Southwestern Energy (SWN) 29 Apr 222022 Q1 Earnings call transcript

Good morning, ladies and gentlemen and thank you for standing by. Welcome to the Southwestern Energy First Quarter 2022 Earnings Call. All participants will be in a listen-only mode. [Operator Instructions] This call is being recorded. I will now turn the call over to Brittany Raiford, Southwestern Energy's Director of Investor Relations.

begin. may You

morning and Good to Energy's Southwestern Thank earnings and call. quarter XXXX first you. welcome

Joining are Giesler, Clay and Carrell, and me Executive Kurtz, Transportation. Chief Chief today Jason Operating Bill Way, Officer; of Carl Head Chief Officer; and Financial Marketing President Officer;

comments statements Many Before the that and in affecting I'd filed outcomes. involve the these and many sections Commission. are started, discussed Securities this are during detail get to forward-looking point risks make report we that in call beyond and factors of out our statements risk like more of of and control we are and quarterly forward-looking with Exchange annual our reports as uncertainties the

are and Although and no financial future may we help refer believe may expectations developments obligation are We also the we some with and they guarantees to actual to not performance expressed are results based peers. materially, assumptions, differ facilitate periods non-GAAP and of them. comparisons under across which update reasonable measures, on

call we non-GAAP I found be Bill nearest the GAAP corresponding release any reconciliation over to use, can For our turn the now on Way. our measure earnings will available website. in a to measures

you good We morning you, Thank and Brittany today. appreciate joining all everyone. of us

Southwestern the a inventory, strengthened and enhanced two XXXX basins, Energy in deepened entered a and upgraded financial business. strategically increased premier de-risked gas scale advantaged with and a US natural profile,

complete, to annual track. With production complementary Appalachia operational portfolio. our we the Thanks execution end Haynesville. reporting leveraging Haynesville including that flow outperformance the program acquisition increasing and second making Haynesville results high technical strong generating is from and company's cash on by the closed just focused free increased quarter excellence, operational our sharply first end, We expanded guidance upgraded year on of first delivered from in are scale of this and the tangible delivering We we our at in did at quarter. and our benefits integration our on

efficiency As shortages. those impacts Louisiana drilling rigs. teams avoiding proud two early I'm from to rigs from gains the our was quarter, planned strength encouraging while our business seeing generated chain $XXX our relocated strong million more two and long-term leverage. Two financial to inflation underscore minimizing delivered the The free reduced how supply lowered we the business. SWN-owned have and our performance in are In resiliency reflected operational results. debt, our our we of of cash realities flow, emerging first of and than of

Union several The we first providing trend European and is investors, foundational a major to believe affordable the natural institutional gas reliable that by is future as recognized and energy. low-carbon

we our year, day this part feet almost of efforts help progressing producing the the per portfolio. of of by future, in X gains be We've certification Appalachia the further cubic wells And we end across of our RSG of continuous to monitoring of entire pads across certified as bring responsibly both well about all made gas. the basins. billion also sourced As completed emissions our will

have events currently highlighted natural LNG to sold help for supply being energy SWN's To The global US security. of that global is global gas is is trend one-third recent natural exporters. gas second as vital meet

a long-term positioned forward facilities Looking we're supply to LNG differentially on basis.

Our the assets proximity have unmatched to accessibility hub. liquefaction and

the producer largest In Gulf total of Haynesville's XX% reaches being to addition our Coast. production, already

partner to LNG. as also offer a We supply reliability

by made perspective, S&P our return by inventory than tenor-firm Haynesville long BB+. have years financial our to XX investment and progress to as portfolio. From recent reliability by assurance we a of with grade the toward We supported evidenced more transportation flow large upgrade

In a than production to and Gulf Coast connectivity management and company's we XXXX, from XX% leveraging volatility. program proximity we disciplined coupled manage financial an have our through basis Appalachia basis transportation peers. more natural with firm supported markets, to basis the of active ability strength practice. financial is our relative our sales differentiated to gas-focused hedges gas protected by When capacity. protection We risk improving the have enterprise basis Our risk our maintain advanced

our capital Given of strength the constructive established we a commodity in at to outlined outlays. policy, ranges be price while cost hedging able outlook to lower improved protecting and financial hedge end expect our our our and

are to generate flow of further and the growing near continue We reduction prioritizing cash level term. free in debt a

constructive call leverage capital US strategic continued target of sustainable program the target range, flow capability through SWN We of from commitment reflect line our a to our believe in near general talk achieve financial in outlook to expanding positioned long-term That generate natural company's clear we strength. and to deliver operations its intent the and will the specifically. LNG over initiate a on participate to a free offers we both our cash position sight opportunity now structurally debt long-term our to export well Clay natural resilient have SWN to be I'll return for expect value creation flow for development. in and gas responsible ratio to turn program. total US durability achievements. free is gas As the would to differentiated a demand and to about the cash

once from sales the successfully along first Haynesville with start assets Thanks place good the Appalachia and full integrated to strong to wells and In up delivered operating track year, our ramped with Bill team invest in quarter portfolio, our activities capital results. our again on assets operationally and combined guidance our GEP. morning. acquired We the

consistent fully execution performance SWN. now complete In to are are well encouraging are delivering beginning see operations in and we executed and gains also on well Appalachia that track wells to by and Haynesville the operational performance. continue We

day natural of Bcf the We range but XX,XXX our XXX or consisted of of Turning was to day few Haynesville. of in due Production approximately at to the end all particular high a per in day and highlights. a X.X which guidance areas delivered of Bcfe X.X per gas Bcfe barrels production liquids. outperformance

see job midstream our continue initial plan. rates to capacity marketing done ahead Haynesville and new production staying wells development optimizing from our our and of strong a of our team has We great

In got already In for were March addition, in have delivered able production drilling of manage with operated impact weather of no the integration underscoring off strategy. were we advantage SWN-owned wells Appalachia and brought our to the a vertical early operational six seasonal additional last originally efficiencies, rigs material running in two to the through to start. second in an the of quarter. our Haynesville week sales good We that planned and

wells the capital we beginning consistent that drilling $XXX the investment quarter six front-loaded line cadence laid of crews to frac lengths sales, including at year. the with average plan feet. sales out was XX First million the development the averaged lateral placed lateral We of plan. XX we We an year placed XX of with more length XX with Appalachia, and our Haynesville In with to in averaging in feet. wells rigs than full XXXX XXXXX

year progress to lateral the lengths than our we an for increase through average Appalachia As to expected year. are the more XX,XXX of feet

the dry the sales XX placed acreage. XX to wells During were gas on quarter of

with we quarter, an roughly liquids in be and anticipate West second quarter with the to first rich our the flat For from to capital Virginia. acreage sales increase investment in wells activity

levels. first a with quarter to fourth As liquids volumes XXXX our oil we to quarter volumes result expect increase the approaching relative

primarily casing last-mile operational cost tubulars, an stimulation fracture inflationary side, logistics. we has continued the of are done excellent The On across and inflationary fuel, job pressure of efficiencies. with some seeing these team and offsetting pressures

further drilling Additionally insulation. frac and rigs provide our crew SWN-owned

material development procurement of our of strategic result encountered sourcing goods any working Consistent with our working with on strategy approach, we and services and all a As providers, key obtaining our services program. fully rigs And contracted relationships we and any are services our our related our in issues for to securing service have areas. for are XXXX plan. of not long-standing XXXX proactively operating

ESG Bill front certifications we mentioned, the completed quarter. as the gas on the our production well responsibly of sourced during Appalachia all On

of continuous expected are call and will emissions the be year. Carl that, efficiently certification We us I'll for update. With and Our reductions. monitoring complete track the over turn to believe differentiators to further on is and certification emission by level Haynesville target financial pad rigorous end help the the

morning. and which company The debt working cash fall. the redemption including resulted Clay our changes supplemented at in capital generated $XXX good flow, by a million of reduction notes in of free XXXX seasonal you Thank million $XXX

unsecured is our it resilient of capital. which to provisions position development. grade This in to to leverage facility. other with while credit XXXX. from it knows supply that Financially flow our maturity level Most lowers extending structural Our to our assurance, and facility our base investment ratio $X.X our capturing responsibility group, X.X the investment to financial and is credit Commercially positioning, elected cash advantages line important us. billion LNG a Earlier please questions. upon to validated RSG to natural grade, pricing cost access Returning key X.X generate our open and complements covenants and times. for accordingly Strategically turns improved concludes billion element importantly, bank operationally, this Operator, amended to achieving our strengthened facility's and the our prepared opportunities. allow we remarks. us our free $X.X responsible of gas group transition intent to to maintaining strategic the flow investment-grade stats. of we our fully borrowing increased We well component added expands believe asset debt, our fallaway commitment month which inventory

you. Thank

Charles We will question-and-answer ahead. begin The go Instructions] Johnson question with [Operator session. now Please comes Rice. from first the Meade

your you Good and to morning whole Bill there. team

Charles. How morning Good are you?

case Thank typical first, in the to I'm perhaps you Haynesville. Clay. well. – you what could congratulations there's about online or you. your and the it But I'm versus dimensions if schedule if acquisition is as This also derisking quarter. wanted hands put that That's coming doing the I for some element outperformance on performance for with on I’m had I two before now well decompose an guys the of ask outperformance are imagine of of perhaps is wondering wondering that you your bringing off. risk actually perhaps on you things that's it -- that time.

we've was begin -- we fleets. and been whatever definitely great to team execution have big assets as active operational the and adjustments be ways frac about integrate has we both the all the of And It needed. good rigs operationally to then Charles, And three running, lot all feel focus doing XX and a the a then of had that then to track Sure. we there. the on on a could program, pre-closing. been improve for took look and job start we efficiencies. really done that it's had Indigo GEP the planning, And get learnings the and over

the from is we've talked performance. was the execution rates. base and the operational improvements to line a are we've initial as sales with XX coming Last is again Appalachia. day think quarter – day year to we we're the to production initial of the of in had million shortening that to beginning to XX – those are on it's I costs. outperformance in like it's like see with Haynesville record this timing around And to wells sales we assumptions rest to came we in that seeing move improved million track average of that talked the synergies where see to we're through continue quarter the wells about. that We're what feel IP. production some the a that beginning start close bode about about But well to coming early times going but cycle track We're

were. oscillation year? kind back swing Thank it half Marcellus it's just be so that trend and that then great your to It more kind going in forward? of natural going a That's And maybe is of just it's Clay. more lines like you. Haynesville. in – one to the be short it. towards of The more that the Got Or to in more sounds a – follow-up. XQ, of back turn of Is two-thirds going detail the

plan just our movement with the natural All consistent quarter-to-quarter.

to Remember with we that be contracts rig XX% capital both going ongoing GEP. Marcellus. Indigo inherited we're Haynesville, and on in guided, about and we As in XX% drilling Haynesville, on programs

of up SWN of reduction assets on quarter first more moving profile the the normal end was the our quarter first the the had activity fourth the quarter fourth quarter. So and in the it through of back into then ramp legacy activity whereas steady-state we a in

the So the that XX-XX you year. that's as or minus out plus part line QX with move see through of split will capital we why but our level guidance in in

should capital our it fortunate come so yes, XX%-XX% we of we inflation costs. of has by a it's terrific we're And And our on get sure team we're period is nature we're job work. improved some out. are increases more in. Overall just is because it sourcing, maintenance A directional lot those concerns too. that we And out to terrific that inventory also it complementary the entire enterprise of kind gas done throughout a what there the see previously controlling costs But seeing thing. running out team that strategic locked the The a lot covered and then the of drilling roughly does of is efficiencies our a is you'll laid this next have. of out works again that complementary and making being in across we a significantly can how lot have operations – schedule than it's some liquids-rich how contracted and

integration to and with Our parts because from position they know we supposed can how they we We and fact know every super-spec cost pieces cost then a what it's need. sets of we a exactly much also have rigs. vendors day have and benchmark what vertical conversations that

that doing underscore Indigo I'll a which together is think one But people an value about underscore better blended all created here and move from just that terrific then working on job GeoSouthern is unified expect that on that assets team Indigo have heritage and extraordinary Haynesville certainly from to I we that helps of the GeoSouthern, but we team. together and I'll the SWN into bringing new And so that. mission bring or with company here the

Thank somebody more you, Clay, to for Plenty Bill else. a detail. lot. that and fall added but questions Thanks they’ll

The from Arun comes next go JPMorgan. with question Jayaram Please, ahead.

Good Arun. morning,

the Bill, discuss, look your amount Coast. morning, capacity to of team I to growing Good Southwestern, if could the wanted Gulf advantage see that's being you, you Yes. at team. how along LNG and take constructed

I heard a-third of mentioned gas your facilities. I You those is directly think, today, sold being you say, to

us what to So with a give sense kind wanted just I see, today. could you are you if of opportunities of

within And what not if but of You're grade, do quite investment strategy? become play this how RSG kind you then does changes investment broader grade?

Yes.

one others strong source inventory of from you to into to place have already depth we gas, and to -- into that Let already us enabling you're happens. moving It's me LNG inventory LNG, opening day to significant with apart. think LNG chime that by of space, global reliable sets this. a happen of our The billion Certainly, -- are gas right depth going large we going very forward. and and believe backstopped proximity, agreements in lot financially about X.X connectivity in here strengths We're already experience Jason I'll those a doesn't is today. this we very projects and a And the comments rely a moved some to our another. financial entering really but of and volume put by commitment company of company the fact that to on reserves get that the when to

risk-adjusted little now. basis, into -- that's additional have that value-enhancing some talk We for There, I'll in a some me in around LNG LNG about well. capacity back. and so reliability and -- in to Jason to that I'll at a come builds agreements about very have line. adding key talk we're a -- the opportunities, We're that the and second, continuously place. of bit important, it we'll future then the let the enter that with down you details quite have on having and And to conversations looking had current We've players it, that fact that time as

Yes.

X.X said, combination basically to So on of a just Gulf We're in right facilities Bill of now that's day we're short LNG selling following up what about Texas. a selling and contracts. export facility Coast every billion to the Louisiana LNG long-term

that about portfolios into coming a the of think And everything, given gets watch We Haynesville, area. continue it Appalachia when this greater have. to About $XXX,XXX transportation itself, as, out lot in we a day future. Bcf about have the well to a LEAP to interconnectivity about of that the we X.X Coast has on day Gulf grows as just whole X you

on Mid-coast Acadian. XXX,XXX We day XXX,XXX day capacity on have a about a

that into have this to Gulf into -- whole the of deliver area. but there, numbers greater different XX Bcf out probably all gets the And to area there's volume make demand So potential where lot looking we greater FID. this Coast day a a there's of a ability to X

think up also only the to when So power about area not have going this LNG, it's Coast you and this come just, Gulf the new with think that's to about showing of demand all a come we basis. between it's the LNG does Coast right to could global price that lowest of on industrial it's area now -- along pricing that potentially the gas because Gulf the have greater US in

more this going general see could to competition new move a lot this of back in of you going play there's for to other capacity So, a where that's area. to area. going gas it's not get to be to manufacturing to out built area. But be basins industrial there's be to just lot able this of out And in

a in markets. premium-priced we're take like of key feel to advantage we be position these able strategic to So,

we to enter consumer. in in be We'll going faster kind that. I want Therefore, of is enabler the we to And from agreements do not current in you that. we an going us forms strategically and And address chose the new down our is look monitoring the to rigorous, even market Jason as gas do risks before a -- with is dialogue that. react we who's we and future comprehensive. company are fit to way domestic that players. already interested reasons. we be path and well of IG to There's number opportunities of the than we the for the like on get narrow which believe today, continue currently but we potential a can then that dialogue the same basis, have RSG in entire comes our that pursuing. a the the to need anybody, facilities just So, to natural we most call not where manage portfolio our to that and be we important that pads that all opportunities we quite we do on that But if to with you credit. include are said clear think a and certain of transport We're we'll RSG big ramp-up when LNG at and gas and certification, a with well to into advantageously for this regular in evaluate we LNG that's And of most various risk-adjusted a work chose in for you've we're and or got not demand positioned into to want long-haul space. want monitored. group to work international only very you're the place get put in you get projects, up if certain to letters deals investment-grade, to will very

money play. so a invested can it's So, you that

We doing progress achieving and that all we very do have that without done strength path his to team we're have making financial banks, believe that's that we we're achieve toward to by know know need that us there. the do result continue be in other having the our Carl and of the to in and level. recognize clear investment-grade our would We criteria to way a we that with is our they we And banks that patient. what that the believe the unanimously sustainably where plan. The position to are get play to to we're that work on and

that potential Permian differentials? production just a basin you And the risk-to-basis based Can Production team's on my XX.X kind given is the basin. takeaway day growing capacity? couple capacity that we're a to Bcf facing that on what follow-up, of ramping Haynesville. view now close as takeaway as takeaway thoughts in I about your Bill well the industry Appalachia. on your challenges to get is in seeing? is wanted of on the talk amount And of SWN's Any thoughts

a what wells -- whether criteria One it's be acquisition of is that's must gas, if or whether of drilling you're is an that the it drilling for, able it must our to choosing needs us. on sustainable there and otherwise the be you and any basis, sense to get to to that value it get doesn't to you're market that a track make able

to the clear one about must a unmistakable it's whether Greater So we to criteria we're transport more serve. markets and to of get the transport not have right the we Haynesville use the or at the option reliable as we time, we build investments think we into in area either continue a stranding is, unused framework -- move assured to so when invest use, you so that and adequate want portfolio to the delivery

lot talk can to you that about Jason So, what a looks like.

Our transport. we is, We Greater We're into recently a that -- and day have put out. million XXX growing added additional on Haynesville business late transport.

production is volatility. hedged Basin right basis it's percent at Our against Appalachia XX-some-odd --

all and the complement which we our able have are gas the the XX% we the of unused believe Haynesville our markets our both fact that wanted get position that to where move to Gulf markets to none of transport of to transports total get and to gas the out the need We can by growing. to includes Coast production be areas that we of

there So constrained any long-haul or parts we're and on or fractionation is. not processing pieces or or gathering

to of segments to doing the really in understand, a the happening what's about fire the ability Jason, transport we these do opt Hainesville to and and talk need them side-by-side with please? teams Our why into and and suppliers we're you and into and important when good want the help capacity job opt picture partnering as strategic it. what get

a seeing add some that, a move about would you're in definitely that in widening of basis seeing areas, think little What different locations areas. when area greater Yes. you're some Sure. is improvement seeing bit just other you Yes. around areas in I different

this we I happen. to kind of think expected

general going in sometime area hedged day behind Gulf we've it late two service -- early on we're of in basis and over in And gross our under a a a Haynesville. NYMEX day what Bcf a about It's the of to Bcf gas coming what's that little out a is And construction. XXXX. should QX is, go so, X.X the happen Run pipeline thought

So it's -- take service little end going and Express end to from to as that saying and bit. as its TransCanada September. went Louisiana another able should be May volume been southern the has of of and the to that XXXX, a move be project They're that well basin, northern the I think would between February late

So that's straight facility. another XXX,XXX has to gas a their SWN day contracted that buy into

just around. basis So as up going see because to think I basis is NYMEX higher you production price. have moving moves outright just Also an you're moves

area. one should able But be fuel out cost that it's So, down going move location to there just overtime general the to area from be more to built in volatile another. to as

Thanks lot. Great. a

from question Markets. is Hanold RBC from Please Scott ahead. Capital next Our go

versus the domestic or more just to premium because a on little be your as a consider more for in or questions. better role could global access Yes, term, supplier markets So future the direct on like value think facilities stronger in looking do with to market? are it's of When about you you more a some see thanks. price I South Hey way get to optionality pricing capacity Bill. LNG of a If long-term the a corridor? molecule in of Western investing your long value you or access LNG the bit LNG getting one

Yeah.

options to in at keep your be beyond I think open and the got your enables think point built, enable to I US. access and open. got those to to advantages which this position believe pieces, eyes I goal be you've that the keep to and given markets premium in the you we're is given all to facilities these many The got of then

our But certainly sense of really role so we other certainly our And those any a about are do it to add studied know makes what then what as at. helping really kind supplier. would that's us? of We for in right also optionality of with a on value moment. to to can be I in value at this and need needs question we risk-adjusted everything to table And to this again -- is know that -- that. is living. your exploring there business. we're now that if But parts a say see that gas mean core part good happen we basis to -- the will we're enable We we're and important just be our I think the chain

a is mentioned couple things locking is are you're vertically others. for here. looking Clay you And right in sensing us of how what, kind you all in Appreciate in market more part advantaged this Understood. I than that. locked good And of, a then obviously, give you at now you had two, think Could of cost that much looking Can so start you in year. you number services One into as you [Indiscernible] this have us and providers helps? maybe -- bit little integrated, a a there? you're for costs inflection your next year remind from already -- XXXX sense with like know that

Yeah. When then of versus anywhere utilizing with split third own all we planned $XX is million a $XX amount activity to we duration you basis party savings on into that fleet that dollar vertical XXXX. two in that think to integration million model we some the gross our that current the about that for with rigs running Appalachia have are the frac seven our it and of ability when level and in

that. from nice what path well maybe they're that getting it's service we're new standpoint, goods average then both be that but Commodity inflation major same path And of for a we're the comes on, inflationary is today. also first And and where us a that and also right which the potentially spend expect the on from that services you number that prioritize being providers now. don't the start to I and on benefit those and now, has XXXX a from served from of right have XXXX than begin have at, the And better will prices it's cost well where proactively engage XXXX So for then categories been we supply before all has seen. are at year a discussions. a

Thank that. Appreciate you.

Thanks Scott.

The Please with go comes question America. Leggate ahead. Bank from next Doug of

Hi, Doug.

How Good everybody doing? morning, is everybody.

you. well. Good, Thank

for Thanks Bill. taking question, my

is to talking all. got I'm LNG first this really not hear believe But guess where story expansion about two love currently. your And are on macro questions. I'd we related if prices long-term out, the of gas and I've So I linkage short-term view US the two potentially honest gas that an three putting the let's in US be a maybe case one after us up-cycle could years gas an obviously is international XX or for prices extended make years for between period.

related the and your constructive that pointed the you view as away lot is investment you've improve a out love might case, So is to let's is business. you've that strategy? Bill on that of of well does of as with thing – diversified my then us hedging a question the is perspective assume kind I'd but with Bill for kind all. back let's that sheet portfolio upside be that that arguably as here you be your first underlying more hedged fully you and that the one of your candid second holding to to And balance how preview that sit assume not The moving grade

this So is Thanks. macro the need what is hedge environment my into to follow-up.

Sure.

yes ahead. So go

gas talk macro is This I'll kind about of from longer-term Jason. a perspective.

of or look seeing obviously out Carl But have consolidation the that part the before the look even market basis, there happened Ukraine overall – a Our with and you events everything what's your based what's market market the going your discipline us. things of global in there's lot when thoughts But Russia that. question. may think market. part on Bill of demand was a producer are I when And growing driving some now. LNG on in on on that the a right Asian hedging at comments that we changing there's for front of around in longer-term in with going just between on we're

it look have of the longer-term out here built we're we that that future. up-cycle in the US years four out sure when to the there the resource on to in next looks facilities get a the assuming can we with us for like over three that a all So in basis longer

at I the transitory, forward don't LNG want curve you is and do but see an you in the $X-plus up looking here or beyond opinion. force market we've the the look to just the short-term your move that you indication seen bottlenecks. point curious towards as is do I'm think when

Yes.

to our seen in production growing future where Gulf the forward curve US into – able looking to we opinion the build that that ability the going pipeline you have and Obviously we've what the demand. think is see to I capacity of take to out the the in piece to as of be other incentivize to to the infrastructure demand market take in towards of Coast to the that's it's here out some basins out there just consideration meet

of also is. this to type to as signal well out what get in to built able as that's the think there can get infrastructure I where demand US here a that's be

Right.

the the recent beyond dynamics hedge? deal Bill So why hedging of flow the requirements of

thing The the from that that to policy you're Those would our have responsible we our strength, demonstrates, our move I perspective. a progress the believe -- risk it to low of those do conditions an to do clearly certain has ahead the is levels at price a company And will we continue of and practice, financial hedging the ahead, now different. Yes will part to our expecting the as moderate our done. but The quite the there, range. the are as scale We hedging level I'm to company's I strength our breadth of can to forward. are the enterprise is level of in market we're do. opportunity materially management that move hedging continue are different complete. move and hedging. numbers that's what of pointed frankly, acquisitions company's look to on assuming And reduction, future end the continue you hedging debt of and anticipate important gas think we've you constructive view -- for In strategy, out economics glad the deals

All answers, Appreciate the right. guys. Thank you.

with ahead. question Please, next comes from go Choudhary Goldman Sachs. The Umang

thank you morning and questions. Good my taking for Hi.

Good morning.

and seeing operational vertical Great Haynesville to in you're which the which hear the integration. from momentum seeing you're the benefit,

to the little in a similar your and talked to or those You cost regional fuel seeing equipment pressures basins? comes Haynesville seeing bit both about from get you're are if it any tubulars, cost inflation trends, and Appalachia when cost some I you differences wanted logistics. sense, between trends just

seeing in the there's some areas. providers what to equal is, are everything We've chain There sustained really, that Appalachia and ways, some of major difference some spend Haynesville. we're got categories in of service service pricing that pieces So, in both are in our Haynesville. a not between

inflationary logistics. of in can with about that So amount of us. general, areas. flare-ups trucking But, There's there's last in that with kind is pressures difference big and localized creating same a the mile some occur both not for some

Great. Thank you.

the to at company for size goods nationally these of negotiate scale a allows The and of number us look services. and and

of so, benefits of one right is the played scale now. being And out

for That's just follow-up, gas. a latest the as Thank thoughts around macro I And you. your near-term to really then, get helpful. wanted

the You talked how you you're from risk near-term concerned any a from about which are about But and thinking management perspective, perspective? macro. areas about that long-term

Jason. Yes. This is

strong facilities see strong a run macro think, going just in the the term should to continue about lot of all the of a is are utilization that Obviously, I the to And due US. perspective shorter is have to when continued macro thing a we're all out you're They at going retirements short think gas it coal a coming just, domestic to, really run, One I mean power seeing happen. amount happened. other of term LNG we that global demand. high rate from burn.

coal and tied of -- coal coal, about global because when -- kind to be pricing. price can of is the think price at then of the it to you exported So

little the So, just that's on permitting pricing allowing basins increased the see side. out makes we pipelines new tough. talked to perspective, the discipline near-term macro difficulty producing what's to I of be process the about able to lack producer like and happening then rise. it production a And just of again in a think And on the continue we from

that we perspective, half in near-term or from of that's the a downside where the see think hard risk weather the growth surprise some I in or a production occurs that -- the type I type potential year. now. macro from the of very to some right of see back if come that a mild major outages, seems But think to LNG would

you. it. Got That’s really Thank helpful.

Thank you.

comes next The question Dingmann with Neal go from Please Truist Securities. ahead.

about you of I guys don't capital think you return. just then goes talk kind as do maybe if on this maybe change which is about think initial your range you specifically. would lower? reach once I level payout broadly And could know question payout year? that -- all this First hit How how target you'll later around leverage the leverage even

Yes, scope the move I that in -- in to I be repayment continue And to position And year. gain is as by capital $X program. near-term. this line forward that. to that. We're near about our said expect then our we we move be looking And position a of billion on in billion the return that. We're this a different clearly of with debt framework We're target, capital sight $X.X on as scale. we And return expect debt think leverage in here would described refine clear to reaching what before at of studying as we options. to initiate reach a talked consistent we and prioritizes to we'll term looking at ratio we've in then our you framework

Go Carl. ahead

be really going I sustainable. and was just going to add part credible to and parcel it's

and capital any capital to be return holistic a discussion communication. allocation will so And program

do So, our how we're investment-grade. it debt that's congruent manner towards in that's absolute continuing in target congruent continuing hit manner we with a would a progress to to

broader So, than of a a it's use internally capital. pure on broader strategy capital discussion and return just be

Thanks Carl.

cost nice you on are delays my Great know is inflation can Bill the speak potential that? any seeing to you'll then And concern to do running on I logistical probably OFS that continue rigs? how for you add. yourselves you Carl. like and job do second to if about that. several that potential for inflation. mitigating Thanks I not just delays you good or operators talk Clay get guys My people all of specifically mean I Really have for more a a about of could job question continue

be an What to It where efficiency, play you -- of One the supplier. the be to of a highest that environment costs challenged does our choice effective very can very services in or It to core especially want mean? hyper in joint operational means planning, operator strategies mean are is effective price. if for doesn't to time or make they joint service to risks little work work there, there with us. suppliers that that on downtime have a debt draws there's or sure together anything working and and communication that in providers non-revenue-bearing opportunities and changes, ensuring there's that deal be to in to no have they

Second thing is around relationships.

through in mind, for the have strategic create to the way is the those us have world suppliers, goods of just to really want strong relationship services our magnificent work all the all are us. both even got we details. through strategic way behaviors processing so, with inflation. our company you together relationships and the its working deals doing US especially with ones beyond again that But position of of or with and our become in key agreements Clay's to And type we them. to a and value some somebody they Our and where gathering

and logistics challenges, with we're team with kind haulers, of just daily and a capitalizing real-time the around navigated on those how and forecasting there's on we coordinating level, road of water levels involved local there's issues the closures, we've for and occurring down But those whether a that then more -- conversations infrastructure trucking be that's to turn it a the weather bottlenecks frequent sand us. have not into all Yes, through where planning providers, to material situation. local are got logistics

Great details. Thanks guys.

comes Tuohy. go question The from with ahead. Parks next Please Noel

Hi, good morning.

ago long that, not longer -- too could things. you about the just you believe was in spoken that recalling if Southwestern laterals in that. of plan, had some I couple I I were on a the update Haynesville wondered Just

Certainly.

year we've And the think in X,XXX somewhere average that. less our I Haynesville. close lateral the foot for average our much than guided around think length I as quarter So, to fourth was

feet. to Our number grew XXXX around XQ

we got As part one we our yet in XXXXX then XX,XXX feet. keep field, well that's locations completed expect we've the and XQ of lateral a hasn't progressing -- to is longest lateral learnings the to that haven't grow drilled right we feet. over continue our completed And different now that that over

part there. we what the think that we we able with operators. be So, to to will And in going efficiency prior our we're relative average that We planned Haynesville it. the progress average that's lateral the with gains were are grow the of on realize as think the to track lengths

at lateral end are And lengths the Haynesville regulatory in by controlled rules the long of state.

deeper, the with combined we're that all is to the that laterals Pennsylvania for So, fact wells able ultra-long example in limited. the drill are these length

find but right a to drill the -- way So we'll to limit. up

The a this this learning organization. is other in of we're very about methodical piece

we and We the a if at take that a us of procedures lateral works but out. methodically same of transferred from through and and end in great At work they arrive a it do learned the being you've things a talents the back to don't use steps a as slingshot the learned lot see those. at are -- And day, short outcome. already lateral being assured of Haynesville to So you got well. we and Appalachia we and place we lot better the long are

all it So works.

the to about Great. bit a environment. price want And little I talk

$X what's abate we thinking issues resolved an maybe of next equipment say to in place enough where going it comes horizon? Just Appalachia trying company the like ownership capital additional and don't I place of of considerably, increased I prices have are and sort both after know plus if or get strong looks we're get a little to longer that term bit, development imagination point expand upgrading or those issues that know say for that to rig my the infrastructure about, so decision if don't regulatory a sustained

Yeah.

things. think -- plans a number of I there's actually those our include

options. We'll look constraints we're constraints that to we any underscore efficiency at take or the me improvement we're in either in shareholders. or different maintenance looking drive capital probably we at value constantly different Haynesville infrastructure look horizons the inventory of to returns infrastructure mode work. going things. now is anywhere pieces efficiency to that right significantly growth set in -- and fewer add no Let those got at of other and of opportunities as well LNG have be than we areas a

a canvas on. quite us to gives it So paint

it So it's the complementary I think when about the thing you overall look great across is inventory piece. at our

Virginia, we whether So it's fly -- about on the and then Haynesville, about identify portfolio move them. value-enhancing Ohio, West can capture shift to those further we Pennsylvania, opportunities move can the and

Great. Thanks a lot.

to back question-and-answer This I Way session. like would closing over the conference turn to remarks. the for Bill any concludes

I time really it. want this to everybody your questions. appreciate Well, for Great morning. We thank

free cash that country. is the leading have two the flow the growing Our in by in premier underpinned capability gas we scale US basins fact

compelling. believe the and especially has said shareholder in high in financial a the markets, commodity profile our Coast the As never proximity call, to strong been we Tier and we inventory, LNG X accessibility and outlook more that in our proposition and the strengthening demand the Gulf industry unmatched given deep changes value

throughout The team what over, on to conversations over to. continuing of to do the up forward XXXX did the doing continuing have quarter, this. continuously look look in they they're a rest we but we're And and so, to terrific we so job And it to deliver. forward

joining weekend. Thanks for So thanks have the questions. a and great for

has concluded. conference Thank attending now presentation. The you today's for

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