Ovintiv (OVV) 25 Feb 222021 Q4 Earnings call transcript

Good day, ladies and gentlemen, and thank you for standing by. Welcome to Ovintiv 2021 Fourth Quarter and Year-End Results Conference Call.

As a reminder, today's call is being recorded. At this time, all participants are in a listen-only mode.

Following the presentation, we will conduct a question-and-answer session. advised without conference Ovintiv. the be recorded not Please rebroadcast, or expressed Instructions] that may this be [Operator consent of would turn Mr. to now call I to over the conference like Jason Investor Verhaest Relations. from Please go ahead, Mr. Verhaest.

our everyone, welcome, This the advisory on filed regarding of call. being disclosure-documents our and operator, at is and of you, to fourth our Please year-end call are quarter slides and and at the ovintiv.com. SEDAR forward-looking end EDGAR. our slides webcast website statements conference and available in on note Thank take

the Following to allow our question Please time be I'll through prepared call and remarks, we turn your to one us take limit over will available of to to will questions. your today. more specific Brendan. This get one follow-up. questions your now

thank continues whose for momentous of we'll team the and is start call resulting touching Corey are to superior multiple Greg be important provide by the affordable value it results reliable in XXXX that for was returns and and will of this our I of morning, our a with on work teamwork, The discuss energy. staff throughout incredible week creation points reminder our how today's proof on and shareholders. today. us. world strategy critically is you responsible, deliver to our our want the company. joining entire expertise acknowledging to global for events year generated Good dedication the

production peer in not year-over-year are has We increase this to maintain I the absolutely committed and XXXX. who we're strategy. said to believe only capital

in continue deliver stakeholders efficiency value We return some deliver our industry leading truly and team had our will set cash to a As are confident result, to XXXX a year banner I'm we beyond. yields. capital in and XXXX. to eye-popping

want a highlights. I take Before to of some key details, to moment today's cover into the we get

last again marks set reaffirms our core six of our second and raise are we base business. of a the growing quarter dividend our believe this to sustainable in the of is the We XX% resilience a proposition. First increase and increase months, value foremost, once that dividend component and

and through to are gains increase efficiency shareholder cost Our returns. flowing elimination

deliver We underway our of buyback of have fourth million framework we quarter, quarter the Since XXXX. program buybacks with in purchased our first approximately additional started in to shares. continue return our on the cash we outstanding X.X

reach set incremental to achieve double year. of we which X cash second this half target, our debt are to returns billion in once Our we now net the expect

financial on have In to reduction continue set we addition our XXXX. the X X and lead and XX% a excellence, operational new target ESG front, Scope emission to we by of GHG

working in key $XXX We and our through framework, pursuit dividend. Capital our shareholders in buybacks our to achievements. shareholder last the of momentum fourth creation, into achieved million is a the quarter our operational speaks approximately 'XX. delivered in base and value milestones us and we announced which an reaffirming debt importantly, XXXX yield, production deliver outlook plan. previously had one even now, spikes number allows us capital to This amongst given are inflection that's our return And once point. XXXX efficiency. year XXXX, for Finally in peers and strategy alone, announced of and itself fall our higher evidence financial for number we cash our X% hit a allocation capital banner in ranks we We share

are and earnings year We alongside a billion grade cash free $X.X We and billion $X.X net investment of -- debt reduce again we flow approximately also rated. result year-over-year of full generated once $X.X as billion. by

the World achieve the World XXXX full ahead years alignment We the also flaring initiative, with focus ESG park routine reduction full continued zero target a and knocked of our of we Bank We by nine methane on our stewardship. Bank's out target.

in points pressures be XXXX the XXXX inflationary year-over-year. proof more well we over versus to these successful now continues This differentiating and our and to Combined, by offset average demonstrate strategy. Corey. performance peers. reduced the call Finally, XX% execution was cost than our turn I'll of

Thanks, Brendan.

is will by our for outlined flow average profile. XXXX peers. efficiency for plan leading our efficiency to $XXX compared industry cash XXXX over in leading This generate Ovintiv free with capital alone underpinned As capital incremental our in million performance the

scrip, condensate. previously We maintenance and year level capital per are XXX,XXX billion of value flat barrels expect second NYMEX that half in oil and billion $X with X.X profile. also roughly our half target of $X.X XXX,XXX our of about generate achieved reaffirming flow to to At line free production debt the roughly cash generates announced XXXX is year. and milestone the we billion capital $XX $X.XX program This to in high and our second net current WTI XXXX day full in

sustainable we dividend. mentioned, Brendan great As base growing and take in pride our

the substantial Our the starting dividend for interest in six free second with XX% leverage our and a increase give cash costs, us confidence and raise to March. lower months, declining profile legacy generation, base in time costs

$X.X that, our At efficiency One we are shareholders, flow, to prices, cash elements cash XX% business of debt these leaving exciting most distribute is with our impressive showing to of flow. capital the our free reduction. up industry-leading along XX% continued or is billion of an reinvesting very about about

on increased approximately over provides shareholder incremental of across plan, buyback program our base underway are returns and to Collectively, program. first quarter quarter, million. million we the $XXX in today $XX first shareholders buyback we'll continued XXXX dividend our strong and Our return

cash XXXX yield distributions. broader XX% to of both the XX% we competitive before yield across is from and inflect market, This the X% return peers is Our in very today's economy. industry

target once $X of shareholder XX% achieve We and increase at set to flow. we least our yield, returns billion this free double net available cash to are debt

in as cash we deck. with $X compelling. highlight we roll-off The over returns on exceeding actual XXXX returns cash yield strip this, same XXXX, and our cash are at years of illustrate cash stats next billion can XXXX see XX%. returns returns XXXX and operations now of we strides grow forward impressive free the taxes generate, Our double post five the over at the debt. benefit We pricing. over it yield we our show call the no to Greg cash as turn to the that team the a return to cash making free price And rolled also continuing XX% I'll see To took from to reminder, program see material we the the the hedges, flow is his front. once

Despite address we quarter. headwinds a full Thanks, key minute milestone strong to take results encountered and a Corey. I few the fourth our to year wanted achievements, in

delays the Montney, fourth feet cubic XXXX of quarter and gas and permitting per First by XX production reduced barrels of volumes and outages day. in unplanned condensate midstream day, million per oil

British activity leveraging basin us Montney turn-in led and well from in delays we our in redirect longer Specifically, fourth forward to portfolio quarter. In flexible fourth issues, prevented completing impact. eight permitting number for lines quarter. pad any multi these a an the shift are response our Columbia the limited operations to minimize to across the of Also, and go the portfolio lateral development to

XXXX first November is but key to detail XX wells turned fourth we in quarter capital didn't production I'll shift in strong minute, more efficiency. have delivering the to until through in a in September from three Permian, this XX our December. cover and lateral a For development our only of line wells example, longer

are technical XXXX extended and strategically XXXX Canadian record our maintain critical production a a emphasize are with The XX,XXX Most development well, These Ovintiv. will XX% of royalty remarkable strong from how us laterals from plan. to this pivotal efficiency. on will In portfolio for year-over-year Finally, embedded In provided across metrics lateral year. last year's based for gains sand our increased generated and Canadian XX% length 'XX, completions, I utilization per I fourth using XX% higher in operational and XX% implemented rates. drilling last prices are efficiency commodity XXXX. positioned heading to have success was The per XXXX. year this and impact a average of derisk year utilized price, want year rates on lateral complete and longer XXXX consistent cost. significantly at completions on the we said, to a over We limited for capital our transition knowledge this, completion that industry-leading impacted into we program to am costs and program. second Permian and scale efficiency success really achieving our local wet a want increase proud industry year. our XXXX, which we an importantly, resulted costs, In recipe With our program our of calculated our reduced stop sliding was team. being quarter volumes items to leading a the to development has that Permian, and year-over-year. feet these drilling in unit a I of in Ovintiv for lower say ongoing are

advantage We sand only required have using local wells this our volumes year $XX also savings completed proactively suppliers, experience year. operations. deliver have Not we to the Simul-Frac sand last in sourcing XX% needed to we million the of sand competitive over that material support a space generate will Simul-Frac. the we secured in have Last, but our logistics

in by five one every Ovintiv. Simul-Frac completions XXXX roughly fact, in In was pumped

over a By and lateral faster footage this drilling XXXX, environment, well the peers on inflationary new Simul-Frac exactly to were years the what continue mitigate of positioned to foot savings of approximately differentiated the And forefront the we average. generated industry completing are the time several center, we lease expanding completion the compared In of cost and day. future. versus These wells amount frontier, Permian today's already location. the a at at of cost technology XXXX the mile side single Ovintiv other portfolio into been path average. per is a new $XX savings a space of line. on the a have industry reduce performance we're to of establishing spent achieved just than significantly the set In We more development simplest XXXX, compared by In for in doing. across we have by efficiencies rate to that to simply efficiently operating faster completing in efficiency company well that delivered the higher is

oil Through down. well activity lift delivering of a condensate and we we're performance. costs well wells. stack industry some in better is to and productivity. drilling the completions and improving both. keep also artificial new Our But efficiency generated Lowering in a and approach. Montney a productivity Pipestone We're costs we making increase path XX% enhanced increase on ways XX% capital designs, and pure faster two-pronged than Longer well are laterals leading completions

pricing Montney WTI last economics a and to As by our of are Also the the quarter. the we brought reminder, basin XXXX. the a industry of on Montney wide premium value year, fourth Permian, play performance performance. program well continued the received with XX supported XX leading wells production, we In across condensate in the consistent our in well our high WTI which year-over-year with in the top

are inflationary wells spacing, actively to portfolio utilizing want in our to durable these resorting macro resource deliver pressures I example service of and we behind. face goods generate the real work are across to teams well incredible time how great costs done industry leave our has a learnings the reminder, would From to productivity. a multi well efficiency top multiple industry are our capital basin comment As to transfer premium which leading tier despite very results are of challenges. real. in and to up team enhance assets not facing labor, the These we

key Wet days leading as efficient of In our inputs efficiency. However, location fewer industry through our cost performance on Sand such operations, commercial leading maintain industry lowering well combination spending and is will completion in delivering world capital sand to culture drive zeroed costs make almost these opportunity of on of drilling and up of pipe, areas designs, our down to innovation and utilize offset half inflation. our pumping We've costs. the

pricing results pumping they of has of Today, advantage and have give OCTG a and to approximately today's will well that of drilling tremendous us flow have performance the call supply a to free fully what of competitive over leading in translating supply XX% Our the peers $XXX environment, achievements over is our to in Brendan. relative chain integrated reaffirmed I occasion. per secured, XXX% plan. risen cost achieve. turn could cash year our leading confidence XXXX to now back The combination contracted, XX% completion secured. services These our we our incremental million team and

life resource made is the year, Thanks, we to We good continuously significant Greg. our generate premium returns. Last ability superior it believe extend just across business extending progress our to portfolio.

First, in property bolt-ons. framework, rollout low-cost allocation to our of our capital the approach announced conjunction with we disciplined

portfolio generate return mid across program and start strong cycle a locations to We had net when the only pricing. I'm do to not $XX cycle premium to this environment, cost we're acting heck current of sure staying million. strong with quite that only full at added well disciplined At a a program. a location, of expect long-term, we've Despite per are we price modest over committed the $XXX,XXX us to our can start under off a this XX and I but of

million we the a per program As is $XXX reminder, year. this see of up magnitude to

billion budget. Second, locations assessment on potential across worth this CapEx appraisal portfolio. And is our we appraisal $X.X an assessed organic and pursuing inventory XXX into premium we're organic that basis. actively program ongoing our It's built noting over

replacement just ratio higher our XXX%. XXXX of reserve a very As still a was the our we reserve If efforts, impact adjusted was ratio of of replacement impressive XXX%. the result shy organic prices,

proved Our helping our business, barrels reserves X.X of and strong sustainability of inventory year-end. over runway barrels across maintain each oil of million performance all core us three oil to to three total of XXX premium these increased initiatives equivalent assets. decade by a providing The is approximately billion our across of equivalent at

While to key through wins to and drive our recent time take run highlight want ESG initiative some today's on financial call. we've operational I to accomplishments our our in progress.

year of 'XX, earlier, four mentioned emissions target. to XX% We at we earlier that have reduction pleased a we're be target. I resoundingly our original than end over years our methane very achieved As reduction announce

our Another key is X.X% progress than and proof of of less XXXX. point venting flaring strong our performance in

the and World Scope momentum emissions XX% target. employees. a routine flaring our GHG the continuing our X 'XX, We all initiative driving this reduction in Bank and In XX% critical with in X on consistency by E&Ps setting were have that of XXXX World we already addition, the further year. one than Bank's first to of of declare are XXXX to We're initiative today nine achieved zero progress. to tied years alignment 'XX, more full continuous target by We're and ahead are Starting our is for target action in reference we reduction believe and since this ESG committed transparency, ESG improvement compensation XXXX.

key provide Q&A, Finally, call I'd value to before reasons reiterate proposition. we differentiated we we to believe like the the turn over a

versus First, our our leading capital efficiency remains advantaged peers.

XXXX there are we debt a of our cash compelling up target we and see we our doubling providing yield X% approximately in Second, this return and from hedges roll-off. achieve when as net $X billion going

on reduction, We are finally, delivering strong strategy long-term. are measurable to continued of deliver committed a to track record have the results. we ESG debt our set over And and we

basin over have a a premium multi decade and of culture unique We a runway, of top innovation. inventory tier portfolio

to we're on thrive leading remarks. business focus our now have Our responsible concludes capital and beyond. prepared This and prepared to disciplined Operator, positioned questions. take our operations in allocation, capital efficiency 'XX

[Operator Instructions].

from with Please RBC Capital Your first Pardy go ahead. Greg Markets. question comes

Permian, role the to gains Montney about you the so talk and Anadarko. we you of got contribution kind generation? the three production looks certainly Bakken terms efficiency I flow with do on cash the typically it of either like a and/or What go and free forward playing basis, see Brendan, forth, ask that you but guys, you covered. the about was going big

and have this we've of We're before, First plans happy would scale to portfolio not we strategic for off, today. the doesn't we portfolio I've think portfolio Bakken, think, M&A we is close the come the but I with no got it. M&A. I when reiterate, that us the dilutive And for hard about say you've on a with very have and get comment we just strategy it worked as competing to before, sort to us, heard the very large we said necessity. just And want where

assets, with their returns. asset You weren't this returns to I've exit smaller fantastic is saw it's Duvernay competitive. the strengthened significantly but since said the compared have a it the the to action take very three of before, larger depths us last portfolio, generates The rest though & core recently. competitive Eagle Ford Bakken year

well, there there. performance seen costs, what and both innovations on like Our well we've and working really we

So, thing attract where add, role playing And are our to think still severely even I the this Greg, I it's make an we peers, it ask to investors. think, portfolio. other smaller in getting in versus our to market I'd have undervalued going ourselves whether we is harder materially

about. think also will we something that's So

And maybe then is dig the the just just question into to second the, repositioning.

a first about I is is this terms the mean, provided helpful. like year, production. bit trajectory and capital guidance, super look maybe know like? I sort of Just going which to in what quarter What it together? of front-end it that is around back-end of look the production kind mid-year is loaded of a Is comes year of or CapEx, year, kind again loaded more everything you

higher to And supply our there's shape make challenges by entire on is away. with to our focus the being those how value here But with capital. in chime we anchored I'll it's today, think returns XX% captured we of of think we industry value our important believe our culprits. some designed that today. forces obviously And generating cycle, and some too of and margins, that something and efficiency And trying very the program. that on better strategy and is price let has to some sure like really curve benefit are Greg, capital performance Greg have always bunch same And returns the here. gas prices our period, disciplined superior we leak the it's gotten that the our one and our up leading oil challenges We of to that on $X.XX there's chain and inflation this are we've And a for creating since barrel prices pretty you if latest at, increase. over doesn't start price on that's on of XX%. a shareholders. capture capture happen, look $XX by

And on on to that so the capital to was when margin hang priority hang our program, we that to efficiency and 'XX expansion. built

so, profile outputs you're really activity out And of that of seeing production design. the cadence that and the are

influence the shortest the profile. is, some a factor. grows is to the just production you one? and so don't year through invite Greg, see talk will why tackle that him But, shape biggest capital I'll that the on minute of you here working a And Greg, shape on interest as But

Just through comments, not only of now critically develop on effectively to Brendan's also inflation. And our we longer to to in position, important us, build for transition we're but as right bit tactics. which going think a our are a we go operating laterals, combat

we go to As that. think have efficient. it's important these longer critically that we we're some And that lumpiness stay be we to built going will laterals, into just

level for and So we were wide fleets the as the as services we the loading a best we strategy was that ensure were our of that way longer our fleets, out frac go take our frac on level we costs loading recognized to frac space one to going and the planning to XXXX, lateral things saw into the we the getting schedules. of

by win-win going receive ability and effectively busy really and worked our utilize lower to crews to us not to see into better with we're keep our entered our efficiencies that allow to execute. year costs, doing So equipment, and that we innovative round. really And that, only we some are providers agreements but those

in a I we but to schedule the or of end more lumpiness lumpiness as have say, that is, in through as So through in go capital, transition. the the we're should the this result go production all we going little

the is an for we've capital that, capital production on do just the to see that year. to. in that, So feel we front really, the And intent can in program full most more the will the capital guided half and we ability the output both our very as but production is of of to efficient the you confident our have a year deliver but little

Your with from comes Arun next Jayaram question JPMorgan.

XXXX me Brendan, the let guide. with start

is the that condensate XXX below XQ to guide bit range. end of oil and XXX the little a Your low

Obviously get range longer that to profile laterals to wanted your shaping hit cost but the shipped the midpoint just that about So of of would -- the as it that of thoughts. be full you of how you think year? as long

midpoint in driving sit shape as We're we the very piece here line that right that hitting that's on. today. track commenting confident turn Greg of was is we're The really range, just the timing that on

to moment the little So, this capturing how kind just our heads is a of to really that bit we again, value. efficiency sure I'll get what of make him in do there. turned we're and out we more details did, capital a But preserve push

out that. why that's And it program just we the the of sit the of way on track very we're the the is that very as through of and today, production confident so And much shape here midpoint But about profile is. sort feel hitting falls year.

So Greg, you maybe turn on touch want in timing line the cadence. to

seeing in saying, as longer a the line. in lumpiness we're turn I turn was go line more in the just and strategy with little cube On laterals, our into development

mentioned, as sorry, had we And online our wells XX and remarks, prepared online in only wells online Permian, December. I in of coming September to wells come XX three December. coming of there the the -- XX in in in So November the

loaded a had in turn end we back So internet line.

the QX, that will we a roughly As back thirds come of coming number profile quarter look two wells the to be to a online online, come going we're we similar online will there, see in our in have that forward wells half. of

our teams. rates. production in in just of the just up are in effect. showing that really a and lumpiness happy so some what's well that is showed efficiency which our today. timing We're things lines deck we that's with We're performance, turn in really little of We're the And our dip with our with happy very a the causing production. seeing crews the It's

portfolio, to to the basin Brendan. monetizing potentially investment on next that There's position. look my follow-up reports at hiring around be bank potentially Ovintiv thoughts been Uinta press And just the an some would to some get

this? questions us secondly, are could the of from annualized press be is couple of looking sense do deny regarding give of you this get proceeds is, confirm your and flow And down report. a kind cash then an a you get or did is some to sale? to if you a may be Could perhaps standpoint, kind of could lead maybe that an One debt from on this would the the cash your the you So timing Uinta? return? And increasing from question timing acceleration asset of

be We you'd I really we assets. play. a surprised what an think cube like three comment cost, say, completion I impressive. Bakken wells there very drilled don't hear has core new the would seen been into the the and don't what and our done performance But second we've talk to Teams the year, that excellent six was here job our earlier, last on we I in and drilling design. it's on mean, and asset, but speculative what about deals. But to about talked again, Uinta, smaller compared I

about there's So, part It's of the moment. of excited just key undeveloped lot Corey flip in But here. is it it capital XXXX. portfolio. potential results to of not amount for a our a play. a the in We're material I'll Maybe a receiving

magnitude cash that? flows, the can of so about asked sort he You fill of relative in

Sure.

flow a XX,XXX and give million. day some for perspective, of XXXX cash you Just XXX to about kind BOEs to XXX million production is is it's

I we're free delivering just to the about Arun close obviously, we're that inflection potentially the maybe cash you impact to from flow then cash getting quite returns, on say organically because point off business. that And for on with just would it the asked the close you,

that leave in terms of there. So value just going I'll materially not I a it's think around. driver, it move to

with Goldman from comes Neil question Sachs. next Your Mehta

the yields environment. because job. start are three you are commodity quarters Slide at really Let's been, here that price been X that that on showing it's now guess robust I flow Brendan, cash you've on free And

think with about you that? As the of that root I'm do to to And return some figured the perhaps of where going think valuation that of maybe discount? pull sort this change it? do how you mechanisms strengthens, discount at, catalyst think about, is, you stock out the that's balance you cause if that have valuation close the of And the as forward, sheet you the one cash trades

you our us really I the ability we think environment I we talk in study seeing what today's when then mean, market are shareholders, shareholders, do with that But our our to reward and increase accelerating and hit those to returns the base you've today. it. is to increased are obviously debt is returns. cash strategy dividend the and seeing to you reduction increasing cash

our on forward. going that on it's belief to going executing So, the plan shape valuation what's is that and that delivering

here that and oil stays to elevated to you And event? that what for end, if your return capital up outsize or would XXXX stays make pull relative more of to of take it case, base that some forward 'XX a

point position this cash Yes, step-up hit that returns. we'd and that's a in $X to those why year of inflection half be you've billion and seen us point second to where the dramatically

how the absolutely focus, that's are and Neil, operating our and about business. executing we So thinking

Your next America. question Doug with of Leggate from Bank comes

sheet capital It equity reduce that, you on me this your and me for folks what cash understand sorry. seems Neil one so I'm structure. as return balance I'm comes on Guys going don't your reflecting still to capital up. volatility that, multiple to asked, cost more to debt, don't question. just valuation seems expands, down, It goes issue be your just of your

So debt, deep have that stock the still at to opportunity you have such a discount. while still you amount buyback your of

you do sight line aggressively? wait, of debt be? before balance cash where step you Why to buyback? sheet you reason to do you to wait? to have that So And have ultimately billion of your hit get back the What's for my step-in to is, $X targets, question you want more the the up the with going this the why not

lot It's thinking a about. spend something we time of

risk. to I it think comes really down

where commodity great. a volatility, price is and today we and in takers there it feels We are business price are

financial look resilience be that, to for You a you cycles of in the we at in that us. on from that the business will inevitably it's lot the the But the for so prices future. reason what screen prepared ensure the we ultimately, optimism price there need create and hear is

walking And marching up we increase why us see today. so that's returns. where at time the you Again, cash gum same did and here, chewing we're dividend base by XX% the

now So debt very and pointing to achieving inflection reduction returns, you're point marching to. cash that that those close up really we're the

So here. hearing you're us what a from approach I is just think, balanced Doug,

I think to on in the make flip debt $X that switch returns. we we get sure at we need cash before net least to that billion

point important is debt here, net the guess I right?

Correct.

follow-up My is an question. operational

they're it away, like doesn't permitting the near-term. You least look and obviously at in going have issues

you walk of through $X.X working has example to us hold can the capital for you XXX% your reallocation So the to how allowed still billion? interest capital

Yes, great how risks. the manage of point it's proof unique these of a can portfolio multi-basin basin some

I'll guidance. it reallocated capital just how to about we've over to Greg talk held flip the that Greg? to 'XX and So here

it'll capital approach, can So that will we're in But working when can we're tribes rotate a our we British, that's the capital, in rotate and other up Columbia, the we to that that think they're of about there, come indigenous contact we the hard in to the the of and we they be shortly. issues coming do We know with regulators on there. going multi-basin with think areas. confident all to interim, benefit resolution

in capital Pipestone continues confident that persist, programs. rotate that our able competitive And back first the can down to work So very returns If issues they go Bakken. over to we feel we and to continue to in half But into very to resolve there. we again, again, the see the capital, rotated issue being is of to that our from all then be DC. Alberta will we'll project, the but

capital we or to similar of those allocate and programs results. regardless can working generate any location, one So interest of

deliver gives confidence for year. to So us this that the on guide the

Neal next Truist Your Dingmann question comes Securities. from with

Can bit I'm for -- very talks wondering nicely you obviously, a one cash about the you you, continue to if progress guys flow. the on Greg, free just obviously

How like -- do do I for a or my low, normalized gotten versus other level keep there what you is reinvestment? see under? things so pretty base it is, think that a down sort -- question something things? that if obviously, having you of it's level, progress And reinvestment about to capital you'd ideal mean, on

mid low, real Yes, Neil, gotten XXs here to It's you're into prices. like low down right. the

you we decisions to done that really, limit cash do we bit more how get to Obviously, invest inside and drive today. we're disciplined the what's as little allocation. of to your debt here are driving a XX% those commitment And reduction sure And our returns. possible the as make remember, that soon committed if the cash was here questions we today well no asking, so Doug is we've capital flow. just But got of of than point,

you've priority over thing talked things that cache different more that bigger to now just And and ideal maybe over obviously this are if there. Greg next about. opportunities is and then the that some bolt-ons take that see or have to I'm let's Greg, first of where you get Would higher his to you level payout, we'll want it you seeing know getting do payout? to have that still then let can you for you I cash, get wondering

to of activity sense I an give on think $XX obviously a and that's million. update of bolt-on scale modest give wanted a just today we where, the why pretty to it's amount

of around other So achieving not shifting those really timing objectives. the it's

So add it's of of we going we'll milestones. it's these to opportunistic but business not piece we're the kind something to the accretive of opportunities into really them, for us, in getting other whereas just see way inventory, let a get to step

from is Mehta Your follow-up next Sachs. question Neil Goldman a with

And a inclusion. EPS And S&P that nice had you of about that? the one think thinking know really earnings number. possibility? is you I How inclusion, for criteria how investors should are GAAP S&P about the that

line asking to punch to that. Thanks you. the it Corey over pass on for hit here I'll So,

criteria last the with the all index for the inclusion to months. the we now the And plus fourth met criteria earnings quarter required prior quarter Obviously, be positive have positive XX earnings. the

pick we can in X% kind passive X% of everything rule a investment more it'll to is Obviously, The opaque, more forward be sort get timing, the a and a do bit met we've nice included looking difficult. we're looked of getting upon there, a the all up in we there's prediction index. criteria on at. to but we'll So decision in because the little that range processors in bit to

it to time this to completed And At the back Mr. turn question-and-answer I'd like we've session. Verhaest.

the now operator. you, Thank That's complete. call end of call is today, our

for and you disconnect your your great day. concludes gentlemen, please Have today. participating thank We and conference a you call ask Ladies this for that lines.