Southwestern Energy (SWN) 5 Aug 222022 Q2 Earnings call transcript

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Southwestern Energy's Second Quarter 2022 Earnings Call. Management will open the call for a question-and-answer session following prepared remarks. In the interest of time, please limit yourself to two questions and re-queue for additional questions. This call is being recorded. to Director conference of like Raiford, to now Energy's Southwestern Investor would turn over the Brittany I Relations.

You may begin.

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

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

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

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

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

and you, Thank Brittany, good morning, everyone.

well natural Southwestern gas U.S. basins. producer positioned leading is as a premier Energy gas in the natural two

June, second our confidence billion year-to-date to our and Company's to allocation and capitalization. business. which integration of XX% XXXX, resilient our we our flow In is as the grow repurchase our management's share strategy, in business our market repurchase complementing a end the successful repayment on long-term continued by free with cash authorization through of generation capital Haynesville share free underscores current capability of of program nearly to up This strategy its debt executing deliberate flow are progressed $X with the I'm quarter of particularly the results. We evidenced contribution results. pleased cash

significant of and Additionally, with flexibility, to Company debt directly grade. reducing investment execute expect program the in financial we its also business to to quarter the the value returning at disconnect second allows intrinsic consistent see PV-XX the reflected capitalize of to our as value the program due objectives recent current enterprise our strategic of our $XX on reserve value This prices. we strip between billion and

current natural gas the supply demand we Regarding free our long and supporting flow cash environment, believe strengthened have dynamics term, and generation. macro near growing

constraints growth. supply side, On discipline, capacity service moderate to consolidation, infrastructure capital the production tightness continue producer and market

U.S. to demand the that natural believe, clean accelerated the strong for capacity the natural decarbonization security energy effect, industrial The is Domestically, less move power more gas continued become global net U.S. further given residential pricing sensitive we have structural gas especially retirements. to and demand, continues oversupply have coal On generation side, the region. priorities from the burning Gulf market power for to potential in and demand excess Coast gas. with demand a market natural reliable balanced

Coast. proximity the our the transportation is and along As long-term SWN a key firm demand differentiator growth Gulf for to

already LNG under feet currently Energy existing As total to of of natural is approximately day reaches per with production double construction. including the the suppliers Appalachia, more largest Today, per at Haynesville transportation X.X firm Southwestern than market. largest Approximately with one XX liquefaction projects, producer Bcf from day XX% of this of in complementary approved is could X day. FERC our service, billion per Bcf which is that exporters cubic gas in

Haynesville benefit premium we basins. pricing believe to a Gulf to will we gas transitions the as other relative natural global garner As regional and commodity, differentially from Coast a price-linked

outlook leveraging by basis, enterprise risk potential adjusted global SWN's Hedging help pricing We long-term to the our capability enable core and approved risk hedging liquefaction management lower supply capital gas of evaluating fundamental on ensuring FID. however, Company's and prices, natural recovery using to ranges reliable cost are and migrate remains for future preference projects expenditures. financial to from levels improved to our expect achieve our practice, a within collars. for supportive the approximate With our opportunities to with benefit position,

and our of our our base. inherent the As key clearly included approach performance of to The to highly reinvestment production XX% and maintenance of asset shareholders. capital the resulting 'XX We're change our reflect flow as operational hedges our year full and more continuity further update differentiates prospective and portfolio our approximately capital updating head investment investment of opportunity. an is profile that offset by This increases SWN across our into encouraged in generation our metrics activity increasing of are the XXXX debt the high other program. as accelerating capability reduction increase capital in impacts settle, level rate flow free we free return cash cash strengthen rate generation, our investment cash an will inflationary by of cumulative guidance

SWN, aspect Haynesville this of will a certified, year, fully the As core production sourced of how gas. by we join Appalachia to responsibly operate end as

This over released and Company. our reduction for longer-term call a achievements report highlights will for fall operational for Additionally, the the to goal it. update. I'll the include to corporate and path this annual Clay be specific ninth report turn an With responsibility that, Company emissions also achieve the GHG will ESG

this performance sustained support continues Halfway business. on to exceed execution program pillar strategy, track and is performance few the year, Thanks, is I good a in Strategic and our expectations. Bill, the our of development our through points will of highlight morning. a and Company's aspect key proof that

an production day gas we and the per quarter, end day net high per of delivered X.X XX of approximately during sales natural Bcf Appalachia, quarter. average Bcfe surpassed XX X.X For placed to well barrels due performance wells In XXX with liquids. Bcfe improvements. the length of day time feet. we Production per the to we of Overall, primarily XXX,XXX lateral guidance sales XX,XXX of to and cycle or including placed wells

quarter-over-quarter of the with in time Haynesville of and have middle less the improve. in average to improvements of across XX% to and spud team In rig to feet XX release Utica wells stacked times including turn-in execution compared days. an highlights X,XXX cubic the XX% lateral average, remaining DeSoto and them East, the areas which placed is an performance. driven interval length XX the position application day learnings of wells, the approximately and Appalachia cycle line currently a lateral, are the in XX over improving and continue strength this superrich a Haynesville. than with we see improvement XX from production earlier greater from feet. wells and lines. Ohio acreage volumes XX,XXX-foot are to Marcellus rates for liquids planning those strong of well a of time than expectations Operational over year-to-date, pay drilling which increasing to for Haynesville, In producing at year. Pennsylvania technologies field, Among by we million continuing is recent in initial the well our gas dry sales accounted new and margins. realized drilling rich delivering On accounted enhancing Our Bossier per we Overall, with

providing and optionality. is in flow necessary assurance ensures approach transportation development integrated capacity and market firm place gathering Our

the guidance, XX select X our strong we expectations standpoint, an and From in are expect first guidance As for updating activity half. during Bill the to consistent half year, planned our crews frac year full mentioned, reflect X to increasing XXXX average half performance both production our we second of development the including year of rigs second to with updated X to the and program. the the

to is range our second first to and levels year be with line be in Third to in $X.X and investment quarter of capital $X.X billion. the expected quarter investment is expected full billion capital

and operational We from continue vertical partially integration are realize that benefits cost our offsetting to industry pressures. execution cost

are operated of delivering STEM the and SWN third-party quarter, provider a reductions operational in We efficiencies. in a adding Appalachia displacing frac third and fleet cost service surety second

and SWN third late we to to owned quarter, the fourth rig times We Haynesville improve cost. repositioning further are cycle reduce in also expect compress performance, a which

planning, In required ensuring deliver sourcing this our goods services to year availability direct the of addition and proactive relationships and provider key both service plan to our are our vertical purchasing, and next. integration,

Now, I'll turn the call over update. to Carl to a provide financial

morning. Clay, and good you, Thank

generated of $XXX we free and our leverage million quarter, approximately improved further X.Xx. to flow cash This ratio

top We end in the a expect leverage to achieve the target X.Xx quarter. to third range of X.Xx

hedge-related million. $XXX hedge This borrowings gas the revolver million. full, Our we later the proceeds included grew a the offsetting reflects by more settlements of our capital April the before increase in that draw. receiving quarter-over-quarter production we By at corresponding in debt natural sharp July, debt most that end capital draw month Recall facility working in working the month. the and producers, sales June. of $XXX balance a rise repaid credit prices quarter-end physical caused duration hedge by between balance than pay early related following about short temporarily Accordingly, of demonstrating had

billion and operational our XXXX settle, Looking approximate and $X per in free forward, price XXXX. performance, given as billion the $X due starting to commodity outlook, cash hedges strong should current year in flow

reach range we open to S&P. our is this both We by placing and rests at the end notch and investment objective risk the credit This next more grade. We able term consistent allocation In cash billion line is expect questions. to also share investment repurchases. below with debt with one to share manage to heavily of shifting is close top This remarks. strategic flow upgraded to investment year, our already the to timing financial debt in end retirement We the continue return, our towards BaX completing Moody's $X.X grade. prepared however, business consistent grade. for with profile grade capital of will concludes enterprise materially of target repurchase SWN the believe now be returning plan free or strip, before of current near strategy allocation improved returning investment to the our while authorization. Please us the that Ultimate prioritize agencies. to At May, of to Moody's

we [Operator the come RBC. question-and-answer with Scott Instructions] Please now will will ahead. go question session. first begin Hanold from And Our today

give us all considering -- the and market the exposure Haynesville? all obviously, is. having going how that your the thoughts allocation most to Can on see center think in you XXXX, you you gas Coast Appalachia about, this you between Gulf what recent you at where And Could the point? about capital as man good talk dynamics

midstream Carl we the locations development Yes. Clay that plan take a have a is of is that And at stacked plan, and we an look couple for may annual Bill. annual comments. and This When racked other are other on that, XX%, and the run at have. taking Economics prioritize XX% we're prioritized, that. account based development Haynesville, into XX%, we XX% in and factors in Appalachia. obviously, all Today,

on that We haven't differ It the and yet. it update granular done we'll from 'XX does. you if work materially shouldn't

ahead. Understood. Okay. go And,

add profile higher rates, the a pricing. really position. benefiting from has Virginia gas Just Obviously, competitive portfolio Haynesville that the natural performance, across high are quick The economics. West got portfolio and liquids-rich, the liquids both like sustained we

And of complementary nature development and complementary these board we did the got has area. at and the looked things Haynesville major in the the every have in activity means nature all fact, back across we of resulted and in Appalachia,

the analysis of as part that's well. So

investment the but to aggressive bit aggressive to buybacks debt grade. I on, versus you'll strategy reduction to still hearing get some debt free regards sense you of flow and leaning a did priority, early if And at right you with buybacks like are with -- little reduction little How still and I'm cash the a with debt the then into could about So you term guess, buybacks in And your the looking to you more your near price a bit is just these levels want goal -- to Understood. harder? debt get right, appetite more reduction just I now? a get buybacks. get with

the It's question. one. good you thank for a Scott,

to our absolutely to that As to maintain and maintained Bill an And expect where primary reduction our we'll allocation our picks we increasing our free as able we shares being to consistently, with cash up investment objectives said, comfortable a commodity regard off fully all in a feel we cash achieve up, with remains repurchase flow. could share it's debt That debt situation possible to that is frame flow free to consistent returning prices time pretty repurchase all steadily hedges priority. continue reasonable said, roll that if be that our to grade, pace. get we pick

Rice. Johnson Our will Austin Aucoin next with from go Please come ahead. question

This quarter's volume both? the combination Appalachia beat. a production Did it Haynesville production or come of from or

Yes.

area, with on driver it, we had that this its came driven what the and Appalachia, was was online Haynesville, the mix QX of improved of that bigger originally do a delivered the it time Appalachia liquids wells Haynesville than and second is online improvements we that came in forecast had lot mainly But that and in the had the quarter, QX. earlier quarter by So, where wells in of forecasted. cycle those to performance

Appreciate is buyback this cash flow you for authorization what it. your after year-end, once do target and complete then the year, expect a And that? with do you Carl. to maybe question free achieve around your But next debt

balance to Number I the is been good ensuring allocation return a Number maintenance then objectives, one both three That's a and that. leverage capital debt our is question. capital. quantum We've is strategy. production. on of was two And consistent our sheet reducing in

as would authorize And done long to and I will have Board imagine capital. second first return we're so us the continue our doing the as to

question next Dingmann come our Securities. go Please And will ahead. from with Truist Neal

take return to a open price, reinvesting the back more A in that return little share the Or priced shareholder creation do consider talked on just were specifically. wondering, bit about? some the would you've given if up? all I'm reasonably you you capacity current different just consider business all better value shareholder

Yes.

clear I to priorities return are capital in around term, think debt near certainly, and capital our reduction around maintenance the really investment. shareholders of around

look objectives have at take objectives opportunities in makes the those change think sense given of and we met, to make when that I some decisions front in a commodity point. of -- what if the both a us, environment think I and Company are at

Bill. it, with agree I Yes,

opportunities down opportunities maybe makes on sense. that I then the wonder just likely a LNG wondering basin. potential future think just position capture see unique deal would know you given in you number could follow-up think of a term speak? structuring about about you in near your I I'm there do is how and are have that there to you you specifically, any -- see And might think there upside? you how all order

Yes.

and is Jason. something major a Coast to and as in facilities But the of now, Bill the we're -- well. different conversations think the that comments have out add. There's multiple have suppliers, may the definitely he the in Appalachia supply Bcf LNG we a earlier, also ability of up to facilities. have have as make are So supplier a correct. I to are I'll or opportunities the And multiple that LNG Gulf approximately Bill right couple this Gulf those we transport with all we to and we to Haynesville going that with the structural said advantage wants then comes the you with back to X.X Coast day

a So risk-adjusted takes transactions large really on these are transactions. of all approach, these because time that we're evaluating and

at of that big -- important basis. a risk-adjusted answer these piece is a think the on I really looking

had place with at are But they've a for swing in we've been negative in years, and the number gas of switched Some of the in in areas agreements where recently conflict. that resulted big prices. have opportunities of off-takers the have looked now margins

you'd risk So have additional there.

margin a based point. premium hub And and is that. against all margin make on a and versus as FID transportation plans helping in of resource then risks a ideas how margin to better decision vast decision players, the support do So our or the them off risk-based around with network most are triangulate a any conversation that much a over we're the our Jason I with of a bit of could approach the couple said, think price

definitely, details, some great opportunities, great guys. No,

our of Doug ahead. will with from come go Please Leggate next question And America. Bank

start think obviously, times, wonder case. do How balance I to mean, with many love you've less you risk as hedging if Bill, your not philosophy management, about DNA. told the hedging with I how right-size see reasons, your go-forward of for you but that's hedging sheet? how factors But could we the part sadly you into today, your philosophy. obvious many, I we'd is me

one Appalachia enabled itself connections centers. the look leader practice When of to hedging to comment very that, Company the is single-basin make transform company, to a dual growing Yes. at hedging I and supported the gas with basin I'll a that today, all demand from

is to as I that with and are lose of of my fundamental Company the that, the in levels -- within you Having would said want future should of that that sight can now you expect access said expect, that remarks, and more the it which migrate more lower any don't our opening the So where Company preference upside -- There probably do term, piece. outlook, go speak supportive And the that, done And there of. approved in to forward. strength you this. with the to I are and the hedges to in to and is going become benefits gives ranges. to collars, place hedging expect confidently transformation near that visible continued some

that's we today. So where sit

expect your wouldn't like buy peers done, have see some We out hedges of Okay. do to we? you

is it's profile really a incumbent and repayment of steadfast to pretty We return that, have forward. and hedges as good unique progressing Doug, particularly we'll share There's off that roll It's our is, obviously trying attractive a into repurchase. moving evaluate. a what we competing have a level, flow opportunity think kind of clearly priorities XXXX. take in that as move question. to We good investment opportunistic with we're consider but we'll at to cash we advantage debt grade, and something we capital think

time don't too to I that, for know while that much happen. we're so look if at And waiting we saying

is easy to guys. the ask not end has the for basis. the know sustainability, depth something spell curve to have it's I portfolio. on off. place an order in out moved once folks up it really of quite substantially. in that follow-up a But you discounted Bill, inventory sustainable think missed of that me my seems hedges need I value just to the to flow gas cash you the I've maybe on one. appreciate of back change roll We taking those that answers Because

your what there? -- across when two sit think economic business today, leave you is the you it I'll and do inventory So here sustainable

of X,XXX spend minutes and portfolio on We've those more Yes. I and now strength want quite impressive. the development with locations for economics are to than some that detail we by couple got have put generated a and the this. those Clay of the table hold the

So Clay, for why put Company? Appalachia don't you that handset together the kind of breakdown in

Sure.

of know deck out on the and or deck an I high-level of now XX went right opportunities starting and pace got low-cost for Doug, for That's a XX about is natural at So gas there's significant a $X.XX per on West being of XXX of in wells years wells combination XX rate, that year. lot high that locations IR X,XXX Haynesville. Bill In the future as drilling liquids-rich Virginia. inventory we've summary below of Appalachia, mentioned, a Appalachia inventory. But point, and drilled information Page breakeven

about breakeven inventory recovered with other Bossier of EUR Haynesville the long-life as we've -- to solid to rates, associated and very the get talked our economics getting initial flatter that some Haynesville, we're profile is in in all has profile XX Haynesville outstanding. the have below between and year. inventory years has and high before, The middle inventory than the first production multiple the profile XX% that commodities. that mix of wells, Appalachia XXX areas those In really of our we gas it's close inventory dry or So, exposure

structure below current two years and cost inventory the that it's XX price on XX, areas, right in breakeven of the commodity XXX now. So pushing in environment between we're and

inventory you to see can the pretty we're it. So complementary a excited areas two really robust about

will come with JPMorgan. Jayaram Please And go next question our from Arun ahead.

more vertically market tightness the your a you're activity integrated done influence Southwestern little perspective activity some get may to to oil services in how first But levels year, bit the wanted I Bill, historically, in extent. next your obviously, half. has on

like of bit you of You had and level-loaded thoughts and crews a potentially a like in terms of more spending experienced shifting about things to shaping because that. to program a little keep

thing times on many a wanted in remarks, line thoughts you or Marcellus to in So, just for cycle you in of wells expect get sense about that. then, prepared the I I'd your could you how mentioned Appalachia, typically rig talk get Clay, every to your Haynesville? same love in sales And to the

questions. the Appreciate

So oilfield in far as the tightness it. services yes, seen we've side, as

because is it and the of we that I services, was planning work acquisition the into nonproductive us. comes for think there's as not on Company Which business. really put that benefit is more for that which it We service or the we're for downtime be. those the would company -- us had a efficient for the to great outcome anybody how makes making as clear providers we work to having both time, implement plans induced could us that efficient the any front-load do

bit because moderated continuity sure -- goods continues of make were and as think little up. and you you a if to back I ramp down ramp that we want services we've to

the some running related that strength of capital and to retain of sure fact, on year in of this we latter that is the part continuity 'XX get 'XX 'XX. to to activity specifically great the a deploy we're going making In start of that the level

takes vertical teams of drill very it contracting through completions, cetera. to drilling what they part the way at we our the a and do the well excel to Our what integration understanding know clear give from continue of all a et detailed partners

a not and threat. cycle of quality talent come that And times, think, teams us. constant -- on a we for the competitive a actually enabler learning to only competitive our drill between can be teams. to are and ourselves, so attracting contracting goes complete there's We drilling and for improved We so we're improved

industry it rigs. us the quality efficiency, is those of with have of that turns what lower we dedicated helping the of So, that rigs, timing, into consistency consistency wells, quality seven teams cost There's seven teams. seeing which that, to than of and quality a that because of might brings of be are people

the… on Moving

On the cycle times, yes.

Yes.

in So wells. times to due the We've Appalachia higher greater made at they in and both the Haynesville depths times the have and shorter, longer cycle times the of than a the in the pressures are improvements drilling those are those. high completion Haynesville, of level,

look get X -- about and all rig to wells times mentioned wells Appalachia, wells high the the my as ways to Southwest release XX it's rig that online get around approach focus little is wells drilled in days back drilling while to on Haynesville Haynesville, You that's to rig general, XX we're wells spud some in days of are go-forward for rig those in some the the somewhere But XX in the X continue areas. number the answer from on the Haynesville. off. And those wells. working in down per now. release a lines drilled. And we turn-in ago we to per time acquisition being bring all line moving those around then those the in We about in We've per and wells commented model compress Appalachia faster when improvements think drilled line XX that the cycle we're to quicker, spud to line of to need rig as to in

is just the that clarify, to sales? just for you say to wells, drilling. when is X And Or X to that

that's you has because sales don't bit what dependent of into that to with piece again, DUCs be do DUCs for a gave drilling you're come of maintain try We little with. as sales, into a to drilling coming year the number upon we it. I of the right be the we be. That's metric can year a DUCs. To build you us amount to efficient the as the lot the lumpy why But can with,

teach-in given use My AMT wondering of Southwestern's bit little help was as some well you And a cash done the Carl, you rate could the M&A us what could the a if you've could as about us Great. activity ability mean of guys tax follow-up, your in maybe for how Okay. I Haynesville? to could give on evolve? that you NOS, think

very Arun, thank you much.

cash already we're $XX prepared with Indigo, taxes it million roughly following behave. $XX accounted flow in prices. prices I'll cash did has to obviously taxes. our taxes is going calls, beginning million cash deal dependent in you And for the in depending on use when that $XX being to to million million to This numbers I'll we think $XX $XX the in upfront. then million I I XXXX, we're to up year, on forward NOLs. had million on talked how a commodity we remarks, our before increased this limit to expecting $XXX That taxes cash about $XXX as XXXX, that, of these cash tell roughly million created on ability our anticipating

should reasonable these provide going we're what payments guidance our so, at forward. ranges. And that cash And to think some I that's are tax why

impact how the just potentially AMT does that? And

still impact We're have already not material evaluating sure described. from a it. what We're we've

from question with Subash Benchmark. next Chandra ahead. will come Our go Please

sale. that to is This have Haynesville you seems question nearly might optimal strange to feel ask, near point that a public at for other it Bill, long Southwestern, So or potentially every scale do private term term? this or and deliver be on you but LNG than every vision

you of those is core our scale opportunities strategy about like and talk accessing part would benefits the one be Capturing LNG benefits. of increased of

to we're within or our two them going looking at study think I M&A basins. opportunities, that activity keep

of which internationally day our greater the and challenging. a the they're corporate grade that capability LNG that X.X that all at and and the the do and bar, overall day of the now and makes risk-adjusted of part part already more quality priced When the ideas just around transactions production locations, a of development other gas on and M&A the domestically the that's than we're Bcf terms company the you the a think gas, moved those I we've LNG, enter investment the work can at recent X,XXX into space around exploring we is objectives raised assets a basis, look Company or into given Bcf and under priced assuming we rate X returning whether to the that. have additional we capacity capital,

look along of the transportation meet so can additional inventory we assure vast we think presence place positioned well can that that operations and with network we're So I today. contractual a flow gathering opportunities. network sure our and And to going already forward, the in at

any And implemented price RSG my materiality? is premiums. pipelines that I pools. out some are seeing that seen have you follow-up, play then guess, pricing in recently Have And you

since to doing entering contracts RSG been XXXX. and We've

get bit let get of an So what a me we're on you seeing. Jason update to

Yes. probably the referring and think out filing say came I I that to would Tennessee new with. they recently you're

think that now. right very is new I

that to at that And different up and the pool so there's now to required a are to beginning potential that lot set are getting transact opportunity able of be people just look there.

no So agreements transactions since suppliers cooling been my But XXXX, we have said, are knowledge. different on Bill interested yet other direct that RSG. new the with have buying to we've as opportunities, in happened that working

come from Goldman question with Umang go Choudhary Sachs. And Please next our will ahead.

get cost question trends of operate time assets. through us latest to first really Haynesville. the or some the guess basin in I on productivity the Haynesville some as was you the those walk Can more you

Sure.

cause bottom-hole as those bottom life you the you higher potentially So have is bottom then can temperatures have it it has temperatures are where benefit tool of higher the to deeper laterals. and hole and depths know, shorter you shorter and pressure, also hole

hole keeping pressure big also and on reducing bottom the is drilling mud low we've those can. been hole with maintaining as the hole maintaining bottom techniques. then the a we And focused as temperatures stability managed temperatures drilling So properties and thing

had our wells in really to we wells. optimize about, early after as year, that in started learn drilling area closing. some And we've expectation so we talking been as was the drilled and right And

then which We're and run get to now to providing time get wells able times. areas other field so back mentioned I of as deepest come And we us moved into cost to we've laterals drilled, able to And are causing the to tool then and now things the savings. longer areas the planned. the hottest we're reduce the is some well longer drill

kind the we're of So in of drilling the on Haynesville that's seeing area. benefits the side driver the

on there on program? Are anything get some front thumbprint your the productivity Haynesville? the you seeing And you uptick as Great. in the

Yes.

see our been XX when subsurface, IPs, of flowing for in data second better the And time. those much over that from gaining from the quarter that then on time to wells and and profile to a part wells. have day we're And row, the back profile So, production rate continuing we're and of production understanding the elevated on how rates flow-back to in willing operators is also and the of public we're to commenting wells the a differential pressure over shallow Haynesville initial that's the decline and the to gross the the optimize averaged us a the about sales sales. that continuing prior we've turning million

of part that's wells and areas both the it's a IPs in day as production So high-quality ranged million we've with the we XX Tier that extremely in The pleased high it's million been performance, have, production Haynesville. Bossier and day occurring our the up different field, of XX as inventory in wells. performance Haynesville middle and we the from the in showing have a think X so and to the

great growth to That's follow-up, of -- growth if this you for can remainder maybe the from for you if can your hear. plans -- on a to maybe the year [indiscernible] online? And tie to heading that midstream rate and which till into are seeing, you And year. can issues asset comes also maybe touch on that limit which if any you next could

Yes.

hit can first second. the Jason and I'll So that, cover of on then part the

capital a in we're program. So, maintenance

we As level, were stay maintenance flat the of at capital going Haynesville. in to that into But enterprise year, program the talked amount we came the a production. small growth about we in

from see is incremental plans growth We that haven't production we finalized on potential can we at you the XXXX capacity we that to with the enterprise but similar Haynesville Haynesville. all XXXX. for As talked stay growth of level year yet, to what the Haynesville did rates, we lead similar amount the growth had earlier maintenance XXXX. expect And program in capital planned in in in we that in some the some that to agreed a realizing going cause we're additional about the in

Yes.

a And marketplace. pipeline wellhead the the with the the and or and really we marketing midstream our any the move we I buy through I'll integrated ensure continually Clay just process way continuous mean have our covered that product all framework capacity. to think but at we that integrated very period, has it add, M&A part operate I just capacity and of planning that division ensures adequate well, to asset just that have the it planning midstream from to Southwestern

Pope will our go come Research. question Please next Nicholas And with ahead. from Seaport

could And the on XX% comments you haven't as was looks you up outside in bit metric dig you from kind are lateral of on per longer mean, made when hoping of over seen took And I right costs, looking as just Haynesville. I should tracking at little it the last because lateral year. Clay at looks that just of think just wells. look link lengths, about foot it like Haynesville kind a we now? inflation and first kind of like we it mean, more the I into significant

So bit in now, operation you've complete gone four trying of last now just as quarters have total XX,XXX-foot costs kind they kind in this a pinpoint tracked and over little Haynesville of right lateral? of costs are the to like drilling what where on of and right kind well these

Sure.

than maybe somewhere in to previous had is the we And did progression the start with, that feet, Appalachia. around from to X,XXX but feet going a So upper in the lower lateral year for X,XXX. average X,XXX operator average X,XXX just to and the like to we're methodical anywhere X,XXX our

we're that, So a $X,XXX steady foot a economic the in execution $X,XXX sure we There's you way lateral range are but per per progressing the tied cost well When methodical big there. foot, throughout doing to that is benefit to constructive year. in staying it to the make we're about lengths. talk

been pressure are more by the other increased hottest, offset and partially has that the they're these returns of But offsetting had versus than then but we're the execution improvements, standpoint of incremental is an has deepest, part in parts strongest why that inflation EURs remember, the Haynesville there. economic have Haynesville that wells our costs as And well those from of some strongest coming we've part in performance. of Now us the area. at in the cost because the highest well

Got it.

So I a mean that's to exactly there, but $X,XXX -- think number what $X,XXX foot impressive. like it is that me that it's I to looked

I I So just one. really wanted I that clarify, to that's appreciate all had.

with from go next will Please Parks Tuohy And Brothers. question come our ahead. Noel

was to benefit release from that CapEx wanted there the the increase maintenance an XXXX there program. is a the Just like just comment of implication budget. in CapEx the was about to going some seemed It that

check sense I might on a wanted to that that what So, get of just involve? and

Sure, Noel.

environment our intention to maintain the this capital so goods this we we've the we're like we that service XXXX seen year through incremental so far. with the was as allow maintaining for the quality the that us with the activity ground the so come planned that and quarter, we XXXX, enter providers us the services, seeing inflation, year that to of hit since strengthened in what track we're and is stays need and levels the through we've So was moved mentioned those you that as higher-than-expected high-quality to running third-party program equipment on all fourth year that into the

you. Got

talked cycle focused to that is add come XXXX. going in start XXXX, and profile XXXX. early quarter activity going the production online to It's which flat well that times XXXX helps we're on earlier. maintain from at us benefit we about production of The the fourth capital, counts isn't The to why that

Okay. Got you.

over wondering affecting something or thing upgrades a spread, about and even since frac and whether component improving there's maintenance I And and one need? parts time. you need the you just any an own getting make that's pressure if own was just you any far if to And tighter? soon as parts chain wondering I and another as still on wondering, Are other your Okay. whether so, see that issues supply control rigs of path just maybe you little or was

Sure.

been any we parties we if important need we of we're parts The why maintenance our stay it. have ahead and vertical upgrades the integration replace supply that who any to that part do. an And issues maintain any ahead they equipment when them, all have They do So, to is they they don't do, to that like there able involve execute time. upgrades. have we of doing of we third chain of

and frac us, environment the that. any the our process dependably sure for in that or And the well we and rigs and performing so, is fleets problems process at had level we are haven't to the safely tied that need delays making of current working any

I'd will Way to And closing question-and-answer like remarks. any conference to this Bill conclude turn over our session. the for back

you on some all you our appreciate I our we to weekend, achievements a speaking thanks great orchestrating Have to of us enjoyed a and Energy, the lot in again call Company. forward conference. this behalf interest today. sharing Southwestern On look soon. at of We now. of your for Bye

Call. Quarter Earnings And Energy XXXX this Second concludes the Southwestern

You this at may disconnect lines your now time.