APA (APA) 2 May 242024 Q1 Earnings call transcript

Good day, and thank you for standing by. Welcome to the APA Corporation's First Quarter 2024 Financial and Operational Results 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 for today, Gary Clark, Vice President of Investor Relations. Thank you.

you Financial us Call. and thank First APA and XXXX Quarter Operational morning, for on joining Corporation's Good Results Conference

Operations. will Vice and and Vice and with Christmann. call results Henderson, and further begin Executive by on our President answer We John the Clay questions Also CEO, Tracey call color an on Exploration; Steve to will Bretches, President CFO, overview President of of outlook. Executive then available provide Riney, the are

remarks about hour with for be prepared the remainder Q&A. length, Our minutes in will XX of allotted the

certain differences financial hope of In our have be conjunction with most non-GAAP which and the found our yesterday's press operational investor.apacorp.com. and reconciliation website the release, A provided between website. information can review comparable supplemental I Please measures on discuss GAAP to Relations measures found that on you Investor the directly measures. opportunity our supplement, be had in financial at we financial can these may the note

with in today's to estimates today's production in like call numbers will barrels. to based that forward-looking assumptions previous current our discussion reasonable on and expectations. cited remind Egypt I'd contain adjusted noncontrolling interest everyone exclude adjusted and are reporting views Consistent Egypt and tax practices,

actual However, what cause number today's a of materially factors results from call. differ to could we discuss on

will of And results plus year over first information APA a reflect on closed website. Please our subsequently stand-alone with first turn results APA X. guidance to call the note on acquisition XXXX Callon X/X reflects only John. APA Corp. A supplemental full and full our the as with combined. April is disclaimer the XXXX quarter the that, on located was I Accordingly, basis, that quarter Callon

Good morning, joining and you for us. thank

of expectations the XXXX. first our remainder production our the plan activity the the of and opportunities closing seeing performance, review discuss today, will I for acquisition compelling Callon and we On are quarter the after call review

the guidance facility, of investment the million $XXX below some quarter, During and planned first leasehold spend. to was primarily of due exploration Upstream capital deferral

excellent with volumes continue quarter exceeding XX% quarter we Basin Permian up expect deliver production U.S. the compared organic through oil of an to we first continue to marking We fifth to as results impressive of talent. XXXX, quarter the consecutive meeting guidance. or were U.S. the year our in oil integrate the and growth first

continued quarter. natural extreme response High, gas Alpine the in curtail substantial we March primarily differentials. of On side, Waha to production to chose second a into in the dynamic has basis amount This at

gross Egypt, shy adjusted impact to in our with of PSC was due oil while line In production expectations, volumes of prices. just higher-than-planned the were guidance

first to As previously, to process discussed and we drilling the rig are ratio rigs drilling capital Egypt quarter, our efficiency. workover optimize In the of XX rebalancing averaged workover XX we rigs. in rig further in

While rig rig the next reduce we be the redirected. to the workover count X drilling will allowing count will rigs quarters, flat, workover remain over

The barrels quarter. and remained day temporarily per amount oil waiting workover of during the on XX,XXX at production off-line around

rig count drilling submersible down now been have experienced vendor design change-out workover fourth pumps The we through with We the resources. comes and XXXX challenges this electrical expect the fully new freeze on progress quarter make faulty and to remediated as up modifications. in

to Turning Sea. the North

facility time was run First a at in in impacted quarter barrel average production decrease by March.

predictable those to like late-life tends occur downtime when is assets we frequently North of type this reminder, less have Sea. in the managing more and a As

front, exploration our exploration recently concluded program. Alaska the drilling we On X-well

state XX on lands, lies position acre roughly analogous XX east XXX,XXX our miles to discoveries. reminder, of industry a As

discovering in zones. oil Our on King Street petroleum working separate #X a system confirmed acreage, well X our

of Voodoo and weather seasonal to objectives to time delays. window their the allotted in X Sockeye were number due reach wells, unable #X other a The #X and target operational

data back the commentary all later analyzing next with in come we'll on Alaska. We more are steps and currently

Lastly, hope end FID we development project, FID study which we our first the the are before of progressing the to on in Suriname, year.

Turning now on to the April acquisition, which Callon closed X.

integration and process are very into are We progress. good making month X the

are efficiencies, and leverage improve tremendous we the finding expertise of by to opportunities reduce our unconventional value anticipated, development create and As acreage. costs, scale Callon workflows applying to operational economies

most we efficiency and inventory transaction capture economics potentially we of $XXX basis further compelling comment and exciting from increased estimate development $XXX Callon these will capital our with remarks. that Accordingly, cost our from synergies still timing to come opportunity the form lies the Steve ahead. synergies expand enhance XX% in which have see the development nature of will value of improvements by overall That annual on his will million million. The and value.

level, For spacing, fewer the and Callon's and wider practices you stimulations. be and revising and completions, a discrete of from logistics includes and planning At high operational facility most This well workflows. remainder see we daily of well will design, aspects fracture operations. and construction landing will XXXX, larger everything contracting of zones drilling many to

will Improvements the production same efficiency of in capital incremental amount deliver fewer wells to manifest volumes. in

as take possible. to changes, near-term Callon's In already XXXX benefit has aspects full meantime, it many begun. much time the implementation some the previous realize will are of we the While these as plan to benefit modifying of capture

with quarter release, and we Permian April U.S., XXXX, X. activity the for second now have been XX for provided and Turning In rigs year oil expected for plans the our the XXXX. we the outlook production since yesterday's running along our fourth in full In rates quarter. guidance to

average changes combined We to this fleet. the for expect actively manage the remainder of we rig XX approximately year to as

pick see rigs some the program. drilling their when as will planned and rigs drop up the more ends term other You for we suitable count change rig

a number adjustments of Similarly, combined our be will making schedule. we frac to

expect guide around fourth oil barrels per of of quarter be in U.S. quarter second our to terms per In which we XX% day. in barrels oil volumes, an we rate production growth from XXX,XXX first our the represents materials quarter XXX,XXX that day noted

would XXXX. higher-than-planned Today, in PSC flat Switching now adjusted remain we adjusted to production relatively the commented prices. anticipate function a as decrease Egypt. oil slightly that In February, will impacts production we of of

full more North third guidance production In manage the a year unchanged as for dip continue value Callon APA's consistent and with the company an expected second Basin Sea, return complete total the creation in is capital approximate and in Basin increased acreage Permian capital XX% financial by underway. XX% footprint Post is will oil by path clear quarter represent on XX%. closing, Permian of our production The with maintenance. Basin business quarter our Upstream of platform in and Callon, and the we and well clear year. The our Permian increased And adjusted approximately to scheduled estimated strategy commitments objectives. unconventional production than we to the our conduct mostly deliver is an has will has and our acquisition and this XX%

projected in oil the XX% increase to XX% stand-alone the will a first on U.S. in our quarter quarter. production second Notably, weighting from the basis in

discuss the flow XX% will but free priorities has emphasize we of debt return that, will to and Steve turn want call around at shareholder to And framework that reduction, cash with our I share Riney. via repurchases. not return dividends least our Finally, to our and Steve will over I continue changed,

morning. good and John, you, Thank

diluted consolidated accepted accounting $XXX under common the of first income reported principles, $X.XX quarter, share. million APA For generally per net or

core million of was that usual, items results costs abandonment are earnings, $XX of for a these liabilities. provision to Gulf addition the most significant which associated of outside As after-tax with Mexico include the

The specifically, adjusted reach Excluding million hole was significant targets. a in quarter this expenses, $XX resulting or $X.XX the per items, adjusted exploration $XXX took earnings to for their we Alaska, net share. other quarter million the some dry income for X unable and were smaller charge include the fourth for wells which exploration

plans remaining wrote well no Bonboni XXXX, which the now Northern the portion the off have of $XX XX. we was exploration carrying drilled we Additionally, were further for as million in in Block exploration Suriname, in active we for

The of $XX through In $X.XX million first share. total quarter, repurchases. adjusted we and after-tax was per items share $XXX these or returned dividends the million impact on earnings

to of remain free we cash indicated, flow John a returning minimum committed to XX% shareholders. As

sales also flow the XX% cognizant return. designated not shareholder sheet, cash in of addition we reduction the are at looking debt strengthen need a of the non-core of free for balance to as We and asset to are source

loan debt for the to will priorities reduction and be term used refinance we the X-year Our revolver. Callon the debt

in million costs with an the closing additional of will roughly for of majority transaction employees first the quarter such associated which other $XX vast we the costs. to be incurred and expect quarter professional departing Callon second Callon costs. of The in $XX Finally, incur and services, million

than process, Now into to we let me month the savings originally One progress realize are Callon more integration. on the on track projected. to turn cost

to up we noted, into $XX million. Annual basis capital the from $XX million This run overhead, been and moving this annual revised end X and to we rate up John is XX% will $XXX expected Recall, of our the million approximately have a of synergies put categories: synergies overhead we quarter. capture by on revised million. of second from $XXX quickly, have cost synergies operational. As

is The $XX paid portion of they realized will annual $XXX termed fully realized will refinancing and quarter. go-forward be debt G&A rate these by million Callon expect We of million. will be unchanged or initial debt at realized the around of off. per synergies run the a these when year-end, out cost nearly are capital Expected synergies synergies of all be our and

We opportunity operational are in amount of seeing synergies. the greatest

Our $XXX $XX original category have which estimate revised we million. upward for was million, this

area, tubing, improvements downtime, extra other impactful in which casing we extremely fleet services drilling eliminate on of LOE progress We good are and lower making and optimization in working and high-grading, and compression supply more artificial scale synergies are the items reduced well strings economies of of days. chain and lift that include reduce optimization design chemicals for frac and recontracting will rig some casing this items, that sand,

reiterate, down see in spacing, with like type transportation and not zone Further effects curves and water these gas associated capital in well the and we frac disposal handling and To and areas synergy marketing include productivity additional size. optimization do recycling. improvements estimates economics well landing potential cost road, through

our already discussed outlook. XXXX plans guidance. to our and has activity John Turning production

on I other expected on the its the and change gas outlook, a to is impact our acquisition with items in the gas just will reflecting third-party material and most Other few Permian marketing note. activities. production touch near-term and Callon So of associated pricing guidance than

April. Waha are As differentials you March basis severe most in of experienced aware, and

of through We expect this May. will much continue

quarter As million Waha reflects continued Hub. into curtail gas a and on impact related gas XX X,XXX at barrels have of second guidance now feet of of quarter cubic to to XQ day per the NGLs day our and result, estimated per weakness the we the an

million $XXX for from supply third-party full our is contract and income from and expected purchased of year be oil which Our the gas significantly guidance gas Cheniere original the $XXX is around up million. including to sold,

will You from removed time. also see at we our guidance have DD&A that this

the We aligning are price booking still reserve and allocation our practices. on Callon working purchase

DD&A with results. reinstate the We second will guidance quarter

Finally, be as Based the second U.S. will prices, XXXX. half first on quarter alternative will I tax call We current year. of the a the these the not will incurred subject to no to in the strip AMT we in in and second in costs for incur to do over reminder, that, starting quarter. Q&A. likely turn with the operator the expect And APA minimum

[Operator Instructions] Freeman from James. of comes Raymond the John line Our first question of

line open. now Your is

sort make Egypt. question first parts had, I understand moving that sure I just of The in to the

offline. was that XX,XXX about had quarter last So

that, X,XXX be offline. I think sorry, I would probably would normally X,XXX be normally, cited all I'm you closer think -- that to

you down level. So that stays level you've said Xx used see and bit, Xx number workover to of all But sort down, I keep the drilling a how workover the rigs. worked of think it coming rigs John to I historically, rig to the little be rigs

year, So goes below you rest rig cadence the stay well even down that level. the as of the still

there? historical ratio? just still help -- maybe you below anymore? off-line how that worked doesn't that what's understand that or down me get Or maybe why just ratio color being Like maybe a additional historical So you any apply can bit despite backlog good

great acknowledge, rigs. this average or rigs. rigs historically, we're rig of side run ratio it's to workover XX No, as you workover a higher run question. we And at a we're going going XX to have Today, the and year, on XX right drilling to drilling

bit we're to It's take but that, So little it's kind chisel more to little away coming of time a at on down bit. it. a going

to rigs will we're wells, things complete the also some to also There's doing drilling help some with of pressure. be that able which

number. So move little it's to just is that a bit see which going why take longer, on a down you'll gradual

in increase then see the Nice And shifting it. just on to the Callon side. synergies of making XX% cost the obviously lot Got a gears. and progress

get to And kind guess that of and out -- -- showing You started presentation productivity, get-go that a be see in results. we it drive results until relative could completed you wider basically from sort of of the some just you show Callon legacy won't all Permian mentioned XQ, to all et previously drill the put to I up spacing, your and all cetera. things well better design the numbers, wells

clear, all to just results legacy doesn't guidance? uplift. you guidance Just assumes well Like Is your Callon that any it in be assume correct right? current

drilled of There the Yes. going more per drill. changes of the to Callon's extent right? us, wells. Today, side can. it's there We're the section front -- immediately drilled zones. making we But is a wells would landing we guidance what's And are are in completion to that on more obviously, lot

have pump in to similar-sized fracs going of we're terms so to loads. And sand

changing thing kind be volumes go progress, but think work big is things a it's I doing right? will we're the with fluid -- in the of will up,

the start you how you'll what think what then We impactful. with modify to plan is things by quarter, get And be time will see be on fourth Apache and we what and we to full to Callon going workflow can the we start that. what has and we

and in and Delaware, rigs, little count there's things was drill plan moved to where ready acreage rigs Midland. rig kind sits want that X in color We've the of Callon X We're some actually in like to a XX terms running Just the there's Apache actually it. we the of of X the today.

some So we've there. accelerated

be to as going it's work this. influx So we through

to But kind get get anxious fourth next the workflow a we're Apache it's quarter. execution. of transition over yes, to quarters planned be And until fully the going and a to X to we

Neal next the of Dingmann line Securities. question Our Truist from of comes

gas wondering what bring your and one Callon to that given play. a for footprint? to compete oily strictly back? the larger needs would of some just more had against interesting returns it on take just It's quick Permian first potential the I the the and acreage I'm play just there. it Is that you it now

mean, that the big to Waha. measure It compete through oil needs on we internally side. the Well, that is driver. I really, And

So you've compete to oil internally and right now, Matterhorn need going see much very coming stronger we've Waha to need weak going Waha. on, got it's very, our Obviously, projects. had to to but we're with

the same maybe totally No, have Steve, last shareholder makes sense. sometime continued and stepped more year, Or just buybacks all. it the you And just, comes should one shareholder for when return? the of or change? and sort again, that then of to towards the it just bit of guys will we to return, end think you that plan a wondering, maybe when more comes just into I'm

weakness, XX% make I sales targeting future. No. do believe and the minimum We we'll we there's with both. we we've as do That the see have which other it's aggressively the side asset need We've continue progress mean We're Callon, we lean picture. debt into approaching us to you'll on believe we a that done, I do some to that debt gives brought but what the think that reduction. with shown we're non-core to us on some for in committed of big And XX%, will we XX%. when right? historically

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

just down next couple DUCs into can of in this and around preliminary intending year? to talk carry as questions and year, One, integrate going further this how wanted your Callon to would many assets. I you you're work you a into ask what the about, program thoughts capital 'XX the year getting you

as combined glide follow-up that, be about And year. you and if company of year, have think into companies in of we improved assuming this capital combined the billion around this efficiencies we sort to would next should that a path spending a on $X year

Yes. David, this is Steve.

this what DUCs, $X.X in order come the and of the the we up to frac second combined capital billion that in to added year added building that of treatment see the did we've us plan just basically ours. X in is frac But final have So we remaining capital program for capital done year in of terms the of DUCs. we some the We were of because capital both program capital now. some the then quarters of Callon's with we've half

go very our think I the Now get you into flux through much point as we the out at it's the probably not towards it. best year. We're I'd still, that working the this say, back because numbers half way of is program simply in

activity the activity. As year that's the John on going later There's any not we Callon of that changing this a changing the hardly we're from lot said, acreage plan. are Callon on,

X you that, so that's a flux. imagine can And weeks in still bit after

like bit call maybe clarity second -- a we some so in can that on the earnings And share more with things quarter August.

a just for would better I we that solidify plan be the remaining be think can bit year. this, and can so the we of through

the we don't to to just basic are believe just of matching of of But tremendous general There general carrying a DUCs. good having because schedules but a some up we drilling amount the some inventory. of efficiency some statement, lot having believe frac efficiency with that it's need DUC in as capital a schedules, and capital value of don't DUCs in be there's logistics

our half And the on only especially we to of modifications the improve our back and I capital portion productivity will obviously, would believe the year. as add the Callon workflows is, thing we go

and year. Apache to right assets the productivity the going the back towards there now, half get Callon improve that companies combined side the So seeing of on and we'll we're

in and that non-core asset from first share can I'm have timing into sales? on those proceeds any just or one. curious mind make you X ask could one I Appreciate you another targets questions, that. If if might I guess,

seems No, in didn't progress we what Corp. to debt knew specific time, to we we to The intervening progress we're now it's as But through focus the try be and make Callon like added We to year. don't acquisition, that doing with make And We to this some good we the that. any feel we and focused on on even just if we these off much for need of get wanted more to 'XX get be and the and non-core as debt, reduction. get can think recognize made they be strong good those during might will and debt that to some that have in and down. for mind. that we've assets time Apache get see we have targets we and we'll needed that 'XX of after some some we going on that market just on prices, debt a

into X, have a we of but massive to to grade been we out that grade. rating that. all good solid climb We're in gotten the X. though grade with able a companies. of there not slid about think the in -- haven't it's we're optimistic of We're investment-grade kind get to you're is metrics and the where target the non-investment point to time edge and type kind sorry, of not grade BBB of on -- that And investment still dancing non-investment oil that, XXXX not We've We with so are investment even debt we price debt we that. our lot doing Ultimately, a around everybody. ultimately, with the downturn of be back a of

of a next you couple think path years? the there's getting to do within there And

achieve. we're what trying to That's Yes.

and a we're possible, to try. certainly it think give going I it's

from of question next Barclays. of the Jiang Our Instructions] line [Operator comes Betty

If for the guidance in you combined outlook going from growth Do like the Permian Just appreciate continued the the organic out XXXX, growth for given production perspective? pro to expect U.S. strategy, or double-digit like delivering think year. overall really see that a oil. to we you color thinking forma forward? is XQ Apache the I have on this growth assets about approach

We're a Permian Yes. been And our Betty, on as the makes the workflows anxious the executing on high at Apache side. rate Callon what I'll merger, to the provide XX% side. of roughly say Callon is, post we've those up now company.

fourth added a to going this have DUCs is of year. quarter bit the We of capital, of the down little which in work some

strong mean, So lot it's I XXXX, a give fourth going to as a it's of quarter. exit but comment early strong we XXXX to us on momentum with very

we're Permian. can what confident we to the that, very anxious So deliver we're and very demonstrate in from

was Betty. Sorry, I thing that. to going just one add to

in of this the pretty why we of One year, second is X inexpensive number reasons the added these frac capacity half days. frac is the

a -- that of John good the now time carrying that Permian plan it's and we're to plan scale be the activity profile have of and production we then a that in efficiency, with to But our said, ought maintaining to to these smoother doing don't lulls of So where we big activity lines as of also way plan turn-in that. but be of in we scale be activity, now, creates able capital with volume. the completions to the rush just company XX% big and to operation a on, it a we to bit Basin, of have able that lull and big amount ought a it kind

as into smoothness or for -- the this of flat do because spot, frac little may a that's lull have downturn and need trying first more than bring doing the volume, of we half that. ourselves to another yet one like that, to setting year we we're can capacity to of a little bit that back we been a And to we is better don't and in achieve that felt be this things up a quarter were we on we get

expect expectation a that to look do seeing asset to When think out workover was renegotiation, related similar an range. is will the go a of shortage. type Egypt growth little post be bit, do of contract that volume back This down ready profile. Egypt, that Do the that? there Egypt to that a growing you PSC of but Great. you we If of gear I the question. color. that to Shifting appreciate to rig single-digit year, lot

mean in been are costs big I declining. one got picture factor Yes. Egypt is you've gas has

declining the level rebalance workover that we've in oil. can we're and there and the drilling we BOEs rigs find production drive have base. been been where of because growing We're in a place working rigs that, the where So good to gross and today a the

So year that we'll in as with this Egypt monitor what year year. of And doing frankly, do terms continues into projections over with play quite to what come in and the that we'll how next we're compete back later the will Permian, well.

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

I there on bit I what financial a the wanted a to to little with bit if little you recently IMF that country. situation wanted follow receivables a the loan of folks I'm up sure here there. Egypt improved of that's saw is Egypt. kind from I kind ago. got just in not sense the an get state well-being

oil you kind speak So to expectations your also, could kind then that? gross bit speak you Egyptian little just a to could And of of volumes? for maybe

you of few quarters? a about looks do next the expect lot has growth to the down the last gross know couple on like I talked volumes it you trade over net, but quarters. trajectory How come growth in sort of

Okay. Yes.

sorry, receivables. So is Yes, Steve. this on

price good X made XXXX. of all, and in So that. down the kind But increased progress things year. very worked through slightly on first receivables said, Egyptian the closely received quarter first We We've this most quarters. quarter as we we've with of during oil it like always bringing XXXX, of despite the Government receivables, that payments especially with

is They've below good point, their But very the that, slightly are I of think rates floated increased quarter the they with we first of outlook their it. Egypt It now. 'XX, raise and on more I control the to But importantly, right improving. but currency, you And average last up with hit ratings bonds it it's where in floated inflation. and a is had that, year. path to the still devalued think they on were interest

from program Bank they've states, their from opportunities. about, $X World estate the offer $X now talked support coming gotten got you around and pledges amount both to some loan from mostly as loan, to IMF They've billion Gulf as of they And well. real in a increased investment billion. significant EU the from The other

now. So for pointing all the Egypt think signs up I are of

is that's That doesn't ride. Liquidity It's in a help as go right a going to improving. It's large the we that going step it's the mean will in have indications get second things direction, that ride, be we certainly not big be forward. but and are positive year. going to we quick of to easy Egyptian just an had And a improving. the from this government quarter payment

be So that we're will actually with time. them around visiting -- same and will be Egypt in

pointing quarter, where improving. that's hasn't certainly we lot So first the Egypt but are a the things It and all receivables. whole are on the up changed in of signs of going in on

for in declining flat to actually XXXX, rose. if you declined now of We've a then oil volume gross we terms and look a back quarters gross row. for haven't from while -- quarter X In We're to pretty volume, quarter. and first fourth was

then the that XX wells We fourth quarter quarter quarter third of in in year. around A lot completion completed the and of in year, XX timing. this we first the new actually completed last is XX

So that in see that's We'll bit not volume surprise be going necessarily oil a go quarter. declining where this forward. we -- might volume a

rig to We count. are reduce drilling the continuing

on to going year oil be go on available we'll an quarter-to-quarter the see for gross through is of that the volume. have we as that wells effect will So completion. But number

use workover John productive And bit very on a -- year-end. our wells, a workover we drilling rigs of work to the efficient as is the question, capital to said workover prior this of not with drilling to capacity approach got be wells. through so capacity with issue much line. then we've And quite because Nothing in cheap production balancing normally as new and of it's of new and volume wrong returns but drilling when drilling than new workover capital is more the wells

of to top And stay work on ideas a to workover the sure program. can Ultimately, make you lot of have the we've there got capacity that. on we through you So how got country, get lot is can the through workover could bring that. before a into more are to rigs to longer work things that try we but the you possibility we there other term, of

we've drilling lot properly over working our balanced to backlog. So functioning do and and properly wells got way through a working that things new XXXX get and between in to

as view roll we'll into 'XX, Egypt then better where going. we a And is give to

very I guess All there. That helpful, good maybe here. Suriname very very to right. quickly was explanation just And turning

stand. get of working Just wanted some I later kind there's happening of with 'XX. achieving in does still your there in a sounds drilling partner FID And 'XX, it you're confidence drilling know where year. what's anticipate sense to of but level towards like better on no that Apache kind still of this things your kind

say very we confident I'd year-end. underway, be Yes, just and anticipate it an still FID would by we're

it's forward So to then moving terms we've dictate program. till exploration got timing the all of XXXX there. drilling And in going start to that's

there's side, could 'XX 'XX. nothing drilling So pressing on back in the but to be we

comes Neil Goldman Sachs. of from Mehta last Our line question of the

stuff synergies. you're around high-grading talking casing, a spend providers, time to of bit the cost the little talking And specifically about on about wanted I economics. John, Callon the side, surface service operational

cost giving getting and those ground us time bit the just of can on us little So granularity you some side? on some more around a spend the synergies operational

the in, we're and jump more a But changing color. Steve add little bit in I'll general, Yes, program. I'll let

fracs larger section, see landing So to zones, in wells general. fewer you're per fewer going

The other gas XX% putting wells High well at outside they of on running about in X/X when lift. ESP lift. Callon of was and been new is terms wells, their Alpine gas complete their XX% on how ESPs and look We've X% thing the count of you

stuff of terms other and then do another and the place the lot also their flowing wells, say operations and big equipping wells we're needed and those they factor. they obviously, just sub then the mean So how is I we're how lot source the turnkeyed in turnkeyed of stuff. the I'll producing self we're wells a of to to that's pumps a power frac going drive of that there. their is that lot a

the on there's a operations lot side. of So low-hanging fruit

operational And a already you've us items. lot we've some lot on seen side. are increase of seen of a which the those ticket So that, big is the why

would we well you went BOE, just of off per -- February, rate in be Yes. areas X BOE Callon failure significantly deck Callon cost want a wells. mark LOE Neil, on history a out we slide pointed Permian percent. that per higher and I'd where new specifically the felt for where was published workover add, much back of we of downtime terms to in to And the kind if we like including they've has

making of failures compression They around -- those the the we compression that and around lot inefficiency larger proactive completed can have choices, of we're -- basis rate equipping compression economies on changes more around optimization making wells of and fleet, costs. are was their the already make on do. and than a for they've equipped. of many and around that some and higher of we're even And use rate some operations, negotiations even feel a we already we of ESP in a There a their on across set and compression of drilled scale

They that have a ESPs very their BOE. to big to services a operations volume per of lot rates discounts purchase LOE a chain tendency the of expensive That's pointed of reducing contract out, aspects they use lot product, of power. and lot As contributor which a larger across get our around for overall we supply use just using labor, and a John they APA and usage. using around

which disposal handling and ESPs, where high had of we we that They better well. compressions rate can rental, had rentals believe of as of can at water high we think They at. much rental do very better we do a a costs,

more We'll side, to to average use decrease drill the to better use technology -- rates. wells. drilling on days On get we'll capital rig

We'll a between do and rig we're moves better Midland the Delaware of the basin Basin. not rigs job moving across the because

better a We typically spec. try doing at facilities, normally. lot -- spudder supply modularize will not that. type get again, costs, the stuff. that rigs that drill. they facilities a we we will built use more on then Frac wells have to chain And have of proppant did of They generally rates practice We for of typically

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Thank turn you. I over would to question-and-answer Christmann does session. back call John remarks. conclude closing for This our the like to now

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conference. does conclude Thank you. today's This

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