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FANG Diamondback Energy

Participants
Adam Lawlis VP, IR
Travis Stice CEO & Director
Michael Hollis President, COO & Director
Kaes Van’t Hof CFO & EVP, Business Development
Neal Dingmann SunTrust Robinson Humphrey
Brian Singer Goldman Sachs Group
Derrick Whitfield Stifel, Nicolaus & Company
Gail Nicholson Stephens Inc.
Jeffrey Grampp Northland Capital Markets
Ryan Todd Simmons & Company International
David Deckelbaum Cowen and Company
Asit Sen Bank of America Merrill Lynch
Timothy Rezvan Oppenheimer
Andrew Venker Morgan Stanley
Jeoffrey Lambujon Tudor, Pickering, Holt & Co.
Charles Meade Johnson Rice & Company
Richard Tullis Capital One Securities
Michael Hall Heikkinen Energy Advisors
Jason Wangler Imperial Capital
Leo Mariani KeyBanc Capital Markets
Call transcript
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Operator

Good day, ladies and gentlemen, and welcome to the Diamondback Energy First Quarter 2019 Earnings Conference Call. [Operator Instructions].

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

Adam Lawlis

Sidney. you, Thank welcome Call. and Energy's Quarter First Good to Conference XXXX morning, Diamondback Representing Mike Stice, COO; Travis Diamondback are today CEO; Hof, Kaes CFO. Hollis, Van’t and President

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

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

Travis Stice

employees organization credit Adam. for XXXX, take you acquisition the all Energen Diamondback and the together to $XX of the ensured while within closing the I'm minute larger day, the growing XXXX navigated to to quarter everyone, of for to while Call. XXX capital learned $X a significantly the XXXX from and the strength the operating to seamlessly. Diamondback of operations costs you, Energen new, the got in in Quarter as XXXX this to working and on Welcome, fast thank of X% quarter through first employees listening former executing we addition have going Conference December fourth XXXX our activity and of combined start on our a acquisition integrating rate First presented Diamondback's XXX,XXX each other, in a structure the and Diamondback to production colleagues company. barrels from fourth cutting We practices quarter prices drop scale. Energen plan oil in Diamondback still larger shown a start full exit and all After with showcased and by Both billion off low-cost our that in give the of immediately family. and our best Thank the and results over of pause group have employees a

quarter generated spent a capital on and EBITDA quarter costs. between and Development production have to guidance synergies acreage cash are counties. perspective, of we in push this as $X prune billion definitive on by the our execution results to per presented expected, From the to July lost presentation transactions Diamondback revised Energen divest first and CapEx XX synergy budget. of in full a wells noncore well year. of XXXX a be cash and we costs, Capital well close merger and as quarter XXX our the These production in operating in capital from properties back is expected grow to to lowered previously expectations half to wells result, we this account from executed of exceed and and expectations will $XXX last with continue maintaining August. are for targets to first achieve than cost disclosed the operating with reflect to We the look $X million drive per barrel from Our assets earlier regardless commodity year $XXX and the acquired these $X.X to Corporate strategy or for Crockett as budget the in expected the on barrel is pace XXX to no have down Diamondback, and intention we X, our Diamondback efficiency the in $X.XX important count million on G&A. Reagan completed agreements discipline and bring conventional including to price. our billion signing by year Energen

We a structure the cost these barrel $X.XX higher guidance account assets. for our also by operating LOE of to lowered year full

subsidiary, contributed in acquisition also with the midstream Energen we market-based Midstream, acquired and oil Secondly, Rattler place. gathering in saltwater disposal contracts our into assets the

outlook capital year of $X down the program actively a of are up have flow budgeting our the to control improvement held be billion in authorized rolled and program we some in of program form commodity budget the process, given in a our the cash remaining mineral oil prices fixed the contracts XXXX do to move improvement the we capital as in and confidence direct realizations from at and legacy Coast. is working off in differential the this stock operations the the use expected business we free free plan our cash reflection this flow Lastly, more XXXX. on Gulf and have to assets of to a and has announcement, quarter, repurchase in we executed This of free and return so XXXX Most expect dropping $XX XXXX. Viper level our With of million over generate flow WTI. barrels to royalty of this to at $XXX end cash have our in at point proceeds expect Diamondback Board for important Directors from in set original clear

maintain a stock see returned to on spend given is free flow be our Diamondback buying stockholders. and every we outlook dollar of free acquisitions. total visible grounded will or represents back and dividend of feel repurchase allocation debt in simply, program pure the continuing capital remain Over acquisition cash At to this capital our our dividend, a level, a catalysts Excess Put step is a into the above will growth, strategy the our deep cash acreage. flow consistent the will return growth today not achieving leading X opportunity next growth and of objective, consistently we Tier inventory large-cap best the term, our at supporting ahead. philosophy evolution reducing return but pure-play. high commune on and replace our the year-over-year this primary multiple long growing

operator, now With comments line for these questions. open the complete, please

Operator

[Operator Instructions].

Our from Neal comes question with first SunTrust. Dingmann

Neal Dingmann

guess in news Could today what you material return is your buyback? release do -- in you growth would impressive production obviously guess slides, for at I'm right mentioned, go level out material with what getting Travis, that expectations assuming the future to announcement. the biggest growth the initiative -- years, all in that in forecast into you've around this speak target shareholder out continue? given all still the I I buyback continue assuming the this the stated XX% stay laid being had to stock that or you you

Travis Stice

XX%, XX%, rate guidance I But our look between rate going to growth our not if be. Neal. I word growth multiyear was upcoming year, is in growth. Sure, going this on Obviously, what XX% think we're big numbers you. key give years, think law you look, eventually going up around of the with the year, catch what to And but last we're it's here and the be at growing to still is

going of we I we're than going are to spend continue part think capital return going to shareholders total less to continue we as to philosophy. return to our -- we're to continue make, and

Neal Dingmann

trying flow what, acquisitions, one rate just are cash in I something just of or equity include acquisition, the that to I'm on I'm I'm look run context just you generating to you've a that disclosed, follow-up. buy at then think I'm VNOM the good And basically maybe the first you budget? wondering trying that what capital a your whole billion Okay. then wondering -- really getting if acreage talk investments, quarter. bit, to capital is around, the to and back you trying $XXX-ish to in -- about stock. what I'm budget is in good and frame needing Could

Kaes Van’t Hof

our billion which and $X we midstream that or capital are the that's subsidiary. and of And to going billion, onetime is consider budget, one. our Rattler mean in proceeds, that equity On that, $X.X Gray in Oak purchases, investments I'll we Neal, be asset infrastructure. to budget. completion, whether drilling I held pipelines, don't sales Yes. take really in have the top the asset EPIC Yes, and

grow cash free going be really, dividend is flow CapEx plan the operating to to and So cash message budget that continuously. we less flow key the the is

Neal Dingmann

won't back you debt that is to So Kaes, with stock, or that something? use buy you'll cash flow that do the

Kaes Van’t Hof

plans. No No.

Operator

line And with Singer following Sachs. question from of Brian Goldman our comes the

Brian Singer

plan of paying cash Following priorities to about investors, to expecting and versus down expected the to repurchase return and flow asset expected sales cash you actual up on little proceeds? free repurchase? the versus the bit can And time share versus revolver portion share are just to a monetization you talk relative actual the how then

Travis Stice

debt. to committed We've Brian. Sure, reducing our

you I we'll of pretty probably think to answer is the quickly. that? part and -- ratio around our get that here reduced leverage back do our want to debt Kaes, X.X,

Kaes Van’t Hof

on in buyback. we this of with at QX in going We're Brian. flow or go let flow billion, to shareholders $X.X down back through any The free the is now year $XXX million get right see model proceeds free by QX and $XXX then the going million revolver majority It's piece. The in of Yes. really of commodity that what is nearly to that cash to strip. alone price, cash form XXXX the this onetime

Brian Singer

broader shifting in consolidation. in assets And participate never landscape, the the shy Great. consolidation to to you've then been

asset you further sale, that Can like terms about the pruning announced strategy. both for scale You of out landscape see and talked talk about grow acquisitions bolt-on with transactions there, to you the that then just here M&A? the larger-scale prune what noncore potential and you in further asset

Travis Stice

of a bolt-ons, do where Diamondback's operation those. part just take We've we're continue advantage that our prowess, to acquisition, to little doing been going are DNA, so clear of the can pretty we

then in make As assets not out your hands. it's on larger any just think And hands I'm going look assets really portfolio we late-life to good sense your assets did, they majority that deals to or at capital look larger the or and or are more the $XXX there. whether not allocator, late-life low-value figure else's those always I And the to at them. speculate by on someone million out important of what of those selling deals,

the very and create we know can't accomplished like the on and is that rather what that's is, really control with in is delivering best outlet presented. what M&A. really my job that clearly to what to on feel job, to goes my I And speculate which low-cost on I today, best-in-class value. for I really operations value drive industry responsibility through I -- execution shareholders My can think working own discuss just what and we shareholder It's or company. the

Operator

question following from Whitfield line with our of And comes Derrick the Stifel.

Derrick Whitfield

Congrats strong repurchase. meaningful to decision update on share pursue your a

Travis Stice

Derrick. Thank you,

Derrick Whitfield

this related question topic Brian's for open-ended question. to is an Travis, on last For you a

views your of spreadsheets, been status, your of you among degree, increasing think bit you've the and with to all the companies advantaged success create overhead your As on come really along forma former I among the made premium quite to peers synergies And we could merits interest M&A midcap is live with on perceived. to the has some know, you mergers a in share Based guys pro us bellweather but that progression a and scale midcap I topic than investors. that? from zero imagine harder execution and

Travis Stice

is want again, does the the I in But talking days. pristine what can trying to the Yes. and learned know just job what on operations what Certainly, on I execution. to think than don't industry I'm going these on focus Diamondback we early that's the shareholders really to execution press, in And and what Diamondback. what that represent what's all read own a And best-in-class my And we're in spreadsheet. M&A what space accomplish. to and say, the and that's want be deliver harder Derrick, I the, know, spokesman -- I focused really about about is I really, lot on control in I goes that is I world. to larger message our the

Derrick Whitfield

my as track increasingly this you Mike. follow-up, last lower has mentioned remarkable. night, I then for in guys And record your completed but perhaps sir. cost driving been Completely, to well

would Frankenstein to wells cost where your basins, were those that place lateral? well peripheral assume you in theoretically in If

Michael Hollis

Absolutely, Derrick.

that limit what push find at well, look that. keeps on the and of basins, we And both So moving. to always that technical always strive technical kind we limit is we

X or we're of keep a so moving. past So the limits they year some technical we had ago,

today. continue direct I going than control. because with organization But have growing efficiency to don't is is cost that you So the answer drive continually said, a that's that for learning, a and we're lower it to answer

Operator

our line Gail And from of Stephens. following question the with comes Nicholson

Gail Nicholson

when that whole, great at it's that think continues one a guys and XX that you -- and improving exist of look think shareholder one XX I standpoint area Diamondback driving that what fruit to the do -- can structure, but cost from on, business that expenses the concentration incremental the Travis, so at a margin it look that that at just well. still improve lowering overall months you you to what next is you cash low-hanging might do return? When do, just

Travis Stice

And their it's thing. on the that Gail, role delivering on can get you operations the got trouble all just organization not I one And execution. inordinately I It's think good if actually just really Yes. we've one things of thing. in really fit and yourself low-cost that's an focus you that understands into in where that believe those. combination

too. cost, because sometimes well, an we'll efficiency focus it's that emerging our items continually so translates low that spend it overall And embrace more you even if drive as If is to on technology. those well, if had to

the of trying -- also going the to but employees, do concept. overall things embraced try as for impressed best that to And So there's just the way we're penny. squeeze quickly do now, to to greatest have that I'm impact how every really look have that, nothing, Diamondback in all We, course, everyone to we are our size that on doubled new with November in portfolio. essentially our organization

Gail Nicholson

are And around a area to of give kind there? Can that very the out results. well more then looking what down And just run little done the at what color going about that then standpoint drilled needs co be that this you well-aligned infrastructure quarter, you think guys from forward? of solid and

Travis Stice

impressed very got midstream that well, the been how our we've some companies and area drilled to that wells value going there it's of actually we're in is develop of as in with of wells down Viper Pecos our to which drilled -- initial we're minerals for County. a Yes. too, investors. driving we we've the there, with down our And example some down actively business Diamondback's Rattler now. business so that developing also acquiring Obviously, lot partner, best are And really good has a different that continue

Operator

question And Capital. our Jeff comes Northland following Grampp from line the of with

Jeffrey Grampp

but on Travis, over understand you efficiencies completed only sure set in it we And that your CapEx go expect not rise you XXXX should were up just there where said Should think well how does mechanically, guidance. curtail strict drilling setting were you a count budget also to point -- within -- completed count guys the the dollar rigs be of your kind program? And is higher. maintaining spending prepared within remarks, completions if at guys I the that but Diamondback wanted I focus driving guess well make how wouldn't do budget and/or for in you to up scenario? type that about of a

Kaes Van’t Hof

year. go Yes. Jeff, well to over planning no, gross that not for we're the count XXX

target. That's half I the budget think it certainly completed lower of count. would the our well our hit us that be very to with higher half hard for

the to So that the on beating best we midpoint side guidance. think midpoint like about the of things and at

$X.X we're internally $X got to billion. So we budget, thinking to with billion billion $X.XX here, beat the

Jeffrey Grampp

offer on of if any sale guys you the to are some X good Okay. made a the guys side prune books. kind that But any you is the to And into there in the feel XX on proactive equation the obviously, you inventory. other imagine in always of business of internally open anything say, kind got someone next, months? compelled additional there, cash turn there for I else to assets? Is you prune backdated effort nice

Travis Stice

able -- It that about we're that. is you've is aware focused as right done. initiatives Jeff, where to synergies allocators, lot as we've a of right I'm got on always tell other That's of represents G&A very time. now, that proud big one delivery that on I'll working But said, now. our got we're get we the the you be acquisition I at to divestiture talked Again, Yes. capital of

so opportunity, of at. maintaining these objectives, take now, focused we're on delivering low-cost right And on operations. a said, we'll like on I focus look our some other corporate But any like

Operator

the with line Energy. question from next of Ryan our comes Todd And Simmons

Ryan Todd

guess clearly a feel primary on on bottom whether particularly quarter are drivers capital. can -- tracking. deploy cost which lower-than-expected Maybe side, cost was probably are you in the D&C it's whether talk CapEx synergies budget? performance half impressive, downside CapEx, of budget the mean makes is given you And sense early, of see at about those the you the But follow-up what and I a how the I sustainable? potential or to our although -- least risk the

Kaes Van’t Hof

cut that We in on activity X in dropped we activity and December we've the And to and right Yes. that delivered immediately Ryan, dropped a quarter. we're spreads going promise made first drilling cut away. rigs. X

from push I we've think Energen learned the organization, vice And we've down versa. folks service and on of the things a lot combined to side. cost the started costs

it's a side first but going So to lot some help the from the be in of quarter. permanent service

Ryan Todd

another a maybe to in that on -- really follow-up Permian. beyond Basin to scale basin as Great. not the suggesting to And X scale, be M&A in your We've longer-term large but having operator on scale being to referred then optimal you as XX recently meant the got that benefit about they another the decreases, move seems Permian that compete somewhere be operator worry and much and in rigs between there's the the necessary one that.

position the scale -- there. the I you think about are a how have need of good obviously scale and guys think your scale or type you to of long you in and basin that have mean You do amount compete? term

Kaes Van’t Hof

commentary. opinion. That's peer's to up I'm Yes. Ryan, going any to on not comment their

merger Diamondback seeing certainly the where two we in a were We're benefits seen post on that benefit side of prior deal. operations Energen between the about being a together. we and put of us, have certainly on the to August cost side companies the scale and For the ton of benefits speaking Energy,

Travis Stice

we've think unique rig we from executors that's lowest-cost we're it's remains And rig, being rig. to dependent horizontal operator And Look, rigs are right the rigs, of grown X that to the focus regardless I rigs. whether on is horizontal the and cadence running what X the our Brian, XX of our best-in-class company operators, where rigs XX rigs. today, whether on each is be over essentially no and XX or low-cost XX or company, objective organizational is,

know to what number do are, right rigs don't whatever I to the calibrate rigs and number of how that we're is best-in-class So of going operator. I be the lowest-cost know but running, Diamondback

strategy requires that Just also able that. that, bigger nice And Diamondback. infrastructure. the your is execution control we piece of Larger company company we your thing your in the and other to to to you -- to the be your which why that so reason importance scale infrastructure of inside an you get, is maintain that's add and and set infrastructure bigger to up that's is can that development being got the being have a control infrastructure, we've why of able control we're

Operator

And Cowen. our of the next of Deckelbaum comes question line from David

David Deckelbaum

contract on it heading that has service point? Midland are per this well been most ahead Where expecting -- XXXX. Just guess the the coming at guys like side you're you cost realizing looks of the savings likely foot on into It of of the from schedule another -- realized. in take be curious out do see $XX side. to you side the on to I seem

cycle well their Midland do certain Delaware look So haven't costs, on $XX then see on like way on the realized When when up some we've to the the extent, we costs And made sort Delaware -- service another particularly, how that do just yet out? at elements Basin side on times. side? you Delaware, the that you catching the to looking, and looks take of over it

Kaes Van’t Hof

we Midland first. I'll in the was additional January. first And $XX in David, question $XX, captured what take the the side the

already is demonstrated we've So place, and in quarter. that that this

on we're On as Delaware side development the so we side. the are Midland the in going far not of again, as forward, Delaware side along going the

fourth based inning. again, on of So terms third, kind

getting seeing we're reducing casing the what wells removing results. drilling these a we're better in wells, changes how techniques, lot So on development, completion and of casing strings, designs, we're pad doing

next higher today you're the first to to compared quarter. a in we So what rate is change Delaware see But the numbers going over period of in the presented near-term saw side. that Midland the we

David Deckelbaum

I Got just, question. that. then And appreciate second it. my

think in about this in you from I I that you XX% having If PDP the wells coming of XXXX, of it better nonproductive base year if into recall. solely of put XX% is a of the benefit out cadence an decline that and there Is a managing think function downtime? going guys XXXX Or about online? -- assumed of sort of terms

Kaes Van’t Hof

wells just mean growth X rigs of on to operated really to and you over that back down It's we longer really the slowing the rate, treadmill I to from look the benefit more natural to time if today, going right? having XXXX increase period. That's went XX.

a Now X going X year decline PDP your is rate with rigs rigs looking naturally, us or and slow. at XX anymore, to not today add

mean we I about from to that declining XXXX see So XXXX. X% by

Operator

our following America. question with comes And Sen Bank Asit of from

Asit Sen

the Appreciate at flow the WTI. $XX cash XXXX for guidance free

And laid the secondary anything in wondering any has you have beyond factored or that additional also count in? Just CapEx out synergies assumption synergies rig you that factoring what been number? are

Kaes Van’t Hof

is perspective, we're more that service add it's capital the factoring bit XXXX. being natural XX stays I Asit, From at rigs if where mean to or side. biggest it a in X don't in higher recalibrated I than is, us rigs things to expect a oil that today. we're the cost X

XXXX, into perspective. number. to a from to So help down majority into be conservatism QX That's baked barrels marketing that of in year. there's better significantly our But the Gulf importantly, this Most a our exporting Coast. we'll contracts realization some us oil looking get going

Asit Sen

there size steady like several actually And an the my stayed fairly it XX, on wondering on of just thoughts optimal number sides has where you is the footprint next your looks over on question average Is in pad completed if both that quarters. Slide opportunity length where And Okay. based past evolving the lateral you have to current basin. see higher? any push

Kaes Van’t Hof

from handle Mike size, the optimal lateral a that X,XXX-foot around while. level let be completed I'll going a we're length, for but to pad

development to we sure laterals Our goal is XX,XXX-foot portfolio. business perspective make from least our at a across have whole

to margin, at XXX makes the a feet from capital certainly going but moving we're every difference efficiency a perspective. be So

Michael Hollis

job Asit, as And team have side, Basin of figuring XX-well Again, our well fluid great on XX-, go the have factors it's what Basin each in optimal. a go Basin, pads There's lot areas. And Midland large the out wells one into the that of of makes as is lot the produce we than area-specific. Delaware the of if on pads. you a to the what does Midland And actually, that geographic we side. a course, more

the smaller. typically, sizes pad So will be

near level the we're X- that four have a to now. but up we the in Basin won't X-, it So grow in that Over somewhere there, to grow, may typically to Midland the as well term. right time, pads side

Operator

our And Tim from comes question following Oppenheimer. Rezvan with

Timothy Rezvan

I a wanted move topics switch and to Carlyle JV. bit the to

wells or night. kind of of was on refresher of could You a give if heels couple very the announced strong And a of what that bit in that, a really, wondering that you drilling that JV how on I last County. of Pecos happen with influence be? of area if within of sort could kind it around could could JV, material kind And

Kaes Van’t Hof

we're partner, and think of with to ourselves. midstream compete next long bought confident Carlyle in well lot partner we the elect enough pleased if northern going half imminently results. expecting didn't lot to of a it of certainly And block. a we're It's a minerals results go to to place well we're in the to main that those drill tranche and acreage up of the We've I term. the have be the over our Tim, that we'd and wells, really have that with yes, and

Timothy Rezvan

then would tranche, the next on how And be? many Okay. that wells

Kaes Van’t Hof

a it'd a amount. the From some Diamondback would be be just wells. It southern half drilling perspective, capital northern very half low out and

Timothy Rezvan

$XXX bit perpetuity know, Okay. -- Fair the and they've if Travis, kind seem repurchases. talked the to enough, you repurchase tactical kind on else assume, plan feel nature them, What like see XXXX price And price a back then doing? enough. do see we a to around the to accretion of the I what is share this? you with execute equal, fair just Or of come is sort all based higher? high, you've to that or there you shares hammer that more, intensity sensitivity but still Would of do from you

Travis Stice

Yes.

that of this a our growth key by is the And So capital growth what way out think be, I is flow our value cash we're whether future. committed This signaling or in enough form that's ongoing ourselves production return will this the of drive capital profile look, share is our cash return profile Board repurchases. it's continue flexibility into figure allowed going just onetime the to we've free an not is to evaluate. to to program, best to something that But the and Board's here is and that underpinned event. that's strategy to share the shareholders well the this

Operator

And following Stanley. Drew from Venker from comes our Morgan question

Andrew Venker

want on little just follow-up bit M&A. the to I a

You've the had you the promised you value lot excellent cost you from opportunities potential to through a and operational Energen our about appreciated. success you space with the and assets way buyback structure in the price like stock see announcements. model a at under with you not We'd put with visible. that quite really that where still the talk large, delivering your how just with balance there's time on you think synergies extract right seems M&A, same your pursuing it the could opportunities actually now? synergies that think on other always is perspective, of number and Can your and the about merger. like And and corporate of your how stock the that they're It's come case

Travis Stice

Yes. basin-wide again, M&A my Drew, activities. to just I just -- speculate not it's role don't on

in acquisition value that put M&A I that's that a that we've billion the we shares $X today our is about. forth believe signal we're talking greatest think the that repurchasing And the front. represents

Andrew Venker

we'd Travis, agree. Certainly,

Your very stock accretive. is

to? sight to billion potential from of number? flow you buyback, -- terms number, a Are the free you $X $X talk you cash flow upside in prices full can specifically? Is talk billion Can proceeds of proceeds about think that? guys is with to asset upside? of think Or cash So the to -- sales upside you incorporate $X funding you it about figure and free the line of have How there that the do billion about asset sales? that from that

Kaes Van’t Hof

Drew, see If executing then catalyst accordingly. we we'll visibility go number to certainly end that's talk the that And through see proceeds the strip. at adjust number to the and we the on of for XXXX. on have and with our Board outperform, we But we side, back now.

Operator

next question Jeoffrey Holt. our Tudor, with comes And Lambujon Pickering, from

Jeoffrey Lambujon

sensitivities crude as that with the WTI? just you are alongside XXXX in can any recalibration, one flow cash think about us WTI figure just would commentary. mentioned changes a first free My at like is on a follow-up I of in cash pieces $XX you moving that pricing. in the know share But around lot flex free example, that you service for there flow variability

Kaes Van’t Hof

to WTI the to reacted always margin. or at down flex we've Jeoff, up

not rig changing our going there's think plan I and set, up. pretty now be in a swing is what's is to that wild count

next overall, adjust and XXX little creating that's of a on have Now a complete be we wells commodity to going count to like of growth But if wild swing falls over bed. there top a we feel rig machine of year. in an down bit little this might execution year out that if this we're

Jeoffrey Lambujon

rest any then out? my you towards thoughts sense expect one the QX the of the of maybe your Got how Is could that? can on us on what from and additional it. how that. what terms detail second speak timing play there both just And activity. can trajectory is are a into And on to production here just year, timing we giving of in just Appreciate played

Kaes Van’t Hof

year. coming into We wells No, with I in in think certainly of weeks Yes. completed X grow to we're of QX, XX wells those the going on the last QX. XX

the much X, be into into to listed into to barrels to another QX. the as first just for consistent month a I day without not quarter So July expected we're grow we will QX, sale. us as And of certainly that production close QX. That's as expect so QX grow going X,XXX then QX.

Operator

Meade next with question Johnson from comes our Rice. Charles And

Charles Meade

-- don't if County. the that's in there you valuable But seem that most talk that you in you a area acreage ask some Basin some your ReWard that have really is basis the assets Permian. into guys. lot Lea wonder in within I you about that's we lugging acre My other it And the don't sense a your scale I Delaware could that of about, on or the at like have with seem really least to north-central to per places basin.

think, those -- on more the more see, what you likely assets side grow strategy you do the of with side? to are likely, So on prune you be or your

Kaes Van’t Hof

as there. our We not on It's certainly enough as we capital development big position areas. have a can core other the substantial plan execute that

team block development actively Our increase is trade positions. working to that up operated the to acreage and business

lot non-op -- Energen we I more had have a we traditionally think acquired at Diamondback. than with we acquisition, the

operating So a we're build translate that of doing position we're operated position in kind can non-op to results not the because of little that Mexico do New area. if we best to opposed larger certainly that bit. our that to planning well position. We're slightly And a in into

Charles Meade

it. helpful. Got That's

to operated, if go want back sense. And say so I'd can I to... transition make But then you would it more to it Travis,

Kaes Van’t Hof

there There's today. position an operated

job attractive to operated so grows, us is for term. sure more Our to develop and position that make long it's

Charles Meade

question own And Got your it. you've that asset remarks, at between operators with is use the you then made I repeated Q&A to and your an you looking once in metrics the even other if in in to some at go comment to when what space -- are it's discrete look a to of you thing. here publicly that back looking purchase? I said your prepared you that's first, you have want span terms Got it. is myself back traded us buying opportunity -- because -- same I to I'll -- bit that I'm to a willing stock my the you're But to that seeing acquisition a own ask that share wanted a that there's use equity little thought or to that you versus and the probably to to looking acquisition best say going And see. opportunity

Travis Stice

allocate of target the accretion, cash the to need be quartile share flow thing still it's -- the cash excellence our bring it's the be want to acquisition then things top that that profile we reserves, immediately mean matter, but I our the other certainly, and any all and and to Well, in flow we to top now got right? accretive on is got capital among portfolio We're so operations per we evaluate. it can of assets. -- to

we as think component of we're is right I within commitment flow to that scale -- now acquisition of this XXXX, continued an reach cash announced and targets it cash since flow that at the demonstrated we've really So important. living

Kaes Van’t Hof

high-teens if engineering top you think we're on about trading of in we an a I feel the capital. X% of perspective, think Charles, that, PV it cost with that from

buying So great is of stock use our capital. that a back

Travis Stice

not laid the back be trade out those I on It's accretion certainly then to can't risk And metrics on got organization for I've never put I that. the anything look targets, of we've executor. do count and best-in-class at word the got used to there's accretive number accretive. we'll being And Mike's you, to of an times that'll

So...

Charles Meade

it's That accretion. the insight. -- flow that helpful that's guys, focus near-term on cash Honestly

So I comments. appreciate those

Operator

Richard from comes Capital question next Tullis with our Securities. And One

Richard Tullis

some XQ. spend for perhaps particular the for the to the favorable cadence theme, Kaes. very trend capital in bigger start off spend set does it year? a How the CapEx back quarter? up maybe infrastructure to X any quickly in Obviously, Is rest Just of there is in

Kaes Van’t Hof

infrastructure is that year Yes. the Richard, spent through quarterly in which We is fairly a the be budget perspective, from a the on think budget, quarter about Rattler basis. I the of midstream QX. going to budget, consistent

bit On we're about QX the bit was That in And piece higher a QX. second to number we little pick I then and average to bit year. interest have think the quarter. a side, budget D&C the on little and lateral a expect for going working higher the in up that length side, infrastructure XX% of total the

working think I that logical it's interest. the number a up D&C picks with So CapEx gross that higher bit

Richard Tullis

expect Okay. Conference acreage. private that we're couple seeing your of Permian there Travis, operator appraisal What know And when well a begin see was And your discussing you do how a playing there? out? that Limelight at some position, for the to outlook is acreage? it's do that weeks DUG for ago, big a solid oil but not results near acreage you I Barnett

Travis Stice

we It'll continue offset fourth about maybe to still that But excited we're quarter pleased see really probably first cost. good And Really, low year. support as a year, event that a to area our thesis be put why we're results this together. block quarter next to explore. that to was

Operator

And of the our following Hall question with from Heikkinen line comes Michael Energy.

Michael Hall

on done execution the this Well quarter.

have of in curious that appraising still I I'm have a of inventory, other and that Just any you the if XXXX. decent plans over of of amount the you for of category. the or any just if Basin guess, derisking course particularly any kind Midland curious

Kaes Van’t Hof

zones. well zones focused codeveloping we're highest think of I A&D. very the and return more always on fast and rate been as certainly we've Michael, as We're follower, a

category, in offset meaningful other that operators might future we've that our way. the really plans change in not some results some seen but think I from a good in

return the to overall the from majority of vast perspective, an are capital highest zones still our get I going of think allocation capital. rate

Michael Hall

And a then I question. of Understood. more right. technical guess All

on curious you implement intention are terms XXXX? buyback in to that the Just your when restrictions light can any transactions over the course get sounded It term. in here started the near potential remaining of course the In with the of buyback. is the of of some like that over on there year, of timing

Kaes Van’t Hof

to knowledge my today. Not

implement and We here. buyback second quarter expect the in sort stock of buying back to the

Operator

And our comes from Wangler question next with Imperial Jason Capital.

Jason Wangler

Just had one.

just of think kind repurchase this differential talked later, with hedging side the about you new and you hedging about. But you the the move think forward you shift you've of think as basically, should on kind kind of for on obviously, company? As we formula should of and the to about it, how getting basis how share the side keep

Kaes Van’t Hof

us. production to pretty XX% barrels at quarter Yes. bit, hedging, the with going at still By worrying In relates WTI that it we're the in I collars. priced XXXX, with there'll hedged some it basis you'll the our Midland see be as all price. be don't mean, XXXX, XXXX about changes Coast. we our the hedge I anymore wide think fortunately, Gulf a little But for about to barrels of

bit we're more on the that But production try to of top. is basis. XX% still swaps downside us probably most to and then little swaps. the of to the collars And protecting go-forward think about I than our a important on via straight going hedge of a

Operator

from comes [Operator Instructions]. And our Mariani question next with KeyBanc. Leo

Leo Mariani

I give see expect would you to of sort XQ, year? sort I quarter. XX you had us of maybe the numbers help in you cadence? wells few could XQ in see in if we guys the that was completion certainly any on Is XQ of hoping that can and this first to put there know a number terms maybe

Kaes Van’t Hof

leaning our the at probably half that XXX don't I'm give we're We're of going And half of gross we going Leo, perspective, in towards budget. run, plan cadence going to the XXX going to quarterly that It's X And to Yes. number to the higher guidance. plan about be complete pretty that's to wells. stick it's running now. throughout we're that lower the spreads. the our lines so to right From year. turn a we're consistent a

Leo Mariani

wanted this just got are million debt of working the asset think sale talked here. to Obviously, But billion year. guys And understand $XXX $X of initiatives you with sort to million All on buyback, and the I the of guess the some I and other you $XXX kind respect million other reduction about $XXX initiatives there right. some to just drop-downs magnitude.

about cash So reduction any asset debt the $XXX in above all really occur to pretty the other year, and some goes cash way dividend to as million year next million proceeds buyback? of sale should this the increase to that assume Is then that to buyback? flow that's of flow to much the the And the that then all rest XXXX, and that you of we assume free right $XXX any that type it? into goes think we work free there's should

Kaes Van’t Hof

to commit to back going want of we're don't buy I number mean, over quarter. how a much I Yes. to quarter

quickly of more programmatic. looking have started I throughout a a dividend that And cash the along we're here. part consistently then free becomes with total our And really XXXX, think to the philosophy. the year, grow and XXXX, buyback amount flow multiyear of we in becomes program as get in return consistent

Operator

at to for am closing to now remarks. questions time. this Stice turn would And not the any back Travis like call showing I further

Travis Stice

again you participating call. today's everyone to in Thank

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

Operator

Ladies today's thank conference. you does and This a and disconnect. you program, in for great participating all day. gentlemen, conclude the Everyone, may have