of told again, execution dividend is are I out of asked related, they the into say, grow the to that, model. it. also

is you dividends about probably to just about I all would have with say And that. I that for So now. leave

Great details. congratulations. Brian

Thank you.

from Meade Rice. Our from ahead. Charles Johnson next please question Charles, comes go

lines. get if beat you, Chris the his onetime understand I what, Brian. Chris, could in an question behind XQ different expected to, being there versus Mechanoid about thing you schedule a your for trying may could is and morning what well say I’m also eye you a production performance, with on this pirate have, really And activity. help me, have maybe be you performance and the for Good me and what trajectory, drivers can at is up non-op out the maybe think thinking turn is production

to you sense makes it framework you that XQ? in that look if does how So to

no, it production us to question. is the knobs sort they Look have on necessarily. a the didn’t Yes, there turning was back of that outcome change fair -

what So I know, just we very to wasn’t anything let different planned really. for, had it you than mean,

areas, the we a end to in perform the I more have think, better bit we did performance, turned at of wells little as day, clearly, non-op. the said, out both better

this to that to some of sort leading continue laterals the And talked for very year longer about efficiencies way of and in it essentially those we more early us. wells just of net through in come

this be Maybe I we different visible or wouldn’t was I way that performing that year. call assets once to would it something we may are is so that. to be be if report out has one-off. you, just than But quarterly. of better thought. always way, And it a out But a be to wouldn’t say as could, that to certainly we not it that reported And or way. as we some attribute turning turned it The there way. if noticeable to

of at The assessment can go for is what with the the we we think to activities at our and risk of so it non-op just coming what how the quarter planned the anticipate things timing going that to say? we are So we fourth mix suggesting sort our guess is of I timing is stage. this suggested sort wells we of the mean, as outcome the I combined likely online. best trying are are of

question. of been success maybe north your a is operator that with efficient and York and hand, my Magnolia, this or just who want the strategy That to had is but Giddings of call have is second I you helpful Eastern the it. at perhaps guys more hasn’t also to to There And success repeatable sell good part other segue or looking President guys, an means you on whatever you and New Chris.

than me seems You asset else that would your and than to anyone in it that anyone so be more have success more much then valuable had else’s. hands

give you you of, a it to a can participate there? for sales So us sense process what take in would guys

we mean upside to are I at in drilling look to optionality quality look with going existing continue locations that Well, opportunities terms compete that with our provide us high future position. of

once someone you that of that points This me it Now, are then that also the clearly and spell come with to wise me doing why not goal is better, same worse. told person can’t least told if make very at bullet acquisition out up company idea. four good any not probably something, you explain a the is

you M&A, you you probably large be doing anticipate us disappointed. anticipate did if or So, would shouldn’t

value, continue on to time. that that pursue are going sense of opportunities more to sort and and for are bolt that value to we add makes truly So transactions, smaller over to accretive are attractive us,

be So we about this. real are particular going to

you Got it, thank guys.

Thanks.

ahead. will question Umang Umang, Sachs. Goldman from from please Next Choudhary come go

from questions morning quick thank taking you and so Most ones been my my have good two Hi me. asked, of questions. hopefully for

from $XXX at sell XQ. million on to if further don’t comments end see the First, of net special the position I wanted down of growth. around a EnerVest? a dividend revisit I giving we any thoughts dividend appreciate cash Especially you the

share our benefit see money play and how like through the dividend Yes, things first a the opposed hope not to price. would for And as sort special Umang My plan choice. probably simply to a and probably question. a I my be but it so dividends, of be about first lot we thanks better of said, the all mean, choice. I to never dividend talked a would just special would that back out. be wouldn’t but will find have say have I use giving help But actually money to never my dividends,

with can cash you Got me further to there be call? like can balance look like you. you sent bolt-on And other on getting are on then then which the and then And the there would enhance lateral which before you you remind net business for enhance the anything, opportunities, is year? well it any next any would transactions opportunity if sheet the follow-up, as that further said, where

Yes.

are gas execute real created think, going said lot we professional bolt way to we at and in best to seem current where look to is kickers. but oil there value. the around we continue property assets the believe truly on describe always say we are is and fairly I opportunities, will things for conditions that again, and guess that, could where there tire right. smaller look to are word sale, and to in we areas bolt But acquisitions a landscape And you certainly out this about as think I the we on, of through particular are that is on is be transactions

Giddings? think I’m about it. sorry, is that on I So what question your

any enhance it lamp. On next to are further Giddings, it just is is And today? year? you there Where opportunity under lacquer

certainly percentage I more are, over of think bit a you, bit bigger probably percentage we depends changes increasing it basis. improvement it And XXXX been already mean, area lateral basis, years, unit sort the of on on little on quite but seen, a I we I the there to like, year. feet has by would really made by I say sort of where want Yes, last lengths have certainly several tell there per have been a a is almost

That helpful. you. is very Thank

from Tim, please go Rezvan ahead. Capital question KeyBanc from Markets. comes The next Tim

a ask I Hi to promotions. on everybody you on that good Giddings. disclosures morning wanted and the congratulations bit little on provide

a you the addressed back stock If uncertainty premium on argue peers could because was have that cheap stock XXXX, pretty go to of healthy at generally you traded asset. now, the trades area. you And to as Magnolia a that

the I think do about so of the and CEO, have? And premium providing multiple, of disclosure do role guess, Chris, defending to sandbox your are you you this as big new about that Giddings you investors you how in kind with how and think kind

viewed job going the our decide Yes, of - going we frankly, think. we to acquired of is a it make to more of but short most Giddings of that it When And now the probably lot and one equivalent just risk an can. there in the than quadrupled own, I about there producing mean, And Tim, to day, around, is be was we the it something had have its it. was is fairly market and that an on optionality is teams that results on valuation, of - of job done, valuation Giddings, says, operating out those was to period exceptional and of time. asset try amount our put up XX,XXX a the first sort assets a as to that I

say so prone that there That be to that fun we that that that more throughout there was also our up completed, it part think are. gas percentage I is aren’t plenty So not we wells of of tended to here. wait own, stands have record the areas oil wells, gaps that and which as well. to And oily brought more on acreage, the its have drilled

not that I and I some that days, talk really up that this more type really we early the of up of think outside that is put stage. speaks put of would think some to have data So, I’m at results. for specific itself. around necessary we well about how growth sure wanted what,

I I not to what don’t it. about more benefit be. there is say suppose sure know we And really the could. would what certainly just so, I’m

to the was give you point that there kind this I But think much area. give think granularity. is you have what and really with Yes, hesitant too can investment how where was delineation, the to more color Steve you on do portions guess some you have in inventory Okay. getting a about But I of just derisked core up proved successful area? the community you of

number usually that, more me, outcome. not is not ways there I’m an that overly be led to diced. endless to Because Yes. about - sliced excited and granularity is great of can it a never

be to more we will areas our are or still that say I I think with delineation about anyway, program appraising. so, And time, that delineation there around mean,

talk be see, are more not more there So I that time yet. about there just information will you and over will think to we

fair, you in were I saw third repurchases. if that. shares off. fairly quarter, switch onto okay could And is as aggressive that I And I sold appreciate all topics, the just

do it date, have do in sort the your about you Are people stone shares left those internal at $X you how up of an a per future? committed million within million of value. quarter in looks to all to Shares that think You - high. $X quarter, you set program. run are sharply think but time about or level you are like math, how million for know that have I repurchases about nine about performance the

Yes.

open the shares the per investor an of one X% think period, will, is or if been than you in quarter in EnerVest have we that sort is way largely commitment, another, X%. outstanding. X% either shares of typically, Our more I from by or the market, And shares it every met buying

You keep than going have you out in on that too is there. better got of we idea a what all mind to

doing And have capable maybe understanding perception so a what Magnolia of value we different the overtime. are or of what assets and or Magnolia

assessment what two markets things. on assessment going the So our may of be different and is

the of be to share look the it run down continue market continue and will et in here the running that so, of of at interesting, sort as up price or And program - move is cetera. volatility is prices, way. particular or But move can that there as the on given and involved product not. we we plenty opportunistic, on opportunities to to market obviously, But, sort I it

you. Thank

Partners. Geoff go please will Energy question Daniel from next come Geoff, from ahead. Jay Our

Real sequential well pedestrian that quick as the quickly of in question. kind sorting magnitude in non-ops completions? some of for and the of QX. Hey Giddings pad is But guys. increase by about there CapEx the eight What

an pad it thought. eight spend being like well completion and Just had in as more caveat, as due the some well And XQ is as to completed. very non-op is originally than we the so yes, higher largely well

So huge is impact yes, wells but it eight the is both, to really a that.

Got you.

it kind I’m guess, the get un-pop. of of about is sort is of extra you if kind sort or the sort capital, And XX% original sort be is guys is in of the than punished of there bigger probably going of pads million I I like mix? are so just it run that fourth I’m back is in it so really, that and from an just how obviously quarter, sort wondering lumpier at, rate guess of guessing just going then of just question I to XXXX looks sort to It like, saying looking mean, you And here.

XXX% correct.

not the why our And to active time next quarter This other so of is quarters. little in XXXX. one correlate does looking higher a at is capital our year. than just of one was average bit that quarters, And in most

would the would pad, completion are tend and mean, period take two up And not is certainly well it deal out. not quarter eight I when I be things rigs or throw an you that part that the running in any one lumpy. of Yes, particular to crew, I one stand going take to you mix is when

say wouldn’t I indicative this border. average of So necessarily is that an

guys. Thanks it. appreciate I Excellent.

[Operator Paul Instructions] from comes ahead go Our question from Paul. next Citi. Diamond Please

the guys horizon pricing out more that guess, or thank taking or point and with a bit take set in stone back next I a kind Is on morning, split call. have two step for that guys to a next would year, what start the wells reevaluate perspective, Giddings XX-months? to from drilling of XX-months in anything my you your for of the to a pretty you much horizon Karnes. that? to Is the pretty you want laid macro the cadence between there a stable I Good at program mechanism is

you say our of reevaluate, activity? you When about or are pace activity talking

that? you shift there is in just Yes, the any anything horizon cause the decide of where and in the would that or it, the to modifications drill or pace to cadence

think of, okay, at sort model. say, look Yes, you business XX% to I it, that. don’t that mean, are and were of next in you it with we to they year, you to want markedly no, to going sort respect change XX% Paul, say this excess is grow I of our again, going year XX,XXX and however feet,

way. the been to pretty has to good. And that here again, we expected so to continue outcome And be that anticipate

I shift at plan so, the activity necessarily all now a right see in the And this need don’t pace to of environment.

Okay, understood. And then just a quick follow-up.

a problem ethos, the, a to holding your that current it no you as cash you like something just With of how have holistic closer guys with like balance, comfortable is more at next to is a it the expeditious to wanting through or manner? either or what start billion point where point you expert goes the if there that quarter deploy not more

but and the and opportunities, use continue that not prune can active it come Well, That we to patient deploy evaluate want on up opportunities are in quite more that. time, do drive is best and of to value is to to don’t be than again, we best the necessary and to of we into likely be we going regard as bit be is out these to to would I around a the kickers but But and cash. they holding goal with are we of returns patient tire certainly smaller to uncertainty try is say do, cash in to just as right be said, as will over year thing of economy the next now it this there opportunistic will just order always we know. amount our

that So any gives you color.

the for Understood. Thanks clarity.

as presentation. our today’s question-and-answer concludes very for Thank conference. much as session attending well this This you

You disconnect. may now