Range Resources (RRC) 24 Jul 242024 Q2 Earnings call transcript

Welcome to the Range Resources Second Quarter 2024 Earnings Conference Call. [Operator Instructions] Statements made during this conference call that are not historical facts are forward-looking statements. Such statements are subject to risks and uncertainties, which could cause actual results to differ materially from those in the forward-looking statements. After the speaker's remarks, there will be a question-and-answer period. At this time, I would like to turn the call over to Mr. Investor Range President, Vice Sando, Relations Resources. at Laith go ahead, sir. Please

today's and operator. Earnings for on Financial Degner, Officer. Good Scucchi, you, and thank Executive Call. are Officer; Chief morning, speakers XXXX Thank Chief Quarter everyone, you Mark Dennis Second joining The call Range's

and the our Hopefully, may website. a release reference review call that presentation certain the to had investor we've on this We morning. you've press slides chance updated posted on

the be Investors XX-Q it today's our also non-GAAP under can EDGAR Range's You measures or on access tab website using system. find you Please referencing on SEC's the note, call. we'll certain

details Our let cash me to non-GAAP to supplemental by the with that, press calculations also margins these Dennis. over measures. website posted With reconciliations tables figures. We've release of most on and comparable pricing that other product, turn of provides along EBITDAX, call GAAP our the realized include

generating to plan Laith, successfully all while Quarter balancing operating with allocation world-class of cash flow driving free Second of of thanks joining to safely with continued and today. which Range's flow for you our remains the strategy was improvements, unchanged, Thanks, year, development and base. free for asset the efficiency and prudent executed operational that consistent and with a peer-leading shareholders the reduction further cash our debt capital long-term returns capital call of

of ongoing business our objectives believe through I advancement demonstrate these the quarter the reflect of cycles. results and resilience Range's second

while cash Range's low successful optionality, high drove breakeven free quality, inventory operational flow. quarter liquids Our which financial updates and another highlight and generating

positioning Range key is QX providing returns a blocky drilling significant to Range's our that costs, class-leading base transportation through rate and while is energy result future flow to free and These on for display attributes and large Our low cash industry, meet solid the the capital of result generating continues demand in in intensity foundation shareholders required in among diverse the Range inventory a team. decline, reinvestment best quarters shallow consistently portfolio. talented completion like core be and to help

profitability Range's and is liquids contribution. Bolstering durability our

As in With realizations of revenue substantial providing gas. Henry all natural Hub uplift price uplift liquids results, to premium the liquids seen Second When prices. we revenue NGL relative an our a gas that as provided to second Quarter our natural together, Along the producers lowest low a the gas thoughtful you quarter hedging a natural organic breakeven capital with rightsized most and program, and get unique XXXX results our story, evidenced among by cash flow projections. resilient intensity. free roll generating

Importantly, for flow inventory compound have high-quality with vast decades growth to our we ability share Marcellus in our per to the wells, free come. derisked of cash

million, in in $XXX with spend As the capital frac second total back of first quarter, for totaling a quarter all-in the look came base crew at early our the we a and rig with of spot activity million. half for Capital level XXXX. along reflected year we capital had the on $XXX

horizontal rigs Range what dedicated single which $XX did of planned generate very we and will well X million in-process $XX our will similar last remainder to be frac the For base year. year, to of running inventory, the crew, million

increase and from while natural long prices for will at second strong laterals well we year, with see in set Production XXXX. the ongoing Bcf by in per gathering gas X.XX came into improvements with Also the systems of driven that of performance. performance optimization second is enhance decrease day, equivalent production continued quarter consistent aligning prior years, the heading modestly spending across half expected capital to

to reflecting our production. We July. across with acreage, were year. slightly XX result and turned that liquids-rich of increased XX% back sale but delayed a wells super-rich a to on the recent our propane of the into today, pads wells versus in wet approximately existing liquids early up near on of activity of half X first lower focus of was these Range's cargo production as production, second quarter XX% QX highs, is Liquids

existing As we've discussed is durable, pads program. of for our a part years, returning to repeatable

this PA. expansions performance has to operating that gathering well system us in been allows Southwest a supporting optimization pads for strong, to also Range per Year-to-date, compression aided included nimble Returning that footprint, and existing operations. normalized is also versus our efficient, peers. infrastructure cost and minimize reutilize surface production foot while well in by efforts have Combined, differentiated results

These continually end of field the level of production the type for lateral previously guidance. day, the from Production second development. expected half performance our support and us optimize production year near course the approximately are Bcf long a of business team as is high of be normal X.X to per placing equivalent expansions works to communicated our

XX,XXX laterals over program's to just but per now the with over with lateral have length average XX the nearly feet. during we Turning in of an greater wells Drilling several lengths feet. horizontal XX operations. XX,XXX quarter And feet drilled XX,XXX history well, added activity than

in continued to the build equipment with and the quarter. strong across the performance new continued X completions, at onboarded successfully second electric of year. start that was the different the operate We personnel from For frac pads team fleet saw the

XXX million approximately just consistent us activity placing which over the completing while our Range's communicated for track on levels at ago. frac of savings year. cost Supporting efficiencies stages for program above a X showcasing nature stages year sharing repeatable finished approximately and we've plans $X per in program, for quarter, day contributed is the our the efficiencies the water Frac

we quarter existing believe given $X.XX optimized position utilization water expenses by blocky logistics. savings well will Cash performance Mcfe similar finished from efficient third-party water our water gathering we acreage see per operating and better forward, at from anticipated Looking lease infrastructure. than strong and shaped the

lease to similar $X.XX improving level project expense operating and of As we we per therefore, are, Mcfe. a for second down look $X.XX previous half forward year, of expenses guidance to to the performance, the our

Turning Range's to transportation flexible with marketing during starting access markets continued and to QX. premium NGLs. portfolio export

we access in terms with international producers generated NGL U.S. LPG realizations. quarter upside, only the price to fantastic of one of Range another As

NGL to Looking they reached to grow. at the PDH the more as imports in add continue demand Chinese second propane quarter all-time an international capacity macro, continues propane high to propane. consume

allowed same the flexible in second led non-U.S. the propane Range's U.S. opportunity, At limited and fundamentals the take quarter. us international of for vast international produced time, transportation tightened exporting to growth supply and propane improved majority advantage exporters. to of during arb an this marketing portfolio has

into maximize margins. market by its to volume the domestic pivoting demonstrated Range Simultaneously, ability optimize to sales butane

Range barrel $X.XX the Mont per Belvieu result, $XX.XX received second the premium a As to NGLs quarter, in per barrel equivalent.

XXXX, Range's we realizations domestic Looking remain of demand ahead a combine we NGL stock to and will positive into XXXX the and with to to absolute and support differentiator. price pricing expect export expect early tightening relative balance NGL

side, majority the natural Midwest regions. expectation our Gulf pricing our On of the gas as line sold to into relative NYMEX gas the Range's vast was we in right with and Coast

U.S. alongside areas or gas levels increased gas observed and the driven can On natural natural front, demand such seen industry, durable burden. power in macro by we maintenance gas be that production for from lower LNG activity year-over-year, as declining exports have

going fundamentals gas forward. we believe in place the So be for to continue improving pricing natural

our published to it profile. over report quickly touch I low-cost the was sustainability week. an showcase corporate that most to as This on emissions wanted to last gas producer report company's a recent handing with Mark, resilience safe Before continues natural enviable

reduction incidents below for to X a employee reaching X great with environmental methane for and threshold. methane in strong look over its years, meetings. these continued future the XX% a intensity X.X% fee results safety EPA's XX% year and We during the just had driving other under the than emissions more Range also Range forward discussing year. or past performance,

more than where that through leave halfway as us XXXX? So does we're

remain outlook the NGLs, full of constructive natural for is importantly, commodity levels The high the backdrop. display. current and business As relatively of stated, we gas the gas on even on Range's in storage presence natural resilience and but

talented the is through by to uplift, Our cash position, portfolio NGL our and underpinned efficiencies, ability large, cycles operational diverse team. marketing high-quality contiguous, free generate acreage flow

NGLs We the to ahead. and gas for in years generate strong value substantial believe shareholders and positioned is believe Range the future well of remain we natural

I'll Mark now the financials. it to to discuss over turn

Thanks, Dennis.

With disciplined most stakeholders. flow Range's and a the executing forward and first program half investment progress, is steady year. of us, its for to generate Range consistently XXXX is making prudent cash year for for next this behind fundamental thinking safely objective

successfully program dividends, pay flow, back to for to prices shares repurchase debt. generate free XXXX continuing and while was navigate fluctuating designed Our cash buy commodity

of our high-quality assets. in the development investing While long-term

commodity near-term customers. positioning steady business As adapt with prices an mentioned while efficient growth has increases economics the flexibility resulting production domestic eventual plan from during maintain our our year as to international and to call, last to demand and long-term for this also Range

basin materializes the production demand price unit our Hub quarter mix of Range's structure, by has byproduct business transportation production in further the the cost Henry to outlooks. portfolio. long-term NYMEX above was of Range incremental Results second per a inventory and highlight infrastructure hedging is and strength continue and energy reliable generated remain prices to production diversified mix Realized As before supplier. sales a and $X.XX near basin, downstream, of and NYMEX

$X.XX, Henry million flow Cash Hub cash million with yielded per shares unit margins Range $XX allocated of capital in million pricing The hedges, quarter repurchase above production $X.XX notes, and of million margin, for in working $XXX Including per quarter cash million. in dividends a in $XX was senior healthy resulting XX% flow in $X.XX realized the of NYMEX to Mcfe along of or investments. prices. roughly second Resilient before $XX $XXX approximately capital common repurchased.

a generated were on deliberate by rightsized diverse unit and but program, continued margins costs. focus Cash by hedging sales also

thoughtful cash G&A a the interest $X.XX, first unit in debt were expense $X.XX decreases the second of reduced and quarter, quarter, byproduct During total from spending. and down costs are

from Gathering, NGL last second for the transport processing quarter of quarter $X.XX timing and of is prevailing declined function a prices cargos. and commodity and

lower NGL processing costs, elements reducing way risk all also with costs contract lower and natural right Second and market electricity maintain declined, quarter we margins. that prices prices, gas experienced fuel

Range's benefit of markets access cargo international occurred out first in days from One July. the East direct to the sales loading NGL of Coast.

should bring be important volumes safety after revenues end and the inventory in at among environmental is third the back midpoint quarter the July, towards recognized capital with to most which such, costs guidance. Right were practices of GP&T corporate GP&T responsibilities. and sound As allocation the being quarter loaded

in see can natural both prices As the while gas growth to responsive capital, quarter, near-term also to investment carefully you of we for returns is the to the us while prepared Prudent during be prudent with of investing strength. commodity future to business demand. continue in of maintaining funding financial in the investments realities second balance the approaching

low we With strength it. same been full modest flexibility time, we when have target can growth costs, has what share calls we prioritize the decisions. flow financial the financial cycle enable efficient so make debt free enables a repurchase opportunistic our it's program. program to we investing execute strength Range able cash a And generate to has remain while efficient for in Range very to inventory within that market At That execute been greater as levels. to

to balance quarters the revolving year. hand, in cash due sheet coming facility. credit mature X cash in undrawn notes an at and are less be easily briefly. notes covered Those Looking XXXX by than The on generated

the believe Suffice maturity to as we that there liquidity ample it is debt to retire efficiently date approaches. say this

and from upgrade our believe to effect positive is thoughtfully quarter for provides a S&P stabilizing of business executed significant that carefully the strategy and Moody's, With hedging our ratings and recognized. element the investments of enable we One better Range's being strength financial this funding is outlook efficient constructed a program.

do in philosophy cash from have production so in average operations improve produced XXXX, in that We has approximately an also natural the stable future. planned, with natural served $X.XX, XX% free efficient through average hedged quarter, and the to on sheet with the company of dynamics shareholder continue provides confidence while financial while A market safe, on Range for will Presently appropriately consistent, more another successful a market results sized providing of planned to opportunities Financial XX% can foundation we forecasted the expect balance returns. cash believe create base also has protecting hedging price generate results added $X.XX. And Range second to well, and flow. approximately of an cycles. Range's flow floor floor reinvestment and long-term XXXX executed rely operations hedging efficient team successful and gas gas hedged increasing exposure consistently budget. Range delivering half enables price stable better predictability near-term

XXXX the others As from slightly for most plan in a the industry. reminder, announced differs we

advantaged extending efficiency, at low-cost cycle metric, And can the our options facilities Range production meaning has durable short paired bit, lateral alternatives. we water cost, full low When commodity in efficiency attractive at similar per our options, with capital inventory margin of into production some. prices, infrastructure enhance or unit a optics how inventory enhancing capital cost on like redeploy among meaningful of provide that depleting reductions current the comparing drill land, a generates any marketing basis can or year of run for capital on other

inventory, largest We continues internationally, financial Appalachia Range across share improving portfolio leverage delivering the shareholders to with underpinned greater by provides believe Range's we transport and is sales to executed growing what the in exposure demand lasting face be on paired core all particularly and efficiency, expected plan business U.S. strong production the the of a per to foundation. markets. believe

team, have significant believe and succeed price We to the to to investors. sheet we back value assets continue balance Dennis, the through to business deliver will and and you. cycles, can Range

Mark. Thanks,

advancement for balance improvements year of flow of another returns of in and world-class base. cash of consistent consistent optimal cash Range plus maintenance operational generating quarters. the efficiencies, free sheet in half the program as first theme results Execution a balancing that further communicated and overall allocation prudent The our flow, of asset capital, development our past reflect planned.

cash showcase these this that decades translated high-quality of is a into business types history, the communicated inventory a and state the before, place in cycles. generating in derisked best Range's believe in You've results free company we heard today flow capable to continue us business having measured through but that of

With for line that, let's open up questions. the

first is Fargo. Read from of The Instructions] question Roger Wells [Operator

there Mark, the I'd on end. the come very stuff at you on some saying quarter. to Congratulations back like were

were opportunities those of et list that magnitude cetera. about out? returns, Some of but also you achievability. If of line you, let's to it, call sort of the do of can in terms would opportunities they to, How time what we listed improved margins, enhanced think of shake for the

because Yes. broad just has it. of it's good of and It's Range a breadth question, ahead question a the opportunity of

I and cash well think Dennis which efficiency. drive unit cost have we structure ways as down our touched the on can in as both various I capital continue to

operating mindful field. touches in Water be costs, continued the execution LOE a and team is out very the seen You've we efficiency. in capital efficient on discussed, topic handling direct LOE consistently improvements which on our both

exercise but day-to-day a team the investments. the that's some in So also by it's field, capital modest

As of for our allocation capital this process know, was that part year. you

that handling size acreage decade. done of position blocked-up hadn't a really consequence we is and use roughly in lot our That for Something any nature of efficient of infrastructure a and or the many year what a pay this that it years on timely, X -- about better expanding into year and should to became back investment, future. payback that with we be or expect

down, item, cost and area think clearly GP&T focus. line sales That's for it's structure, I way outlets about it's but your cost, It's work importantly, a about an being I that have. a of you think, larger more focus we enhancing As of portfolio margins. maintaining the

molecules our into will So But today, markets, a Range strong to incremental existing over great today our profile XX% production. market time, of for that outlet sell the be and think out or when it, it's have there's we opportunity it to moving its basin. continue the gas calls end the with of production

to extending then gas seen bit or capital we be will And liquids. allocate markets mind have as which that be to are well, those on natural us built it end to efficiently to just strong the takes XX move running for a program the that X growth lateral little to steady year, capital you've front, last very natural a it ability potentially think maintenance molecules lengths, is all We years. the come this Range that again, gas over program well those for X as again, efficient that crews and up topics of land common to running months frac to the as we've the running able the this year, and to this given year, example, inventory rigs full execute modest next a the crew, few generate into do

So area to those just all specific one of plan not across factors together and but whittling the down improvement, capital cost structure efficiency. the

kind is of as or I think what better the is is whatever. you're to XXXX, episodic? this across and want think with? are had appreciate that's then getting as question you'd country potentially about there a I supply-demand the about be thinking hedging No, if comfortable tripwire about mean, XX% more that little Or to that feel XX a patient going there -- balance sort something to But do that? we more clarification. on you year, is there. setting How about macro think for I hedging? level be up of obviously, you your you price But Or the And more the equivalent other you

very start with stands about the feel I'll good Yes, where XXXX we book today.

up backing an enterprise philosophy, the concern, drilling a inventory. years we're Just going XX-plus to of running

the business So the away this the cash is not managing flow. upside prudently risk hedging in while about in

operations, end, fixed picking philosophy to to that cost to is and try cover costly. and extremely inefficient the things up crews and to maintain So the dropping steady is

of cash value. more predictability lot think, having that of flow, we So stable adds a

them with focus LNG do the prices months. is XX book shaped Well, next over unfolding able mind, were we on a It's lock shape in. feel in to at XX how see clearly was fundamentals that service to also based we XXXX. like the headlines. as in you that the in and So do we the the designed

facilities early may be are facilities and some delayed. Some

becoming those the we gas late this the of year early really reality the first are form next year. collars, half loaded XXXX opportunities retaining they're of and see and the were to exposure can we the improved provide positive incremental half in year, while downside front-end in positions protection that So prices some that as added first of so

about So that's really how year. next we think

comes of Stephens. Our next Michael question from Scialla

you with natural is and the you production that changed the moving your play to curious the moving end contemplating? of that high curtailing to gas that see and you're do like to liquids If more or plans, Range. plans, feel your the just your lines? you need adjust be fundamentals would doesn't really both Or improving natural guidance company not you're the 'XX any Dennis revenues Mark, what delaying production mentioned out, forward gas it turn-in

a there Michael, communicated we for kind of year's program which about a we think and level program. what by or base we'll very I'll go-forward on level at start bit for would type somewhat the thinking it a of activity the the maybe we're approach 'XX, plus. call lean what reiterating really that this maintenance And way level of is business base call we

flat the the frac plus X crew. rigs base So X

it's similar And $XX that of $XX to last to million in-process inventory -- very to this million year, so generating $XX million year.

And about up so really with to to good set as and answer wanted we think ourselves your start options. to we question, flexibility XXXX,

at we impact in some risk, and see in we consider that our we for setting production also differently. up know facilities have that take puts ultimately, But And could commodities profile forward. to reshape so LNG further use how that inventory for will if 'XX to And anything that or go delays else by it inventory have ability the an XXXX. way, of that the we

thinking if be ago mean, that that just and standpoint. based onetime at what to and decade, the be infrastructure I $XXX program use million in going one-off year, more capital look we when inventory nature are at water program this capital the a of to Mark ability for But there then think moments I upon some aspects you that's toggle on few going investments commodity that from will. to that really, clearly, once are touched the decent like to our $XXX a level, way million a we see a But about

the I lot even just clearly going demand played of XXXX, the to components to. There's on power And a billion is when point year-to-date. is just day to think reasons them. that's look There's power that in believe into one look $X.X this can I think, you And of too a contribution many incremental though. side that natural burn at better, you gas's

got that's so the And we based from in program of to up upon the reasons 'XX us what production right to see we be lot excited there's set inventory market. to a We've think allow lean about and reshape XXXX.

Appreciate that.

your would LNG any maybe get to Does done to with those kind more political the bring on court facilities think want that blocking within the might the regulatory judge specific Just make thoughts on or improve Chevron could environment? lines? it pause on Appalachia front of along federal take Anything anything you and you capacity optimistic be that the return doctrine. away

for path electrify to of happens what grid, a the further we with place, here bolster what do Lower gas here going with natural different that conversation if go when about demand almost meetings, we've conversation political and reliable to question. hard like more avenue, at demand see meaning ended Well, go same to talking playing through generation. you all about you're are AI, and I forward, administration how think the smaller regardless you prior power -- if to you that feel said a get you it's the the playing group in variables the role look way low-cost, the you the have look with the maybe the you prominent the you're at the think when when and centers XX, on data in you component, into maybe see in maybe forward, the I think maybe I'll But we start

reform. that we So with and follows permit real a look conversation about when then serious -- at

and are forward. think or language day I the permit from Barrasso So right moved was we that's to think over being it And the reform the signals. those encouraging X announcement within Manchin some here, Senator just last see

are front see So like need both companies others, there that look real expanded to also and on as a like at we play D.C. home an role. there's clearly, us in that here the for would Range that

When that, of our having the into do you have we feed the inventory, to asset market, especially PJM XX look at to serves around million people. the gas which base, our with ability ability supply

So we a but supported see really positive lot of to be outlook, some by reform to sure. need it's permit for going

comes question Leggate next Our Doug Research. from Wolfe of

Mark, be So first for or you whoever capacity. I guess, takeaway question to to wants might my take this, relating it's

that inventory those not takeaway. magnitude why why offer think on taking words, Our as roll are and given follow-up, be In got wondering can privates you folks kind really please. of and case? timing understanding like of is a depth would for term both renewing for might the fixed yourself, helpful. that some the or sits that the kind you a I've and opportunity not the your company are publics of And takeaway things other I'm how takeaway, Any around renewal be

because good that [ logical. a Range understanding, can the over We're the can is out in most and focused pipeline what or Appalachia that's common of Doug, ] time, on accurate, coming what is access question utilize. aggregate, Range which is

perhaps the coming have existing pipelines. lot what great to there's opportunities some we even even capacity before about we be basin we think of think eventually expansions Brownfield will eventually new portfolio, a for even but out of and today, So Range a use

up start some proceedings on so lay under there's used off. them projected capacity not firm shorter-term either to underutilized, firm and up it sign capacity just it's was signed transport, just through those that's that contracts for nature. did out, remarketed companies or to various and But There's

exists. pipeline the So

then it down behind down for use to to use that and to road of an for question. X, who So to years, term. able inventory it a the XX-plus underwrite market it has next to be that you extended really And it stand comes capacity leads share the the XX, fully

only that's of utilize for capacity take Range not what customers Range have own So to an take chooses to appropriate and our capacity. or clearly to itself, It's at on capacity. has opportunity question on grow time but a their the end

markets those it So you essentially, it. name end XX have utilities across Lower or own, or X you their be can to sell that anywhere customers marketers

we of Lower of simple said, are the So And and the XX both on population eventually, sell earlier, it, there's the of there. MVP, those while customers to a be Dennis' and electric can I of other existing expand capacity across of capacity, holders so them point to we them. expansions, whether MVP have in paths, power on going don't like have number via power pipelines demand, to needs talking industry, generation electrification reindustrialization increased get to side, to distribution, you're industries, the relationships

even a various significant to our plans Midwest, the our example, types then power gas side to So existing it as a is potentially to of and again, closer represents near the where pipeline for tremendous And new and equation goes demand the portfolio of areas at expansion Brownfield Range, to X/X some it opportunity, construction for demand, that in point. home industrial in-basin states. bringing significant basin there's leveraging of industrial we the or of nearby term where sometimes is

So by of underpinned and duration here, inventory really Range's story. great opportunity

for question, me but the second here's is you for quick timing, can forgive Range. kind how is a a not quick, impacts asking This my Mark, of here's offer number, it very clarification. timing the magnitude any and

early bit as about look and capital little get XXXX budget a like. refine a it's perhaps little may and we think think to I what that closer

question It's of said, not option. a growth we've if. is when, As an

longer-term compression and processing, the it be to gathering, customers the transport of end part marketing the with infrastructure, those coordinating in layered So all and process. relationships is

debt balance a question. really is follow-up My sheet Okay.

certainty with gas think a that the structure done one equity becomes I sheet breakeven the a situation obviously tremendous part volatility, job supply the of balance your the sheet. demand and You've means and significantly is can forward capital higher rightsizing But curve volatility. balance which see we big for

structure down? in couple So refinance those? pay bond X do Will an for maturities my you is, you years. volatile Range? a extraordinarily them see you next X environment will you of have capital the How Or to question fairly right sizable over the

$X.X us capital the of Well, to returns options, in $X and deleveraging. range I'll giving billion which within, with start both further debt of we net debt is billion, lot are target a of

plan some will that brings within cost volatility. hopefully the certainly and of of balance to your we So it point, if and brings out of risking, stay some you reduces sheet optimize out the capital, the to

mentioned to point, those. ample take got the opening So I that to care as liquidity comments, we've 'XX, the of during

is of generated We and the sheet have to in flow be cash revolver, balance the lots the likely. further cash quarters deleveraging on coming

returns And with capital of as well. that capital. balance markets open We'll are

options clearly as we the There a XXXX, next there next year. call there's through on the in quarters. few early roll forward notes price the So down step X.XX% is the

time of So that a after presents passes to a might refinancing possible look what that like. consider

So highest the achieving also of deleverage say, I'll to our a fortunately, at optimize sheet level, while lot options we return ahead have of of good objectives. capital us the balance further

of Our & next Company. Jake question Roberts comes TPH from

wondering to current well may it with number QX? the was aware at cadence I XX%. curious the being of -- getting in is on the quarter granularity that that the if some But mix line, the push on what second just more TIL and weighting out for more shake just that And get is that the than then in going higher XX% to year. ultimately, in dry QX to liquids

first very the been all several well, as have seen and the liquids we've we've that much we the we'll to you because last expect a would clearly percentage going as QX. also to production carry QX, on sent see years, then now, By the modest, ratable consistent weighting well. back, year having nature, that's to wet of turn-in-lines and a of to the over to side, in XX% seen lot of lot mean similar back profiles our turn-in-lines half turn-in-line the is QX a the in a similar I QX think But the right for take cadence of to at the bulk we're looking that we're year, as approximately see step here over been in be XXX% factor but sales our I about what weight between that going half the If line. we're the increase way start of in that to contribution those through

we'll in TILs, gathering a we over the way keeping -- but gas system X how some clearly, with allowing really been dry that has look performed say, The we're really at early, gas we're about it's push of under pay year very do last to optimization have TILs. dividends in X the a still it's those you When flexible the evaluation. months, want the how into still to ongoing dry those, where seeing efforts that we're little a us to way deep think

balance up seeing So ultimately should the through really way top liquids the and we're there, the that and decline being a is flexibility base the contribution liquids cadence on between it, we consistent the turn-in-line year. of shaping low, the the profile just production have of

and export in XXX% forecasted Okay. look factoring and could side know And around capacity that then also utilization also XXXX then we wondering the following my think second we but gas as XXXX, potential should of late -- the remain you any about XXXX. the additional to program? export I'm tightness curious the into you closer offer I spoke that if about flexibility conversation particularly to XXXX we if for capacity capacity in in thoughts And of earlier at how might export the that question, on some LPG the I'm is natural pricing,

Yes.

spot mean bumping consistently the out just export you're for Gulf. of -- basis on. XX%, the past the I utilization month it's XX months in we'll really been a the think we a almost out on great month running in lot of and XX% a see high I But a range plus say in story that ways probably has now.

of it be only advantage, the really and Philadelphia water, but presents us, to Northeast a we've out this number said but proven unique a our ability us. to times, products in not and to to for also the has a water For really of our get the differentiator

to shine would we really when some in in think forward. start see value versus our to for Mont that raise forward, congestion continue from the Belvieu time go to getting the expect relative its that head, out to ongoing persist us Gulf harvest the time so as and you by And go will we and continues to about

we the basins water the value to the Belvieu versus Mont our get go relative the to to on shine that Northeast. expect you're the is that when component 'XX Again, products So in probably in export think about South, and follows that the our continue you grow. see able supply going other capacity and demand beyond to continue out right, in But with to to of forward, being to start to

from Our next of question Hanold RBC. Scott comes

your about opportunity of little your of for is liquids of are as optionality. talk you activity that kind a level liquids-oriented C-type a and delivering plus it an you pricing to backlog bit there more color DUC some Or backlog. gas doing given around better you building that out you more look constructive curiosity, gives build optional that, wells? obviously give a Just outlook all Can when at also, you really some maintenance

of it think way the our think what and and to Yes. that what our looks out, on lean in run toward program in we'll of Scott, But see a side best side. year going just asset activity a like, you our year more lot about liquids-rich XX% base. Program that it's inherently by XX% we the I the way will to kind in year inventory year base around nature, the of on to mirror liquid out. year say and

on other, then And is between to inventory. side. going the we'll super-rich say our more wet the be and just dry So XX%

some flexibility capacity inventory what the look liquid our forward the we leave where where see what the and So going always our it's build infrastructure some drill -- when upon primarily in at to we based shape way, well, I in how would we be program by but side. we our inventory we Inherently, towards as go leaning on we and expect going lies, we the where on we're seeing market. inventory,

we back and ability move forward. nimble our And be go seeing react for to differentiator know to us. on we able for is most But just it's be us touch going production a allows but our real this what a lot, think ability, to and helpful be to I we're the to to what pads really existing with

liquid and real program, similar look it side. to the will should balance rest the inventory lean but mix So towards the of

of So -- that as gas when -- well, as you much improving that? think balance I executing think capacity -- it of just but NGL export growth potential when is makes when whether dry it prices, about well? sense, I of also there's that, Is about should like is more a sort -- as that

toward course contribution it's the clearly, comes in realization year, the small going think improvement this the in over lean expect a all just to see time, in when seeing of you're of contribution, I of I look NGL that time. above. of the And we're like with to at just over the our course you uplift our balance inherently, would liquids

be it global that see would course to our time. uplift get our So a inherently with the it and going because to of it's inventory going be the percentage free out, could into our that flow. what going be way ability that cash advantage and that's And see expect Again, the improving revenue of markets is a laid to to number, of but small to on small ability over take how our impacts is we I factor to water. the

then Okay. is That's probably clear. for Mark. my follow-up And

give to as You Just balance create sense you obviously in the of like think or value a you it think about point? the this hit can most equity, the buybacks on Like combination? sense the us it that? the both the what incremental shareholder as doing makes how of it that. is you well how about Is buybacks? sense a debt Or do us some debt at give is

shied formulaic of the prices demands question, a commodity is change to because it change, of from change, approach giving we've fair a growth and that away cost may and when. a it's again question Yes, field purely may

sell So First customers and and to efficient have safe, gas provide operations and foremost, our energy, liquids job and natural is gas profitably. our to natural this

first the that's thing. So

is within that the range. Underpinning there we're our which target balance strong sheet,

direction from forward, like we in of So another. the optionality one or leaning here

of capital So as can share the I'll target within is free restate per kind up time. as it flow leave appropriate and on cash down strongest driver cash returns, the greatest see provide of sheet stronger, just we of returns and balance over that the get to to we flow turn continues or the the

will from in last the us over say the that it be years. dissimilar So I prefer the programs. not you've a executing give can't you seen from But specific flexibility suffice behavior We number. our what to few that

conservative. in, One became bought little shares. more came year, and million back we Commodity in a prices bit we $XXX

just just with as debt we're it. punchline the greater I'll But and we've changes and cash of leave we in So flow, again, our responsive over within got prices flexibility. to target it range, further move value stay into relative

Neil Mehta Goldman Our next question from comes Sachs. of

questions I had macro, realization. but price a NGL of on couple also your

the first your Slide So on price calculation. question XX,

end are of What equivalent doing job on Belvieu what the the how netback. do to the towards best you get barrel, top be to are get done above just continue headwinds? have are the tailwinds? realizing your $X.XX a guys Mont the $X.XX? And great you perspective the What You to

Range. Neil, managed a this is I Engberg. at Alan marketing program

not we we've that what portfolio question. that of exposed such So at not A stab a is it's to portfolio, managed in diversity and all I'll -- the got answering take to Belvieu. the lot we've We we're overly your set Mont magical. do up

towards it, weighted we've we or propane fact, growth. markets saw lot whether In significant a ethane, of where it's butane international

using forward, Ethane if tremendous disadvantaged. them are that into We've they're Europe. out of ethane ethane, of of seeing also ethylene demand, than going steam going Most the macro think really So Asia, looks good got growth other but they're I still feed operating in crackers. particularly out internationally.

So demand of their lot and they're is a creating feed just growth. continued capacity shifting ethane towards ethane that

that that our going just growth, contracts for domestic the to that good realization ethane, feel to demand given continue we relative So priced internationally we're are to benchmarks. on see

in story, increasing. Similarly, slows internationally, Asia, relatively the a growth I'm go that sure and on we're going about as to to you've capacity positive negative, operating I is on. as capacity getting We're PDH a some growth, that as just tighter that at bit low is view view still because going down, LPG, actually utilization start quite continuing capacity to market utilization which people be a really, a heard and but the particularly

a continued to years runway demand growth for front see going international multiple the So for of LPG. we're on

well, And out exposure to currently. got for domestic Range, again, relative market really indices. it's the to that worked We've

we domestic us the into our allows like So markets. the export the on is right export going forward, portfolio capable flexible our seasonality very position. an time that market, to but of or between when the a right have and portfolio also is side happy of to very LPG being XX% when We're pivot

a of the constructive of into follow-up, Slide kind your view, NGL share the there. challenge Yes. side, on is but lot economy XX. the propane get We That of out we which given the China, particularly builds pushback on

be So a I'd on soft ground time face picture. of you're perspective? Asia real demand the seems love seeing from perspective Eastern the a of propane what in And in your to perform what can demand

demand far the there. in with you, has it's agree right? has I less as economy it's still as been the But massive, Well, China reading -- And so growth we're everything still than stellar. been

in remarks, his the prepared the I that it actually hit remarks China. another in hit think referenced during to second quarter, Dennis record is U.S. that of fact, terms we his In exports

during say, it I was. barrels what of from We propane -- suffice number is, -- China but it it I'm is XXX,XXX the don't per day imported what front that trying me, to to in quarter the have standpoint. see here second

lot massive. rates the strongly those not it for operating were the increased. been I really units actually about of despite rates The operating hoping a economy would, it's people was that So performing as talking have as PDH

backdrop. into again, economic that's utilization a And against the mid-XX% During the we weak quarter, got rate. second

continue and I'll grow actually and that flat. to demand to stimulate the further of feeling the will rates the improving grow, once then is economy. And to happens, government relatively those economy LPG is starts making are efforts been international So going to the that supply well. add has continue Once if that as -- utilization

second down was year-on-year export from the actually standpoint. an quarter OPEC during X%

demand. And demand is emphasizes into to So the strong. supply it quite U.S. just that look that from the that of source continues standpoint, our

from comes question of JPMorgan. next Arun Our Jayaram

kind you're this XXXX. touched I I thinking wanted in the you ask you how about around to just know call. earlier of on

the some of had then build this XXXX, $XX inventory. year, kind well -- $XX of to you capital And used you is million. think number in about I million going into So that the

have well you capital, So is in $XX about of inventory. million which call it

the grow with macro of CapEx you returns plan the today, a types to number plan a [ would those to at the to maybe maintenance little bit given picture or is look lower attractive at $XXX you a for call prices? As move XXXX deliver CapEx and maybe it, to million,] gas strip, around your

Yes.

mean, plus I for production about ability the of think into we at the the to maintenance we type have options we so to I or set have when think I 'XX a XXXX the start the we reshape think profile XXXX. or that the activity ability up program, get where to today, to back stay flexible see until to 'XX wanted level you our we

'XX for you're That example, If XXXX. it's start as you program challenge running a this up as middle blowing your down to then if inventory flexibility. it's where lean market of a that have you 'XX, year, set doesn't or unique early you into you're an and presents whether a the improvements, scenario leading into

allows maybe to at either low it we'll or gives It capital keeping us level? in-process end say, use on the think about been it and utilize that like maintained to we generated. So us inventory it then that's a that the our as differently again, a, ability

from grow of it crew aggregate you half you just X rigs X has have. more frac kind for what that year. like the frac lean our there to inventory than crew consumes. the the and the a kick really bit production And upon time program of X reshape program, the by based feel do we these impact, out we frac rig little ability Or crew that the first

half of had bit then but half the production last where And ratable think the you our If several a your year, program of half following and up see lines always we've when maintenance levels. on the modest, to dip of first back the then year early character year years, you has activity of a in a the had going you the -- a sees increase. you're back until about activity bit from always pick wave, a the that sign in get to turn

and the like presents ability feel into we the reshape market us. demand and what it we to feeding about growing we the that to So way think have change in

we what of a define our the to utilize the but So inventory that options also that that ourselves to exactly capital-efficient keep at at for the and like, us like little ability we disposal have looks leading to a program. early edge

kind cost maybe you're just you a you Dennis, could relative think efficient frontier Appalachia, wondering do you fleet? the maybe per completion highlighted stages go equation? foot zoos it. the follow-up, and drilling very of the to where how the if your efficiency much the efficiency is are averaging And from guide, And was comment versus your very, see there. I on D&C Got on X some of is in gains And initial of side leading-edge to my seeing there per day, highlight you which

a of to there's ongoing the little program, XX% our very testing our were drilling the utilization and that team Yes, say, we'll did job. on through look drilling a, looking efficiencies KPI-driven testing type year. drilling some there upgrades some a performance, we And on has basically our fantastic done a improvement When we at super-spec performance. rigs, back always last just really an year, question. over drilling a Last good in we saw nature

efficiency seeing And well. ongoing translated we're as an so into that that's this year

improvements side continues from with consistent frac team see very when year-to-year. return to we The So the completions, to pads existing production. on

touched pad we improvement production as few existing ultimately, a in with months be ago. efficiencies. return XX% I that as a see we a it But much when on could we think to it

egress, more nonproductive out ingress, look into you all time, translates route et manage You numbers efficiently for cetera. you're it to ways that And the seeing.

been say, past has few in than years. we've fleet better good or as for the well would us. it's where really zoos performed And the So I

when standard unbelievable. for was imagine, organization, day just frac in And X a So joined stages hard around to I it's crew. industry doing but a here the we and amount XXXX, that XX-hour are Xx

So everybody service on team South plus there the hats Point. our to off side in

Arun, the translate that $XXX into what you per you range. with probably something foot cost per when seeing think you're $XXX the I in foot to cost, that get side, current is somewhere

deflation basis, start We along that's a But helped on very as you with have seen efficiencies imagine. the materialize. of kind that limited some to would

conference. nearing We're the end of today's

We Diamond will go for final to Citi Paul from question. a

deflationary kind into expectations tail and a end of into this bit a the on XXXX. Just of piggyback kind quick the year of one, in

if few market playing out? a could seeing you wondering put numbers how really around Just the you're

service Yes. different XXX% where side completion by on now of up, kind I up, level seeing And structured -- type some a across electric are I about where Paul, commodities costs the think historically the use deflation play an maybe I'll E-fleets down, at we're as many contracts. when regards, it's utilization is down. that out, in than service it's of mean around cost commodities are you're seeing multiyear and XX those the fleet example. what Lower

to line be when a you look case, to where of the that hand, the item, in to 'XX may Similar in just going and deflation may on relief see time have our does, you so the of the type relief and see some when lot prices, through sand other not what you significant you opportunity also a they But drilling And individual a maybe way. see exposure. frac may say, rig impact. starting in contract fuel, an against potential start up start activity present at we I'll exposures, large in levels not could is some on one your areas not other protection are like see 'XX our a go of consumables. it term some has storyline -- it It oil by diesel of, prices natural

But in starts to it meaningful dollars. aggregate, become

to D&C I we transform part And of early. of next year. our translate deflationary roll RFP say of program. fall, per our little be likely part will savings for be a that a just or the we'll a process our going part out could that then it's bit and We're foot think into in So most

follow-up. just And Understood. more quick one

bit a You a sharing it your talked of longer-term being about of set. opportunity kind water program and more

big opportunity around in do Just wondering if that. the mean, I numbers and medium term. some you could see you how longer put the that over set

ago team The Point a started water sharing there it our to look all program story, other water to has reach years our their the now really producers space. to in and and utilize part their of great been operations creativity ability out and with produced for South as several a

So it's across a -- we think board, it's the win-win.

Looking back, for volumes. now several water approximately of annual produced routinely recycled we've to XXX% years, XXX% our

and the So because of it's that somewhere look in producers you at of savings on into, water. other ability XXX% potential in and costs or plus low-cost area. take a plus When range of to coming basis from again, we've minus the seen annual ours translate could remainder $XX the million water an what

we're kind environmental year year, stewardship that our low long-term, report the our complements in support after When cost. this water investments really and look our at to that it infrastructure making efforts water also, efficiency also low you'll And year. into capital that of see you CSR that's

development cost it our this with can be to continue up again, we that to repeat, those we to well with to is inventory, our decades and for savings. runway come, capture us sets So able think something

back I'd question-and-answer Degner turn to his to remarks. session. call over today's concludes concluding This the for Mr. like

for I'd the just like joining us the always, to in call, Q&A. as healthy thank on everyone

questions, and call Relations in team, see don't follow-up any Investor have we'll hesitate you Thank the reach October. on you our you. to If to next out

for Thank conference. your you participation today's in

may You disconnect.