Pioneer Natural Resources (PXD) 28 Oct 222022 Q3 Earnings call transcript

Company Profile

Participants

Neal Shah	executive
Scott Sheffield	executive
Richard Dealy	executive
Neil Mehta	analyst
John Freeman	analyst
Douglas Leggate	analyst
Scott Hanold	analyst
Charles Meade	analyst
Derrick Whitfield	analyst
Arun Jayaram	analyst
Matthew Portillo	analyst
Leo Mariani	analyst
Neal Dingmann	analyst
Bob Brackett	analyst
Phillips Johnston	analyst
Jeanine Wai	analyst

Call transcript

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Operator

Welcome to Pioneer Natural Resources Third Quarter Conference Call.

Joining us today will be Scott Sheffield, Chief Executive Officer; Rich Dealy, President and Chief Operating Officer; and Neal Shah, Senior Vice President and Chief Financial Officer.

Pioneer has prepared presentation slides to supplement comments made today. These slides are available on the Internet at www.pxd.com. Navigate to the Investors tab found at the top of the web page and then select investor presentations. recorded. being is call Today's A replay through archived www.pxd.com will the XX, XXXX. call November be on of

Page The risks today Private the the Pioneer's a safe Act results company's number differ pursuant XXXX. presentation business Pioneer's harbor materially statements. and made on These comments of and to are provisions news will prospects include slide of of in of in from Exchange subject statements described periods and risks of the future actual are These Securities and cause Pioneer Reform statements Litigation public and may forward-looking to to with uncertainties that the filings Commission. X release, the forward-looking in made Securities uncertainties

turn and to Senior sir. At this time, Financial for Chief opening Please to call Vice Pioneer's the remarks, go President Neal like I Shah. Officer, ahead, over would

Neal Shah

morning, you, for earnings third quarter us Melinda. thank Thank joining Good you for Pioneer's everyone, call. and

and Pioneer's results Today, highlight we capital peer-leading return operating and will excellent of quarter strategy. third financial

Importantly, strong discuss XXXX as development. beginning well instituting program, seeing as thresholds with the return we we the we our long our are through lateral will benefit are increased

our also strengthen that participation energy our We will to and our profile in renewable help X excited are leading highlight ESG reduce emissions further projects strategy.

up We for open call will then questions. the

I turn it will that, With over to Scott.

Scott Sheffield

Thank you, morning. Good Neal.

paid dividend return per contributing The is the base over which in shareholders. variable of free billion this to capital results, $X.X cash to $X.X mid-December. be Slide the share, through on being generating delivered during third Pioneer $X.XX our of will Starting quarter, strong X. billion plus in majority flow returned the of back

cash quarter shares the free This and strong our opportunistic price represents execute with share dividends share to quarter representing XXX% $XXX repurchases return approximately third million continue shares. retired of an repurchases, capital flow. third of both million $XXX, of we through approximately average X.X on in at of Additionally,

dividends demonstrates return free our and framework generation. will billion commitment flow XXXX, repurchased to robust we be $X.X paid to significant shareholders return that by When clearly date to approximately our our cash This including all to year. supported in is investment this

also are This Pioneer's acreage own will energy operation. project that utilizes wind that generation to pleased we're We to utilize NextEra. in participating project generate XXX-megawatt service with in renewable announce we our

greater continued X, Slide third cash to quarter, third range, free Going oil our billion. [ half guidance our of substantial total results. during upper both with execution $X.X quarter production in strong driving Pioneer's than on and the ] of generation flow the

remains than forecast to tier, profile we be year-end. top leverage to less which Our debt EBITDA X.Xx net at

share third nearly XXX $X billion repurchased was price per This Slide of our $XXX. July a the price. to at strong shares dividend To date, $X discount authorization, best-in-class of a price $X.XX share the stock of have fourth an the Going executed quarter under we've quarter at the $XXX program. average XXX of Supplementing repurchased average month by average at our X% through total billion share repurchase to Of the to price our we current payout, shares an program. outstanding during $X.X million share, an continue since and of XXXX leaving opportunistically million billion XXbX $XXX current our billion our in of remaining utilized of of reduction approximately X. represents at

Slide to #X. Going

cash growing variable our but underpinned flow. corporate to our post-base free oil generates dividend low production shareholders a of up thesis dividend by base leverage, to dividend, of this was flow. returned growth, and delivers cash free Our represents strong XX% returns reinvestment core remains investment free and peer-leading This significant rate. low unchanged, Majority through cash moderate and which strong flow

strong our an balance than strengthened total, We leveraging yield shareholders, annualized this equates resulted aggressively XX%. to returning of sheet return repurchase billion which shares. this to $X.X In to total greater in quarter's by

dividends Slide flow ability cycle. low peer-leading #X, significant the to free our Pioneer's Going high-quality assets, from through oil growth breakeven moderate cash pay to and provides

plus WTI. able prices As exceeding we're at seen dividend yield to average yield on deliver prices oil of than than graph, with to a the with oil compelling well, a upside sustain dividend variable at have XX% shareholders Conversely, prices higher $XX. base S&P higher the greater $XXX the far oil significant as

in to of in majors Going of resulting be dividends XXXX, XXX. all a in average peers yield to XX% exceeds excess paid in S&P today's yield the price. This Slide #X. yield the at and Total share

Going to to S&P group Pioneer's Slide every sector. market, broader yield #X. When peer the XXX looking dividend beyond exceeds our

demonstrates yield underlying of flow quality strategy. dividend assets strength and of return and of power Pioneer's cash the capital double-digit Our peer-leading our generative the

I'll now to turn it over Rich.

Richard Dealy

good and Scott, everybody. Thanks, morning,

previous can I'm you that production unchanged our where going to start XX, on update and August. year remains in see Slide from our capital guidance full XXXX

cash and third the actual quarter for fourth flow cash for free deliver quarter, we for of estimating $X are and $XX the billion over Updating in than for strip for year billion forecasted results operating flow generate we prices the that now the year. will more

plan fleets with see run and simulfrac XX of X those the you approximately remainder X can year. the and right, As for fleets, of level frac being activity our remains upper between the unchanged, we rigs average to in and XX

to Turning XX. Slide

well XXXX improve the more significantly better result these per productivity programs XXXX XXXX threshold free productivity and our result substantially significant than As thresholds company, surpassing made forward. learnings years. in this and will you be we This program. to satisfied stringent higher Implementing would more well with capital and to and with higher in development flow increase program development return to step the for are Consistent expect, subsequent which have threshold future into return been levels, of levels the efficiency well and change the material BOE. going the inside our efficient, not continually XXXX DNA we cash have our implement improve a the strive performance

XXXX, zones. transitioned of approach, strategy X includes has fully full stack course which the highly our drilling a development to up to Over productive

our delayed drill extended our taking are contiguous that and advantage XX% to of We significantly generate higher developments well. XX,XXX-foot position have reduced a XX,XXX-foot laterals acreage than returns also

quality consistent highly and our the on this of the XXXX is repeatable many period depth program and the past years the for on graph Given threshold inventory, higher XXXX highlighted to right.

productivity wells. mentioned strong provide Slide to and capital I completion to than long and per increasing And XX% reduce Turning an significant increased these approximately savings foot. XX,XXX-foot of the as improved The laterals efficiency Developing with IRRs more XX. returns gains we are from slide, in drive percentage returns points the laterals. XX,XXX-foot realizing average strong on and lateral productivity when lateral drilling combination XX that by of these drilling savings resulting costs, previous compared

date, of online from in lateral contiguous XX for XX,XXX-foot XXXX, locations extensive development that in development To lateral the the or wells. acres, long plan up more our acreage have Midland than supports we than million gross to of so Pioneer's Basin, X,XXX high-return and those expect position XXXX. more identified wells online approaches place in which XXX nearly we X to put

XX. Slide to Turning

compared has you Midland to can the a oil duration the inventory in longest and when the on company, As inventory premier as high-quality Pioneer decades core Pioneer left, of data Basin. independent of gas peers. the with highlights see This third-party high-quality of

flow BOE from the highlights slide cash This XX. in the Slide significant high-return per having return highest free supports the our capital to with of peers, This robust a decades Pioneer's powerful peers. ability combination its to Pioneer's over combination and to longest differentiates high-quality of of U.S. unconventional of of Pioneer generation amongst inventory free duration long period space. cash and Turning inventory flow combined shareholders time

to I'll Neal. stop it there turn and over

Neal Shah

Thank you, Rich.

Slide XX. Turning to

quarters, margin entire of has cash highest delivered For the our peer Pioneer multiple group. consecutive

oil-weighted unmatched low costs, price netted underpins realizations, which production unhedged against when results. Our these strong drive cash our

infrastructure, costs previously, and efficient cash are As with coupon debt function a best-in-class produced. This low robust margin, highest we've per BOE the discussed support of our flow free paired a cash G&A. highly top-tier our operations, low

of other case an corporate through next to an leading [ ROCE Turning slide. Pairing the results investment sector. continues an all profile durable S&P valuation, sectors believe in investment majors and the discounted as projected return returns inexpensive we within valuation. with to continues the exceed opportunity attractive energy shareholders well the Pioneer Pioneer's and for combination our to compelling and offer XXX, the ] extremely as strong our for broader shareholders.

With I'll that, turn it to Scott. back

Scott Sheffield

Thank you.

published initiatives. We the and to our Pioneer's on We further sustainability that leader Going which XX. focus commitment Slide as a demonstrate these focus ESG strengthen ESG and year, our this industry. Pioneer's our significant actions earlier position in and highlights on believe XXXX progress report

to expect on climate Our this updated updated our quarter. sustainability later we can website, report risk found be an report publish and

Concho operations supply well to in participation jointly our Pioneer's processing Both service announce to to project our Solar field Targa credits owned reduction in and Valley energy renewable reduce system. excited We're Pioneer's as renewable and wind XX. energy power the on and our Midland contribute will the acreage, owned X Slide energy This renewable to Going Basin emission projects will a development project. generated Pioneer's emissions Scope goals. both as gas

by and The development, wind being XXXX. in the expected currently to is [indiscernible] Solar NextEra, Concho project operational built be operational Valley is

We wind experience and have and have developing a partner, unmatched to resources. are pleased in solar NextEra as they

Pioneer's addition X own initial evaluate We in further development continue these projects. solar to on wind and service to acreage

is the discussed our final creating summary for the have on we shareholders. which our On this key value of our today, Slide XX, that highlight commitment to slide, attributes

questions. open now will We the call for

Operator

Instructions] we'll go [Operator Neil caller, with first our to Goldman Sachs. Mehta And

Neil Mehta

can turn here. to want just a expand little I Slide it XX, more you Rich, and on maybe to bit

inflect, saying sort better? XXXX So for out in the stack XXXX get year as productivity to look you do 'XX 'XX have path we to well inflection? sequentially see and you that trough further that to the you of represents to think Or expect when about are

Richard Dealy

there's 'XX the question. really we've great will Yes, the immediately. a Neil, process. made change trough. But as permitting started know, mean, process it's I and Yes, and you planning be

the wells you see XXXX. first results course So in the and the higher move start those of quarter thresholds through we the see will to of spud as

it the into from a going forward. annual we've productivity, game bar our I mean, higher going basically, So increase in generation to program the capital program cash our increase and every it's that means well free to really and 'XX. result got program efficiency higher plan that's in flow going it's

Neil Mehta

And What the the confidence on gotten about biggest in this risk just productivity? over improvement it's is shift? What because last so investor achieving focus expect that months. this much the couple you to of is build interval the here to

Richard Dealy

great Neil, X,XXX portfolio some wells, bringing and but out having forward risk. horizontal there were of that having we thresholds a We're got deferring and very that -- do data, reshuffling return can it's big can higher we I over wells the higher the database -- we low just think our just given and wells really of that wells hit.

results so that just have the those we confidence reality to reallocate the have we But deferred we're laid going here. and capital. out achieve And that we've the is high

Operator

Raymond And of moving John on James. to Freeman

John Freeman

areas all what you When of you we of the know I the seeing all look that But pretty sort you're already need of just that to at you XXXX majority remaining secured. just that got when are the still think and chain, plan, of vast next tight anything supply about you year? sort your plan what of try nail down for sort loosening sort versus

Richard Dealy

course XX be mean, Think a think most kind I year you from just probably will about the we're as what need from is to it to tied probably I rigs, really at. we've John, those of Yes, [ terms in which of activity e-fleets up and like. what got frac to X of to 'XX X of it is going give look ] as of an of the X in flavor we over those what looking of XX well level. pretty come crews,

which see had, given where or the [ flattening if this growth As at and still a has year kind is put X% so number going -- 'XX, say our we'll at been and -- fruition that like Having anything but suppliers, prices. range that's we'll hopefully, biggest bit, we still to of early working -- comes we're to a where from to but see of we've it really that's casing I on, that don't and not. is talked like we're it's I steel today, ] see sounds in look but to inflation mid-X%

it seems think same But else, otherwise, the of I at everything we're inflation. not like level

seeing higher, it. we've we're but It XX%-type generally 'XX we're that's program to talked slightly think in that about where Hopefully I still before kind 'XX, of our seeing be inflation could relative that level. that helps.

John Freeman

of the year. Absolutely. fleets substations going to installed how installed in the be kind be you of next next e-frac electric going get plans are and to the kind few some plays maybe you've sort all over I of the sort electric of that that mentioned like those you'll talk over and how nearly stuff couple field And you nearly X in of know just you have delivered looks. that to move that that [ realistically, When all to Just could then to be field? that Can the you timeline ] when, substations are got all got of electric years. timeline out? years next the

Richard Dealy

Sure. call, And I think 'XX, be transition a year. I'd would

diesel. everything and I've on -- mentioned that maybe we'll on think running year, calls previous I this virtually we're So

and [ e-fleets of that when be to XXX%, get get in diesel, where headed. going more part that forward Part then to And our is transition CNG operations ] some engine [ of we'll will of Next then 'XX, to see 'XX-time probably our XXX%, closer these power to highline substations we fuel, us ] on year, start you dual period. built, be and 'XX, be get doing we these XXXX It able move but kind won't continue as fleets as we're more operations. will of

think I to that's Obviously, general the become lower life longer engines, evolution. cost. e-fleet ] But activity the [

standpoint. and so a emissions it's from for And cost better better structure

there. to take And to power waiting everybody and is want if directionally, then what's build-out to to So time be we It's higher. the on get does demand that's transmission going really that -- of it, just where the going go.

need So we well. as come power generation to online

Operator

Leggate Bank Doug from hear America. of we'll of Next,

Douglas Leggate

previously? way wonder really just capital this to to it's could is lower the -- pick anticipated? you Was delayed about of cube guess, what if I'm guess, that deferred the on our is, a develop relative trying program something to asset going I the to to deferred target back there to the have development. back forward. you're philosophy And Rich, behind a that in capital any going your the think the little targets resulted for target Are going the, expression, your guess, brain impacts or your I a I I you on that Is going you expectation when one the you I get deferral, to surprise productivity? on bit philosophy

Richard Dealy

in It Yes, still anticipated. the targets I'd just have say we underperformed we where better delayed would have They portfolio. have locations is great have our returns.

results And gotten thresholds. move to to so course the satisfactory and that, us, that's decided want of we've not higher we've forward to as those over this we year,

date those -- across said we've -- later I full just so deck, a But moving road. we'll down the And earlier, and as basically stack reshuffled are to the field. and the not targets defer to and delayed

as better as we move had learnings year this forward. So plan the smarter we've get we really, and that's the game been that and

Douglas Leggate

pads. of the be to presumably, benefit had clear, existing you But

a in way for developing going So be change the implication is capital the you'll forward? there

Richard Dealy

Doug, relatively It's grand it's in significant -- probably but things. the pad small is not the a scheme of small, cost

cases, So were to and in tank -- still batteries. expand some we having

which be So a that are yes, were new in cash is think you'll to free and 'XX, higher extent, to overall, better and generation. than objective small but forward efficient the capital and we programs I productivity going more going flow see the

Douglas Leggate

just bit like if trend the lower my cash at a quick over deferred I'm position. is It wonder I started update taxes to question, the third you what And quarter. least as tax us after. time, based to Neal my That's a NOL looks on wait can was sure Neal. for little give could I follow-up

your So there be any would appreciated help on expected timing.

Neal Shah

right. I utilized Doug, -- full all, that's Yes, We've our NOL mean, good of our balance. essentially we've first essentially morning. utilized Yes,

it part, is a we'll I'd next So here the several most model But that over bit we've got little utilize utilized. for the being years.

look price year. estimated based on at the was date, a our upon earlier commodity to taxes taxes, it based If cash in paid you higher federal

So for you that guidance. change QX saw

on obligations. which federal if we And commodity going strip, I based be high we'll to you're to as have current lower said outlook, earlier that, the to mid we our on price remaining on we XXXX, forward then minimal based fast were year, is So XXXX believe in somewhere tax based where the cash before, teens.

Operator

on Moving Scott of Markets. Hanold RBC to Capital

Scott Hanold

Maybe just little high-level a with budget. a and just the stick budget or XXXX bit

of kind It to of that? that good range, sense? make you about X.X% pretty cost percent some couple and got think And overall you've service generally that around can sort like talk does pushes pulls rigs. of when XX-plus I inflation, about adding kind a of think then I But and X.X% potentially feels may a capital occur a color. some

Richard Dealy

talked to directionally with add Yes, today million, XX% that's where think and we right. million kind Scott. then where X that. I mean, about those capital $XXX you mean, the we I I we've are X as spend, those $XXX of have they sit see rigs,

implications we from return and it, X.X%, Obviously, increases sit you that at to X.X% on where the efficiency increasing capital to it. gets So range. still we're working add it to has And improvements. today, to those and thresholds X%, X% it it's general

directionally, all And But through think I still it we're that. right. you've working so got

Scott Hanold

going stack the it you whatever reason, about -- give of where kind back really whether of areas the were more and But not of for And targeting Appreciate wells kind Okay. completion to less impact? existing the think deferred the laid some say, other drilling question targeting, about that. us my do acreage full the, you you wasn't at generally as guess, level, kind core higher I when was drilling sense out of earn some obviously, the of When coming And you've XXXX if in day. it is about where and go drilled of stack part to other high program, where then you and the or XXXX? when And portfolio? thinks at development than a in into drawing to sort best you the of those, the as change end optimized of wells. of return versus in targets just like of I can the some strategy back can

Richard Dealy

spread things acres, rigs that there. we X that all I'd say we it to gross those out higher really you laid that out more have when the But million Scott. as areas Yes, handle our on to field you across higher, had the be returns. threshold got of move rate focuses

So to move capital north the activity of of return. rates to really in going here that's across more general, a focus -- But generating the in field. is really probably allocation higher that's little the the

that's on it. of to going has higher so return, call. The longer about as the we And drive obviously, laterals, talked rate a

on And there's wells so going a those that. XXX over in focus to the of have We're program. XXXX

just really locations and just about are that's so -- the doing that still full and have pads how we've that we're rates stack. that -- those those wells we're prioritizing of return. We're And gone selection, higher

Scott Hanold

Okay.

my have on XX. on you illustration So I specific more guess that question was Chart

right? zones we development XXXX, pretty expect in much you're all targeting can of program, these in So X the

Richard Dealy

Absolutely.

Operator

[Operator Instructions] Johnson Moving Rice. Charles with on to Meade

Charles Meade

is kind lines questions question first of this my the you've morning. of on got most of Rich, same these

under in your a thought. program or you little you little a prepared were remarks where heard say in disappointed that 'XX you bit I I think your came

so wanted in your another there making is here? understand, versus 'XX? I made to the the dimension Or of some is 'XX for evolution essentially reversing change you changes just that to And you're 'XX

Richard Dealy

it's and and just say capital locations higher of areas. a about allocation moving I'd to Charles, Yes, more the return

fix are I to in And with wanted so so weren't they're we 'XX just program satisfied take productivity in are I a the we little anybody anticipated, returns. we to want generating still don't from great that fantastic. and we mean, it. away rectify came than and that not that less It's and returns the that

move we portfolio can And around. so got a we've that depth of things

have that's And And [indiscernible] productivity really with from drill 'XX, allocation so and just higher what we've make of to higher charged happen. going going rates those wells capital return, into we're a and changes. that standpoint made we're to

that's and that so highly is the focus on And program going it, where execute we're our focused team going forward. to is. And

Charles Meade

back wanted thinking able guys second to Scott, at. that Great. of off, congratulate quarter. they're you execute great -- shares And mix probably you an take a my just price variable the about first to Scott. in and get I I you is your the That's for -- wanted from buybacks follow-up versus the update dividends you're were to now. temperature guys, buying how on

Scott Sheffield

the As that we was still it's in laid from investors over we've years. all program, getting heavily feedback weighted dividends, long-term our out our the toward been X which last

be continue got and very we'll So We sheet also. we'll obviously, opportunistic, and that continue that. with balance the we've that also, to shown

Operator

And of hear Derrick from next, Whitfield we'll Stifel.

Derrick Whitfield

that Express limited question, views to XXXX exposure tightness your I prices Coast recent macro if maintenance have first on of for in to [indiscernible] Could you peers? shut by ask wanted weakness My with understanding to lead gas Gulf you for some on to [indiscernible] your and driven and is could EPNG speak in-basin the and pipeline. Waha

Richard Dealy

got they're SoCal there, at trading IMEX I at on other coming. Yes. Waha pipelines out prices and curve mean, to you and places. we've as [ can I mean, look obviously, ] a the coming in forward But incremental obviously, discount compression

the specifically, Pioneer little maintenance in down. of to think range I higher of we've being on talked having El about SoCal exposure bit XX% a because been that Paso about For It's Waha.

transportation kind. were on We volumes volumes west haven't those we've 'XX, firm we We'll basin in out as in as incremental have well in moving that on out also period Parsley and But Matterhorn more DoublePoint comes then Waha. 'XX-time liked. 'XX on. 'XX in We're got them as and our of moving be volumes move would coming when been able to we many capacity as take

we'll those mean, I us. seen this late at transportation, at getting they're be those that I'm going forecasted have point, that an operators But result to obviously, I And And -- Waha of Others, any point, could -- they're haven't so of seeing firm but until that from exposure Pioneer expected. are this it period for smaller standpoint, probably aware have going 'XX, [ we'll ultimate come, don't at in to for is any 'XX-time some new that is very pipes prices. not kind be shut-ins or discounted for see. that are ]. any little

Derrick Whitfield

great. economic program? my That's to I focus percent to that Slide just of back wanted that see threshold in XX-plus perhaps in new XX, to category? Could you on returns of for wanted XXXX falls go commentary. your And increase expect follow-up, to to and year XXXX help And frame the into degree inventory what your you'd

Richard Dealy

were mean, increase it's we Tier of 'XX-time we've our I inventory, given what depth period. just a 'XX Yes. we're doing XX,XXX from that 'XX, where got the X meaningful in locations in there. And to

productivity. got we've higher runway that we've and to a that long So to execute higher get returns these same set at economic threshold

of we inventory to blessed execute and we're have time. long have, we period the this So a can for

Operator

Arun with JPMorgan. from hear we'll Next, Jayaram

Arun Jayaram

Rich or on just are could you Scott, understand what you if I the IRR us that help and investment return thresholds shifted new to. was wondering

Richard Dealy

I and programs really impact meaningful is to -- like them, Arun, we've we're -- threshold just said it's our year question, subsequent and Yes, the made really XXXX last a I building on. increase that what in guess

cash that therefore, free there better our And be is getting tell I And Slide and capital think has so substantial efficiency, demonstrated and the flow will higher generation I'll that you'll shift, productivity you see it's that. will better. be XX from a

been a of satisfied team really the we've to before, with -- said And improve as that's dramatic the that. shift So as been results. our not we've focus 'XX made I

Arun Jayaram

a maybe follow-up, just And Understood. Rich.

it, and Basin, in historical less B. and XXXX, mid half in the A wells That Wolfcamp completing the in the 'XX, 'XX about Wolfcamp in done between and Northern Spraberry XX% upper This to of B 'XX. than XX% some data you've Pioneer at of was and your XXs between in and Midland wells looking the Just call about year, decline the to, its XXXX of the A intervals.

you're A trying mix -- the is a just what to trying So previous to basis is of consistent shifts I to in higher XXXX. on early to and shift wells it Just plan go-forward Wolfcamp the Or back new zones? with B understand years? areas? new a targeting

Richard Dealy

more as you're geographically it's still where drilling. I think you a going to us, field. mean, know, we're see across of I And think I the

more than others. are prolific Some zones

part. haven't And and the going think program, going the so, it I general, be but at to in zones it's probably probably specifically, evenly I but that the to will most at we're basin. areas look as we weighted across by it's each specific, looked 'XX the zones towards the zone Wolfcamp area slightly Maybe maximize Spraberry for think program, it returns to that between in for be the and be in going different given Wolfcamp I it's split --

Operator

Portillo with Matt TPH. on to Moving

Matthew Portillo

spacing question Just around design. a quick

about a over field particular. learnings of well to think has in led communication on how vertical forward development, You've moving couple from the gone perspective? in you spacing the results guys extremely spacing you've to curious, pretty a perspective an last I'm basis design vertical are design as years, any horizontal consistent full consistent in had a which on there Wolfcamp,

Richard Dealy

in we continue But But at acreage hasn't the X generally our of different X years think here on XXX Matt, changed changed as the last hasn't across really it still XXX if things. we over everybody as and or It's all. feet we spacing new rule general, to position, say there. learn broadly I'd learn you wells I really go. that spacing thumb, mean, like to our much. it's

So I don't I as big nothing -- would characterize it.

Matthew Portillo

consistent, have years. Again, bit a lot set Spraberry the know results of Perfect. The Wolfcamp noise I differentiation generally between a a there's the on state may And the be volatility more in like few in looks data. data the just it zones. follow-up last been the over pretty

we've forward development last around some moving you in seen in XXXX focused Is program. overall of forward? color any on the improvement variances of look high-grading And can part you're and guys the the this just years? couple kind just into Spraberry over in you As Spraberry data of give in that some the occurring the zones

Richard Dealy

Yes.

I of or data, full single or on were depend on the will whether targets some think targets. development it delayed they Spraberry stack

of get So based data basis up. threshold a per on per we've you were applies well the zone different a how wells when on vintage is Overall, of those on [ stayed kind the ] just our completed. program,

areas drop zones prolific, are less the in will from stack development. where we So full then those

those And wells the how case maximize select to across a so in value we'll of really pads just that continue each it's stack. in we full

us that highest highest give kind full and the we're So of of analysis looking productivity it's rate return the a economic for. that

Operator

from Mariani with MKM. we'll Next, hear Leo

Leo Mariani

that the step at the running just of here, be Just it more of Are of range? program if XXXX terms of Or you how at rigs few guidance do the still meaningful step still on POPs the of looking in kind POPs? terms you that high in like in terms think than like to fourth a the XX-something well get date. quarter looks of in 'XX? It down, you'll down looking a POPs data the at see kind you're kind we'll end going, based just maybe in of the pretty here program is we sounds

Richard Dealy

fourth all you're plan along quarter. think ] the I Leo, had right. having No, the in is less mean POPs [ I

in how So it's timing we just were by we're nature the less the call than in of going quarter plan be just out. roughly, working to the POPs of third XX quarter it, and fourth the

say the timing, QX than was where that's and in program our read shakes I for guidance. So just and I planned out in it out laid anything wouldn't other that.

Leo Mariani

cut. a Okay. That's then oil little ask And just wanted on helpful. to bit

like where expecting for maybe XQ in down of looks Just you are cut to terms kind and at oil level, here guidance quarter. it High looking it XQ. of was come slightly the in the fourth

Just rough bit have wanted terms that to color in then what why Any down in you kind estimate high be be? see maybe think improving sense get a the Do oil you the would grading you appreciated. wells? cuts a been the of of of cut the with of kind little the a might of 'XX. during And kind little do 'XX, of course of coming guys

Richard Dealy

sure. Yes,

I to in changing. it's forecast mean, GOR general down continues the just our -- of we I oil the of has Much It years wells come [ at all, oil forecast -- XX%, as solutions. our out gas to these continues come hasn't anticipate right. that it over the but grow. You're don't range. ] been changed XX%

that's been part be I of general, programs to think XX% So 'XX range. as think we've what same XX%, in in you just getting. that about But would

Operator

from hear we'll Truist Neal next, Securities. with And Dingmann

Neal Dingmann

Nice quarter.

on tackling a continues of of on quick one, gas guys gas call, next wells mentioned very just a you ] time gas Obviously, targeting your do continued Could Scott, I on a well. the just wells thoughts think the you're last couple say the development. that? year couple Woodford, First, -- just you you the [ in Barnett. to

still of that is that? wondering, and the the I'm so And sort plan rationale behind

Richard Dealy

planning Neal, forward. of it's wells Barnett the plan on a That's and Rich. of we're part we each Yes, in next what of still Woodford testing couple zones year.

as they're And really -- wells, those -- there. to obviously, we're find be will deeper be expect to We we resource gassier.

And understand really lower in are those curve. Waha but what just maybe longer productivity be just the to resource that expect prices where And so want where of given wells. we We gas term forward is. them today, what's the it to

And those, then see there. like so capital looks year from productivity go and worthwhile spend next to some it's think to we the we'll and test what

Neal Dingmann

normal POPs think a bit. the while going you what down of And more it normal about you, think the a then little be maybe sense. year, have about could I the than timing just how sort that Makes started a the it DUCs bit know having comment little of a might just, you would just I end you bit talked will in Or of what DUCs is Rich, have? -- do if you at or 'XX? level? follow-up and don't on I all because you help know little a and

Richard Dealy

pads ahead think that of Yes, than are of the it what frac materially that I different our I'd don't will are just be call working normal capital DUCs fleet.

of nothing a the change it's through to So most big is been going year. from that be where

be it. I'd So how as is it usual business will put

Operator

we'll next, Bernstein Bob Research. And from hear with Brackett

Bob Brackett

from strategy. exceeded initial zones the wells target delayed and those coming simply the that of underperformance heights targets. to that frac the Could the Question contributions What's and be that? some the their back of getting target you're just delayed relative responsibility

Richard Dealy

there's of definitely some Bob, communication. I level think

delayed reservoirs and that as the come those back we've seen we've so And wells. done

so wells plenty full And on better we But there. still returns of in resource of at delayed end from very, the said can still locations. and earlier, the anticipate. I just wells, returns like those to very moving those some by there's It's productivity that's didn't the have impacted stack other we that get the day, the strong returns been

Bob Brackett

be, side low opportunistic That's How other price. than Pioneer buying have effectively about your $XXX question a Bob, target respond XXXs. who knows is buy I at clear. would got well, argues, the But that shares been a more clearly, repurchases retiring Pioneer, share you've the do anyone to the price. in

no, thanks. So

Scott Sheffield

to and of -- our I we on discount. quarter. on our a and always stronger at I bit be each think -- We're -- rather to But always it's buy We're it's stock try assets, NAVs run going mean, better. I'd buy all the a little

we So the way that's so. just are,

Neal Shah

And look, dividend. discussed, primarily, XX% method conversations of and that, desired in their we've has takes follow-up base to with of we've as flow. with to as capital our the return had variable of the dividend, been That terms free you shareholders cash combined the a of that

very we've even flow that that, incrementally shy So shares. the to said, been and for. not and capital is deploy free majority above the And buy of back cash to over spoken that being opportunistic

market there do us shareholders, our preference equity. the step by the been has variable. capital, into the plus been and we to the it's base It's that for So a return to communicated repurchase as just

that of of big rationale, part So course. that's a

Scott Sheffield

to stock the And return. look you've got total at

our You $XX. take we -- out current paid

you So of lot a TSR, look that a people, at payout. total $XX when charts show don't

got Bob, also, so. So just you about to think that

Operator

And to with on Johnston One. Phillips Capital moving

Phillips Johnston

like correctly, heard Rich, aren't zones Matt's approach. necessarily you a and there's geographic element I It follow-up new And of to a on given if area. any the questions. sounds clearly shift just mix Arun mix within changing the

selective Stackberry. Is shift section. away no going real there's within and sort a are just mix it towards more given sounds you correct? that be So to from But of like Wolfcamp

Richard Dealy

Yes.

position just we're by thresholds our will we acreage around things in. expansive the where move that to return think, areas given maximize the I geographic

definitely yes, in and that I will -- So to go areas locations extent there's little north. to move I that we're have going of think as certain mentioned, to the a rates bit the return, highest

Phillips Johnston

Okay.

per guess, So wells fewer to up, I wind is that going section? yielding

Richard Dealy

changing. we're changing we're rates earlier, spacing Like I said were I of those -- we're that -- has return that what targeting. I to the on wells, higher No, areas it's mean, and think just the not it's don't anywhere, going productivity higher therefore,

of versus it's so tomorrow. -- It's going but really or depth drilling said, to what last. changing we're long how I it's just -- not like not And it's we're drilling what inventory our today

So we've we some to had the in forward things and high just deferred push time things that back in portfolio we're have return. of that some bring going that rates

Operator

And time Barclays. with final X question. for we Wai Jeanine have

Jeanine Wai

you first Our the question provided. update that is renewables on

about you didn't buying a that these you little those you going could that bit to electricity capital the have come the with of what maybe projects? the commentary or give any you're be relative if would if be wondering to economics anything of Just cost around paying agreements? And requirements

Richard Dealy

Sure, Jeanine.

mean, In location project I being on the developing developed Concho Valley terms by them. NextEra our of is surface and that's on the capital, one

our be no investing side that's so to capital from that. going And in

mentioned, to on like, based like, at prices forward as these electricity We are market where to curve are the that. looks power. purchase take you favorable on that agreements the power And signing

the we're projects to power that excited it benefit agreement those of pricing. get and So get purchase on

it, energy reduce pricing of emissions. that come that, that with it. So way they're top can our is we then X renewable we good credits the Scope at on look And get the

we think projects and look more. it's overall, great to some doing forward X So

Jeanine Wai

Okay. you topic Great. for second overall is fun how development that love in stack And be But missed we have apologize question, going just something the And wondering estimate would I maps. more of this much impaired? qualify versus back virgin, I would for if acreage development virgin rough of the another stack then if a full with more our Pioneer's to as and question.

Richard Dealy

and don't have I and a don't amount you say I would I could that. scale would estimate. of I Jeanine, of to percent virgin. there. do footprint, have I mean, quote rough our I I want just But be don't given a the just that still significant a there's size guessing,

top off that it, head. my So we can the probably find of but don't I know

Operator

the all or over Scott for the turn back And any today. Sheffield questions have remarks. We'll we closing that's conference time for to additional

Scott Sheffield

and participating, a for Happy over months safely. the much couple have next travel and very you thank Again, Holidays you. of everybody Thank

Operator

conference. conclude your And today's participation. thank for you that does We

You may now disconnect.

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