Southwestern Energy (SWN) 28 Oct 222022 Q3 Earnings call transcript

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Southwestern Energy's Third 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 Chad. third welcome

Operating President Joining today Executive Carrell, Giesler, are Financial Way, Officer; me and Carl and Bill Officer; Chief Clay Officer. Chief Chief

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

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

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

good everyone. and Brittany, you, Thank morning,

In target flow, generate free and debt leverage third Southwestern leading generate gas basins. used development flow quarter, US our positions premier to resilient Energy's of was the continued cash in is the range. strategic from to intent to achieve gas natural our cash company free responsible natural which the reduce two

expected resilience by range our our LNG, opportunity cycle of to stock, expanding free the enhancing reducing investment the debt progress and our target the reduction, total billion $X $XX our authorized including flow $X.X to of billion million supporting cash volatility XX% We return of the toward also to we share year-to-date grade. of with debt complemented amount. our as through Prioritizing shareholders bringing set, debt approximately benefits reduction our a repurchases,

provide commodity With the risk us improved exposure, greater shareholders while moderate balance current outlook management. levels maintaining enterprise our that and our sheet price commodity price allows to to hedging disciplined

expect cash flow We commodity increasing lower even price generate in backwardated will environment. profile our this free hedge

As recent and hedge billion our value of financial and results, evidenced another of upstream We years our at will by business more metrics the value enterprise yet marketing to increased our anticipate reflect transportation key we financial clearly position case, more of our is core reserve of PV-XX our tangible our integrated $XX believe than our in moderates, and underlying capturing as value this approach scale. example developing than more inventory scale of the strip. benefits XX pre-tax

the benefit well are from gas Coast natural structurally positioned We demand long-term Gulf to growth. supported

exposure to gross million to become gas natural positioned gross feet volatility near greater corridor on acquisition to scaled from our other centers the Coast. us to per the from markets international on as day gas gas sales supply LNG we X is consent opportunities this, suppliers to up billion gas Bcf cubic under us LNG with demand XXX to capture supply Gulf daily XX% the pricing up Based along is giving -- XX% for one Haynesville growing of risk-adjusted transported or the Appalachia feet well-timed and the Gulf the and the of dual corridor day and to we is consistent LNG Haynesville Our up producer, target to Coast inherently exposure. gas production. be with further X.X cubic a are LNG price global sector. of has us of the basin of reserves which This to gas Haynesville, to pricing of Hub-based plan to large-scale Today, Coast. production overall production largest assessing enabled largest Gulf approach and Henry agreements, SWN per advantaged Today,

gas additional flow secured and Coast. Given of assurance importance Gulf marketing capacity optionality, projects on the we to future the takeaway

upcoming emission the capacity. be positioned capacity GHG fully further This to long-term our a company is Both that in to the project decrease help realize expanded on low energy To expected announce well quarter, the domestic markets XXXX. by operations, that our LNG with to path focus of lower of a both lead goal natural is are XX% carbon NGX proud gas, Momentum’s projects serviced long-term XXXX. gas believe the by record global foundational Net and and We cost on role the track reliably growing we emissions natural support global access added with by needs Zero and to company's of help future, meet which consistent and reduction and future. are to we XXXX, low

like of an commitment profile, investment to near Clay rate generation sheet, communities only supplements sustainable compelling With responsible the consume more to value ratings, the value actions value. as strong natural and a We live. Shortly, to direct the LNG environment our other differentiated our ESG offers building impactful being gas of outlook. approach resilient through reduction in to including updates. to first work freshwater company business. the how achieved meaningful access detail we with are reductions corridor we This we expect release development and cash to and XX% core in report, legacy will we back call over will demand centers, to for increasing corporate existing aligns on ninth flow GHG the E&P investment-grade some credit constructive growing be a programs, Energy a -- through forecasted believe of ESG turn annual which our I'd our and long-term balance operational Southwestern where our return responsibility our change and we structurally than opportunity This in operational increasingly free advantaged longer-term goal creating emission a of goal an and and with abatements.

delivered with the of quarter good Appalachia and on and high-end near track production solid development both and Bill, guidance across the another program morning. Haynesville. Thanks, We

day, of day XX,XXX Bcfe of per X.X or including production quarter, barrels and per per liquids. Bcfe XXX the we day gas natural of Bcf had For X.X net

upstream move integrated impacts point and wellhead transportation to length the production quarter. XX sales placed periodic midstream wells average to we markets events. of to feet. our XX,XXX Appalachia, the of we to ample from an sales has marketing choice capacity mitigate In with to ensured approximately we have sales lateral approach Overall, wells firm Our of during downtime placed XX and

in dry Haynesville, for with based turn-in and flat. lateral volumes the wells sales West and in of superrich accounted and completions, of we our gas those accounted for Appalachia Pennsylvania In Ohio the approximately the our middle on area acreage eight an fourth wells with timing length superrich X,XXX the Virginia lines. Haynesville remaining Our in the to and Marcellus Utica the activity holding XX placed anticipate feet. average in team of Bossier and XX oil In quarter, two

initial to cubic from our production continue feet million see per rates We XX averaging wells, strong day.

of team inflationary on reduced XXXX, from Despite ground this and were industry continue job cycle X,XXX running lateral quarter, and a We've the and operating sight wells the feet line on economics production done approximately SWN. and the since in environment. and fully performance designs. now by completed feet costs, opportunities than expectations. This sales has well of past that the delivering date. the efficient improvement to quarter technical year and clear in Haynesville, good marks to by incorporate learnings entered hitting we've times to results We well went extended a from implemented asset X,XXX on average pressure planned, learnings for lengths been less The we and have year. completion encouraged more one and new operational efficiencies successfully we In drilled go-forward the challenging all as to exceed

time, decrease to momentum This further environment into large-scale We the SWN's costs strong asset delivery, has well have and inflationary and year and XXXX. compress abates. we times of heading as cycle capability expect demonstrated integration over

making Haynesville as the all are now enterprise. wells certified fully certified Additionally, our across RSG, us

planned top moderate of inflationary and fourth continue Looking next guidance with investment market year. consistent development full near capital our program, a end XXXX range. to and Sector will our will year pressures will into be expect services we tight the the quarter, our our activity

goods work to contracting on range, well consistent in securing to way are our our and inflation the XX% we XXXX to necessary services deliver and anticipate our the We date, on XXXX with estimates. based to XX% industry program,

strategic actively to working are sourcing and inflationary including offset ways integration our benefits efficiencies, assets. operational further vertical capturing from this We pressure, partially through

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

by debt million capital allowed approximately reversals, Thank buybacks. we morning. $XXX share the execute us another you, In and Clay, more $XX with and flow. million than quarter, Together third has this working both generated to $XXX million of reduce free cash in good

quarter are at leverage to within long-term X.X end X.X X.X with times times. now We our leverage target range

continue investment pace progress rated are notch our will expect this upgraded progress We now target grade range top range debt we in quarter With on program. to agencies. XXXX. volatility, of achieve Future consensus debt and $X.X our and below prices will of XXXX to we all late early dictate target repurchase Fitch one SWN the $X.X to BB+ end authorized billion. by our pricing recent three billion the or towards to

returns. enabling options free As expect capital expand, our achieve our capital future target the of we allocation structure, shareholder consideration we cash additional flow will

and believe economic SWN open the reasons, Session gas we drive long-term Please returns questions. for environment. other is Question-and-Answer these natural structurally shareholder to For line supportive and and value well-positioned the

begin Thank we Leggate first you America. will be And go very time, will with this the question-and-answer [Operator much. Please At session. of Bank our ahead. from question Instructions] Doug

of Guys, agreements have. morning I on could the you that recollect, you acquisitions new were predicated if off Good on takeaway had takeaway adequate question start takeaway. the with everybody. the I Thanks. as ensuring I Bill, a that wonder

to what to that of us incremental realizations? a nuance this walk please. So, you of you move through the the allocation of got where takeaway your implications expect a basis And trying are? Is higher destination can means? I'm different the understand then follow-up, weighted just or what I've

Sure.

Doug. know morning good As -- you well

a approach you basin. in take a very integrated marketing whether wells the we're know, of acquisition in E&P and or to and do part particular As and so, well we're whether transportation drilling mode we

transportation to completed condition all gas the deals. as interested in that that and the when the so were And we we did able was it, capacity doing and to we at a had of those move forward that be you attempting to look precedent the of as very we optimize a do we'll want require else, of -- our move move. that. and And all you We if acquisition new -- But we've and transportation a transportation we that. continuously in add to time, an of some can we find our If marketing we marketplace add bit transportation. find that somewhere opportunity become off and we pursue if we to to can lay look

maintenance we're capital net, a So in mode.

capacity we're build million layer If so optimize on beyond to it to like We can growth one $XXX plan. our program. reinforces flow in this to done. our that When we maintenance other like transport markets capacity, we And in it that we $XXX optionality are in a economics long-term a and build I'll a it it's the million, the not of day, million on to necessarily about to optimization. the not take the through make our and signaling doesn't access serves. really $XXX optimize a in, and we come one assurance day growth further. or We're production capital -- drilling we opportunity comment found going

of give in on don't market excess can have or but where this, would you to away take the a position luxury obviously, peers does capacity? you number put your that for Because a in you place? follow-up Bill, the do having me same this

resell that turn present, Yes. maximize optimize transportation don't is to transportation acquire we its then and we it. We to Obviously, value. don't our acquired plan, opportunity but around

it bit outcome transportation to can planning have that. capacity when laid you're more the make the an in your temporarily finished little objective. a of We doing we do it's that we core others side, on or of sold off If than and a past,

well. gas and -- about… part as gas make there's our move all transport our a It's and through any buy there of little where available also capacity We through margin

on My follow-up, obviously, a for pressure is Carl, Carl upward quick one – there's CapEx. hopefully,

in then. what's free But pretty capacity about I'm the we're all you on come point? in see share XXXX happening last since any -- aware could free with for of update at you what this as quarter, if at CapEx any flow you strip outlook pressures there. cash today how has cash you I changes see cash flow down strip talked wondering meaningfully think taxes, your example, and

we our with repurchase line of near-term said, discussed least inflation sight our expect and for clear believe in actually at Obviously, pretty in flow than the to in line cash while levels targets prices, you come continued we of lower August. debt That softening to commodity to that had thank we Doug, question. we progress our still achieving a program sight have next year. continuing a the

Thanks, deck. Carl. slide the On

you. Thank

the next Charles Meade ahead. from And come Johnson Please Rice. you. Thank from question will go

and Yes, good Clay rest the morning, Bill Carl team the and to there. of

Bill

I wanted about had it XQ, And a bit the little we're are are XXXX. in seeing implications Bill, into XXXX on beat are though makes XQ in but you going a spread guys from your going over guys that makes -- carry a going it there? to even trajectory the to steeper still specifically, that is sense, ask track into nice you more – in what into in decline larger XQ, decline but

start. I'll right it with levels second on where talked all in when up so quarterly that know, consistent track keep levels that to fourth quarter off impact all could timing was what levels. due clearly with year quarter Charles, start we originally capital the to production completions about It's we inflation, activity we of for guidance elevated activity Yes, activity the the on sets the our we has a XXXX And us the as planned in and way.

going in the beginning. production comes a XXXX. fourth And And we is to the what that XXXX program then we're similar so loaded come front-end doing have we somewhat in into the as online will be in quarter

a move have production should we as into that So similar to profile we XXXX.

of What the us perhaps guess, Got give -- the you they the then sense now the you it. the -- you couple under That's efficiencies is And where efficiency follow-up, of of helpful on? that quarters put you a see think -- a have referenced are quantitative. Haynesville, expect there. of detail, guys scale belt of line qualitative the your have And you these to kind in the can I gains Clay. the you Can you and the of sight coming?

We've forecast operating conversations we've been of a continuation them move consistent the started that design Haynesville. on we that cycle impact time as XXXX. and done We've be moved year we Yes. when as of clearly levels online. program. facility of that we us program helping we completion with the year. It's We've improvements wells XXXX the has a seen more reduce of the touching brought as year into had through the get have production that modifications got as improvements the as help optimize through these across learnings feel will the in downtime like We're is to performance we we us the helped well

we that into us. continue especially progress So year behind as move efficiency us we make with learning's improvement of categories are for we up the set the focus one think, all around to of to key and on XXXX,

That's Clay. helpful. Thanks, Got it.

Yep.

question ahead. Scott with next the go Hanold come from Please And RBC. will

Scott. Hey,

you I as had Hey, but And look you would you in free how you only first ask fast, are doing? on really also – beyond. share did a reduce I into foremost, good well. job generating and a did say, buyback Can strong and flow XQ debt XXXX of all not a you pretty lot cash of quarter as and

stock like the about about stock reduction next think between As your that you strip is third because it buybacks of you and back bought quarter. at the you sort kind now year that of how Doug Obviously, debt look do out X.XX target, looks in point prices there, balance the below into and having $X. lower made about

it's good like seems opportunity into it lean here. So to a really buybacks

Scott, is it's not approach a our has reality great really question. And the changed.

objectives, should towards our the debt. It a our think believe a prices We pace asset on Our various that reduced progress for net and that we benefits. for accretive flow for priority repurchase and share corresponding future or as That those cash to our benefits, reduce debt we will commodity and price progress equity of that value, not disconnect what front. the opportunity buybacks said, debt our in be remains to significant between is shares. believe with volatility And were has continue other we dictate we'll QX, certainly while. and only

also are you of Got it. today as what back what And are is just discussions exposure right differ that give those sense did of of it contract or that with now? those price to the some Thanks. how my are all in those market? to how going negotiating of will LNG get uplift of does markets corridor. conversations counterparties follow-up, a from How – out kind Can you going pricing XXX selling the dynamics that? going? you on international the kind And on How adding us

gives example. added capacity versus Perryville, the So better us for netbacks

And get we took opportunity so the capacity. the to

Now, of It's strong, of Perryville LNG, moved me multiple to gives billion we advantage. LNG an quite us in this today but let a bit wrong the added sector gas that agreements. either. there's nothing with On $X.X comment

Our better us And X access that potentially day and would Bcf BCF and for to LNG to a today pricing, understand an pursue market strategy take it margins. there is where be make the focused moved of higher it that, has we opportunity forward believe on and specifically day. X.X us X.X international Bcf have per

with the real that, there. clear and Bcf is further at a X.X pursue target But X.X to right away than not Bcf mentioned may the given deciding where all that. that. approach want gas we or would go agreement ways to a up -- our I is from a that day, conversations risk having I any go which can We're continue. the point a the learning an place will -- day quite again, global but and that's now discussions of to be appropriate volatility nature market that. a even going is robust a we're projects global to volatility in to to risk-based go We take reach that of that LNG expect need of dialogue We're we're and to measured so that the and still the will with pursuit, gas in all we do approach that on, a

markets ago providing those is a you more looking it three the counterparties robust, -- it to more were of been international prices when and they at a months lot open Are more of Okay. two, to kind have might little say of access they kind approach as -- bit to balanced well? or a are

Yes.

to next to a got and entrants into looking you new two some the in The that opportunities. opportunities. marketing to There's I having about wave it new on you've where going space. kinds always some marketing -- there's less with but to time anyone the sets, create all increased all options there's builds to in strength would we're for think main, international of in even happen -- next more or relate that event, to nuances pricing, need that the of agreement negotiate in are that. about come And somebody the enable of and exceptions those and discussions whether probably think facility through and kind I terms an of of good something go has the pipeline with existing to main, up let some game gas. the it LNG and to exporters or to very of that, the there. -- the seen them the financial a existing to likely But agreements in-basin in forward ways healthy are back comes takes producer something that an that's enabling reserves like interested press But, to in work it's always in different as

Got it. I what looking Thanks, for. was Bill. That’s exactly

Citi. is Please, go And ahead. our Diamond next Paul with question from

back you I morning, call. and efficiency productivity my taking for Haynesville all. of a Thank to circle hoping on was Good just the gains. bit kind

kind any far it, others, X,XXX-foot kind at where as from Is noted are to more holes basin. any there location? know roses? You or you laterals. enthused moving that guys you're been about entire coming poke X,XXX is I you you're than there call Has surprises of of areas up everything point a that in as the

that, would part and ways, on original to wells based had DeSoto and and as We Well, we the it did than expected the even we've River and would and development, has I we we've EURs Southeast across play be we lot deliverability where in of greater figured when and Fault our that, Parish zone is play position thought. say of the had Natchitoches performance across performing in that the the we expected. the had a is that our what the Red evaluation better those the and throughout continued performance where that performance. reservoir best have, pressure acreage case position, the been the but see The

are that the in that's of in occurred that the execution if wells, think getting are integration asset think little with more. then over quality a and bit of proof and our we're the I that environment, program and not on the to has how of delivered. points turn the the the we've the track this the activities then performance drill points year, it positive All we I a big service all the the And that lines. team expected, delivered program

play is How still Haynesville. talked Okay. into Understood. does that Appalachia expenditures splitting your hold, just about And on like capital and way previously, you. I Thank you've or or approach follow-up there the other? any results those more that. your leakage do one XX/XX in one well of quick between know

them for year, and rack economic that and of stack enterprise by across the take all the our have prepare a we we we opportunities budget This return. is Bill. When given effectively

these large wells. Haynesville You have

with in We as of gas have Appalachia well. wells volumes high

liquids gas natural with condensate. wells have We and

around slate to a So then we then economically, that. optimize wells put drilled them all of and pick we be down

or midstream not under capacity we're So place somewhere. in we're not capitalizing over utilizing

really will the of laying a Certainly, It be of wells. economics at the so fact an enterprise. given in approach are neighborhood some out inventory we change? wholesale we're but right this now, our at in point. the Probably that somewhere part XX/XX. decimal every Could to choreographed in investment in will that the business. the be changes have opportunities we the it And complementary versus And could, advantaged strength same probably of it's it points across it

Understood. the Thank for you clarity.

next The go will Seaport. Pope be question Nick from Please from ahead.

morning, everyone. Good

Morning.

was I hoping guys little on more costs. clarity a provide operating you that could

year full guidance you guys that full at unit guidance, Looking are trending well below operating year on cost. where is

operating is to understand sure I costs, or on or going trying just So of there uptick if fourth if there? that's anything we make should unusual guys in you expect operating ahead schedule, quarter, some

of But us provide don't we've take And Yeah. that main I efficiencies as an from offset have year-to-date. categories side very change us take into well have full big how can And capital I focused we seen those. of -- hauling, expense as that side is see the impact inflationary water seen a don't costs. the disposal, move standpoint, as seen the on fourth we the quarter, But water on brunt have the those of we we our the some in would some say to what team compression. increases.

to I that Brittany further Yeah, some you, I'll I tell agree with reach have that. you can and don't give at out why color. look you, And

Got it. that. I appreciate

far. all know questions I we're On it of efficiency that so on there's the several – kind been to question, back

the lengths that you the where If in might you there? able last two think kind X,XXX-foot. of, the further? it quarters of kind Haynesville being putting do optimal feel or of you you geometry, been to Is kind you're of are reaching do of like have there? similar lateral seems how there the at you – limits kind are like wells a you big guess, link you like on ballpark X,XXX, on you kind Do down might limitations I push think on look push

Sure.

occurred. year, has we lot this So, about of like learning talked a first

field we're stay specifics be in we relates going limit And of that to it we lateral to We it want efficient very sure that links, did about As go. we long methodical some maybe each the in like to how can area just program. the make Appalachia. has

And that's geometry, It's zone. that Net not go XX,XXX potential feet Appalachia faulting a there opportunity same in there's the there we like acres some fault so had laterals given to lever. the in

efficiency, foot take So we'll right methodical optimized finding that very forward. now some to the we're where approach I and continue X,XXX is think a around to going

And by way of can in laterals example, a XX,XXX foot we Pennsylvania. do further

wells All of optimized. our aren't XX,XXX they're

one that's data So point.

data point part. in most to XX,XXX-foot laterals The other you're in Louisiana, restricted is

wells to And that against not limit. all going bumping our so time once, we'll put but then – to Clay we're said, average up of our take that at All as and forward. learn advance

helpful. very Got you. is it. That it. Appreciate Thank

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

easy one Good morning, Carl first. all. Thanks for an time. the

improving. talk going forward? obviously the Can about for and just Just talk sheet balance quickly you today you teams suggest could not hedging you

the we to been anticipate outlook, strengthening XXXX structurally forward. our a below levels, part they've Look, for particularly Neal, the for strong certainly hedge thanks balance our enterprise risk said, management. Bill going able does we where of with described, lower and question. long-term believe is what hedging for XXXX a gas, That core as sheet, natural remain being

So we'll while we'll moderate, continue our protect financial to strength.

of as Glad long and then curious M&A. would the sort you that still deals two in they the more your any number these are as maybe entertain satisfy bit around Haynesville; of Bill, and past? that. floating – I'm there One, a outstanding obviously a follow-up did you've of for on guys there criteria two, had just in on Again, ago. is deals to And team, just you a hear you

the year, and periods, the first a make the by XX We've hedging have make the comment that. before first get we that. actually rolling I'll We've XX%. period. period And end these – rolling for thanks the one So, more percentage low to on points I on to where three we be comment in used lowered I to and – second want rolling

done and we the third. already -- So had

enterprise risk keeping strength, management financial company stronger that again, capability in So line. of the

of On capturing about, the the be we're bigger. not is what to benefits M&A, all around tangible growing just certainly strategy scale

so to let greater to as what's But to And show important on That believe to choose mean are to hear, what you we book, in everything. It's call, me up, to understand you continue us coming on look haven't deals, we continue us capability objectives our you come talk need importance our it's before. buy of that understand heard look to occasionally, our we're recent you if for corporate optionality, up the that about that. been look And at at you just that But we expand at. well. We look going around our the be. this to more we opportunities and for debt, at doesn't and in Those meeting understand basins which framework we capital for we're to M&A the where base. into improvement means. has see our the where made going marketing areas benefits in our to define become purchased and asset of that repaying given acquisitions, the challenging work criteria returning shareholders in that we've given assets opportunities going

focus but we Again, and is debt, of we're now shareholders. right at strength continuously look sticking priority returning that our of company. evaluate improving capital down think paying the to the to some them, things I

will go question Please next Umang the Sachs. with And you. from Choudhary Thank come Goldman ahead.

My is Goldman first Good Umang Hi. inflation. hear Sachs. Hope Choudhary from question me on can you morning. okay.

any next to in seeing year. and you're signs any of how Haynesville? XX% about Are much regional inflation seeing talked You terms Appalachia between you XX% bifurcation of inflation

Yes.

is inflation we we've Haynesville in little early done. that of and of in and have a advance did in we and chain XXXX of but well a around Haynesville the quality the XXXX seen their a categories spend XXXX, the have went XXXX, and used through Appalachia, Haynesville trend started our continuing, year, we than used higher any services of as where is maybe contracting getting supply than served well us for in that realized operators all around coming We've issues the goods that especially And and little approach Appalachia. some So timely bit, the goods in in not from in Appalachia. the higher contracting services considering execution as major same process we moderating the that around

we're using into that's we move So the XXXX. approach as

you. for macro a path to How about the discussions to on or with comfortable a grade credit is environment, the boggy for are which wanted probably debt the going $X.X given they're rating. credit helpful. I question, Thank number, billion number? investment And agencies comfortable they talk That's higher next that is are they are my the your looking with

$X.X to of $X Great your that. going To exactly billion answer question a range target of for to Thank debt directly, you question. our I'm that. billion is comments. make couple

become to grade. to Our potentially could range, meet agencies progress from they while level we that to target investment debt. the that, we that that said openly and us debt achieve not expect achieving meet of before investment need is grade that, requirement a that, Referring that

either I on profile, wanted the us delivering at a, I for be, when that broadly. do time, is, to two rather point our very decision in make. believe guess, investment the – a matter close decisions profile business to for leads point, continue both a or we've my that because financial we grade. said we'd already more with agencies So third we to from that it's the to are make to just what make ultimately And market second to risk And least it's do and guess, really at a agencies their for risk clear. of they the I

meet opportunity had credibility talk the And lot into we a a that banking I've of is to well. what bit We quite detail of they on. the not is our but And that. absolute number, go as are lot path an a the about it's Carl there get – share We think detail, them and right, I of to on path.

We our game and and they're path a belief. that with dialogue pathway confidence wholesale have gives they now, pursuing about built the the around of change credible right in But very confidence clear have that. that us us shared the we're that the a changes

you. you Thank Okay. Thank the answer. for

question ahead. Chandra Benchmark. The from Subash next from be go Please will The

been, question have interest have carbon term. guys perhaps in pretty some development type when it's things a sustainable certainly you not for it sustainable hydrogen, early. involved now, sequestration that you Well, getting longer of or to these comes whether been I maybe thanks. sort Bill, on other in Any think, of

So curious there? what you think

Yes.

by about options we to But a we'll approach, think are We've at, one make are changes nature the up into are in carbon a more. about more is and real long and in evaluate indirect. that we one achievements air water difference I by We water that versus continuous obviously, and them bit us, that and of it's to been time if think looking sequestration along we'll that make is about sequestration position those and take leading the or improvement some we them to you that of up are metrics business those, with, or whether that opportunities reductions backed and sense have. think that, for study a And continue to backed they dig thinking we in doing a as actual you air.

has in that but release component in in that momentum the part our stages, it to GX early talked about of press the is deal. deal was that The attraction tied a CCUS we to

Exactly.

the Okay. Interesting. of traction Southwestern when active guess, sequestration I an plays that say NGX? a role where that And aspect is you Clay, in of deal,

emissions area. that happens So a we're with COX reduction we're basin partnering and improving Haynesville the that them, in from of

to next towards the that of your of of through floating your think context Okay. price that that is still that be Got it. has give how Thanks. follow-up, something you're of a And services. sort like going just securing year? on how of like you you course a much mentioned Can way, I XXXX much well visibility,

have with service contracting fixed providers worked have contract. Sure. dealing for contract them. typically all or traditional example, year It some XX-month has the with twice to quarterly lot in Drilling components with past. the a We're openers a some six-month a the are openers, we've it service same of rigs, in company either a for

the the ground cost we go position quality So we continuing we structure environment, forward, this that's together to as work well the company best continue agreements underway. new services to those we and breaking the opportunity best also way but update we're not and company for provide to to to as the in get can of the

continuity our -- employees And use Seven equipment I I and count we of own execute on that we of are Energy fleets rigs will by able on table use that to in that incredible, staffed business think of that and contractor degree capabilities counterparts, continuity then team of have we other aspects part their capability very thrilled risk on also they're the and use very Southwestern people is we of that frac them strongly employees, can we're risk table, aspect the but talent of as the the to one are off capable and that they are in stand XXXX focus it other XXXX high of moves to and the and we fact and and plans direct put being they the with profile. and the we the a have.

Okay. gentlemen. Thank you,

ahead. you. question go from Parks Noel the Please Brothers. next And is Thank from Tuohy

morning. Good Hi.

Good morning.

Good morning.

the growth $X frame consider in you I'm maybe the the we're time or thinking companies lead company-owned better another peak for terms a build. inflation. rigs, from of long-term, the if company-owned of and of for thinking I've world risk/reward Would long the And rig some gas own as wondering of new time we've hit and caution. and I'm things in rig a in say, your about and as was Talking I their far seen

be think? So you is table would the that something you, on that for

is at the of couple think priorities debt, use in flow look ways. kind two capital One, that our an got priorities, of I different allocation cash returning opportunity shareholders a of paying cash. to to in you've down

where you the just Second are certain keep roll it is business and investment to in to to the backwards, base opportunities environment operate keep the part understanding the increase. the thing the on we studying is and then rates got capital plan. load to utilization doesn't And maintenance consistent being other able needs and a that just place how that

seven frac we note, you'll don't seven rigs. As have and fleets

learn. frac partly fewer we have parties fleets and We availability for having for from partly mix that third utilization, can so

have that teams that, right the So say capital we I allocation has market. to discussion. that the great into now, would the we're we on strategy in and focused out go put that And

enough. Fair Great.

And and lock this sorry, there's if already, flows. with less debt, in about you your pressure but touched obviously, less hedging on cash strategy to thinking

start the is get in Nat globally gas just beyond terms to it's I on As kind next seems exposure and think there, into the next is leaving look XXXX, likely think year need time turn just a ride one-way upside side more are of certainly for need thinking fundamentals protection. caution where you outweighs XXXX downside to thinking up. on the you the there ahead think of you It year, But of back to you might a that point we some downside the still do about erring it protection. or towards

question. Thank the you for

risk protection remain We're remain. balance and the moderate market our do the So current perspective we that, we're the downside that understand When let of where strengthen, we hedges more in place as not part the piece saying, stronger, of and balance bit me by to in company's you sheet that, environment, management will is to left risk. strengthened get have the going be managing enterprise able of from on perspective, practice, you defensive that But – major start but is hedge defense stronger, and to we've a all the watching is happening. optionality. a minimums what's hedging

is I the and is everybody that of to protect us think lot priorities a and money we've for that, key the at your of just And lot got like get capital of does. else back point a least. costs, one

managing that given set the and strip take are we gas that that liquid strip ranges that risk. hedging are targets sure on we hedging the strip, take forward that you're account depending making so the we and into at account into And doing pricing, or what

the exposure. hedged. our to a yourself and we've collars can you already use such have opportunity we're that give more We said, And hedges, things bit upside as swaps and other

link them moves but and it with Our upper limit current around those and the But together. that in is we a need We be at it to year as don't place. monitor given XX%. around, move at strip,

I defensive lot who we're management, have want that it's think so away and to I certain investors our management – integral enterprise risk we side, of walking be not are So a know to not. that we risk from

lot. a Thanks Great.

question-and-answer remarks. like of any back this closing to session. gentlemen, End Q&A and Way conference concludes Ladies for to I Bill our would turn the over

Well, with joining IR our much thank and to talk. our – clarification soon. call. please we'll very you And Any for talk you team, they're a that, us, questions. on especially very to Thank reach plans, the for on to go further have weekend, you all Astros, to us out the great happy

Third Call. Thank This Energy's Earnings XXXX Quarter Southwestern you, concludes sir.

now disconnect. may You