Marathon Oil (MRO) 4 Nov 212021 Q3 Earnings call transcript

Company Profile

Participants

Lee Tillman	Chairman, President, and CEO
Guy Baber	Vice President Investor Relations
Dane Whitehead	Executive VP and CFO
Pat Wagner	Executive VP of Corporate Development strategy
Mike Henderson	Executive VP of Operations
Jeanine Way	Barclays
Arun Jayaram	JP Morgan
Scott Hanold	RBC Capital Market
Doug Leggate	Bank of America
Neal Dingmann	tours Securities
Scott Gruber	Citigroup

Call transcript

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Operator

Welcome to the Marathon Oil Third Quarter Earnings Conference Call. My name is Cheryl and I will be your Operator for today's call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session. [Operator instructions] Please note that this conference call is being recorded. the to turn President Baber, now Relations. Investor will call Guy over Vice I

Sir. begin, can You

Guy Baber

Thank thank call. be documents Cheryl. a address us at close, you, our And website issued found slide this for to we XXXX investor Marathonoil.com. morning on joining presentation, everyone Third and our on package press Quarter can the a Yesterday an the you after release, as that well These results.

CEO, Tillman, me Corporate Executive Dane today's Henderson, and are Operations. Chairman, Joining Wagner, Development of of Mike Whitehead, Lee and VP our Pat on and CFO, Executive VP VP President, call Executive strategy,

to always, As that, to and his filings. as by presentation turn Mike, session. I in refer actual will cause the well our results hear release get subject also Pat statements in to cautionary the as Dave, over Lee. everyone differ press to such SEC question-and-answer to statements. who the those described from forward-looking language to implied risks and risk before today's materially will included materials, uncertainties I remarks. or factors could call and We'll that Lee, we will our from With the contain expressed call opening provide

Lee Tillman

to their delivery. good for you, execution and and continued start today. environmental I dedication of on to outstanding listening hard Thank want safety And another morning contractors their to contributions of Guy. for to employees excellence, our once everyone, to our financial commitment their and quarter call and again for work, thanking

our and $X it are billion capital impressive forward now highlighted our is billion curve per to by generate our this capital than Company's discipline commodity flow about makes possible. over free to breakeven full-year for For a our today, well we Through more shareholders, expect financial flow successfully flow below the their year. outlet differentiated reinvestment and free all cash $X While of privilege this billion we below that cash I outsized pricing, cash outcomes $XX get And XXXX a XX% talking and of of our [Indiscernible]. year-to-date $X.X delivering free budget of at barrel rate hard commitment execution, work results

flow A minimum our cash cash with sustainable total on shareholder first XX% flow. operations call of to objective commitment our base of business. our quarter. in the dividend the cumulative sign representing we have a in increased of confidence dividend increased in that This base our in price pay have and We of our quarter to is has all end a from the and line against and other achieving has put results of on balance in forward improvement are This Company us the successfully this our objectives, return energy enabled the head-to-head sheet confidence the sector capital delivering and to framework, Under financial return of to our we our capital any given operational And XXX. us our financial pull the that row this to current have a raised performance other a dramatically competitive we dividend, further by on balance unique the bottom shareholders to strong get S&P increase investment-grade targets. XXX% against base holders. will and we accelerate our any third XX% Consistent sheet our already equity environment. XXXX, returns

equity believe Quarter million already targeting of flow during cash of $XXX share offers Fourth free with we At executed. our also yield are XX%, value. tremendous $XXX approximately repurchases We north million a

increasing buying model metrics that back the underwrites significantly a good with potential remains added cycle. there even for mature longer-term dislocation between equity our of stock for coupled per-share through improving and capacity meaningfully Further, our increases. more our a base value strengthening Additionally, scenario, our commodity share prices repurchases and business dividend count, of all per-share continued maintenance our reducing the under provides a

fourth cash holders. return flow consistent dividend XX% that operations first. share base approximately quarter, of from to Looking to total ahead our including Fully and to our capital with the planned repurchases, equity our expect framework prioritizes of shareholder we return

plans commodity Our and share $X.X importantly, our everything flexibility portfolio XXXX. to pursuit in the GHG our that progress the our And our executing turn can of intensity, brief our will XXXX billion perhaps financial quartile as power will on Operations, it through plan. update relative X-year reductions authorization Henderson, Mike benchmark confidence continue best-in-class Board and performance, sustainable, business Executive also ongoing we to our of environment through increase execution excellence ESG of maintenance top corporate significant to our overview, I of safety ensure for VP is who to provided the return to over current scenario by total doing price our our governance. that an we on most capital we provide repurchase are backed our and to With

Mike Henderson

Thanks demonstrating we key all Lee, related the or XXXX objectives at the year. established quarter beginning were third against odds, of we to operational, on financial, remain all achieve outperform that track of operations ESG the that and

$X XXXX in execution and cash full-year flow, XX%, quarter. and sequential First $XX material below the a a rates per full-year below our free breakeven comfortable outside reinvestment expected financial fourth billion A increase WTI. translating outcomes, of foremost, cash expected flow consistent barrel highlighted to corporate with over is by free

to with XXXX budget. this Production year change also new XXX% Xnd our consistent initial full also to during $XXX third beginning Oil There year our no XXXX Guidance Method We're continue is equity as a emissions midpoint Company GHG quarter the commodity XX% increase Our Guidance. levels intensity. the year we Oil $XXX Total Company the commitment is last gas at our capture capital billion raising to we also year Equivalent Income or to of This prices. There's stronger our increase quarter a for to discipline. of Total quarter, no full change Raising to guidance consideration to reduce a exceeded $X to the been of capital our spending our the has our from consecutive never due relative XX% guidance range year. million EG and provided million full

net income the and full-year contemplate unplanned in guidance EG truly in Our outage quarter. of equity late third an production we experienced EG

of strong between of to increasing to day XXX third thousand ahead fourth Looking per oil XXX,XXX Company comparison during to all quarter, oil XXX XXX,XXX thousand we finish quarter. the year the production expect our barrels with barrels day in to per total and

barrel is due largely subject normal significant deferred small, increase outages, framing, third production volumes quarterly some base [Indiscernible] performance, to management. midstream sequential that are well Our always and but production associated to [Indiscernible] solid with associated production variability with party

quarter our total with per increase to previously an referenced to day. improved With a offsetting strong production capital U.S. the and Company a turn oil discuss how operations of will third outage. in Guinea over expect Sheet sequential holders. Balance also associated be barrels Whitehead, to are to who I the now equivalent decrease our and it Dane return CFO, equity contributing similar acceleration quarter at will Equatorial We in fourth EVP in equivalent sequential to oil of XXX,XXX an

Dane Whitehead

Thank you, Mike.

forward, going of the significant in our well investment-grade as and we Balance generate to total debt original we and plan And to which debt $X please This million a the consecutive shareholders. no gross beyond repositioning was $XXX accelerate level. billion additional which be [Indiscernible] priorities retired Sheet Early capital we are As Balance [Indiscernible] need and financial these of retired the in debt returning note significant we clear schedule, door Third capital maturities free for holders. milestone, cash to with to ahead With opened significant it significant returns longer base equity matures. reduction we quarter, reduction strong quarter. the debt to Sheet, sustainable in just our have simply our I increased Quarter, that unchanged, already noted returns begin achieving and gross return achieved last clear, are bringing amount billion our no $X.X debt XXXX third XXXX. to To this feel targeted flow, dividend,

base Our is up actually period. XXX% dividend over time that a

annual in portion to this will million due significant a of $X.XX per of realize will share a savings at or fund increase. help dividend debt Now, quarter base gross interest -- the $XX

return WTI is S&P equity when to a delivering return or for at of calls is any XXX. framework of in Our minimum $XX the barrel. shareholders sector from operations XX% This It capital a also cash pure above of leading competitive with commitment. a is

approximately XX% bit up At a Add dividend or this of peak, combination and Fourth that, flow expected $XXX doubled commodity flow to free quite recent in due billion to our quarter from prices oil volumes could in Third is pricing, strong distributions to the stronger could shaping take quarter Quarter be to cash X.X operating cash flow an third Third to versus about increase than pre-cash of exceptionally CapEx almost lower a and Quarter. fourth-quarter Our EG increase higher million. north Quarter. strip a relative an in sequential

we expect equity lots flow returns. minimum for have of So XX% thresholds to our exceed to in QX, of cash flexibility operating

our share base dividend through repurchases. approximately $XXX of million and In fact,

We and while investors expect the to to net improving balance during position. flow approximately cash debt our quarter, operating XX% cash return our fourth further of

total market our delivery prices. sense. fashion investors $X.X equity stock There many of mentioned, combined million reduction, free $X also disciplined buying in billion. commodity XXXX is dividends, we million the Stepping a full-year over provide operating exceptional; flow the in As aren't tremendous full-year XX%. debt right $XXX now north representing back, of expected $XXX [Indiscernible] that and XX% to over that back yield We're billion opportunities we debt return base and flow cash our sustainable a cash believe in makes a of repurchases, of financial share in

and strong record Our a have returns. Balance kicked actions successfully in Sheet equity off of the XXXX repositioned track

the decisions. taking on not we're not going to play Strategy have a drill resource minimum our the on exploration forward, outlook capital financial framework based from is of laser-focused that stay framework on to percentage an program. our return and into bit. return when the update priorities over our for and EVP of operations our account making free Corporate cash Development flow of cash investor flow call will equity Because the call cash Going Pat I'll first on turn flow, now cash Wagner,

Pat Wagner

recently is net contiguous completed Thanks, Delaware Oil acre Plant. We our which of delineation our in focused Texas [Indiscernible] position drilling continued XXXX on Dane. the our XX,XXX program,

a Woodford both an initial the pre Woodford the cut while of exceeding pads that leasing, barrels the essentially very cost one And achieved interest. are of almost working an is production of grassroots rates low more to the Woodford -drill our this is XX IP third and online expectations. play an brought X,XXX our of It already oil complementary per We Merrimack XXX% oil at Delaware. XX%. reminder, day multi-well both while specifically, through of a wells strongest And ever concept rates have is with This was that early, As early entry appears drilled and in two secured bolt-on quarter. still oil we positive. a for including new the and the base. to are don't exploration any other it very first is our the wells, yet Northern be position all in indicators, IP established well Woodford XXs, very for in XX-day Bareback during

Woodford our this sales. to XXX the with date, and we're no evidence of separation our first of objective primary Our play. To interference spacing the to was Merrimack over feet vertical consistent two between due of testable expectations seeing execute pad between X-well

first As by I including encouraged certainly initial the tests, but early record spacing conclusions, productivity. still results the we need and draw more history to stronger stated, this we're it's from Woodford production

completed The second our continue cost to in improvements progress to well was costs. objective and learning

experience expect one, well and We production to leveraging used than end. and in comparable collectively entry how we at oil cuts it's deliver play X now productivity. scoop lower delineated successfully greater to strong aggressively demonstrated dated longer substantial shallower with long-term much declines. ratios since costs are hopeful well In have the brought XX%, Oil ultimately line total, wells our those wells the to our below X our positions. have

of Looking expect should ahead us understanding integrate promising our this our to play. XXXX, continue to to learnings you progress and

will capital will manner Lee, up. within we will who this turn a rate do so wrap to now framework. our re-investment in call However, the I disciplined over strict allocation and

Lee Tillman

positioned focus have in Pat. success capital Sheet [Indiscernible] a the you, matter, respect on there Spoiler no put close I return XXXX our we capital summary and no Balance efficiency, we some cash to Thank delivering of preview surprises our yield, framework. free and with expect us quick will to stream. what If from how with in flow and for Company are XXXX. we will of a be financial compromise alert, benchmarks that top-tier

sub range. are average. leverage sub free cash to delivering Sheet S&P year one-time the XXX peer yield quartile as with below prices lowest discipline, Our both our operating both delivering at in outsized of below intensity our price and market per per all grade of and market XXX well XXXX We're the per are net group, efficiency efficiency. a all with of cost our this are sub cash capital the leading average. performance the $XX see our performance also to profile our are also one financial support WTI capital the production, and few We're capital this to capex the down and deliver peer XX% investment we reductions, doing validation average. and rate our are a XXXX group top we more flow group XXX E&Ps the $XX short, way successfully power of at this versus Yet above among operating contributing structure well-positioned broader and E&P peer of or the deliver and at our lower perhaps improvements, versus importantly, breakeven. strong independent of capital all measured free rate barrel the to group. by the S&P our and reinvestment And, than a competitive experiencing we financial expecting peer well we In flow also XXXX an S&P capital EBITDA, a broader Balance is debt commitment we sustainable commodity year. the today; to to barrel barrel much This

call our cash XXXX, prioritizes generation differentiated framework flow shareholder on not at to the first change. ahead allocation will Looking that capital the

maintenance prioritizes be sustainable XX% Recall that not Our returns a cash of maintenance annual our year commitment featured at the capital to cash unique billion spending, industry meaningful rate, XXXX discipline model flow rate. $XX investors, equity oil scenario broad $X to a to and a production, waver believe We will the earlier billion we and is reinvestment what five-year low free annual for budget. to capital. $X finalize of with this we entered case business not right $X.X mature free a reinvestment WTI, as flow,

flow it consider living in environment $XX to longer reasonable barrel up both prices a under would billion north uplift performance financial the inflation Yet outcome. capital free And a no such of level current X inflation to prudent of and the about of in to environment. benchmark lead this once that that importantly, above comparison a pressure pricing, excess $X cash XX% peers in we're currently scenario Given level per free S&P of cash are $XX approximately order recent on is a maintenance range. again some positioned cash XX%, With the times XXXX to of limited strip of XXXX nominally per or and the the maintenance scenario scenario, $XX flow on are yield free the our X%. in yield potentially with yield pales at modest flow to we're XXX modest barrel, the maintenance

to CFO, disclosed by oil double-digit further at action we authorization our about XX% with our to have of confidence number holder the profile, recognize see net minimum, need delivery yield price to sufficient billion approximately confirms XQ target XX% return first prioritizes Sheet that among year. a a holder the flow capital. At holder would next share debt outsized Even conservative XXXX. framework billion commitment headroom our Company next to of return $X.X $XX board flow cash of position. But returns, XXXX returns a equity that return peers in runway per to cash To our to model only $X.X XXXX of balance significant was that year. cash is continue close, Balance move delivering environment, to translates supported recent Our return XX% returns billion expected capital to to run business of sustainable to more free $X of Applying drive $X.X flow, minimum cash and estimates distribution still equity XXXX. on our increase we improving a in our the about our this cash is improvement, higher. while still billion, ensure translates barrel our returns in equity to capital minimum and repurchase investors target of rate to to increase leading equity of by flow. and the of consensus The

compensation executing the and today aligning this with the They're outcomes delivering executive We new have for Q&A. also competitive on [Indiscernible] broader way open and expectations. better line direct model our investor peers, also market. the we with and not model just excellence. led ESG successfully to up We're that, but both With financial our can

Operator

Thank you.

We the and session. question instructions]. will begin answer now [Operator

Our Way, comes first question from Barclays. from Jeanine

Your open. is line now

Jeanine Way

everyone. Good Thanks questions. taking for morning, our Hi.

Dane Whitehead

Morning.

Jeanine Way

morning. Good

the on returns of just guess, you Can decide XX first detail more like XQ of on the that. than criteria could determining mechanics make would the it And It XX%? wanted needs than how looks number what for Our other us And you on a it for how I buyback quarter-to-quarter? level to XX% be that quarterly did maybe of a but some concurrent we walk you tranches? change get Dane. you're more question, through basis,

Dane Whitehead

questions. Great

about it. share One to repurchases. is we couple think I a more aspects a tactical the there's execute different how of little

more programs, also can day in levels, execute minimum when that set gives shareholders. about to them the view that periods. time. a little talk really to we you about free flow, for a we've motion done we're a the and basis; the flow. so cash prices, -- We significant of from we debt on on our X-X return return short It percentages and million short, retired decisions in because real-time execute Sheet, and $XXX over generate it blackout X-X sustainable we the to what free The of capital you on. a exceed and XX what on financial what's operating back far allows QX capital a aspects cash just talked the Sheet by priorities best through more We are those grounded calibrate generated So of other XX that under seeing briefly stepping -- year-to-date. basis can short period really in looks spend that, is commodity process be advantage which like perspective. be of And business, corporate -- we the on us year-to-date, financial yet riding whether decision based context in it's for do in Balance then always can regular bullet going a our proof billion strong returns, about significant quarter duration, significant September Balance

substantial holders So we're the debt door opens only billion schedule, if warrant. ahead the equity that much of more gross target and at $X conditions returns to for

level. positioned We now period. very And sustainable also and up the this the through that competitively base over It's dividend bumped also right recycles current third the at year. fuel's XXX% for time

return to above than above the a were We in high. is only Oil QX. to be cash the of at that returning well flow is they QX, all WTI $XX. turned not minimum of commodity $XX, quite a XX% bit look stronger when framework WTI capital for should volumes is calls we shareholders So complex operating

dividend an year the capex the QX, of EG expect distributions burn from capital which rate our versus was uptick side. and point We in the high lower for on

XX%. So we expect that exceed lots of to flexibility

have Sheet. add level cash Balance also We to to continue to a of some desire the

process that our mature. go they we'd maturities plans pay as significant sized reduce and to flexibility, level are of in the off they through but year in ultimately our the net future have aren't debt the we -- debt. And future, As debt

of return and be our follow, operating minimums So to make involved. it judgment great over that minimum or so on It's cash a a but percentage XX% have right; we'll action. just XX% need decisions accordingly. have bit I of it's we are real-time and the think and there's this, of latitude example is, ability whatever in they it's those but all to of sure to modulate to a QX, ability shareholder appear framework make Is that when exceed -- conditions or we based the call time, to little a

Jeanine Way

it. great. the appreciate for Okay, Thank you answer. I detailed

Dane Whitehead

Okay.

Jeanine Way

in decreases Mike. Would on Ford for any The characterize as Maybe for just on my it decreased inflation the outlook sustainable quarter-over-quarter helpful. per well question, Bakken. and current second 'XX foot, color for maybe Eagle your would 'XX? those And the be you

For mentioned cost peers 'XX maintenance adjust warranted meant whether and just of didn't I XX% that the earlier on capex on the catch And they you. activity. Thank put if meant inflation would believe example, your in that is it. would activity I X.X. his scenario on or remarks one prepared this that pressure now inflation week Lee that said

Mike Henderson

it We're To year, up both the year-to-date macro-environment's on we Bakken. as CWC costs highlight on that. the the dynamic our for quarter seems in XXXX bottoms-up XXXX. noted with being Ford moment. to working where down well Yeah, Quarter it's XX% lowest actually take turned at Eagle we the on in and the Well, costs of from Third the Jeanine, still average. I'll foot and pretty I'll were obviously we're expectation for start the planning

similar So to 'XX, to going our point for you've improve to our we'll file what structure. I'd what opportunities progress cost and continue probably see in to seen be starting that's 'XX

should to we we I in improve 'XX. see think inflation -- some could start noted, as

steel been Please very for question, maybe largely On there. and CTG. to inflation bit much little dot color inflation into in the with it 'XX, more It's characterize 'XX. a confined start check how

$X budget. our that We capital have our and for capital, accounted billion fully

to modest we're noted, reasonable at And 'XX some seems through the it working inflation. moment. As

some I think wouldn't I looking take are that. to highlight we actions.

we and some year. requirements our for of Reg next [Indiscernible] for secured So example, frac [Indiscernible]

I the area a think there's that's But issue labor. uncertainty quite maybe broader bit is a of where probably economy-wide.

up could inflation. noted, we we as XX% So to see

to on I working again, think that activity offset will pressures. levels. of hard to and be any going those mitigate depend to similar But we're 'XX, cost

Jeanine Way

Okay. Thank much. you very

Lee Tillman

Yeah, Jeanine, just for maybe around just out to clarity.

when we mentioned in XX% the remarks, think that range predicated at $XX the case provided WTI that on you X least up that in capital to I that As what zip-code benchmark about is that range to my you and correct being really X.X, I applying think gets to

Guy Baber

scenario maintenance a under for XXXX.

Jeanine Way

Perfect thank you.

Guy Baber

you, Jeanine. Thank

Operator

Thank you.

Our from comes next JP Jayaram question from Morgan. Arun

is line now open. Your

Arun Jayaram

thoughts perhaps morning. allocation your in Good really commodity the and better you place in plan a basins Obviously, should on of Eagle you Permian? oil get wanted focused for both think in Ford. to Bakken environment about to the lean on in guys your the some such lower and plays. Lee, gas as But much of I a of and price how on environment we and how capital outside that Mike the to core those inventory core NGLs Oklahoma have

Lee Tillman

we XX% again, XX% This Rin. expect the consistent how about Yeah, increasing with to scenario. our I and to under Oklahoma range up Permian do in that Lee, be is talked a we maintenance think to past, allocation

balanced of of commodity that fact are in of a commodity we the the have And in I we're For two is of and Clearly, more and a oil prices which like reference, year. Percent XX really direction Bakken already and seeing the where basins effect XX% natural net XX% across think the about gas really a with moving the very lifting the in black Eagle of to our constructive has Ford. that for the strength really those our plays oil NGL. XXXX all very complex this all to even boats having accounted exposure benefit allocation exposure this portfolio

both So Oklahoma, and there's strengthening elevate and in the also are elevated other returns well. believe and thinking gas served to changed. strong oil competitive as only hasn't our further. opportunities -- those in NGL there and has extremely We But basins Permian our the no has

exposure that the strength the So gives we commodity us portfolio feel great across balanced complex. of the

Arun Jayaram

about your peers that the update Rex an Great, -- dollar in within the basin. maybe how inventory some U.S. do basin, and on bigger your in for how I basin transactions renewal. and great. multi-billion wanted of my some portfolio thinking on to but basins. larger pardon some follow-up in on key me. thoughts in this see And And have to thinking the a the of existing Pat us resource to Lee, about just some want announced expansion you're program, Ryan larger the opportunities Bakken. just gave Bakken the just the They're renewal you X in Permian of peers -- portfolio question get have your you're get picture and is other Harold, operators says so, of the moves your of you X large what Bakken, about

Lee Tillman

Arun. Yeah,

work peer-leading criteria strict start the delivery, saying lens large accretion. that's that off a I by our organic any First compelling M&A just all, always through to very case, financial really our or we're small, whether of would it'd any predicated view be going on of financial and transaction,

we And so space. that organic returns. opportunity. that's are Bakken We really continues certainly our same the the filter The offer apply apply type of to exceptional are we we going to going the inorganic discipline obviously in opportunities, that view believe any that to to

in deck, place our the would have here you would frankly and that It the would come that high U.S. in returns for see the today. some just at certainly that at margin in earnings inorganically to a will in the have relative appendix quite very right the look look material you within If But some it value. how we our us slides, of of other competitive is really, to anything direction. And offer to full-cycle move is Bakken significant

of Delaware do dilutive in could You to And play talked we opportunity we're the programs delivery. our Texas opportunities extremely talked Certainly what we strong XX% opening not that anything don't sure a XX Eagle with to to we basis. to in the be market. market dramatic would redevelopment dedicated that every that and kind a market prices make like the about simply the that, in we renewal little bit be has anything -- remarks. in years have consider commodity that to capital more sustainable organic budget said of Ford and about M&A having year, today the have Pat portfolio the experiencing. financial what our with up things do could to those become the that, exceptional and however, things the argue past be we is we embedded see Bakken. that that could the that seller's each consistent of inventory, addressed need enhancement that like over oil on that of we a about continue be And It want than But

As we inventory. years look replenish and replace attempts our out in continue those and to out to best make

dated for we want head-to-head with definitely very to path I now portfolio. we into to production clear in play some path still the longer for we current were learnings spacing example program. best now, low our DMC there able very the drive some for great getting today that terms some see entry get And a And we of into a a some and from have But is compete of the think work Delaware that there's do that oil of information the to compete certainly capital asset in things allocation. Texas some tests for to to cost.

Did addressed I anything? all of I hopefully, So miss Arun. questions, your

Arun Jayaram

follow-up, Well, just Lee. a maybe quick

are at of you the portfolio play aware In which topic on just Delaware terms renewal, of peers of this are the testing point? Texas your this any of

Pat Wagner

to-date, There is There have both play tests Woodford other between and on Pat. spot the us. this as the of okay. we've And Arun, not some and We specifically pressure bit Merrimack the a again, good but some area's of best thick. we not a Hi think there's to the separation little as good eastern side but of good we But lower have test, well, been Merrimack have south results been had platform, and with pressure as absolutely the that stacked them Woodford been obviously. as been tests, then of some ours. sweetest have them have some where

Arun Jayaram

Great. Thanks lot. a

Operator

you. Thank

Capital Our RBC next comes Hanold of Scott from question Market.

is now open. line Your

Scott Hanold

this that? in on circle, I was then addition? think in should in good you of production capital be exit where Good fall and cases, things. your oil for baseline wondering or a to look or should be all. we average more if you're that obviously remind within clarify oil XXXX maintenance uplift you about just XQ, in the some included 'XX where spending framework capital production, does big capex, provided Is within and year having to Thanks. billion concept, morning might a here that we me couple the that you to the dollars $X can would Rex rate of $X.X in that One,

Lee Tillman

Yes.

being a calibrated scenario maintenance all of on production. about in you our average XXXX oil Scott. XXXX -- First your our to question, should think first Yes,

variability. All in It's variability drive of notional production in we'd to of as natural investments again, at XXX,XXX scenario toward natural per be some quarter-to-quarter barrels you day. short-cycle But us oil the that see looking that that a our maintenance experienced numbers.

question, around is other case as inclusive our one-to-one well spending of second Rex in investments, opportunity. any including capital one, Your includes That even all the Scott, enhancement benchmark number, of all as number organic our and

peak the was mean, online billion CapEx of in saw Just $X the as the the Plant. did bit third this reason a X-well Oil of one budget Texas the of quarter that in Delaware bringing pad I year. impact little

as should nothing at So put is an There's be the on that number. side. and in carved all out looked

Scott Hanold

pivoting great. to returns. shareholder And that. back Okay. That's Appreciate

in even prices primary going other do like look opportunities to forward, you And very of I mix guys bigger wait And as with sitting the robust to the to answer is seems or obviously to know looks you such increased dividends you're be as variable eat until But of plus picture? be, goosing still it have if in as harvest front pretty going you next these fixed us. commodity to outlet the buyback flow. that see continue You likely that special hold we authorization, a you're forward going for year buyback going quickly plan. the some dividend it any cash that probably over look we this look forward, time, that or buybacks actually let's out. up is as like longer-term the free

Dane Whitehead

Yeah, Scott, Dane. this is

me a first take Let kind of at that least.

can magic of that when they're authorization asked light us place, do in the up that we good talked persists excess still we going $XXX stock dividend. would to into board X.X the the certainly go million that about I of yielding us authorized the the authorization on than place open will a year this through of need through that great the $X.X we we remaining you clear through cash the room chew thing only no fact happening distribution if chunk be will do, options that said we and to at we call up today And manage XX% because to of pretty flow that free truly to if year no your incremental give running had that that to the that Quarter look of over value. brainer. Fourth so ever cash that and It and we'll went next think as first authorization, to that's just as it's to that's over to When it's excess capacity. time, today, shareholders this But where the than that keep obviously, and was in time, that. X.X the And sit into we we billion above process of haven't number. getting that base our billion with top - yesterday billion valuation

Lee Tillman

at do minimum we as Scott holders in operations not cash from real-time the unique XX% be flow to to of did when quarter potential calibrated clearly, you to to closely. look deliver just again, we'll but something exceed in have that against fourth But equity only a going I actually we the think that's financial that. delivery to watch opportunity back and that be will XXXX,

mechanism. I forward The to I one the clear also didn't. but base quantum something a wanted repurchase flexibility stress developed And of forward. We ourselves program a we the rateable that limit today, framework would of wanted on. potential to today. absolute we've we a the Dane shareholders. as laying purposefully back were going our going the that most said, confidence makes to keep Dane thing mechanics, be dividend else share to did job going out environment, get of investor to the really But We in something sustainable sense really think didn't to give competitive and in else. plus that repurchases. is quantum. clearly share intentionally been the cash impact great and we steadying We delivery But current That a knew

Scott Hanold

I Okay, agree. that for Thanks color.

Operator

Thank you.

from comes question next of Bank Our Leggate from America. Doug

now Your is line open.

Doug Leggate

what commodity. And ultimately get the change your morning, Good in Mike is end cash about maintenance me how given to was is day of of your perceives has ask dictate gas yield. would trying half Fellows, free Thanks view the at compete changed quality What back view I'm morning. actually the in the how high I'm that this call the scenario, at really I your getting of thinking that on the beginning inventory about market you the particular, to does the in guys. for does the Mid-Continent, allocation? want what's the flow comments, think drill the capital it we because given inventory I to to going you in to better, year, that's going talked five-years backdrop

Lee Tillman

Yeah.

return been from I view. nominally we've our on WTI efficient talked cycle $XX think greater the capital decade a really high inventory back based stepping the of about, inventory, men's than that it's

prices basis, impact opportunities fact in an actual clearly even of on around into that window. planning move may the maturing that opportunities bring economic additional those has As and

look of efficiently So it and driven I be as strong environment. around mix return going of at agnostic in plan going individual executing those of driven say it's our basis could conservative and Company, that into the we we to of completely set not we opportunities about secondary a on modest planning is deliver but a inventory by very to it's putting commodity's most day, be alter conservatively very across -- our the end dynamic the against opportunities, our about view play give can the question and we're gas dollars selecting core your by the thing, more we're won't the how we're a products how at economics. product and a but driven all them. pricing decisions. so -- then particularly strengthening To by to economic our investment we're and business the Look, barrels just NGL

thrilled balanced So, all the the because and we it's strictly is an portfolio. well economic uplift an I'm it that that NGL recovered, although really to portfolio, $XX at our a has oil decision. oil of although that portfolio, And as tends very sitting because weighted above have thrilled I'm is as gas equally mark

pricings And economics. portfolio allocation our so to we be going but are a driven are individual advantage decisions product at capital in essence secondary by those level, taking of

Doug Leggate

footnote this that. I a that, perhaps. Maybe Guy quick to appreciate for is Lee

of it today. environment talk production lot in a the again, $XX I on X% Slide maybe really just at because cap a my that [Indiscernible] think X But footnote. complete would inventory, the appears. market commitment on your rhetoric [Indiscernible] underscores you growth grew to of on views part is nevertheless, the with very The dynamic your still [Indiscernible] you X [Indiscernible] with business an that have about [Indiscernible] is than the model. of you inventory been is Slide some I be on on issue idea deck, our WTI would congratulate from discipline. greater not clear And leading and helpful quick early follow-up there's challenge get I But a the -- real on visibility away about commodity that

back is you decide production? So right when do go to time to the growing

Lee Tillman

for way Yeah, as I to high is you simply that there framework line up very, the a think for was bright a that very us hurdle that on growth. stated, set a

about able above all day, to the framework, growth outsized at metrics it's end be our the the that to an prices input. Because investments. relative past we're we lower. the very that to financial that be but deliver offer price future to will $XX. see clearly We know it's it remains macro, of demonstrate in we constructive are financial be within very still competitive have financial it of consideration, think delivering that fit we but we given of can and output the volatility when history And outcomes opposed when is financial To environment alternative would of the by would oil moderate reality I volatility become the always to, some us important informed that more as out-sized an for model into returns that will sector, extent a there a that

to in really just So it's acknowledge put step the it really framework, there it.

even in drive today it's the need think we to even we the a see would see that range, in near and hard just to I today X% say that it number, to don't future.

Doug Leggate

much, so Thanks Lee

Lee Tillman

Doug. Thank you,

Operator

you. Thank

Dingmann Securities. Neal from comes question next tours Our from

now is Your line open.

Neal Dingmann

still activity My about been basically Eagle percentage part that's is this the of the I question of that run Morning and plans ask I assume year? just Does has except those Ford and if asked. for next activity. X same the you for the consistent know on I'm all. year. few next want last plan for Bakken to wondering about total quarters

Lee Tillman

lot the when budget at that. budget But an we the allocation flowing coming would fact hypothetical maintenance terms capital next the our of would have detail you and when year. get make would we around Oklahoma incremental speaking tuned, release for in that into that Bakken some Yes. of Ford just say asset and more level still to for in But of we'll I out Eagle out to February. obviously, Neal, a we be will room get stay budget. released to capital have consider obviously, that not We're expect Permian, we

Neal Dingmann

and you as Delaware, far into obviously about just assume especially a other just of that you do you as here maybe [Indiscernible] are some for further you could push resource think size encouraging results pad that all much the of where I'm just this completion, in things here? so then from like pointed on we No, as you the Slide wondering early you when the XX some compare go terms follow-up how out comment very really I'm Okay. on the results could wondering -- guidance the comments encouraged play.

Pat Wagner

Hi, Neal. This is Pat.

Our primary is spacing. the has pad this objective

X now Woodford right at so per And X zone. drilled the drilled at a We we and spacing in this of wells Bareback. more the

far X. is XXX the all between So thickness foot the There between interference we're seeing no those. at

going to we're pad these So give we'll more some production And then longer-term X and on scenario. wells if perform. by this so, how X see [Indiscernible] development

even but test think However, opportunities to to X lot a refine some any on so have further. approach that. to I we obviously now, that to wells our We've we details of Hard continue inside. [Indiscernible] on we've give drilled drilling had learnings that, the and

costs down drive our I we'll our I to continue remarks. as mentioned think prepared in

continue So ultimately see we else this to progress call. as to 'XX, we'll [Indiscernible] take there what we to thing into need learning our do and go

Scott Hanold

Thanks, good. Pat. Thanks Very Lee.

Pat Wagner

for Thanks your remarks.

Operator

Thank you.

from comes final Gruber Citigroup. from Our question Scott

open. now is line Your

Scott Gruber

from Cash key dividends lagged believe EG the was still expected, Good Yes. The but to morning. equity $XX million, see, see. raised was was great booking those but good to income I magnitude? and in of income. in back interest should terms your think pace from EG of Can flow ahead we you speak and about equity in how to cash Marathon the quarters the

Dane Whitehead

equity for so Yes, Dane. me. our EG is the this investments are on excuse Scott, method, accounted that for Hi,

in that prices time they periods The dividends especially in changes, match think saw QX. expect fair we run-up it's to income. match. significant like you bid over timing have in vary, equity a that cash I where don't Quarter-to-quarter, can always

in in this dividends so case, And QX. earnings significantly lagged fairly

to that expect up near catch future. reasonable the in We

you So there over going equal much it's variability some can I see probably to think pretty when equal -- be just But you're modeling, to -- quarter-to-quarter. time. expect

Scott Gruber

catch-up basis? where on -- here at is point lagged Is exceed dividends, I your got there little or just it least a the you. income near-term in A a bit equity to cash

Dane Whitehead

period. a next earnings dividends certainly we the the catch-up equity where in We're exceed Yeah. can see

Scott Gruber

And five-year five-year ramping NOL. up the out cash outlook can outlook, then remind do there's you taxes just Given U.S. [Indiscernible]. thinking for at earnings about better have taxes cash taxes, your cash front us, you But the guys end, have you a within large

Dane Whitehead

on by the Good question asset.

we do billion $X.X in big used credits so be attributes one form offset NOL And course tax of well. has Both then to of the as taxes. foreign which have will significant tax and of the future

tax changed. really a even tax is doesn't commodity changes impact at the don't outlook, accelerating taxes hasn't us We against And ability. rates, really the The cash federal on tested have tax outlook of durable. meaningful to corporate a pricing decade. part prices, treatments the paying have Our until IDC latter forward higher income that

the that think hasn't I So quarters. answer changed few over past

Scott Gruber

Appreciate it. color. Got the

Dane Whitehead

Okay.

Operator

concludes the session. call Tillman now Lee you. question-and-answer to turn That will for I comments. Thank final our back

Lee Tillman

Marathon energy Thank again, in of Oil their need close dedicated I'd to by thanking interest like all every commitment your the for employees the for and to you our and contractors world safely deliver and Thank responsibly each and day. you.

Operator

This gentlemen. conference. concludes participation. you today's your and ladies for you, Thank Thank

disconnect. You may now

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