Docoh
Loading...

FANG Diamondback Energy

Participants
Adam Lawlis Vice President of Investor Relations
Travis Stice CEO & Director
Daniel Wesson EVP, Operations
Kaes Van’t Hof CFO & EVP, Business Development
Arun Jayaram JPMorgan
Neil Mehta Goldman Sachs
Neal Dingmann Truist Securities
Gail Nicholson Stephens
Doug Leggett Bank of America
Scott Gruber Citi
Derrick Whitfield Stifel
Leo Mariani KeyBanc
Jeoffrey Lambujon Tudor, Pickering, Holt & Company.
Charles Meade Johnson Rice
Call transcript
Due to licensing restrictions, you must log in to view earnings call transcripts.
Operator

Good day, and thank you for standing by. Welcome to the Diamondback Energy Second Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers presentations there will be a question and answer session. [Operator Instructions]. today's being that advice be conference recorded. is Please Instructions]. [Operator hand over Vice to I of would speaker conference to like Lawlis, now your the today, Relations. Investor President Adam Please go ahead.

Adam Lawlis

Energy's Good welcome Chelsea Call. morning you, XXXX Conference [ph]. to Thank Diamondback Second Quarter and

we website. Wesson, During Diamondback's Van't updated investor found Diamondback Hof, and EVP Kaes today are CFO reference presentation, our will an Daniel can of which Operations. call be CEO; and today, Representing on Travis Stice,

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

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

Travis Stice

through been proud quarter boundaries acquisitions. everything and accomplish many new added track thought of technologies the to of second second am to excellence. from Diamondback's quarter Diamondback able of and record call. Thank you, I an Adam, which extending had pushing year teams our welcome this processes by we've its our the earnings personnel playbooks, current our and embracing operational have outstanding of come

the wells depth Midland XX% decreased averaging our basin. the over and to where cycle We’ve Nowhere drilling XX times completion are in Permian two-mile lower we in for is a and business, of continue side more -- to spud and improve of that the costs drill just on total the evident times. days over to drill than

On and a our which side, downtime now we're our improve three efficiencies. the running crews, lower simul-frac pad completion

XX% of basin, as early zipper-frac the XXXX are designs. feet We compared in improvement currently per our lateral an day nearly Midland completing approximately to

these ability All translate less. to more with of our advances operational to do

on to and inflation offset some C&E has guidance of the operationally seeing and/or ability more diesel, be are and materials, range. our increases to other end continue cost at improve D, steel leading-edge these We our low cost become more than efficient continually

result, capital As capital crews need guidance down of a rigs our the year's reducing decreasing expectations. prior to full-year X% million we $XXX we're and number and by this are plan from execute or

outperformed On the expectations have production side, our wells year. this

a As increasing guidance, oil to decision are grow. a should conscious slightly Permian our production taken be which we as result, not

and withheld supply is demand not market oil fundamentals, purposefully a we at look on to still growth. we shale being there's and supply U.S. As continue call production from believe the

production highlights will wells led operational to planned record completing continue therefore free originally the cash foreseeable that future flat a for macro than to We do less to generation with coupled by target for plan Diamondback. These year. this supportive and oil flow backdrop

cash annually. free when this free calling expense far we over of To expected reduction so million During by notes debt callable. quarter, with for work $X.XX anticipating million million $XXX will into We've total, and over the perspective, our year debt this $XXX share. by full million cash or of reduce this we already down almost diluted paying per the this year. later XXXX this flow roughly interest $XX $XXX more in become year cash callable put In to put XXXX cash entered second flow generated this amount

future XX.X% share and returns increasing debt increasing reducing mutually about to a from puts annualized. quarterly XX% And proved Diamondback, above that promises. shareholder rather prefer at XXXX emphasize levels. are to $X.XX to $X.XX This we not talk our than share put exclusive. by we year-to-date this At current growth by or point our continue this We again dividend a $X.XX dividend performance our

base increase it the has and relates allowed return we to of pay capital strip to XXXX dividend. additional debt it's put free as performance our in our outlook down accelerate us However, now current cash And given some posts to flow feel up pricing. our goal appropriate at

we is XXXX plan to the XX% dividend. additional base price a our now simply environment of the reflective well we of owners our intend deliver flow unchanged cash take return current to between can initiated since appropriate to now of and by the and but happen of maturation in of free our the our the to we XXXX. we return This but guidance will the of strategy our time, clarity believe additional lot of company. feel Our be form business. board we capital is are be shareholders based commodity evolution free is best which distribute This flexible year, XXXX. end when advantage at decided on in flow to cash our positioned our of the stockholders, and Remember, our also differential opportunities A present the

maintain level to allows protecting $X.X by capital to of on to pricing and margin, billion our $X.X The structure extreme billion plan Our a cost hedges on cash oil continued form in allowing production base price approximately that to improvement cash to which are an spending total focused as combined protect downside of upside. improvement participate shareholders we us realized our commodity elevated a layer XXXX low Permian in we best-in-class efficiency capital. through

ESG. Turning to

significant still our to emissions. we've continue continues biggest work initiatives. XXXX, have the be progress made our We while we COX make to ESG one of since of do. Flaring on progress to And drivers

is than the and half produced year number. flare the XXXX were less gross target in gas X% first of that to in of Our above we

this quarter. this the and we of infrastructure expect the improve Now in build assets we is as out close to and divestiture metric Midland primarily integration the this due Williston to QEP additional the basin later

and tank tankless limited utilizing projects facility designs. pilot two begun also have We

to quarter. expected On the limited successful pilots. While installed elected design the year our success, two back had XXXX. facilities expand facility extend We've from the is XX%. XX another first in COX our reduced we've tankless than this to design and already this pilot storage fourth average in additional tank this in be more Because tanks to to of half emissions an facilities this of five by

we Lastly, out are substations, from which will continuing to build and equipment, emissions generators compressors. our minimize engine help primarily driven electrical combustion gas

of least by as by We XX% reducing least XXXX our reduce well by XXX or XX% positioned commitment to are by at our these GHG XXXX. of us over to remove combination working to intensity efforts figures meet The XXXX. compared and of our units X these Scope at methane intensity replace

quarter second a the industry. exemplified leader and our exceeded The expectations why is Diamondback in

uniquely people more positioning for Our continue responsible and us environmentally us innovate, efficient the future. to making

year. free robust positioning us to next generation shareholder record returns debt us cash dividend Our accelerate pay the our while increase for flow down allowed and all our

We are to delivering our continuing return reducing to Permian on and maintaining strategy, returning exploit focus cash on volumes, shareholders. and debt oil

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

Operator

[Operator with from line first comes Instructions] question Jayaram Your the of JPMorgan. Arun

Arun Jayaram

larger a Diamondback get A&D and We the for a stock packages away fear on market. scale print. your of sensed bit team. on larger Yes. of regarding of bit maybe little Travis, block. M&A engage apparently your Good to in to of potential a the a morning, with the factor the Travis I want kind some thoughts little bit But from the to and start

in So, of how A&D just approach remind returns? to market start the Tier general wanted And call could opportunities I maybe your maybe investors kind of X to and scarcity balance, you on just A&D? and the versus economics you it

Travis Stice

generally, it Sure. A lot just of feels there. But there. market like questions out seller's a contained in

a Our capital. we as kind And intense around most our for when price of M&A is focus NGLs allocating XX non-core is of than and one assets. XX use the prices stock NAV And you higher look really much mid-cycle of we oil where jobs gas. important we is today. management selling $X [ph], that of The have look, for at are and kind

M&A our of But even what feel today, been that call. own we've do. in and forms, capital right to it's backdrop thing rather what clear And we've persists, look stock. earnings is articulated like. doesn't the best in every But look, frameworks our decision that that's framework if our use -- not back our So, buying the the very like just acquisition market, in

hard So business. well looking focus really monetizing at is assets non-core our and simply around

So I looks really our like forward with plan way inventories. the our existing

Arun Jayaram

just follow-up. Great. that. Thanks my for And

model but year, did billion You half kind wondering, year sense I your even drove second that? Travis X.X general, we're I just the if call get -- and -- it, XXXX? to what XXX on comment of the your team, like want outlook back you relative expectations raise if consensus Bakken. And flat production the XXXX? around you you It out to thoughts our back of [ph] next was and guidance a and around to hold, around just your half your sounds it's for

Travis Stice

I'll year take Yes. first. this

bakken going are close approvals. due We bit little a to we later than the to external expected

guide which contribution. XXX QX our raised our have the that side from year Permian about think full bakken for this raised side. by we the the apples-to-apples our we're the X% basis guidance And I CapEx months XXX outperformed year impetus And said, to two XXX. we year. the our year on overall up And wells therefore, think a we've capital cut have kind barrels raised an And guide some the that's of not for in to is production so more XXXX guide. that on day, but early oil also really growth mode, is outperformance But of and we Permian in XXX raising really above versus Travis as therefore, than and we're on to I comfortable

generally as we inflation we cost But basin a to we today. XX a of to year more efficient And or the case Midland fewer X% up dark as which is you as capital This Permian bit. couple the production completing a next really flat production flat capital bit little it flat plan, be -- generally of but service translates importantly, Permian originally right to of possible a we excited and day So, kind in price side before. know the are going the than little kind the with barrels wells percentage is from high generally our number But is capital this were how percent, we're XXX,XXX keeps partners little manner. planned business year very that holding yesterday where know now. pencil a to a completed And bakes down that that modeling. that I think about of wells XXX,XXX see XXXX in on X% push in in posted able

Arun Jayaram

helpful. Super Thanks.

Travis Stice

Arun. Thank you,

Operator

next Your the question line Sachs. Mehta Neil with of comes from Goldman

Neil Mehta

XXXX mechanism XX% free cash see there that early the to terms it Thank on that time as capital, of flow. through yielding the buybacks do grow any you cash what is And threw then terms dividends is number that return out to of we thoughts for sheet you. And potential balance strengthens? the of yield Travis, maybe whether especially in could return start it's right with in over stock the you right or flow that the now? the

Travis Stice

we're to XXXX Yes. flexibility that we of more cash and to greatest the at excited what XX% over create a more Certainly, we've tend creates that decision look, that the we you what maintain be occurs. want done the which Because point that shareholders. Look, And when return yield, And going always company. look couldn't try think I flow greatest a that about to you time? shareholder make plus to what the the would the to stock what try generates for decision that free our have to number forward is buyback. But does of Neil, on do allow outlook do framework and it's if flexibility returns. make

make a daily free Our barrel, -- that flow said of going out we're comes of as evolution also the going the back and that to with do of I a around that we decision price cost is of like to that our guidance in to that really break-even $XX we've even through by what oil into very as evolution reflective on XX% clearly the talking And basis we'll guidance we're But cash what signaled making cash know when our business. shareholders. And about doors an good -- mid-cycle future. look maturation at lot a it. and a you

Neil Mehta

and but all can about you relates and as a that get you XXXX, you cost Travis, the as both capital year, talk evolving time, it the back half the into efficiency? the structure not of And How little see the over pieces business. only bit different of do moving cost to

Travis Stice

to be have honest. I

I to completing were from some out and continues that just up drilling that -- we're here wells. organization what the we clear over And fluid feel these doing significant I came me. came acquisition. and And guys mean, these they've operations already technology do knocked QEP yes, best like out surprise the just cost. we Our and honestly with quite drilling

continues really of with me. out don't organization we're slide efficiencies with up lean it's going capital more continues goods increasing don't I can Because prudent know improve efficiencies our you to think next services. that of and of on But the deck. impressed months and of guidance I'm and that to that forecast to XX because always it's just it's less. back surprise think reasonable, cost way issue in I backdrop doing going the certainly but capital able the to our six cost I year, against into down the And way.

Kaes Van’t Hof

Yes.

our what I we step to times once think, Midland basically us the for XXXX the with of in in we stay do with ten rigs capitals team allocated can is with the generally, do future. through has foreseeable that the made where the to And basin. to change beyond. that's now eight And And going permanent, be that's drilling right? can and be -- had majority going

Neil Mehta

Thanks, Kaes.

Operator

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

Neal Dingmann

or a timing guess of Kaes, to around cash the what wondering I year. My and formula of this -- of next will more of determining Travis also will looking type the first be for or comment return specifically just is guys. Really, backward XX% wondering, all your Morning, I'm question use flow shareholder your plan return? I'm approach free more you

Kaes Van’t Hof

good Neal, Yes, question.

buyback. -- come share comes a it really dividend to down or think I variable

do buyback it'll the that we a backward per buyback, basis. think think essentially I math pay I looking will variable generating But dividend, announced that cash a if be free prior. we'll quarter and it's a consistent we're tough little the on much how it's on much quarter for [ph] if day a

are and go to provides think best on those or one don't the answers be There's other flexibility So return I a period for which one And at to board permanent the those. think the of the the shareholders very of focused going between to time. Travis I time.

continuing the only to is I base dividend. thing think sacrosanct the that is grow the base dividend and

Neal Dingmann

this? to production just XXXX and you're And -- then my a Great. question is with any And forward. a your say drivers notable comment involved second versus spreads your Glad going Could release QEP ducts for this and of expectations QEP there. change of this higher the going guess other to over achieve frac speak for you're the decline? rig expectations and that, sort your I maybe Guidon to I you driven production using staying and the some baseline that the pertains flexible in should spin. in expectation the understand slightly on I flat XQ of by XXXX what

Travis Stice

Yes.

start XX% with the versus XX% more with while So, that's increase this number, year. an to I'll capital, the

at that didn't I quarter QEP and think their capital what's QX, is of so the end have a we forgotten Guidon full contribution. of closed

benefit drilling if So, nice did other we're say you that's XXX about it. wells to year. we And have XX% half is, completing a DUC I'd portion increase the XXX half of also a the of see, and XX% this

early we're use to the backlog, taking as we that and instead advantage of million was rigs the decided So dollars build investor at into this year. not about downturn, a the were fees $XXX of little DUC Because as that's time which best bit we're when another benefit. the running and termination pay we many

a think a quarter. But efficient generally gotten plan, this and somewhere So, back. XX on or need fourth crew XX how a that crews execute bring year We'll perspective, count probably the to operations I dropped has spot which here. those and probably and rigs from rig we next two three is to we'll rigs rigs team two simul-frac crew around maybe testament

Neal Dingmann

Thanks for good. the Very details.

Travis Stice

Neal. Thanks

Operator

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

Gail Nicholson

Good morning.

demonstrated You a guys strong have commitment ESG. to very

already. And of above On water potential XXXX that cost the about the recycling target of sadly just you can the recycling? front, Can progression water you in exists remind savings you're talk that the me future world?

Travis Stice

an important Yes. question. That's

above I far to our so are target think we the year this shift Midland basin. with the

have going store on down water, the are not to that only will underway. significantly. side. a Ranch but water, end up build --our permanent side our is system that not go Martin freshwater the solid year. by We next kind That we're need some allow to the out across intensity I to the to number the and Robertson we to County that be us so also on produced middle able of going nice positions And to sale, Midland infrastructure recycle process basin of using expect that's connected recycling to

So, used you're on recycled system. have water But the just Midland pulling XXX% existing less Delaware side Usually water the basin. off the in we've you production.

So it and percentage that allow it use over water come downhaul the is and years. And the up next in I storing think being couple to produced to pretty able should dramatically next the target evolution. reuse that step that

Gail Nicholson

the guys fracs well, LOE you an there the about talk are then on electrical fleets you as rigs? efforts then And that electric electrification, doing. to is Can work, the correct? thoughts And and Great. utilization benefit substation on on drilling that of

Travis Stice

pretty by run times, in for only costs mean, it power costs less work the significantly Because inspection. and not I but it field than is Yes. positive obvious ESG substation electrical it generation. is

years. few that been So, we've on last the working for

of our It's little to The drilling of time much of on on power. fields line frac to and infield frac line on They sight major But as generally for co-ops get issue us. end as we'll take been all testing we're think drilling year, some being side a we is have power I to taken bit electrification. rigs power. of crew. by the ready think the up think the this we've I use I Now to the don't a

crews I you add on X think ask power. tying capabilities that. to right now versus to Tier more are engine I'll Danny into and if anything our line want dual fuel And focused frac

Daniel Wesson

generation on running. generally that's friends stuff think it the hard power of side to certainly right. and side the server we to watching issues But on advancing power are that -- the do been the working fleet We I on to efrac things, There's solve And some how in issue. on our provide be there the side enough to we're years. hope couple next close. the

Gail Nicholson

Great. Thank you.

Operator

question America. next Doug Bank of comes from Your Leggett with

Doug Leggett

debt Good question. is to my to ways level right value morning the you're of free of you to debt. return see easiest pay off right throwing the consider absolute for taking down do Thanks when everybody. investors cash now? flow you the Where one Guys,

Travis Stice

Yes. that's That a good question.

as prices in you us near the that of flexibility next to XXXXs years to with But in and the of our cash build cash both give in paying I out a pay a off really two reduction. be, enough to year, grow low debt think the this take delta feels ahead into the more near in off the side free debt XXXX having shareholders a of with a cash schedule, coming current maturities to like in of break and think prior by term, the gross and term, and to oil with billions is to not stepping is and our bullet to the leverage Put the they that us and good does position. lot basically I $X handling as on good everything XXXXs turn it puts come these even when position cash kind a place free on and low balance due. the very between accelerator

Doug Leggett

think XX I that. is terrific. for yes, Thanks slide Great. And

is that It's including deck. the in for you I slide thank question guess my my kind So of follow-up. XX case

the decline growing the if being, slows capital you're one down has some. model imagine time certain moving to for you're the underlying not If production, sustaining to

is line hold Thanks. it to through even happens So $XX there. that bottom you going if what And XXXX? line I'll break on leave production of the the end

Travis Stice

less Also the I goes Good it think Yes. Doug, in question. past down, than it years. has dramatically albeit

I now. of the think quarter in end rate XXs mid oil to oil right to kind decline -- end our lower quarter is

I no kind spend year that down then development a percent to came infrastructure a flat. to keep think Sale next and little infrastructure and the real that midstream with midstream tick-up of going other we're it and year with two infrastructure. if have stay moves continue Ranch or a But Robertson we the have to going in also we're on

well. So comes down as that spin

that So us lot I or year. two down down return think, with a generally lot to free things to pay do shareholders. of a we'll keep by of gives pushing flexibility debt it and a buck And a cash

Doug Leggett

Travis. Thank Terrific.

Travis Stice

Thank you, Doug.

Operator

question next Your of comes Scott Gruber with from the Citi. line

Scott Gruber

Yes. Good morning.

a base pathway for dividend been cash return the Diamondback's to core So has shareholders.

appropriate the level there think nice of do definitely about And you another about deliver? certain percentage you Is at How a the dividend? flow So price? percentage you think base How bump dividend over base time? oil certain this change that today. the you does see a as for target do cash to

Travis Stice

back look board about that return. previously dividend another S&P go communicated has having the and is When somewhat approximates that you talked the above a anything And of at then the way commitment. Scott. shareholder Yes, yields. base We've this form

is X.X% something dividend. what of sort that we for like that yield base target base that So

Kaes Van’t Hof

Yes.

is at gives So barrel I think now. our break that we the a WTI. even on time even more to flexibility top XX breakeven dividend little right? as think XXXX down break pay a you of our about dividend right that, comes over too,

to all we base, you that call more a the sacrosanct bit flexibility the question, in like if needs because protected comes little last a and alluded be break earlier gives the down the at costs. base is on even little I the in said As dividend to that

Scott Gruber

missed to the obviously back least at may count then or XXXX a is But TIL have the guys program have count turning maintenance But the just TIL earlier. it productivity there plan. be. given acquisitions plan, is and Got there maintenance that what gains you will I it. seen? the at And the

Travis Stice

mean, I minus where the year, be of will right flat generally, are be XX second the it's we're the XX our in mean, of those now couple I where and XX we Yes. or of a percentage XX pace quarter plus going of to points. are generally and in TILs to to kind half But a or in the basin. Midland

Scott Gruber

the Appreciate you. color. it. Got Thank

Travis Stice

Thank you, Scott.

Operator

question Your Derrick with next comes from line Whitfield Stifel. of the

Derrick Whitfield

all and Hey, good morning congrats strong on and quarter your update.

Travis Stice

Derrick. you, Thank

Derrick Whitfield

for your regarding one Perhaps production are would you to factors two outperformance volume Kaes, Travis QX, or outperformance? that attribute during there that to

Kaes Van’t Hof

that the more generally best think on Diamondback year position are last but brought legacy on the Midland two returning the the we of the I basin, reallocating across and downturn seeing Derrick, benefits assets the portfolio. to new capital wells that our

didn't from good even around. mean, production base outperformance unforeseen lot seeing is early I suffer all quarter So A there. was generally, events. or the a -- time base we're weather of

we So, generally on what development acquired that assets the positive year Guidon. only rest the on I we're think XXXX we're the the pretty holds side, on the but performance and not cost side improving efficiency from excited QEP have about and to capital the the the of going is and given on

Derrick Whitfield

activity private breakdown my the Great. potential inflationary and you from in of perspective industry Travis. for a concerned the perspective How in in perhaps Permian And from ramp the follow-up pressures capital recent with of discipline? as are the

Travis Stice

I But interesting notwithstanding question, of do curve or productive. X.X is really where So, Derrick. there's the a should on But price. that or that's more the exercising leading And macro in be what flat a disconnected out the have Tier more is the commodity our $XX too privates pass, and costs the are things doubt the But that Tier both fact zero. but quite they're today's forward a in see X-ish lot the needs. privates no won't Tier have there's -- that the and of that X public from higher going is, couple industry are not think privates to that on quarters into I Permian will price One privates our the Permian really real some be. early considered. overall while this the a effect assets, And production, It's here equation, not effect discipline going the is on what the the to bit to an companies think the is I it's element think of reality impact production change. think be is what just increases I little as

Kaes Van’t Hof

depth longevity given that and the impact hopefully private well of And as the of inventory the on side.

Travis Stice

Right.

Derrick Whitfield

That's update and time. thanks again for your great

Travis Stice

Thank you, Derrick.

Operator

question with the next line from comes Your Leo Mariani of KeyBanc.

Leo Mariani

some notice and the that cost. on wanted cash XQ? basis here. in But expense kind per Guidon Hey picked versus to XQ. the second the in up jump quarter QEP bit little guess transport I your know most of your a to items certainly side guys, a closed of equation even G&A, Certainly, LOE and your in of expense your I BOE that later guys you notably

some of one-time kind second you're there? half. in a categories some kind all hit as there's Where that here Any might expect in the of those of kind numbers integration help us can flushing start and of through which you barrel get should to those drop to want the sense. give items cost have to the Just per you

Kaes Van’t Hof

Yes, surely. Good question.

structure our the with much With assets. Permian come assets, the assets than addition cost a of traditional those different bakken

for still quarter, contribution from the a get from that little Permian would what and on I a expect continue feel the -- the say, the bakken there We'll In can in $X-ish remained contribution was. LOE side, to range, the pickup in on So so QX. GP&T me. the LOE that bakken, the you bakken excuse

of side, half QEP amount did On kind of transition the the employees. G&A a period wanes we good year. for off back in a That transition the have the period of

So I in the of think generally, G&A back the ticks down half slightly year.

Leo Mariani

Okay.

for look here. a take production your And guidance sure. I at guess just helpful to harder that's Now,

or it of just kind down generally holding little I you some talked like that your seasonality number. I Looking actual of at know it Is compare variance flat? have just to number, to best, some do volumes there looks about it your speaking, oil just oil come if third trying quarter bit. kind that But you're flat. your second XXXX kind a guide, keep maybe kind in of quarter of the random guys

Kaes Van’t Hof

Yes.

think was great And I I from about the quarter production very think vocal a we've no U.S. needed growth QX Leo. been

that resetting baseline I QX. we're So in think to were back originally where we

outperformance. I there's think of growing think rather in bit the cut through capital a lieu said, little like kind I production. of And So, or capital we'd sacrifice year we've

So keep beating your estimates staying baseline and growth. flat, really for that's if you raising production

don't And so, want we really that.

So the think expectations pleased for baseline under and XXX use XXX Permian outperform QX QX and the to we and XXXX. generally, into over the And promise a can deliver ops continue oil hopefully for bit. that we're I to teams

Leo Mariani

sense. That Okay. makes

like well? and something to some had every well not in you basically element necessarily sounds guide just last can it of couple the there's quarter So quarters, performance you as folks, very that's strong

Travis Stice

planned improvement delivering. But basin. to particularly over we this right. in we continued do is And mean, efficiency promising expect expect development with Midland about well. think capital and new under the I we industry I have That's to continue the

Leo Mariani

Now that sense. lastly makes a asset on And of just lot then sales.

anything know next or that maybe But hard bakken the year this being else you're year? folks late prune talked You your there closing seller's a bit is into about it in working market. to you're on a of obviously looking divestiture. I purview

Travis Stice

development XX had some on for Yes. I don't years our non-core plan. mean, we've assets inbounds that compete the capital I in next some think of

again, But I might do lot of if shareholders generally six pay ago. selling guarantees, some do would take there's that of what private these for we that surprisingly right we'll on for a so, months twist generally a someone E&P and that I but of assets. not we're non-core call. a the our think PV basis our be looking And to on And to shareholders no something what's areas in a I case seller, couple has things is wants capital think from value for or value there no nine for think a to that

Leo Mariani

Okay. Thanks guys.

Travis Stice

Leo. Thanks

Operator

Holt Your Tudor, comes with next Jeoffrey question of the Company. & Pickering, from line Lambujon

Jeoffrey Lambujon

speaks improve the questions. if volatility Good the wanted gets to overall well just as remind There's obviously capacity serves already morning. of obviously year half on sheet the as continue of to lot of earlier to one's which us and additions as My a that on to first better? year there. the to the look in maybe natural which to your the as Thanks get the next balance you bulk my with back hedging add just taking a curve projection you for how of better we latest the But the strategy sits. as as philosophy

Kaes Van’t Hof

Yes, Jeff, great question.

I relation think see the in back the curve. we

further out the nine XX kind hard it's of us than to for next hedge So months. to

two-way into to these keep XX% quarters to build or So is I like four puts for close layer we have upside wide relatively get XX%, that value premium the hedged and away prior to to callers. be take consistently that as we'd closer sort sense deferred time a two-way generally, not our the on some quarter. try late to makes think to and goes What to of going money quarter done of three think investors. over quarters the wide down top And of callers I we

think good generation XX generally, even be The where the year. the flow year. cash at TI free balance going about of we the next at really sheets to I feel end

we're And downside so to of that's kind protect. the trying

Jeoffrey Lambujon

a the secondly, just anything Got cost to just inflation on moving to. spoke see it. on you you bit that if in on Thanks. And then there's dig wanted more could pieces

incremental anything the moving on could there's currently particular? side if of on things what's Just services in you speak

Kaes Van’t Hof

it's material been the the and raw visible steel, side. side diesel very Well, on

But the think to steel up more with our labor lines on oriented world I some at that down side inflation in generally slow the service service go think think the needs inflation point. opinion the pieces the flip to of -- is on I going and I that recount. to cost the that

side. any of on counteracted that think increase front. done But most importantly to what of has enough So service the I a little basin industry the I I that Midland think And days off side push TD that the on able so is to think held is lowering far. price here long we've on we've

Jeoffrey Lambujon

Thanks. the color. Appreciate Okay.

Travis Stice

Thanks Jeff.

Operator

Rice. Your next from Charles question the Johnson of with comes Meade line

Charles Meade

and the one different I shareholders options -- team cash from Travis Kaes, in of your XXXX. keep you the guys to more on and that Good free maybe like morning, a question direction on return to XX% the rest there. ask that open. I'd of that cash going recognize are to

the bad But preferences idea that framework industries maybe that kind the any lines have I'm And the to just how share business, have bit But approach tell of reputation more you have of decision. going of observe thinking on pro efficient. going -- in a cyclical. even kind then but conditions also a buybacks of you're as to you since that guys share share a not E&P can or other You're tax decision? along the will that's an you buybacks present, when used books are little in that being make to you

you any how for So it? are you question? how are guys going approach do there And that to preferences

Kaes Van’t Hof

good mean, cyclical internally debated I that's pro Yes. highly topic Charles a really buybacks. a it's on share question, and

changed I and to cash little as return can bit to think we no shareholders. the a is in grow as growing longer and capital business fast what's spending we're

constrained a mid-cycle that At being capital with environment. the and day, look then mid-cycle price because the commodity flexibility to we're you oil a end have below NAV to of maintenance, now buyback generally a that makes trading on buying better basis return ground. in is lot the than price think market have that. looks And where return is like fundamentally oil know the the I our a with stock buy above on what of to sense, it even we at PV if you

of it But some to and it's feels again, that's August way So Today we into that Xrd today that's kind go. to it. analysis and have go right buyback decision. make Xnd still going the the is time a to like

Travis Stice

differential perspective. that on to made decision to program. be solve we'll at And day our going there's value. can't the need is return statement board's emphasize is with enough I addressed. responsibility generate technical that's value. shareholder problem Charles. that the questions That end the our Yes, still yes, But And shareholder from the shareholder to of what drives be greatest the

Charles Meade

a That to tankless This your this it's I'm talk was And talked follow-up. is you helpful. quarters the on the And a do cost you think this you curious, if -- don't against preparing feel ESG caught was that by guys you punt Thank amount at they design. have your about about productive. that, -- specifically of a you your remarks tankless free you you And do I how offset and guys cost, my -- when But new for look talking then that. stack perhaps, that attention you Travis, up you fair make? past in the carbon buying have of you cost credits. Is this incremental matched -- comparison up? about if spent of

Travis Stice

that's really in that be to Yes. It's as field but doing things trying operationally we an go. -- why isn't communicative be emissions way This that secret with and XX% to the right? this these try a was where we flaring is calculus, a collaborative we're be for. be to technique. of be couple it's nor Diamondback This we're We But the Because share That's think favorably move into by that that tanks. And that be of share has reductions Diamondback share to can war, next we this good atmospheric And is over this the the fundamental want it's we're and either to this good years. this. can our COX it we strategy tactical. credits issue we specific something as part associated deploying want industry-wide learnings is want And we to going I position get carbon more very the to a decision recognition reducing to is think and on as is to it. meaningful the of not as a on solutions have. to an us need The form well. industry-wide we as to a statistics much able to collaboratively

from ideas from these of probably came some fact that other we got operators. In

results advantage moved proud as has look, So are environmental we efforts well. certainly importantly job line that we better that industry since thought or got it drilling what that Diamondback And proud applying generated also from about sand doing we us that in impact is to we I'm of a very, do saying I'm is in more the our we've And away very we're has a it in by the has enjoyed horizontal success take fracking and XXXX. particularly and what of the the drew industry maybe narrative. really we've didn't spending an as But of to an and control innovative dollars that. doing, and the that processes got same us recognize narrative

good that on environmental this quarter really problem problem each going we're and we're responsibility So ways our to solving objectives. communicate solvers we're

Charles Meade

that all for that Thanks Great. commentary.

Travis Stice

You Charles. bet. Thanks

Operator

Travis are Stice, turn There further I CEO. call to the questions. over no will

Travis Stice

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

using If us you provided. contact please the questions, information contact any have

Operator

conference for participating. you today's concludes This call. Thank

disconnect. now may You