Marathon Oil (MRO) 16 Feb 232022 Q4 Earnings call transcript

Company Profile

Participants

Guy Baber	VP of IR
Lee Tillman	Chairman, President and CEO
Dane Whitehead	EVP and CFO
Pat Wagner	EVP, Corporate Development and Strategy
Michael Henderson	EVP, Operations
Jeanine Wai	Barclays
Neal Dingmann	Truist Securities
Douglas Leggate	Bank of America Merrill Lynch
Matthew Portillo	TPH
Subhasish Chandra	Benchmark Company
Nitin Kumar	Mizuho Securities
Neil Mehta	Goldman Sachs

Call transcript

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Operator

Good morning. And welcome to the Marathon Oil Fourth Quarter and Full Year 2022 Conference Call. All participants will be in a listen-only mode. [Operator Instructions]. Please note, this event is being recorded.

to of conference Investor like Baber, to now President Vice Relations. would turn over the Guy I Please go ahead.

Guy Baber

our this be the Thank as XXXX you, release, addressed joining outlook. call our for XXXX well a well to Yesterday found Anita. And investor documents website and These thank as us you slide presentation fourth @marathonoil.com. on our packet a quarter we results, issued close, as on and everyone morning. can press after that the year full

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

to differ uncertainties results statements. As cause actual from could materially risks and implied a call statements reminder, today’s by to that expressed will those or contain such subject forward-looking

refer always our the presentation release and in I the risk As described included well the will cautionary language press filings. to factors as everyone materials, to as SEC in

We today’s reconciled discussion, will earnings our which terms materials. in non-GAAP defined in been and have reference certain also

After that, completion we will question-and-answer With Lee? over of remarks. the these the to of team, I who call will prepared provide move the and remarks, will Lee turn to rest session. the

Lee Tillman

you, Thank call Guy, today. to everyone listening morning to and our good

all comprehensive against remarkable to First, year I delivery want for to of that described thank success. contractors established for year. framework A another as only our collective contributions our and their employees can well be dimensions

-- exceptional about get excellence that core talk well that Your possible dedication environmental including steadfast values, today. hard safety as commitment your it the to and results possible made our as work, I and made to

you. thank So

an outlook compelling. and year. exceptional is for XXXX equally XXXX our was truly beyond But

start While the cover things. today team I lot highlighting I'll a will few ground a by key of and

at the mandate operational champions S&P of They top group, the successfully at peer top we're just executing performing XXX. high financial outcomes are last and delivering E&P our for the less years. E&P S&P the not on but our very First, more two the of

lowest do The the strongest yield operating S&P flow the free the high a reinvestment lowest peer XXX rate in XXXX billion $X five group, group performing well XX of indicators the full now of yields one efficiency points free our flow to all really flow relative results of themselves. in in in cash intensities, XXX. one The advantage And speak adjusted a capital our and generation, percentage peer top cash free peer the cash a for and of entire capital established below average. S&P group.

of our we're cash significant framework. Second, flow our to driven returning capital return capital through back shareholders

call Our framework protect prioritizes is capital, transparent, and the from uniquely as capital on distributions inflation. it our investors it's differentiated, first shareholder it

the or shareholder adjusted yield E&P our billion free the cash And XX% top we’ve models of to space, from to of S&P and flow XXXX, equates XXX. flow returned relative XX operations to those That cash translates for shareholders. distribution distribution During of XX% XX% of $X free highest cash deals yield, to peers, our entire free a about one that our on keeping based also the peer in distribution the score flow.

a steadfast the competitive commitment remained combination dividend. to powerful We've our of sustainable in and base

XX%, a on repurchases. off count That by $X.X reduced driving to growth significant per with our In paid share billion accredited addition share basis. share of That consistency repurchases. consistent share

three track our of the increases repurchase our bringing count way during Rewinding this have we eight quarters. in seven back base times by XXXX, record And in peer group. XXXX, Again, recent share reduced all we most October of our XX%. program start the last leading the raised to dividend share to the

and portfolio Ensign criteria. It's acquisition a the strengthening acquisition box credit core makes compelling our Ford high scale. disciplined our logic to us we our and enhancing it’s key a a inventory closed we Third, every company. metrics, of framework, it Ensign on of stronger year it’s our Materially Checking credit Eagle successfully acquisition quality The before the a industrial credit financial life a in well. to return offers capital basin know to our of end.

will efforts have results the well. call additional provide integration expectations. Pat initial progressing details insure, later our XXXX that in outperformed are And

XXXX banner and and our XXXX our return was capital year, excited consistent significant cash XXXX with flow shareholders. potential our capital to prioritizes while I'm generation of certainly just budget disciplined a allocation beyond. Finally, as framework, about Fully in free

$X TTF. At reference WTI $XX of prices and $XX Henry Hub commodity

We flow shareholders, double providing expect a our $X.X cash to clear to of to expect we a digit generate $X.X free to yield. and distribution billion shareholder billion return visibility of minimum adjusted

$XXX the in that natural by ongoing Hub recognizing volatility commodity prices, $X.XX note MMBtu is change Henry And gas million. impacts to over per in particularly a our annual flow important just cash only

$XX in flow reflecting continued pricing about at While balanced cash oil million, moves to dollar WTI by our change portfolio. leverage

lead most. again, financial flow we comes S&P to capital operating and distributions. generation, and Free when the and expect Once cash fully it metrics XXX shareholder peer operational efficiency broader the group and to our that matter

benefit unique will Equatorial is LNG global While our XXXX positioned an integrated better we're Guinea to guests for outlook in XXXX even gas from our exposure. increase compelling, price as business

gas global Henry current Alba of market reminder, base LNG equity contract a we expires end to a as And move Hub our will the ET LNG through the index XXXX. for linkage. Just at

more million EBITDA to relative between global we Henry to an of With this and into potentially arbitrage expect prices, the LNG billion XXXX. to to $X translate significant Hub current $XXX than and uplift XXXX

provide I'll With and performance of over Dane? detail who’ll turn around capital outlook. more to Dane, our it that, return

Dane Whitehead

had capital Lee Good outlook. the elaborate execution of you, our points, and giving Thank I'll framework, morning, referred Lee. importance our on all. you high further topic, our

track it of really comes distributions, proud shareholders, when that through stated matters. a And to our we've track significant record investors in this amount a we're the foundational returning cycle, and to to of trust. shareholder record As marketplace. before, can capital We're building proposition value remains

we’ve shareholder the $X our distributions accretive total Total of exceeding CFO significantly distribution our XX% in repurchases and to framework XXX. That highest billion, That's year. CFO of a peer top commitment. XXXX the During yields distribution good the to one $X.X shareholder in for of amounted yield space XX%. our returned of shareholders, S&P share of the XX% billion includes during

share due to believe a in very base trading in we We our capital the back free grow the an efficient Repurchases is to upper at value per value and a are synergistic to means cash with excellent our flow of continue or shares, teens. that our stock accretive buying use see to growth dividends. yield drive

share During since count peer space by XXXX, share the repurchase graphic XX%, reinitiating reduced program as on seven. by most by shown significant share XXXX, we on our bottom October the right reduced XX%. our in in we've more than count far, share And Slide count our our reduction

of recently the our by our increase Another to share. buyback quarters. eight in dividend. raised capacity seventh quarterly per The ongoing base trailing base per is benefit our in for dividend We program, share it the creates growth XX% $X.XX

dividend incremental in buyback than its acquisition, While increases share ongoing base increases from more program the the for from our further inside recent fully reductions cash funded future. by flow potential count clear most

of driven believe to a on the first this our us. inflation, cash capital operating truly cash will commitment call inflation get and the it our stronger We flow Our as offsetting differentiated protects for makes is framework is distributions investors effects on investors, from flow.

operating For makes pre-acquisition, capacity. to our flow, cash recently our shareholder adding XX% close therefore to friendly our XXXX, completed and XX% to distribution Ensign the acquisition more framework even and shareholder

XXXX the will able to hand, Ensign, U.S. actual financial with -- the December defer alternative minimum cash results in close be XXXX. along with addition, In we financial with taxes anticipate to

maintaining of firmly financing. them, framework, is the our we balance flexibility. believe our continuing by to the already XXXX all continue grade return of both, leadership return adhere peer for priority also our and gross to our debt least to financial including top capital while which investment through do supported XX% capital Ensign objective sheet and related enhance acquisition strength and can paying space, is in of to We Our at this return CFO to some reduction,

have plan reduce and debt with we maturing to sheet, gross about million $XXX debt high We hand U.S.X balance pay on expense. cash interest off coupon the and that replaced. to On of

have are unique also do bonds cost advantage tax tax the in XXXX. cost low leverage very the future or of and tax million $XXX with exempt We those XXXX tax capacity component our same exempt XXXX. XXXX. These refinance bonds the capital we and to of in plan bonds flexible exempt in And to maturities maturing optionality exempt to have We credit structure.

reference our return provides yield, regard distributions billion price on With double capital the return our a of minimum as visibility space. of commitment peer shareholder XXXX of to $X.X highest shareholder at our returns, in in deck capital one to digit XX%

so to capacity our ‘XX. far QX We have And so framework. do current have ample been in share executing authorization plan we continue Board with keep in consistent And our moving. to to repurchases

the improvement. if exceed to for of we'll have that returns shareholder the over debt benefit benefit significantly record track starting And balance leverage Especially price and look return, While use we point of any minimum which a intact support to we'll price shareholders. They year, both commodity your enhance good the commodity our reduction. from tremendous to XXXX. would been our has represents models, that XX% record in to track keep and that

Now Ensign Pat, briefly I'll update who’ll over acquisition. to the turn us walk an the call on through

Pat Wagner

successfully our the Consistent year. end Ensign market acquisition of we with closed Dane. the commitment, before the Thanks, on

immediate maintaining industrial return to strength of and sheet. transaction checks quality on framework, consistent life stated, with investment our scale, we've enhanced logic comments, this the As accretion, Dane boxes our and capital financial financial all inventory and of M&A appreciation all balance accretion grade with

based no refrac. potential redevelopment maintenance with Ensign a on program our we valuation upside with one credit rig associated And for

integration focus on and is Our now execution.

integration, of well. operations month. complete planned activities for to up major be by the exceptionally We terms substantially expect months this we not early take originally close, the of elements to four to post have had with gone end transition transition In efforts of

collaboration in a to And excellent success. the That both serves comes record competence it large track accelerated an timeline with and that of underscore base then is between to due organizations. and execution cooperation has established and the acquisition measure

that the performance and our the of execution the best the view XX on On and in on consistent the to Eagles is acquired entire well capital inventory the Ford, with stated some Ensign potential highest deliver as therefore deck. the returns has XX. efficiency highlighted Lower side, Early Slide

Eagle wells acquired on Our acreage, to wells two the sales outperforming to XX bring delivering This nine legacy Ensign year Eagle approximately returns pads, The first in in those about productivity from accretive top the are for basin. Ford expectations expected decile and oil oil efficiency Ford are accounting to program. financial wells we total plan one-third our deliver program. productivity comparable of total capital to

I'll capital now to provide over to XXXX hand program. Mike, our color on more

Michael Henderson

Thanks, Pat.

to capital deck. points a high the Slide our of our brief Turning pool. provide XX I'll of overview XXXX of

expected, capital deliver our capital return As with consistent wide our flow to cash of allocation E&P the on shareholders a more S&P prices mandate, significant and less right as strong commodity we graphics our across of free expect the band show. and to disciplined the framework slide

we our deck, to $X price $X.X just over reinvestment billion flow billion reference expect deliver our cash capital free budget a billion to XX% at $X.X paid. adjusted At

X average of highlighted, we'll expect to deliver we least Lee at operate To to to $X.X approximately our Dane outcomes, and on billion shareholders. both frac As nine year. financial return X this rigs these crews and capital

first We by in our of about the with activity. capital XXXX our first be year concentrated weighted, timing the total spend to half driven of the XX% of largely expect capital half

maintenance Ensign XXX,XXX approximately the level our oil midpoint flat per production oil to volumes. of to day, barrels of guidance, after incorporating relative deliver we At XXXX of expect

lower storm typical annual As production, total our quarter-to-quarter business, variability Ellie, barrels range oil sales, modest good and a starting impact per along a oil XXX,XXX guidance be Bakken. carryover well reflection associated The the end very year. point for day. is our some of will the is approximately there our concentrated standard timing quarter throughout with from first of in for impact a the on of negative activity This largely winter is

to With sales into to third see production quarters. expect we for trend activity weighted oil quarters two and second the an to and first of the improving wells the year,

outcomes. deliver set our of The is second to us inclusive day, is EG XXX,XXX operational Turning to and equivalent equivalent a uptime high XXXX. plan of production. program of barrels quarter midpoint for oil to in in financial a per a level turnaround that disciplined designed planned oil strong Overall, XXXX and our confidence up high designed is guidance

we Ford, Eagle run the a X-rig In program.

again, licensed Bakken, the We our to due contributions. Permian, average already average In feet lateral the expect we an high-quality trend six current in continue increasing this on average activity our the improving expect we an improving prices. the in X well XXXX Ensign part an pays where in rigs will our out play, at In run lines well by over year, XXXX, to and increase XX,XXX of from hectare capital of productivity in in XXXX. strong to area focusing months commodity XX% efficiency

While Woodford supports pad one plan our which between looks of of that well productivity early drilling Meramac our well and therefore, higher XX Permian this spud getting work year, support back to wells headline level of Delaware, XXXX will to sales sales XXXX. competitive to we've second is higher a multi-well half last capital least strong inclusive delivered similar over wells XX fleet, guidance performance to and Texas allocation. year level the at and of completion in in a We, the

capital Our a an Permian all other longer team compete it asset is position asset development into for heads-up will on where Texas integrated with exploration basis now Delaware is assets. our fully the no The play.

gas provide continues our the strengthening fundamental valuable environment. and to a to asset us optionality So NGL Oklahoma price of

We Rather, that X.X to rig limited our lower year. capital. efficiently and and to much near-term priority position delineate is scope aren't asset program acreage some capital activity venture a will joint limited to this us acreage allow defend exposing the

update Lee, on With Integrated Gas turn an who provide to over I'll in it business our will Guinea. Equatorial that,

Lee Tillman

world-class at of of over the Thank Mike. guidance We generated million XXXX for gas delivered an And business equity integrated approximately in the EBITDA. was of year. exceptional unique you, income more our million EG. $XXX double year we $XXX beginning our than

natural as Henry results higher-than-expected for by Hub solid gas. pricing, especially as were European performance well driven Our operational commodity and

and to however, EG expect planned our especially significant beyond outlook for the referenced price cash realize prices, the exposure. earnings to as second back robust and we turnaround during XXXX income increase natural due the assume to equity XXXX, an For is of expect in in improvement largely gas EBITDA global commodity lower and decline XXXX, significantly on LNG The quarter. we already flow

A background, XXXX. XX,XXX day way of operated basis which oil equivalent to Alba barrels in per produced approximately our a XX% gas the on addition interest in net in condensate field,

accounted LNG third-party currently legacy is contract XXXX. processes a Henry have basis. also of facility plus facility. Henry Hub from our sharing expires X.X gas gas This total baseload We operated XX% and contract Hub the LNG interest end field Alba equity equity MTPA volumes on in Alba The that a Alen a sold at link link profit on

significant sold commercial drive a Henry XXXX, our While we're Hub and will material which that expected and LNG X, the Henry line to arbitrage pricing. between given financial global be still January LNG details, contractual through be the working no bottom is will at source Alba market uplift a linkage. It company longer global is into LNG sold beginning for the Hub

with or million $XX More specifically, realize pricing curve an EBITDA to generally XXXX. in the TTF, approximate per comparison consistent we're MMBtu positioned at uplift forward $XXX to

LNG there prices. is also a As in XXXX the help have appreciate side in LNG potential leverage range to wide global price XXXX, better of sensitivity you a global high we'll we've to outcomes provided

of by haulage gas EGL&G. further we remain available leveraging expected consistent per in uplift with billion. upside unique the of an significant assets uplift focused trailing Assuming financial long-term in a And on XXXX maximizing the the months, be case the in could potential equally TTF $X excess XX or MMBtu of $XX value beyond EG of through our EBITDA the price average XXXX,

is This world-class gas as West and one well EG most to the aggregation gas opportunities. prone in natural monetize point a areas of of infrastructure positioned as indigenous undeveloped cross-border discovered Africa is well both

increased of sector the investor market, for generation with reiterated deliver less cash years free summary, in to other as competitive and In must for view S&P, performance investment return capital. attract alternatives that for I've E&D. our and flow company corporate by now, returns, measured our More sponsorship, financial the we my

years they I top. out. quarter over We've quarter And to results out, We're and outlook believe last up challenge, is our prove delivered but at year-end that been. are ever two sustainable, in, and are. now We performance has as as just not for year strong the believe our I said is as type and very it exactly before, our that of competitive, the challenge the

investment call flow that first from We compelling inflation. distributions protect is of framework Our case cash offer unique return and capital shareholders on simple. a and provides differentiated capital

providing we're XXXX, clear visibility yield. distribution shareholder For double-digit to

We track that distributions XXX flow wide record investors and yield attractive competes an have market-leading capital free any company with profile of cash cash range free a in flow and offer of return at and an a S&P commodity and sector of established shareholder valuation prices. the across

peer-leading delivered all portfolio in a leads repurchase this efficiency, have acquisition. sector-leading and share of base our per a high strengthened addition share program high-quality by with record the and by consistent over via competitive inventory U.S. financial growth a recently the a delivery peers sustainable, unconventional We Ensign We to underpinned metrics decade that capital track is return our that of matter across believe durable dividend.

a leverage an and portfolio XXXX investment-grade uplift gas and delivering all oil Our demand provides with will of ESG And elements we're and strong with by while increasing weighting, global sheet. results finally, to our unique balance commodity oil meet all these in to financial drive material LNG that prioritizing beyond, global exposure coupled underpinned help prices performance.

am company. position of I again the I our want reiterate close, proud way how To to we

and those oil and delivering our and oil about is needs. world but staying results, The We core global poverty driven, gas defending come enjoy. to gas responsibly of progress, out true to that U.S. are is how living, the also the limiting to have of results we deliver we energy and critical it protecting economic security, all furthering standard energy values the billions

can for that, open With Q&A. the line we

Operator

go first comes Jeanine Instructions] today with Please from ahead. question Barclays. [Operator The Wai

Jeanine Wai

Thanks everyone. for taking morning, good question. Hi, our

first year-on-year outlook the of and out of Lee in sales one actually Eagle stood starting to number was Ford the if us wells it's Ensign the the XX was basis, on decently lower Our of just adjusted for and things just outlook below wells forecast, XX% or to 'XX add really question, think, then maybe to mode that assume last which about, the you you an with and our I number year. maintenance the wells plan, did the Mike, you

Ford And about Eagle Eagle were we if be details we you saw capital well improved about efficiency year-over-year seems And meaningful. the higher aggregate just in because it the Ford in share the in your any implied comments 'XX. further productivity wondering pretty could to

Ford Eagle anything if Ford So it example, would there year maintenance mode adjusted working wells this interest the other -- for are the there Thank and the to be the basis the year in sales, else? this actually affecting that or Eagle any mix, on is out whether an be factors you.

Michael Henderson

Thanks, call. it's Jeanine, that here. I'll take Mike

So I to of this it's maintenance Eagle it And maintenance mode in is correct. think think -- assume that I mode Yes, question. maybe your answer year. safe the to also part Ford is all

say is that. You're a count go A into in couple also positive a I volumes we of sales which the well on legacy correct thing. obviously elements would are in that flat XXXX, lower position, holding

being one the timing we the of when first in bring wells The online year.

'XX. sales going volumes. wells close helps that half the annualized first to And definitely of the We to in legacy our of bringing be to XX% are

the from But probably design. been one goes you optimize And the perspective is continuing the our an the our factored this of has second uplift see well and in well and has that doing my volumetric and really to into that That I business resulted walk outlook. plan is productivity in completion ultimate think things more performance. well one team important year's element into productivity. and the

in strong for year legacy So the Ford we already were a setting business. up Eagle with

Pat addition I think acreage position, mentioned. the reinforces as only Ensign our of the

wells we're online we performance capital the was brought think particularly decile of condensate of encouraged that in X really strong with oil, fully business. belief from window, highest with the what that capital-efficient the top the adds the productivity, pads to the X I very first in that inventory already a and our is this Eagle only some efficiency highly Ford. And consistent

So the this about us the that even very, opportunities very brings year excited beyond. acquisition and

Jeanine Wai

for on really the Great. Same year. committed a XX% down, you this turning to is good as you're returns The comfortable returning detail. pay versus least this at fraction you Okay. Maybe Dane, the CFO is always on a shareholder place. thing. just to debt balance sheet in Thank

where up, remarks should Barclays, But you've at new calls talked prices meaningfully assuming In to debt in of our how the this you this least crude prices. allocation of percent about commodity think the house return. were higher We mix. prepared around, early past, capital your prices the time buybacks between target year. debt about record At percent the original your $XX targets the forecast in scenario heard Ensign we pay got And than our different actually at and down? is you've different this given track exceed kind show

as or do you the after simple as color? any chipping is $XX so what more? start Thank if it point Ensign more that at debt? $XX, Is away you. And start provide at going oil really you Can you

Dane Whitehead

morning, Jeanine, yes, Good definitely.

my that right we're of to obviously, stated, a our $XX to how cash to operating second, kind particular to work back XX% me flow way Let capital then above about now. thinking capital for firmly committed of go on framework, paying and WTI return timing we're debt down shareholders a and assumes and I'll that. our of of we're is acquisition I framework well commitment minimum about as One,

billion share to that. XX%, hit back of that shareholders, 'XX, billion In was we $X.X We significantly $X repurchases. exceeded

as of well. return share the form thinking and significant about in that's So to repurchases, XXXX how we're

and both return capacity. Ensign cash enhances flow shareholder acquisition really The XX% operating our added capability about pre-acquisition shareholder distribution our our

pre-Ensign. is way post XX% shareholder return be think XX% about a minimum have Ensign would both that another to So

but So delivered we're only far our at having track to to what and that we've done meeting year, close a so goal, we we and meeting exceeding that. minimum, a intend it, that's our continue pretty target like last we actually minimum not what record

but soon our Too that, guidance you on bias. give that's to more to model

how capability back respect acquisition I to our pay return to we of the in look the meet as that at commodity do capacity interest at price, debt get even shareholder With exceed and context think debt not to and see have that the to only this, that debt return the at framework, chip both, really of meaningfully do out and expense goals acquisition I today's we just but start away to gross system. I the

lips increase commodity From on to our capacity. strong that prices, tremendous oil amount your leverage God's a and especially higher to have return price, we of just would oil, ears

note sheet did us positive is balance Rating You our around really that. agencies feedback strong. have given

to in rush a So delever. we're mad not

that And $X.X cash is probably start case at go think get taken can term is. on And loan can as kind go slicing off assess that without year so prepay window. billion penalty we we based base generation that just we within how X-year I But chunks through as of my through. we paid we'll the off periodically just our down to it

the debt. our goal, primary X restated seat that not paying But down once return back again, our goal will take to and is to shareholders, a number

coupon like our my have to me noted the we in have debt I legacy a structure. let X.X% -- talk comments, prepared capital flexibility USX just to second $XXX about million it's coupon. be we going it's X% here, I'm of While in high

system. on hand. get that out just the cash to pay we're quantum, big not So it'd so of that to of be really a nice It's off going

mature from only that, in bonds and are tax XXXX. And can exempt that bond already in XXXX the tax out the 'XX, in acquisition as somewhat to we loan we and referenced, arrangement, the 'XX now under way tenor all any billion aggregate that fees, relatably that they exempt have come over refinance $X I due and Aside term maturities other between 'XX.

bit very they're normalize of the they're apart to taxable things a Even coupon interest So quite a companies. retiring a is this the of ton as from kind They're go -- X advantaged there. that's interest crazy rate flexibility we this rate now in on debt. rate little from an and X%, bit perspective, environment, interest X forward we're and here advantaged

So like we that really flexibility.

we last July the extended our of $X.X to billion credit thing out say I'll And recently is XXXX. facility

So flexibility kind line, debt of Bottom first, pay there. returns shareholder second. back

going proceed. have I'm not line that's to But that's And going thinking about do how capacity you We commitment. a our how formula give break both. it. we're to we're to

Jeanine Wai

Great. Thank you, Dane.

Operator

Next question Neal from Please comes Dingmann, Securities. Truist go ahead.

Neal Dingmann

dividend just savers my dividend and you changed payout. support valuation leave I'm have specifically. buyback capital your or the first as the Dane, curious, question the for allocation, stock you on you appreciate stock focus. or I'll your I definitely really all the way think about

the used mean, you you're all details there kind is at you disk? how on buyback I think other Or mid-cycle of were the when some wondering, taking to Just metrics? provide the about at versus prices looking any looking

Michael Henderson

Yes. ahead, Dane. Go

Dane Whitehead

yes. Neal,

and want base So trend dividend. a base maybe be there. operating XX% say, not governor kind to is at dividend mid-cycle sustainable. look far competitive the We And of cash on that WTI sort we from get conservative that sustainability $XX a pricing, world perspective, flow too of and of of,

a governor. bit a of so And that's

in increase, Now that this the window stock be XX% another pay definitely the we'll again surprising enough -- how synergy to buy surprisingly is with we sometime have year. for back quickly can you that and share repurchases

would our flow as program, free how way that we to and dividend, long of buy about to repurchases, obviously, is I indicative cash that's efficient share capital expect think So stock. of really the a organic continue of return lion's back our share as yield

Lee Tillman

Yes.

at a I aggregate since notable. back reduction remarkable. of us XX% been of if the our pretty XX% feature over to shareholders. effect in about back getting repurchase you be -- dramatic in has differentiating, the the has think, that, Neal, a very as program, metrics also I synergy is it program talking that it a and shares base started that the for for we efficiency mechanism really that it's with is mean look And think, has cash share I October pretty not on only efficient But outstanding impact to share Dane dividend that noted, per that 'XX.

that still we the look believe, case XXXX. we mechanisms, to into ahead those So be are -- as

Neal Dingmann

be it Yes, out. Incremental question on second once that I expectations And my for seem then topical few again. next just cost, really to is love now quarters cost growth, the the share per specifically. stands most

believe you Just these And in can done good maybe talking volatile you've the the next all to quarters piece know X and a in curious It let's be. -- say, will a good to of the locking you continue? those. that past, how for on I like X, pretty Mike when even team. seems continue X, caused job

guys here in? when locking about costs thinking wondering just I'm So and you for call the you're at look term near -- it, that, the how

Lee Tillman

really of in time. X of Yes. of mitigate details of some you we those hand comments cost we're of But year. get just to Maybe to that the into I'll provide how to overall, mind when a pressures working perhaps about XXXX a bear couple tale was have kind to halves and in the Mike over of then think

certainly -- we first that was second of impacts in level of The the half. year the half see didn't the inflationary saw

the feeling in year fact pressures. as inflationary a the of those that we some only but is the not impact have XXXX think I full pressure of the company that we're sector, So

of $X contemplates billion billion that those full And number inflationary our $X.X fully pressures. impact year to

lock providers. I a just think in disciplined costs expand being Mike little I'll maybe that from has let outstanding very the and bit job on about how capacity service done an point. we our And team both

Michael Henderson

characterize Lee. Thanks, Maybe high couple Mike How things. we've Yes. that 'XX. of maybe Neal. It's I'd fourth a a of similar kind here, assumed level, cost environment. At service quarter on

touched highlighted So XXXX. We're into built point with and XX% is for XXXX that's starting budget what to little we maybe that XX% assuming you. probably this as consistent good a on And to relative bit. our previously, a inflation we've

kind that of of really was but to A the to perspective. past, baseload one in as We've describe disciplined doing benefits mentioned we the lot and our we've Really, taken working need I As approach. safety, thoughtful the been try from really in execution work. spot program hard. commercial this for minimize a what maintenance objective

the see priority working with And are to providers to protect the majority and in access same equipment were 'XX has using that business the we're there. tell execution really and that side I with the folks Our in try high-quality working we get the and been been to folks of that we're 'XX, 'XX. successful we of in you can

open at then second can pricing that the been we patient. to the the first I majority mechanisms. the our like Most not of There's feels calls year given As year, half index That volatility in where try fully of the but the for And all the the is think maybe bit moment. macro of a pumping link more little for pressure, half bit to really secured. the in. locked that's -- a pricing, the of year, sand reg just leads little right about a price of lot

price equipment, the business. and some work we've our we potentially some see much high-quality especially of lock of natural you if We less feel that to but of bit the activity, little Potentially, to and particularly gas our advantage the if please. side could been persists, recently, a those on particularly good that providers That more thoughtful in completion this maybe higher terms in. gas, of to commodity drilling seen lead could how we weakness later cost in year, ability that about in prices access

Lee Tillman

one lot I side the our unit inflationary gaining and from A that about model. of XX% on the And closing for actually team, Ensign a obviously, don't also of acquisition. a want Neal. business implicit by work this I also reflects business year-over-year. guidance, we're at scale to particularly down the expenses pressures the you as the year, going expense element U.S. but is our our great the it efficiency forget talking we through U.S. the of lot comment some if by production the CapEx a kind -- Yes. of circa look spend performance our time critical just us lot And well, business. know of that of operating maybe are

financial just delivery our time CapEx, is our metrics. on So I a of all just of key focus element don't still to want OpEx of very

just these I wanted so before that to highlight we questions. let And

Neal Dingmann

That’s a Mike. great. Thanks, Lee, thanks,

Operator

Doug ahead. comes Please The America. question from next of go Bank Leggate with

Douglas Leggate

Thanks for morning, guys. Good getting me on.

like So question portfolio. Lee of XX, about me the more the Eagle let And My tremendous frame years, XX-year how of about in and XX Ford. acquisition half this. of Slide sight showing in or today balance that's also thoughts about address XX, you're the but you suggesting the you production. Ford Eagle you're than my question is whether line a Lower any the inventory On have is

the coming portfolio So I'm a guess to the that sub-XX. conclusion probably of is rest I

if asset, asset give think parts maybe whether got extending a I'm portfolio? as but So And please. thoughts you those life how us on to you break I've down other sounds about wondering the by some could reasonable, that of it the follow-up,

Lee Tillman

first Yes. No. This the I Doug. pointing that also kind appreciate inventory third-party It's This in topic. you breakeven -- life important out you, data. sub-$XX data. I pack. WTI is this we of think the showed is all, Well, is an Thank do of because

in very that To mind have you in key clustered are XX- of that that one a or XX-year slice this just to keep companies specific the sitting So that life. X life. other is really me, to X inventory with of we're inventory takeaways in is

ZIP we're so in there. code very good And a

at quality level. talking also a exceptionally for that and I beyond any not premise. disadvantaged form fashion low a Getting breakeven. as to want that the with inventory when about like comes it basin So We're start portfolio, or inventory to life but with in

that you a been You're know, that's to basin to to Ensign the level Eagle calculation, tend right we the in Ford. portfolio sits accretive as a at life ultimately sense why But it look opposed and very specifically level. inventory at the as rates consumption has allocation capital

look that you inventory do the take better all said, that our we or we an across how at internal comfort in when like can fact look you kind But when basins, from are perspective. of in at well, XX-year We that they aggregate, of makes growing I to that the we're and the integrate moving sense digest just to wanting that think company representative life was now, Well, Ensign acquisition, right? forward. a us, about Marathon, for like inventory type acquisition think of which, very right much

would also Ensign positive a And logic. but If criteria to of exactly that compete a evaluate and big can look not it life. accretion. industrial And the you -- on was today, was talked would It inventory, was net effect that opportunities extensively or we seeing the we obviously use component now acquisition. assets But acquisition. that's have inventory from for any obviously inventory that to long-dated just financial we're right about what

criteria it the within looking if so that and was core constantly extent will raised the -- bar actually to some opportunities Ford in has the our screen here Eagle So to we specifically anything, and Pat meet that I at that are the to that find continue at the look hard opportunities But overall elevated at and accretive And team that enterprise very look metrics. a criteria. because and his we Ensign and basins. that raise U.S. take and they

Douglas Leggate

a you hands and that. going Lee. answer, the cash can assets appreciate good kind I see I'm great management with mean, I with of where lot and of

follow-up thank little extraordinary. contract kind been with realize you of a struggling we've a answer. change is So for you that the bit of XX-year the step similar question kind know I And in My is because on EG. the this

we're any going and capital third-party problem the That looks more years, the on numbers associated you about with gross uplift XX% on looks in the particular, the production at facing coming million next on this through is to X million data, it's year. like less plant. $XXX or about our that $XXX it decline over of don't the production, least The EBITDA have

So might my the can maintain it you questions on what which that whether question third-party spend capital, is, are actually -- of opportunities you what on terms or that gas how kind capital that. brings over margin of in do require maintain to

So do backfill guess Is I'm confirmation. decline it? for that how you really looking And rate? the I

Lee Tillman

first of safe, Well, of time rate. I the gas Alba decline kind X% all, and -- equity Yes. to think annual we're on rate, XX% the on the decline

decline that So would rate typically we asset. that's that within kind of experience the

In it me opportunities, terms of describe like this. future let

monetized have flow they Africa. will unless of of in the LNG. in comments, as probably those First opening I my quite unique frankly, infrastructure of this sitting most gas And very world-class get through West areas said all, X we prone molecules EG not

in already And success we've We are monetization. to that. route demonstrated the

molecule, But a If were sharing if which, Alen non-equity as profit you the proceeds to look as another we the percentage you of you that, both as that. on at of tolling project. will, participate project, said, with side a well able a from

the had us critical only undeveloped built that more Not market. capital, project when now know that, to but Alen out someone gas connects subsequently come for was additional on pipeline. about ultimately to you it discovered talk Alen also that but will obviously we we else's And i.e., infrastructure capital, the

transportation for route where monetization Basin, There in Remember, those and other the we're advantaged molecules. no Atlantic geographically to is European markets.

third-party to well a opportunities off on-block block we that as that the between Alba opportunities confidence continue ourselves. have both as assess I So very high fact and

there. some there capital Now could requirements be

going are in we're going molecules, have and to to those for we just the us, like to But come the participate able upside, in Alen be third-party to project.

for LNG out these and that a molecules have I about have or have a of confidence got going about we've stranded commercial a when strong trajectory that fact we at our that to very when gas. find EG those XXXX home be be works that I opportunities, So demonstrated I all think beyond. to framework of The success and can lot in aggregate, to they're framework replicated. think already Alen,

Douglas Leggate

much. Lee, Appreciate so answer. the thanks

Lee Tillman

there. Anita, maybe per question we on a remaining key our analyst to try can do through make way to

Operator

Matt with Portillo comes Okay. from question The go Please next ahead. TPH.

Matthew Portillo

Great to its Doug's Texas Delaware the program. development the question. see to a Just making follow-up way into

for us this you update far? kind an delineation can impact for the of give And might plan how What if inventory kind you've the so curious on this of Permian your views year? moving learned forward? Just

Patrick Wagner

wells longer-term with barrels The just pad. expectations. Yes, still and wells per are to most on on flow our at the high are three Matt, cuts, Pat. consistent water It's achieve some least oil showing there. one. performance, wells positive need of as but on our performing recent X,XXX time this you and this well wells. date, predrill decline, take said, that exhibiting early look low low still I'll they're good, We're outcome three back. a completed is All indications ratios to early. We some day at watching they're oil we

is development. We to Meramec, recall that two takeaway key deliberately our seen we and the the pad in lot work The may we've and try that there's a strong those and period. collected can check both so Woodford evidence Woodford which and gives down-spaced the spacing, us without co-develop day between no we optimal spacing communication and far You that reservoirs in in data vertically this fiber the horizontally. other successfully of

the with to a regard future XxX our way view most original learnings early spacing, will say appear confirm I'd co-development. that will development With from go probably acreage. develop be the to capital-efficient this pad to optimally That

well. shallow XX just generate decline. very remind online in about the the XX,XXX-acre have or I'll And Woodford the very this productivity, performance wells to their low Meramec. now well position drilled strongest have very a and previous ultimately, Again, in the is that we continues all really going average Woodford We oil in high we oil pad, returns. you across ratio that to well strong play that and confident be we the X think water had high

of the opening multi-well another As development, see longer We'll said, with rest Mike goes. It integrated how year that. drill exploration will portfolio. play continue this his we into we'll no That help will compete said with it remarks, to cap for the capital team. an in fully and in pad the the

Operator

Subhasish from comes question next The Instructions] Chandra Company. with Benchmark [Operator

Subhasish Chandra

risk derivative. that Yesterday, strategy, gas a in might oil macro Just have the a what's that given views. curious of as company we on the and gas world. targets And your happened see seen

your commentary, could you in activity are prices? on cetera. you might least But I based more more Mid-Con, how at all specifically at et talk gas, gas in think to you cautious adjust on

Bakken. follow-up on how And secondly, forward? of a no you look gassier, I follow-up should the -- kind and that -- Bakken at going well, is getting

Lee Tillman

Lee. Subhasish, Yes, this is

pricing. views, I gas gas our in price keep business though, a to We're about of in portfolio natural mind virtue want oil, very terms not of we're that taker. in portfolio. our hedge about XX% by the We is predicting do NGL. have, however, a and of Just XX%

here portfolio gas even see there, within side, well this seen allocation on So a we absolutely? prices anticipate optimization have chase though we some inherently, or the because for will inevitably and whole We've radical changes Could But that try very that gives don't again, deck. commodity we volatility. across exhibit capital year. our small exposure we're not the balanced predict us going to to a pricing very broad program

So very we feel good about that.

like talked and on in WTI, -- oil. We in the change that very are flow now oil within leveraged $XX about some fact a I for that's us. dollar like We still And that every very that, the uplift for is constructive We think sensitivities that. million in the portfolio. I'm to We cash our future. of

allocation in So any shifts as volume. result a capital I anticipate of don't major gas

the area, we driven fully commodities. be cetera, in to into some variation economics. profitability. see On moved the around typically, GOR. I obviously, et again, we will Hector to Bakken, question your natural But agnostic have won't again, by other just we're say going as But by driven we're we're

Michael Henderson

Yes.

expect Bakken. What basin got well and in continue. as capture just in chime that for the better better ourselves. you're and the each just maybe well gas to seeing I'll We've improving Subhash, there and as progressively is think, situation I on the year

that probably well. element of playing it there's as into an So

Lee Tillman

conscious to with investment field gas our the well that part And that. as benefits Yes. value come obviously been capture as capture in improve that the that's on to a that emissions

Operator

Please The Kumar Securities. from Mizuho comes next Nitin with question go ahead.

Nitin Kumar

talk allocation thanks one And had key wells forward? the for myself for how few four do little Ford, you the taking see a in morning. amongst As out, going but doing did we XXXX. limit more you're fewer Hi, good to I'll question. pointed about question, in you capital you U.S. Eagle resource also one-part expected base question. bit you Bakken your Can than a my

about should how we X allocation between of the plays? capital just So think the

Lee Tillman

Eagle uplift we and allocation outstanding experienced flowing to a that the in to allocation XXXX. I'll of of Bakken. on the is things, the the But also let we about in have maybe this some Mike allocation, Well, year-over-year couple XX% well fill say maybe capital I'll But in as based an Ford and year's Permian details. -- and capital of the the results

going bit march now for would is a at And for that the the allocation. this to are we start Delaware basin with year. maybe more so some up the not of time, happening terms that's compete directly capital. is and But There Mike in what still Delaware, going and the as there's are allocation Northern in Texas other flowing. very, very we're each level. a color only subtleties competing what's Meramec specifically obviously stepping that within And of but forward with capital how I Eagle on to at capital Woodford, the Bakken no I'll coupled basin position, Permian let Ford heavily looking doubt give little expect

Michael Henderson

Yes, sales Mike to 'XX. in bit the It's splits a little and wells detail on here. deck. the the We more just reg provided

X.X X.X the X the Bakken then Eagle So rigs XX and the on in in to in then and Ensign X I'll with rigs be the acreage rigs that's X in X total, excluding Ford, activity, JV Oklahoma. Permian in JV

going to roughly think Permian little a the surprised just grabbing it remaining bit really, and Eagle was And year. capital market last capital not, asset addition Ford driven we've with that I by of Lee had of that's the in Eagle Ensign. the the of maybe acute maybe results Permian And majority is that XX% Ford mentioned is the well, excellent capital.

there the now some XXXX. the Ford big a of it, no is and of is Bakken, in feat, is very, capital That a in for against elements even very making more mean that And effectively asset strong for well to couple case which aggregate. Eagle capital competing small part strong results productivity a seen

county in IPXXs averaged and brought of oil last cut. really year over a X,XXX is per day well. of Extended production oil barrels the wells good as history equivalent XX online we that XX% The looking

XXX the of oil that barrels IP well day. One an X,XXX Thunderbird over of per in XH achieved Red Hills,

teams their And I that seen XX we're couple think a We've completion activities, hours in excel over the day. with probably then team. really pumping you for the

can think see all together then. I combine you XXXX a like about efficiency, you of performance to lot and capital the that

probably. and the adding that acreage paint great capital that trades done our to Just job efficient. lateral that's with of as length, Yes, teams just even kind become well asset have average more it causes to

Lee Tillman

one take question. more we’ll Anita,

Operator

next with Sachs. Our go Neil from question Please Goldman ahead. comes Mehta

Neil Mehta

Thanks squeezing me in. for

on efficiency. provided but little of are you Just with coming real of question guide of a a diesel better. improving getting Obviously, any you derivative capital the chemicals the off, seeing 'XX bit inflation time signs here, quick second

what Just actually be talk into is might direction? about sticky what and moving back your

Lee Tillman

what Mike as $X we saw earlier, no change this on levels think -- XXXX. of we budget I is inflation doubt And said have Well, embedded the certainly there's rate that inflation exited to is basically that $X.X we we to billion that slow. billion the year's as in

cost We a et inflation and our from as to us would So not our Mike, commodities our well. only if cetera, but else to we expect moderate. for program, want see be that I to that to that? don't perspective, capital you say extent on start like relative know operating anything the basically diesel, to also obviously tailwind

Michael Henderson

they helpful other this look well. should an mean be could rig I activity tailing maybe maybe market and of bit well. in the also the weakening to start particularly alluded and with you in activity my commodity that little answers being probably off to where from see as the speaking, potentially a flattened prices, gas kind to count, definitely particular, -- potentially I of of I lead previous gas are think broadly basins, some as at that's thing a in one perspective of that

that comes start And a crews contribution everything then else sector. non-current rigs, service on in oilfield the with effect and there's I'll but probably

first on when pretty in the year I most strategy, So approach -- situation. prices touched our and pretty broad year terms the few ago we think about of the of I half minutes again, think locking about in I of think the year, our macro when flexibility the in half a good much the of feel in, second to the I then our

Operator

conference would now to Tillman This the question-and-answer concludes over session. like to remarks. closing back Lee any our I turn for

Lee Tillman

needs for and and you I'd responsibly than our Well, again close of now all contractors the you Oil. ever. thanking the in their Marathon thank to interest deliver very your safely much. commitment employees world Thank to like more dedicated energy by for

Operator

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

You may now disconnect.

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