ConocoPhillips (COP) 1 Aug 242024 Q2 Earnings call transcript

Company Profile

Participants

Phil Gresh	executive
Ryan Lance	executive
William Bullock	executive
Neil Mehta	analyst
Douglas George Blyth Leggate	analyst
Andrew O'Brien	executive
Scott Hanold	analyst
Wei Jiang	analyst
Kirk Johnson	executive
Stephen Richardson	analyst
Nicholas Olds	executive
John Royall	analyst
Roger Read	analyst
Ryan Todd	analyst
Neal Dingmann	analyst
Leo Mariani	analyst
Kaleinoheaokealaula Akamine	analyst
Bob Brackett	analyst
Kevin MacCurdy	analyst
Paul Cheng	analyst
Joshua Silverstein	analyst

Call transcript

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Operator

Welcome to the Second Quarter 2024 ConocoPhillips Earnings Conference Call. My name is Liz, and I will 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.

Phil Gresh

Thank you, Liz, and welcome, everyone, to our Second Quarter 2024 Earnings Conference Call.

Officer; are Lance, of Bullock, Sustainability Chairman President Senior Chief of today team, ConocoPhillips Executive President and call Vice Vice XX; and Ryan Senior and Executive including and Financial of Technology; the Nick several Strategy, Operations. Vice the members leadership Vice President Olds, On of O'Brien, President Commercial Lower Andy Global CEO; Johnson, Bill Kirk

available which will Bill with it your the quick team few kick be after and Ryan opening reminders. will off for A questions. remarks,

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

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

reference financial release in found to We measures. can GAAP some today's corresponding will non-GAAP website. Reconciliations measure our make nearest the be and on to

will the to before to per turn will we we caller. move I take Third, call one that, question Q&A, Ryan. over With

Ryan Lance

Thanks, quarter thank conference another quarter was second call. It for XXXX busy everyone Phil, joining you the earnings company. and for our to

dividend continue We in further on to value ordinary returns-focused We the a global commercial Oil. our We progressed XX% acquisition our in fourth our announced quarter. of planned announced increase we the proposition. Marathon execute starting And strategy. LNG

at XXXX. XX, in Norway. In production and a Canada, Lower Arthur Pad spending in quarter, continue and at single-digit to XXX with make And Bohai strong and second XXXX LNG X at subsea Qatar. the continued at the still production strong Phase the deliver and the production the of Now lower Surmont projects in record our Internationally, Montney with on from ramp we entire Willow delivered progress capital Port in to tiebacks up in starting portfolio. China XB to We results. expect relative growth contributions level low we to

long-term XXXX. signed of to volumes regasification and in commercial deliver Asia, X sales we to additional into LNG, Europe shifting Now start recently both will and agreements which

have annum expand of volume just the With to to X to XX in new we as up we to look commercial agreements, offtake portfolio secured opportunities continue million LNG we work under tons placement these our now offtake placement our million and per and coming XX commitments, for million years. tons per annum

Oil, has The to regarding the Oil Marathon we been close. we set about seamless We received transaction that shareholder remain quarter. still are a the late planning excited upon transaction, mid-July. are Now and fourth for August this FTC's planned through acquisition underway XX, Marathon and to vote second our very activities integration ensure working in request expect of we close the in transition

We on basis. capital. to least stand-alone remain to $X committed this a of return billion distributing On year shareholders at

to As we at incorporating long-term representing XX% May, said our that dividend S&P this we the VROC into grow our in record, confident back with increase relative base our be XXX. we dividend fourth top-quartile can the starting ordinary quarter, a will And in a are consistent rate dividend. we track in the

equity we increasing retire to Finally, a as equivalent run be $X Marathon of our we the by the amount buyback with plan upon previously X acquisition, newly rate announced closing, X billion with will issued to years. annualized in

to year. our up, later closing execution, are to the operational and So pleased we this Marathon with we're forward wrap transaction looking

to second to and me call Bill cover more quarter turn guidance over in let detail. the performance XXXX Now our

William Bullock

the day year-over-year, and $X.XX barrels this in generated underlying In second quarter, of Well, share of barrels X% day, earnings. XX,XXX representing produced the per We impact adjusted oil per equivalent thanks, X,XXX,XXX includes of we Ryan. per turnarounds. growth

in XXX,XXX growth barrels day, Surmont production X,XXX,XXX in X% equivalent Bakken. effects. the in underlying and Permian, representing with Alaska oil excluding day, also acquisition barrels averaged of and the per equivalent XXX,XXX XXX,XXX per XX XXX,XXX year-over-year, production roughly the International Ford oil of averaged the Lower Eagle

Now this highlights the benefits diversified global of our portfolio.

cash to flows. Moving

we over investments. which lower $X.X million was than capital including quarter, in just buybacks some in under and VROC $XXX billion timing shifted billion headwind, was ordinary Capital APLNG payments. the of quarter expenditures $X Working billion. dividends cash of million CFO billion were of $X.X $XXX with and of expected and quarter $X in short-term third $XXX million million included $X.X distributions. Second longer-term our We And in returned the liquid shareholders ended of tax $X our the was and $XXX investments the to billion, billion which guidance quarter. into as payments

Now to guidance. turning

about of For the barrels range X.XX third quarter. driver XX,XXX million This million during equivalent turnaround is primary day impact per barrels of expect The per Surmont, barrels we once-every-five-year a of the impacts at the of that in to to that per last of which XX,XXX X.XX will production quarter. discussed is by oil inclusive turnaround be production our day quarter, day. we

outlook, For our quarter the midpoint reflecting the production we raised results. second full have strong of year,

barrels Our day, implies per is X% which oil million new X.XX roughly range underlying growth to of X.XX million year-over-year. equivalent

be Our XX,XXX forecast turnaround to full barrels per year day. continues about

and Lower operating to $X.X in now, of we were be partially our pressures higher billion, segment $X.X a in costs adjusted lowered the by On lowered a now inflationary our costs range to corporate to forecasted income of loss million. million primarily items, range $X.X due and net transportation which statement guidance increased guidance XX. have of billion, to we $XXX to to adjusted These $X.X to DD&A billion range processing we $XXX after-tax anticipate billion annual have a decreases offset and

spend $XX.X to billion. expect we CapEx, approximately For

Willow and On additional that this third $XXX increasing we reflects to competitive year distributions scope billion, $X.X on full $XXX APLNG million has guidance for as activity of progress in our are year Lower as distributions strong flow, Now some highly million expect the allocated quarter. to we returns. the cash by XX for partner-operated well capital these

$XXX have to in contribution a third going million pension quarter. the we're Additionally,

the regarding working quarter impact second outflow capital. pending anticipate based quarter. $XXX the as mentioned of the acquisitions. Finally, third tax reminder, I to million excludes We the a from payment on guidance a And shift

conclusion, on deliver continue plan for We to focused our our in executing XXXX. initiatives. strategic we remain on So

highly committed transaction. competitive our to towards And are Marathon We shareholder distributions. staying the on we're progressing closing

That now remarks. operator Q&A. turn the I'll start concludes back our prepared the over to it to

Operator

from line Instructions] question Sachs. Neil Our Mehta Goldman first with come [Operator the will of

Neil Mehta

around just buyback. is question My everything

over volatility -- to above to back so your about that the you back in get as plan of as strategy for But the advantage at taking relates and back on market. the number, capital remind So just be out the half return if year $X could and just probably it to to come repurchases. the commitment between going you and the on billion now share half and or the you're us, August $X in XX, share billion repurchase talk your perspective

William Bullock

for related we've And on at the first Yes, we've to very you restrictions some confident transaction May. the billion about things, paid repurchases Neil, and of look we're XX% CFO out in the despite having $X that of open place are half that market distributions since that's year. the at in had year, if Marathon least of in

run that's result as first $X those at a look billion restrictions, below annualized billion you distributions rate. a in $X.X our of bit of a things as so half, And the

August as out. That's place, around with we any buying right shares have requirements is know, vote. we're XX. proxy just Marathon shareholder from until now But And of corner. mailed the restricted is regulatory back you our that the that that in But

And leaning so, to answer Marathon your the to shareholder buybacks. be into question, you complete, votes us once expect should

And really -- that. reset. That's would one stock of third quarter. quarter. about the least should It's in our third track in largest the pretty straightforward. had with important think through at that of $X long-term retiring strategy basis really And our that's on us billion we've fourth record annualized consistently can every the of that because you of right line since shares And that we we on math X% and an run been the put buybacks buyers you our expect of

his annualized reiterated inclusive at run we for weighted the we our increase rate to increasing the rate of billion, billion. Ryan $XX above by close $X expect once as distributions quarter. fourth Then annualized dividend That a buyback total put comments, in Marathon, be would

buybacks bit of into little go quite through to looking leaning things as yes, we remainder So the to, a really and pretty of forward year be the about. excited

Ryan Lance

time. consistent shares million get We the shareholders transaction. that's the year, And to watch Neil, everybody look, would remind just our over retired been market of and that, we and would We've to proposition, out I the XXX it. frustrating share that I since come value our of price first add of been Marathon period we reset that in first the has of XXXX. in over the due been half through the

$XX And price I the that per share average per in think the share somewhere purchased price. we is

-- been the it's managed well. really has So remember, been program

If this capital of shareholders of nearly gone XXXX today. of look our that year, our period billion return that's representing expect the time time, end XX% what of cumulatively, our market to has about you from period through over cap of do capital to at over at $XX of we back that

distribute free we're back as shareholders. today. based we transaction have bigger, better. going So to with X we're about to the X cash to but we're we're shares, have -- the just said see years, is, And going be why our to just And to our my we're I more funds there's And retire the Marathon be going and in plans excited opening as comments, flow. to to going -- to it we'll more on be going

It return So then performance, be an capital as not well, undercurrent price pleased as soon we're some in we're buy of market XXXX. question. target the but back to for can, the as determined around with got this probably the to we our hit back and shares is which share important

Operator

Doug will Our the from next with come line Research. Wolfe of Leggate question

Douglas George Blyth Leggate

button. Sorry, to the trying it off mute was was a ago. good couple I you Ryan, weeks seeing of turn

of time. a I question last So done got out

stick through the that market want dividends companies the make but your I'm Ryan, quickly, So to recognition to very I one, comment of to for size. flows going value, and of one is,

the So dividend to you on see I I'm decision about. to look only commend have CNQ at think you on the And decision. -- talking what I

congratulations So making on decision. that

and that to like how I while I'm more a legacy what and understand your risk on not, that synergies. is announced, view ultimately fleshed question, Q&A. Marathon of benefits, And the think you use look if was was what out, whether but in And trying My you that terms not however, of value? or is were into of incorporated don't importantly, could the NOLs. out lot on deal really I tax has the

William Bullock

is of Yes, NOLs. billion what, Bill. Doug, $X.X has, sure. this Yes, Marathon

XXXX, this XX, as a using of about December point As last prior to tax-affected that we will in of that's Marathon the end expect those the of is losses you And of out, But portion that closing. of year stock year certainly a transaction. $XXX million. value XXXX be a

As have or any they such, net its assuming in assets be NOLs. Marathon's tax basis of operating as those well that as losses we'd

just NOLs within years the as tax And expect today's be full so now. we're And in use right to cash-paying first position we X would so. a remaining able at to or reminder, pricing, a any

so And as this we be on, consider as we deal to is announcement. yes, action tax going up synergies NOLs the of They as we're NOLs so tend the bring is value. synergies. don't important of something are about as benefits think I didn't to that But things are think what part real that part certainly consider transaction. taking about this We we

Andrew O'Brien

closing, of see part remain Doug, $XXX synergy synergy, are confident our progressing really as run number. NOLs include this that the And of to mentioned, But that And achieving didn't too. we million well year things within of upside a Bill there, terms We is of in synergies. as rate we the Andy. very and

So our well. now activities are progressing

we We so organizational we we seamless to systems be that as close previously, a mentioned stood They're the structures to soon ready focused our pretty reviewing As be as can expect up teams. get a we this go. and on integration. integration

some are support, on well back-office G&A there the function integrations. system corporate primarily as So as the obvious synergies, focused duplication

that The looking other at cost operating we're on are the side synergies of things.

operating going We're field areas, the be to office. the field clear efficiencies to there's also rationalize our as of adjacency improved productive of going lead such is to able staff. time which to So

from on several been really drive too. worked to And And a would in of be consistent opportunities the going here, digging we've run our capital here. side, ability the of savings. examples scale cost-saving the We've that's angles program to couple

reroute and to opportunities bring we super operations Eagle's frac position. our see of deeper, the look we use to As zippers Mountain the

day synergy the be ready of go transaction really We're one soon So on to side going closes. to the we're progressing as things, as well.

Ryan Lance

add And the on the the the Well, out. just and I'd in I'm the comments make probably your holdout on to Doug, dividend. say, I last one appreciate having XXXX. decision given back Look, history team,

a more look, lowered flow. lot dramatically So cash lowered prices company We've shape. free bigger. cash lot and sheet's of our well. Balance -- supply, we've lot the lowered as a has great better, more capital resource, gotten we've It gotten we've we've gotten cost more flow, our in as sustaining a

that Marathon the So of to consistent transaction, your to really -- we the we're itself it action with lends going in to the the fourth And all this do well. earlier do on lastly, quarter, integration close doing dividend the comment.

well, we experience, experience. do over Concho our will this really and synergies. the one the Shell Just look We'll on deliver at

Operator

next line with from the of comes Capital Our Scott Hanold question Markets. RBC

Scott Hanold

I'd around there. to and is million are hear regas about the Asia recent how strategy XX million and takeaway to regional be question stated and XX get How you've evolving, about is agreement. that interesting to specifically the out future contracting to that agreement LNG, on My you targeting your your atZeebrugge thinking

Andrew O'Brien

is Andy. take can I this that one. Scott,

progress yes, terminal the sales then a of you entered X.XX As an on our capacity Zeebrugge mentioned, with Asian for we also MTPA. in And buyer made regas secure Belgium. we at MTPA X.X did further approximately contract We LNG. into have marketing long-term a

MTPA. previously I reminder, a total have in So we these support of of the X was communicated we now recent to with our is placements X the SPAs that Qatar. from X.X take

communicated, as Now both offtake much quarter, from advance, really on can talk too don't And But you we're good this for fronts. sources competitive where see reasons, we're we about, progress in regas making developing scale or capacity. a really us. XX previously size, term, for across over range would of our can At organization. of full be good we to that achieve the XX we long as the capacity MTPA benefits

for think we're everything made progress I think the I very we're to we've trying what happy track quarter. on with So And here. this achieve is

Operator

question Barclays. comes with of line the next Our Jiang from Betty

Wei Jiang

range, Willow want CapEx an budget? And in guidance So the versus tracking end Willow of that the add the your the movement which about upper to most is of Can to give specifically then update us I upward plan? responsible nonoperator is in and you the how was to increase activity. attributed on for the

Andrew O'Brien

your start Betty. This just by the I'll question Sure, Andy. and sort directly. then of is of sort guidance clearing Maybe total Willow Kirk can take

$XX beginning So of uncertainties, Willow. we of billion guidance initially at a included a $XX.X year, to including set the billion of that number range the and

halfway foundation to time success projects milestones early and execution. of large Any assess derisk So our have up billion really now on line years achieving critical we year. is the season, sight quite or now and through winter of around project the Willow achieving the this successful wrapped such at and us scope we're for we scope the And construction a in work first have billion $X.X of few Willow, year. to $X.X for as

said XX. And other specifically called as the out is Lower area we I the

wells operating a going parts of Now And side couple We we're also attractive the our by of And then we here, here. there supply when increase more on moving things, we're the see scope. as our -- are seeing in result to cost partners, an balancing specifically partner-operated are low opportunities efficiencies. participate. on of of a

the partner-operated -- in both us production efficiencies, brought So XXXX. they're going the activity to some benefit and

of for we've the half. we're this pleased in locked achieved we far the think scope we've the second when it, and scope year work with So then so about

we're year, be going total guiding is Now given halfway to the $XX.X comfortable now for year capital that the about billion. we're through

Kirk Johnson

course, of billion view can here full total really construction we're to, of our scope in as our And milestones across is all of achieving and color be and foundation workflows, success a workflows, a And first the the and Betty, first from into in $X.X our And $X.X spoke execution give specifically. on us way here Willow, just years, large taken give it's just of the company Kirk. strong is execution across this just why realized factored suite project guidance. On it this through Willow, a Certainly, as to that fabrication little year year, range. this our accomplishments this for And just strong such Again, our I that's that critical. of and late any forward a billion moving into going Willow bit through function is, the supply engineering few the chain, we've last in continues capital Andy more will strong especially XXXX. sets here its part having project. our FID what here to as

to from last season to as able heard planned critical were early achieve our winter challenging get this Center August. And in me despite arrived of month XXXX completed. On offload, that modules weather here last, have fabrication, our the delays. and largest shore, they've we critical Certainly, from in here we some had that some barge plans we in Operations But all completed of to we construction ahead to quarter, of you scope able actually that take modules, up, pretty schedule. Alaska. wrapped here we caused shipped, all scope the now and ultimately, Those were

planned, the And early. Center ramping track. a well position on actually couple we doing roll fact as as in couple fab foundation to Ops we're able bit Central just the of do also a modules. project. from large -- Processing up months the directly that modules this as to set into us modules this Facility for well contractors we're us strong engineering these really that we than better is puts Center as and which our to the Operations up allowed just a when Engineering on It's And

last July. fact, month In we just steel cut here in

just this it's wrap again, important, first also it by, is year, So reinforcing, up I'll and important in post FID procurement.

fact, make where contracts equipment our in wrapped we that spend we into is the of continue on up of to And at within we landed contracts. facility total in move half here now a of orders. place as been say major And All facility have second we're XX% the can progress year. our

And lot and So capital, still project again, a our it hitting track really important. us total confidence for guide milestones we're all the prior these first across to gives on a workflows, is reinforce just on oil. early XXXX of

Ryan Lance

would back And level. Betty, a high step I too. couple comments on just my A at very of side,

decision You this. is This to is And that's that the choice described. Kirk Andy deal on back as our -- want number to and project, shareholders on extra program some capital a hit operated should about, good the us look, the either. cut derisking doing our big not work year, talked for

program we're So back of ballots the rather sense than cost of those operators cover other lot to of supply getting cut doesn't just given an us additional opportunities. from a operated for to make

both to stage. wanting we're So of this them at fund

Operator

Richardson from Steve comes Evercore line ISI. question next the with Our of

Stephen Richardson

I terms XX. wondered if I that Lower could in just follow in comment, Ryan, the up last activity of on

what on this sounds half combination in more edge for numbers year, a the And in you Can up of it maintaining and and that that what program. you're probably second if kind talk mean the of bit you of high-level foreshadow terms leading So also the show service costs? 'XX? edge leading what seeing the I about could of OBO of could but doesn't your like a seeing appreciate that, on you're little

Andrew O'Brien

XX. of start and the just details talk I'll that, Nick can to Maybe Lower

while communicated, XX So previously this experiencing seeing a and deflation, in we're with inflation. is terms bifurcation of inflation as A&I we seeing some bit of year Lower a deflation,

the annual right deflation slightly deflation full is slightly our low we're in say than average the but the single-digit I'd at company-wide, seeing margin. still right in Now year the XX, at guided. we more than we expected, expectation expected Overall, Lower margin, higher previously is as A&I while that's

and XX% the provide low by gains Nick Lower we've to deflation last seeing, single more But a rig the efficiency in those activity still are in let we're to production, key the improvements I'll XX. are And where seen So driven specifically and on a we seeing XX double-digit efficiency frac spend categories. high our drop over resulting Lower reductions. what in some of months, activity bit color industry-wide, higher XX,

Nicholas Olds

is Yes, Steve, this Nick.

Just more commentary. a little

continued we as or that the price there's think XXXX. pumping see half seen first second We over little -- the For you will decrease in half, The bit of half a in in continue because about see deflation the services. half deflation have We some proppant general, have And well. rate. when it Lower into in there. an spoke we gains we're the out we'll around so curtail in half. second But Permian, look probably into well. We'll And that. we've first as that second proppant in oversupply the the XXXX overall, seeing continue will run seen of capturing at OCTG we're fairly probably going large full of reduction XX a

we'll look December, that where you fact our is than the That's by from we capture. that that July deflation. driven lower budget market XXXX primarily XXXX, through deflation If modestly see capture

Operator

with question of Royall next line comes from the JPMorgan. Our John

John Royall

a already talked called moving how little back generally. you've we you color with guidance XQ steadily the progress pieces guidance I into the the guide. for on half full So just give the the line between a increasing like then about throughout out. at if in the And your year impact in the your production in regions production. that's year I It could of XQ. looking for outside backing the maybe my looks as and I'm year, question back turnaround impact add year, profile But is from the turnaround just pretty different XQ of think you've on

Andrew O'Brien

was that We're consistent pretty think that can Alaska the I a yes, roughly as Bill X% it Lower Lower is to in end the take organic expecting for -- X% top his International. up with when you again, answer XXXX, which to across the the short across in XX should and be second is, Sure. pretty And turnarounds. is production said remarks, towards grow guidance, year-over-year one. our organic I and that balance And in XX prepared A&I. quarter, X% Yes. and steady the adjust and production of

turnaround of I Norway day profile in in Bill XX,XXX that actually to is Now each in production and what then Qatar. that. the the you're year, XX, quarter XX,XXX profile, on more bit give prepared that you growing a It's the a alluding is our mentioned in and to, with this in heaviest our the was if some in barrels at now and in And split expectations. in you turnarounds, Canada, outperformed impact That XX,XXX is pretty X,XXX XX, quarter X,XXX turnaround in being X,XXX look barrels time, that The of a the quarter. think second masked our Lower remarks. Maybe third Lower just at our Alaska, basically if Malaysia bit color exclude XX,XXX X% little straightforward. we're as specifically, the that's one quarters

have third due Now in and day Eagle in fourth third we'll versus fairly we at to the be barrels mentioned turnaround flat at up quarter. a be that quarter, then the expecting the just are the that's Ford, XX,XXX production I to quarter the we

seeing. tracking we're just line right turnaround masked that line, So you're bottom is the somewhat a the with bit quarter-to-quarter our guidance, activity with in

Operator

the Wells Roger with from line Fargo. comes question Read of next Our

Roger Read

talking guidance cost the come little going you're Maybe Obviously, on coming about OpEx up back front. the -- bit. side on a

of this the external? And like You've things on I inflationary the of talked were higher those speaking, know internal What broadly didn't CapEx is kind are versus about the pressures? side. what costs. together activity, tied part some higher of if

Andrew O'Brien

I This take that is Roger. can Andy. one. Sure,

As to in to guidance Bill $X.X the raised billion have the full year. mentioned prepared we remarks, for the $X.X billion

some about XX then utilities of higher some of higher That's primarily costs, costs. activity. half the Lower is processing transportation workover half result and a our is position this nonoperating the other own lifting from our and additional Now and

another experiencing be reminder, been quarter as have incorporating that, some our quarter, we would the in third these just and impacts guidance. is year turnaround And the to referred point of to. we're second large going a make those the Probably I full into is that I now

So the point the will with costs the third this controllable see be actually of quarter year. that, we high for

Operator

Sandler. comes Our line next Todd from of Piper the Ryan question with

Ryan Todd

about Maybe Congrats on from have business. if -- Maybe up supply-demand seeing got on market terms you as on speak broadly how maybe broadly seeing LNG earlier. in you're the sales that appetite announced the markets? LNG deals on gas, in can of and offtake the you contracts, the could on for over you dynamics what I X follow what years and topic market, next you're of those more think LNG global you more dynamics in the couple

Andrew O'Brien

take Yes, I can of that terms one, too, in what we're seeing.

things, the offtake from maybe on In the I'll marketing. the of side offtake terms comment of

our this grow going XX things. in big them. on been play. MTPA potential of in demand and look we're some clearly further communicated. side LNG making opportunities that of we're position, much And quarter. our for don't is and this happy the with we buyers marketing come to X the address causing high continue that think timing the I to again, it, sign we them offtake we as we've the be as competitive far pricing we're project. And talk the globe, to benefits say, of quite to terms pause continuing I'd picture, as LNG. there'll of role to likelihood But the backdrop, deals XX across of with new our And to in we And for to remain see, terms highlights LNG, Europe continue the advance. too we the we're remain permitted about from both very LNG on on FID. more the happy the and pleased to The In opportunities of But of we've able and work We with progress against in that position that constructive Asia, and out previously it's questions the

Operator

question from Truist. the comes next of Dingmann Our with Neal line

Neal Dingmann

And gas suggest expectations. tell and you question curtailing I'm know Permian are all is, My maybe ahead? you more pipeline added. you you And the just my be to is wondering, gas capacity several for rebounds? you can takeaway on the and third-party have mostly they anything gas question oil. XX I realization quarters pressure is all expect consider remain depressed, all thinking would the Lower until Permian prices could

see to potentially was if curtail. to just So there anything

William Bullock

Neal. Yes,

gas call, particularly realizations indicated earnings So as we low. first on expected XX to Lower be the quarter we quarter our in second

Permian That that Basin at how is, the played recall, in pricings negative. -- for out was fact, printing quarter. You'll time, a things

a month saw gas negative and through first of quarter. pricing the You daily Waha

month, in So the just XX% first were XX yes, of quarter. under Hub realizations Lower Henry

our quarter, Now we'd production of pressure as portion receive that in pricing. sizable We've through increased a was And out to on pricing. portion downward in-basin a our Permian, of put Permian Basin. Permian we've second that we and Gulf there does production ship activity but the significant markets said multiple is Basin including the went maintenance the the West Coast got of Coast,

Lower into quarter we quarter takeaway. XX significant to for some's really and We towards to in capture third look that's is continue the Pipeline we pretty an overall improve as expect as Basin Permian be issue. should And the now. end trend coming quarter right of going coming would rates and quarter. Takeaways with into constrained fourth go are adding the helpful forward. on, third think Matterhorn that we fully the Relief is the basin The really utilized. Outages later third pricing

about the discount is The Henry Inventory that, Milder border pricing to Permian other that a the quarter year Basin at impacted. the was the months high. at shoulder out pricing low, not quarter, levels would into lot were itself, we as is just only you bit second thing too. markets was go the will but look resolve of a I and traded you premium of unusual. in the note, as which and California expect, on. Hub, of were fall, a going weather think that, second I'd remainder

we've And Permian point think got not But takeaway looking on curtailing, Basin to we're a a repeatedly, is issue, little assurance the is of about said would then well, picking for of And this with flow Matterhorn a bit you big about, we've thing capacity that. coming up. your out for the as issue. pricing ConocoPhillips, capacity additional

and in the opportunities primarily flare. that's Permian oil-producing not important we're because Basin, do we And routinely really in investing

being to production that able move important. is So

way So we're out oil long a looking at away curtailing capacity from looking coming Permian to forward of but additional Basin. the we production, are

Operator

of Our comes line ROTH. Mariani next from question with Leo the

Leo Mariani

very couple in operating quarter. to production base a from also And a perspective. nice your your pretty up volumes very, touch this volumes want Canadian were Eagle a just I Ford on saw rise as sharply you areas of different Montney well.

I give around hoping can you a those. So little color was

trajectory temporary. Eagle a and jump on sense of trying there to was kind is Ford that on this the to somewhat of also, production I that production expect Just turn-in-lines of some moderate also. stuff, mean is later to going in asset steadily Maybe get And just lot a grow? there just the year. of Montney

Nicholas Olds

here. start I'll Leo, Yes,

take encouraged Eagle the on had XXXX, second we're XXX,XXX back, that reinstated we production. versus To per hit that frac crew. half that group in then really we you're We of XXX,XXX we equivalent the barrels and So the from had QX. frac day Ford, gap right, with

in that you're really QX seeing so the we work And as benefit through inventory.

end and the with we in QX that QX. encouraged really of So wells placed online

a production performing Wells the So strong in we've bump strong are there. seen throughout. very

turnarounds expected, and as Now running. large XX,XXX we that. up That's in expect planned, Eagle as you'll we'll the day for have QX on to Ford. be impact, currently Andy as That's QX, day on going slightly mentioned, and we're so per as through, back equivalent turnaround going per speak, barrels down

overall. strong Ford performance Eagle really on So

Kirk Johnson

Montney all being to obviously, that's commissioned this same as CPFX late a in Leo, today. fill as than bringing to about a you online had us asked We equivalent where take that just you as well. barrels driven by barrels That's can capacity, more day. here new quarter XX,XXX second I, seek And well, last really this And quarter start strong bit. XXXX, too, we last up relative roughly year. Yes. And last quarter, here we averaged we And then quarter-over-quarter wells in double year. -- additional back a we're X,XXX

been production with in line Montney, rates Also, for type curves. our our have

grow online. wells as And in XXXX, us they come continue can unconventional So production really quarter-to-quarter. fact, seeing you XX those bit modestly you've know, the throughout we with in albeit, how pleased our expect we're to profiles, witnessed do, lumpy and to from Lower be a

in And start uptick the last so an again flat to be the I'll guide of quarter here third you here a in to quarter, second year. see little we'll quarter then bit. We the pretty do but expect

seeking XXX million capacity sure and remains processing it's crude So production added with an cubic make year, additional we're capacity new course, last this handling of feet this processing phase. offtake just in to and condensate again, gas with naturally, in cubic feet both having facility a and capacity of XX sync day that, new million our

earlier the capacity, And year, continue expect and having that to slowly into so future. modestly we're ramping rig the we brought that this new into just on second here

pleased and we're again, wells that everything XX. activities, have then, Lower we how we're the experience with their gaining just performance on obviously, So progress in making from our some the

Operator

next of line of comes Kalei the from with Bank Our Akamine America. question

Kaleinoheaokealaula Akamine

like follow the on I'd gas discussion. to up

how due little how to bit term, like through a interesting can, about shaping extent you talk Permian you the exports. and the I'd a little longer And on more To gets power of out and year-end. end your that macro talked that setup bit expand about maybe well through the is is to You macro XXXX.

your is change, that you positioned assess to appropriately that sort you as portfolio So I'm of if wondering of exploit macro. think kind

Andrew O'Brien

the that. can of we demand then Maybe side Kalei, I here. about sort is talk might that, of with I'll take. This and we respond how can start to Andy

in narrative the data of gas up needs. to of of are and in set you side we see transportation pretty LNG sort sort think the center the I side, for well -- So expecting on tailwinds there terms -- gas demand

to broader trends. There the of So under several electrification plants going just day lot XX alongside LNG to next years. over forecasts. of That's the add construction XX a the Bcf are has been a

I natural demand. think all them demand, power all and on seen they're for gas we've AI-driven constructive

But the power I of such the there as pace to expansion, constraints important, efficiency. data here different improvement so are of those build-outs, out, in the on want expected at it's point play factors do center lots

portfolio, in it's working carefully still piece going mean sort how of yes, over the driving material what second half we're equation for of us? we But portfolio terms of opportunities So to of through terms lot we and to to unconventionals. absolutely, opportunities. that Also, of just have time. lot our a that the sort be does demand. Then question, gassier of seeing going have the of gas lot today, that do it the see target associated of we're we our developing So a choose not could currently in of dry in gas of in parts unconventionals, a basically gas we

gas our bottom sense, supply compete us, a gas is our can if a supply opportunities cost are portfolio, there, for But the on really And to competing pivot the of basis. there we to makes it's is support in cost is, if and the program. line the on is, it quickly basis the nice of cut and demand it's make capital very today about where for these the annual to got we thing

Operator

from Bob comes Our Bernstein Brackett of with line Research. next question the

Bob Brackett

of biggest project. Slope I'll North return It's billion years. the Willow CapEx. in to last the $X I perhaps XX on It's the think, project,

to guess, the the side doability project. mentioned And of of of on you the operations the around that arrival some center. And ask are comfort I get so I'll questions a spend, little facility the nitpicky

the And of get the I around you're processing in strong pieces facility, drill other those? pads and guess, the that comfort philosophy control central those? of facility, what's are you then the do The how design

Kirk Johnson

takes out how how good winter much what outside in And Bob, is we of lot hearing been this of certainly, a over North winter from pretty It's the seeking combination, of have of is planning Slope, those Alaska Kirk. we naturally, build each a as seasons. effort do within which course, to for the where years. you're conditions. is of what it challenging it's and very out we're Yes, these coming can that's proactive what weather certainly, playing to We've me And us, project questions. lot remote. planned -- do modules we construction a this

in very large we identify us. certainly which build be can purposeful so in regions it globally, in off-site, in other And how that and partners we Alaska aggregate we've with progress those preferred modules or those whether and build been and these areas with can contractors

it fabrication our of described XX% the of total construction spend You've heard of spend as as how bulk upwards of whether off-site, I've our in modules. well of the through facility we've this, all in locked be the up

and the in Slope. transportation, are of into pieces truckables and still Alaska. on to in appropriate, of that we're labor the work those work do markets and exploit talent that Alaska. to have in And Alaska We're few we North then, all course, we there of Obviously, that the that a can sealifting we the making have transporting

expectations seasons, across us that's to knock important opportunity. And we scope so good out this weather actually me which is describe why next is of for year. you in had that have hear good Slope. winter And again, North the work it's We do that are these all And year have multiple weather-dependent. why the this we even that construction when on more work XXXX we have when

so And get that we project this done. can we scope staged created purposely so and that

across good construction that's strong We to sight Alaska, expect again, activity, down. our and our of in the premised have years, both expect contractors. XXXX on peak stair-step and XXXX to in line fabrication that weather, to But

And got post FID. foundation project just feel so we how immediately is starting a we've to like strong really this just

happy is us, with this all Bob. looking really how for So

Ryan Lance

sites the don't we've This designs. of North add more XX same things, North for design built last I other They're drill the drill just is, site the XX that that from experience we've Slope. or on or I'd They're And Slope. my lateral on and the a long-term know, all XXth Bob, years. on truck done couple

isn't the size of the of them themselves size And part winter a your off-site them. So them, opportunity we Slope and for offsite for sealifted we've is do central the to fabrication. important lent North We've lot Willow and stick-built there facilities, this to us to scope. And then season, the done construction facilities built how the and any know scope them we've facilities incremental and on on We've up. the question, done the both. during of our and

window our hitting in And the great of on could I activity, think pretty project ramping well When Gulf the a get we've slot Coast. of we the set pretty team good ability job demonstrated, there really quickly, was gotten And up the has our showing facilities did the Slope first up. then already to North as facilities with the productivity. well the to sealift down

important the of because on go the the size building with and demonstrated and on an a productivity advantage need year-round to stick-built off-site So that's the build distinction it better Coast, get Gulf take -- to to Slope. Slope of Willow, and us, lot ship the North of North then

stuff So that doing. comfort. of done done should past. this just give the know we're We've you are And we've repeats what We in before. these some

Operator

Our the from of Partners. next question comes MacCurdy Pickering line Energy Kevin with

Kevin MacCurdy

do that of was the in line, you on for do to material expect but fourth To in the the question the partner-operated earlier the Willow kind end assume We year. pointing And the would high activity to build your see geared first production -- when more you impact range towards now CapEx, CapEx half that of see the But or for is how you're the activity? higher about is from nonactivity? quarter. spend CapEx when

Nicholas Olds

Yes.

to in jump capital I'll as then add total anything me to on here, Kirk, you Maybe Kevin. for just want back XX. take if well. this the you And Let Lower

compared we XXXX, modestly by be Ryan lower mentioned, that As expect mainly capital deflation. to driven to market

rig side, continue that improved through to and by and are as we'll crew XXXX, capture. have fairly driven on that we deflation realize frac -- flat mentioned the efficiencies on Now that's before, operated operating we capital counts, we we and

higher capital the ballots on is guidance Permian higher nonoperated as seen to we've the of your relative Now given. side, anticipated point, amount nonoperated to than XXXX

Andy those. in participate mentioned, And to activity. as we'll So continue that's higher

framework. supply our attractive are we've competitive investments of program. go We analysis guidance. on these of Now why through we our that cost our detailed to these as XQ, compared that's supply and raised within through seen of operated are especially, do all framework cost We've

typically in years, the I non-op if half end of to benefit like then the QX. back QX deflation. continue the look in off Now second we'll we've seen of tails realize the that previous and of kind year, of this activity And

we So expect as that well.

lower for just the capital is year back, XXXX. of our modestly again, circling just than So kind

Operator

Our with question the comes next from of Scotiabank. Cheng Paul line

Paul Cheng

I looks 'XX. Ryan and maybe down, from of parts but Maybe If like for in share and up XXXX way spending with looking XXXX? then us comparing or terms of this would Bill. 'XX is will down, up just can moving their spending part we're CapEx, you at there, for some it to of Alaska the be may be imagine, the actually

if So is that we into us parts can what should the you give that idea -- key some moving take consideration?

Ryan Lance

Yes, Paul.

Andrew O'Brien

this Paul, is Andy.

Ryan Lance

Yes, go ahead, Andy.

Andrew O'Brien

the at when we're for prior the XXXX. what about moving is Paul, bit to closing highlighted a few we us were that point, spend the a talking to capital having in Marathon going to it's particularly Yes, this of transaction. be early XXXX be, But parts you've

CapEx. the So we 'XX get to transaction we're -- that's detail later to talk to the going closed I about and wanting think through until wait going in Marathon year get to through be have before

Operator

from of UBS. Josh Our next line Silverstein the question comes with

Joshua Silverstein

-- it's actually to on get the just to Port was an about the permitting And update some helped U.S. LNG LNG Arthur. the curious since year been I Saguaro at wanted it's if on too. has I announcement. wanted update the an the slowdown pace get Just of then I that in project, a product think development. of development

Andrew O'Brien

there. and and Projects in you the so But U.S. questions pause, on point the track terms one. On the I'd is MPL a to pace of mentioned, same that at of in to on This construction just operator then else project the does. going they rest industry And answered one track. sort impacted not our being impacting started those you Port impacted. or take critical of Phase of at this of think probably and by is as are by point. FID this -- see, was the this the I really like your of say, X MPL. -- things this much -- that -- at. go sort progressed. is terms and planned. And and stage, they're that question second probably see, is that We started Mexico, are the contractor. of Really you where on as are is project. I regulatory construction permitted better in Arthur, say construction It's fully hurdles milestones the project of with there the the specifically, can I Yes, face the But Andy. the We these

to You MTPA offtake in have mentioned -- correct take that you're X.X of MPL. we agreed -- we've

that progress pause. So the we're contingent LNG is clearly watching the too, but there, on one

Operator

today's further at you conference. have you, participating. questions We for This no concludes ladies time. Thank this and Thank gentlemen.

You disconnect. may now

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