ConocoPhillips (COP) 3 Nov 222022 Q3 Earnings call transcript

Company Profile

Participants

Philip Gresh	VP, IR
Ryan Lance	Chairman & CEO
William Bullock	EVP & CFO
Jack Harper	EVP, Lower 48
Dominic Macklon	EVP, Strategy, Sustainability & Technology
Nicholas Olds	EVP, Global Operations
Neil Mehta	Goldman Sachs
Stephen Richardson	Evercore ISI
Doug Leggate	Bank of America Merrill Lynch
Scott Hanold	RBC Capital Markets
Raphael DuBois	Societe Generale
Leo Mariani	MKM Partners
Jeanine Wai	Barclays Bank
John Royall	JPMorgan Chase & Co.
Jeoffrey Lambujon	Tudor, Pickering & Holt
Ryan Todd	Piper Sandler
Paul Cheng	Scotiabank
Neal Dingmann	Truist Securities

Call transcript

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Operator

Welcome to the Q3 2022 ConocoPhillips Earnings Conference Call. My name is Richard, and I'll be your operator for today's call. [Operator Instructions]. I will now turn the call over to Phil Gresh, Vice President, Investor Relations. Sir, you may begin.

Philip Gresh

Yes. welcome conference joining call. and third for Richard, earnings quarter you, to us everyone our Thank

off and Executive On of Officer; Sustainability team, Chairman and Leach, the call and Operations; Dominic ConocoPhillips Bill President the remarks, today President Olds, the of leadership including are and Macklon, questions. kick Executive Tim Vice Bill Technology; opening Jack Ryan Ryan Lower CEO. of Chief Executive Nick President and adviser Vice call several Harper, Global Vice the after members of team President CEO; available to with will Financial the Bullock, Strategy, will Lance, Vice for XX; Executive which be your

Just a few reminders. quick

and Relations which our First, find on can website. a presentation along release, financial with today's Investor you we published materials supplemental

filings. this release during Actual expectations. noted may Second, forward-looking making we in be and on our in call, statements to current based SEC differ factors today's due results will periodic

to measures. Finally, today's make non-GAAP measure our and be over found Ryan. will the to Reconciliations corresponding nearest call website. we GAAP on turn reference to release that, in the I can will some With financial

Ryan Lance

Thank you, Phil.

into to thoughts of including the results strong production, I'd us. big record for mind like get for that I touch Before few our a top on quarter, picture are

extremely costs with is industry. inflation in and combined First, of supply supply the rapidly chain industry-wide the the entire particularly pace true This escalating growth. shale, constraints and our are across economy production continue U.S. limiting where tight

secure, be successful This challenges. these lower and of addition The well future. investments production that our inventory developing our positioned prevent help going enacting the functioning a carbon going Governments American for need reliable disastrous medium- that properly fundamental in and depth Obstacles solution. our all-of-the-above would to world energy for global includes combined unconventional shale supporting policies in investments affordable are that get This solution. global from us is need with finally, streamlining U.S. believe not resources emission will permitting a can the allies. we fiscal transition. the help has and U.S. oil be infrastructure diverse to plays. meet stability, through to world the and an gas for an quality requires long-term while encourage energy to to must market and meet Second, in that by needed society's long-cycle critical to progressing transition portfolio all-of-the-above supply to lower and And consumer

that to capital win is Now We ambition. energy in our remain demand, reliably to meeting and on achieving returns emissions pathway net of towards triple progressing and zero environment. of responsibly backdrop, operational ConocoPhillips our against well believe and positioned transition we competitive any committed this delivering delivering on mandate

record of our further per at evidence $X.XX increased million further share XX-month authorization milestone oil returns, On XX%. the $X.XX by by buyback for As demonstrated anticipate results third quarter. in barrels we company this quarter X over production. production we total equivalent Lower XX commitment, day, and fourth a per the billion. growth of hit share to per announced ordinary of VROC ROCE a quarter trailing We $XX and and share, dividend generated XX% of our increased XXXX, we we our a first

in over annual Additionally, excess of XX% projected XX% of commitment. for of which we'll $XX billion than represents our return XXXX, greater capital our well CFO,

want our strategic a framework commitment that update methane we new to recently From finally, returns provide differentiates to believe X.X. global with our joining OGMP announced an emissions intensity our initiatives. perspective, peers. net CFO-based we Now recent And on operational medium-term zero our relative consistent a objectives ambition, I LNG us of

the in East, selection our to were to selected our Field to North recently earlier participate South following Qatar's participate Energy. with project, which relationship long positive Field Qatar we North this adds in First, year

a agreed project early we terminal with in we LNG prospective expect to Sempra, the next FID continue which at Germany. import LNG to And reach our Brunsbuettel for XX-year to year. period terminal by Arthur progress services Port Second, third, we

portfolio we of low-cost to Now this reductions on of our the assets overall, strong global outlook well flow for the drive substitution cash global we emissions. LNG and of and longer-cycle triple a have the on constructive in demand related the gas all supply and greenhouse short-, into that we continue to remain believe opportunity an Putting mandate. gas together, future. generate for represents industry, we natural deliver medium- should as continue coal significant opportunities place in This deep

Now to for the to Bill quarter. overall cover let performance turn me our the call over

William Bullock

equivalent as Well, turnarounds day, standpoint, $X.XX majeure from had per we solid some of guided impacts of approximately generated thanks, financial third over a Lithia the quarter. July. from oil XX,XXX Ryan. included previously scheduled temporary equivalent per impact which well Production a in adjusted share X,XXX,XXX per in earnings. day force barrels in From oil We as our was barrels

do fourth from activities oil was record per $X.X day, including equivalent the turnaround barrels production impacts. any from XXX,XXX X,XXX,XXX and billion. Ford operating XX,XXX from material Bakken. from XX Cash not Permian, Eagle quarter, of the we For the the Lower expect provided a XXX,XXX averaged

the lower a benefit and included payments related primarily from Norway capital, to receivables. of tax billion $XX timing Now working this

$X.X around working and APLNG cash of we proceeds, $XX.X we On than disposition quarter, million XX. invested be million. investments Excluding $X.X business million operations quarter cash at in quarter. capital, billion to $X.X June in $XXX billion for million fourth to distributions was and $X.X shareholders distributions cash the were of the we in the back XX, billion the up billion expect resulted Factoring short-term in September capital, which billion, $XXX covered flow returned ending from at third more This about were free quarter, from including the acquisitions. $XXX billion. into $XXX in $X.X

equivalent fourth operating quarter full increased billion, X.XX of of barrels driven a day. this per with $X.X million by of impacts. per guidance range to billion and $X.X still is to of year cost X.X inflationary guidance to guidance, year full production Turning we million adjusted On million we've equivalent from day, costs, expect X.XX oil barrels oil

have billion, increased we inflationary full reduced from DD&A from also driven year $X.X organic to guidance working also billion We have increases, CapEx and $X.X Partially by to these billion billion. partner-operated impacts $X.X full interests. offsetting year $X.X

earnings guidance, providing call In details we terms anticipate of early with in fourth February. our XXXX quarter full

and at back to the with And for also the spring We an hosting so more stay I'll turn will Ryan. call please details. Meeting be tuned Investor Analyst Exchange, York Stock next New that,

Ryan Lance

Bill. you, Thank

Q&A, minute a few a go organizational Now to wanted I important before spend to we discussing announcements.

to family First, will Lower leaving I greatly medical that EVP missed. And me of that speak informed I situation. be a Jack I know say Harper, on will be when of Jack company XX, due the behalf organization the our entire he

in executive Now of with the join this become Andy our XX; Treasurer, O'Brien, Olds, become currently our Executive and Senior Global and and team. conjunction Executive President of currently Vice Vice announcement, Global Vice President President, President leadership will Lower Operations Nick the Operations, Vice will

over to I Now with to be -- the thoughts. say wanted few that, opportunity and turn Jack him call the to give I'd a

Jack Harper

Thanks, Ryan.

years. has ConocoPhillips side ConocoPhillips with a dynamic differentiated most may and past situation. Concho transaction about that board stay did I When times strong be the medical seen the a makes believe feel As certainly how that uniquely and ever on due cannot played out. merger a wish Ryan family is we I one be ahead. so company, both ConocoPhillips, leaving to the industry. in It I for of would my what will to Concho This me XX.X and over the competitive because been that better work this And privilege create has truly mentioned, the agreed we for to could we've

few However, With planned have up with the our I'm transition the back confident the to organizational turn and that, that call we over next team success me Ryan. for let set over months. structure

Ryan Lance

everybody Jack. prayers. all your you, and I family you know speak have ConocoPhillips, Thank we for at in And our I

going with back the Q&A. and So with me to Phil over it that, we'll turn let get

Philip Gresh

that, And to turn Instructions]. [Operator it we'll Ryan. Thanks, Richard, Great. with you. back

Operator

And Goldman on Instructions]. question from Neil Sachs. Mehta from first [Operator line our comes

Neil Mehta

from that, towards maybe LNG supply the you have And you U.S. what could worry be the around by the a into a strategy. projects these as to about decade? it market LNG the seen together individual of to spending long-term in a how portfolio. could you Qatar of pull decade. all talk we you the want the Conoco of maybe you I interesting could we've announcements. thinks see Ryan, as about But with talk LNG its how kick on and sloppier on off of lot relates of lot in middle for coming it do about these end And about part new as together coming And risk

Ryan Lance

Yes, for a company, I around Neil. LNG think question. some long, time. we've you, Thank No. long context for Appreciate in been the involved the

think liquefaction You to we our with of have today, technology up by that's Kenai world many, started operators and the delivering about this the many around 'XXs effectively used back our our years project we being friends. in business that in Japan gas marketing

just sense then transactions out been U.S. lot look a creating for at coming growing we So of couple -- the that long time. this And you U.S. resource a and the so more done when years, last the position the we've in a of in we've business have of over demand makes

the back we U.S. started thinking profile be and the the views step replace of is done with that transition to that that fuel going in it, and our similar can LNG in to and we about gas as the the necessary view the So has combined United energy reduced States coal, emissions the way a

transition. something as going through we So needing we this go be is is globe this to the energy think

you ago together this portfolio. and we our a said over So grow year a we that wanted and that piece put said was to all in back

and seen, APLNG. here up to the to with at there. started early Arthur, we We well. U.S. thought the named we decided advantage the then opportunity, Mexico it the in got of on North that to in some have and wanting South. best up FID as have when they Sempra. us U.S. you've then next North Field the position in some Then expect project with the interest more something do and and recently develop opportunity for demand as gives combined opportunity And to looked more at We that we Field reach of the product with we So and that's also at west permits was here in take optionality expansion And Port positioned more picked year the that who with we coast join the

to all opportunity our by entered at now looked we complemented and term business build when into. German long this, trying we've the this So regas for that

commercial great substantial is a to want around into be that and going chain. just organization that we long So get got a think full to into be well going we the going be that's future. to this And can value to optimize We've term this. business

-- be and to there decade But point, into going again, we're that's X when pricing there's going may a more get it's for little the contracts. when of this supply. a where coming periods to demand XX-year your are lot Now or of exceeds the demand be entering because this exceeds period maybe of and be a in. later soft XX- to projects And supply time year a coming

we inside we just to can capability this to view really our given and over the excel more to is at, company, business good long-term a that of to business and ConocoPhillips one going history time. that build and this -- the want try So a expect have be

Neil Mehta

go clear, that it. here to XXXX, some what going like as we're in more capital of the for the thoughts, get the sounds That's point, on starting $X.X follow-up 'XX But are as off just moving pieces we bridge you spending on And Yes. if can Ryan. of? took we recognizing really the February is it billion into

Ryan Lance

not base looking pace, the would given about probably Yes, we our inflation into kind into that operation, by Neil, business XX -- trying going of our last think that see. I scope to kind of I'd I add Lower at I for saying environment XXXX. annualize on year, of we as that that half would start the guess We're take this

scope have looks inflation assess starting year. our share think in they're of importantly, to And the doing our that are terms for we partners we'll that fund execute So there, trying what next we'll of. to assess we what like

then new we'll grow say as ratable I'd projects, around are those of So going to, base off which is was at until that there'll we hope we businesses Qatari be about second business reach the Obviously, some Willow with and funding into start in unknowns to year. construction some next of that Willow. to but Again, the associated the allows hope X that and up place and year going be some with Sempra develop FID trying next take we funding funding into we're project. that getting have you of activities be year. half to next then the we permit do company think a us finally, And that the NFS, that go expand next year. this kind And that so NFE won't the year and to

business are into as adders of those XXXX. and kind So that's we the the look base

Operator

Evercore Our next Richardson Stephen question on ISI. from line comes from

Stephen Richardson

there's And But you're variability had closer if of than a environment. wondering kind to about you hubs, Ryan, about talked I return talk obviously, the for I a acknowledging bit of year you've lot lot year. 'XX, envelope from how the about little thinking just we're maybe this cash was of in you cash think XX% could certainly higher last your really quarter baseline. trending strong a flow how a

I into we acknowledging think how that talked moving maybe you 'XX the next that. do so about environment about about is capital today thinking the think I uncertain. can what is about question just if wonder and have if year, get a you're with just But we this have environment you little how we talk And we the bit parts, with

Ryan Lance

strong of our this got we year, shares is level macro, to volatility average that's course we that's the going the XXXX, which just at think about the XX% similar over first of of a we it's of sort to and level Yes, now. comment it's should we expect macro today think a At in year VROC distributions, with ought , bit little I next setting think you quarter next may the Stephen, set similar well $X.XX my watch at commitment. macro you the distributions. if going value look the But to share. to in of the volatile. to which is for it's I a kind a of up similar similar that be we expect But think XXXX, excess And have back, the of environment I similar that signaled as of going see. think into the But we're it's about would we're you how function combination that buying VROC-based and because reasonably we've thinking right we a our dividend going be incredibly macro right to think proposition be

Stephen Richardson

Permian if wondering in numbers wells were we've the the this a bit where That's in timing productivity the the versus really really was talk particularly seeing in could some Obviously, industry the Lower little of of results XX great. I impressive program strong what maybe the Lower just this across XX. XX morning. Maybe can't a and you you've really, of just say about from had you're follow-up how on seen of updates kind same evolve, and the elsewhere some performance Lower the quarter.

Jack Harper

low do kind lower the a growth, return. should to quarter that of Ryan Lower expect course, more in is that yields Stephen. cost and first Thanks, the single Jack. digits continued I you Yes. targeting progression. as we've longer of saw with we is hope partners that of in XX, of anticipated, and the We've In laterals half we like our Yes, modestly in our Permian expect production Lower economic which, XX. also plans, the talking we the seen than supply exceed been OBO fourth This increasingly back quarter the loaded, mentioned, out about. see the

plans and as stack of closely and and well we productivity planned. terms really have externally monitor We peers are our this In very progressing we up. our internally with where like

Operator

Our comes next Leggate America. line question from Bank the of on from Doug

Doug Leggate

quick I've questions, deferred I I and Bill, Jack, cross with got could tax if paths may. well wish wonder deal X first you Good at luck. point. some quarter. the our in hope if I the I again

would cash I just about which in tax in through you XX. quarter. we're updated you full in Has heard to happened maybe see deferred delayed talk the but somehow? walk you could tax would think the been any past that when quite a guidance number, It's Or hit the we've big happy Lower appreciated. what be obviously,

William Bullock

to, Yes, sure. Happy Doug.

So first, earnings. expect pretax increase in the rate increase geographic Europe. shift earnings earnings, due the high primarily you'd mix And in in given that in on we're third quarter of to reflects tax seeing price Continental a environment Norway's gas our

tax you've you XX% know, in in so So XX% seen environment quarter the a increase high fairly from third effective our quarter. Norway tax rate from the second as is

forward, the level and I'd our the be to expect range, mid- similar holds with moving rate curve. a pricing Now the to upper effective tax forward assuming production in XXs

As a you of quarter of source world. we're now cash noted, position quarter. just over U.S. million. a And tax be cash of year. cash-paying tax-paying enter was did a the the the throughout We taxes second jurisdictions deferred $XXX deferred the to in expect in around our tax And the I'd position for the a most in in source

to important a can is close current to think quarterly taxes And note estimating modest our levels, remain forecast that quarter. that cash, source taxes could by it's impacted pretty deferred assuming though a taxes items stays be of tax over deferred given time. prices on tax tough. a cash and I I basis think to program in any So capital It see trying our of and should around to do ETR you be book more cash number

an seeing basis. an our rate closer effective I as be that expect effective getting tax on to what time about think income we're our to you rate encourage cash across And that to really period. I'd annual So tax

Doug Leggate

had a little to about really Could you portfolio. your like? and point but is guys give in the differential I lot understand obviously that's in you my realization. changes have a We're the of quarter follow-up, around widened I a lot volatility guess takeaway looks my refresh Permian the a question mix bit as takeaway. Waha, what of your I helpful. on just quick actually seeing this guess, obviously your

there. to handle leave and So it trying I'll get just on that, a

William Bullock

Yes, sure.

quarter to we've So materials, Hub. differentials relative QX Henry prices that's markets, we'd fourth XXs by presentation Hub be our And realizations as QX. us. the September primarily E&P, so Henry the you a XX% in Waha Permian cash in this that average seen we're last our on globally large And But look to flow that the by at in Lower XXs in driven decreased impact in-basin the upper XX% relatively diverse when know, we said, from lower of in immaterial a overall pricing Hub for expect to low percentage to was as X% based from to it in relative quarter. for forward month Henry XX

our in So in is the seeing this the to Permian, that assurance pricing right and marketing following largest now. constraints. to takeaway through there's events. volatility a we We've with Permian that's we only we're beneficial ensure that we and we've marketing North short- expect really I'd to situation. through Doug, We're leverage strong takeaway got got continue medium-term volatility and that hard that, capability manage that's thing confident come the reminder, a online sufficient and in-basin And second that, we're capacity assurance our until going flow build acquisitions, flow gas in our market the to guess portfolio, in with a as -- what really worked really very our And lot we've capacity these in I around of later multiples the the of XXXX. market that's additional see position just We've America. think gas got

not So a for ConocoPhillips, this issue, is essentially price issue. a flow

Operator

from Our comes from question Barclays. Wai next Jeanine

Jeanine Wai

wish you partnership well. for thanks Jack, the we and

forth that are the up you Can the first high-level commentary latest Any moving there's original Willow. the relative question, to project, given on what an of what is just maybe last been FID following think roughly there a on billion pieces approvals? we project? of update our on in got provide bunch was So on that maybe 'XX, a June it there lead and X-year and on time update back I And to from on $X it and was first the the detailed production capital about on estimate. was

Nicholas Olds

Definitely, XQ is July, milestone just early supported in that. special been forward through I'll Jeanine, I'll a as And was little that Maybe Nick. the I the in SEIS. SEIS Yes. new go is area. that draft in key time as put was period accomplished walk a ConocoPhillips. as There here. draft reminder, footprint call, reducing well. back that that bit a a and this The in has was X-pad Lake And comment alternative, completed the mentioned that by

is and to District addresses that the Alaska findings. Court Now responsive

a of respect would with by decision we record year. are next I the FID a of Now targeting BLM a early final SEIS supportive record as the still support this and we're mentioned and by in targeting previously, only schedule, to take SEIS final decision we following Jeanine, year. FID BLM end the

Now and roads. so record laying winter civil of upcoming we have up XXXX on season, some opening pending capital that be mainly for mine site gravel that'd expect this focused that's spend construction, to and decision, successful

won't to we a have take we development. or investments again, FID Now until clear significant make path

Willow and do and update cost inflationary seen well the to costs recently of continue referenced to Alternative globally details also updated more Bill supply as know for expected. cost update BLM's very year. the on the update in that. you I some market we'll our market our to that to have that due leave engineering referenced some cost competitive this. We pressures their related seeing to want in Despite framework. next at the our And project final E that you as with the SEIS. remains pressures, the finally, project We But draft scope all I provide estimates. We're to detailed impacts went as

Jeanine Wai

lot The conversations free Conoco's here. around such great. cetera, really major investor how that capital with returns. projects and et Qatar just and projects, as a There's for capital follow-up, flow cash commitments been Sempra, maybe cash the project, Okay, Willow, of sticking impacts

So that a but in metric, all of course, kind returns, a CFO it's cash metric, Conoco's we way. free know cash on is of a circular not flow

So you cash you wanted hold. level strategic want guess, that And previously the of just it we and just to is the Permian again on to capital you Shell I the in same the that as you that -- the as because, deals, need could to post Concho check was on hand, to on then other argue much. but reserve And need hold that don't major you've got projects for. some horizon

And so lot there. you you $XX.X of so ended the of a with billion options quarter cash have

William Bullock

Yes. is Sure, Jeanine. This Bill.

forward of on this for same to I'd expect billion first, prices, same year roughly with achieving quarter. the So the cash, of end note, And our -- $XX shareholders the $XX on that third year. roughly predicated distribution amount also we'd the billion is to our us noted of you end based that's,

the continues out for think operating billion allocations. about to the strategic framework shareholder billion and of Now framework be strength we allocation changed. capital cash to priorities our It's strong having really organic balance hasn't guided balance to way think cash competitive the carry and anything a cash laid reserve and by of of intending that be efficient $X that above that $X sheet we as of and that. about distribution, And inorganic cash, how continuing we've

saw cash, is mid- do you [indiscernible] to you Permian long-cycle opportunity like with strategic us opportunities our cycles program the about So capture that value-enhancing for we to projects. acquisition about when the fund think and to fund and think Shell

our So unchanged. balances the we basic way is about that cash think

Operator

comes Capital Hanold question RBC Scott from next Our Markets. from

Scott Hanold

look that goes like at? highly level when you set you it. But and a could the play shareholder that you we sending of think of just with for of how shareholder mean, you into if quarter, companies some the wondering go sense like what there's are formulaic VROC back think I mix that us first was returns the into I want give to about as what returns. obviously,

Ryan Lance

the and going Well, next at a we're into well project commitment. obviously, our cash I meet think of in of we forward excess And that. XX% of in try look Scott, commodity we're at price, obviously, And where year. flows things, couple -- our we're to macro's this guidance to

X-year XX-or-more in our percent the and year, think is of the mid-XXs, cash. average I this we're

So as the into year, the thinking distributions, growing think dividend count I a I if environment reliable next about In on. to can of channel, same said to absolute base you move want earlier. a we be similar again, on you level regards ought to that persists to

we XX% You got the shares the monitoring shares. think S&P cash cycles. we in at as But competitive much the know our we we VROC. with to elevated And a We're then forward be, a going price want macro it's commitment we -- volatile. could some think barrel. some that's we a the through buy cycles, mid-cycle monitoring about market. we're base and be and into it introduced be going cash, of VROC we're these is the up, back. We going about We combination XXXX. to it's flexibility to our the of be it's And to to because going it $XX, We through and could we can to prices, that could be $XXX We dividend. third why count best buy wake do through on more know and it's on our about. hit the the what think XXX, that's how shares do top we're trying at to want up getting channel The

as like it. to top some some buy we So as of that's why the and cash that up shares VROC channel, is be variable there our well as to think about we

bullish As pretty we that's year, the of kind had amount how said quarter, we're which signal course about XXXX. it should first that through we the on for think of last we ratable the that

Scott Hanold

good past color. family. to great worked appreciate and decade-plus before actually, my But opportunities Jack, with you at was a like best the with out I all your together looking look get question that mean, I Tommeliten I and that. But these my Eldfisk. to progressing it you're the I and have you then we've so you to is follow-up pleasure you all That's the question, And years over all work on luck. second Norway, have this. started should in

more sense, maintaining a developments. you there of process Or give Because and global do these gas production that this gassy new really of just sort little part there? more that it's opportunity? opportunity is an a to I bit of can lot is a believe really just Now out in of grow us a

Nicholas Olds

Nick. quick this No, and X are X in that update developments. got you operated on give actually progress, nonoperated. is those I'll developments Yes. a X We've

You all the as is of we'll way probably very Alpha Eldfisk North more well templates just set But so we've again, come Eldfisk drilling all of Tommeliten will talking are X those they're of as portfolio. low North. recently key and on tied I Alpha Even to view But means A , the very our competitive. online Tommeliten global developments those XXXX. subsea supply. couple later are this to area that in as We the back infrastructure. Both infrastructure. assets. tied year. low our existing are nonoperated referenced existing Tommeliten, partner-operated those start base That X and back decline cost the in within competitive are well. the that greater of and both We're very here Eldfisk milestones subsea got offsetting of All throughout X

Operator

from Our John next Royall question comes from JPMorgan.

John Royall

small the to might know increase, bit on give maybe I the the on NOJV the just a color but it's inflation you portion of of there think if percentage a be could little any relatively percentage piece. about and of the it I Lower is JV that overall us nonoperated of CapEx or on that helpful. way there the mean, anything split between your production So XX? a CapEx Maybe or And in could piece, exposure help then there?

Dominic Macklon

it's John, here. Dominic Yes.

to with $XXX of of bit related Just be we're still of may working causing our shifting change our I increase and But management seeing $XXX go in and probably doing is this, interest about of we're in us a their terms capital that's and really little million in up million, to And the of good inflation, $XXX working own related million some in the think wells. interest it. partners split well OBO they're capital mix. down, then a to seeing

to seeing just a fact, there. our we're maybe I'll in what bit program comment Jack on In OBO little ask

Jack Harper

We're pleased results the very with seeing. we're Yes.

we As I going before, mentioned program. lateral have development some longer in that on OBO

Some of hopefully and year next provide momentum. cross will little into over bit those of a wells

John Royall

maybe switching That's LNG. helpful. then And to over just

the we helpful to Mexico about bit and color be FID. with there potential Sempra how involved has the the Arthur getting there and Sempra take how a think that of XQ for shape that you're Just little out could will Port if relative I should timing put opportunity on Western target think

Ryan Lance

Yes.

some plant in Coast, West the participate think it operating have think expansion and we the that of into converting of expansion And they're liquefaction today. at facility a to longer-dated, regas I John, -- looking I small that option is that's currently an opportunities. and would is that be portion

decide HOA that road we to they our another agreement, our us if when that build in train opportunity So gives the down to Sempra, have the at heads participate facility. with and that of

Operator

Our next from Ryan question from Todd line on comes Sandler. Piper

Ryan Todd

issue? thoughts on are seeing execute tightness pricing anything you'd what you Maybe keep be any second like that's XXXX. that's volumes you're of with seeing sounds for one to case, the like of -- it XXXX now, the ability half levels a early the in least your In to? Permian Or Permian, plan maybe is If challenging on earlier basin it for trajectory a that the saying during for the XXXX? would be any the your comments. would activity at you are that And follow-up flat just largely

Jack Harper

Lower very next and prudent we're with the our XX. to of amount it's that on say going and going execution feel would Ryan, very consistent year now I with our plans keep happy out Permian there are of this right And long-term into internal Yes, next year. the and a steady out outlook production our activity into

Ryan Todd

little then a view on follow-up maybe the has your mean, seemed more cash on sustainability the reflective of your longer-term of on just always position Great. the returns. And outlook. I a dividend

in the has this view the -- longer-term nice term? your a you longer on bit sizable outlook maybe uptick can commodity dividend the a read-through Given in reflected improved Is that your about sustainability is and little talk of increase, dividend?

Ryan Lance

that analyst And chance Yes, basically, in in up we year. that I X that last the to our more yes, We've talked view, early think we've that the of think certain bit. talk mid-cycle are reflective talked think But that it Ryan, that in next a we'll meeting given prices over X get is today. we about about have I or we longer-term X to a a spring it's dynamics a mid-cycle the that going years. market price the about moved on had

reflective in quarter. And fourth raise result, so dividend afford here base can that as we we and the of more a the announced

Operator

on next Our line from Cheng Paul Scotiabank. from question comes

Paul Cheng

Two questions, please.

that's The in your XX% the maybe dividend. the In we we buyback. proxy into is look and that buyback, split how we're saying going first looking that, split really that do. you is at back go with about third okay, If to into guys future, should can't dividend reasonable that a quarter, and between maybe in it XX% are one, what [indiscernible] the or

that's So first question. the

North Second about number it's you of on North you question is Qatar any share Field into in that that given here. that think, -- say, share? the there LNG the same extension, South. the I capital Is can the the Field congratulations, your commitment is get volume, and

until North there stream because kick expansion that is will South spending the also it's on Field whether and anything that that in maybe the will South on come that, are also should assume the similar? Field Field that And between can North So you share? XXXX? I think we when basically don't terms North And same,

Ryan Lance

try Paul, Yes. me take let to those.

through friend a of with that. call me Let Nick part

had think between so part, So on and that I you buybacks yes, first split, VROC, I share think think the dividends. the I think about, we was way

the think you have, that XX%-XX%. historically split mentioned we've I

South share that's a think kind cash how reasonable it. be and North see the expansion VROC. to bad about we But like nominally are the I we But LNG, we not on the trains how think are and to Qatar a to how is between probably buybacks think up trains. Field those going XX-XX to see Field split start. respect from replicated North subject place I that's to of the macro With based change nominally,

of the capital, same of maybe adjusted because view kind will for So But inflation later scope, exact yes, to the they relative size train. same be starting. to same bit and same your of amount going they're be a little

then years the we Field North project. how NFS. the was think timing. last to of about add, it one much you'd the in the very timing. I And expansion similar that's with there's associated right -- So capital next what you're think Nick? couple Yes, on Anything the don't

Nicholas Olds

Yes.

remember in to expansion, -- call, as million add, total Paul, North the on QX $XXX nets just that for Just about Field talked we us.

We will have catch-up payments.

a and once NFS NFE or the energy set, early for million reverse will we'll happen this condition project. probably That next year then XXXX net those NFE follow precedents And so year, and for year even Startup again the COP for are total project late is costs. $XXX share could later. again,

Operator

Raphael DuBois from next Societe question Our from Generale. comes

Raphael DuBois

resources the on it projects what incentivized Seen sort you better permitting, would stability? you is between call bit tax the in from of in be to a U.S. of government guarantee there production industry distribution. monetize and/or that in side increase tax there of extra initial windfall the Are your production? as could trade-off tax question. remarks, were explain or faster if Can my you you of maybe a mentioned any increasing terms from you pond, looks That if you some phase, sanctioned this received like of of terms

Ryan Lance

thanks. Yes,

we're I company. growing already think our

the faced pace inflation. industry. shortages, the other They're and with around in issues we're supply think the of chain some term I short labor probably dictating

more to the medium- maybe to a the generally, and relates for think America. infrastructure to more shale need needed U.S. outlook. for and and product growth Eventually exporting going -- development more in the the Canada of infrastructure then longer-term Central growth Mexico and of question into more even your up is down continue I and a and some

that. certainty large executing changes associated in put the cycle less structure because times policy on have make is risk the with project sure projects permitting more give have front this I stability these and the choices think And the is could that's the things And administration more certainty with tax issue have this going in to they So that takes of you the don't the that the you're -- years have just we long-term them. help the end, do coming to and making. we on some to fiscal

in is stability. So permitting. conversation around certainly would windfall this that's permitting not transition, I then as right taxes fiscal add remarks The why were more need conversation you around around my around the helpful profits on if an want the certainty you whole and well, a -- permitting, energy now U.S. the certainly And

for need wind, You high-voltage transmission for for permitting offshore onshore, the solar installations, lines.

energy going relief and in support strategies. energy chance trying the permitting transition having want if to you of any required all-of-the-above in of through So execute is an

topics next the X our and important think as we these decade are really I X, business. think or So about years X the X, next for

Raphael DuBois

spin was Surmont way has the and if [indiscernible] might GHG for also tell their it is question announced [indiscernible]. that Energy could recently us Total it's second wondering something off Surmont in will your My consider what I intensity. you emissions whether Great. and could run change you to they is And lower

Jack Harper

I'll applications, capital perform of net XXXX. this, low record production back out up transform significant by barrels The I if don't X way like-minded emission there. position extremely Yes, day we coming Actually, start greatly. look our -- that's We've a resource to the Raphaël, in well. Again, XXX,XXX the continued Surmont to we obviously, a through sands is piloting level-loaded joining portfolio. including stable value Surmont emissions to the that which opportunities, low oil together intensity a maybe it asset a with is technology at asset offers It's reduction production lower hit industry, supply, overall with diverse September, continues Pathways zero of day in gross. Alliance, you follow know asset from we companies cost

understand to we're as continuing respect I SpinCo this looks what or further portfolio. plans, that. can't NewCo Total's beyond like that So the to see comment in we and With staying

Ryan Lance

to do. would for what Total Raphaël, global I it say, does nothing emissions trying is

Operator

question Holt. Pickering from Tudor, Our from and Lambujon on next Jeoffrey line comes

Jeoffrey Lambujon

point in talked Permian. to assessing I focal bolt-ons the anything and more any hurdle. My focus, seeing you views what quarter-to-quarter. have get as and where wanted what continues about supply acquisition framework the first Permian on on particularly results that you'd of cost in opportunities the assembled it those obviously in be kind don't as to on today I the But you appetite larger might you've the the say upstream know But environment for position great, deals, need be particularly the portfolio would X updated is management might just be, for assets you the know just strategy. we're that years. your in of of in around see the just to would of over terms given there you've see

Ryan Lance

has been as and well I'll this last can active because start I comment know years. space X.X to it I Maybe then on his over in Jack Yes. the team X, ask very

to about to and up in one. doing little we what opportunity there. We kind bit opportunities But small went going ahead the what is what of of Permian on, doing were did let a It lot we the so was Eagle acquisitions. bolt-on doing focus and a a let there, we're core in mentioned me that. Jack look we're describe Ford We continue for to

Jack Harper

areas. looking we in development. lower Sure. trades. XX,XXX or these The supply about for as and the lateral cost and development of of in we're about acres to core find to always opportunistically Yes, so highest in team now calls, longer that add Ryan. allows value XX talked our right approaches Thanks, that and swaps And completed has we've previous

more many those to XX-ish or pipeline. addition that deals, in have the about So in we

Jeoffrey Lambujon

just then the Perfect. disposition lastly Appreciate on that. And side.

some the of noncore with was, year that next or think release those least past. to I picture, guess the going main noncore looks think been Lower be like is positions for that up, you Is about I time since of of target setting tallied way it billion. And end in XX or the quarter's represent it that $X.X last kind earnings, bigger the opportunities recent half the right the sales last like at all priorities press forward? then, there, Would incremental done seems to the about included? over today's it's

Dominic Macklon

Dominic. Yes. Jeff, it's

then well, -- and we've we little the Shell obviously cleanup. sold transactions, closed do bit the to we a since So of portfolio wanted the --

have inclusive So the And of because we've pleased and of really low-margin supplies. said, billion we that's priority sold that $X.X billion, for this assets, or represent quarter. $X.X typically you the as pretty they we're assets very about high-cost sale, mature

some HXS the and So assets high Indonesia, legacy assets like so Builder Central on. in Madden, that's the Basin platform

monetized that. in those So pleased We've with we've a strong been market.

Going We're we're of high-grade that are. pretty usual. that happy point. we happy with opportunities. after just this sort But transactions. really any where at look opportunity we target we've we're X -- do those would forward, always I main wanted We'll to into big say cleanup not so completed on back basically normal as the We're for focused

Operator

Our Securities. Dingmann comes from next question Truist from Neal

Neal Dingmann

shareholder and first on Jack, again, maybe top I you allocation. on my with call And the family. return I question, well. for Hope jour goes would your prayers all du capital it Ryan, guess,

just high return opportunities? to hit you and accelerate you stocks -- well Specifically, the change buybacks are all your have. the say I the high returns high shareholder thinking that, incredible particular the growth opportunities, any all-time how about all versus versus just to given or well maybe specifically opportunities an obviously, knowing

Ryan Lance

in I now. sense then and programs think do there. invest tried projects. like, No, that be We want the described this ramp well. We obviously, as right doing just to we doesn't projects us medium- and more in opportunities release. the Neal. longer-cycle and in environment, Willow that just XX, Lower right to those more run but make the we've to it We Thanks, stable describe could have to We in around feel to Yes. Qatari efficient Sempra

an need kind of portfolio into trying our we to with to And assets fit profile to particular and be there reductions opportunities are going the we're our supply, these we to area. needed think to industry these believe in cost leaning our our in make going are as has want important. that term. term company we the long ensure that long of low are and we So we're are supply invest that -- global emissions GHG that is that supply to intensity And diverse

Neal Dingmann

those to you year when was about it, hear. fully you guess, a there you Shell returns are Great probably well that it if And those curious year how maybe more the about, you've on or of -- question, are Jack, wondering then XXX look there, the versus former assets second ago. think I and Permian been I'm purchased, my expectations specifically those to or utilized, I now ago if how what up just was was a now seeing at stacking guys all is initial that's and being there. pipe utilized. are miles more I for

Jack Harper

Well, Yes. in fully Thanks, general, Neal. we're with that very It's happy deal. integrated.

everyone. we the better piece been seen as mentioned have started the And we our as bring by then continues. I at so of and OBO, that that, mentioned had quarter, last initial think has and the some drilling an on the before, completion, far, of strong we our that the upside we extended anticipated. for are I as on least of deal projects with style to lengths that's other partners results to lateral And and

business right But that. do usual. and to now, in it's continue folded we'll So as completely

Philip Gresh

question. Operator, for we X think I have time more

Operator

MKM Our Partners. from next Leo comes question from Mariani

Leo Mariani

some quickly follow around to comments. your up of Wanted prepared

your certainly You I of U.S. the entered of Arthur nice there's that And particularly that some benefit to production you base, kind deals Port the alluded kind for LNG fact the project. you've into. discussed with guess,

do years? to those obviously into some would in about And think I next that there's of couple of you the increase look kind maybe as of of ability Just volumes mean, anticipate thinking to gas of hold as as to you're of that, advantage kind out kind the take you decade middle this production your that into trying feedstock? some of you an of

Ryan Lance

I that's the create -- in as Well, -- move I assets. to between as integration market big in creating about trying world. The good some the thing, wouldn't the resource physical plentiful demand liquefaction to of the this involved is our U.S. want -- in the more We resource pretty in being be we that of market. play. then markets the a shipping resource in think it yes, to think U.S. the to don't there's want U.S. exploit the quite is comments is resource we're gas U.S. as regasification and that we opening a and liquid think -- We what We in the our higher-value said, we're is see the Leo, it the and around substantial. we to

Leo Mariani

makes layer that talking the kind major about of are of offer of having prepared half in XXXX on you be this? And millions in some second we project guess, of sense. of possible Okay, 'XX $X to annualized major spend, of medium-term your that in comments north of capital In any top this we kind if magnitude kind this should it could this start billion? talked of will. on kind I you of also Is order hundreds or project spend, to this potentially

Ryan Lance

little we us. we the in described it's Well, bit what our the get do some the medium- to them. it's them. CFO. payment? I for big make early fund going How kind to projects We an on nuances upfront We're for needs shareholders a for suffer going going just and to lean of of started? saying Qatar? sense again, think So telegraphing will to that these us based on to as these back won't? aren't certainly, to returns Willow, We're world is We're that Will of some terms are is be on projects. think Nick in an Do absolute. of we proposition value because have longer-cycle the And

on based flow. not it's So free cash

Operator

questions, I Phil over further no to now will turn closing have comments. it we for As

Philip Gresh

Thanks, operator.

this the will up So today. call wrap

is appreciate have and today. you time any your If around questions, we Relations Investor

Operator

you, for ladies and gentlemen. conference. concludes participating. thank This you Thank today's And

disconnect. now may You

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