APA (APA) 1 Aug 242024 Q2 Earnings call transcript

Good day, and thank you for standing by. Welcome to APA Corporation's Second Quarter 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 today, Gary Clark, Vice President of Investor Relations. Please go ahead.

you Financial us Call. and thank Second 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

comparable that are these A remarks which be less directly the length, measures allotted reporting measures the and differences to in everyone on today's with production with adjusted Consistent our review and practices, will be and in be in interest prepared assumptions opportunity with website our the found today's hope discussion information for we conjunction in and financial forward-looking reconciliation Our previous reasonable between adjusted can numbers found the provided website. XX certain cited on most GAAP on call financial views remind expectations. minutes note Relations may contain the estimates financial non-GAAP of operational our that I will than to barrels. I'd discuss tax our In the have release, current to based noncontrolling remainder Egypt measures. exclude like Egypt hour supplemental yesterday's had you supplement, can Investor of press Q&A. investor.apacorp.com. Please and at

I a X/X XXXX Accordingly, disclaimer website. Please the results will with supplemental actual acquisition X. However, turn A first discuss over differ today's basis, materially John. located a to call from the results that, Callon our of plus April full stand-alone we cause reflects our to combined. And APA on guidance Callon note number on factors with and what call. information that could on of the closed is full-year quarter APA on

us. thank for and you morning, Good joining

for of will and APA's discuss plan remainder the review the I call the expectations second Callon performance, integration activity XXXX. our production review today, On quarter and

as across XX% production oil with due per lower the higher-than-expected and than quarter into second incorporated discretionary Callon of from up basis on first after of all U.S., costs NGL quarter day the and XXX,XXX operations. sales than results operational were natural adjusting strong we asset were CapEx Our barrels a significantly X the was Production for spend. In our expected, BOE expected better gas were volumes and mostly to areas. board timing curtailments. in

a basis, production U.S. marked XX% flow U.S. cash Basin water to guidance. On now in high injection oil at following change we benefiting transaction. recompletions production to particularly Base We APA's a Our a this expectations. contribution several approximately is Callon exceeded meeting the quarter increased level, oil projects. from our price continued of exposure, Permian also With and production. perform our of In comprises results implementation exceeding continues sixth $XXX from row BOE in new sensitivity a oil barrel saw of or production positive the wells, $X improved million production new base from is annually. per strong and Egypt, a total

the offline to up beginning drilling waiting in workover also are decrease we as count oil resources. rig volumes a workover on We see free moderate to rig

with quarter were production. driving Operations Sea. North the relatively in higher better-than-forecast time facility to run smooth Turning the second

through we forward returning options XXXX. and exploration the has life our rightsizing Our our is Suriname, the North that first ongoing offshore In FPSO and Total, recently it late structure secured announced Sea our development, for hull in still for upcoming focus in to partner, cost working look for and to we are before remain And on season winter year-end Alaska, track the activities. FID oil for drilling first in operations.

acquisition. of that reductions. $XXX Callon of as some driving estimate million the leverage release, Note in $XXX more to the businesses. of economies synergies cost last these million, to from we initiatives increased the about scale in of Callon detail night's specific annual now speak will we combined Callon our Turning and Steve Permian APA cost

importantly, More create efficiency. and beginning drilling value improved and unit Callon just are the in we we operational that well expect to performance changes design via will implement capital substantial acreage

our Basin can results Our X-mile fourth preliminary million standardized and roughly was the Coleman We estimate is than [ recently a designed drill see in in unit less begin to the Callon X-well on drilling should ] $X flowback in initial Callon the for spud that Midland lateral first XXXX. APA spending acreage, we Unit quarter.

X will year, X% the plans our XX plan in second wells barrels roughly half and growth increasing per rigs frac the to release, half of June. average we outlook day for U.S. notable the crews in which for to XX barrels guidance XXX,XXX is for rigs quarter. to oil X Delaware day, In of fourth quarters, for remainder oil to the rigs of which second represents about and the the run impact of quarter we activity X in U.S., approximately complete this growth third fourth year. Accordingly, strong and year-end. the stage asset the provided XXXX. in This Turning now yesterday's per sets the guidance the by production some we for of are This X the of We consisting second up to sales contains Midland. compared and to In adjusting positives. after X,XXX closed X organic

levels. performance continuation operating remediate fewer normalized but be we will made There will project some to the driven production of Egypt, from increased We operational year-end, volume impacts offline. mitigated discretionary increase half we an expect By workover quarter. year. In progress count capacity by we that also curtailments the be to backlogged decrease, closer and of in our rig in the production this expect wells strong base than be oil more should and production, the a in second by gas natural NGL first the primarily

May flat through down in On adjusted that production the while the production relatively remainder remain said of flat slightly call, XXXX our in to Egypt would year. would gross oil we be

While Egypt, to moving outlook, of May variances therefore, our see parts is program to there and are in we unchanged. the number guidance no a material

the at in Sea quarter rebound full guidance year now though with larger is unchanged fourth third maintenance our expect production associated North larger in quarter. activity volumes in slightly we Similarly, a a and bit turnaround subsequent Beryl the and decrease

was an quarter the In high and we execute continue at closing, in operationally, quarter second Basin. level a to excellent Permian

efficiency the a and very the Egypt assets. efficiency count and Though improvements. to is deliver is production base sustain in those half. increase free deliver had good setting pathway a return will the of to wells in the We have half volumes in strength significant Callon of our and offline term. are up plan flow also beginning At near savings the second greater-than-expected help quarter the is realizing continued clear down, acquisition a from improving cost rig pricing, year capital first current coming to and capital cash strip to drilling on substantial compared

our track while very for delivering year. on goals am these proud results remaining I lastly, our teams and the safety environmental achieve of to for And

environmental turn XXXX the Report, and Steve. For performance, website. And a published APA's can over Sustainability safety which accessed review our I call to review be of our with recently you I will detailed to via encourage that,

you, Thank John.

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

transaction, results for these and earnings, most of which of charges that a reorganization costs, million associated after-tax after-tax with are include gain Callon the outside divestitures usual, acquisition. $XXX core separation mostly items As $XX significant the of million were on and

items, smaller second per net other and adjusted $XXX million for the or quarter was these Excluding share. income $X.XX

free prices, anticipate remains few returned to shareholders, be further will flow, share consisted cash During $XXX free plans the higher million free of nearly the important balance first and we a year. repurchases, we priority, $XXX compared generated debt cash an and sheet about flow half to those year, of million the half but reduction we minutes. like of of $XXX at cash buying said, second flow for share in million that's of and a talk the lot roughly of in the the half That I will much which

integration. on turn Callon Now the let to me progress

Since our of have As of synergies announced buckets: John into noted, overhead, estimate X $XXX we the we categorized cost we acquisition, annual Callon million. to synergies capital increased operational. and

synergies we that million. of about run time, will quarter We of overhead G&A we expected quarterly Callon are captured to enter anticipate Most our now that, At basis approximately will year-end. million. $XXX done of a remainder will the year on XX% core eliminated by have be annual second this was $XX rate the and we this our next rate cost. With increasing estimate overhead end by be of run the as

likely. are synergies further material no So

these economics end debt do and would simply to step with spacing, approximately to the LOE. capital current estimate out the are will is refinance lower benefits a million of from borrowing. and pay synergies. And cost to $X XX% asset before $X.X of realize associated off capital optimization debt through term Instead believe this to terming increasing We flow X-year long-term and forward APA's strengthen our synergies cost annually, intention its we and is sheet material of loan landing well this and This cost cash these to the long-term not annually operational To productivity with billion cash Callon's to significant a Our curves uplifting size. sales billion reiterate, source used include out, assumed million term. capital goal and which $XX of value free the debt. synergies XX% X-year At in lastly, synergy zone terming savings our revolver of at improving type use accretion. loan the frac represent associated to closing, this we attributable of balance the fully $XXX be of a

We A and combination, the U.S. lower XXXX contribute discussed our already minor in potential this, guidance, has mostly Turning factors activity planned down capital just a now capture outlook. full-year will trending capital add number to of billion in service few items original bit. so synergy could note. of production further that may John and guidance the start set, to I reductions plans our activity of $X.X expect efficiency a improving our the from costs, including Callon

of This NGLs. guidance, XX Permian per barrels cubic curtailments For further purposes per also million X,XXX feet of of we curtailment the day. of estimating production would result day quarter gas in third are BOE U.S.

and of gas when profitable and Waha are third-party purchased oil from more are note income primarily absolute is aware, volatility gas gas driven significantly from and you and marketing between It's generally differentials Gulf regardless levels. wider. activities pricing APA's pricing of price important that to the Coast the differentials are most As Waha and gas sold can by change our This quarter-to-quarter. transportation

the example, differential For in second wide very quarter. Waha was the

are oil contract third-party Gulf purchased expectations. At million our transportation estimate marketing and to third-party negative nearly was gas our expect $XXX averaged Waha Coast supply from third from prices by $X.XX, attributable prices dynamic raising million. sold attributable closer transportation marketing averaged and gas $X activities current Accordingly, the of Approximately similar full-year income well differential, and is $XXX is of above around of the While activities. the gas estimate around gas quarter. we and Because our the to gas a in half strip to pricing, full-year to and we Cheniere $X.XX. half income

for tax is accruals accordingly, turn to the call for we introducing new APA U.S. the year. And of over minimum alternative tax. And I million U.S. for to guidance now are with operator $XX that, Q&A. will the subject current the Lastly,

[Operator Wolfe comes question from Research. of Leggate first Instructions] Our Doug

going X.X, around the guess about be going run in objective on -- things case flat, thinking that to held call which [ something it, next you a try ] decline after exit, are it many $XXX Callon, would which your that that it I million, a be there us I'm the quarter could So be fourth if to XXXX. after. you from like looks we around your looks should you're XX% CapEx I to year? year-over-year couple. quarter, for go But, just that hold Steve, rate so X.X grow is Is got objective into momentum the to

that quarter of quarter. Yes, completion We're be quarter wells this Doug, of because -- lot just little been a of quarter of in is fourth timing a just second the on for into third bunched I'd fourth has using to going because the year and be probably activity completion. careful availability

little the would the then easier by and way that just per exploration I spend, at going which get I something So spend was be to be probably then around fourth to average-ish close divide X quarter quarters take probably that to I quarter. And because APA. the do to think And going to be is the a of out is think and just first a about is it adjust you'll full-year would quarter for quarter first third number high, quarter, look low. then $XXX

All That's get Okay. hopefully a guys. right. then chance... really And helpful,

Sorry, Doug.

If $XXX a the and out of the get U.S. exploration, the of Egypt. you probably lot whole capital basically something There's to spend on take you as activity, onshore you'll quarter million going not a closer capital in know, North Sea. on

I to rate. run trying was the Okay. get That's what

since you're really if you've helpful. inventory getting John, that's So but now. hands be that on Callon not wonder to your around drawn depth guessing I I'm wanted the deal,

rigs guess, going the with thinking about you ]? the with I'll -- it pace XX your X So to What half, there. you second when like so are now looks are in what you on? thinking at drilling look up-spacing the in inventory And depth [ at I lower be the you're and leave

Yes, where kind at look Callon you of we're run rig the every end said Permian existing we Doug, a And bringing is rate, duration. we're What in, at. one always It's I pretty decade say it's of we've would day. the the if similar we're said rate working with question. U.S. when great

comes the for we then there's play not acquisition. think I pay our inventory on think we in did Callon upside improvements can one we will that can, is that be the more that that drive there we productivity into

that's we're working something So on. currently

lot to on going X If look quarter year. about at we've flexibility We're we XX going a of X%. into fourth where Permian to sit a you very strong got grow next from today, rigs, to quarter second cliff

we to plenty lot flexibility visibility the want to next had on working And of going have And decade. we've we we'll And end us year of that carry of there. us gives so it pace into a the that keep go. inventory to

Yes.

that Callon fairly a probably the Just look on, the view into John more productivity We working more were to to on beyond service is said counts. said, inventory, of Callon most something And that we of looking we years to John on of acquisition, would at it capital it's them would of more world. more we similar get a the the of efficiency, lot this our fairly said, thought at some the can probably what people inventory Doug, quantum duration. ours no, more providers in right indicated, inventory a inventory have based had on could enhance to outside When that what add decade. said, which just conservative the the which analysis, extend as And other how that of did, room, course, than bit. is John to far acreage, place of that grow running was, capital back end were just we as

question Freeman James. of comes John next Raymond from Our

about sure I second right, the Doug's pretty year. just around. on you're got both -- XX drop you the rigs Egypt of the that And half some Permian and specifically solid exceeding year, of rigs in that I'm Egypt, XX Just where to the guidance, half averaged of getting of thinking in following to a up mean, job down the of going this first to turned questions. you've trying kind make on I'm and

that in steps recompletion, that of cadence like production what's am improved resolving the moving number the of that of year? kind of half make half trying at that the volumes? that back it oil of I off-line maintain up of the year? that all XX And the of the of on management, rigs terms Is sort of in understand kind year half backlog in because catching of an of lower you I in kind to base of reading -- cadence the the to pieces. rig second is kind kind Just sure acceptable the mean, the I right outlined even second

the track. on free say the we've a it's critical of to right No, John, had rig rigs it's to is been that able up of I'd CTIs, get the a great dropping by able which the you're question, and lot a have benefit is been also And we've to lot conversion which have really, because time, recompletions. that we injection we to. are workover projects

XX guided much of Egypt gotten freeing back, the not so And ratcheting kind projects we're early that slightly to we impact. Is By that when rigs we XX it's number? back us to But running flat tell about. a just lot other rigs very that right there's drilling XX rigs, Is huge to front. and up are and down. of year, that time, get talking also some it's projects meaningful letting making It's the were workover to there's from Egypt, this -- a XX to on slack. having

some example, and be as things, pretty well. gas too, For could impactful which other drilling

there. through lots through And there's work planning of we'll be as working flexibility we So that cycles. our

just XQ. you'd less Great. to that -- it and you'd well, the you you with see of gas the follow-up, actually volumes, sort the might then mentioned was fact that curtailed do drivers -- have of And the some, gas one volumes the U.S. had my side grow on in potentially John,

more in built to guidance, you obviously, mean, in -- full-year get in you assume I'm trying the XQ. into So XQ, all current in some even it that's something any you does had just I guidance. curtailments that XQ? have

in. does obviously, curtailments had -- Waha with up with quarter the any built have not third fourth we sits. Today to quarter where But September

XX had during of the an BOEs we nearly per curtailed, barrels million of was day. per on that amount the actuals, That's day. quarter and X,XXX XX,XXX quarter cubic curtailed average gas second just day NGLs And feet Yes.

on third our million cubic are large and XX we've for of gas really per numbers That's day BOEs X,XXX day. XX,XXX per feet left effectively imagine. might forecast quarter Our guidance Those of barrels of you what is NGLs. as

One our Neal question, comes moment of for next Dingmann which Truist. from

is could this Permian development. future think, or of the you forward sort wondering immaterial little just on potentially really the there with talked spacing, either other wondering I'm completion just on of John, a specifically acreage maybe on Callon, openly sticking bit. changes upspacing doing you or -- going I other potentially the side Callon potentially besides see pretty any point? the here, all about,

Yes.

prepared advantages, $X too, one the which As design what seeing we're business, Callon the I about standard year, think X-mile lateral is said from supply we the is XX%. that of Neal, the less than million We spending the on remarks, combined in just was chain impacts wells. for we drill can a how last

planned anxious we're So to spud acreage. we're of the seeing. start those pads quite Apache come what now But to just through. starting on excited about numbers the frankly, to And see we're Callon some

So going excited things to are on extremely but the see well integration those results, side.

with I on since the Yes. we a not would that add we much many. loading haven't We or bit space wells quite a completion drilled The than spud only thing the wells, on those. on Callon on fracs. tighter really changed the loading were but few, fluid those spaced they did side, increased would Callon significantly But to the profit them, we

be As proppant loading the quite larger. our and bit we ones drill, get to will we fluid obviously, that wells, a both

maybe, for Steve, And then Great. you. Great.

on second shareholder question Just return. a

Specifically, be quite return shareholder your active. continues to

think in for bit I'm 'XX? Or a you down would little think quarter. the year? about for the step-up this a remainder like I just large of last anticipate the can 'XX how was program we to remainder wondering to sequentially it

we're got an a and bit. with cash framework shares, that free free We that We're But over a both half continued afraid not after share or in of past flow XX% We've second least tend ] really what basis in let's cash to I over we've the and that also XX% for quite the half of change, on minimum. year doesn't there's we'll dividends ahead acquisition. -- to We the recognize And at the balance [ the for X flow outlook using the think first calendar the obviously -- annual XX% framework. of well the go April way of dividends at need through acquisition -- brings. through see sheet think basis. buybacks, But year. of [indiscernible] we demonstrated strengthening

balance go to a going And really -- We'll to from we day-by-day next. see basis. we where are so that on we're quarter-by-quarter, we'll the one as year

comes Our next from question Rice. Charles Johnson Meade of

of talk I you I'm market, is kind share much And curious doesn't the at -- didn't surprised want prominently if And guess next. there. that asset you platform, about or people seem which or couple Basin capital least you the about these can but wondering, few with of you surprise a is last share anymore, most sales. don't Central you I'm an like maybe you might I'm to deploying are asset thinking what area guys an we and it whole really

are No, to sales. mean, that us not looking about talk there's and that wait to there's But we're we other putting that at things Charles. core a property not capital. places I chance, we're typically

may you So some intel there. out decent have

have Fair then enough. and about the marketing And the question the Permian. in shut-ins a I

about surmising -- if valuable that, gas and that essentially I got that to how production, coast, your that would -- I NGLs, X,XXX I you or of Or a are guess, there liquids-rich barrels think that have day I that -- of the your and basis you I'm you XX some firm manage that could that, gas? given of wider? transport would all the million curtail is more is dry As is

Yes, Charles.

quite that, amount. -- can more a actually curtail there's So a bit twice than than yes, little more that we

dip that into do just significantly prices richer low, When but typically it's we'll or when dipping into and we're not gas anticipation go time the of a bit there quarter, are periods is, prices quite an for And so especially just gas. in we'll which curtailing the negative. what where that being average that of negative gas, is go gas of the with rich and lean

from can it tranche basis. on we that different gas -- do where price one got we X shut gas we in specific to So a from lean that specific have do another. We've we going of mechanisms. move pricing tranches to We prices richer based

And now Callon. Permian is do so on large more Alpine transport one obligations. in is the in in clear the that that and Permian curtailment on of really about Gulf gas. and -- And make X we we points, activities able buy that our pipelines, because and the to just pipelines with Basin firm want sell transport to sell have marketing various I Gulf we Permian the in to sure of then High particular, fact, we Coast. have is volumes on something and that totally because to to And I want which we're be the that gas purchased to we access fulfill independent have then do with the both Basin, gas we those that Coast have And marketing

anyway. we we to gas, pay to doing have of a transport not choose we If that. transport don't have fee choice the So

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

you Egypt's to into about it sort we should maybe Is decision? I'd 'XX on of up 'XX your offer decision the from drilling switch where like to maybe just that Is Egypt, like is all the partners? coming understand, to some decision? extent from And of discussions the on that workovers? way? that we your to the any reversing guidance on Is how then that as follow think can exit

joint mean, a I have venture we there. Well,

shows of with new lot what Sinopec, more has never really Very some very do, there rig activity, just good a minister we of terms President would support. some with him. about think into would we to the -- do with We some is under in there's impressed as play is the thing flexibility. I drilling excited with think to flexibility X/X constructive performance to frameworks our is just there, directionally the members. rig work workover it's getting things, the it we but we been had it and choice into issues us we met cabinet over recently in strong, news And outlined his we'll and go a something terms impactful. other in are Sisi, the have have projects which that I on that. of adding of think the full we're new could right And And And say and that very gives so just be and partner balance and volumes met meetings, process. planning with factor bringing

Okay. late quarters or understanding of the you we to mid, as Apache what that? we brings the in integration or I whatever, on are old to just think early, integration, really baseball the that. changes the And appreciate synergies the an then of process the to are of game Callon if just about the around and come give But like idea in and were the family, we really understand kind all. us back football and you Callon understanding terms all

Yes.

quickly. like the is There's of Obviously, to forth, still we developing, can phases the so that piece exciting portfolio. that going through you that and and does ahead with right? productivity is on probably But drive the We the the in come, we've I inventory most that's improvements and in through to what the locations. assets early think into through what that terms integration organization worked the of more that camp. get still going phases terms be do it's fall worked quickly very of you're

those the we're obviously, with on pads first just plant to now Apache getting wells. And and anxious get spudding So first results. our to

the characterize baseball I'd analogy. it using Yes,

acreage. as and and on out the we've getting up. the through going Callon through of headcounts warm going pre-game well said, just integrated, John the organization drilled that's that, think I our synergies all the And kind first of

the is taken it's the would I first So just say and Game inning, we're that beginning. just haven't yet, starting. bat first we pitch at so

question comes Hanold next Scott RBC. Our from of

more high-level to at we're and on upcoming could your there. color has thoughts I your and how an spending bit understanding activity get early maybe you are we Analyst I -- may and was pivot be wondering Suriname this Day going partner if your XXXX? at look what is point? that it what to But a in know

we've time And put were pretty Scott, project, finish that on appraisal we been we that FID remain It's to the since Total has track. year have -- we plan stated have were an I message consistent year-end going obviously, Krabdagoe confident a now the and this we that highly to with after we by last out. consistent mean, 'XX. the we

and think step. And going together, is get I once to obviously that a are that we and well are their about more can working the things Teams very thing. well. means that are step, all what talk extremely lot next they we but of doing then that,

now, for we say accelerate FID first track year-end right So and and remain working by to XXXX, they're hard on oil I'd those.

my of question back Permian Understood. kind follow-up Okay. inventory runway. And the to is

You your a being decade there you? through position all other in there opportunities what are of Do talked Do get for think to point now? the what that about feel Or that's trying I'm appetite this so time. to you position? for strong at the end consolidation? with comfortable confident is is like enough And you further

high sit. about inventory, we're we laterals very I when PIs. -- comfortable long we Today, feel with we talking extremely mean with where about talk

So it's high-quality inventory.

just We and we and in got with goes the how along time our do through, tests it lot As as and a footprint a a we as into today, know to more there, inherently inventory. drillable got you improve get way. But always on will of working large more that that Permian. but on. mark time to know, we're bring we've prospects, very lot there's the acreage comfortable you've acreage We're takes you

saw very patient. have you've very We've one. of I it opportunity a very think sit to and it. transactions lot bar. we even which comes things, when got why we is with have Callon, We've that continue been today, high where more will in But visibility we're and a be We moved to do had to content on to believe what today. there than into we

comes from of Our Bernstein Bob Research. next question Brackett

most conviction secured That's things update. on leading Does lead tell A you interesting an that bit expensive state-of-the-art and gone long the is follow-up am an I your a the FID contractor. partners X out overreaching? of have a I FPSO I your for One in from of. item Suriname. with all that a on think slot about or from can interpret

but we'd I confident Bob, FID. still really -- we get right? have think project, So need been to to a we've

and just But you timeline takes we get it declare of -- accelerate. wouldn't change commerciality to and we're earlier tells it an just it's to that that. to now, they're did to just we've this I year. the said lot We know seriousness year-end, decision. But technical -- trying work looking FID So they accelerate work that a the got

ring-fence all the that disclosed agreed recover you've for my around is issue Sapakara-Krabdagoe I majority PSC have development a area then second out your If a the upon Am cost vast a there, through future of discoveries capture and that cost field the Krabdagoe, could pretty correctly I there? sharpen good fence ring of then that, and for is work. the joint under kind development. and I pool And Sapakara draw crayon thinking

about and if a fairway talk we -- driven, the Krabdagoe And so a field seismically Sapakara, we we of confirm prospects. we and it only right? we appraising back that lot not you I when have to we say and comments it about talked go obviously but about derisked appraising did said the would appraisal appraise well, today. Krabdagoe, other announced as it's defined when pretty much just talked Krabdagoe, it When defined

the So the right starting next let's will be at But this think we about definitely way. directionally in an there. FID, to point, and -- need you're things to step get

just of Good of pretty value suggests Is increased say, way low. in acreage something that perhaps is a that that option the acreage think or to you Alaska throw your see I'll you good that thing. XX%, a interesting to there And it? which guys is by one in, last

Yes. I It miles proves The would chasing, it's just Alaska. east XX sits discovery say the is we're that proven. excited play about Street to we're of concept. of it's proof been where XX -- King

So was we're sands. oil, a good a high-quality in said area. We it high-quality discovery

get continue to Alaska exploring in anxious are back we future. in near and So the

question from Leo next Mariani Our from comes ROTH.

Egypt. here I follow up to wanted quickly on

you oil that first would a bit you in up oil gross know that the your little May slightly where reiterated quarter thought quarter. to from second Certainly Egypt. I be versus was in So comments noticed the down gross flat

is hold down can Just think some trying year the a of you the bit that likely Egypt? it's to maybe more down sense. you the coming a oil run by count half, know rig in rate think lower but activity? that get rig do comes second end do gross you in the it I little quarter second of Or that with the

Leo. see script, alter going reason But we'll just what in was would our this guidance. I didn't we quarter the at -- said second any strong. stick well in say to It point, were Egypt. Things we clearly, to Yes.

in can Okay. Any receivable you the situation on there share? update that Egypt guys

over Yes. from got I'd say being we back there. just

some think got good it, situation. fairly cabinet. I step really I Sisi of Egypt. As of done and a look with going in I has are new had if meeting his meet job President good I managing President, back at a difficult Things a the to well mean, said, you

been we've So impressed with that.

We this some have receiving year. payments been

to all, well, no in And Steve? lot and all concerned point. through fronts. to numerous see difficult work are situation, going of continue be So this on a they we positive but things reason at a things

get anxious well. companies about oil has to only sit get of Minister off. I is priorities of John, a down that, The to thing is on [indiscernible] that. follow new serious is and of the list the And with list that set Yes. to on he high priorities, paid he's And add him Petroleum and we of that that would his as started

this really helpful. know there. short from sounds gas like opportunities I That's your some you anticipate could intimated the they're you Would potentially has Egypt gas Okay. that with change additional been And to back on there it. some then summer. gas guys that a in be and comments some be of the little could opportunities desperate forward? associated price get at going It

and There a a the had just had projects about have large country. to Desert, produce would very gas discovery explored We in is Yes. of some in we're could it gas. to couple take Western some historically, maybe do of gas and go the be helpful the focused Western that oil conversations decades We after we've lot ago. say, I what for a mainly we on oil. Desert, would in Qasr

them, at economic So could it's gas something a something that with something that it's future higher for come early. future. definitely we're sense in look that into the exploration. but obviously, price but made with probably play But more discussing And you'd it's early,

Our Scott next question from Gruber of Citigroup. comes

wanted Callon the back the on come to acreage. to upside I

completion the the improvement and design be material the redesign, decline from there key-ins? the and X- as shallower IP manifest I'm potential improvement means improvement in productivity targets the XX-day will improvement in improvement XX-day and more So time about upspacing think for XX-month just clearly will shift a the what versus Or we completion IPs? a the the wondering that if longer-term in potential. potential over

just we pumping I obviously, looking need get a fluid. Scott, some at, we're Yes. But mean, be more to the changes with we'd lot down.

there, you little performance. also think see longer-term should you but wider I could see increases a better spacing, with

-- and this results which talk So from anxious we just and need to so delivered at demonstrate. we're on point, get wells down to getting to some

Okay.

another Okay. follow-up on Egypt. And just then

that will much CapEx, half. to further in on to XX the guys half, you the how net rigs drop in the and XX about average a running first $XXX second drop spent Egyptian So Roughly, will quarter you? reduction million

that running is and of rigs and Yes. that work some workover be hand. number to It that relatively capital doesn't change. don't I have XX well, should we're as proportional, but that

probably you with Gary. you So on give data some that. could see could He get

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

Steve, I spending on your wanted thinking to and John start about get how we thoughts in XXXX. should

into Alaska as outside can base your think -- run as wondering maybe think well assuming $XXX quarter Suriname, FID some if per an a your And CapEx rate million You next of in mentioned D&C was maybe for placeholder about I as year. help us was maybe at a areas for I heading you of wondering, we exploration program. about activities of

Yes.

So a was you about we run that make about million. conversation do a a And excluding -- was grip I included first spending. on That sure basis about get the much exploration of XXXX of all, structure how -- with with get $XXX capital I Callon actually spending how number well, was was company clear me -- are it as do the rate was let a was a current exploration, activity. on you how the it

Alaska exploration third was, what about that's much And how and second, $XXX of if exclude type and activity. average between the of XXXX fourth we're so you that's million quarter spending on Suriname

about going to that was indication can going amount that thing do, normally forward-looking allocation of actually. -- about returns be you think portfolio, make with we've I And the As the into to an John view earlier, to clear capital where and not that, just of process that where of is a mentioned point right complex now. best allocating far optionality. of The the great are decisions a portfolio we is got going huge capital, our It's that. be that's the to would rate be got our [indiscernible]. what a XXXX, a lot you've run through a we're thing And middle planning as do, so we be in best as being

our through fall. what mid-summer that's planning so we And the process run typically starting in

a got will February. what that we've about plan, And have that the preview process upcoming all typically look typically give the through. run in We with Board XXXX then give like. details we a an plan. We November that of conversation in of high-level And a of we view

you wanted half The X% was $XXX is at this other Arun, Steve actually if growing million, about thing back I saying what on to the of year. look the say, Permian in at

year. right put in if next of lot moderating into process. a the of we choose So decision-making we'll what going a what the room of to into terms plan there's And lot that's is

to do to time rigs? we're with And to little that's and on to Egypt take of does to down And a also that backlog, back great can Yes, some Egypt, point, a we around talk had these workover injection water XX get flat about we're and rigs create to John. XXXX? going to capacity about, fields. flat we we're get Yes. rigs, run the well, hold convert that at it had number -- XX injection XX us using conversation to okay, of what the for running lot into A people bit flat recompletions you of workover a because -- a

And for in Egypt. was running X% second year, in more rigs this Maybe, to and clearly hold XX be we're running second earlier quarter is we're X Egypt be XX not. the XX rigs closer year, growing it running as to to XX. from to running we much maybe half the XX It but XX rigs John in than low, to might Egypt quarter. flat? little we fourth can needed is the Permian, were said, of than flat rigs So a and

of So many number to run clearly, how in in terms stay that rigs is below flat. Permian have the the do you to

year's benefiting pipes? financial So my have you on do think more that picture wanted earnings and and for normalized kind midstream, about arbitrage Great. earnings call And some Steve, Matterhorn it, normalized think Coast. Waha is follow-up. from there. piece the when how to that you along potential other your of maybe just a about to obviously Gulf how just about weak ability This maybe the you prices think

Waha oil time. over still nothing resale, money need know And anymore the feet do [Audio tell ends, making situation cubic last per remember difference you typically you after the of and multiple maybe squeeze below general, in pricing we market because buying for where in purchase would fuel differentials. talking Gulf pennies and on the on pennies, price, Coast for normalized which, can but that, Channel, day, that we've Gap]. Well, or I Cheniere Waha gas and that that something has about is it take points, they Houston basically side, slightly above and differentials points, a both few and can to here pays that million Waha do, we dynamics on XXX best multiple you're can on the mcf. And But balanced We're includes be makes would out Coast, what sell quarters. for a several a course, there, costs. that receipt a delivery pennies don't got and Gulf just and by Ship transport then just with the But contract, Permian but you between

question comes Energy next Jay Daniel Geoff of Partners. Your from

I some foot. savings on kind guys the just to you $XXX talked about. of get a mean clarification D&C wanted I

the those guess of $XX are I synergy. X-mile, Callon million like a total For

Just what's more in numbers that kind you cost of wondering if give granularity in And there. are there about figure? any me service deflation can any

Yes.

integrity we've [Audio So lower frac a some rates of Gap] $XXX the in is excludes rig of for what market million included annualized synergies the synergies. [indiscernible] benefit have excluding that any

So wells. And the rate we these the year. XX $XX in what on XX% of Basin, drill other run What cost single million includes while we lower lower that some that well, about took John that's that because the many is $XXX million rigs things. about for in benefits is, of of X to the Permian a running frac cheaper Callon but and that about in XX% is wells how talked costs a $X basically drilling with the on $XX to million given rigs, on or the million is included of drill only number about would is market on market benefit, steel, annualized

running if full capture XX something a we'll to the year a near of how like we calendar But we're that's we obviously these -- got number. rate capture to so running drilling probably that not in not year, this days, it's that $XX million not at in We're And we're we're wells then XXXX. that similar going 'XX. so keep benefit

comes Our Cheng Paul next of from Scotiabank. question

John, how spending can what's going over what are that the you Street? And be there? quick us be or you're some to going may all talking to mean, I much -- trend one. on the drilling exploration guys it's doing you appraisal wells Just whether share King many we about? with Alaska, one real drill, how that

we're mean working a plans partner. Paul, with Yes, I it early. through is

there. plans. this some update be up we specifically at for Alaska, doing on will Other point, drilling no that, more than So

closing question-and-answer I the to concludes John back now Christmann, remarks. it turn to would for CEO, session. This like

here. Permian, and well. you, extremely one, of points Thank is a results Callon and strong we're the to going in just wrap couple integration up, delivering really, Number the

we back one, in seeing up turn do reducing workover, both X workover production of to some visible. results those are full-year while oil waterflood with very impactful Secondly, wells Egypt the operator. And our raising bias full-year backlog Thank to for downward I'll lastly, the you. capital. And the implementing a of are things: two, and guidance that, it is initiatives; freeing the very recompletion, us rigs letting of waiting

Thank conclude the participation in conference. program. today's you for This does your

disconnect. now may You