Earnings call transcript Q1 2023

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Operator

Good morning, everyone, and welcome to the Marathon Oil First Quarter 2023 Earnings Conference Call. [Operator Instructions] Please also note today's line is being recorded.

At this time, I'd like to turn the floor over to Guy Baber, Vice President of Investor Relations. Please go ahead.

Guy Baber

Thanks, Jamie, and thank you as well to everyone for joining us on the call this morning. we packet press quarter that close, presentation, a XXXX the investor and address after issued release, a slide results. Yesterday, our first marathonoil.com. can documents be on website Those found at our

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

forward-looking to statements could discussion, press a materially release subject risks and cautionary defined have will reminder, As our the filings. as or our been earnings that as results today's language well in SEC and statements. everyone expressed materials. cause those contain the actual such today's I'll risk differ call We'll also from in non-GAAP uncertainties which included by presentation described certain in to to and implied reconciled factors reference refer the materials, in terms

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

Lee Tillman

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

quarter, our especially staying another safety, First, say and for for to execution while our and thank environmental quarter, execution, values. differentiated grateful on I'm framework against great a true done our I contractors success. another for your comprehensive to employees you to want commitment core Well excellence. to

our on to market-leading takeaway to topics key start of today financial the reviewing I'll notable continue performance. peer-leading with build operational by of number consistent X cover earnings a have summary and on to We our and presentation. Slide some

February and back very is strong that the consistent further delivery. track on First, we our in built guidance fully of operationally record we another both with quarter, financially provided and reported

to industry-leading operations against cash our shareholders driven and XX% at exceeding framework, capital again execute return commitment. our to We our flow flow cash from of return differentiated commitment least to continue of

share E.G. handily during per generated earnings any free adjusted cash and quarter, dividends. we cash strong beat Our receiving consensus, first not flow despite

The timing, receive and first expect importantly, flow did making E.G. exceed be variance up for cash This quarter, $XX to by the E.G. than distributions to related cash we $XXX income our receive over E.G. during entirety difference expect we quarter but income, of flow And any cash can that consensus. million delta more E.G. the consensus reported E.G. to free fact cash of dividends. distributions versus equity fact, equity explained not XXXX. in million is the and we strictly of for cash full-year in versus second

strengthen industry-leading to shareholder we investment-grade not continue reduce an our either/or proving debt. deliver balance both We can gross sheet, It's and returns already proposition. our

consistent oils day, And with quarter barrels in guidance. came oil operationally, first of at per XXX,XXX our production

into production We the expect and our and second program the capital our third wells an oil associated of sales. improving quarters, weighted to given trend first-half timing

Second key takeaway.

share. breakeven growth distributions in reinvestment and shareholder efficiency, efficiency, production rate high-quality our cash flow E&P guidance matter and total our Our Those free and pre include cash remains cash benchmarked at We on free our top that very to basis, plan and metrics full-year on capitalization, flow deliver post-dividend the that our business peer most. spending and to market track yield plan, production relative capital remain of flow capital both XXXX free group our the on per unchanged. metrics the

growth. focuses our and our but only strong is operational framework on quality strength capital This that return of capital of of merits evidence the disciplined the shareholder-friendly the our execution allocation of that not per-share assets and

morning. and takeaway my final this third And

now successfully competitive XXXX focused enhancements our to positioning focused equally sustainability. we're continuous on leads plan are that further integrated executing We've we sector, improve While on portfolio our and our longer-term return acquisition highly-accretive delivering We're Permian last realizing tremendous since schedule of in results we're our ahead results the activity the our Basin wells from Ensign sales. to to excellent and year. initial

with And further of best portfolio, Bakken in bar fully-integrated progress Eagle our business. and Guinea, Today, the outlook in a the the competing is high capital Permian effectively our global a on finally. made strategic very Ford heads-up to the for we've great longer-term basis clear. gas Equatorial unique, strengthening and of

over With will how that, our who stacks to and detail peers. I'll Dane, outlook turn XXXX on to provide more up it it

Dane Whitehead

good morning, and Thank you, everybody. Lee,

of on we E&P charts Full group top performed year deck. believe of at very we consistent a matter the the of our our with benchmarks broader that sector last top market, of very indicates XXXX peer business all at the that guidance as that as the most. metrics X XXXX data high-quality An Slide analysis year, the our shows well plan again and

a our slide outlook our of on with start recap I'll return deck. of of capital X XXXX Slide summarized

remains stated I've our significant through foundational our cycle As many proposition. calls, times shareholders value on the earnings capital to to returning

step share $XX me, journey. a track of that shareholder XX% of of XX% minimum exceeded base returns years, a -- measured to to again dividend. can $XXX and quarters, return building excuse was commitment on long-term including repurchases We XQ returning focused We're another on that just record and in be consistent shareholders, million million our our not of CFO, our

$XXX debt to bonds exempt high-coupon investment-grade sheet. of and And $XX very great we're some our believe start, framework, off expect on while maintain capital at remarketing XX% our CFO our debt, already while paying a enhance to favorable both, our Ensign-related the rate. can tax the year, return-of-capital at we continue including leadership and XQ, beating of we down target million in adhering do balance down further finance. return million a of USX Looking full also to paying We

We'll take down million our July remaining in of USX debt maturity. $XXX and

our to inflation. and is framework Offsetting first advantaged is on capital from call investors continue providing on returns uniquely the ops, effects capital shareholder. of truly with the insulating We peers, believe cash inflation of flow versus return driven cash the flow shareholder not

prices return average. top-right XX% It minimum sector-leading. X, on with our our of top broad as shown peer of the on double-digit peer commitment, about yield and of Slide total Even shareholder of graphic distribution CFO the a a is group framework across clear capital benchmarks very the at commodity double yield provides it to a visibility range the our

In billion the of terms coming outstanding, repurchases. of have shareholder share no shareholder preferred vehicle competitive which for returns approach. our share returns, our gives buyback base a there's with us pay of currently room keep executing. authorization through We'll We $X of to to dividend plenty change sustainable lion's

proponent early share growth, without dollar-cost to yield repurchases XX since in we've have our buybacks sustainability. base Though our October model, XX% high-teens, flow highly has the delivered cash significantly very drive value-accretive, XXXX and withdrawing peers our compromising which and eight averaging shares migrated synergistic out we quarters free per-share were our of to approach remain our a raised dividends, in efficient With means reduction a outstanding. now of an peer-leading last

The profile underpinned strength cash capital return and durability strong generation of and efficiency. by our shareholder flow free

we While trend. the a from our strengthen solid flow million, operations at number cash flow through There was first flow both quarter free driving of as are to $XXX underlying this cash cash we factors progress and year. free expect

we we XQ. E.G. As mentioned, dividends receive didn't during any cash

larger-than-normal quarter, the distributions those more receiving in a start to expect with beginning second of dividend than We million. $XXX

quarter our about with comparable half to capital to loaded CapEx in capital year. concentrated our with the first the to spend of XX% consistent XQ be of front-end first outlook expected Additionally, our for be full-year is

with through of move flow timing growth year. flow free the the generation we and we assumptions from the oil our operationally drive cash And our improving underpinned earlier this capacity this will remain financially, initial as outlook on provided cash spend that track year. production XQ fully levels, full-year Therefore,

space illustrated deck. very of on Page our clearly the peer And XXXX as the X at our outlook top benchmarks of

top-left to at one graphic continue S&P yields We XXX, the most cash as of the shows. attractive in entire trade free flow the

yields is shows to well While this free valuation, free a also flow cash our average. cash attractive peer free part it's right flow our top The cash meeting graphic above function due of efficiency. peer-leading margins in the flow

average cash E&P. delivering than the flow every high-quality more we For produce, barrel we're free XX%

efficiency our peer percentage is is the a below reinvestment barrel space, direct our the of and points intensity capital operating flow capital average. a than Further, better true rate, both a production, Similarly, versus as more XX considers cash average. of in measured CapEx is XX% lowest expenditures, capital metric invested cash per full peer flow than measure generated, it by the

and base our a the is strength testament to performance in discipline not strong execution operational the This our the inherent our framework. of of quality allocation capital only but asset

Our every returns corporate maximizing and spend. we on cash the flow focus dollar remains free on

achieve cash the scorecard. structure free our flow of focus incentive ongoing hardwired objective so ourselves lowest Turning disciplined XX, we've optimization short-term it capital most important WTI is one price flow necessary efficiency, operating flow oil on to to our we our the a benchmarked sector, Through neutrality, breakeven Slide cash or that our breakeven free and sustainable capital metric important cash our level. the metrics allocation, to and for on maintain free relentless into a cost

to model outperform low only remain commodity maintaining we we free do the free commodity When XXX. flow S&P we're can the are to ensuring with range XXX business commodity is to prices. challenged, positioned in materially healthy, cash flow expect by maintaining S&P competitive breakeven. prices This are of to cash When cash we broad a expect crucial and generation. across a flow deliver resilience free prices And compelling this

pre-dividend lowest per peers we XX breakeven have the Slide flow XXXX cash $XX at And barrel free shows around WTI. high-quality among

to driven by in to XXXX financial expect significant our E.G. breakeven flow we improvement in largely realize the XXXX, free Additionally, from expected cash uplift

better So positioning is while our it's even competitive XXXX. strong, XXXX in

cash free a the is our on post-dividend basis. flow Finally, lowest also breakeven

of that the and dividend our the sustainable sustainability dividend between XX base dividend and base exist we growth. While in we've on raised synergies quarters, focused eight share stay last buybacks

to longer-term headroom as add have even a share that to now base peers base adds $X certain dividends growth our long our dividend $XX more as a their $X continue our we barrel barrel, underscoring Whereas per sustainability breakeven, or for to count. modest and a $XX reduce

Slide to Turning XX.

to a a of growth that XX% more grow basis. to cash by corporate group per proponent the significantly the is allocation see growth, over that capital free per-share grow leading expect alone, we're peer metrics. in prioritizes XXXX expect production our per-share Absolute share a we While XXXX XXXX, approximately XX%. production in framework value but our underlying year-over-year. production we on generation leading per reality we objective, not returns to by the share we've growing growth do and production In than flow strongly been is

Two exceptional profile. our primary factors per-share growth driving are

strong our share reduced six consistent we've XX% buyback quarters. returns to disciplined the First, program, shareholder emphasis a count with and on last a approach Through by our buybacks. in

first-mover advantage. of accretive a second, Our by peers have increased no which enjoying the acquisition, model, approximately our but highly And oil maintenance share toward moved increase our in production with definitely we're Ensign count. XX%

our competitiveness, outstanding So provide XXXX update and to and over that our it the in of Permian. Mike I'll turn to with on plan summary recent Ensign a business brief performance

Mike Henderson

Thanks, Dane.

Ensign we've immediate strength framework, and all checks scale, M&A while and our and capital maintaining acquisition inventory investment-grade balance with return accretion, logic As accretion every sheet. stated, box life financial enhanced to of the quality of accretion, industrial financial our

of have is We faster-than-anticipated acquisition stated an execution the a Today, With established comes integration we integration has an confidence that record a been execution. basin where our the before to underscoring timeline with focus report now happy track and that asset I'm early Ensign our and with success. on of complete.

first on continues expected XX returns another the Eagle to in wells some total, well delivering on wells top the capital deck, basin. demonstrate inventory Ensign entire as productivity Ford. XX legacy comparable Ford accretive quarter. early oil in efficiency productivity financial to And in Slide offers online the capital the so the program. to three bring second the wells returns oil performance These are of strongest acquired Eagle our that with during in XX efficiency and our side, decile of to or are execution parts, Of the deliver plan We highlighted

has team activity to last since let to level Permian the of me year. we turn that, results a higher operations delivering tremendous With been our where returned

we activity As was during effectively XXXX, from we commodity a performance pause period of low have our commodity down a during best Bakken before dissimilar in of the price done, activity took XXXX in during we the hindsight, the pausing the things of the Permian also asset. in collapse. we reminder, not shut one that program COVID-related In price could transformed

peer asset results better perspective for More specifically, We analyzed acreage success. from of basin our by traits we that the the taking team laterals last closely across in extended Permian, spent today. couple core on up well worked a understanding the years completion like repositioning our to are and we a drilling top-down, the position we designs hard to look spacing and enable areas our at diligently bottoms-up our and

is XX length sales, Northern The the XX culmination Slide at of returning an second of laterals this are of last shown to XX. half we hard brought about work activity scale Since Delaware lateral which on of year, feet. average wells extended to X,XXX during with

Malaga laterals evenly during and oil This operators between Basin well Hills, includes basis first over XXXH on These in XXX the Thunderbird entire absolute the areas. well its XX significantly barrels exceptional laterals split the cumulative which these Delaware compete are in are the during in outperforming XX XX%, the results Red XXXX, Red that basin. Geographically, extended Delaware our of the by Basin days. top-quartile Hills produced oil also XXX,XXX extended set strongest with about a best truly

And from from point acreage exclusively drilling we'll footprint as almost we extended high benefit forward, the be development our up our grading coring this program, and laterals.

With enhancing the the portfolio, results, no best and for outlook which company. task long-term asset in effectively the in competing against capital Ford Bakken our is is Eagle and our these for the easy now

I'll an E.G. prepared back then will now remarks. to and provide hand it on our Lee, who conclude update operations our

Lee Tillman

Thank you, Mike.

we a E.G. significant highlighted on XX, completed is the to Slide now normal turnaround recently back and As asset operations. planned

of contribute production Alba as reduced well downtime for oil The when more stronger numbers. both per equivalent for next by XXXX, impact quarter our benefit the day, intended full-year it's about in the uptime our winter gas. second beyond attractive year to While as fully and XX,XXX barrels production E.G. contemplated for pricing we'll our turnaround to equity is

our reducing natural million, lower guidance are income to gas strictly full-year prices. due We E.G. assumed by equity about $XX

cash exceed E.G. income bit assets nature a in cash resilient. year, expect dividends prove this catch-up of quarters. cash equity in illustrating strong distribution flow we E.G. actually second of our quarter, the to starting However, more flows should the prior from plus

realize cash price to XXXX, back expect to ahead flow significant increase Looking earnings our global we an in of LNG the exposure. to continue improvement on and

through specifics, XXXX, the the longer at line While sold beginning Alba January X, no is, Hub sourced we're still be working a bottom contractual linkage. will Henry LNG

prone a company, capturing infrastructure significant uplift Africa value pricing. leveraging We're focused flow multiyear global Hub commercial in the one on material and to It financial E.G. not cash of be capacity. market, the the into outlook arbitrage our longer-term most will sold it's to equally uplift and fully LNG for our the which of West of gas Henry in LNG Yet, enhance our expected is the about given areas drive between free just unique global

few recently-signed summarized the our highlighting. intended HOA what accomplish. of are HOA recently-announced elements on exactly XX A Slide worth That's as to

from value uplift the toll the equity gas share discussed, new X involves XXXX, Regional of basis Mega all expected contractual Alen of XXXX under the our and For on Alba LNG the just is end. aligns market. cash with profit of X, delivering Gas I clarity, completed the global Phase The on of linkage the commercial January Gas parties Phase X the processing a Hub as E.G. critical necessary molecules that processing gas to terms third-party principles to HOA the Mega plus already via Hub Field. flow

potential the and our XX% Unit Alba on of we the Alba upstream chain E.G. LNG interest alignment for the analyzing a working are also operator our we're equity that X, the giving value both. molecules. in Phase XX% for -- downstream facility and block, interest Recall given Under in a working infill Alba have the drilling across

program LNG-linked shorter-cycle Alba plays. that to LNG confidence, the generated Alba compete risk-based molecules resource two-well U.S. with opportunity a global maximize targeting mitigate are to These decline risks, could high up opportunities plant more low-execution under More specifically, our base flow we're returns of and assessing equity terms. expected from the through attractive

up. Aseng step Mega blowdown plant next of that The partners. gas process pipeline our intent to X same Regional by facilities funded in capacity cap Phase the was Alen to and once constructed gas LNG the at at open access upsized Aseng the the The can highlights begins third-party development the Hub. the Gas

flow decade, consistent as with long-term E.G. cash our infrastructure as free or by the world-class extract as long fully keeping facility value our objective capacity. is from X the possible enhancing the LNG This LNG the long-stated to Phase possible. extend maximum full effectively as into next life of will facility our E.G.

the we'll and undeveloped additional the runs discovered E.G. discoveries. a infrastructure. X, in to between to mind. Phase opens cross-border other and Beyond regional continue door in monetization opportunities opportunities in additional same agreement is of area the through path to addition the gas our track recent assess with lot fast to Cameroon There A objective

on XX. close recent our Slide we've conclude to same used now quarters. our Turning slide the I'll call to remarks in

for free exactly of at competitive, just I've financial E&P. now, less company alternatives deliver return other investment by very that that of years sponsorship, type For in performance our We've years top. with reiterated the flow measured and our returns, capital as the the for cash S&P, or competitive not to performance last investor must but two attract we increased sector and market, delivered and over corporate generation

by Ensign with and E.G. Our our U.S. well an acquisition benchmarking competitive detailed positioned our recently and sustainable growth. one portfolio, matter investment XXX advantaged fully-integrated It's lead our global peer-leading free And by that group the not peer capital profile, It's we're the high complemented flow on again both top-tier is thesis, financial to multiyear at of by yield XXXX show unique business in the attractive our continuation line phenomenon. return gas cash an slide valuation as quality on per-share one-year S&P centered strengthened operational underpinned that a today, delivery unconventional This oil-weighted is and a most. sustainable, metrics trend. a of

To am -- to close, of reiterate proud the how iterate our I company. I want we positioned way

all results-driven, but our oil and it energy we of and to enjoy. less. And to core also transition progress, are positioned the about needs gas is true and those energy out we world We of economic The and staying gas world deliver oil property the values energy expansion is more uniquely responsibly delivering an U.S. not drive energy results, have how standard protect to energy, and needs. defend really is security, the lift billions come global living the

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

Operator

[Operator from Instructions] today with first from question Jayaram Our Arun comes question. ahead your Please JPMorgan. go

Arun Jayaram

Yes, actuals, $XX of E.G. generate good guide. income of dividend to equity the first the equity morning. expect Lee, XQ for to get wanted that I that more $XXX the you. and run suggest of and you a income some an about million including expectations based dividend, maybe million your million insights flow you -- wanted to few half by out math year, to relative would cash on $XXX tailwind XQ In would maybe on to

by see sense So you. to wanted if math to run made that that to

Lee Tillman

little payment that E.G. LNG, and second than coming on, to a from of make Arun, a greater space your income quarter we're of clarity that cash you for have receipt time reality cash this quarter. than we more for of the is is in bringing to stated, bit time in we're with the on. between dislocation thanks in math to equity but from Yes, dividend $XXX little dividend and But relatively that a spot million And bit is accurately your Arun. up going spot point, but math first do as

Arun Jayaram

Lee, just to my I wanted back follow-up, And again. E.G. go Great. to

nameplate, one per tons has XX% the a gross to out Lee, it, about stock as that thesis X.X but are to closer that I annum Alba the annum of know million call million know, you the facility. bring XX-K, declining, bare the XX% at the ton Alba annum we're of fact at the volumes per Alen Looking sales X you on clip. been volumes at

help you thoughts or and get your to Slide see on on to third-party X, Phase plant continuing with wanting more your of just on strategy so, volumes broader how Phase through XX X get opportunities thoughts full. strategy wanted The from facility. keep that can -- that your Marathon the these duration volumes Phase operating on X, this And capital-light

Lee Tillman

question. Yes. Thanks the for

long opportunities that a life, right. plant. bridge a high with we volumes third-party relatively been both coupled design Alba, of case that exactly set with that in of the the ensure now, utilization X equity volumes, and work's of low Alba keep Right was physical rate You're that's deals Phase And to this really was the with coupling that next volumes, at the through And that that would utilized. Alen, -- to like Alen facility completed. of kind part we're some decline networks -- that

We and another us the connects Field. Alen have pipeline now piece, with the that a infrastructure fantastic

is it So what that phase was designed to doing exactly do.

see we'll be pricing Hub going gas is ahead, As seen dominated really we've really about about of Phase from weakened arbitrage cash market course. intact, Henry the that Even value production LNG we the though X by out the a the and between volume commercial is LNG environment, to that's more uplift and global a uplift. associated that to look really flow so less is in exposure which the gaining global structure, remains shift and and the reality that, more

into which -- in an to is part allow through Phase water. also us have opportunities, still going equity of just additional molecules Alba in we're the clarity, X this early some that but days the but infill facility. for that of for to of play brought the to high-value the And shallow LNG these we be evaluation, -- that fact evaluating E.G. the relatively decline, are move element some kind are base been that as And drilling mitigate potential has we've potential equity

material here drilling, movers our a budget. -- standpoint, This from for not think when those that the is sure the the with will there out to be of about course, trees, dry do is That you U.S. phased it in of kind is in jack-up so compete that these we capital be those just are capital going time. test not in have opportunities, making head-to-head And also

addition little weaved that that's into we of an So this story the a quarter. bit

then, And we Alen-Aseng of is with our associated again area, is like to kind when X, you is, the that this molecules Aseng it's coming the is Phase broad looking a that, with course, will that monetization operated by the out at all the cap and view Field get Chevron, that Phase part and from and third-party E.G. finally, of HOA this gas signed parties. decade. extends just be Alen X, that, work, us was the was for other into relevant X path and that is X, of of through Phase that The Phase positive really next there

now this us So opportunities. additional gives it runway to advance

provide what in remarks agreement Cameroon, mentioned in discovered, West said up be X? the efficient I numerous that to very opening could opportunities beyond frankly, gas-prone and opens my we areas remarks, monetization E.G. and the Well, So most of about talked LNG a opportunities. is bilateral I route. aperture could There's that my And Africa. one in Phase the and undeveloped between this quite a cross-border E.G. as profitable

Arun Jayaram

Lee. Thanks Great. a lot,

Operator

our your question. And Please from question from with ahead comes Hanold go RBC. next Scott

Scott Hanold

thanks. Yes,

sustainability results inventory got depth Just is, seemed and of it's of laterals? it can the ability would question seem the impressive. of -- this bigger And part those kind it my look at about the now and pretty you do overall talk the it was portfolio. to looked like a be extended the to mean how does but the really the base, complementary turning be Permian, like And going kind of of step asset forward? up to I you play

you that opportunities inventory to guys the what's depth like? -- acreage to add look at that position? is And So looking are of

Mike Henderson

Scott, hopefully I'll Mike question answer that here. Hi, you. it's for

of two In I terms two almost the publicly the current at, consumption decades of there. you're rate, runway looking we've rates, think current inventory or than two decades activity that even decades to of looking maybe more disclosed that -- up at potential we're at

gives we maybe future. a looking for what that like you be So in fuel could the

delivered Permian. the team's some to And work productivity the middle there, mean, and And you're on delivered execution for an capital. got absolutely right, while the maybe absolutely well sales that I of the of year, as to perspective drilling that performance perspective, from in last would only the that a is they've based since from competing has from I wells the remind but completion back team well, completion results you activity, [indiscernible] not

do a have drilling then up us We heavy XXXX. year, which pretty for this well program set will

capital of back on But go year. as you're getting part So forward. early performance for those not competing bit this there, next we've since drilling. the that right, to based wells see we've additional to kind with that looking seen wells. going for been definitely of a little work absolutely performance the asset in terms sales the until probably the We've We're of is we to preempted going to those be coming

Lee Tillman

we -- to play could in thing highlight in I I it's if been just and have And as for play, for Yes. the into play successful well, oil Woodford-Meramec is of if that, more I Permian refer an within our really what part now, want It one integrated us. of jump we for maybe fully has now base as capital Basin. to minute a numbers oil allocation Delaware Texas migrated the very exploration the the Permian

and of inventory are Permian moved teams, remind another has that's team. everyone in unique I'll Oklahoma teams. that integrated that's that And tranche our they that And asset now sense in just the that, so to

two that develop migrate those absolute sense team makes zones. for that broad play it into in so how to And natural a to Woodford-Meramec already experience has such

our And are that M&A of question that to what other rates your around acreage probably is if would Ensign To addition further. even remains anything, We addition, say the I unchanged. framework that we everything today, see look would that still really our criteria. a just But is basins. what that market core satisfies the in at demanding very tell don't I you within M&A anything

Scott Hanold

it. decades those Got decades laterals? Are those one -- inventory lateral? you said thing extended there's two clarify there. two of to on just Are of And extended

Mike Henderson

-- smaller converting very maybe end, maybe the predominantly been the There's some And XLs. quite tails laterals. Scott. extended of team Pretty those it to have frankly, off much, active back to but SLs

at SLs So Expectation to maybe the those portfolio convert are of we'd some time. back moment. be end longer the over of at those laterals that looking the is to that

Scott Hanold

And you then, at to optimize is about Like, are back year, for over sort forward? going to flexible just of kind what keep setting E.G. XXXX. open the it that? to Thinking of of longer-term us Okay. now you with starting follow-up you the up this again. taking Or my sign to rolling positioning give opportunistic a more and a to end looking But it? the do is contract look more to pricing are going of Understood. sense kind what just be Do at at dynamics hard how way you're how of in steps expect want right it some the you question best contract?

Pat Wagner

Hi, one. to is XXXX. January I'll we're Scott, market Yes, that this obviously, take X, Pat. getting ready on

a to shortly those contracts determined, be, big LNG in has to process And that RFP global be what We marker as be QX. we'll but global will providers. market said, have going LNG linked prices, will that tie with still up and expect an probably Lee to for through to is

Scott Hanold

Understood. Thanks.

Lee Tillman

market. worked I be out proximal will of cargoes -- for LNG the to such European an the believe there advantaged tension set are we be there's market Scott, still to but details that And there, in that competitive

Scott Hanold

-- is say, U.S. What relative benefit cost to, you that shipping volumes? right. do U.S. like think Right,

Lee Tillman

I LNG that the lens it you're going think pretty going torque kind of of relative Hub pricing mean look be bulk kind I And link you stand how to the contract.. -- gas does global movement Xx think to be as the regardless absolute a at mean, move about to link, index when global significant. movement we the where about of from we a goes there, index you more I through today. -- is or to where look Well, Henry a talking uplift to Xx of

Scott Hanold

Thanks. Understood.

Lee Tillman

Scott. Thanks,

Operator

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

Unidentified Analyst

on [Clay] This is morning, guys. on got of good follow-ups Doug. a Hi, I've actually couple E.G. for

in will and or guys completed the decline? secondly, is opportunity what discuss highlighted infill what turnaround be you you could And can drilling a to one, been there that rate decline do First has a stem your turnaround that that uptime. qualify what and the And less Can downtime that's I'll What there. Thanks. it it? downtime? we've volumes 'XX? simply mean avoid And improve that that for does going leave that is means you does to

Lee Tillman

It's turnaround. Well, occurs that in program so until very onshore that funded program is early and fully years. uptime start the E.G. defined help decline comprehensive. already It's triennial E.G. a it's comprehensive that's offshore, really, really and the that probably is to LNG. amount to every about infill really contribution respect very of four the to to protecting It With no It's world offset land. both mean, where There's by maybe turnaround. that's the nominal that's ultimately class turnaround, of I too partners. performance Yes. three per decline about a usually so at that's and will off decline. with year, an doubt XX% the talk our some mitigate we Alba question. And

This year. to reliable that LNG And delivers is globally best uptime of facilities exceptional each to every in market. we're investing and continue most really operating, as really recognized performance team protect the one the that that

really investment. we're phase to more this is transition through important heavily this so And leveraging more we And the much into prices becomes as even global Henry LNG it that going Hub. where commercial be

very gas contracting. fortuitous. still low beginning it's to So that we're turnaround done It's prices Henry and during Hub linked while

Mike Henderson

at We're more color. I'll uptime bit Yes, facilities there Clay, plus speak E.G. in little the a XX% from about looking

really we year specifically. uptime next as So out, we that get into protecting as about pointed it's

Unidentified Analyst

you. appreciate it, Thank guys. I

Operator

question. Our question Dingmann Truist. with comes go from your next ahead from Please Neal

Neal Dingmann

they'll or compete. first compete on or just for asset Lee the now wondering the how changes the the for asset operated maybe any capital versus just think that just you've assets? for My so time. I'm Can Mike, Hi. brief for to you Ensign, you good, question, how speak Both thoughts legacy a on Thanks just will time. curious are

Mike Henderson

super, schedule, with how everything's super happy gone, positive. the mean, I integration's surprises, ahead no of obviously,

at, XX on the Top- the basin. in I Slide we You oil decile think results of performance basis that the saw well put deck. it's within there

very, more may of future, a get perspective. to are be that. positive, view to allocation and is very does from little of too in what bit impression feels think a we think allocating it's a I definitive say be first bit I capital if that But a early terms we little perspective, it going to doing on just the capital a anything in like early but from too

Neal Dingmann

any I'm difficulty] could have about, wondering you only domestically speak then, with if you question others you to softness either potential seeing. be second but Mike. OFS -- or potentially that some just do specific can And any not [technical might what forward areas, just some spoken E.G. to see that inflation. it, on

Mike Henderson

that start take Yes, I'll a reminder. Neal, maybe one with again, just

of moderation bit XX% was we over to assuming to to assume comparable didn't would actually the Our the in to second quarter we cost through which we're what fourth half of of deflation the be starting XXXX. the year. compared XXXX did incorporate any pricing, We XX% did XXXX assume XXXX. see. were guidance, environment inflation a about And little We steel

we're say we plateauing the is service pricing access at side. What could seeing is What has to or some of a moment I'd potentially maybe improved that seeing later And definitely improved. flattening in year. maybe costs. are definitely general the lead That the

year. the start could guidance we've the again, think As I rates lead the rig areas in quarter within I some or second look the in to the larger at the out maybe the spend, later that have softening come seen with publics activity of all specific modest softer rigs, and

definitely we're improved, there, the is consistent Pressure go I that rates half seeing still of access potentially commodities. to call certainly trending softness pumping little general but the the in mentioned, where think year. a the market with second all lower bit pretty that's I on just and steel And of the early as pricing make it's in

with the the hybrid actually One few areas access point flexibility and in the to been we've half improving situation able make of second got the in a contracting market year, we've already I of that would the is business.

So for That six example, was we that get more experienced ago. couldn't months happen crews, we're equipment. getting five, better something

counting trend second year. somewhat the be bit would So I'm the in there. caution, deflation I early pro too does in a feel of painting half it to just with a little positive

you just we when I at about the the think volatility of that think, moment. face the particularly backdrop

Lee Tillman

could just jump Yes, I Neal. think I in, that, if

and left contractual the flexibility think half market. in year the that in take the opportunity intentionally advantage I such that to any we the second of commercial of we would have softening

However, we credit within the took that budget. no for

So reflects full budget the across said, our fully year. Mike inflation as

a see be even tailwind bit would a if that softening, more of the in second So to certainly were the a perhaps of we half year.

Neal Dingmann

great That's Thanks, guy. detail.

Operator

comes TPH. go next Our Please your question from with from Matt ahead Portillo question.

Matt Portillo

an you Good starting Permian, the in wells Delaware. turned morning, all. line additional in the Texas in Maybe four just out

design all I but that's give that's updated on data surprising Looking area on but wells, the spacing on infer about from you working performance. color going anything, well terms the over us to been early been are early how state just at an of also the thoughts thinking time spacing bit know Curious you you a the may the just too these in guys years, are quite any few performance last if design. some tests, be and curious could forward.

Pat Wagner

I'll we in four pre-drill This those wells as Pat. characterize one. that as the performing is on is quarter. said, with this Yes, brought you everyone. take for first reminder expectations. a wells would in I line Matt,

wells call. of wells. above spacing XXX-foot we down Meramec the spacing did feet test, two the one I those about in XXX so kind a heard a of think between was This this we little Woodford and three at bit last

the high in other and that we're are from oil acting strong cuts, early decline oil they're low pad low time takeaway is wells this oil -- So that the just wells, production, like already key ratio the seeing.

there's confidence moving us Meramec, communication and that forward. between about gives The no Woodford the a of lot the co-development been other which key takeaway is

We across And moved Permian into and position, very productivity the of do acre blocking XX we're the Meramec. we've the four our Woodford team it now of and said, wells in there. and integrated I nine online have XX,XXX fully confident it as asset now

future a terms spacing was this In down of test. development,

in at look the at to of a maximize co-development, capital that I oil pursue drill think we're But as learnings in again. and we little we XxX next Woodford, just a to our the probably large bit volume that continue will the pad, will we're going look early efficiency. going is spacing in maybe there's Woodford, place a such tighter which to

Lee Tillman

were a to first cost oil and at really essentially combination to amass Maybe if operators were in course, this active get we able Woodford XXX% the net I mover Meramec. acre could And see just the continuous in now working add interest. kind too, a of we starting Matt, at are low we relatively more and XX,XXX position of Woodford-Meramec other both window

And for kind all And believe this that I and that think constructive been that supportive all of is compete what of saying asset along. we've capital we allocations. can

integrated is reasons One into we've moving now out phase. Permian we exploration that it phase the developmental believe of the of key really in and we're the with

Matt Portillo

volume Perfect. a cadence for color as the on for And follow-up just just wanted the clarify the then, to question, year.

You guys QX helpful. gave context which quite QX, is on and

a and we looks like the you've fill half Eagle I year, QX. got know of Permian. Ford look second it the towards as in curious the heavy in QX Just the program And

you half a you Any up well. perspective first will part, color in provide able some about as there to think as be about the half thinking but should into figure volume from TIL of might year just QX, on we gave most how the color we in to QX trying wrap general. the the For additional cadence? know back should I out be

Lee Tillman

one, jump on me let Matt. Maybe in that

think right we first be I quarter landed opening XXX,XXX. to at, we the where comments, expected as mentioned his Mike in

we the full-year program. midpoint will, production But if do third Our the quarter guidance reflective for right and of increasing, see is the capital trend moving which an being of guidance. second really oil you second around is quarter forward,

the full-year and basis. our that, said Having intact oil both and guidance on OEB -- remains

start that of fact, provided. are very that momentum profile also ahead we generate in we as to XXXX And so mindful, of well. we And as making thinking will, course, sure maintain that we midpoints those

Matt Portillo

you. Thank

Operator

Our next comes Please go Citigroup. Gruber question question. from with Scott from ahead your

Scott Gruber

economics bit growth more and further. a gas the Permian Gulf gas to the cost little the the deeper, come to the to a opportunities, But are we associated of morning. of want the Coast, may just I the Eagle in than a have maybe Ford. guys potential but window future you dry It's the need Haynesville going sense we Good whether as the the out the wells contemplate Do for Yes. for sense look of wondering more, along theme out and back you demand actually have Eagle of good Ford? so breakeven.

Lee Tillman

dry and disadvantage, our Yes, well, and both some plays, these you in of at as costs all drilling basins, the these areas of as get inventory of complete look a completion into you quite today the will high. pricing gas bit certainly, as cost, a get say at we of is

optionality We also have, of good our course, dry within as gas position a example. Oklahoma And that's well.

these favorable in acreage, JV both put general, for environment we that Oklahoma, bit we plays us to and keep place rely our a as structure gas on Oklahoma heavily that allows NGLs. as crews find well operating, production in our if think, more protect gas and do in see I a a do be that more we prepared combo

everything and keeping to go. a good how ready program But we're example warm is of the JV really

that is to the gas Ford. question think don't I Eagle necessarily So limited

based as of be be on capital. It's at won't done think going by to we're it's completely just the could the to end commodity. agnostic Oklahoma day, all with well. and apply makes driven And I need ready to I we say mean, opportunities But to when I that on economics. it sense. return be going

Scott Gruber

the course. to with term, whether prices the collective out guys future position, your contemplate just -- recovery to you thinking on of the depressed kind I'm is potential of It's I of good know and given gas growth, worthwhile building it's position no, demand Oklahoma highlight inside that Yes, here but south position. plate near lot from kind have today. or acreage further a a about

radar or on that's the not. Just wondering whether

Lee Tillman

think more in there's, generally in our to of you certainly particularly today, do it think, could you're also dry gas that if Ensign, I window. well back, are gas as that as of condensate oil, very Even kind opportunities getting there we with within strong look right NGL well, lot this sense production we're XX% a But Yes. company. and significant Scott, optionality. the from think XX% just there Well, step a future. certainly, I you exploit is portfolio about gas Ensign when brings though, though we're gas in oil the it

balance And commodity that like that we we like price and exposure.

of keeping we includes full right course, a side, exposure different at even enterprise our exposed to very want So is balanced kind and of commodity be to future, price mindful that the an the E.G. to which, And that and now, kind have assets, again, price. level, just, clearly of of the that condensate in And on then the Brent linked getting linkage they're exposure that stronger. into both even global LNG. commodity

Scott Gruber

Thank Got it. I'll Appreciate back. the turn it you. color, Lee.

Lee Tillman

Thanks, Scott.

Operator

with Goldman Umang next Our Sachs. comes Choudhary your Instructions] question question. ahead go Please from from [Operator

Umang Choudhary

and morning thank you for my taking good question. Hi,

Lee Tillman

morning. Good

Umang Choudhary

just and sharp on see is today. is attractive international first LNG arb would thoughts, price Henry very those to capacity any gas gas in build But My XXXX? if through on risk question you your love international with outlook. Hub the between the out the Hi. arbs Clearly,

Lee Tillman

half that the that's one but to on power likely start Yes. the is will gas on projects of that and But growing. in that to certainly Without too that to world are heavily LNG. are generation we want to second be going things I never this the of is deeply is going to to lean to do of decade crystal demand, lot still demand ball, in coming LNG into pricing think There needs is that look say meet more the predict forward. will I Europe, A pretend trying what going energy.

between U.S. as be in will think global will LNG, well be so And demand. as contracts. linked certainly, I strong still that LNG global LNG and we Henry still believe in arbitrage that And Hub play,

at today the in to that's absolute intact. be the still dynamic future. at look there, arbitrage going will think still certainly, a strong pricing, LNG that look the So we volatility in even Europe remain And you if you we believe when we gas and see market for

Umang Choudhary

your in wondering towards weakness any I from Thank Very And drilling just helpful. if natural the as was to areas. it. shift today, think through we any Got liquids-rich more-gassier away more you. given prices then plan, flexibility there's gas a

Lee Tillman

Well, our already around that Yes. outcome. that is reality optimized plan the we've

basins, balanced to capital at terms capital As oil program flowing our I an enterprise the that have Eagle a Bakken. and allocation very oil-weighted is Ford bulk reality program we a But of allocation. the is in black level. are the is our which The mentioned, our very program of

that and we that JV, back early to recognized Oklahoma -- So again, that's, on. going

leveraging spending of than funding we're for there, And reason. capital very others so our rather operated the that basically

believe that the is today, that program going around extremely optimized it's feel strong returns. generate already seeing the very and we good we pricing So we're commodity to

Umang Choudhary

questions. my taking Thank you. Thanks for

Operator

And session. for we'll gentlemen, that, ladies turn floor any I'd concluding closing remarks. with to the be Lee to question-and-answer Tillman like today's back and over

Lee Tillman

And contractors they needs close the world responsibly you. now more Well, every and achieve thank and you call. Oil. for like our Thank all in Marathon safely prouder And each to employees ever. concludes for the day. what your of their than by I'd to deliver dedicated that interest again Cannot thanking and energy commitment our be

Operator

you with gentlemen, joining. conference for and thank and We we'll presentation. Ladies today's that, call conclude

may You disconnect now lines. your

Marathon Oil (MRO) 4 May 232023 Q1 Earnings call transcript