Cimarex Energy (CIMXP) 21 Feb 192018 Q4 Earnings call transcript

Company Profile

Participants

Karen Acierno	Director, IR
Thomas Jorden	Chairman, CEO & President
John Lambuth	SVP, Exploration
Joseph Albi	EVP, COO & Director
Mark Burford	VP & CFO
Arun Jayaram	JPMorgan Chase & Co.
Andrew Venker	Morgan Stanley
Kalei Akamine	Bank of America Merrill Lynch
Jeffrey Campbell	Tuohy Brothers Investment Research
Jeanine Wai	Barclays Bank
Neal Dingmann	SunTrust Robinson Humphrey
Betty Jiang	Crédit Suisse
Noel Parks	Coker & Palmer Investment Securities
Michael Scialla	Stifel, Nicolaus & Company
Phillip Jungwirth	BMO Capital Markets

Call transcript

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Operator

Good morning, and welcome to the Cimarex Fourth Quarter 2018 Earnings Release Conference Call. [Operator Instructions]. Please note, this event is being recorded. I would now like to turn the conference over to Karen Acierno. Please go ahead.

Karen Acierno

everyone. morning, Good fourth call. our results XXXX and Welcome quarter conference guidance to XXXX An website the to we posted updated was presentation our referring this will to yesterday presentation today. during call be and afternoon results morning this guidance. a the our focused The of call and is Cimarex discussion on of historical XXXX not same. Due to do the matters address with transaction to pending related we Resolute, intend to the

shareholders, acquisition of to including the X. Resolute the on the the close satisfaction conditions, we subject to However, of expect March approval

the of the involved on not Resolute assumes Also, March guidance vote We do comments of on or is year have X. of any Resolute or full Our securities acquisition solicitation a discussion this expected approval. closes a not after until closing.

SEC information You pending transaction. the that contain are read with urged to about the public the filings

forward-looking discussion we from materially statements. number our to actual of what cause addition, will actions results A could In differ discuss. contain

year and with was news latest other You XX-Q statements on is associated there the should our filings the December business. on forward-looking also for read risk in our our yesterday and ended factors release our XX. disclosures for filed That

to update SVP we well our results Joe prepared CFO, Instructions]. will begin an an answer activities costs. and will operations, with questions from help drilling Albi, here CEO, of any Mark update Lambuth, Exploration; always, COO, Tom and followed from production our by remarks John our and Jorden; as Burford, well. on including As overview our on then [Operator is you

with to Tom. that, call so I'll over And the turn

Thomas Jorden

that returns. $XXX flawless was share or billion exceeded and execution earnings I great performance consensus invested everybody. for in -- salute our per Good in Karen. it and a in revenues year achieved We on XXXX. million and of organization share of for earnings with and $X.XX production All billion. the estimates all, execution morning, me, of excellent you, beat CapEx. year, exploration an per Thank both We solid generated excuse development our strong, $X.XX and year targets. excellent finished investment had $X.X We and Cimarex

in That the You the of close expected Karen Corporation. assets will sold will recall acquisition, which that on County to March we is of as help proceeds Energy finance said, to in X. announced Resolute Ward acquisition XXXX,

we XXXX. are at activity Simply into borrow forward As move neutrality our flow a XXXX, in money. will on we basis, to looking put, combined cash committed we not

billion oil at neutral payment Our cash planned exploration $X.XX price. will NYMEX development a including and billion $X.XX a us $XX.XX position, capital dividend quarterly our flow in of to put of

neutral Before will dividend, NYMEX cash considering price. we be flow our oil at a $XX

consider However, flow discretionary, to so we of cash neutrality do discuss payment we the not after internally be dividend. our dividend

that increased You our may per have we also to dividend share quarter. per $X.XX noticed yesterday

primarily provide an these understanding years past by driven our in have detail optimum we this. development. will work The XXXX, more few projects. of has increased year will John active on We development have done greatly

Spring, developments. Woodford a behavior, Our well experiments across Bone result including portfolio understandings and include our project of These and multi-well reservoir economics of learnings here are Wolfcamp, the Meramec. interference

not we assets. on developing conclusions we but the economics are Our find and that in our sweet well are can spacing spot value incremental obvious, confident

billion, Basin. includes capital Permian $X.XX the and be projected of billion which $X.XX plan XXXX exploration Our will in development to of invested XX%

midpoint, XX% including midpoint at is oil year-over-year. production growth increase the of XX% expected total Our to the at

flow sensitivity free a presentation, at outlook oil cash NYMEX have including assets the price. $XX progress flow X-year result where and we we would As good XX oil growth dividend. $XX of Slide in to latest I a you NYMEX refer price, at organization multiyear and like have made, cash and a present will to our $XX a our deliver a the we where

cash free oil X year. after cumulative versus next million years averaging chart flow growth our while last delivering The to the XX% Our over payment X over flow the of the the outlook assets years next of our X on of for the $XXX generate $XXX comparison is a cash per million dividend can left years.

discuss in $XXX free during about NYMEX in capital a period a more that to about swing 'XX is We're execution. on be as spending our as will science $XXX cash our has of the will to total at solid our to $XX another organizational year outspending be $XXX and turn The to returns. our on $XXX hit million as $X Cimarex million seeing over With of the flow capability the to will percent. call in free do XX% innovation period cash showed over XXXX, XXXX over of the XXXX oil of was XX% period cash calculated We generating well focus John to we on average will million as to on of XXXX ability execute that stride. a economic benefits again. it more generating year our and some growth highlights. emphasis average, from planned. XXXX. and oil see to we XX% I potential generate that, the In flow XXXX flow billion expect million

John Lambuth

Tom. Thanks,

in and XXX XXXX, We in or results gross, for completion XX% XXXX Mid-Continent. activities, in in our drilling $X.XX net XXX was the production. $X.X growth billion development fourth participated million into the new XX% to both excellent These Cimarex bringing capital During or the wells spend quarter, total Permian for drilled the exploration in XX% reserves investments of and of yielded and invested wells. in invested with Cimarex, and including region $XXX billion.

in estimated new $X.X in total XX XX with $X.XX net drilling our exploration capital billion Permian wells to to gross billion and represents the with currently capital XXXX, of the exploration toward and our completion development company-wide completion total complete X investment. $X.XX of average, result billion region in billion, We and region. lateral Mid-Continent. going our during lateral $X.X with and and drilling XX to wells. approximately the XXXX, of is total amount For a the This going spend will the our This XX% development capital rigs, and operate of from X,XXX feet. investment X,XXX the -- drill brought rest to average online capital in was XXXX, feet, which increasing to with XXXX length operated Mid-Continent Permian plan We XX% in

average on the online region. quarter fourth the wells. wells delineation significant XX Now start of A will This Bone continues specifics our oil expand first XX-day quarter, the Third XX on State this region, well production total the X,XXX net each the year located per Culberson in net outstanding Unit for will our to about landing County, brought barrels in part test of gross, Wolfcamp to we the where to lead prospective very for had was in peak bringing barrels XH some to fourth the Permian for the XX XX densities acreage per block. Spring greater an rate western in well development on brought result hydrocarbon Upper equivalent area. oil I day, window day. including of The Kingman which of X,XXX Culberson

White our X,XXX on including we of This test equivalent Kingdom oil presentation this you Southern rate for day in Page feet acreage refer XX-day in the have per XH, of the section. of average City, XX Eddy per fourth per call XX to of XX-day million return oil barrels Another development, day, testing infill the Crawford X X,XXX per Eddy and located equivalent these quarter for significant Southern X acreage X and Wolfcamp in barrels Upper of XX,XXX-foot County a These online This combined I'll location. is our this well stream helps strong XX laterals peak peak FEE the opportunity of Animal we was XX-XX oil XX,XXX-foot per achieved rate barrels result wells achieved a rate gas block the Also consists confirm of day, wells step-out coming numbers. X,XXX delineation which average its being position. day. of quarter of investor cubic

be any have per results for developments Tam than Tim Wolfcamp the the future project early Lower X-well tighter previously would planned this section and at much would Although do developments XXXX, pilot. planned announced we suggest Lower successful Wolfcamp not from spacing

allocated to equates the which capital a XXXX, region over our spending of to have in XXXX. Permian absolute XX% X% We increase in

development X drilled be projects across thickness targeting area. be Reeves acreage drilled the to the in within will Culberson in development of XX per of for development on located Basin will the and Red vary planned section our for Five spread County, section, our upon depending section. X one total All are a prolific position XX more each Three of joint have highly of Lea from online the X all spacing project these hydrocarbon block of more pilots New development will projects will Planned equivalent wells Delaware of interval. these these overall projects for acreage County, Upper per wells Texas, Mexico. our We located Southern them 'XX, at X Wolfcamp Hills project. come

operated in X,XXX increased has Finally, length X,XXX from our lateral to XXXX. in average Permian feet feet the XXXX in

are in total fewer for XX% the feet operated our XXXX, lateral versus we X% although XX% resulting So in laterals wells year. have increase a drilled longer,

the XX X oil day rates XX,XXX-foot XX barrels Dupree. you the the and wells quarter, I net region wells year Of location to Page wells brought barrels the online on equivalent section. was the the in total development called oil for X the X peak per fourth additional Mid-Continent Average of was per which Meramec development Mid-Continent. for Dupree, X,XXX drilled presentation refer per XX-day project bringing Now In day. the to were net note the wells. the of to X,XXX for of at

in-place well and the second for of spacing The three online Meramec spacing these varies capital of decisions completing With understanding better be the to the we for undeveloped from required, be the the that, rest delayed will better previously potential for the X Joe will development Albi. to X our Meramec section. is over development call of quarter. I'll turn per projects the Leota position. to resulting of in then and And Our This year, possibly leading due the to infill three projects hydrocarbon bringing now project finally, project Woodford XXXX. until planned size wells Meramec

Joseph Albi

our XXXX call comments fourth the QX up LOE and production, items, on John, thank with year service quarter finish our for today. then on and and costs. I'll touch our you, production a full usual you and guidance I'll joining Thank few all

in with With oil QX barrels X,XXX our coming a mentioned, setting XXXX equivalent volume MBOEs reported per categories. records XXXX Tom in by strong our of reported coming our exceeded upper year-over-year XX,XXX daily end net wells up drove beating online day, are ranges XXX.X call production, barrels XXXX. volume those QX, guidance guidance and reflect for quarter the reported production and end equivalent volumes in day. ended at over at upper surpassing for production. ramp, with oil product QX came the a nearly records of As books, our in per our oil very and we full With volume solid new we production our net equivalent during production our and XX% our year all and gave volume production strong with XXXX the range our guidance XX% regional and company that Oil gains, XX last up day, quarter-over-quarter

which is XXXX, a looking at incorporates, NYMEX production forecasted on into and tied model oil. constrained the reflects really, One flow investment, Permian So our focus primary X to cash capital neutrality $XX forward inputs. is our

the is projects. drilling is into smoother our And high investment completion cadence. a of rate third much second in transition return The continued

for projects based well as late capital completion are frac as power, assumptions and on a holes include pilot such $XX we've as and in and experiments. for used total approximately cost science well extra and that infrastructure windage little such drilling million as XXXX the Our program-related estimates upsize SWD model select

the on in model capital March well as such, X, The our integrates transition the in built completions XXXX net touch addition and reductions in a spending beginning completion slowdown reflects quarter projected As completion lower our followed in just flat recent Resolute QX a beginning beginning the the volumes I the into second quarter. smoother potential XXXX, completion and bit I'll into current first The 'XX, the count by and with second a compared growth result cadence net to is in XXXX as drilling to volumes production mentioned capital our QX quarter-over-quarter just cost -- of we projection. not on are quarter. lower

and as XX,XXX in For volume barrels per oil QX, but up of XX,XXX volume XXX,XXX XXX,XXX with net flat over projected at oil from volume equivalent with XX% are we're significantly from XX,XXX daily in the volumes. full well County net up XX% our the per in forecasted XXX,XXX year net average up lifting the smooth up XX% barrels QX, great fourth to XXXX now in equivalent from our up to in workovers quarter full an our with quarter. to our a to of day, our With beginning projecting XX% significantly books equivalent Ward day, per year ago, projected we projection our volumes production our both XX% our costs saw to XX% day, of volume first the to day, volume QX, oil we quarter with volumes of With to increase year. 'XX XXXX reported and XX% posted QX projected oil for in range cadence to our OpEx. that up to XX,XXX QX, oil virtually oil properties ramp during our projection also to barrels BOEs equivalent off net the 'XX, to to XXX,XXX XXXX, daily Switching per as to average QX expense out our oil reduction and equivalent and gears completion last both year a XX% with

at in we of or we BOE, well gave range the and $X.XX Our in from low $X.XX, down $X.XX that QX to cost end XX% per $X.XX our of were lifting where QX. came below guidance

items SWD of our as of $X.XX compression, acquisition BOE. lifting to be projecting on properties, and with continued the cost Permian XXXX the As we're $X.XX pressures we range year market drilling XXXX, focus increased our such and into to forward look Resolute per in cost the full

come With I X, And to likely completion the range March, March and we're at or below the cost. full to comments guidance books projecting just Resolute properties in QX added 'XX on drilling lastly, our some year beginning on mentioned. in

reductions, side, drilling zipper cost AFEs drilling place, in our with cost and decreases and by programs, our via both in we On since our talked the last But hold service additional local Permian Mid-Continent recycling, we've now the rig programs. completion sourcing, we side, for call. and on each every in in realized completion last of recently quarter the increases challenging fracking sand of managed design to the about the check rate water portion one our

quoted As $XX.X new cost design AFEs. Meramec we on just Mid-Continent, where quarter. The cost down and recently $X.X X-mile million Wolfcamp last from from to design $XX.X pricing lowered are completion the local a Wolfcamp cost to sand with lowered interval, our depending In estimate in the our our on a million AFEs million with XXXX place, we've we've running frac now year is than of total $XX current down of well refined well a our just more million. million. result, a program $XXX,XXX $XXX,XXX ago. That's range majority total $XX.X facility logistics, our the focused and That's most Permian, in the X-mile area,

earlier, As these on cost now drill have I mentioned they with a just us our realizing incorporated potential the not current corporate model have into savings, bit complete. to and forefront planning fully for been wells yet we just of

ranges. guidance beating we oil great QX, of our closing, had both equivalent in production and So the upper a end

a We to with profitable development further With drops We're optimizing to continuing mark, lifting capital entire structure focused and with the equivalent generate shape production and organization disciplined XXXX cost improved significant execute and we cost cost in year-over-year growth. program, in cost. with oil solid on closed XXXX overall great both growth. our our

over turn to call the I'll So Q&A. with that,

Operator

[Operator Instructions].

question JPMorgan. first Jayaram from come Arun of will The

Arun Jayaram

have Tom, just Perhaps 'XX, compared to just what did bit you're a or versus on of E&D simplistic, at a number question efficiency. looked it budget your we capital I but actual. 'XX and it's quick and in 'XX by tills the divided XXXX we was wells projecting we in

but looked that just lengths at million modeling levels? basis, wondered $XX of costs just if well from go I discuss you're drivers in the the the just million. efficiency you $XX capital increasing XXXX versus a and lateral on I that some, as you if per well So XXXX as XXXX increase improvement are under know this can to

Thomas Jorden

And I'll don't it Well, up one Arun, I'll to give borrow level, want money. But is I'll it to cash high detail. tee from to to that we you and say turn absolutely within over then Joe are we thing flow. a live committed means very

there if little to is because to go were upside. that's then debt want didn't close capital number, we over the a would the bias a to it's up probably So bit our a we flying if situation. We in into in numbers, come to end going that ground, with a

program do So We on into potential sidetrack do a our in cost a we've a occasionally built occasionally every money tubing them see little well. overages. to actually have We for year. drill-out. We stick

bit And is historically built We infrastructure have at and in we've confusion. But some of a know so of bit little there. I little what a that is say, do I'll dollars. there windage we've looked

We do when facility per unit have see increase. numbers, internal cost a we some dollars. in look we our not But

over back can trying on last squeeze the we say to capital we cost, thing And So we I'm at project to that turn have internally a looking push reengineering going out our efficiency. now, right rigorous going is decrease to I before our then fairly Joe, in it of there back on is what a would programs. our

to Joe. not they're grabs. to are with I'm that they're clean, that, But last. to turn over facilities build it's of We for safe built and Some going it up

Joseph Albi

based what We've putting the were about current very that QX we've current year together. now, side, our I'll got And in Tom, right I that's the further elaborate later to reduction Yes, model today AFEs the tell frac can bit a per number windage. cost in since foot one, capital simplistically, a that on mentioned about in you on XX% Tom late we frac seen little on our numbers.

the lastly, into are extent we we to capital on bit given of year, spent year. cost so that higher were foot, capital the costs number where to correct actually have, the per we're slight projects the the obviously, at When way are itself we and foot infrastructure we our and not per may with bias year the And program the have trying that's it. are take multi-well development with we capital of built number the that at online at wells exactly, XXXX. conservative out at in And cost look simplistic our the a And in to the numbers company total latter the break there. that we say some level, reduction calculations I'll may to seeing the that be we model, the any completion brought reflect part compare a without that, that a XXXX that doesn't have quantify you XXXX, associated be those side from of little deduct lateral during there's doing model, doing, of in what

Arun Jayaram

comment I you us And position, can maybe if follow-up, thoughts the or Austin X Tom helpful. for potentially on XX-K the an was the play. your Louisiana broaden points. those my can confirm similarly, exploration wondering like now, beyond portfolio Permian, out if you on was have on and That's in acres, looks that update for Mid-Continent. The Chalk give wondering a reasonable you John, XXX,XXX did I

John Lambuth

didn't John. disclosing realize I Arun, our this I guess XX-K that. is was

have okay? said, as then point, impactful, accumulated some we've we a And we've and yes, we and to And do. is accumulate good there. actively position more will of then to there idea if indeed we yes, we we that acreage position speak it. what always pursuing often a Louisiana exploration we'll able very have but But an we nice that's are any at me, results -- see, News to do in been have

Thomas Jorden

to on part say new we mean there we our can to that. Arun, exploration our preferred our that Leasing, Certainly, the Resolute find assets in always we new understanding grow getting ideas, But to a a well our and spacing point whole doing a assets is data over also it. right is a lot target an growing target assets. to And bolt-on is Bone a that want That an our things. want new up our working by couple Culberson we're can that was to extending for know, that. is I And what of zones. new and Spring reemphasize risk of That is But Third asset goal footprint, in love think way. a attached is. finding and said. And our that's of you development important County John County. opening well things opportunity just had grow well a of our That's deal If organically overlaps our it. zone Culberson amount I sense, Cimarex. makes significant fair it then

that was and idea. a fact, geological In engineering creative

up dip, had probably reside idea that north it And those you the most would would We zones dip, that yet basin-wide you entire think was oilier fashion, interval landing a were are be almost same in down the maps to maybe of a and we And for wet. asset. the part tested basin geological overlaps we a look If that over oil success. well part of in bearing. remarkable that it right where and

through of creative there's I more internal science we point out to and and a So -- want we I as do to -- of to lot but want we ways do grow just it do we that. to want to always, assets, our need it,

Operator

come The Stanley. next question of Venker will Morgan Drew from

Andrew Venker

may about cash little how And a to right cash of you couple your plan next of ordered return mind, talk flow for how priorities that hoping the use bit Tom, free years? I in was are, increase of your over you can now?

Thomas Jorden

and our Well, first execute it. priority to generate is

part we're not our taking, to our committed And continue that's cash we confident that. you know can grow pretty we're of dividend, to insignificant we're a so to going do flow. And that. Yes,

to have see. ahead, going can that As to we we cash. we're have do look mean, that first thing we demonstrate bank and to I is just execute

cash our our running down balance Resolute on closing. be will sheet post We

not So last after say, used of one that couple years. sheet we're over we spoil." cash of we either. mean, keep said, close to I directors balance find like on won't love our return that's the we don't in I'll our to committed and and that "Cash to to not we're does nervous but it, sheet, additional cash always what used our about are bolt-ons, Resolute, We'd we on to cash have to balance the say shareholders.

will certainly So of forefront we mind. cash. free generate and need first to But that our be and foremost, that execute

Andrew Venker

follow-up, for Understood, a color. in the buyback? about addition or have special thought as guess dividend the -- whether form might maybe Tom, take I dividends, you that to thanks just

Thomas Jorden

what Well, it. we've about constantly. said. that it. new We already say than course, think to yes, on don't But think about have anything We get we it of about I asked

our our committed we is understand owners. about. who and We what to all for are plan that's We work

Operator

next The question will Leggate Merrill of from Douglas America Bank of Lynch. come

Kalei Akamine

got couple questions is Akamine This on Doug. of for I've Kalei here. a

CapEx? if our the future I'm your now you the question Mid-Continent full margins and the really the portfolio? wondering so oil Basin. But activity can into Mid-Con And by plan for appear growth, is core fits XXXX how also that's to just begs the $XX the So plans, framed like looks a address shift to in how positive obviously, forth. Permian which cash pivot

John Lambuth

stab that. John. take a this I'll Well, at is

much relative the Anadarko given between Permian do in to oil disparity Anadarko. doubt, in a oil manner gas Permian have our without a off, portfolio we in better than we First Basin. And shines and price, opportunities

are Anadarko. there opportunities in said, that Now oilier

is bring to in leading in on to achieve a in development of think development quarter, we much fact, able Permian. we that capital returns. is ways, investment on, some this demonstrated though, thing, other a our deploy the the able our both the I further the were confidence projects time, is of mode that number and volumes. it the there and volumes ahead the strongly even be to expectation The And We're to game ahead Permian this of exceeding with in fourth in was further that's decision our and full Permian and in lot in

We that So we have in to obligation it lot maintaining that of in to acreage and maintain get capital thing a say I'll in don't and ability position. deploy now deploy to confidence significant last terms to a position. we of in have And really has that still we're acreage right capital Permian be have done. pretty Anadarko, then it our spend is of happy our to deployed the our amount Permian in any

capital the as go led of fully development them projects will So all for and you of that I we that investment Anadarko, Permian, And to with to year. with challenging expect in to XXXX. into we tell year's on said, come I that see that compete up this will with decision. Not fighting working we'll be all type that throughout region the that are

John Lambuth

all you is And as had in has regulatory the new that's targets, New to we're is of for Basin are them. business almost Mexico, that, add of It's list Basin State in punch with looking can a of fulfills just pressured, basins, to with Texas multiple that. we multi-pay. Anadarko wonderful addition and Anadarko a to Oklahoma, I'll what is deal environment Yes, basin. it and plan places a constructive. as up where come If your

Basin, we I and novel in come challenged to Lea our with the the County Spring, just figure In up XXXX, well Permian and we the of all called up things bit with it drilled here. organization a and we down horizontal so tell out new a wanted And history in do. idea want a laid Second came rigs were they to off to Bone And of there little races. we to

do region be the a surprise issued both to that find we're Basin. we to highly things that look We're a And similar we've creative, upside to Anadarko the internally. and in confident competitive find highly that compete in I basin, what to am for capital. So going our Anadarko challenge through organization, externally and can

Kalei Akamine

of plan for what Mid-Con the you decline for natural kind and the expect do BOE Given gas? XXXX,

Thomas Jorden

He's to looking yes. out, Joe that. for We're pointing yes. at, papers He's pulling his

Joseph Albi

to a XX% XXXX the equivalent might down we're X% on be plus. and Yes, most that's BOE obviously Permian in on of at growth X% is projecting overall, the side basis, the side that the Anadarko. majority And

Kalei Akamine

Awesome.

Just the was Basin. speak can you takeaway follow-up, gas to if as the a in I situation wondering Permian

Now oil assets, some in you guys to the a just natural of happen Permian, powerful but gas. produce lot really have they

in value, Just given near yield, XXXX, as also do us your wondering for previously then, projected an agreement around to I can think And XX%? stood on you talk see can Permian plans, important? in which at So XXXX the insights December your your through your sales if you give term since update you've evolving expectations you finalized market pricing? this

Joseph Albi

this comfortably end or issues to We're takeaway, the that out sure liquids of through differential-wise in side there seeing side. secured beyond and and off arrangements. first the if sales comments gas to oil the I'll We've Joe, But no QX, not basin with XX% gas XXXX. few XXXX. gas those is I'm side. the sitting really in Yes, the the a in We've you only nothing Permian on all same but through on in and quarter had expansions the We whatever. we're by go very at know pre-sales and arrangements the wanted make also our NGL residue that and hedging of Mark regard leads the about changed. has what is hand into of to side, on

side, situation in established to linked whom pipe. to. with on the at oil for And Our the processors arrangements long-term our selling volumes. place with the oil of likewise, NGL processing production is either are XX% those purchaser-backed for on who is we same have or facilities sales sales

our all, -- of All say XX% all wells quarter quarter I first of oil of put shouldn't on about our second going to new be are pipe. and

basin, arrangements So pipe the But them. importantly, we've have out to we're sales with percentage that pipe who anticipating with people and it's put in forward. on more of go got place

to seen haven't sold. ago, if that any So don't comfortable, we're on you in we're And months real to did the regard. about our X the end, from my in position differentials? as feel speak want we I changes get X, know we what seeing to products Mark, I that

Mark Burford

Kalei, Mark. is this Sure.

at a using continues are portion of the Permian of range in passive range obviously, realization hedged up Panhandle in or $X.XX. calendar it's Annual Eastern for for is for And so. 'XX And $X.XX We the strip for it covered almost differentials will in fourth at for about strip, expansion, in Waha improve $X.XX, you Permian, range of $X. looking you know, price collars forward with the couple with Waha collars 'XX, pipeline with at next those XX% that of collars. $X.XX that's looking look I Improving in difference the and to Looking our you quarter, out point -- of the collars. the passive at out into quarters. as are a right have forward we those 'XX, -- do some Permian. look $X.XX-type we're the to some the and around

Operator

come Jeffrey from The will Investment Campbell Brothers Research. Tuohy question of next

Jeffrey Campbell

question there on First Are color add Woodford together? had that, capital, be back the Mid-Con. you made the locations? locations some X multi-zone will Since going you've can Or the fight on, of some to Meramec for described grade? discrete development that it to these is have

John Lambuth

we've said those and leading the much from think sections' can type wells capital of of Well, look on there. drilled we'll the to forward my as We of We we're returns have quarter. wells appropriately that we spacing to Meramec think the in we bringing be are we'll I those get and already compete. kind second in very in X worth remarks, development that

I they in Woodford. capital versus type investments for again, compete that there. and those of Honestly, to to cycle typically, development capital. we take time get when the we than Right of we're a terms in especially kind to these they'll deploy opportunities, making refresh Woodford, capital we're we, again, get our rate that, and have that trying coming confident and is in those ultimately Permian Permian of more it's capital great of what we a the opportunities, think go is have projects. But now, good how just opportunities, just lot bigger of investment of investment there the large ability number but of develop a quicker. point Other to where question out like see the kind we

Thomas Jorden

Yes, I'll to that. add just

Anadarko the very in much which do we But or in development, the X- because you for X-well be that projects. interference Woodford, is Woodford. very, larger that's phenomenon, Woodford, well-to-well the a of suspicious to you your lend And that And development, that's our really the is to to a does because it something reason in the ready may issues means the of returns to phenomenon. Woodford generating going boundaries. well-to-well be of of many we returns. the want a the play of is that's lot with, although And One portfolio, And that one perfect of in is to subject consider of protect than want really our if Permian, nice to that it things to larger interference are different roll capital reservoirs just contributed reservoir in you're have up chunks allocation, Woodford, the good and a one same in capital. teed in other

Jeffrey Campbell

I appreciate that color.

all, I already of some apologize, if the that. covered part call, earlier you'd First the of of I missed

Thomas Jorden

problem. No

very You remarks. some missed eloquent

Jeffrey Campbell

now? have would the about cycle. that's an the you -- a itself that as 'XX that opposed to you've want point making talked once But to you've bit is of comfort lend know actually investment that place, with discussed have to right you multiyear start but discussed, a in of of year, type up practical of brings kind you've that that to interesting move a more actually and And more kind to that big planning in Woodford not I little

John Lambuth

absolutely. No,

I it Tom put said, the we development as the working number plans also together. look again, at those get up alluded timing lined forward are Anadarko Because when as amount we there to into it a as see attractive. Tom your look just, get In a forward. projects project, to moving to, again, on of we that It's those with that fact, takes said, multiyears. look everybody like as to have And different we of offset partners get to metrics

little a said, can. best compete XXXX for in takes they again, projects. investments, that just more number Permian with lead we're to planning, the to And investment to of projects. ultimately a good we're we level which probably going That that always hold still upfront could of making have it development some So those sure making

Thomas Jorden

a assets is by because all high-class This our are, production. problem, large, and held by Anadarko

it from have fit. see I the we odd to pretty the as do to outside a in, stage but nice know Yes, it we have. standpoint, looking luxury looks our So from it's problem

Jeffrey Campbell

is to like it short this, Is And up said discussed to down Right. your feasible. you're cycle then, the make to going times on had to out try get as sounds team challenge how to just having follow what that to to right? you earlier, that figure as Mid-Con

John Lambuth

say but I wells Tom think trust one to going more look steps the impact, when minimize lot quite an taking develop to development in we we cycle you And at the energy is frankly, me, ground. time development toward projects. a alluded, and we spend we a lot come next of importantly, see existing aspect, things have carefully interference well-to-well as on time, of and very these

get some that, kind type can times we're just that of the rates. cycle more with and in then And of so that just design by and excited I'm at. refresh get the allow developments us we that, a comfortable things to would change yes, major If quicker of would to looking us

putting as be they're we're we energy a And sure. of for Tom lot can have just things, challenge, these of So on the into up small some said, it. competing, and if they'll breakthrough a to

Jeffrey Campbell

couple it color, that this sounds it's the if note and Spring and is, like doesn't there Third that to you Bone of on And can obviously, questions. development? you also so seem Spring have well, how took I to prospectivity minds' I any capable simple feel lower many need the lot Or solve. this communication appreciate ask $XX, a involved does because thing in and more Third with standalone drill just Bone good think problems a quick to any of wells just, far, One, certainly like it a I zone is Culberson get throughout does well your if Culberson work. of acreage? But zones? wanted you handle do

John Lambuth

to lead breadth be of to we'll do was delineate wells say, drainage, of year of and Well, relative our that have this landing encouraging Culberson What wells how Suffice a because to to is alluded I wells, that your the think in just the part of to landing as will do extent, speak number future that, yes, some we much have number determine put further adding to a is we'll position over quickly our and just question, it that section -- the per years, wells the now, a this have to then very that prospective. and the then in lead more zone as acreage certainly up I up first then much ultimate to well. as to and now upper trying been, it one in vertical section. let's pushing second we draining and this developments, zone. section, this very we're can't really be further in zone is We other decisions about that the teeing Tom mapped continue it's the to exciting its question, answer of higher looks say, going we to position. going I can't it as we will landing and your doing over go which we overall, near as to be develop higher communication as and across

Operator

Barclays. Jeanine The next come question will of from Wai

Jeanine Wai

three is year question the first on guide. My

do X look With I trajectory there even the you back the out continued flat get the your oil guess, growth such or and to half you could the does what in XXXX? sequential XXXX maybe And growth you completion that see XXXX? a that couple capital CapEx quarters improvement see roughly commented get being flat efficiency in you previously year. probably years like plan, specifically, that and when in And looks would out you're to take to there. getting like the this cadence in over it You wanted level of it next of

Mark Burford

well. are Yes, cadence and the In more that do growth of annual as working and Jeanine, XX% past those 'XX period, we still get as in averages in get into But of predicted and that kind Mark. out is we see, you as periods discussed, this 'XX period. oil to steady those we 'XX, completions

in but working and that in a improvements cadence see, have kind as initial continue capital plans, flatter can the as cadence 'XX years, still and a those full our steady years 'XX. is efficiency that is But -- 'XX in also in it's those more this are improving So working those growth. speak. outer we're still it we development. of efficiencies do through see And we improvements, capital improving portion But to we of through 'XX run-through through

Jeanine Wai

since assume you Wolfcamp my -- on second about helpful. in maybe for else similar if somewhere Okay, in great. last we Culberson technique just the But and Lower question And Upper of might that other County the have in I returns in have this completion is call. this is or and effect can update. noticed Or driving spacing the change this of your assumption, That's there a declined the that what's Wolfcamp, maybe missed then the the one-off? portfolio? the a talk apologies And just presentation Is kind some parts the in change? also the

Karen Acierno

I'll that. jump in and answer Jeanine,

-- think months updated I this we those every that we it. So sensitivities ago six run was

and we may it's fact, not are to still curve. very What But like it's curves what these down, here just types zones happens included come is might and forward-looking They use all they're high. curves the upper across of acreage. a but type type be So blend of in that. in some adjustments have really things the

just $XX, that too to would John at turning in -- It's And type $XX price. a cause there so. oil, quarter-to-quarter. It's from in in something cage, the movements at even our concerned which So improvement -- interested the has with I'm so right? good let's look slight -- wouldn't would at those more be say adjustments changes curves had about just be So get Wolfcamp Lower at we've while. I $XX that and returns for

Thomas Jorden

of on one light we'll As a soon put we table. curve find the we light can hang if old another and up, as the on new still table, top

Operator

question next SunTrust. will from of Dingmann come Neal The

Neal Dingmann

just talk think how but a on on your you further just and your given have consolidation, growth, broad past, DJ sense, comment more in I you organic about forward other going thoughts that? focusing Delaware, in you in things, comments about Tom, only might not could the colors the on mentioned any or

Thomas Jorden

predictable in my Well, I'm answer. be probably pretty to going

the it. I think pay consolidation off the in original all the County excited we're can make and about wasn't great that. are assets 'XX It are bringing to It reason. get pretty be Resolute sense. off best of can in assets We transactions in attention than consolidator -- were competing that better the they Ward for consolidated the X was And the capital for in to the make more when hands certainly, hands sense our owner. purchaser. same of the better they'll the in And

And so sense. I make can consolidation think

price. of Now the consolidation in the can't at absence looked be

very consolidation, transaction. value-creation we So be it's would interested a but only if type in

because between, create Resolute that few the we the hunt for sense they add in love delighted shareholder. We've to far kind the So for hunt. are years. We'll continue to to is we're another be there does, If that in we'd of We're makes week. always been value closing find to but Cimarex in hunt. be bolt-on, next another and and the want the one Resolute

Neal Dingmann

billion any of one last the I K, for of for guess, Great, exploration, CapEx is outlined maybe or some now just overall one got on like that plays $X.XX great then -- the thought the $X.XX other And that guys, just either you've for billion, that of details. you've that John, think much in 'XX, Mark go I Louisiana, down how of you'd I line. areas? newer kind or

John Lambuth

These and to of that just of billion, rank unique a do we what a It's well, on be for out And these typically, They're $X.XX much XX would, -- wildcat that about them. would this more that error. ever error we wells. company. there if even of lay tend on of don't embarked are like is overall overall that we time the said, they all we talk opportunities, it rounding terms rounding small E&D even strategic but in a so very this would a, be see. we're we $X.XX it don't -- relative I opportunities hardly drilling not indeed, really John. more be again, b, like I spend type out for capital we to Well, those We I budgeting that particular know drilling billion, argue

Operator

Betty next will from of question Suisse. come The Jiang Crédit

Betty Jiang

production doing a type XXXX you in the that Can CapEx XXXX some you're It level. does about in like what improves please in for XXXX? growth seems activities of talk preparation for similar --

high-impact wondering from just the there one grading to asset program some any you So another? if if can of program are high that Or point to?

John Lambuth

not you this I is, that to and on on towards Joe 'XX lot activity come our drilling projects John. I do 'XX. a the that of Well, is in Delaware all we I is, contribute alluded of on going will this, development think of throughout guess, Basin position part to number tell a greatly 'XX and latter can have

oil acreage know necessarily change the some I growth. don't But I a but in think them to of that time, Some that, over would some of positions. lead -- expect good are on yes, them significant existing to. very I infrastructure, to do do don't know, sure look than lead I'm things at we've what and I that, advantage conclusion the we modeled or...? not taking that would as you maybe such in, Mark, don't are but other that, of coming are

Mark Burford

an also guess to as in of the benefits just of model development, 'XX an more comment full from as 'XX some spacing do don't as even some would of I think necessarily and I being I of a even development more see 'XX, 'XX more and probably in is see moves we benefit. our 'XX. improvement multi-pad we outsized that and opposed the benefits -- bit 'XX, that is to

Betty Jiang

a we volumes how about that's can you're Mid-Con flat? Got level between what between thinking helpful. capital sense allocation split to activity the XXXX? And about And get oil and is Mid-Con the can you Permian talk then needed No, keep the it. on

Thomas Jorden

of here we I'll value at handle say, better we have year. And long-term capital to If for can year, some flow. allocation. for fresh that creating as or former. every generate look I that's a latter. We've in basins. want handle both lots have projects continuity, where jump We and It's opportunities got Mark I it ball jump really the have opportunity we want capital value let our Well, ball. basin any the one great greatest it's another, to a in given in the Joe we over although

we and it's to productive. extent prudent the are that way that's production So than requiring anything our not think us -- Particularly flow to held to a approach other that by do it. assets most to where capital

what's presage in doesn't to going of So necessarily XX% the putting happen Permian the year. year our capital we're that next fact in this

Karen Acierno

that year a I think Although the jump three but assumption, that makes it's point, to ball. plan Tom's

would that -- would think, we make, would would changes So better. anything we any it we make

Thomas Jorden

to...? Mark, you want

Mark Burford

the have the does comment just nearly to plan, as going 'XX well. Yes, but make, I'll the the a proportion on amount do, X-year the year 'XX on XX% going only and we and it Permian, -- three capital, to good Permian, still on

evolve. Anadarko and we to for the I'll what improved just plans anything, these But is. as the see would if continually still evolved better a forecast be But has opportunities. forecast, continue I breakeven and Anadarko oil again, more trend continually to don't have they'd going comment, capital far compete being a breakeven as as to were high-grade statistic So as plans capital, these oil it's on are for be

Thomas Jorden

plan is particular time. a formed Yes, a point at in

plan point and gets And some But be our heavy. in modified. and this challenged they looks, time Permian as So next if will do, group in as three the years find said earlier when things call, the say compete. that yes, look we've John our at it really we to overwhelmingly

Operator

from Coker Noel will question & Parks next Palmer. The come of

Noel Parks

you year, in a ask just little to a Spring County. Lea your it's good but I about, barrels a know the part for of bit about to wells, about day talk Bone release, budget Third talked almost really X wanted the IP. relatively small have you it X,XXX I

a XX-day forward? for they the when just for number drilled? about there was you this And as those Are sort going wells over Or I a you I were think wondering sense just of is just So of of at getting IPs, production? your of months? expectations roughly reported, beginning those

John Lambuth

This is John.

Bone to think I all are on Third the we most Lea were acreage. our of in reference Spring and them quarter. wells across the of the the latter drilled County of fourth brought wells middle part They're made

XX-day achieved those to inventory. rates, still could averages. you we a we So continue nice thus hold give We

at that that that so flexibility lined them we whether we program. whether Bone Third wells, X this your The like great of to issue Bone up least really have to at in and about is Spring we drilling, We Third a Spring, there terms what's to time. go get drill going. you talk we is one can like enough permits you with nice do soon can get cycle just is that, about don't time, do them biggest But multi-pad.

a as area. Hills. be in year, And not drilling, later one is in that projects, Red Red already the nice bit a in Lea Bone on of couple just Wolfcamp have but the then I County, We we development which doing development well in have further Hills really Third quite we'll of investment mentioned, Avalon going a

we portion good capital with position we're County. have returns is of Lea a great there pleased So and to there. the going We very our see

Noel Parks

stage of wondering I there back of the is for opportunities about just That's expired know if get anything the was sort horizon Mid-Continent. there, I to their a terrific. of of I can't horizon the for who everything, -- a a relative farm-in and a the play at out on Meramec, we was amount at curious, this talked you low-hanging play the have -- that their you wondering, were you? where economics a bit hit but this just I turning leases seeing lot leases to people where fair at STACK was just in like fruit

John Lambuth

STACK This on every say just and is general, at I'd initiation the and answer one the to like the us, at play, drilled section of at every operator, John. no, is In least about enthusiasm went the HBP. get after well just because

I that see is you're of to think So people for held to would don't STACK, Meramec, the of areas big forward most a acreage. and that that the churn, in by timing a when or acreage going most argue the part, that about you as the production. care And no, matter I that within it's now just develop go

Thomas Jorden

private fairly for active a players. of arena It's also well-funded handful a equity small,

John Lambuth

It is.

Thomas Jorden

competition. And increased that's

Operator

will next The question from Scialla of Stifel. come Mike

Michael Scialla

are once influence steep acquisition capital over Does pretty put have on take that decline forecasting steep a acquisition? you will were was on fair that about there? least down can't quarter. have to volumes, your seeing Tom, changes about fight efficiency but seems I Resolute are Is of because an you you are in they out are hold recently numbers the then projected decline the the versus 'XX were going here over people when there in capital put here place, acquisition, production say quarter anticipated on to ramp I be anything a to actually XXXX relationship going oil efficiency to Resolute the prior -- fourth be say you know kind in of the I a said put first you to they know in this XXXX. XXXX to things from and lot seeing side, I X-K concern anticipated an they know the improvement to some at assume acquisition. saying of in it

Thomas Jorden

efficiency, it live clear, has know know It's be our But love on focus Cimarex to it don't asset. in but look, we I want XXXX. I to an in capital within County. well. flow Well, this if going We cash influence in Reeves area is

also outspend. on Now the were but they that job asset, with a Resolute fantastic team a fairly significant did

assets, so within an both impact money, flow cash I to when going we not assets. does. say has borrow those It and combine just that And logically live on when two we're

a figure we the about end in So to fuller to you being do and And that arithmetic the can talk way what at it means. out able look forward of our fair we're within here. overprint live activity, and that to but closing amount next committed we'll week. cash going is But a to flow that fact we're have an of the certainly

Michael Scialla

Draw, the That are Avalon? makes it a XX what data XX-well per but in say Is see similar to if sense. section the I the And Draw I the Triste can at on of kind in test there's know there? this test you anything -- with early section Avalon? point, area for tests terms planning want you of Vaca wells just per

John Lambuth

so going very I Yes, the We knew, what's this on we answer very can to is hone away, it that But that's were sometimes, limit upper the still there. into just carefully. good are pushing that do, in watching really I'll be that get knew optimal. upfront, Triste right rather on we obviously spacing We John. I'd because

that then fair that tight. test, our section, landing zones like learnings, We Avalon. wells that the be will it's and Draw of say, that's earlier, for we're the we still say Vaca too for Avalon okay. think I developing have we mentioned for that optimize additional acreage, a I XX was plan, But taking where lot chose to we

not that spacing What there. be hope other Triste as you overdeveloping to spaced, it. in us. the when I We're have for well of finalized months, competitor we'll coming of the generates be terms I do a of the as Avalon in know in results develop some But way what definitely settle want on area. will returns It's Avalon. out looking is reservoir what's in now to, that that We rate phenomenal not results. careful to at properly the best Avalon best the exactly

-- in then the take do Vaca Avalon we'll what's development especially So year. upcoming going here future, the near on this Draw we're forward us, those for in we'll settle with we're pilot Triste results and going path to to pilot that the right

Operator

Jungwirth Phillip last The of BMO come Markets. Capital from will question today

Phillip Jungwirth

maybe the performance capital lowering hit was on Slide more XX. color on the outlined increasing as around drivers some on I and well production provide of productivity specifically, the you the And could hoping cost?

Thomas Jorden

Well, and here. chime sure I'm others I'll will take a in stab,

piece. look a certainly, program As I performance of this list our big drivers, at are efficiencies

we As it multi-well into go to off of point third leveraging the infrastructure. really keys development,

capital The have our of with our fact that costs really a program. a operating We required are low smart lot so function investments. is of

our advantage That's part well efficiency still that. are to disposal understanding on size -- that's a really looking those focusing per And and on facility Taking big but even each not drivers. really lower landing saltwater mode, the our maximize The landing to zone then Well we're is how cost new only can We'd is allow basis, love is zones. you off structure. And our of but we're make stagger also wells have a can and And with new so you one engineering shave of cost sign pads, well of at development more And productivity engineer of leverage another. strong can right vendors, all story. to those. lower productive. from multi-well a XX% we your costs. X%, performance

that a absolutely focus on real. or are do you want that? are good we're to comment Joe learning things that that. on things these are on John, They and focused organization And should So

John Lambuth

I'd as that made upfront at existing add perspective, where of point these can projects. comfortable acreage a our where choose quite we and my we we're thing forward where maximize That point in and investments that of breath forward the opportunity now our and now that only go development to The -- is development bit each cost the importantly, infrastructure, infrastructure. a then our bring we develop of to minimizes very pick the we've from full we've of the with more become

hitting in are regard. We our just that stride

particular well...? a attribute, maybe I no or more drilling advantage program, costs our longer ways, some think obligations so driven, by by in and taking being of infrastructure acreage can that keep or as needs our per than existing And ever, overall we even is our so Joe, down. but more say

Joseph Albi

pushed development Yes, and example an Our Tip the give on go of end completion our infrastructure. on to X cost finish heard are projects. XX could buy mention projects. that coincides year, then we water transitioning I'll with In so Brokers Sir things of crews, that for the had both but with words, that fleet you leveraging so here the water can haul X water us projects talking efficiencies. we these the recycling those and sure make operate deals. into into needs At we intentionally we're of those other Tom in our have by you've and smoother to about coming accelerated And completion we that We kind all John we have waiting fulfilling Barton would XXX% the had we cadence: water one out development QX. could wells and just frac

to So X/X cadence. what production money. us think going QX, designs. all a The us it focused themselves it challenging casing give it's those slide our into wells on well to the costs. with of constantly ended It's going really to focusing days that help group on was In They're on save TD. is to smoother drilling case, now cost we're optimize up doing those total how completion was, I side,

per save statistics how a stimulation John On down. in cost constantly the that get few on that guys challenging completion fracs side, us ourselves I are to Zipper our can mentioned what regard. and we doing obtained on on program, is anywhere when to sand with too. from do big local our a Recycling, $XXX,XXX them. can Wolfcamp $X.X impact and a well having we $XXX,XXX we're million well

on all these working, focused that's of groups So that are with day cost one things to our efficiency. are our in day, every

Phillip Jungwirth

positioning And around XXXX of be prepared company number much and of second for the some $XX of development change pilots. how driven commented of section balancing Great. And 'XX rate wondering I in some -- per pilots? will was Delaware half in the NPV shift reposition or second -- is the in the or maybe a performance versus second about thinking remarks, return just of of than by in oil the of you half the then wells how fewer

John Lambuth

section any Well, that in this down didn't the and and infer believe Mid-Continent I I I opening comments, we spacing lean less XX. X our interval per because to now anywhere where to Bone in previous in up this forward X in more the specifically If to tend wells way, expectations Meramec Permian, opening is Delaware our going that anything, to my want Third between so make John, we're section, position. the versus in in -- in really, X to clear I'm of of Spring sections people had Culberson, would more more

I'm not comment referring sure what So to. you're

Thomas Jorden

have just follow our I'll that economic But philosophy a on developments. we up strong

closer that than John organization, where the drilled hindsight said, see don't even -- wells look in well-to-well and of just the as at we like a that it, rate we learning the were brought week with so back recommendation. -- a from up And value. here the present last hot they touched to they at probably Avalon like our development. thoroughness that was and pleased We another are team a We we We optimum, looking last our we and to years. net And things just goes forward of as a of philosophy year Draw, off. little we Triste lot on at in of outgrowth the stove on. the we've of a some done more both study look we've look data our there elements the interference, science It's couple sharing return an

we we've obvious you put this find forthcoming development, that that think the I how really with you'll see and our the lot not to construction able and apart of that I it. been you'll really, design, worth conclusions tear think are effort more when that we're a it be and view has into

Operator

conference concludes would to Jorden session. our over turn remarks. any this I back question-and-answer the Tom to for like closing now And

Thomas Jorden

and great been a for Yes, quarter organization congratulate thank I great a there's XXXX. I just we our we just great interest your to color. further We closed, but really you once you. forward some want provided Resolute Hopefully, on a everybody, some acquisition want to update to the get thank questions. Thank look and

Operator

you now concluded. Thank attending has presentation. conference today's The for

disconnect Have lines. great now a You day. your may

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