Occidental Petroleum (OXY) 8 May 242024 Q1 Earnings call transcript

Good afternoon and welcome to Occidental's First Quarter 2024 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Jordan Tanner, Vice President of Investor Relations. Please go ahead.

Thank you, Drew. thank Conference participating Call. and Quarter Occidental's everyone Earnings XXXX afternoon, you in for First Good

Senior Chief On and International Vicki Operations, Ken Chief Mathew, Dillon, Hollub, call U.S. Gas President President the with Carbon President and Operations. Executive us Onshore Resources Senior Officer; Management Jackson, Vice Officer; Oil Richard Financial today and are Vice President, and and Sunil President, and

presentation call on will refer nearest few that non-GAAP corresponding our of to website. afternoon. our slides a in the Slide financial the can also on measure on to section to The found be on will the Reconciliations statements we available this reference GAAP our Investors the X We'll website. afternoon, and includes made measures forward-looking release a statement cautionary This schedules today. earnings regarding be

to turn the call now I'll over Vicki.

our a execution. report to Thank XXXX, I'm pleased you, to by focus good everyone. Jordan strong start afternoon, persistent on on and driven operational

As outage, we results extended first today's an guidance. and oil and offsetting essentially robust our third-party business quarter call, delivered our businesses gas outperformed production Midstream OxyChem our will while detail in

first success Today, what's Permian's to significant discussing including by these are our Delaware how horizon shareholders. initiatives for appraisal the value our performance, expected on generate I'll runway. our Then and start highlighting to contribution discuss for its quarter development I'll Oxy and

our all of Gulf our made outage guidance outage capital. do our and in restarted to operating to of performance from affected mid-April. excellent We the third-party areas production over at we in the capabilities we $X.X midpoint by a Mexico approximating and the in concluded start the delivered generated teams working quarter the Mexico by first platforms fundamental quarter Though our the flow challenging evident is teams production it Gulf of the first everything before cash excellence our Operational portfolio. during Oxy year, of were in as Eastern our billion

results, strong look quarter overcoming at in and our midpoint we to better-than-expected performance closer winter from the first secondary Delaware the the in our production benefited of the In guidance Taking the year. impact Permian, well early a Basin. weather the production of due in exceeded the the Permian performance Rockies, Basin bench new in part

generated are impressive performance achieving teams and primary results proprietary by same benches our in secondary Delaware -- that the applying Our have by benches. results remarkable performance subsurface workflows applying success that to

nearly fit-for-purpose secondary expertise, utilization performance more cumulative by reservoir well Oxy's first XXXX year from average that, horizontal our period design characterization for all benches for Through the record-setting industry of program same in wells exceeds wells XX%. Not the production Delaware secondary and is matching than average. XXXX Oxy's only

financial We our by efficiencies. by returns of ability near-term shareholders runway of our infrastructure capital are for use our Tier inventory and improving extending locations. Meanwhile, driving our X meaningful grade to yields existing high our

our development We impactful become substantial become of program. benches more more these secondary expect a to part benefits as efficiency

and driven achieved partly Our outside higher-than-expected of production production the volumes. new first driven in North, outperformed then production operating Oman performance new Rockies And quarter strong by better uptime, well DJ production assets uptime. guidance, internationally, well Basin, our gross the high end we daily in by record performance

million teams between well River per half Basins, year. and innovative capital completion chain combination stage the cementing of $X profit These cost to in $XXX,XXX design our through efficiency design, continue compared supply of In and the tangible execution, last reductions DJ casing design well quarter and of well well first resulted utilization. enhancements fit-for-purpose and a first teams plans, to proactive Powder management improve optimized practices. Our and exceptional

also cost reduction to We're Delaware progress see Basin. in the starting

Oxy drive able of operational the a operational Basin increased of I'm and we're and gas electric Axis Expanding emissions. our Services into and reduce efficiencies savings, continuous deployment industry in but integral helps in reduce rig safety its involvement is advanced cost strategy not electrification first emissions fully only because first, generates Oxy's many of our also Energy for team's oil instances, the goals. our well it that net service rig. Our kind Permian to and proud improves deployed operations. zero another innovations to to progress leads improvement toward increases efficiency, our

disjointed market various performance regions. in third-party by product portfolio. storage quarter infrastructure some resulted these Outperformance maintenance Our weather, gas Midstream's Midstream and in combined our along driven our Oxy's rich intelligence quarter. in value guidance midstream our optimization the captured our with teams Warmer business significantly teams how our for first pricing demonstrates realized at of disparities. transportation expected prices across value leveraging where by first regional with from end marketing partly abnormalities high than was pricing the outperformed portfolio

Looking playing role. optimization the major back our over marketing teams capabilities a outperform, transportation quarters, have multiple demonstrated with to frequently our ability

provide commodity we products, for marketed saw longer from as in with diversification great Not guidance opportunities flow does the events of anticipate our exclude us price also our we similar Over because we of it term, periods only the predicting early volatility XXXX. difficulty occurrence. offers generally marketing opportunities assurance but our Midstream during in those business

in manufactures, is within one with cash performers the diversifier consistent is renowned OxyChem efficiency. flow the due of focus a business, on Along operational being to its top our products part for

vinyl for including This from our diversified lower demonstrates ethylene how cycle. our our to deliver first cost. financial improved products, PVC the well asset as positioned portfolio is During quarter, results the performance throughout OxyChem from well commodity benefited and chloride as shareholders demand marketed

reiterated through projects I'd and mentioned that we our for earnings flow basis an calls, prior share in provide on update an our the call. specific on investors like quarterly In and absolute drive we growth. value have increase per to cash our Today, to last

elected to but Employees, OxyChem done, the of be the city The crude Coast site complete April ceremony kickoff the officials plant million $XXX and community year. the are in support from leaders to there incremental partners, project. rates OxyChem Some contractors, team projects the the groundbreaking to more a the projects the Permian of is work. aspects and in X, expected held to oil including and reductions approximately project completion are attended Gulf where flow of transportation cash deliver Battleground on enhancement of per

their business, in current on will we Midstream over the Based of Midstream West our ownership additional West announced distribution, our that we year also million results. February, distribution. anticipate to over to West, $XXX flow In increase will that Oxy. Western In contribute financial or enhance an our cash expect of stake XX% per

free cash savings increase repaying Repayment existing then applied flow by it debt Additionally, interest cash flow balance million of be we of debt through from further XXXX maturities annualized $XXX matures. approximately intend as that in incremental sheet. will to to result our can strengthen

flow Overall, continued our than that does billion That commodities' of for cycles. of which independent gas also success. cash we more are poised improvements expect is business, financial include oil $X figure and not

entered provide Midland The expected return the and the flow enabled the As appreciation accretion most portfolio into know, CrownRock. CrownRock acquisition grading for our at enhance and high of cash acceleration the Basin end with of our by agreement priorities. last to an potential strategically we free are year, of to equity to of acquisition you portfolio be shareholder

of flow In first first the focused flow cash during strengthen is quarter, we pleased to value schedule. direct cash to our and on oil announce price of expanding cash resilient portfolio, Oxy's we expect variety flow on decades volatility And our businesses, low further and come. credit enhancing dioxide a Construction resiliency. carbon customers shareholder ventures are generate a multitude capture detached gas STRATOS, removal with air of across plant, Oxy's for from to and advancing we agreements Throughout sectors. were carbon

now hand will financial the over cover our to I results Sunil, who guidance. will and call

we between by Thank reported reported offset gains adjusted and primarily per Vicki. per $X.XX included the our the derivative diluted by Andes was partially in to of and related $X.XX diluted of equity on arbitration first losses. sales share. profit of settlement profit an you, adjusted XXXX, gain generated difference The litigation income, share In a profit driven quarter and

a is compensation tax largely and We exited $X.X of cash. had semiannual billion We quarter change, unrestricted to nearly payments capital working our which first payments quarter negative with annual the due payments on first property under plans. the for debt, interest typical is our and

cash $XXX During in of quarter, flow before third-party delivered to we of the despite high-margin free production capital working outage portions Mexico. oily the of our million Gulf impacts first over

segments. our outperformance First quarter in our onshore cash and underpinned was domestic Midstream by OxyChem flow portfolio and free

guidance of be to the The range highest day of quarter at maintenance the to mid-April the production annual and years. X.XX X.XX the levels, return mainly over Gulf onshore quarterly to production production low of Mexico to of production is X due million annual company ahead U.S. plant in is completion The increase in quarter the second midpoint BOE Looking Dolphin compared increase to of a expected BOE total production will activity million X.XX outage. quarter, to the per from day. first of second per million

of Gulf April maintenance impacts Central Gulf production plant outage well third-party guidance quarter in the second Mexico Our Mexico. as as includes in of

offset result Gulf company for year annual extended down, of Though total a modified it total outage, and guidance of are the is to mix fully full the The guidance expected outperformance by we in we year. cut. maintaining revised production production company Mexico our oil production Rockies is impact the as

our to business highlighted. as prices improvements marketing gas period midstream the subdued XXXX and seasonal opportunities are in had exit combined We that on of portfolio, unfavorable the well usual teams our second in quarter, and capitalize to from chemicals volumes Vicki benefits costs price lower are higher with strong our positioned Though energy OxyChem start anticipate a demand. the modest we during elsewhere reduced gas

full enabled guidance outperformance Midstream's year has million. Solid to by raise range us $XXX

portfolio. performance quarter the benefits first our of Oxy's differentiated demonstrates

operational shareholders' capabilities Our resiliency offer the cash commodities flow our throughout diversified assets and cycle. distinguished

quarter that the plan of alignment weighted is terms XXXX towards capital results our In the business half in the capital year. program of and the spending, first were first with

to and the earnings last or wells, call, associated capital the drilled carried wells XX% from the intend reduce is year. -- On year approximately We of XXXX. completing for inventory is that these uncompleted the first of Permian with weighted high and Rockies the This Similarly, half quarterly to through and capital DUCs, DUC half we variability in with continue towards utilization stated of the second for year half year. ramp-up, highest is increased first working the to in onshore second the combined due quarter U.S. the to interest capital profile, desire year. grade expected rigs Battleground result of and the the into being capital rates

the on CrownRock touching I by to acquisition. would like close today

FTC close are the teams that in the third quarter the working of Our transaction constructively with will we and year. anticipate this

price As and CrownRock's XXXX, Oxy transaction's X, date will to between purchase from benefit subject close, activity customary a adjustments. reminder, the January effective

with and announced XX to assets high-quality Concurrent CrownRock the principal acquisition, or debt to the transactions of applied within the divestiture a program portfolio garnered our $X Sales billion stages be interest to early The we billion divestiture to months commenced be deleveraging our $XX will billion have of the teams our completed much close. proceeds within we below. until have $X.X process. reduce

debt per expected Vicki free enable target. resume value program flow accelerate flow to us growth share provide cash our to the target greater near-term even The per and debt for share. enhancements intend repurchase our to shareholders our is common share common deliver our After and cash are highlighted we achievement to that met, significant of diluted

positioned a As deliver well of today's are we discussed build proposition we quarter shareholders. XXXX differentiated to on a to have first our and strong long-term on value call,

to I will call over back the Vicki. now turn

Thank you, Sunil.

Their quarter. move states. on Before operations day, trading a are X continue I milestone stretch employees New carbon management I Exchange on outperform our Stock gas of the company the our the in to in international of true XXX what tell But last and team our and Oxy celebrated differentiator. March X, portfolio we're York XXXX. history. to in drive you to we consisted want Q&A, about and expertise that wells believe our On chemicals industry. that Today, limits best is began a achievable an Oxy's to with energy, oil

achievements long-term through and more executing I hard on look our result are best-in-class their forward superior employees Our in assets. and to calls. operations efforts work strategy Their shareholder value showcasing future of at

With that, open now questions. for we'll the call

as reminder, Jordan today with a as Ken for Jackson Dillon Richard mentioned, And Q&A the session. us and are

Fargo. [Operator Read question Instructions] from The first Roger with comes Wells

curious call forecast just maybe XX. afternoon. Permian we just maybe I'm the CapEx in at Rockies, more we dig like the look good the we on Lower full at if outlook we're and If looking the -- if a probably or Yes. I optimistic for you little let's Thank more to I'd the a could get part here, little EOR, difference didn't it volumes? changes, wells. production just then we're little the look at including the as little wondering a year, and don't see bit you that's about we And less seeing a more the shale year-over-year recognize was maybe maybe that I little well? of why total why raised And within a

Richard?

with a out Permian and Roger. kind guess, mean on. clearly, on focus Appreciate results the of the the of Thanks, Yes. both on just Both our good first. [indiscernible] quarter I'll the very anchor there I things with couple Permian. had first several coming fronts. looking Rockies question. year the I quarter, pleased of the -- to

think quarter, versus increase Permian. a is we in to of in quarter the half Sunil second in XX,XXX half the and first we're As production second Permian, at reducing mentioned, while going which a terms for the half doing step to about the looking big rigs from first up about -- first barrels but half day that implied second even quite

we we're getting activity. less of with terms think in So how more about

the on of production on facilities we're half front-load Some facilities through both also to starting capital, a increase plays but you the take that we're of rigs mentioned, on front-loading next year as the quarter. that heavy, in as bit the as first

The things are is, good well. news performing

at that wanted well of couple highlight years a production, really the trajectory in things we especially success meaningful which the but primary the with so and only look play highlight going the you we year. the zones, we're this the benches meaningful not our are of year think portfolio over And our we've highlighted when quarter, now, you about on the that last business, new the role to secondary for to

The enough decline. that talk don't other we thing base is about

our this at look you year, if Permian so improving. And resources we're

Our year X% around base from a to XX,XXX last X%. declined day. barrels about That's

so only a lot better that's come operations. really but better not wells And through

X% X% to places improving is uptime Our Delaware. in like the

and the just thought over we this quarter guidance, capital production look to certainly increase as say the think, forward next couple of you results first I that. The we the quarters see how so through plays about last we but the to out about that, would year full And is, appreciated but thing in over we as efficiency. milestones steep updating behind I our capital, progress think seeing are wanted

That's So we done with approaches our the but Rockies which in cost progress I'm Permian. there. also well highlighted we both through some pleased noted. and of changes, with service the the improvements, being strong our team's very design companies through well

the And capital at which capital, so last goal. year as together, over we year has improved look year, our put is production versus we intensity that this total this

dollars, spending, improved dollars stay we'll -- focused and year-on-year on millions we're has of added that. So what per production

to we year total kind go for this as to more our put updates together help of that look forward piece outlook. year through So

over being just better? you Okay, think the capture I years, and X.X a is able we're but the forward little gas where coming much next to to other a another appreciate that. constrained the of maybe performance have of the to going to X basin about opportunities think we're question out all the years? ought it oil go -- you other just period bit to about probably We'll forward for way intro on we there, on I that about guess Vicki the talked that something midstream, of as how had move

not ways And moving performance to that, it's an so the other to molecules us, issue for gas don't and a we oil markets. to positive trade gas impacts for fact, have elsewhere -- due Permian too fact capacity get Basin. we really or And we midstream we move in the molecules. of the perspective, from have things, gas have some that out and the can around California Well, are to our of

take really marketing gas shape in good there. perspective, So we're capacity from in good a shape and away

Oil, good we're in also shape.

get overcapacity the now have out to barrels of Permian. We

we associated crude talk up that's to barrels above with the with business production. fill about capacity that our respect third-party associated -- when marketing, So that Midstream with some normally need barrels to the of picking fluctuations the incremental that in are and beyond we with current

along the cause does So volatility. with that's in the that, business, the marketing, volatility Midstream mostly gas

is [indiscernible] have to that others upside advantage for move us situations take to -- just disadvantaged. because that, are things volatility of normally, I But we of capability that the around the fact the mentioned, where and as

Waha are able Midstream business that it's in lower situation while that. capture is but to opportunity realizations the So upstream offset and now, with our to our

Cheng next question Paul with Scotiabank. comes The from

maybe, Is you're is think secondary there too of Is performance the there's kind in the or that you your -- there -- specifically any or X performing mean countries? certain Vicki, for branches secondly, those the in area? -- that is for already. think, entire your actually, this your operation spread that, wells at really say, level? And own pattern in see to DJ that strong quarters Rich, or were guidance So talking it it for your characteristic for, of mean, will trying about of operation number those to understand to Bone or terms overall very from can been, inventory why far this branches, lead how Spring. X I I you overall least your important we're quarters well, beating a I has that has been I

remaining primary a outperformance mean, for the maybe that, little DJ? bit I the there? also are the estimate standpoint, the reasons So is for current conservative the in And what from year that of your that

Permian get the start the and I'll Paul. in Rockies. to Thanks, Yes.

I turned we of the think sort what our it's primary approach really is by unique and into then our -- describe area. to way benches secondary benches

of spend both about we've we lot and the reservoir it and a over it past, a time you really then geologic perspective in subsurface so from think And from aspects, talked focused on about the a perspective. as time,

I we've on we terms in And be we space to in wells think the do that delineate these of optimize put that we to broad zones continued recovery. more areas, focus put so how the together subsurface and as in together in

play design factors stimulation your an role. these other course, of And, and important

So by I area. think don't unique it's

we've Basin with the terms what it's we've success Barnett, delivered Midland upper the approach in in or of think doing I whether same Delaware Springs the we're it's in Bone that deeper Wolfcamp. had the Basin, the

And about the there. think approach of I sort think, as the Rockies, we same

of think had started the time there. seeing over subsurface year really with stimulation and about lot where spacing, Rockies, terms I great approach that of a In spent approach a were thinking intensity last performance lot we do And we length how really the they've the plus. the early gains lateral we of

I we're more today think We down. these wells draw do seeing lot we talk what about operational. is how a

time So and back really And longer what improvements in term. we're both. is early flow seeing then

time And it's talked like the rate at really kind plunger long assist, recovery So base but that, the in performance, term, with things AI. do having our then the emissions. early handling correct a the the only facilities handle to of not lift we've to and emissions about

the just I I they've so of say overperformance. much. what was are these really it could so delivered I think And wish conservative. things types improved

in we've tough some that's I the XX% and than year year-on-year, of When as But I still job in year. over But done Permian better a what narrowing teams this of earlier, to in to I you're think terms these outlook. mature are We're like doing the of the advancements hook gotten those last the on terms improving the sort lot more think we're of well. they've answered optimistic, outlooks. sometimes of uncertainty all better outperform

So I appreciate the helps. question and that hopefully,

Mehta Neil from Sachs. comes question next The Goldman with

deal have conversations around sales, some we But noncore have is first just time question continue I to before My the closes. the around asset would you still imagine divestments. recognizing

confidence billion curious the your the many have of right perspective achievability noncore of asset and to in that now is up your so to? the sales anchored $X just And what market on

billion -- there's announced we billion, It's divest Once of Sunil and lot calls getting and $X.X of started Yes. going incoming $X to we a letters. a interest. lot phone between that were

difference interest appropriate options we that, might high what have we And selling. that comes it's it the going consider things of there because translates know, acreage. lots that level high down valuation and to interest. that's for so as offers But into the is of And all for we're and and you us and is make of to interest very do levels the hoping expecting

that So divestitures. we're to we we going to cause But be impediments haven't any value something with decision barring have that would the make best can. there us we issues see don't foreseen that that would our

on And is sorry, perspective your the follow-up Sunil. please just --

idea is What were what to we to just looking an for go respect that haven't those be going get of of with just through Sunil Yes. to going we're divestitures, to give is we those do listening might about at. what think who heard, the kind

Yes.

other we said but -- in and and the the attractive portfolio, companies. we as portfolio does are our fit that have evaluating could plan what our to that not identifying plan So near-term high-graded be assets -- development development in our are previously,

that the monetize? want to a criteria So can by we're that And what monetizing mentioned, value like what of asset? like is accelerate we the is this asset announcement high-graded fit is potentially that to this in said, the lot evaluate, and Vicki asset Vicki but a this the more that the we is strategic even potentially we before can portfolio? of announcement inbounds get? getting value the using after And lot this an So we're

question we billion months between principal back the of organic fully outlined. we And the $XX proceeds sales yes, from that of flow to achieving billion, we have to and to are closing. $X.X target XX billion to committed going $X asset cash debt And to about your want the within get

just both is about perspective then do Battleground. online, just think and how markets. soda do follow-up your products? that you the chlorine And the love comes caustic That's for the on there? changes supply-demand the the dynamics on And think of once any these outlook great perspective. expansion And I'd you

to to we've the years. and in PVC able look super what at about earnings When in cycle go think last second ever, soda best XXXX our we third do in caustic come Just and achieved back been year, just out of highest OxyChem of this few an and in annual we our has XXXX, pricing incredible best earnings our where, XXXX.

Now that were we're and the into XXXX, a be and first the inflation bottom. we prices States, don't see through very along reality soda some in the quite the going bit. But is we seem weak with caustic United that our at demand overbuilt to -- so to quarter, now started we PVC some And there little strengthening as around that past inflationary was demand year, do -- commercial residential getting in don't both better out certainty basically reduction because and and believe there's getting environment buildings, inflation. right this that they're soon. in see of China beyond But China housing some of anytime we

think growth primed the is already for housing We again. market

if market inflation and get market in export, we in conducive the certainly see the an States. so The start that us. United to impacts could that, recovery for we prices international is here seeing we'll -- And level so do international

that believe do and back we'll in again to growth continue that some the that and getting demand places driven this we'll so that And market. pricing by see we'll India start beyond next But months, other challenges I up. ultimately, year in seeing going prices see XX and

like So right we're bottom probably a feeling we're now. at

JPMorgan. The next John question comes Royall with from

of are modeling versus you're kind we So $XXX in [indiscernible], just about of what's today the extent of terms going And contract just other the expecting? better way How baked terms get locked of as midstream thinking level numbers to closer that's in those from the the million you the to roll-offs? what much into roll-offs. confidence your

you question a repeat bit. little some that I'm We disturbance. had sorry, could

could any the you pick handset by a Royall, speaker up phone, on you're up, pick chance? Mr. if

me now? Can better? hear you Is this

I that question. better. repeat Sir, think ahead your Go is please

Okay, that, apologies for Vicki.

the So that And about might How from today expecting? thinking if versus not midstream the into roll-offs. before that, the you're of what's extent better kind it level just not of locked baked contract to your $XXX you have million numbers go those terms to if the in in, locked what other of way renegotiate? confidence much

high that we're some that me, confidence we confident that the it million I we of already do it. today. I $XXX wouldn't And pretty that believe wouldn't, get we we'll achieve seeing have we'll and trust if weren't say

this cash cash John, million. us it's $XXX flow helped to from And incremental million confidence increase $XXX that -- our flow actually

Yes.

on flattish XQ if apologies then a get And enough. little I which you but I guide GoM the Fair with bit, hoping anything production despite XQ missed somewhat back OpEx up. this the was could into higher is with

So it denominator looks like a numerator issue and not a issue.

Just maybe any color there on the OpEx guide.

production see on. any mostly and I driven think of the back It's coming the don't by Do you? there. Mexico of differential production OpEx was Gulf impact guide the I the --

No, in pipeline improvement outage Gulf my include impact a Mexico. the But have think yes, does again, also coming from back. second like and Mexico I seeing remarks, in planned Central shutdown the that's quarter we -- production some with we're That's Gulf right. mentioned of I of prepared

see you the to So by get you in third the fourth and an operating cost. time quarter, should the improvement

Yes, John, second we're the at add U.S. trajectory. $XX.XX that $XX.XX and in QX outlooking quarter. actuals were LOE to for just to

comes Truist. next Neal from The question Dingmann with

-- there. think the question is I plans, like you're XX, Slide on particularly what I your Permian showing my around D&C

is of XX And get -- go it about rigs sense And I'm a something as they've also first wondering maybe of production I'm average. a it about year efficiencies continue This continue would talked more? on just down. some this plan? been, you quarter? running guess, with ramp that would ultimately cadence, if would to I let XX good sort to you the you and I suggest, your operational of be in all producing rigs after think shows running just Or as is kind kind You of be typical up just wondering it what trying -- the end

question. And half the the Like plan just and is into I we came of appreciate been of I Yes, Perfect. ramp the plan boarded earlier, as year. sequentially that's out. go kind we to down since second Yes. the the mentioned really,

good I'd say seeing time operational really area are we So slightly is efficiencies. improved. in to market every

that any consider we to may kind of capital just how the we'll year that into want as accelerate to that. So and respond how we go to understand

has that I well, to and a would say X of thing things cost these out note. we noted improvements couple played

our outcomes service efficiencies, seeing good operational just some Beyond we with work like as we are providers [indiscernible].

and of that balance able the our our relook And the let's as half core. say, in level is kind so we've and been more on going about up wise, hit year, of frac second XX% we utilization to, activity

more also that's pumping but for they per business. hours how manage both us year good our terms of frac that's their good providers So in for and

which think in so some acceleration with types operational And of are things savings delivering even our efficiencies. those pace these we will well

the as the to you'll goes that as we're of So in cadence start increase. you'll D&C the facilities like back the year, drop mentioned. heavy and year on production really capital year, see And this that I and see well, half

level going us And should and loaded that much forward up pace optimized looking into so then to set at more XXXX. that. And a

thinking next. on depending us options have going we'll with into this the but that's sort obviously, to take wants capital where year our so And of program into and Vicki

doing How That's days, typical which the the these what my Slides And I think XX quick again, on economics? curves Richard, well just your second. on the Permian on for I great is, Why view Delaware Midland I XX, Richard. you then was versus show and at you're you all ask bulk [indiscernible]. looking do but typical looking follow-up is for,

around wells, showing year in maybe you're XXX,XXX cheaper in BOE the think the a difference think after broad how BOE Midland, again, which you versus knowing just they're strokes, that wondering XXX,XXX the Del about in I the economics? around in

only benches secondary Same and Delaware matters. I a cost about costs. Yes. Basin bit and it costs, secondary drilling in the look Springs, benches, saying even the way you're shallower, I drilling get the same completion to the into it's can and a in the little a little mean, we you -- it's Bone at mean, they're the Delaware, lower drilling different And shallower leading these the cheaper. I bit little and to in not right. completion the Midland primary for think think

team's certainly, they it impacts costs. it's But way And about the development the think put play their so areas, see the facility on D&C. on through you together the

one drilled these we primary. with the was I we examples, recently, the returns we came on, wells. was Spring were to able after even And So that double for facilities. production, we the shallower some that know secondary And I the X Wolfcamp because years those here wells, think, about Bone production of had about reutilize wells reviewed lower had

of And how put economics. so make that timing of impact you can production together improvement on the the a tremendous that

not OpEx. being the about per And just costs, same costs, dollar you as think basins, of maintenance thing. we're Midland spent, most The so capital it the in allows production advantages all even optimize more things do the these but to balanced us to these make we in getting Basin facility all sure

the absolutely we cycle appreciate that at question full how So that's capital, the balancing look forward. return for looking and

Gruber with comes Citigroup. The Scott from next question

benches Can the the the on Permian success unconventional provide Permian. when included topic it on the the comes count to Bone how the of in higher? Springs? potentially And does in push you some Staying color secondary inventory your inventory count what's

how about in general can Bone in some Yes. I'll how we're thinking our some of address I terms just, perspective inventory of and the Spring. going maybe on that's give you

the we've also but the I'll drilled and in a question which Spring One able reduction. in production buckets. wells give of improvement Bone inventory, on of activity, cost appraisal improvements which replace So color to terms you your with couple in than years, little been more X come last to is

call only $XX of $XX but add for ultimately what those both and breakeven it, things, less move we they to inventory So us left, that it to going than less less we're than inventory. $XX, not than the gets then

unconventional $XX think or this the less of this in the Bone on year of will with XXX add slide inventory. had MBOE bulk that than of terms X was our that Spring of target the And than breakeven. A so one around bulk from as that in we will year we we adding about, in the unconventional, this come highlights third XXX improvement greater we of we highlighted, a -- had target a MBO. wells had promotion wells Those the highlighting of

$XX quarter, Bone breakeven. That aiming shallower at, the in to Spring there. Spring also New came, the from adds XXX, mentioned you less about half getting just even of some And out of Mexico so and the the Bone we're of than give had that, first wells that we in some but I we're color, things I for so when XX quarter look this first

year the it's a benches of which we're adding in the And total today, up wells secondary inventory not drilled what in it's as future. our only is that in so of going percentage drilling terms really low-cost but

so as of inventory And lot our we'll a It's it. over the times, this the being intensity to really few this we extend get low-cost able plan next that's of years. capital and what so prosecute

do the the those think you Or you're Got and the Wolfcamp? And potentially it. core how at Bone hitting infrastructure leveraging some of coming zones, with installed codeveloping about Springs, back looking mentioned? as then along you mainly

Yes.

where I say big doing I optimizing we years, zones how of, Midland, together. Obviously, call that's a part more co-development think that time. mean we lot next what the few the these in you're is I'd put -- at really the we same do a

One of to able a of barriers. the frac Delaware in bit the because little the being them, is sequence have more precision benefits

] maximize opportunities, or really reusing facilities, about a So co-development these savings opportunity we great of to from get more us don't [ cube the think have gives the I like which described. to we

Delaware. This we're secondary year, last think the benches were of north in around XX%. So year, XX% we I

of terms see prominent that development can sort our you becoming opportunity So of plans. in more

Kumar Nitin Mizuho. from with comes question next The

start quickly. I on just want to CrownRock

to the you're You deal, CrownRock. the the on quarter. from deal third still When per mentioned announced production BOE in we talked that track of day XXX,XXX about close had you

there see revisit close? that how Just as are you the things are see to if wanted and you could getting closer trending to

but have the believe, not the we'll will update on our it's what I quarter. -- going we've of sometime provide We or time, the production provide either any an just closed, have be definitely third update any certainly quarterly to the we next Because -- previously. don't really maybe have other We'll metrics probably that from provided meeting. in by we when CrownRock,

some requires are what I'd a that producer Oxy? in take You're what for initiative? there's around that movement of state Colorado a and to would sort in And big been like just production around thought your SBXX, fee which Great. shot. thoughts -- the look see a I on Want producers.

Yes.

agreement Colorado reached both and the -- the for a Colorado. that Colorado in was I think the in that was win-win the investments of people investors

the gas have industry fee bills scenario and Colorado feel could we collected. paying some have the it severely ballot with taken do and provides would together, that the government measures So fee that and to what to will something that do the some that paying away with and potential oil the you of along that the together, take all when positive a governor restricted be for fees

ozone as to the come scenario from an that justice us So doing help we we well along more that burdensome the our on not to environmental going help view will actually work and reduce the We for some working a as is on to other operations. with overly doable impact some for impact things of it's this, towards things be as be this think that doing will layer, which standpoint. things

that fee. It's good So a it's not And just a together, deal. putting all a full package it's deal.

Deckelbaum Cowen. with The next question comes TD from David

oil the ask perhaps Are that this some Algeria? I'm of you the impact so the Mexico, in bit I from wanted color other like PSE are your to from year? in just little is gassier a on cut progressing contributing of clear year. or the and some impact reduction numbers The Gulf on more the of seeing point XXX-basis guide contribution for this some what's areas just zones exclusively how core assets to

was to differently it portfolio. really Mexico we entirely trending that almost the Gulf No, shutdown. There's our else due have of nothing in

returns the a asset divestiture you call, be that to organically receiving deleveraging sales. It Appreciate the And emphasizing just more as flagged then in materialize? has higher candidates. to in like sounds flow be take or dollar that intention the on you value follow-up either intend longer that maybe Is the sales would that. that assets be otherwise might that might some on this around that would reflect to cash discussion more these flow from maybe of market cash theoretically delever asset signaling in here noncore contribution noncore and you

evaluate areas that decisions ensure we we what intended value noncore And That we the on want talk based to think don't just we're is want is to that's give. that the divestitures do we we're fact to everything message that about will what and from that intended of I able should interest to the a When we the right making perspective, not we do. we that say. be believe to we seeing something achieve. that was

question-and-answer turn this conference like Hollub remarks. Vicki back concludes closing the of any I would to to time, the our In for session. over interest

your questions and you like just joining rest great thank of day. your for to all I'd Have for our call. a

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

disconnect. now may You