Expand Energy (EXE) 2 Aug 232023 Q2 Earnings call transcript

Good morning, and welcome to the Chesapeake Energy Second Quarter 2023 Conference Call. [Operator Instructions] Note this event is being recorded. I would now like to turn the conference over to Chris Ayres. Please go ahead.

Thank you, Marley. thank second joining operating quarter and to call results. everyone, Chesapeake's discuss XXXX morning, you our for today Good financial and and yesterday. Hopefully, our that chance a posted the release we website you've presentation updated our to to investor had press review

required call, including to not be place making such morning's press statements, financial including projections beliefs, expectations, statements of yesterday peers. regarding which statements. results forward-looking measures, recognize reference by which and will SEC should and statements, forward-looking by there be are periods factors factors update of to cause and our facilitate also we you note reliance across and other Please non-GAAP undue forecasts, underlying as We Please cannot to differ applicable our statements. no with undertake any that may and confirmed identified refer comparisons we the future to law, this materially from in statements, forward-looking consist number duty our During statements such existing on assumptions release will filings. performance information, any goals, a except discussed that help that actual certain

GAAP can a use to any measure non-GAAP For we be our the measure nearest website. reconciliation on corresponding and found

the a up me overview open of are the and and to Nick give we call Nick today will will brief on Josh our With Dell'Osso, Q&A. Mohit Viets. Singh then results, teleconference

So with teleconference turn the over to that, you Nick. now thank again and

Q&A. deliver to and on you continue quarter, operating of quick our then Thank and outstanding cycles. execute we jump our shareholders a to strategy results highlight had an Good I'll recent for call. value and joining We this morning, sustainable through accomplishments, give to we'll some everyone.

the has basin-leading think efficiency and innings get of industry strong, show our we if asked Our go. the of equation. several to our the continues opportunities some enhance innovative pleased We've things remains that at have the field I run performance. team that operating We to highlighted level find I'm all ways performance out to often today

We we fleet us start, combination this rig These a X XX,XXX-foot To machine of grading and company technologies advancements side and our improved We reached the a total quarter. rapidly drilling in behind drill efficiencies second learning, year fastest equipment. than in included a the X records of saw increase best This of recent of our in frac allowed to data during on operations well. depth zipper wells under which lateral, a previous days. to relative to to both high strong yield Marcellus as history the team the the analytics, our operations. in XX,XXX XX% and greater equipment new completion results leading feet Marcellus X equally deployed Haynesville

our and of development team strong In the strategy. push drilling completion performance, our addition continues to to the boundary

much million well hybrid the cost sections a our I'm average similar impact. a more for our acreage spend X over by per lower deliver to than while design efficient length in XX% Upper extended Our need extended Marcellus basin years. single productivity the the the incremental the and stranded pleased see across increased well our prolific decreasing Marcellus wellbore, program, in the multiple well. last entire has also laterals combined The per design footage greater Upper drilling lower into foot. with Marcellus vertical to lateral per surface NPV and eliminating Marcellus reducing capital accretive $X yields Marcellus in Overall,

Moving to Haynesville. the

efforts Resulting of to XX our in between to per has million near-term feet. Our Combination has our uplift working $X XX,XXX X,XXX-foot lateral NPV effort our through incremental to X%. million leasing approximately acreage leasing and optimize projects interest location. trades an position of $X nearly increased by growth locations acreage on all converted of

through paying offload offloads. to also capacity effort last pressures midstream year Haynesville through over and lower the the production. have to our ongoing expansions in is systems Our debottleneck and line additional a increase we higher recognized dividends XX% And

As we the be with optimize also continue in ready. to to Haynesville, our LNG we're path our operations progressing importantly

our deliver Our a recent Lake with Gunvor previously exposure. liquefaction linked LNG Lake with Charles agreement Charles on for agreement -- agreement JKM recent for our price announced to advances gas

strength allocate competitive the value-oriented on today's way I'm In in impactful really a production innovations, advantage capital voluntarily for prudent value in on in shareholders, this addition and a the TILs we financial current for reducing in periods given to deferring and lean means focus pleased can This low market. creation In prices is our and year pricing. stronger us and levels smarter market, that cycles. decisions of to enables flexibility through the activity

will of quarter at half second half be our first lower our X/X reached Bcfe While by spuds, CapEx. approximately day, guidance rig quarterly our as production activity completions Our second high the approximately measured end per and than XXXX X.X

have shares our dividend. As spend buy increased continue activities, we we reduce on base and our to development back

agencies. reaching the credit inventory as adding credit rating. net year and and In half We're our on more lease from we cost valuable acreage. to debt strong to acre acreage we we to to an at in to received added total and path position add of Today, $X,XXX of continue our about return Year-to-date, footprint our expect Marcellus recent second we opportunities length. strategically have the Haynesville doing of addition acres all an to program, is average on XX%, are X improving investment-grade our our our and our approximately in using cap XX,XXX rating per this focused upgrades

of progress. will our balance further strengthened through exit, continues We Eagle completion sheet the expect be that our to Ford which

and resulted million Our prices being fallen so capital have year, allocation this than strategy while far $XXX prioritizes to significantly. shareholder returns in returned has shareholders more gas

we raised Our X.X% this which base in and returned growing approach includes a year-to-date which $XXX quarter. has stable dividend, million

buyback returned including our million $XXX repurchases, Our year-to-date, share returned has which program, procyclical has variable quarter. second the dividend, million $XXX during which countercyclical $XXX in and million

today's We remain a the only shares consistently repurchasing market. in and company large-cap gas paying dividend

attention our strategic lastly, address means levels And our year, our capital rest The and will to levels our of we on should remain us the our focused continue what activity will maximizing commitment the adjust execute conditions steadfast discipline pillars, strength company to to should will which not for be. that's allows Pleased our prudent activity further We'll and underlying your exactly decisions make of value patient shareholders. on maintain and waiver. we to remain approach warrant. value, questions. adjust Turning to long-term we'll in further

if line. open so you'll the operator, And

begin from from first question-and-answer Goldman Instructions] [Operator the now question will session. We comes Sachs. Our Umang Choudhary

is My really question. first question a two-pronged

And two, commodity. volatility have repurchase your would share the influence of the through contracyclical and First, talked of underlying cadence about balance optionality macro gas and the sheet, extent thoughts love the thoughts hedging given risk fortress hedging? you a purchase macro. maintaining also How the of management around of your the the does around

great Those Sure. questions. start. I'll are

now. year. We year. So TILs from respond. been even Those deferred pretty activity perspective, think has cuts up activity earlier in really First, the than cuts seen cutting this macro early through announced a well We the the activity. We cuts are We've We showing cut activity. demand showed pretty up. industry the supply challenged

been think or certainly decisions year, make and 'XX. own cash to it's We'll it of profile. that's been continue to kinds the off out gas some pulled smoothed those we We approach helpful. think that we our helpful flow So as in

LNG cut of exact we poised from have demand at of think a We the that. through activity coming capacity timing perspective we're supply-demand a doing, that for form is as or What the as industry of have not growing course, the we individually online. market recovery an levels and is predicting great in

tangible let improving on we'll our strength be to bring back. we signs move to talk look front our us. expect for that's that, when leaning financial getting we'll what show kinds in some decisions. the market So that like are things about really of to activity I'm out and I way those before of And don't a make We really

cycles smart and times a you I don't just great that. have decisions We there's and to do without to be financial have decisions, at prudent leaning through think of when too continue make strength I they're ride have uncertainty. and in think to able hard to prudent lot to

So about that. good we feel

how From do offset a to us a hedging add perspective, hedges cash X-quarter very around out our year. to a That to continue looking basis. nice on has It we've well. a rolling view flows approach offers methodical hedging really to with going exactly this We're served that.

us think it is things a the of activity. year. hedge friction about in you'll changes to rest way One offset see, levels we and changes activity to through the is those allow how cost smooth really helps -- That a that out reduces that in of we that of the sizable them the course, gain these in pretty have of

One of been that the a and Northeast. this of lot basis point get pretty year, in I'd it's tough, we as out challenged hedges you've seen particularly But our things have differentials other is the well. really

basis just basis to those well serving And So those it's not it's index hedges. us are as hedging, offset hedges differentials. an

that and there hedging income in NYMEX. the up hedges to there our statement in addition they in So are on lines basis show realized embedded

progressing about increase really about And I the that. then to a in cadence, role the We the think announced buyback, lastly, well with ago, a buyback, that. we and plays year macro buyback guess, we're certainly, how our our

We have $XXX million remaining.

the program the to carry cash going have that really the it cash quite to feel conditions buyback into of for We're deploy lot a half maximizes we that think as and time. the warrant. to shareholders that out progress But for we buyback we second having to prudently over We good to And value ultimately, of finish when we'll and look about buyback. against year. flexibility accelerate our continue expect opportunities

your Slide lot the forward? design you've your response. the I the one what confidence of operations on things helpful of do And side lower add and Very just And Upper thoughts about Marcellus the design, A program in it is of well love equation. On Appalachia, hybrid interesting in. how If talked in expect single X, more the execution? the combining Marcellus today? a around wellbore. going you in Would much can

Umang.

So of X these. date, to executed we've

would is execute I high. our in our ability confidence to say so quite And

well an designs. W-shaped I the design U-turn think hybrid to as years we've wells, of The done well with ability Texas, wells. South is we've innovative complex a that. we've example really proven in our be company, done through

we I and be from we assets innovative that to that really create and think own. teams the ability have capture value technical operational incremental these so And proven our have and

X half work year. will We as we these through this more execute of the back about of

value enhance program. stated, inventory the to execute our and constantly we've kind from the have at assets. position, in we're of the remaining we As yet critiquing all around looking to XX acreage opportunities

excited pretty about we're the done, we're So our that well confident and presented ability to to execute here we in hybrid highly what we've design today.

a of by go mean, at life that if as finding this well great add longer about you it's Umang, us opportunities with of remaining. the well been plays would developed talked to some to to there's all about So central opportunities in core to design laterals just laterals. a wells. leasing have the look around acreage could is all add and program we later of We I longer and know the Haynesville, if what back shorter think really across add there kinds way otherwise with value some the trading in you that. in as that short stranded hybrid early development play, that both these laterals I And adding the there for acreage the of back areas as more And longer program. for

development creating really is to some great ultimately ways think of a that opportunities drill well. the continue bring front of development these lateral by us, we'll the opportunities an to this So to long to lateral smaller for something about back program.

Great. Makes . a so you lot Thank sense. much. of

comes And from go Silverstein from our next Josh ahead. question UBS. Please.

process. Ford still sale with package you is ongoing the Nick, the remaining mentioned Eagle

do And environment price it an a this proceeds something give opportunities all Is the execute for on? towards those you're is Just sheet divested, then shareholder here waiting about higher return natural then? right as go there? that if this the we're thinking now, to balance gas update buyback with just is where

programs we're sale incremental from Josh, we've with return how about the along buybacks. all talked towards leaning

an I ongoing how markets So about once to financing done. assets. transaction. finish with mind year get have front been for strong. you It's that's that the think a and obviously. an we're we it I been to us, will hope But expect get here. that, that continue multiple super talk is The It's can line we're to making challenging have parties process and progress complete of think seeking It to to we process. It's something been not sell interesting good

rigs. the come in in the kind talk Haynesville, optionality of leaving you're rigs from lower X then what prices you're stay you've Can the level? how And declines around or rig don't if count? managing to you about with X XXX XXXX for the And flexibility

Yes.

-- we're is so this And Josh.

dropping So we're right middle the rigs. of in

we'll In from to rigs X go X this week. fact,

to we as are X-year environment. we will I rig And back I presented matters. commodity so . Previously, to the in I thoughtful to say going productive that's we just important get maintain is would that indicated to gas do be we rebound year. And case that's continue when attempt a to to it's think we'll monitor. this a flexibility that that price being supply our our think that avoid presented more needed. sixth we allow as January. signal something constructive we're just that We end created And what market going think into into about the outlook, absolutely maintain of really, to capacity. very think a coming any simply We we're inefficiencies

improve think balance really really don't being ultimately back feel so our We're do. the which strong happy assets conditions for And today and is us to our market being out we front and key and that. into get is just to patient, pressure us any sheet affords We the what it. us pull flexible, for really to run

have we Bank please from ahead. a America. And from Leggate of question go Doug now Doug,

or wants a Josh, one Thank have you of to which slightly micro question. Nick I know I don't you this, take different but

Haynesville. One from we be in DUC what get be seems the at it is U.S. pushbacks between to hearing the of we look markets a the But big whatever, very whether overhang new sort in in and industry gas what the when our of the seems company. the Baris, on EIA, think data, of brince there Rystad to we're dynamics

DUC I So you're reporting could your looks if us it the maybe wonder are like tell your what backlog agencies seeing with DUC what and looks convert -- you what backlog like?

overstated. overhang indicate numbers track we metric that this implication something We commonly would and the for of of would But a accurately. It's Haynesville Yes, were metric that to course, generally is I could the there type you align in this it a And that the of Josh. believe is agree if is a DUCs. supply data public potentially think lot impact on of noise would current relatively that any most complex in over that to XXX recovery. is there's

or many contribute that, may So maybe rig which being I think there's a can't noncore crew on a frac several be fall that, in included reasons into creating. zones which really you for have is of how production mismatches units

don't get completed. wells a do maybe mechanical also, that reasons be simply to you taken will abandoned that, that case will have never out then of just And of

drilling. is what the have So pads own extract put the beam, of actually we What we're data roughly on data see our in think best see X/X us inventory is we XX%. majority our looking that from really are I they If it sitting at Haynesville actively DUC public the at to were set. these would sources, we

they're sense not in therefore, word. any so And of considered DUCs the true

us XX% consider true to with about And so DUCs. that be leaves we would what

frac put per about with in crews, you you working you that X And normal pad, about pretty If run into that leaves consider X you would inventory. pads. if a wells X

Haynesville opposed that put you where that implication maybe and XXX the have to overstated. publishers. closer the roughly X/X XXX DUCs ultimately, something probably the of And XXX to this, to maybe would as is again, So other stated

into So again, maybe internal industry our to the whole. just using sits data back as that's of a where kind

to it. in That's helpful largely just color, sense is now was question. the with understanding I wanted you're Is the activity check is Eagle that, of My Josh. done kind going really hopefully Ford. a I follow-up but way My simple with

realize your cadence us which has your a be. down to can capital, to little capital would extent normally It I that at your of where come under looks you quite a bit. you So the looking is sustaining

So 'XX current say would main what Ford, portfolio maybe go outlook looks and you beyond capital that ex and forward Eagle for capital outlook there.

the And development Yes. Josh Doug, can really I'll add. Haynesville. both And production. down crew. in the a with It's profile to start maintain times, frac rigs Haynesville. and accelerate you this, something adding you and But sustaining we may either about really obviously, changed to takes X the X different what slow or us in for way have the at about Marcellus rigs is or Marcellus hasn't that by around that capital that and around either subtracting think can it in

And so to frac exact an there's maintenance level crews a to there. ratio of rigs that equate

a right that little But below now, design. that we're in

And recovery so into of market level looking back see more always that the maintain growth the go the and ability next increase year we'll we for should the above true need we for market we that signals and then clear the and as go market the volumes. to to supply,

us. modeling think going that's in a pretty X about to in get when capital X Marcellus, rigs you you So about maintenance good Haynesville, the level rigs for think us,

Our Matt go comes TPH. next question from from Matt, Portillo please ahead.

with start Maybe question for off just Josh. a to

expansion the tail talk And Could you've you operational expectations bit additional forward? about has of infrastructure know expect do like occurred. going just looks the at I year-to-date. outperforming seen a level. talked Haynesville, been of some the On you gains field the asset the you some about

Yes.

out as looks there as of to related new infrastructure. the performance half and I it Haynesville of our maybe first wells, everything line would the strong relatively year, first far in largely just very expectations. with comment have We through is seen asset

And one we XXXX the the the very gathering large year And is things a of at from our part outperformance last of that was largely worked interconnects adjacent so from And between systems. coming introducing base. TILs. is hard

a response pressure operations have that is we so us work as upset, has time marketing to with our relative quickly And flow. see to pressure allowed there to system And downtime center. allowed simply ability asset midstream underlying then a alarming And our we our adding do what that's into And any the Haynesville. in forecast. redirect midstream associated that's is own the less that to to translates demonstrating in teams what's to the our of And strength outages. ultimately potentially it's really, outproduce just what us

Great. a know follow-up guys LNG then active And you been I front. on question. have the quite

You're making great some progress there.

negotiations LNG evolved investment how things. curious side the those reaching and potentially grade forward have position your could Just on how potentially maybe improve going of

Matt. I'll is Mohit. that. Yes, take This

We today. are with we where stand very pleased

you in if heads So March, with we recall, Gunvor. agreement our announced of

high And a One have LNG. LNG means was working we've be just methodology used through. that X way of to facility. So -- of do here, we with accessibility, has we to the grade high-grade facilities the gas which dimensions. [indiscernible] going is we since then, is the Gunvor then it's field from the which that And different to that been buyer liquefy transporting to our jointly -- would

is be the The we liquefaction of second course, much would have to pay. how do one pricing, fees which

versus it was gets treated treatment, The derivative the third, to accounting as not. which whether important also was us

just requirements, which but the get front taking ton grade, that of the facility a feels very you we us creative with on one And not FID. would that, is credit have least ways not which a made that referenced will we've up to circumventing last some So being fourth And investment good. the well. be as but of come progress the

line us. of declaring to gets probability the that for time a what them FID So that on works is

using So saw, to Lake recently based on graded facilities. of a have we facility. that methodology, Transfer signed a high Charles heads with on few Energy we you And agreement the

towards the is efforts That's XX% clearly I'm on. you progress Charles. a in seller. see This the now get LNG. of a X announcing end there And very, the buyer should you put proud excited. say signaled Gunvor to very has taking have linked our being a of of to willing lot being deals parties willing we previously that pretty conversations that's the the similar step Lake going So want made. in it through production the state. to There's not involved us and future. We And to us team XX% then that and that. we There's to

Zach next comes Our question Parham from Zach. from JPMorgan.

of just Eagle million some first payments cash $X to there quarter. is the you the on I the with year? $XX indicates guess tax this Can tax the just expectation taxes But pieces updated sale. of payments moving with Yes, numbers that the for guidance what million your know the year, cash the Ford that taxes. I cash cash includes in and tax clarify second associated for half were

is Mohit. Zach,this Yes,

divestitures. year out, $X So it to million the to and our you outflow as pointed also, about is net million between stays base the guidance should $XX again, full remains referenced, changed you unchanged. our us also as for cash you $X is still think to the way million. has million. is What that That $XX The business includes

clarify, full to just the second the half for is for And or that year?

the the full for year. full for year. that's No, That's

In in slide pretty deflation the Haynesville a detail X%. given little area. any the granular on of just some level operating Okay. you more And talk Can follow-up. versus of there? about activity deflation seeing X% total you're in you deck, just deflation provided you deflation, one seeing differences the then to the Marcellus highlighting declines cost Are

behave deflation Zach, of Haynesville expect similarly. -- some this we in inflation differential We Josh. just we the relative I is like to the Marcellus, would somewhat level Yes, see to think the saw

dependent flexibility And or just the something that and long-term under. going somewhat we're the depend terms today. though in I to Marcellus, the also in think have contract going contractual service contracting the we which to under have really Haynesville we at be upon that's working whereas

the a think I more little of what's I much Haynesville. be more it in probably bit your But the the see think dependent you of timing so going expect think . to would fundamentals deflation each to it basin. situation I in upon than contract long is is So term, occurring

And our question from from next Donnes Truist. comes Bert

the just talk maybe liquefaction? fact? for in locking the negotiations. guys on finding the transfer LNG more to bit And Chesapeake? and pull comfortably? the that additional everybody next you against you existing curtain then after out want each you'll going dynamic about if the your energy are a just far I very you power agreements with maybe describe other? follow you Or little and back are of more question. on volumes you step then could these focused these into negotiations what's backfill in some up Is so kind Or Are Can focused on is of these liquefaction volumes pitting

remains another is view is plan way And take LNG The get we strategy diversification the we point production. on announced Mohit. our When I'll unchanged for of LNG initially this side us. was just Bert, sales that. us. the it, the for to

of XX% we a sort look Haynesville. at point say on say, the to should overall CGML be or LNG is the of MX index, XX% is and any portfolio just sales our just -- similar, So that XX% to production in we the when intent view to let's some sales XX% an Tetco to to linked

that open wide eyes in diversification be go do of we money. be periods will will in time that where there the Now

this of on reduce the returns the the doing back be to of out for And XX-plus in risk will years we duration duration money. be portfolio which overall a the these contracts. by But when is are will shareholders it the the expectation There at that diversification. looking long-term the we risk of and time our returns, underpins periods

and that So that's behind unchanged. the broad this, strategy remains

the of about part these is your LNG The power question tight-knit universe dynamics in pretty second The conversations. group.

said, of We have the would X.X then go suddenly heads and with the we inbounds to received as working of since that together doing And have at number a we high announce we least. past inroads is facilities I we say years in what has have agreement what Chesapeake did and of interest great created want through. I the been was that -- our of in that Gunvor, once making graded lot working March, some been for first

pretty to visibility the So as we were announcing it's traction a we suddenly that heads heads -- very Lake -- increased of and agreement led signed you our the announcing to expect these. and earlier, these agreement getting. see And of of to more space we have excited us and some competitive of that Charles, with think we we increased more were that referenced should us that be

That's great. shifting gears. then And

I but earlier, guys front, have on it on think cash buyback kind of you you touched the obviously large a balance.

it You talk opportunistic And buybacks amount to your you buybacks are optionality some cash Or a maybe what significant Could cash float? use for based free just investors in market? now. you the about you are probably a drivers? reserving your of pushing linked to some flow. to on -- that that? you for so want aren't your amount market to of Is percentage certain your of for do how guys have do internal Just formula

a get want more you how color just when to enter decide little I the market. on to So

wanting Nick. about is -- how said doing think We that going us. valued those are warehouse about we're this of point just a before, drives how things to We we've think to not approach All to certainly Yes, in what about sure at repurchases. consistent we make relevant cash. we're that think time, any and we

don't There's think we this cash is year. about We delivering over. a think macro of to come and environment of shareholders. think definitely the a we expect gas. But been back be to want we lot to lot in uncertainty volatility about. about what So that And volatility been there's

program that We've positioned and the uncertainty, like even fact been active. to to active continue buyback be we've that been active and we're with our with

about to about the deploy in do of for prudent and think have it, in some good We way the thing having the that buyback cash nice the to when right a but on going opportunities second through can. a shareholders we're for And looking we're think for is times now, pretty to maintained more, approach be balance we we flexibility. to We the look we'll you sheet. think right So going do half the long term. that's year cash that

So holding have think a thing. investors, with specific certainly we good balance but cash talk about is we a don't that we that a number

have the expect we'll quite now. unfolds lot more. to I like before, But to continue we'll it, and us we for So to a . and deploy would how do I continue us. And we'll see to be said active. for right opportunities market look

question from . Paul a have now we Diamond And Citigroup. from

a -- on and hybrid term, X, in long between Haynesville Haynesville Marcellus. Slide Bossier? that view transferred wells you you quick the over question guys to highlighted tech about that the Just guys talking that Does is down the wells

Yes. is Paul, Josh. this

think types challenging unique to certain replicate general I other and require the that for between another. practices opportunities makes true that basins. technology rock as to bit one X characteristics There's Haynesville that distances, constantly bud and be probably and the differences operational looking we're differences is formations going more a little between Marcellus the vertical

accomplish. looks So today, phenomenal things. teams would would never of like capable are I say tough I our say doing But that because never. feat a to pretty Paul, pretty some

your On follow-up And just any expectations well. & on that was could those of rigs, all you guys the Understood. I kind stand bit deflationary one as a going you Slide wondering you a a or than are they that Is give pumping, X, on then coming breakdown out bit others? color Or like mid-single-digit there few pressure gave of down a in OCTG, more if around Logistics? quick more Sand range? right that environment. see

that Yes. Paul, take I'll again.

for is is us side. OCTG I probably be to So how that the over surplus the Imports capacity think There's a I been mill right easiest really about general see on impactful could just it the mean, high, think of one year. has and inventory. U.S. last now, healthy are

little And that's bit surplus. of so created a

not so about, And I the it's think, really, magnitude.

we go, be going through material we but part we out inventories think pipe as think we it's just work that. that quite have I it's savings need that to to of And bought advance in timing. our

start the we that. realizing into benefits get we as of so quarter, fourth And the

the I maybe just think a others, more as little bit described sticky. being

rig dependent the counts is be to Permian. the be really by upon to but in basins, impacted activity just in the going where like going places not gas going, see we It's Haynesville

good And pumping in I seeing pressure so about side. we now, feel I softening the think think right pretty

with really think diesel commodities prices logistical being lower under then which contracts. rigs on sand. longer-term are low, today, typically relatively I are And up-priced modestly oil rigs, support help cost

rates. And be contract have situation so and your to really a managed you rigs position renegotiate that, at to to go in to in bring realize lower in have order

out, market up just that well good spot QX that want to to of the level. we But efficiency this the for from primed improvements a really think changes to year to to a in that of it X% also has taken I that is point work exclude are that. the X% road pretty still pace, magnitude the to And done where going QX roughly a think reduction date of year. the we that's us conditions will I or in -- The lateraling. we So down we've to next see air. do any think is And

So upside potentially that we into well as XXXX. on some as head

next Scott question RBC our Hanold from is And Capital. from

look get are look And like gas 'XX but sounded Nick, kind obviously, it point more, all there where you outlook. just you if Is it sense what the your Is trigger decisions pace, this that activity a it focused give is of hedging? on relative is us to to more specifically it the can So when you basis? Is macro are a you some time. year? where off But your rigs price? storage are looking hold add leads somewhat it at in in specific of I those of what cautious at points optimistic, on guess, really you that you'd just for to amount in constructive on? next back you're

We're question. great the Scott, fundamentals. Yes, focused on

as through focused level. we relative where spring, that doing what of is the out come winter and market storage look to production like that we're certainly what this positions So on storage fall, into winter to ends the

is things, knows. that of the winter face of be, wild then year one time we of in. course, factor All this And no what those always will big card

inaccurate. of highly Early usually are predictions weather

side, then in basis. gas power those. to of demand in And That the we'll things strong. LNG we'll predictions for put domestic very And but see weather-adjusted Are despite the happens for We watch nicely a with the seeing longer-term of will So much they demand. pay impactful, we performed the attention demand timing winter course, for don't also We're holding? chunky. are gen see recession to of be watch to continuing for the facilities. pullback and demand very well and demand gas And very trends stock hold. country. gas on quite what importantly, very on economic the then, up growth for We're those hold in

those are better anybody schedules feel we're will there else if impact has information We that We on on so than us. those projects. reading pretty those to projects. any about good have what changes And don't

and therefore market the to I of lean actually again, the market gaining supply really but time we the that. we'll share front the line out market fundamentals is think in projects, would far we needs that confidence of same show the those of before view that in us in allow

definitely like monitoring of It very situation. a more of sounds kind real-time Okay.

appreciate certainly, So I that.

you that you don't Scott, we're point the in about X mind is talking me the though, at there we're X would and now, if I Marcellus right in Haynesville. rigs adding

we've being So maintenance. indicated X as each in talking play we're our really what about rig below

it production by us trajectory would change that's our design. not of the much. for amount the that to is And So change of take

to that wanted really market, a you don't prudent a of of want is place friction to soft pull in our all a have there's think capital costs capital we but in We so manner hedge, also tremendous for pivot. why a that's back be and can we us. we where And that allocate in working

And take move that market us market, going when our not to decide when it's part. to it's respond to we the time a heroic the on so to shows respond, ready we're

book, this offers look it wide. the add you fairly and of downside feel so hedge When Mohit. very -- the that hedges good I if is at may of the hedging, The on our Scott, our we've very, Bcf about width last added we callers protection disclosure. the since XXX about

the the downside. same at time, protects while retains us the it upside So from

good bare about plays So the at retaining floors quite if But the we with the upside the time, scenario then callers. the bullish the same bit that feel through through new collars. out, are white very a the we plays then of out,

And all question guess, a bit bolt-ons doing. Got strategic and Okay. M&A the I on you tactical is my are follow-up obviously, little it.

big the Is on mean -- picture, M&A? are the with like what cash out you opportunity what the your are financing with form of Just right provide some side. that balance, M&A things us more out could there of that your about is parties car you does Ford Eagle the appetite issued of now? there sense attractive? bit moving a you countercyclical attractive But there with forward. little be we I that on of bolt-ons a And just talk to there? of the some Is scale things give see being

attention close to really paying what's always We're available.

stay have of for lot willing We've months attractive, And are with transact. price And a that's to things. a lot but of side. quiet in things what acquisition so people attractive seller seller the motivated are contact to or a you several now have a about we there on that been at

if price, do always for acreage reasonable us We don't feel want at we've at always there's be. probably you've be sellers spread there's their we'll uncertainty as to there available may think what a and But while. a strategic least bid-ask direction in, there's I in seen add. rush a appetite we patient now be you So patient been an interested that tells a that the part But to good or of things anything. to that

have comes we'll We we to to. see what way. something And financial do strength plenty so do and our should of watch decide

appreciate at And strategic so important when advantage. you that is able of to be time attractive there because that others to aggressive, real are that raising a think is point really flexibility financial as assets not I part If that's are buy good maybe to a we maintain. a

So we for can we on hold to and to try us. those that, to come to things wait

from Read Wells from comes Roger question Fargo. next Our

something more or I'd Thanks. questions last Good follow I latter to, maybe proactive and terms up committing to level part to that here on the the maybe favorable, guess, reactive guess gets get be beyond maintenance as of service couple in of of in drilling like your your willingness to macro 'XX morning. of contracts, the to 'XX. of I up terms a

look materials does it's pressure contract do status or look there? how about whether an status -- contract pumping over rigs compared your how So we you does side, maybe market think current just the the XX XX months? next, or to ideal you How as to the say, as current

Roger, this is Josh.

we so of this will will when year. renewal up rigs, as roughly as half of fleet, those in of of come end far end be half As X the at the by contracts roughly our week, our go, look of the of for that rig of kind the service

of with pretty that on to side, turns say I actually it's half end the that of half flexibility shorter-term up the that's take the the So come contracts, we one some out contract, of the have similar but have frac on on potentially to softer And fleet a that. would advantage roughly will of longer-term markets. is we it We're at and year.

positioned flexibility think So tenors flexibility for provide think by important our always be adjustments will really going we cost. ultimately business. is to well design. is to able think to structural the that We us to contract lower our work action we're we actually to pretty and advantage lead That's that across maintaining

which market rather wait I is or it earlier, anticipate. than the guess, needs I for more to production think the you trying willingness And you'll you I answered to show then question, mean,

Just clarify if to I understood wanted directly. comment that

see earlier shape to very as feel just a commenting Yes, as market was We XXXX fact, the Roger, to is needed. there need the gas far is, in true. aggressively Nick Josh until That we absolutely adding don't activity this start Acro, signals that are more. want again clear back as bit And up here. little

flexibility. again, . really we affords that company us So strength it's And fairly the the of dynamic. think, flexibility But think matters. we

environment the think should understand where for year. sort this forward, But linear going prices I taxes. obligations. you. cash on for think guidance is between question about better gas any follow-up my this a of we Mohit, cash how about tax probably expectation as there then is we And and price Okay.

you Yes, a year, for outlay prices One the much this little Roger, we our they there's this tax overpaying that's us a last linked from on That XQ business how to weakening, divestitures. in initially. how year doing would of is certainly, When the pay would components. when received year, have a And an unknown. base And refund one and think know To IRS, -- that that of prices is had was we of when what because the just the bit overpaid the couple because think they Mohit. numbers. last the tax estimates generating. of are point, Yes, of you started be leakage, other is gas what remember, we pretty prices then unknown were the you much we are well had the settled your based the strengthening. if is they on

what So would to remain. is unknown prices Unfortunately, do. will an that the as volatility

to basis, just all-in in the business. on reiterate, an including is divestitures base guidance, the Our as said, I

guidance guidance now the we us between best net $XX X million cat of million still give for $ to point. up adding And the all that's components. flow remains Our different can probably

Subash And our Chandra from from Benchmark. at last question time, we'll take this

Great.

something guess, you So as there, a Nick, X-part not and the I effort maybe separate that's being and liquefaction a stakes about But equity on LNG. I talked think imminent. question

you First if list. Lake then I handicap on opportunities? get on think? the Charles makes that that Obviously, many how the do have projects thoughts this assume FID is if you And is had any those LNG other part you updated to year,

sure invest that us. will done sense ever has been Not make momentum would us. and stakes equity be, and consider very to successful for great. projects right that We've that on we talked we've it projects, structure handful afraid far, of to came If along. done our for proven not We've does, project, so said in the we've so for lately, about that -- Subash, that. that, a deal to if we've the

give of I And dollars where because you exposure relatively tell to expect to modest so great could that, things but of place think a like that, We necessarily in we're a return program. you our that a could derisking would project. that be not you're a capital compared about coming. to similar rate it's amount where and

anticipating it open but to now. it not necessarily So right

been others where On lot projects FID-ed a to about that a our of what a FID-ed, the try slide handful we point There's construction, gets the projects show have there. we are tracking there there. that that we've out deck in and got of of are are what going are think get under to

to really for demand We of continue that think lot about estimates the what market, And are and about LNG means we this of all LNG to more. a broadly. the internationally that need

to It's around going tremendous they're gas the And reliable for continues to fuel. to see as think it's resources. you're consumers internationally resources to a a those export as where FID-ed. The a more lower advantage U.S. lower economy an an that advantage continue economies then growing, broadly gas carbon projects to the advantage an to gas I long we connect volume demand up are hold has of needed. lower to should fuel. perspective, cost estimates be and have an the to that So importing markets It's the -- from carbon get

for momentum more of So I there's plenty think LNG.

chain. and continue, we're I well think value it I to positioned that pertain think in will

the Great. activity. and of My on sort follow-up is industry Haynesville

I spot drops were in were guys the the recall, was And quarter. slow third by to those happen if rig even you view that of think I calling your rig drops on would most though think for start. they I

So then slow stop. would down, about not or just now, it if and give take,

just And hold thoughts to required so on if and the are case replacement rigs what wanted flat? that's your still production

Yes.

changes those all now. made have we So

of get things that the You're seeing that to effects we now. this Marcellus. year we we that that smooth And some one did some had some of particularly and effects levels the we've the predicted in activity fall TILs early defer to out or is of the sooner did to that right reduced production

there way you in on otherwise, where gas. that you're up our and seeing drop a might conditions a that where lot had what defer We're can so pull then a market TILs production allow demand been the in of production activity a more take given for in is And place back cycle makes show numbers sense of stronger decision-making. in for and to thoughtful we position see the

a middle rig So run to in of other pad and don't down it's in words, a that drilling. shut out you have the

you money you costs the wells. where You a you're of finish changes decision better through then spending have make reduce and started that doing, you there front of plans can already what you've you in in friction to activity work

how we've out for happy We're a this pretty gone. Modest So we a think seeing changes to have from that's that to to doing about that what and standpoint. year. been production like have big good. how on really we're We able That's play pull, impact us lever activity to it. pull

for and So the Marcellus X in And we're how the we both Haynesville, I that's feel about really for then currently said good of us. plays. gone X in before, at short those that's of maintenance like rigs X

supply recover, go to And what doing just add right see you'll towards really the the doing always should we're option both shows is so the now, growth, have market us we're rig focused back market those. that. would what in see of And a the us required. need we on we until market as But

I about maybe are what's of well. that of that production you a yes. is level will industry clarify, that as firm activity. some will DUC industry Haynesville was Sorry, publicly the if hold of fraction views mirror Nick. experiencing. To count stated And wondering you're think truly kind if And what overstated if And Haynesville

process, Haynesville reduced think how we we of analysis things And really is to DUC when has running about rigs below. of think a one also to that expand completion, the the that cycle short an crews. are bit, are through or that year, wells about of wells completions maintenance in course, waiting with has what completion walked additional of moving truly that term We level this a think tight. adding and the through And of cycle underlying to But count, all times but count the and activity rig numbers of that the ratio relatively the affect been can Josh good that's now and on Yes. you we're rig he happens. of for market you times that activity the the cadence with completions, that happened reduced is seeing walked in has reduced wells

crews to market starting and now some to tight. stay are But You completion see go completions the sidelines there. for has the been

activity of the That is below maybe So effect. I at a think maintenance. levels lag a place that in mains Haynesville has or now are

to supply So think X around the to activity has see up. up bit. wait the showing that to you're should still going for X do of made industry last the But and the decisions months right a the in we production show Haynesville, from we for

any closing remarks. Dell'Osso our concludes the would I over And back to for like turn this question-and-answer session. to Nick conference

for reduced the a certainly morning. good We all this you feel year company. thank where Well, we're for in but prices, performance It's of been time really gas this about strong year. our

return really value with to we proud we're for have look for this We the you to to seeing questions the are we the Thanks performance, again setup forward Thanks. that of time, and of guys always continue out available pleased after road. call the offline way on shareholders for your proud future. and and that

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

now disconnect. You may