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FANG Diamondback Energy

Participants
Adam T. Lawlis Diamondback Energy, Inc.
Travis D. Stice Diamondback Energy, Inc.
Michael L. Hollis Diamondback Energy, Inc.
Teresa L. Dick Diamondback Energy, Inc.
Kaes Van't Hof Diamondback Energy, Inc.
Paul S. Molnar Diamondback Energy, Inc.
David Kistler Simmons/Piper Jaffray
Neal D. Dingmann SunTrust Robinson Humphrey, Inc.
John Nelson Goldman Sachs & Co. LLC
Drew E. Venker Morgan Stanley & Co. LLC
Asit Sen Bank of America Merrill Lynch
Gail Nicholson KLR Group LLC
Jason A. Wangler Imperial Capital, LLC
Jeff Grampp Northland Securities, Inc.
Richard Merlin Tullis Capital One Securities, Inc.
Daniel Eugene McSpirit BMO Capital Markets (United States)
Michael Anthony Hall Heikkinen Energy Advisors LLC
Call transcript
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Operator

Good day, ladies and gentlemen, and welcome to the Diamondback Energy third quarter 2017 earnings conference call.

As a reminder, this conference is being recorded. I would now like to introduce your host for today's conference, Adam Lawlis, Director, Investor Relations. Sir, you may begin.

Adam T. Lawlis

Thank you, Simon. to third welcome call. XXXX and morning Diamondback quarter Energy's conference Good

Diamondback Stice, our reference COO; found can Representing will today, and on are updated website. During we which Tracy an Dick, call President Mike CEO; Hollis, investor CFO. presentation Diamondback's today and Travis be

materially forward-looking results We results variety those this plans, of due from filings During certain objectives, call, could caution the with in to performance statements the be concerning company's participants the on relating conference businesses. found you of these operations, actual that company's differ make and indicated the forward-looking are may statements financial Information that can factors. condition, SEC. factors these a to

The in the be turn Stice. In measures can earnings GAAP our the reconciliations Travis with afternoon. addition, make call non-GAAP we will I'll found appropriate issued reference release yesterday to to now over measures. certain

Travis D. Stice

you everyone, Thank Diamondback's call. thank you, third Welcome, conference for Adam. listening XXXX to and quarter

years company, strict capital past execution, transparency, maintaining concurrently the core Diamondback while low-cost operations a best-in-class three by five discipline. principles: Over operated and has as publicly-traded

sake, of and third price. we capital not cost Diamondback, business been our us no but last within never flow. discipline different for for foundation grown deliver efficiency on commodity cash for company XX cash Capital flow differentially at is along Diamondback strategy, operating The rewarded to rather strong as position by and within control. growth each operations-focused have of within production The quarter over about organization, management growth, are at concepts and in attractive any rewarded principles. growth's quarters new grow This production for we XXX% acreage the continued with not these and has operating flow nearly as was to our allows cash

until to three four Basin add Southern We completion crews. six as the prices. in plan operating as nine and We dedicated rig coming maintain given in and are rigs the today, rig current well Midland in weeks year-end, Basin, cadence commodity a tenth the operating Delaware this

As CapEx done match decrease and will we we just have we cash and or infrastructure drilling rig look ahead flow count like into historically. to accordingly, XXXX, increase operating

slide quarter full-cycle an share debt and capital on on corporate quarters for as evidenced employed The for has consistent over of production pivoted industry XXX% Diamondback a a matter, but focus return generating of growth X% always returns shown on has returns As emphasized had economics. adjusted each the past X, recently, Diamondback of has and that by peer-leading XXXX. the second over average since commentary four

With complete, to turn these now over the comments Mike. call now I'll

Michael L. Hollis

Travis. Thank you,

plans with four has and asset shows X, each possible currently Diamondback Diamondback adding lateral our for across lengths wells drill rigs wells well completion the million length completed as flow completed near of completed XX to cash of average crews continues capital drilled flow quarters. and and year-to-date, this as quarter-over-quarter. as discipline in flow coming efficiently our complete to time as lateral level of operating cash maintain maintained Slide Turning capital discipline generated free break-even X slide $XX has cash and the of to allows. quarter. up base over number XX% Diamondback average as running years,

margins Basin per industry-leading have lateral cash completed of shown $XXX XX%. year-to-date, As well under maintaining XX, in on we while slide cost Midland foot controlled the

pressure particularly work on inflations and mitigate the de-bundling efficiencies, are service pumping the services, continuing the by longer to to business. increasing of side across laterals We drilling Basin cost

demonstrate two Delaware the in IPs Turning across of the that XX-day Basin assets, performance ahead we new extended slide area. results to multiple XX, from strong have wells Southern well including data our

tests additional as and Spring Lower operated are Bone in of this XXXX. well a zone continues to expectations, first exceed result, Our evaluating Second we

first running our the have there in new drilling are operated rig We its Midland Delaware currently move Basin. to after the Southern plan and in pad rigs Basin three

We continue the to maximize netbacks by asset upgrading infrastructure building and across base.

are maintain the running continued currently this type and six areas and Basin, to XX Turning reserve in from outperform shows to Andrews with Slide plan wells rigs cadence. Midland impressive assets to our County, continuing curves. in the both we Howard performance auditor

Tracy. the With call complete, these now comments I'll turn over to

Teresa L. Dick

quarter $X.XX and Thank diluted adjusted our third was you, Diamondback's net per was share. share for non-cash net per income Mike. income $X.XX diluted XXXX derivatives

for costs Our cash was quarter-over-quarter operating quarter $XXX with adjusted million, up BOE. $X.XX the EBITDA of X% per

and free on cash properties, $XX During the million acquisitions. flow, spent $XXX generated drilling, Year-to-date, million $XX and infrastructure. have excluding completion on non-operated we quarter, Diamondback of million

from increase close a an As XXXX redetermination elect expected EBITDA billion in The slide to facility with to shown to on XXXX our and commitment $X.X November, million. billion the a will lead adjusted of our bank QX in $XXX current increase the of company liquidity. borrowing to with pro $X.X net on of third recommended from $X annualized the ended In forma Fall quarter billion. base ratio $XXX million X.X debt connection elected credit of XX, times commitment Diamondback

to currently. base Viper $XXX expects its from have increased borrowing to million Additionally, million $XXX

now X% I'll prior CapEx to over Our narrowing XXXX the guidance, full slide guidance. back production increased midpoint XX, presented on year turn call from Travis. was while

Travis D. Stice

our deliver operations. to quarter Thank a commitment another continued as and able result of was execution you, Diamondback to Tracy. low-cost great

increasing operating the We and cash production maintaining costs year. spend are capital while for guidance

to have many our that forward to capital within operating the price. commodity at grow nearly and years not match to XXXX, has As our budget we any look ability flow flow projected changed expect to for our differentially we strategy cash cash and

public of our to Before a who employees grown a Diamondback final line celebrated IPO. make over barrels in past years, an one five-year XX,XXX built to be employees the always to To a of we've production dozen amazing here and over a over have from and to company indebted couple with This our we days, remains successfully the as day. years thousand who your of from these a XXX loyalty; individual each determination, now company, now we've for a please of employees because couple October, collection you were what line to we'll day of future done. hard bright to for barrels our open comment. your I for the the talents, the and open questions, that Operator, questions. joined work, us want Thanks the five early anniversary In perseverance. you've trust, past of

Operator

Certainly.

comes Your the Kistler line with Dave Jaffray. of first Simmons/Piper question from

Your open. is line

David Kistler

and may elect words, return highlight In count a Good thinking capital on to about point morning, a guys. Real capital which flow, you going about of you cash other within activity how move different price but regimes. versus guys think rig when bit shareholders? quickly, return increase balancing X at growth you how you not there guys cash rather talk about to that return in slide little on forward? Can flow is

Travis D. Stice

into And right way great to is efficiency we current of cash we rigs. that flow cadence. those future, then rig that, a right get our free But to to the rig have feel that's think return conversations. Dave, to to cadence I can question, probably not-too-distant it somewhere we'll way think And flow cash true it a footprint, we conversations the going is XX something being about capital. believe about it's one the excess around that model shows in way generate of the to rig have consistently that maximum future. best model any is I out is about Once we the think created, redeployed that about you that get think XX like on that's think to to discretionary until to certainly acreage the able get our we that be

David Kistler

that, State a color. section, Second an series about and Bone And you presentation, about and Can of interval lower four the on talk how thinking a at allow wells. then those you're bit doing wells that been a possibility that guys that you're prosecuting when to extra upper looking that Spring, wells, existing there's about in decision with but inventory? timing incremental the the well adding that, and watching both you make would little per for work appreciate might a indicate I you for your maybe of that plan has talk Kelley Great,

Travis D. Stice

not a We've able our lot underwrote the be but we tried we machine. view be in the to of ton exciting story a of completed And May the to locations add well year – communicate how the trying a we a and data the the part about early May-ish going well next conservative one think it's Brigham more be don't doing feed year of historically, pretty on. of that been have to put of lot we that timeframe. this very I of locations, NAV the the S, science end, majority look about as Wolfcamp and to we're acquisition, important year. asset on we'll the have remember yet drilling this value in A. before Dave, we'll communicate every And development still we've that that probably and to we quarter and that to call way on still horizon, we're

the a still acquisition but is and So believe we cost little while to mirror the upside it's is lot pretty see to because the probably unrecognized, drill. model a excited. we it's has it's that it's Basin on in to our that real And reason Midland not unrealized easier what over-pressured, for us side. And going it's shallower closely slightly

good be it done, give us left So capital, work allocate there's Dave. us But we when – some a still really to gives will horizon.

David Kistler

a bit and that Great, that, costs service for little in? on up Delaware I or doing up differently or there, crept I little of crept that's that cost at guidance bit. inflation about one is you're creeping what the appreciate least Can a bit well just little a noticed one talk purely that me. you last

Kaes Van't Hof

guide to couple We're trying foot Delaware year, in with the the the more a that extra the beginning sand back per went comes will costs. of I half as of new so well. pounds foot Hey, versus X,XXX-pound say this and side Dave. we've a with well in Kaes lot the per in the on wide things. into came done Basin, year pretty We a on here. X,XXX year, jobs fluid

that we on drilling going fluid, the cost has say side, trying increase stim side. extra improvement I driven side figure there on a up. cycle we've continue will and our mix extra sand, days on It's drilling out our as location seen So completion location to cost bigger times guys really extra so forward. decrease the on time the on and just

David Kistler

work. much Great, added appreciate color, Thanks the I so and guys. good

Travis D. Stice

Dave. Thanks,

Operator

question SunTrust. Dingmann from Your with next comes of the Neal line

open. is line Your

Neal D. Dingmann

out. have on Travis, slide a all more was maybe like see going on other looking first things all. basically how versus Could others morning, good formations seem do, you can assumed talk color that you to there? my about, question, you what new either just your thought that certainly much seem XXXX? at Any through Good conservative all as spacing side that of about there. – slide far we that, assumptions I a You number X, could as think you in today add you you than

Travis D. Stice

mind, that Neal, know we away. own we done way communicate but you locations like you've per that minds like when number not of studied add science us in in we the conservative locations, reserve them to proves to what the do now we And things for section. have take we locations, try auditors. be like not And five the also of and that years, is typically in clearly only add our our to

to And what we've comments hear done so to you're the been to my conservatively number trying about talk going drive through adds I locations. continue of every the historically machine NAV about not location has back quarter. Again, Diamondback think to

on things we've think share, a capital that stand debt-adjusted really and matter return I on inspection. that cash I is generate think like what returns pretty per we flow high employed and basis done in full-cycle unique

Neal D. Dingmann

on team if little you just what bit could a might locations and see you and and just be see you And talk on on you then leasing, you on both M&A, Travis, Kaes your potentially any writing of off? potentially then the lastly,

Travis D. Stice

it lateral at in areas in ReWard XXs, working increased interest up for a into small bringing bought area, Each value From of instance, own they land leasing areas. we definitely excited with an that, interests so all the the to treats actively and we've XX% working their perspective, high essentially now continue bolt we're rig so but area as we're and done, a we on BD length team department, little amount the of a deals half forward. and trade in

On the larger see Tier M&A XXXX. side, X it's available been lot a of properties tough to in

that perspective, and, our that's buying overall cash our focused per very And the share seen asset from we something Permian we're flow accretive immediately base. on one, XXXX. really across think to, I two, haven't in

Neal D. Dingmann

Perfect. Thank you all.

Operator

Your with Goldman from line comes of John next Sachs. question the Nelson

Your line is open.

John Nelson

and environment. operating team a Good on congratulations to another morning, challenging the quarter in outstanding

Travis D. Stice

John. Thanks,

John Nelson

be Travis, providers, pass-throughs things the on rigs the talk the level, just your is a at providers? I lines. kind seeing year-to-date? staffed I Basin of, was already you're maybe have of helpful. those wondering and of of within you organization some kind those any levels? about comment of, service you being would of know if Where are, staffing maybe from to layer optimal, do to some That kind target we along a you can tightness from seeing sort are service And XX labor think yourselves your you come not kind between getting XX of longer-term of

Travis D. Stice

Sure.

think, I increases, you commodity demonstrated on business times our they starts in the so ask to industry price partners hearing to start John, has your when for service-side rate past staff. successful, start equipment and business build we qualified partners them to be that new to capital. new want their can to we crew And continue equipment working build want look, our with move,

so And earlier as guided. year, of and business we this anticipate our some part we've cycle increases it's

now consideration. I total the comments as ten was generate always Diamondback's we to I as of flow upon incumbent had think well people about total going mentioned now, a and you rigs At we've XXX rigs every some constraints. the not make cost taking XXX. talked well months team to free for have an year, cash to we X% fleet our internal cash number going long build prosecute five on right staffed right for little over three this employees, We're up. of our we're under comfortably very flow pick we're that that we're to last to those enough cost, as we When the ten to about It's Diamondback, our for of we to internally and leadership time rig plan. got about year, sure rig, and up increase look

prosecute rigs. best the likely the an players to feel history, plan our sit So able we'll we'll in with accordingly. growth continue we we've our through and gone unprecedented today those we comfortable very ten company's where but draft, And to in be find add to athletes

John Nelson

I imagine now estimate appreciate really higher guess in into little That's flow it And where question, spend within has that be in helpful. has where how second curious really strength pretty July debate was but my the of I will much internal comments a again, bit level, in but that XXXX, cash your the bought recent kind just oil changed prices? of I'd materially. we'll versus the

or potentially a would So range just hedging any that additional flow, could helpful. cash to for it's on thoughts to spend be you speak will us. how sure if But you just within that you whether make guidance protect wider

Travis D. Stice

believe answer the I'll with do strip, us focuses within we is to they because price to let everything oil Kaes it couple sure strategically And the strategy remind but I've second price rate our me business capital what lower asset as I I we then conservative earlier, we organization at we we're decision-makers the that I know commodity used what think hedging. discipline about about we you let conservative I'll actually commodity for And everybody hedging then talk the the price, a how When XX return. out. if Kaes strategy remind – get run oil the about price, to a always on making the we let audience, flow. on of and flow we're things because as is think talk highest is about cadence in run somewhere to talked We've as a until thing think higher, existing lower free a price price doing cash miss and base. organizationally. in going does generate second probably allocate is acreage of our our a about that XX-rig on cash Sure. commodity free and our on And what forces here teams

Kaes Van't Hof

one strip, flow. we so our And below about business and price John, plan cash production other point, basis, now at of every current $XX right dollar an million us annualized of on gives

at across maintain what on right those is on us the continue to right protection gives leasehold of rigs probably our basis time. it then five-rig drilling to So XX-month a forward And And adding think a both protect a back lot hedging, required we now minimum cadence. that's to the basins. we

and about look the we and by average next right look So months. for basically swaps that price XX over five now price oil our $XX multiply protected, we at and have them the protect rigs to

John Nelson

again the someone That's very let helpful. quarter. else on. hop Congrats I'll on

Travis D. Stice

Thanks, John.

Operator

of Morgan Your comes from the next Drew Venker with Stanley. line question

Your line open. is

Drew E. Venker

outstanding across limitations the as Midland strong the well. have? I your Travis, midstream performing very in whole the how But there, areas by was just Delaware position could if of just see it the curious like fast and or of quarter, allocation strong really lot of just legacy versus results. core logistics can you some considerations you hoping And had everyone. the rates return? across material Basin You've driven really morning, as a run to much looks Good portfolio some want you about as results really you this is capital

Kaes Van't Hof

side, on Hey, into the Basin and Midland I'll Midland Delaware. divide Yeah, it the the Drew.

to need now. the fast side, run really Basin Midland we On we as as can

make the be side the to high a rig And the Delaware, build I been the able infrastructure or and at on barrels on rigs. were we flow on Midland Basin. can cadence we freshwater to disposal running think operate side to three we've the sure down-cycle some fortunate through

to there We by then to XXXX. early QX, as and can of end move the Our fourth budgeted anticipate as in this the the to off year we rigs the fit sometime is we Delaware it's and had on major complete well. rig going side see be really, out items that we add infrastructure races

total then a as us quarter for So capital. to will return and into a infrastructure this percentage spend next, pretty infrastructure standard spend more probably and after of that we high a

Drew E. Venker

follow-up to really in resource that's a Spring you XX to to over in addition next A. And are Okay, just plans had Can size that Delaware year months up results the speak Bone strong or plan so? in helpful. next you've some the you the year, for plan next delineation or how for the what to the Wolfcamp

Kaes Van't Hof

The majority next on the A will on Delaware side. be spent Wolfcamp of still year capital our looking into

very some Bone Spring, by the of capital will Second should the see in Reeves you probably majority are vast tests Wolfcamp anticipate But the Third I County throughout maybe area Spring in be on half encouraged We so a tests. Delaware of spent XXXX. B the Bone Wolfcamp also year couple the the in our results the first some and A.

Drew E. Venker

Thanks.

Operator

Your next Bank Lynch. the Sen question Merrill America Asit comes of from with line of

is line open. Your

Asit Sen

change view and morning; world? today? questions just this just not you. service market on $XX-plus Travis, but how broadly FANG, – to how you in you good speak for the Thanks, Could as view view things a your your And is two oil broad

Travis D. Stice

do in line service to with constraints, of we predict business needs side. really we're that can't terms partners what in additional that that the we be we have first but expect our on Asit, going

we able an increases. service to growth. price price see before, as continue it impediment important been I with at grow As partners the the our points, in it's We've requesting, we think up, been But on to I our commodity even still see to side note to increases mentioned price. that hasn't goes business – some

Asit Sen

What be the since views XXXX. production on we on have industry disappointed that? on Permian Okay. to wanted your I on, are Travis, And that you today? on growth Could your hear thoughts in we debate

Travis D. Stice

that smart the people of lot study out production Permian. There's of total really coming a

But plan. I look in some think XXXX, future. particularly forecast are a you've commodity I of downside. indication to think what probably the you've surface, at there's so what trouble a XQ that in a how lot seen within on there's price can in the that intelligent more And to these think to in do on constraints seen And releases, past about people But and is I and possibility cash grows confidence of their some what's that if happened study view degree a macro in with a performance goes continues but industry put we talking can high flow. focuses if having not you Diamondback, the then that production is our just people rise future operators, accurately and Diamondback. surprise Diamondback good together again, of than prosecuting some the XQ

Asit Sen

right. stop in my question, Permian. the M&A broader And last I your macro on Travis, there, is I'll All thoughts promise

Travis D. Stice

I think as earlier Kaes commented on well. that a little bit

inventory fingerprints think either and out that in the in you're have, to we in current we grow that You're we looking our although that unless is, game the responsibility necessarily just But in business going a said be I can to development to in for we to that feel I've for a X do on that call to are high-quality be deals that shareholders. return in past have Tier business opportunities. development something continue should And the I very occurs lot our years And accretive of inventory what perspective from look to not Permian trade of our a Diamondback be with And not. we is shareholders. what every really or many the properties continue for our for don't it's future a marketplace. confident you're Basin, with seeing compelled the great active do

Asit Sen

the appreciate I you. color. Thank

Operator

of Gail with comes Nicholson KLR the question next Group. from Your line

open. is line Your

Gail Nicholson

think high-resolution doing Good get to to you how improve in that's help think guys up in zone that Delaware to will landing maybe X-D Can well or you Basin? seismic morning, shoot regards talk the incremental about you is proving some you that performance, to that regards the everyone. are more do in wells potential land maybe zone regards well do performance? you'll across important better in And XXXX,

Travis D. Stice

Gail, geosteer of let XX% where control; probably a Delaware give on very zone. of have landing vertical just how think efficiently Diamondback and drilled the well about or little seismic, broad zones. answer we exactly feel experience now, right have I'll and we let the we the of some time, within quite confident specifics In got you XX-foot window, me a the about Basin experience Basin, we've and the close over It's landing to don't X-D the the in the one, honestly, into a Midland the and XXX side. two, very right we're as but Midland have probably quite industry we; move Basin zone different time Paul high-res view we don't it, in the the for we wells zone the where we we

zone the $X.X is testing. million what Paul, shoot the will can different Basin, about we of that best help exactly where midpoint with? answer little landing us Kaes these that identified some intimated for we're which is we in have just don't bit, because horizons we're is reason Delaware doing specifically part of the So costs confidently you high-res the And, the a that our anticipate moving of

Paul S. Molnar

essentially potential zone to targeting as yes we're the far both a that it's additional of assets that's we've To the state-of-the-art, about all seismic. delineating better already it, We're excited in the participating it Southern question, zones We're our in spec in targeted. better shoot think miles, high-resolution your in a landing where of also and Right. really covers as delineating Delaware. square XXX we zones

there, have but we're don't data. much the As vertical far most XX-acre essentially Midland there's as just on assets our between spacing. of as Basin, In know, upside we we drilling wells

new additional zones seismic relatively do it's about wells excited we're it's we've it – to helpful in But the and to geosteer. seismic very date. help us drilled set we the the geosteering. steering cheap really easier some been in us getting or cost the Delaware help that that So much have in high-grade – to data And the we're and and

Travis D. Stice

following quantify have delta talked wondering significant can you between ESP And ESP Delaware. uplift versus in over the the then Great. production was versus guys utilizing seeing a gas I you you're lift gas about lift.

Travis D. Stice

although – sure routinely I I pay I No. much we the in on for the more incremental of know a oil But run ESP yet, Mike, we to ESPs, have costs ask slide not deck, to to Probably put how performance? I make these running ESPs. produce it cost guys the did because those

we when of run track future seeing for that's probably have is we paying we the and that internally, for Gail, ESPs, So – and But we uplift uplift dissemination. cost these are an ESPs. the

it think right think about until that's communicate details. to we the I more So can way

Gail Nicholson

the much the the Midland you're more Okay, going gap averaging day be per as feet there to, able great. that in can Midland? in to as do move you always on feet in curve last Delaware. and X,XXX to the you I'm going completions, up about the be X,XXX X,XXX completion Delaware, you you feet to how a sneak in day one learning one. get In guys to Are in going between as towards in the standpoint? efficient that move a Or you're is regards

Michael L. Hollis

Gail. difference, alluded between But a the side same They're schedule. to the crews. size is so Kaes This of as Delaware days much all kind the XX is running on have of the they week, Mike. Midland and maintenance frac efficiency of earlier, Hey, the the seven the really is day, the a The and not difference hours job.

bigger. – continue we the is up jobs may Delaware So on have change size, jobs can – little amount on to footage that to Delaware, side, we may as we're the may the we per we Midland difference between about we optimize much things in and the X,XXX in difference to as optimize cost, to down complete pump faster. come to the the as that a again, a have little bit would us because just And and foot. of the allow the size in pounds job and continue over continue the But that the and you'll time

Gail Nicholson

Thank great. Okay, you.

Operator

comes from with next question Wangler Your Capital. the of Imperial Jason line

Your line is open.

Jason A. Wangler

like as basins. to morning. the Good about looks Travis, – be you going four Hey. you're in six talk just curious rigs rigs kind and of two

XX think year do to XX the of even As you next to or get longer-term? rigs kind how rigs see that either down that you as level, you in breaking split about

Travis D. Stice

Yeah.

Kaes more total out we Delaware more us side. produce the the barrels want we see and we're all rigs continue that midstream by rigs to can our as allow midstream migrate to to have means the having midstream we efficiently fluid build I just and over infrastructure alluded place, that continue think down. produce as But those that got we in facilities which to make earlier we and able barrels when will to you gas oil as our bring efficiently structure sure as to the infrastructure there to those towards expenditures in

rigs same that side. we returning a equal you'll metrics ultimately, So either perspective, think both about, have areas on are the capital allocation from return

Jason A. Wangler

Okay.

more it's the infrastructure So else. than anything

just then acreage up across Okay. you some picked And the plays.

obviously, the things, clip, some but changing, to about side you're acreage on talked of quarter? you based at what like, in on that that just on obviously being did small – is to, pick still – a decent M&A maybe third the you something bolt-on able kind being up looks able Just pretty it do

Travis D. Stice

know good And just to our own that levels. really development handle about everything bringing quarterly are and business. of to level to Little Little teams need A, opportunities call asset Big business job leasehold, forward. is at and The job teams a really that our and the they bolt-ons, at on And good predict at do do are asset A. we but asset in our do. deals we A need the team it's knowing smart advance out, the business what think that really what about Those do the you touches what drives only in leasehold strategically we which those these not development and I it opportunities. do a stuff can't teams be negotiated We schedule. drilling know everything of going they basis able to a day day But Yeah. the really

Jason A. Wangler

back. I agree. Thanks. it turn I'll

Operator

Jeff next comes Capital. Your the Northland with from question of line Grampp

line open. is Your

Jeff Grampp

configurated I that of the Midland Really here slide that lateral laterals years and obviously the feet or clearly of that already X.X do Midland's X,XXX-ish not the wondering, couple on at? we over the potential five. the have detail. the you on potentially slide potentially But that be kind in guys. that had get such, kind expect guys Delaware morning, mile-ish but the longer case. to Or length Good have a just that worked Delaware. to should appreciate appreciate to question you the in on last is And

trying Just on to a that. get handle

Michael L. Hollis

This Jeff. is Hey, Absolutely. Mike.

the Northern tracks Southern the near XX,XXX-foot plus river, of acreage have the So all portion are river up the lateral lengths. Delaware in we of most the

lengths. up we legacy we go X,XXX As forward down into some everything but had that acquired a for lateral acreage, from we were we're XX,XXX-foot of Brigham, portions setting the lot that going feet most

or The XX,XXX-foot going X,XXX-foot the to norm. kind So exceptions is will of to that. be close be

So average forward. we're X,XXX for going to somewhere the X,XXX-foot that kind as to of looking closer

Travis D. Stice

team the continue to as continue the asset, to ago, we it length acquiring Pecos increase only eight we'll trade that ten continues and block up. trade lateral in there months our As to to

Jeff Grampp

Have far identified, those on both as had, I I similar just frontier lateral up guys Midland necessarily Okay, an efficient don't are that but on comfortable perfect. on lengths far are wondering be today? is you technology different And guess, really a conversations from on and follow guys on side? and per as the nearly far kind as efficiencies side, to as with cost that any tying or then a technology at where topic. as Delaware getting if a as as just know you the it if need stands foot issue of EUR changes there's well of obviously

Travis D. Stice

few each of Jeff, a these and couple the are to differences embedded questions there them. get there's move side difference Delaware in wells. a we Delaware kind in of fluid that and on try more the Midland do I'll Basins, to The one there between

XX,XXX-foot looking that at most Delaware push. as about companywide is as about seems on the the want definitely efficient we side XX,XXX be today. to far So to foot the we're But

the that amount to Delaware, foot fluid of looks in able the a well XX,XXX about from XX,XXX being move we Just well that have deliverability with foot right.

that that As we almost we plus several to the have lateral Basin are side, XX,XXX-foot go wells XX,XXX-foot Midland length. to

going very doable So XX,XXX frontier Midland very for feel the on standpoint, but still standpoint lease the a footers field we efficient of side. XX,XXX most is geometry footers, technical are Basin a to an from just XX,XXX-foot From doable. we have set standpoint up from

Jeff Grampp

there. guys. I'll the Perfect. right. time, leave All Thanks for it

Operator

Capital Your next from Tullis the of Richard comes with question line One.

open. Your line is

Richard Merlin Tullis

Good thanks. nice morning, Hey, Travis, quarter. everyone.

Travis D. Stice

Richard. Thanks,

Richard Merlin Tullis

You're welcome.

the rig you in You at earlier week. just rig price? about Are at to XXth point verify. talked adding current year next a early to I oil XXth coming wanted the the an this add little planning

Kaes Van't Hof

think in discussion. point we're in at we we're rig don't we're the XXXX. have think plan I $XX to XX definitely world, the world. there adding our happy And yet, I but in business some a $XX

going in today, happen think world, to I that's a sooner. are just $XX we little where a

rig the So consistently that starting on ago price and planning XX rig our flow respect. based projected we're days with oil is And and we budget business that XX, cash ahead this around and our work operating our updating probably had on time. conversations to XX now

I but yet to So conversations are can't commit into XXXX. any timeframe happening,

Richard Merlin Tullis

impact handle oil to that would ability to level Thanks, how gets looking to sustained current Kaes. XX And operationally if acquisitions term, on running for rigs forward? the longer calls that company's going the acreage, price larger a XX

Travis D. Stice

rigs. as to to want said, build we're rigs. I now XX to the And handle organization run appropriately You the suited XX the XX to

these deals people. be threshold. some a lot to building the time, out we X XX with don't coming of in XX So acquisitions from a perspective, point start development big At our have Again, that business to are organization we'd to to within see accordingly. going to larger fit rigs, get there Tier

our one ultimately, those make things the everything to consider we into sure is that of human takes as business leaders and consideration, development that's capital. responsibility So

wouldn't so we doing an to do, Richard, be So it impediment what it's a deal.

Richard Merlin Tullis

Okay, I it. appreciate that's helpful, Travis. And that's all me. for

Travis D. Stice

Thank you, Richard.

Operator

next from with Dan McSpirit Capital comes BMO the Your of question line Markets.

open. line Your is

Daniel Eugene McSpirit

as can't? morning. return dividend, either dividend it a sector you you, to If the and a is can consistent ultimate in shareholders paying generate Thank paying see free of that producer distinction could point Good we the a of revisit the subject do to or cash folks. flow sufficient

Travis D. Stice

illustrate going the for I've know, That's Diamondback. don't on now. industry. flow. quarters in for a about I'm done. is I within six Dan, to commentary to I've that not focus last tried has whole cash mentioned XX living weeks the new What has what commentary that The to Diamondback pivoted

If versus you more we've flow, we've what operating quarters add spent generated cash XX operating in flow. the cash actually

but It's of capital from to I we've And we've DNA. as is the So investor don't part way discipline matter think clearly future. an the discipline right know the I perspective, believes Diamondback and that returns go grown so a It's company. to our right where very the going what a now that's much to done. run think fundamentally always that business way is about

Daniel Eugene McSpirit

in plans, trouble stands about I Got from new those operators experienced production having field. It And other and the we appears hasn't comes honest the same Diamondback same. that appreciate less just suffered from it. and their suffered could the remarks slippage prosecuting maybe have if answer. producers the your revisit context

And Why same? be an for services? question and to the hasn't the tighter immune a somewhat Here's for could what labor how Diamondback suffered is obvious market company you.

Michael L. Hollis

I'll Dan, take this one.

necessarily focused sure we plan hear on to quarterly relentless execution, And planning was our those this we always our and toe operated that after XXXX. having stub into call. we bringing that every in XXXX I on other our frac to on which be we a and focus growth going think our going crew our were planned after about accordingly organization extra August, talk in supervision and to returned and about we year were fourth February. business sure had in in you there's from a operators, downturn I onsite didn't discussions like made sure in we've execution we don't XXXX, the made in and industry making but

Daniel Eugene McSpirit

Got have it. appreciate day. Thanks again, Again, a great answers. I the

Travis D. Stice

Dan. Thanks,

Operator

Your Energy next comes line of with Heikkinen Advisors. from Hall question the Michael

open. is line Your

Michael Anthony Hall

think then tailwinds perhaps you Thanks. headwinds by as spend in dollar what say as I to Midland on think to wanted you XXXX spent we program I time. and the Delaware the versus XXXX the the would just up key and the capital appreciate efficiency What some I the Basin guess high-level around our XXXX about XXXX? Basin we capital also broken are about efficiency, in questions versus hit program.

Paul S. Molnar

Delaware percentage capital XXXX, a the will be spent. obviously in total Michael, higher of

drilling and perspective, get days from a location bullish on very on I rate guys And our returns from cut increase perspective, out of we're think times cycle better to cost on of return I rate think there. the Delaware. a continue still and

Going down. total, horizontal to going push percentage the Midland to still production as Basin increase continues costs side, of to a our we're as cash

XXXX. As the from we is XX-plus look for perspective, LOE this need only today in we G&A perspective. netbacks the putting a set going increase we running to as is into an And up talked our about, organization infrastructure rigs on that

Michael Anthony Hall

the the design, from look X,XXX-foot of change productivity over big from you pretty landing forward broadly of as an a industry does years. guess a has Basin, completion improvement And in per the and Delaware that at tailwind I Basin both in and look the basin Diamondback? you How as Midland had zones, for couple change rate in last each et look cetera, assets

Travis D. Stice

of Delaware the say rate than higher change the in still looks Midland. I'd the

last outcomes Basin step-change or experience when there range happened. the in I think design smaller the three Midland years ago the than our on the given years, it today completion big is of side, a was range over five two

we different test on I designs. continue zones landing different side, the Delaware and So to mean completion

this the basin increased for of that at potential side the on performance is think point. I higher

Michael Anthony Hall

move my infrastructure level quarter. spend somewhat total in normalized does of like alluded And Diamondback? I past level down spend to first infrastructure capital the for last normalized you to total a Okay. end relative is, as more then you more percent as guess a on to capital coming What look XXXX of a

Travis D. Stice

then on be after these X% And probably volumes total and for sized just And just-in-time a long-term On lifting really, it's spent on infrastructure that, to be is it's adding of both grow. development. XX% full a because field the heavy that's basis, disposal the done oil water will basis on as pipelines going infrastructure. infrastructure the big basins capital to

Michael Anthony Hall

much. Perfect, thanks so

Operator

over There you. I to are CEO, this Stice, the back no call further Travis questions at time. turn

Travis D. Stice

everyone participating in again Thanks today's call. to

got questions, any Thanks again. the you've If us please using information contact provided. contact

Operator

gentlemen, conference concludes call. this today's and Ladies

disconnect. now may You