PXD - Earnings call transcript Q2 2021 | Pioneer Natural Resources Co.

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Operator

Welcome to Pioneer Natural Resources Second Quarter Conference Call.

Joining us today will be; Scott Sheffield, Chief Executive Officer; Rich Dealy, President and Chief Operating Officer; Joey Hall, Executive Vice President of Operations; and Neal Shah, Senior Vice President and Chief Financial Officer. Pioneer has prepared PowerPoint slides to supplement their comments today. These slides can be accessed over the interest at www.pxd.com. Again, the Internet site to access the slides related to today's call is www.pxd.com. Investors, Earnings select Webcast. website, the then and select At recorded. This being call is call A XX, through site replay XXXX. will archived of the be on the Internet August The Litigation Reform made of XXXX. forward-looking harbor company's of Act will the provisions Securities to safe statements Private the comments today pursuant include These the materially in results future of to differ business Pioneer a statements. subject to actual statements of may risks cause the and from forward-looking number and prospects are uncertainties that periods release Securities uncertainties on presentation and described Commission. are the public Pioneer's news X risks slide Page These and filings in of made and Pioneer's in with the Exchange this over I to remarks, would Chief for Vice call Senior the and President turn Shah. At Pioneer's Neal time, Financial like opening Officer, to Please go ahead, sir.

Neal Shah

thank second discussing for Thank capital for you results you, second Ken. quarter of call. be will joining our Pioneer's Good Pioneer's we strong and strategy. Today, quarter and everyone, return earnings us enhanced morning,

present best-in-class that, operations your over low stewardship that, strong open also our With safe the execution, and will price. continued the call Scott. accomplished, up it maintaining will questions. I'll our all After field. oil to is breakeven in turn underpinning our while We and we environmental rate for reinvestment This

Scott Sheffield

third vaccine. demand After balance a free quarter as to successful flow. talking sheet the morning. quarter we're improved Good dividend strip accelerating this both due second payment Neil. strengthen announce as you, Thank as that of are into for very the year to higher about as excited Obviously, XX after of XX% result it a cash we reflect to to variable the increasing months our oil payment continues base of well payment dividend first our and pricing

our to the to of greater or The X quarter dividend, quarter third that material X as returned highly execution be in up base shareholders will third over million $XXX year. production alone. When addition, making flow, driving dividend total than milestone flow with significant our second receiving Pioneer's investment of combined a accretive approximately us share initiation end a $X return guidance, will through marks transactions top the during In delivering the of begin decision XXXX total with shareholders $XXX payments framework during dividend quarter, continued estimated payments the and near free billion. dividend the to of we free in accelerating. checks this strong about million led $X.X cash per cash variable also cash had per

the from breakeven the highly locations, largest is shareholder and inventory. We accretive acquisitions. over the were largest significant any X acquisitions Apollo, the Pioneer bought Both more Lower XXX not who recent Lastly, largest DoublePoint. were inventory in Basin Permian available. with of the XX, Tier lowest producer price in was added We X the Midland the Tier large two at best looking and XX.

shareholder million sold has of largest about down million now outstanding company. from DoublePoint XX to from X% than shares Our and the the less of shares X

of flow total expense our Pioneer of strong operating total, billion generated when In number approximately lease first our the ranges we operations half into Horizontal quarter. production the half guidance and oil in free in by per compared XXXX. nearly $X.XX to dropped cash $X the BOE in first Pioneer's slide to Going were DoublePoint's remains as as upper integrated X. successfully execution production program.

Going slide number X. to

acceleration oil our both price outlook increase underpinned Our the variable and inaugural supports strong by balance improved sheet of dividend.

quarter based dividend on quarter, accelerated first will second from be XX% the The during flow. cash paid free third variable

over and shareholders free mid-teens a you stable look base compelling of combination XX% growth at and result returned value This from years the to in increase months approximately to previous in the incremental dividend growing high-return our on Obviously, and $XX XX% are program approximately the base durable On to is predicated changes because five strip XX $X low free planned. significant be sooner When the of to significant low Additionally, total up over including the third returned investment the dividend cash generating to expected rate, the the we variable be much variable flow. Post cash shareholders number through per core higher to up company's dividend. X, mid-teens, previously about The the than the dividend separate billion X%. dividend exceed return years return remain variable next to is These delivering through cash to creates quarter free our in committed total for program dividend is inclusive leverage, dividend, when XXXX, turn payment five of increasing year, both next cash to XX%. XX%. oil in flow dividends over the around average on dividend, our backwardation. investment to share. checks the eight our XXXX, is next years variable XX% and base in per shareholders five slide we thesis, strong with $X over corporate returns oil base flow

to balance continue sheet cash as we will free of our allocate to balance flow remaining the portion maintain sheet. pristine We the

Going to slide number X.

our through than billion enterprise allocated cash flow, and about billion strip the than greater cumulative than cash Cumulative to which free to cash drive remind less net to current X.X. XXXX, drops want XXXX. of amounting billion of generation backwardation value EBITDA $XX $XX total the X, flow, pricing, more XX% slide XX% It efficiency, on over that this free next in on through see $XX can years. is balance flow capital in I five the Again, Pioneer's free based significant towards $XX than program debt assets sheet, over backwardation. generates product of is strip dividends top-tier remaining our of the represents you cash you greater greater Considering to As high-quality free our of strengthening driving the market cap. with than flow and

as a a with exceed opportunity combination average yield dividends companies sectors, sectors. and to dividend a all in The S&P of yield all companies flow dividend shareholders XX total on about X%, all by energy positioning This average to as across expected Again, S&P is the XXXX and about in which reminder, speaks to on number the dividend numbers Pioneer's in assets. investment XX%. and slide major leading power capital Going is focus of and that than XXX. other than of Annualized with cash a XXX free yield underlying to the the will second compelling the half expected yield to X, previous outlined these oil dividend framework $XX yield the companies paid competitive cash to look at a $XX well year of leads highly of on strip return slide XX creates significant Again, you and quality yield Pioneer's the backwardation. the due when is cumulative greater just to the per greater increases returned approximately flow. X%, to of free underpinned you cash times an billion XXXX,

the Rich it Let outlook. to over for me turn

Rich Dealy

good Great. morning. Scott, and Thanks,

from integrating Parsley including transactions both slide, special thanks all I Before a year. over just excellent DoublePoint the our team, this job to and for that give came I transactions, Pioneer entire the to on done wanted in the people great start the they've

items extremely have small and have a on period these a teams integrating have hard of left seamlessly a tremendous we few DoublePoint, worked operations very While time. the in done short job

So thank to are those you that all listening.

slide Turning at to and nine. looking

per full to but slide see unchanged to per $X.XX XXX,XXX teams. there's on by is it inflationary and the our and most change and our is day being of billion improvements You drilling here, BOEs the year of production work capital, no seeing on range oil some XXX,XXX $XXX,XXX by day. of although of barrel Similarly, are total can pressure, completions production guidance oil at to $X.XX facilities efficiency by billion, our to great we offset $XXX,XXX

at Looking flow. cash

You call commodity about. are the as $X.XX our free those forecasted operating Both with has $XXX to in flow earnings. increased related May in to to cash talked has flow Scott what and increased up we from forecasted billion, QX of billion, cash our can $X.X million see prices, increase

XX. to Turning slide

remains rigs for average full unchanged to is Our year. set XX the plan drilling and between XX and

currently X frac Basin. and Midland in rigs XX are the fleets running We

of and the further lower plans, burden quarter, Basin our we our we've oil is team returns, achieved Delaware Basin into Delaware well the the improving higher terms goal are royalty this bringing and forward of In Delaware moving acreage. the in Midland with especially to to multiple gains the looking rigs that in cut the Delaware, given the efficiency same

production Just XX% was for reference, oil Delaware during the QX.

the in have with X we you As inventory. acres see here, a over can Permian significant Basin, million

to monetize opportunities evaluate will longer-dated we of continue inventory. So to portions our

acreage past, packages, we've include monetization As evaluating opportunities will the as non-core as well drill-co other done these in opportunities. small

about synergies. Turning to slide XX and talk

from we see related here You the that target the $XXX million DoublePoint to in Parsley both and interest can and on G&A synergy have slide transactions. realized

XX% made future plans. synergies operational being into with the progress over being the of we On and synergies, incorporated have target identified great

in For will We've relationships, we're new reuse which about tank identified this examples, position instance, wirelines, we including providing for items. savings talk locations a forward. future seeing cement, that have incorporated leveraged second reduces more have fleet our across facilities, we incorporated there, on supplier simulfrac capital going successfully just additional among drill our future The and our just X,XXX it. few. I development we DoublePoint Joey simulfrac tested it our our benefits laterals builds. -- the significant, the also significant other water a given into Neal. casing, that name improvement being which disposal, stop And lastly, system team need pressure infrastructure, XX,XXX-foot has in partially Obviously, don't to Midland the take optimize mainly and are as our and acreage existing over to into of development I'll plans is teams advantage batteries, facilities are to to our Basin. turn leveraging continuing acreage, future water that efficiency program, Pioneer, significant across have Why pumping, contiguous brands, can

Neal Shah

operational operations. yields Slide that, E&P barrel the capital This our peers low a Pioneer's drives below XXs, Pioneer's the oil the it our into and over corporate On underpins to realize base, XX, rate Rich. percent high combined our to and durable $XX only financial see asset which unparalleled barrels, price and mix, WTI. return oil high Pioneer a shareholders future. you, oil breakeven Joey enables our peer-leading strong Thank significant With only cash flow margin is reinvestment to peer-leading that discuss turn in it with and free I'll strength, you'll drive our well a breakeven not positioning high-quality of amongst to

Joey Hall

continuous their to good I'm continued morning where our going improvement and be XX, to and Slide journey. teams Neal, completions on Thanks, everybody. starting drilling have

XXXX, improvement you since integration than in As completed feet seen than per XX% feet their in drill This considering increased including per impressive XX% more is teams can levels, more see, and have these journey day. even when the their more improvement Parsley DoublePoint. and two of our activity day

simulfrac we've our process second in starting As of the seen fleet. operations. success also Consequently, simulfrac Rich we're our mentioned, continued up the of

projects environmental operational and partially capital our to operations teams Our working progressing facilities are to in are upgrade operations. diligently technologies our our trialing ESG new teams and standards. initiatives DoublePoint low-carbon by And our production power to

want teams. production noting that none in always, the to our improvements planning other the possible support will and from past, management be completions, and effort and operations. without emphasize our groups And continue this in but our robust great the that in team, our operations, chain water performance of we development I construction we're tremendous only as drilling see As supply to

our team Congrats employees going contractor move continue to in QX. and keeping peer-leading environmental Slide entire performance our for footprint. I'm We our and delivering XX. the efficient now and safe, I focused Pioneer to safe partners reducing remain on execution to to

slide. emissions you facilities, our standards only our peers Despite Pioneer's position, possible surveys. was detection thoughtful the results with intensity program, made planning And to see our greenhouse marketplace low routine exceptionally to that, a wrap standards. high with XX% through intensity environmental at emissions and the top-tier long best-in-class back US by This production to XXXX, storyline our of scale. will our aerial over can and flaring produces Scott XX, comprehensive and And XX% by we to oil leak global extremely increasing commitment by on intensity up. which the in further previous years our gas intensity includes coupled Slide for breakeven very continuing things results a and goal through resilient Here, of This, to investments emissions time. minimize the place methane our compared majors. and a repair moving now to demonstrates global combined emission and it reducing I'll intensity and Pioneer's environmental leadership to our long-standing have with of that also meeting expect commitment from COX turn Pioneer low

Scott Sheffield

number On slide all pillars of great you, Joey. Pioneer XX, importance. to Thank continues ESG of hold

I think in last months the of regard we've about Basin the million the the a B a to XX most with about Permian talking XXX one flaring. recent points over from to as it day a declined report, less Rystad been important has since than day

So, to less focused on are people all than flaring almost companies. reducing X%,

to you if and got your continue need in the to -- in pressure to biggest the the we Permian equity. companies the We flares, Basin. the private continue to in ask put We you private to be Permian, regard on continue find companies private

which We live in work. community and diverse we the which continue to promote workforce, reflects a

look As see, XX%. you individuals when company, run at top at you we're can that the XX our

we welcome pivotal Lastly, to her our our like a navigating experience play changing Lori in of landscape. Coca-Cola. to role would officer the Directors. of with excited global is energy and D&I Lori very have Board We're an to leadership Billingsley

release Our is left XX. these in slide. XXXX scheduled finally, shareholders. in the on driving all third to the for sustainability portion slide Pioneer And the Pioneer's for on of report progress values of which targets environmental quarter, will outlined our committed include is the

up it for Now, we'll open Q&A.

Operator

Neil take Mehta Thank Goldman Sachs. Instructions] from the question now can [Operator We from first you.

Neil Mehta

question Yes. going can very on you or I about. the and sense you're been to contracts first I plan us disparable in the time of much. Thank to introducing look accelerating basis, dividend? a give variable you've see the time? you ratio, the congratulations you introduction is you appreciate for how Is expect of And the to guys a this to something updating that go-forward? guess just potential the payout talking the on also over move about, you higher market forward, we variable quarterly just right that talk payout on then should around this a as dividend variable do the continue

Scott Sheffield

comments. the is our to business. quarter running for slides, cash free Board -- XX% base the of know, flow as including Neil, The Yes, thanks years. of That's our the intention to is pay you bottom everything, every next for approval. subject at our to long-term opening we're But the up several how

have, the number have we roughly we With locations around We're XXX XX,XXX of drilling over probably locations. that about a year.

largest So, of we inventory anybody have out probably the there.

X% for So, growth produce we on several next yields go can and deliver the and years. strong

should energy it stock. So, be the go-to

focus want focused the buybacks. want when focused stock was that on talked that. we they was over primarily, and to can our we got. to don't take any invest of to months, the dividends dividends do feedback because really dividends was got. back They they XX stock, the They want the the all our buy to last it you're ability dividends. want feedback in on back we're the that that we of the feedback If shareholders They

why we're up have that's greatest the So payout we to and XX%. focused

So commodity the variability, be price. obviously, will

us us feedbacks low ask regard want will capital variable the for, we end. shareholders that very to any the hedging to the If stop not to sheet. variable to of budget dividend. be do will It hedging. balance do be If will protect dividend, and to they'll regard I'll plan One to it have give in the protect there. feedback very, any we the in hedging, do at we

Neil Mehta

the And going update quarterly forward? quarterly it a on variable like on get an dividend on basis the sounds we'll --

Scott Sheffield

Yes.

Neil Mehta

follow-up then And the around M&A. is just Okay.

point the going you you little seller's or words, in opposed asset at your given you can existing for addition pursuing A&D what questions a are it other work do provide general, in transactions a this provided inventory slides two Pioneer synergies that One more color really just incremental to this around bit at transaction. capturing to relates buyers the So you you? or buyer market And a the In on you're Point as as about base as Double the point? to to here view associated as the this. in is, with

Rich Dealy

Rich. it's Neil,

Parsley focus program base transactions Pioneer. the related is to Our along really our and the executing on with DoublePoint

talked to focused laterals, operational think, G&A mentioned, focused On of I capital our capital the plan, facilities integration that I captured into the that side synergies, and as that of and the about, longer integration identified we've we're on over simulfrac XX% interest. that that We're have when the incorporating and using our Joey on including that those the standards our our sustainability to got upgrade And to high report. going to that come spent that the you'll of high to or Parsley standards. we report see you're DoublePoint facilities operational and and dollars, to related our some adhere to out, spending in -- see we you want we've see sustainability

And accomplish so those being are those dollars activities. to spent

Scott Sheffield

And second had Neal, on was opportunities. bought Tier I available, available There becoming at We we great were current the And DoublePoint. two They Parsley available. question, -- anything I anticipate said, became don't as nothing inventory. the best the They had and them. X time. your

in us So there's for look this opportunities other no at need time. point at to

Neil Mehta

Terrific. Thanks guys.

Operator

will from Raymond next John now James. from the We question Freeman take

John Freeman

guys. morning Good

Scott Sheffield

John. Hi

Rich Dealy

Hi John.

John Freeman

mechanics see year, of per of works mechanics that know have to Scott, paid I sense assumes variable a base on how past, about plan roughly get of the the to in on to X% increase like trying side schedule. look in the I process And dividend. a well. a dividend well base I'm average you've things? X% variable out talked long-term are the thought dividend dividend, really we though the base lave the that payout at you when great obviously, It's ahead -- dividend the laid

past, the said you Just the the as the is dividend? gives just toggle dividend, as mainly main sheet lower, the variable that? base any linked ability commodity in the I've that So base dividend, the the price, leverage goes is to raise there balance on is to additional color it if

Scott Sheffield

X% X% base, but increase an annual our on building just base. is on five basis approval, still years you that base the still in, to next the increase we're that's that's said, intention, over Yes, Board to to the the as subject in

it So the strip the bit same, so... as we increase base, variable a the the little keeping reduces

John Freeman

is we're there my to initial one the there Got area some to question, those got to drill starting it. And and wells. on yet That then just any update Delaware. rig the for other compete try We've looks capital.

any Just the Delaware seeing results? early in updates what the on you're on

Rich Dealy

Yes, John, there. putting we're we're first just this getting started. -- our We're just over rigs quarter,

just more have or the But next fully in we'll data to we've this over the so Basin. Delaware early at the into And operational that into on seen this year But We're get expect it's to Basin bring performance. started year Midland point. excited there. to we benefits

So until I don't to share XXXX. probably yet have really early any results

John Freeman

Got guys. it. Congratulations. Thanks,

Rich Dealy

Thanks.

Operator

can question We now Derrick next Whitfield from from take the Stifel.

Derrick Whitfield

on morning, there are question, program-wide? ops. quarter I deployment Perhaps update. dividend my focus and practical Joey, to With wanted on any for all limit ops of your and congrats simulfrac variable your Good that first can limitations

Joey Hall

Yes.

all pad. as number some One water the upgrade get working basically have is of particularly fleets around frac often logistics is were logistics, is water all wells the to of because around on we'd maybe we area and well. other But seen to frac the great of that. of more the we've One, simulfrac there's if on not to capital simulfrac. of of water operations, the a couple amount And systems requirements things convert in quite a because success trivial one course, our questions the significant I our that limit sand fleets also our doubled spend matter of why under the of

pad, If capital have sure bang want the you the primarily, deploying have we're slight of odd the make efficiently that for and number But it efficiency. to an impact getting a on wells buck. the can we're on we

thing most water impactful to we at the single logistics So simulfrac. probably deploying is that look

Derrick Whitfield

to in question. prepared And question, follow-up moderal ask referencing with your Understood. activity XX comments staying on a lengths. XXXX ops Slide I on wanted my

for Are for infrastructure and pad internally a us share activity size with lateral on broad that guys you lengths any are As prepared and XXXX? permitting possible you XXXX average from perspective. there outlines could

Rich Dealy

Yes.

the size pad pad I as think we've four talk year. past, as in per about four that of average we on about this talked basically wells

to And the for about of going be talk for XXXX. when and the laterals that's consistent then think many locations still will how longer in I developing of we laterals, drill, but improve. midst exact longer fairly we're the drilling the been XXXX in part in it has will what XXXX in to capital longer we've definitely of bigger obviously, the that. portfolio as continues our a be looked efficiency laterals past at XXXX than And and

and a per an percent XX,XXX-foot on probably average foot cost basis. per it's an basis, So on overall drilling on XX-plus laterals savings completions foot

Derrick Whitfield

Great right. All for time. your again thanks and update

Rich Dealy

Sure.

Operator

question Leggate from We can now Doug Bank next take from the of America.

Doug Leggate

Thanks. taking Good for Scott, got my morning, I've two. Thanks everybody. question.

M&A. the your of Obviously, probably guess, some acquisition. all for opportunity reset both There's share a the is of price, -- cost to means an stock where have some shares. today, acquisition the in criticism to given over little by you. you they're of buying your price And DP it well, more been bit think I -- on the obviously one I related first they’re is

cheaper understand the if that's like, the cost Now given been management in clarified, occurred if lower today, by overhang by chance curious, variable acquisition the you dividend that price not? I'm to is buying I that ever to or and a or have policy. this -- a your you lot your But you implied opportunity stock just that

Scott Sheffield

Yeah, Doug.

can Parsley. all per market paid we same of the balance think that It's I property price low paid transaction. the all, sheet, in for each unproved at misunderstood look we the $XX,XXX of exact -- totally and our the acre. do same on When First DoublePoint you you as

$XX,XXX is per anybody paying they're had we're talking criticizing no us, So acre, about. idea what

to regard listening In the shareholder buybacks, transaction. great base. a was it I'm Secondly, to

we conference calls, will that approval. we below dislocations. Board debt-to-EBITDA be prior be in As see subject I've definitely stock back the stated already buying we our when We'll -- to drive one,

I'm we saw the year, sheets, have firm So one buy the believer, a markets, of lot the best last we're stock of when like a to want of so bottom $XX. at at I I can balance

at of to buying think I XX% investor. rather XX% so, back or price, I'd flow, it I And today's it the our all distribute of think cash

in So I with agree got what OPEC see is sort shale more five year doing my and based of the creating seen I'd at see stability, less the the same we dislocations marketplace. last happening we but five around the with years in you, time, next volatility we what's over I places like -- I've if what's and than firepower, the on saw last in don't happening, hope save world. we've U.S. years, rather other confidence

that's we're today. thinking So how

Doug Leggate

Okay. the off-line. appreciate mark answer. We acreage I can take

Pioneer at rather you. the a My I that's follow-up, dots, the and if bit SX output we I to least, taken truce to hard join but came agree a with appeared Cabot, Cabot. suggest a little at than Scott, input, think is out, Similar completely question. has that look the more of

in of have of and that whether being for into out you two with the gone packages were in thinking drilling I about Parsley shell sale you could wonder opportunities DoublePoint, us best that everything you the Delaware? might and possible said So light that help start yourself if

Scott Sheffield

Yes.

on top, And Parsley Parsley comment -- had we specific at but a we were lot downturn, don't Chevron Obviously, so, at extreme the early the During different and and CEOs. continue just during lot of like opportunities, looking of summer. all last discussions with did to at look on Exxon a

XXX% are XX.X% on on Permian and Midland obviously, focused, Basin probably we So, the focused the Basin.

So, that's where lies. focus our

Doug Leggate

Thanks trying question. right. to the answer it. for Appreciate All

Operator

We from the the from can Markets. Meade now Capital We from Charles RBC Hanold next question take take Scott from question Johnson can now Rice. next

Scott Hanold

this commend on little your to on from to that Congrats business getting investors you're in path the there. the and hedging feedback the ask thanks. then certainly, and more been again to to Yes to this investors maybe appropriately to moving bit you for hedging? back have quarter. And point But has listen adjust model. effort point And a I at strategy time. a forward you what determined your going your I'm question have

Scott Sheffield

Yes.

with the conferences. talk to to just over We in now it out virtual We're -- happened start it's like getting feedback to meeting. what's next several to have COVID-XX and going through one-on-one few hard the to do conferences, shareholders. weeks Obviously, We and the due get sort ability with travel. those of

to Pioneer team the So, the to talking shareholders. XX travel you're over next going see to the US weeks, eight throughout and

at to So, have I'll to what in give variable on the they point, this to dividend. regard hedging us the feedback regard in reserve

November a it's for to question probably So, us ask. in

Scott Hanold

Okay.

to flow also underpinned certain still of going stated I that. is commodity cash this the your but current So, is billion a obviously, price. strong shareholder with To outlook. And make that sort a point I with of developing guess would that's obviously, free extent, return I the plan operations, thought by process forward? $XX Because certainly think you've a pretty

of that billion And now, all we put of like to so like a sounds in. why thought flow But It at obviously, good that bit when with further volatile. shareholders. can know that process that's Is you little something some but it at that lock $XX looks is like risk oil the evaluate cash sort right? you of free need the

Scott Sheffield

the the right. the free protect most a base. it We changed. to goes Yes, dollar budget it's -- cash we're of spend drill back And essentially well. primarily. shareholder used -- to all all It that's to would every flow capital now Because totally

our get to with visit to going feedback. we're shareholders So,

won't feedback long-term our that but be and there above So, it them, policies. develop something we've probably is get shareholder consensus done is historically

Scott Hanold

to Thank forward Look it. you. Absolutely.

Operator

from can Rice. Meade from We the take Johnson now next Charles question

Charles Meade

I am -- team and Scott morning. Good this live time?

Scott Sheffield

Yes, it working.

last-- about Sorry

Charles Meade

at are happen. looking so had guess, to comments, you for I time might And the would anyway, your it think way But belaboring other in in literally, I on not I it heard Basin, say sure you're Basin you company. I acquisitions. Basin core apologize you about this we're are -- I your tack is Midland maybe A&D any But Delaware question. the really think, but Midland right believe to think Scott, big well, guys Not prepared looking at I

– the And of the just Basin really so you is Midland future focus that on you the Pioneer. is interpret that way to really

So how should we interpret that?

Scott Sheffield

Well, it's the company our XX% our of Basin. Midland is locations in

at The in economics, also. as I in rig, We're why than need several develop the and frame, focused that's time Delaware today's drilling we're So the a rig wells. said, more own we one Delaware, moving say moving we're returns to for tremendous rigs. but our one We're Rich averaging that. price short in on look

prices close higher so to with Midland Delaware being the Basin. oil equal go, And is the

So in $XX versus this $XX inventory the up to $XX, range. moves range $XX the significantly

So we're is try to Basin. where dollar and back focused on and every base on just the focused Midland current we're Delaware get both shareholder to asset our the the

continuing are We'll two X Rich do mentioned may have look at trades our number code continue properties. we're We to doing think drill I to on small divestitures. Tier

on there small So And side, is. but small be opportunities where and the could the insignificant that's affect some cash it's free flow. doesn't focus

Charles Meade

I you on what terms of -- And And offer could is see in of likely but you. those volume what versus you so thoughts, onshore expectations? your macro get maybe the think expecting but to price, do then not kind think And they're from XXXX? growth then, Thank wondered you US if it. much Scott, world Got do more maybe in to

Scott Sheffield

yes, has numbers. Most the numbers of highest XX.XX%. I at They're the look at,

years declining. in in that more realistic. XX.X%. tanks will high. most and Permian Most I look a together, at, at free flat the think probably model, cash we'll they're US lucky a they're looking And still over the more be I'm when But I their opinion. next my of companies in change growth it. deliver And you all the be X% XX. about around several general that other think the can't lower to That's basins as X% That's year grow they put way to other flow I too

to XX. So is Devon just committed like Cimarex Cabot to was XX; merger committed to the Diamondback committed XX;

XX, whether commit companies, more they they're to not and more So change. XX going or to

I'm going comfortable with much grow not just which fact so US getting And more helps… to they're shale, the that

Operator

Gruber from the next Scott take We can Citigroup. now question from

Scott Gruber

morning. Yes, good

an period just appetite XX% you would a you sense. approach stock -- variable cash converting a stock supplement would the of How to buybacks clarify, in to approach dividends, of of around some differentiation? comments But buyback to remaining you during make the market buyback on up a a for following varying the the Scott, base? free dislocation, Just buyback or during is would would flow variable which

Scott Sheffield

No, what I a call have the That's balance dislocation is in XXXX. happened year sheet. – dislocations. we to best or late and When want what last

X.X in debt-to-EBITDA our below So XXXX. gets

talking cash to risk X.X, $XX have major free our not $X.XX. the when I'd I'd about buy So of to long as at balance instead the dislocation. day $X.XX back sheet shares a dislocation. see we'll firepower we flow of rather XX% a it all rather down then at and shares to I'm or gets below distribute investor. firepower, using buy the

that's plan. So the

Scott Gruber

in XXk the rig roll the about today? be XXXX? crude around simulfrac out that's based how gains do count frac Got gains guys you'll then underlying inflation think certainly, inflation with about it. efficiency offset the you the you initiatives just, should you gains the we what growth given And much today, And X% seeing future rate a on you industry then to Pioneer count thinking percolating industry just for seeing you're able up back and What these as potential ops, the that that be to laterals. next thinking can efficiency of maintain are and is to year, in through

Rich Dealy

Rich. it's Scott, Yes,

I about On to growth growth one rigs the to X% accomplish like would that. per the drilling rigs to talked add, accomplish year we two mean, before, as plans, longer-term just that got you we've

forward. efficiency that And and seeing little chemicals, from But modeling some starting improvements we fortunately, to and pressure bit see long-term have we're it overall, contracts inflation, how labor look would, cement, On really going dampened our I in tubulars, our at we're well. are a in seeing also perspective, it diesel, so, a but as that.

which with And about were that so, this grow expect in the do of in XX%. offsetting efficiencies. But of to most to we of the we're for year, I'd mid-single year, this projecting, call, half back inflation, what digits

to that And inflation something year. so to look do that's gains of we've been capture we efficiency in versus able what this we'll where have see at XXXX

a in highly going part but on focused capital play still think efficiency I gains, budget. getting our we're to going So inflation be to is do XXXX

Scott Gruber

Got it. Appreciate it. Thank you.

Rich Dealy

You’re welcome.

Operator

from Energy Partners. We from now take the Pickering question David Heikkinen can next

David Heikkinen

and guys you Good the taking morning, for question. thank

the what was for the flaring you thing DoublePoint. up clean As been provide you acquisition I really thought intensity Parsley's helping at where you've and and all Permian, can relative to same the lowest

moves will making then their and the put Just in you're and third flaring big a quantify quarter impact their second how it impact percent, venting. into trying to the an

Rich Dealy

the can pioneers can't down numbers, definitely but have they our where but big Yes, exact exact They -- those for don't don't integration and I emissions you. their footprint. improving it capital big have higher like David, facilities were the you. coming the continuing remember we're standpoint we progress. for we I than get are focus making that is to definitely, numbers, them a a an and and -- from I to But But can but get were, on lower focus

something capital definitely on. it's we're spending So that

Scott Sheffield

David, at we if one-tenth And two to the David down Scott. of you're is this before X% looking Rystad, acquisitions. were

Now we're half X%. of about

And in Permian like we're so, the six number Basin.

goal is one. to to Our being number back get

at when -- feel, if can better get look the a that's on quarterly you at you them basis. you look report, a Rystad So

David Heikkinen

too. will That in report, your be updated sustainability

work the that quarter, the of you VRUs, doing? barrels this have are So all have? you of an you I dial that third that curtailment the to Did maybe and you did in number helpful. curtailment, trying pneumatics what missed -- do some be of the like was just quantify cleanup -- amount I you because you like will exact do

Rich Dealy

guidance we have QX don't right is exact What to Dave, is where I'd Yeah, tell on I the it be. numbers expected our that. you

And so making efficient account capital takes and being our sure -- capital and on not overspending back focus choking -- we're it and our wells. on facilities into that

wells capital down. it flatter takes DoublePoint have therefore, rates and lower those the still, have as we that upgrade talked about Parsley the we spending But are time that facilities declines. choke we've also capital the be back to and efficient, integration IP a we're to past, and and in So into this account

So it in. factors all that

what to expected. the is exactly no are in where so we production would we we've guidance QX full change what for is forecasted have year And really

David Heikkinen

cleaning up. Thanks guys. it Keep

Operator

Arun We from Jayaram can now take the JPMorgan. question from next

Arun Jayaram

simulfrac, of good up get your I of thoughts pulls your Yeah, how inflation. from obviously and Scott, with to outlined trend. some obviously synergy pushes tailwinds you've on to $XXX Parsley X% thoughts DoublePoint, oil on wanted get morning. some could wanted XXXX. growth million There's I and some but there's CapEx to and

if maybe know next XXX,XXX $X.X in the oil wondering I where playing see at year? Street you for next how the barrels business the expectations I street frame, So KBD CapEx. under year to out around just think billion to for you could in for just relative was is

Rich Dealy

per last about per barrels oil growth day XXXX. to But our for XXX,XXX think little equates it’s we're It’s for speaking, oil said XXXX. details BOEs we Rich. Arun Yeah, yields a specifically for much production. of about on early the then comment slightly and to maximum too I for XXX,XXX of year that you for that framework investment to tell and XXXX that committed us I'd what the CapEx X% over quarter, day that broadly And of

Arun Jayaram

it, got it. Got

you legacy a to wells. how acquired was just Okay. DoublePoint? a point then I you between would quarter, Pioneer acreage the my give in maybe on turned on is bit acreage productivity the us the double wondering frame versus I you Fair XXX mix guys enough. could maybe well And if think And follow-up partly. sales, of

Rich Dealy

Yeah.

a job. a Our teams really great did

I mentioned during great. efficiencies were on the drilling integration early about QX As and completion

strong. that pop And cadence production happy the look did with But our anticipate DoublePoint, like. very at was so in at quarter. this do We very that our Parsley, were XX% -- step was them the wells and that in cadence mean, pioneer we point, to Pioneer of expectation to all wells. down during will performed to higher at QX XX% about all what QX this look performance I so led pop the We overall, for well. in and all terms of

have So is as we would everything just liked. progressing

Arun Jayaram

a lot Rich. Thanks Great.

Operator

from We take question Scotia now Paul can from the next Cheng Bank.

Paul Cheng

you. Thank morning. questions. Good Two

Pioneer how give look us out be for Can the to Scott, support still trying circumstances? you will Pioneer at Scott, or still that think, over tax that two years, is that grow or grow several is cash production next, the Neal. just given the event is we production the idea $XX-plus oil net -- that to if is the prices. some say, OPEC oil that in theoretical. macro if question going currently? we environment, The the the oil to X% for kind years a second we is First, I at progression three Under next see curtailing should under to or of look

Neal Shah

into it Hey $X Paul, XXXX. I'll our mean, Scott. you kick and you turn at billion. it's strip to it off free the I'll expectation Scott I did if approximately increase cash frame time consider Richard prices accelerate the balance, forward and flow and current spoke over NOL to, look for if that and tax cash in substantial profile our the commodity But

cash the current on generation. flow based and our free that's So, strip

profile. free flow acceleration, slight a good but based the cash So, upon

state If portion of you look current our are at related. taxes, those

on tax profile to of cash the So, it we a kind as In that's pertains regards. payer basis. a and where sit go-forward

Paul Cheng

was the tax Scott, become tax going look just I'm cash XXXX, total asking cash when of sorry, percent like? your what of the in I represent to you payer kind tax

Neal Shah

to XXXX. layer in starts it So, Paul, in,

payer it in So, we're not and a step start XXXX maximum that timeframe. does to XXXX, point, throughout but at that layer up

Paul Cheng

Okay. Thank All right. you.

Scott Sheffield

to question, OPEC up say the on Yes, -- X%. Paul, we the

and on People demand to going into pick roll still significantly strong that XXXX. the the the back this next will year So, half is demand as assumption continue and to to is get in over. I'm vaccinated Delta variant and up going year long as going is of

be easily happened, grow we'll for still a softness, actually can grow anticipate year. growing X%, I as that's And X% we any So, off there's long back If strong X%, can the we demand. -- X%, zero. reason some

but -- we're So, right X%. now, modeling

Paul Cheng

it's whether industry Thank at not I of you. XX-year, Thank actually hedge, think don't the get lot strong sure want on that single very you requirement one really your low proposition. or to want hedging. guys that -- look you over always just can to make the a is observation the XX-year, comment don't to the company a why you see, I'm and I money people, or your want make hedging XX-year, a do I whatever with upside. you. industry money the sheet. happen losing hedge you very balance breakeven investors Personally,

Scott Sheffield

a you're Hopefully, feedback, Paul. me and shareholder give

Operator

Bob from question next the Bernstein take Brackett now Research. can from We

Bob Brackett

for the been good that. asked. have already questions you Thank Most of

which is chime shareholders just me uncharacteristic So, that for the oxygen return strategy and and I variable modest reducing growth. let say to dividend truly in, the me appreciate cash and

leave just there. Thanks. I'll it So,

Rich Dealy

Thanks.

Operator

can One. now from Capital question from next take the Johnston Phillips We

Phillips Johnston

Hey, Thanks. guys.

Just just for a me, on the follow-up one variable. of really and it's question the mechanics

quarter throughout I free actual is think prior the evenly year, cash tie to whereas night pay the flow prior plan actual was annual variable of variable cash the tied every quarter, just that the flow. that to year's the and you second last sort to announced component

variable think tied which format, you bit the the free now more real-time but between which So cash quarter's flow? maybe clarify just prior trade-off sort bit to little if I to new about a and be does a also into this a a real so, plus, talk can And little fashion, of more it always quarterly bring is of free out payout. volatility pays cash flow

Scott Sheffield

accretive plan I fact five-year-old our the since that up significantly. of mean two was more what transactions. in Devon And the We've Yes. driven saw the moved last already. highly made all we announced strip, all it's we strip benefit doing February,

to move forward. decided we and So go it ahead

third commodity a now. quarter as is fluctuate, in mean, it's already is So at least pretty Brent will October of – the from – closed almost trading already like but it is standpoint. I

pretty you much the quarter. know third So

we'd the months. wait. It route, had to be easy for estimate gone flow Obviously, to would investors it negative. I the XX If we been their models. it analysts cash the and So old have vary. with was delayed will free That think had

Phillips Johnston

Got sense. Thanks. Makes okay. Yes, it.

Operator

We now can Deckelbaum take from from next question Cowen. David the

David Deckelbaum

Thanks you. hopefully, on for variable And payments. couple, inaugural squeezing just a I ones me guys. had in the congrats quick for

higher I was, XX-month the and drop the Just back had DoublePoint you where a guess, between production that that a bring the a down maintain curious, you after production still there weighing, a you maintaining had guess, deal, look acquired? then Scott, move day now, then and I like that strip to is that. $XX Was if to flush plan, to XXX,XXX of just level those equivalent against guess, rigs I there

Scott Sheffield

No. That's still change. No plan. the

David Deckelbaum

year-end making the follow-up potential this a always but I decisions you growth occurring guess frame, chooses arbitrary function of time I to is that forward of a is bringing fall would about going this at year, just to be process that, perhaps talk And there calendar, point, in as off as there's for always there's a be X% as more X% for you return-based like where guess where it -- every sort for activity current terms this the where year positioning that year in of it's growth following or maybe to the points determined the point? that are throughout be along way

Scott Sheffield

to We to X% decision go year. early and in the had make XXXX to this

end X%. to of wait can't XXXX the You go until

You'll end way capital. much up spending too

adding few any, if And with some year. dropping capital X% setting back up two this next at rigs, is we'll very one we're to us our to this go So program year most, be year. adding

you shut so year, in I the last year We XX mean great Joey, weeks, have a to can rigs. down in have how we a during down. from can ahead But a rigs, sheet, the many down we time what why through make short shut happened decisions the time. two So That's frame we shut pandemic. of we best to it's learned also cycle. balance drill

free fast even the many XX decisions a had say and So so cash amazing mean to price react year. was to our that's get cycles we we cash and And the model first through worst XXXX in gone years we've change. oil free how Pioneer quick But we've down what's can flow in can flow. then XXXX is XXXX, And that I that last over make learned, XXXX. at

David Deckelbaum

in just clarity. squeeze I a I could appreciate the If quick one.

the right water XXXX? system capacity that where that of do estimate Midland's of amount utilizing you in Just out of out on the affluent the be coming you'll now,

Rich Dealy

still about Yeah, take but to XX,XXX, XX,XXX up up, a that to ramping from have the day it's can ability barrels we system.

the it's lowest really over where lowest-cost and anticipate modeled, system up so And but hydraulics and our basically Midland on the logistics of is being of it's the which cost so optimize plan, getting time. would and going to the it it's that's one waters and we're and drilling just water, mechanics -- to is and -- still -- where game that's depends we

David Deckelbaum

Thank you guys.

Rich Dealy

Sure.

Operator

like closing I'd concludes call Scott This any question-and-answer to additional to over today’s or for now Sheffield pass remarks. session. back

Scott Sheffield

see you all at appreciate November. questions. you. can and the point forward Stay in look some on safe, and time. We we to the see everybody we'll road we everybody, Again, hopefully, Thank seeing in

Operator

call. This you Thank your participation. concludes today’s for

You may disconnect. now

Pioneer Natural Resources (PXD) 3 Aug 212021 Q2 Earnings call transcript