WPX - Earnings call transcript Q2 2020

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Operator

Ladies and gentlemen, thank you for standing by. And welcome to the WPX Energy Second Quarter 2020 Earnings Conference Call. At this time, all participant lines are in a listen-only mode. After the speakers' presentation, there will be question-and-answer session. [Operator Instructions] Please be advice that today's conference maybe recorded. now for hand today, would to conference I speaker your Mr. Instructions] like the to over [Operator David Sullivan, Vice President of Investor Relations. Thank you. sir. Please ahead, go

David Sullivan

forward Kevin, Thank with President the presentation. We review remarks. presentation available Welcome for members press quarter everybody. oil management our on On CFO questions They're Chairman our other market WPX you. Q will WPX Clay Please the Muncrief, Rick, you and wpxenergy.com, Good second reserves Gaspar, looking will this gas after team and Kevin to the CEO; filed issued today's Energy after our our Energy. closed the important the statement to presentation. and Rick slide XXXX COO; and be the your end our morning. the appreciate the call. Also, integral of Clay, our today. will website disclaimer presentation prepared and Along yesterday. interest and and at in the find later of release earnings are morning Vann, review

review them. please So

I'll Rick, turn over. that, with So it

Rick Muncrief

and a you, get our accomplish. but morning this, to everyone WPX, for your to through in our continue on people Thank we year obviously very our time unlike for confident David. any This ability interest remain in webcast. is Thank to your confident. and nation's today's Good you what other, company

but management of Everyone including This we're patience pandemic have timeline the need That's in the navigate a waters. companies, to experience there science of truly there's this why seen rough in As the to just these progress practices across steady hand. right and hard demands WPX. We've now. the art recovery and the are more globe we've I how XX were some so they risk sure There's competence to comes apart. all exactly volatility yet, it. And when solid and sector it That all foundation in team plenty the and core It's clarity a happened scenarios preparation of a out play our that of facing, said grey falling that when having but is to for company face a greater you be lot to some months, to fully last know around our for for shades an let's imagine seen making take I separates the prefer that did. and last to appear credit going We're days. but we're to what certainty from another. hold. ready. not matter difference one quarter, things around we to acquisition makes would real

or have You it don't. can't fake you discipline, either

the such necessary planning, the manner adjustments The our market proud a commitments flying and future capital make we're in since I'm honored Because our years shareholders as The let's on revolver or to strength us just providers. this actions and about of say story edge. by benefit not management cuts, give and in to where unprecedented such to disciplined track slamming And continues we're our in WPX of forget, WPX and smart, defined sensible magnified environment competence, is hedges position windshield. taking Your quick, are as in XXXX. this. considerable our a like to going in our for service balance today. certainly prudent continuity well. record is our our capacity And execution we've an through that been thoughtful a that's time. without positive and stability, One commodity sheet, philosophy an most we've people to to also the gets starts results, brakes even able

have we the targeted exit right do The our performance and so quarter continuity We program, including the for curtailments ways, to and going that our rate despite continue to year, in help development will many shutdowns the forward. way. us in this strive our thing second what right means

course, to we have outcome, any generate well of Now, too. flow the and cash is business run free there for nice desired results

So let's turn with that, X. to Page

recall, you out the possible two scenarios XXXX. of As for laid second we half

We round. million spending scenario we have to the starting of we year balance production, for reduced one, and XXXX. determined Well, know don't a the the is this visibility because barrels our by capital oil exiting $XX or at XXX,XXX occur, day preferred

million You want also the think and managing At timing for our to of to to what XXX can our is try targeted, little more now ascertain into people we're the forward dividend. and Financially, the appropriate about we time, cadence chalk for result it but how also it's originally also cost could cash know efficiencies, insight like, we do savings like macro what right help up expectations durable, internally million prudent second a the of XXX we're for direct we'd we down our nail us million XXXX we're which more raising about this from and This environment. will same this Recall, plan. clarity gaining XXXX we and and to decision. something that's meaningful to of do begs development a question our XX I year. flow in and free the the quarter. achieved this could look

that So had to the some like previous We've support building revenue certainty, into and programs. hedges or a we also $XX adding stay barrel risks have to tuned, addressed we'd XXXX attractive please. capital at going by

As by reshaping rate. a always, at opportunistic towers remained we our proactively debt interest lower

manageable which is doesn't maturity occur $XXX million. Our next XXXX, very a significant until

get as This thing value the begin the Felix company return significant data during incredible ability such well by power the we the I a continuity. completions under extremely transition. see, we're our commodity going do I as We is we've completions not who associated unnoticed of prices. a way. We're moderated managing great ahead middle It impressed one ourselves like. still value despite and our to of integrate gained revenue the want the activity but better the the working distancing another appreciated, from to am on somewhat job realizing thoughtful Finally, from be allows resuming social environment, or acquisition. that normal go team. is it a do pandemic, to with to or other to is matter from feat everyone There and whole to home, a don't seamless in knobs

page a of value. short-term Because positioned of years. in have back bringing back our a This online, one approach to rate more This let's XXX,XXX Phase is XXXX thoughtful leading to not of interest incremental and return industry the well and address redeploying of toward business spending. scale the as per turn do for we how approaching normal planned next year, how or exit to DUC to which balance three inventory. our now this we and of our the is backed busy to here we're our by This hedges production we're capital Now at long-term as a even you're shows ahead December crews team We've quarter this a involves supports half XXXX. been in What can sheet work completion barrels our putting X. we discipline ability of oil couple seeing plan an XXst. day for back the that's planning third stressing our way

COO, will some call our you books operations, company's the President exciting turn I'll over to Clay results, Gaspar, who update newest our and pass. one Now including of

to Page Let's turn X.

Clay Gaspar

Thanks, Rick and morning, good everyone.

coming against proactively hopefully to financial to situations first risks, our and the a years of Rick build we defend of values opportunity courage, human most and positioning the are WPX you foundation, amount spending been the of most class work The midterm act luxury for certainly is strong value concerns. creating the progressively top of just results by and door on energy box than a and towards And by the term workforce, and collector have defending can long-term the debt stressful are to unprecedented on a tended comments the of mentioned, to able consider instinct at relationships. basic our sitting towards fair work near opportunities. base, As these and is has check driven opportunities from to opportunities, able rock times. asset solid I on against immediate risks a the rather In on back of longer hope sense being today, years.

On the the look we earnings what helped laid call, last out scenarios delineate two might balance XXXX that of like.

bring supports completion the were of low in methodically to still mistake rig assuming crews quicker will us the was at the and down back the just thoughtfully down same the the we're crews price speed Please to don't scenario doing the work allow first ahead. that our bringing and strip tending will maintenance working the us beyond. full The healthier DUCs. and time 'XX the allow in of rate We're safely curtailed, mindset and this completion 'XX these year can and very and recovery oil us free benefits and exit well floating importantly I for cash year's workplace XXXX. these for XXXX. a material more and and positioned this about half actions more tell be will in you 'XX position actions implications capital and puts to talk for Kevin in great that second this to for The XX backlog that. that actions a the wells of counts, near-term,

Slide to discuss and recent X some turn more results. Now, let's well

thank completion great now Felix, ESG let importantly a and use wells to on even well were First, The to through are Felix and similarly all the our The parts creation. we for can that on Felix Felix completion integration team are no drilled that spaced, well. the all that fold. has WPX pad flow and back performance, focusing conclusively [indiscernible] into remaining completed this six company four, by driving standard were working wells use on the as I by say bring worked methodology. and hard same integrated laterals is well reduction, of incremental and Felix style two. value we elected a the value my example the me We improving to considerations fully cost the from improve of assets

As the our completion you from the approach. completions were outperformed fields style can significantly right, curves, than to but see has WPX the plots better the acquisition type touched

the same baked opportunities this is steering nearly better how structure. significant landing opportunities just fact, design the improving with beginning. the XX% case. In $XXX,XXX overall on location, and I WPX still the companies design cost in was Also service believe on We on cheaper. for and casing a first by completed the the and the In this than same WPX. perform have on the that the and absolute we acquisition these on the the on fourth curve touch they our show I we on were underwrote eager quarter, bit I'm more next results the production acquisition. you of drilled will wells that Felix will type the versus have acquisition slide. wells to

X the turn and about let's costs. Slide Delaware well Now talk to we'll

tip I completion want in the of to to line. the team, a First, of the the give hat and who's state nine well CBR midst technical

With again and once This the ability to of and long-term cost or the perfect August, having implications. very freed you value, are understand the zones focus expected time very investing in consider bandwidth considerations still in better investment, on Intel question as may this gather but timing well is team, as science environment. the late technical the understand we this landing first when a spacing. up the low to One sales to complex of some a

pad, distinct how zones we may yet are CBR how Each we wells completion able are studying nine even proven competitive costs to cut the completions What our these pricing. landing in performance. be of is tweak eight improved the returns individually landed and interact zones. and to generate still On to and the today's design continue are landing in

of week, of subsequent and we field The on critical Also, Permian the You all project bone understand did is the we're project laterals. The way is development. running XXX that some for what and the learnings and Pecos share technical Wolfcamp telling I but in We our employing millions compelling. typically can work this completion can contiguous wells without the lines, also longer details the changed from real next of new having XXs progress what springs along tangible it thought, towards a appraisals progress It's earlier could basis. to be I'm in with ability and B, design. to distance. you, data The these XXXX. don't to pressure The is the external collection of to fiber from available We've changes look past. hard step in every evidence Core our pad every recall CBR me the very the test mentioning included may doesn't and landing Wilson It also wells. important post that microseismic, these to discern but tests to project it's the dollars and and through eye. a production for the that's view is add back larger the Normalizing down context and third a the that the staggering data the spacing and regards be this in publicly. to Pecos the savings data spacing, necessity, certainly State provided foot cost sure learning hard sequencing. in core, with state an the be preview temperature we're some culture making really incredible a the the at takes and the back to used gauges. every decisions limited color it to had right I've production a of make columns zones. are and from We optics, account associated per save up basis foot the appreciate well,

tell can take as public and step facility see When We 'XX. back can deliver coming a costs returns 'XX Since that of and program be more completion I annual where all a I can price also will Permian progress steady capital cost also consider you to well on year's said, productivity in couple results XX%. you the inclusive the making better outperform the methodology. improvements we've creation. program, present also that tag From board. we're than same the the with as an each XXXX XXXX or all certainty, by to XXXX consistent reduced value on the I with the see evident believe quarters. drilling, look XXXX, will inclusive to time you change with absolute do I

XXXX, lift deal, of for I million related also from described like completions, Wolfcamp these are The are of artificial the is well percentage assume $XXX,XXX benefiting which to but I'll The we Pecos drilling, completion well deflation, second about synergies significant very that half note cost also purchase State well improvements. facilities should some changes price. as economics that costs costs you usually announced I our include well of the as related costs to the of the well. remind deal, Felix we when A. the assume no X-mile per $XX in Felix

us cost see $XXX,XXX about significantly from well state Felix X-mile delta opportunity combined As well, The on. has around you in the the can Narrowing for line projected material more Felix the in that line wells X.X from million are than X.X A the economics. state gain wells, is Felix lower Wolfcamp come each for to to additional an value acquisition million.

DAPL court Slide and to mitigation. the turn very order trains let's and DC of think onto risk very pipes court Now regarding candidly Xth downside outcome people away who clearly. July that DAPL oil the discuss thinking to very and X, from was pushing in but and us The I'll proves are order our environment trucks unpredictable, ultimate risk. potential requires is mitigate not this of The still name disappointing,

one additional a group well partners, to marketing with tight moved trusted transactions after invasive, price also as quickly continues year secure the ruling fixed as Our deal, and to have deals through rail capacity.

be most overall that but before differential be worth for the to the $X.XX. differential a the be half policy, fee. incremental impact Our ruling, approximately XXXX. risk to of full call flow, $X.XX as be an about DAPL XXXX downside differential mitigating Wilson. may in On oil In After continues the This that case $X assumed post we'll to is able year cost. DAPL second original to oil we've of should small consolidated back of well protecting asymmetric is incremental shown our $X basis, DAPL, guidance exposure oil XXXX can the insurance post of Wilson unnecessary $X.XX the

Vann, Now I'll financial our to turn it over Kevin update. for CFO

Kevin Vann

scrambled wow, what the our of traded oil operations risk team both team strategy, with we Clay. than a there's a The consistency And sides and a bond the getting it and market financial less at working the In for team the curveball in marketing that quarter. balance a a team hit open debt zero minded. the management of together short and want realized the ball, proactive to saying restacking being without goes team for knees our Thanks known overall on file to current towers, bumping focused whole We a we're treasury opportunistically the quarter accomplished. eye lot term through able continues as vision. WPX what because on from commodity markets remain dramatically taking our where long we're sheet and on as her what calm without optimize without prices market time disciplined, that take wanted and that's believe consistency. declined, And our has on

business in from obviously managers. you are commodity swing but The understand expect ebbs We risk desires risk the and year. here is management one of don't proactive business. We based quarter a the WPX. investors' do It's for wants resume on a practices. fences and includes every that we are should our flows, always running We or good good thing every that WPX the

five seen over from You've years. it us the last

hedging sound adapt and track to record awareness we think at last level so. and constantly little ourselves. better. dynamic You to course self others the get environments. as any What how years. evaluate perfect over be to but extends our We may five beyond of That commodity cliché, modify expect it how prices and should we a to about company from Are doing are Risk from expect itself management Of because everything? believes no it us, with well. way not,

I did better are downturn think this companies not and proven commodity of things that. hope were still proactive we you not the We producer. proactive. were have as just through a sit seeing decisions prices. We Many those got and gas natural managers and risk consequences

risk hit macro manage have events believe pride But need risk ready all will by the been the that We you. the We for right now. the being you to unexpected. we in manage ourselves or

our stability, cash free seeing development You're continuity flow. program in and financial meaningful

I the shock active have we before course, are considered this the field decay utilizing we We of anything the of starting capital capital in absorbers long others put we benefit outcome at Of being beginning away the always utilizing place down, benefits Like program of adjusted financial do but mentioned, XXXX. our inventory. to year, managers. by risk the in cutting the ramping of or for chip just our

we Slide the to million are realized for adjusted full for million XXX and free quarter expect for Now XXX year. the despite approximately million increased from this XXX XXX commodities year. XX% in of million turn to Also, decrease X, EBITDAX the first generated in half for the cash average all prices flow XXXX

adjusted same barrels again, in the XX% discussed driven acquisition Despite the were about previously. Felix. the barrels than driven the oil per Energy up of production XX% XX% increase is to the up quarter XXX,XXX acquisition last prior Total equivalent period higher the Felix At is EBITDAX period same over the year. was that per XXX,XXXbarrels our day, year, over by March. XXXX. For were of by This of clay day curtailment

in million down are to second cost the we an We're quarterly quarter came $XX million, physical only and the For hedge per amount prior income per totals year. But realizations million as reflect relates management Not our head infrastructure. revenues go operating items quarter was of down higher we quarter, north took approximately year. last by EBITDAX for than of driven $XX.XX XXX reporting the to Of strategy, expenditures during the optimize quarter offset higher XX this X versus $XX.XX activity to by the XXXX. completion XX cost of or prices of EBITDAX adjusted risk position drive variable the drilling we're which adjusted The Boe XX adjusted is efforts for XXX record barrel. than and did incurred for this we actually million steps of million. results year the benefits second realized improvement down per of quarter. versus also our costs an midstream versus impacting million more Capital slightly well. same the the volumes wells reporting net this and second as the barrels and XXX our The million

Now let's turn Slide XX. to

plans the unclear prices. the the prices quarter by and first our were During caused fires thought day commodity call, for this COVID current on balance as were year we of our

year first with which per barrels to will leaning previous than I'm us can XX the the Clay approximately full billion barrel crude we oil end dugs. lower to year we say of to exiting north year our how will With we're our given As the of $XX pricing capital for around XX might into this on there. numbers options XXXX $XX the of ultimate to a mentioned, out depending a laid that achieve per estimates, the us pleased balance and million of couple and capital of crude returns out the next XXX,XXX scenario, day, play well get XX believe we're costs. as and around balance take year, X.X has pricing we year, which

estimate keep capital. will More 'XX million year-end take between to our that we in production in to it XXX million XXX importantly, flat

$XX We for price that flow can generate a also roughly we cash free WTI believe million at XXX the 'XX. approximately

efficiency said, that and looking capital the capital Clay can spin our means year are achieve. to As to what trajectory we not XXXX only this we the next in

anybody is to common, just WPX see approached risk thing think say didn't don't WPX's recognize I management. XXXX it world not of One has has back adapting it events to I changed everybody is else. we Before like We want Rick, turn the over the I to that proactive did. changed.

However, unforeseen our balance this sheet was blow. for ready

to additional of team for to second to the made quarter place absorb how during I'll WPX protect in shock, and the help turn it had we value shareholders. moves I'm some protection flow back proud cash us Rick the Our comments. for closing WPX the

Rick Muncrief

close Thank ahead you, we morning. the remain where Kevin. here never have daunting to future WPX, our real, but society, company, the started like significance what challenges of America believe of to the unmatched in the in Simply this to we in sector contributes and that I'd down. spirit our to back we're put, I and The task. up

will wholeheartedly socially responsibility to embrace meaningful continue We to and our deliver financially results.

it can our numbers report ESG see our that You our can see you quarter gone in second through, we've website. XXXX as is available now on

how closely employees. Our for our continued bias training the action, to we with provide and to stakeholders, strive work we our

As our always, serve employees. and shareholders I'm to our honored represent

So, operator, Q&A. elevate Thank for we can a you. line

Operator

Asit Our Instructions] Sen comes of first question [Operator America. with Bank from

Asit Sen

and color steps. the Clay, have the you situation. And X, guys to adapting to you go all about talked Slide if appreciate could I mitigating on the DAPL how

provide Clearbrook wanted bit and probe Could rough a to Just additional sales PADDX. Cushing, your talk breakdown to outlet you you and on of on slide comment about there little then pipe that? a agreements, the

Clay Gaspar

aggressively good right and work away some of think that building real move very here of in -- where We on eye opportunities very on have we've We knew Well, done the over that. the where I close keep we that a the were, opportunities. we the relationships pole has were, that. gaps those handle on a the years, been

that and numbers agreements, protected Horne we're we I details, you you want think There's see well is just risk, but more don't to bit there's a we about how add those rolling get protection. tell going anything. do Some the to of 'XX downside of that very here if of little Greg, even thoughtful just granular? asymmetric kind a out I into of these the kind call, on have think up the measure individual we're into 'XX. things. Greg I the nature That's

Greg Horne

it's sufficient, Clay. I think pretty

Asit Sen

be thanks. And million conceptual, split or are about -- the thinking the to maintenance is broadly, about basis. you scenario? million, basis it's again, how CapEx and basins or of DUC rig on number, scenario how a $XXX there are you two year-end would perhaps the And on number the thinking Okay, $XXX either that the completion count a CapEx midstream between what XX in in

Clay Gaspar

year-end or Year-end 'XX 'XX?

Rick Muncrief

Year-end 'XX.

the would we a a we So as of for say online We been what basically, we about year DUCs. And is was half anything consume we little we have to first days in during 'XX. the then, the standard XX that's different remember what to XX definition above, think everybody's DUC. XX we And call cadence. 'XX, year-end of XX

So post put rig a because but its online little releases, that us. We a XX that's for days. abnormal special, bit into

So, that. half 'XX, just at wells, about what first we 'XX, be that amount that we would talked year-end consume of

the very wanted oilier option the state allocation As far be as capital summer. XX-XX. we're our the in that's that's between we line two this down one very We'll an two, strategic the to ballpark pre-planned complement Wilson that's going and the basin. is currently of running rigs logical And was in later of part acquisition Felix

been distribution. us the has would company the oilier overall helps way Felix we and like the push that kind continue so XX% numbers of And roughly oil

rigs five costs for that we five do may anyway, as to we end until and between It having on don't And that. Wilson So basin look I one other that side there's hurt Permian Basin, one things rigs really the close we those where and do side then swings would enough it at up balance rig in is pool. one and jumps the all Felix big to Stateline. low say the

Operator

Whitfield Our comes Derrick next Stifel. from with question

Derrick Whitfield

on to to Would so, Perhaps benefit section current operational Clay, the last you're cost the page if to service you're based concept seeing assume your For suggests opportunities? speaking bullet in fair focus could price environment? six. on wanted my the And a cost of environment question, for first efficiencies areas capital under be downside. the it the to where you greatest I flat speak there's additional

Clay Gaspar

Derrick. question, great Yes,

You're exactly right.

say at any I some assume I'd we're opportunity. the some baked to looking not WPX this that you kind or cost pieces we're state line things word said surely bring that We're the we real announcement, move out focus. is is that area into of see, of But the that And as Felix operational. that that didn't to be just price. a we about overall things these, more of smaller if the of very becomes time on gap one is the finding I we're strip just And to and saying have exporting we Felix mean, the, we that So, commodity pay over XXX,XXX the works of deflationary. to down the of going side, fully thoughtful shifting work yet in here. the pointed did big of equation come better. it recall the actually some at

facilities things others Some and like.

those, we really of opportunity about a most comparison. evaluate, Really head several results recent what workflow before and happens good doing it's tests. side of excited that think this I more number as to you'll a side several the lose the So environment we're have to overall to in by we kind with these head on bake side. that regardless. those drilling flat pressure But we on downward cost some or commodity side, facility And of price the some continued in, downside see

Derrick Whitfield

attain months? you'd Are the the first your attend positive the stay what scores there Clay acreage. to on are the other And tweaks coming wells representative in two completion just in the oriented tweaks. Great. they can based your And Wolfcamp across operations Felix like then non-completion the view design you on are on provision? overwhelmingly in A Felix in

Clay Gaspar

combining to big redraw things, an be casing every say, to here's that know spacing design single of to need on pointed one understand facilities, scale. this hikers. other to can from export to some I just believers I this design, okay, and hesitate We're tempting very economies of I We everything is in experimentation. well. drilling that

lot as doing we're completion the that on the the For CBR have in this did some in implications the work right of side, and as we'll same whole now, we use well, as Stateline Felix well. logic time Wilson knobs we'll last area same will, that the over of to

between next So we're some of the always improvement. little change of to this some it to make and that that, basins kind time of a but sub and tweaking pollination digest takes trying cross

Operator

Singer Goldman with Sachs. Brian from Our next comes question

Brian Singer

first Couple my for CapEx. similar topics on the questions,

cost to the through you activity million Now The the will temporarily to a million question capital Can maintenance about half this maintenance you million earlier And next in seem that for run $XXX in contributor rate. imply second million differences DUCs the follow-up that run year lower reduction? maybe first would spent capital to structure about the in a $XXX in unique year for quarterly us drive quarterly $XXX the half. 'XX? of or rate the take on about implies Asit's as the $XXX

Clay Gaspar

will is for a with significant we that flat, we benefit now really, we five mitigate, We're The a it and what much in a And back as 'XX. base point company is really flattening very Yes, objective decline. additional a we sets bacon us mean, frac bit as I in that in flatten decline as XX on you projecting base we of would remaining a the without significant a recall to messaging. helps capital Also dropping pretty ballpark more from 'XX, anything a what dynamic frac at is the that number we've on track little base that have reductions, if upside. to of XXXX early DUCs little those make But back the hard ago, grown into mitigate decline their I it Brian, capital proud activity nature crews years. of on 'XX bringing really, we've quarter-to-quarter. for our DUCs crews growth, flat growth should efficiency. be cost do We our rigs, need that we're don't dropping back, that's of some the year outlook. But flatter disclose into consistent really question, been 'XX. although very year-end, structure to pullback something growth noted to couple said relative bit quarters up with a that But

Kevin Vann

is half Kevin, the of And think about this XXX being quarter. the rate as roughly run you the for year second

dropping to arrest decline that quarter just really activity trying ever a result an the we curtailing have as completion second the created also You and crews. in of

bit in see little half year. of why this the that's a So higher you of a of back level quarter-to-quarter

Brian Singer

have early production disclose at data two what that on in the this lower the Would thought But the is back the regards or would show that you're to as strategy Felix days. up follow=up then my is And days wells XX with stickers more, for slow stickers. selling. well here opposed to which usually you

fields question an the earlier. is, and first just from just from at West is East actually and then the the what Derrick question call average conclusions should the wells, inferior implication accelerate to there So And wells acres asking was you're part draw best future? it's two to within acres Delta? business? your It's these Well, you the then performance that within or block hard of we're in your and or would and acres, benefit the the second

Clay Gaspar

Brian this curve actually forget, to the type was I lowest that in [indiscernible] acquisition the model. Before good

get out for that I'll A. So the

I I give there's so And this, but same to thing Derrick. is, this will said think from upside I them

This ahead wells about, so. in we extrapolate get new thoughtful about, excited two not that Let's we're These is but type not the ourselves. to of curve. be are need we how

effective much to the to what connections conductivity, same more of proves side. the pressure fracture reservoir. a These regards slow first world, reservoir. we two it's using same I the what's But Your on of back the happening, difference, WPX both made have sets thinking and on before in it part. flow the allowing and the the by wells your better technique, same The changes, case kind question very is, are happen. wells WPX. strategy right contacting what we the of Felix, Remember, because back was to It's side same good you're is, we're insightful the stimulation, we're show said back use that

our quality, connectivity is So it's but not that just difference effective a better. stimulation reservoir in

volume into what the you're that more just getting so And through for job translates setting, same is that.

And so we're XX that's and wells that days up volumes, we make, have. step opening all just production the in, that those you these changes still

in that the complete a manner. evidence have it's rock more to a better, just You you've better connected

Operator

Dingmann SunTrust. comes with next Neal from question Our

Neal Dingmann

we it, Clay, got get next laid any could two, regime as over change now anything and permits. week change anything happens change, Bakken two well on I whole And do is January worst the the to wouldn’t of the the on know you changes, into stick as foresee Rick got would to. I'm political you just you've or here something now seems potentially been I be out to in it, wondering lot, federal something of the a well like potentially you plan, in it really diffs if the we think sort about speaks in scenarios? plan? notable the materially Would 'XX. case gap able that those with but your change some saw if slides a plan talks in There plan of

Rick Muncrief

almost did anything nice I case We certainly articulating pretty we I really that a we've think at a the company the impact And changing. out, laid per We to covered that it barrel I think Horne's job. were scenario, see worst really, don't is Company deducts. think, clearly Greg what total team $X.XX

risk Clay But, a think we be minimized that, it right from think. hopeful the our standpoint us. I and and look decisions. I we've comments some team proud we made management and we're so made Really their Kevin's it really and models will at of nice can impacts it plug everybody illustrated, decisions impact, in I the see how just but think

from what So, there. see go we'll happens. We'll

Clay Gaspar

if we market, out? that open, have along sort at. where it's bit maybe of the relative Who thankful the it. of or the recoup even insurance been shakes where We'll the it's very most case DAPL worst So very, to really how you $X.XX. of, little is has actually will spot down spot remains market The that way, actually insurance interesting $X.XX, perspective a really the that to knows need $X.XX a come

the of of speak. premium, to so you that a kind you little insurance, recoup need If don't bit

is, thing mentioned we the Remember, have you acreage. XXX,XXX acres Permian in other federal Basin. The

roughly that We the amount of XX,XXX than lands a in expose something less operated. acres, none federal fair have is

think think a roll that And as we you in it's we forward the in election something regard. I sit as process. consider to really So good position about

Neal Dingmann

about and buying one return. at just really kind quantitatively I'm been, variable wondering, with debt a is potential that down about Clay level. you guys do things, when you stock last on wondering, one, some dividend, I'm then for potential shareholder step, start and next to about last able back year, it, up, started this look at that's comfortable options to morning are and if even the get get, you, again, when like see Rick I know talks of go you you're And to guys just you basically prices and point? think pay you And you you really, Kevin, more a different be what contract

Rick Muncrief

board a was capital a meeting, in I since long bit And our the bit the just certainties. Neal, give it that the obviously be, would thing it to lean prudent would doing Yes, the would time first more even us And little and shareholder level. last felt way. for of board verge returns. I probably at that more toward think, just think our we debated say we like I really on dividend we've something thing the implementing And come quite a

any really recall we So that's thing, think I that near-term the don't have first debt.

around I placing it turning masterful point of so time. in was, that in Kevin, team his our day So, bonds data or in strong XXX some as reality not but are of the powers, XXXX, million is the new at trading those did decision some mentioned the think XXX job, and to was a this really last end economic that it was, spend in reshaping million

internally the kicked of something you some help So we've that's road, if plays the that's But do something well. obviously, initiation. in it then And we'll prices how it along dividend had variable see I dividends out. is around with as commodity well here think all lines down near-term, as

where So, we're blank. That's I of at. think, kind point just

Operator

with Charles Meade from comes question next Our Rice. Johnson

Charles Meade

reduces or and out the close now? it But that and is continue it too there your that have be where insurance off. a much right got of too place your first curious guys then becomes need that to put I Bakken do there the wanted just to like a and becomes much. are and Wilson I that to which you you in presumably appetite nuisance terminology. you about How the I question buy ask point reach the insurance to exposed position, there And I'm or medical the points, just at some appreciate insurance some in or

Rick Muncrief

we some really probably deep, years that got lot said, it's still cash to being of for a for inventories we'd no. several honestly, Charles is is nice look free this generate have we come. But to and at like us going

asking Where a And so quite of is away we're free like lot about. like going think from you're generate we I something asset considering cash. even to ways a the

And to last few plays mentioned, I As how all over our performance been years. that out. somewhat see we'll core really it's

there's insurance costs, about in the far the only XX the today. is, reality if as will, Basin running you As rigs Williston

very And $XX, so increase basin see $XX a about very, you're with up when there going some activity, you not client a a sustaining even start completion of measured, it's of we rig the probably to resumption some much thinking get until barrel. of

back that to that as if continues think be will to decline, think in a out other be out. production we some got of a there's coming if profile possibly differential actually nice plays so supply like there And upside to for us, that, going I basement you've pulling

Charles Meade

is sequencing around your question follow-up in the of or year. cadency back half completion the My

end pads, you're in be out online? looking piece really big the of at on then you've you're and off between towards when you what maybe you of towards large of I wonder, more brought in laid color one to You give of of can a, going we're production I'm have production right wells a maybe all regard? kind have the guys July, when might when a if to for the bring appreciate guys you end get the just if maybe I'm kind work. on add have If pads, of to you been a those there's have a here on in bring a another little But looking working connection August. what couple one to the really is, that at the hits explicit quick color bit gone if crew's can back What it though if good bat, completion and in number had on we teachers crews work And way queue. you trying going Alternatively, those that actually even kind the off toughing of of October. couple are

Kevin Vann

question basic And these for start good resource tremendously. rig levels very of the to reduce perceptive. fall. the Yes, line is count when decline and basins, any you a stopped we've production takes play over And shy Because stop you basins, or the never that the real drilling you And we're lines. through away from really from base immune certainly the not for our period. basic that run that, completing math

both. the I from that Now, as second brought production August back see really half from remarks production in will through we Williston would mentioned Those come July. a that of the prepared we say, and in early in completion Permian, in one sometime, the both

our so environment. up to try point, And have production and cost a of engineers doing that low and hard seen decline enhance you we've mitigate working things to your to production exceptionally what decline, are base base a that lot is

those back Specifically in thoroughly curtailment wells we've bringing we're online. basin, the and had the talked fairly Wilson that we through,

pretty that bringing are guys production those online. So busy back

the completions, crews, remarks. Stateline that and of and weeks, six that all half I answer in in pretty second frac signs pointedly, my of, of to of your of up, the other for case half kind and the crews, manifest mentioned four That's they're frac first two it's But July, they the between drill dynamic. So question, August. in came the the the somewhere the first includes production all really prepared

Operator

comes Nicholson Our with Gail next Stephens. from question

Gail Nicholson

of kind in rate half you XXXX. how about foreseeing you XXXX run I'm specifically, elderly can and how good 'XX you're use guys LOE of And this talk the more looking just think is second curious, exit really forward? in to

Clay Gaspar

the respond to desperation, term. thank challenging on we We maybe few downward the a we've really and the over But you, out on maybe when come, of LOE. we in best ways working your trajectory And another interesting, creativity. think installed that. different were there's of some another I level years, the always maybe creativity really last engagement kind a benefited and of of, level Gail. from It's it. times And Yes, teams

creative For message as as the need was get we very man very much commodity to we really delivered and the need prices it need aggressive. fell to did, we team, that to effectively

the would work second in same that the the numbers. we number quarter saw quarter the overs. is only reduce we I You of the say second at had clouding time

wells efficient, normal The of of the about see this you'll be that an and first of stick more some work half we the level part ourselves, some overs that that work have creativity can bring we really cadence have of will improvements thinking around, So quarter, things be of those we do we translate these and overs. over. additional we the a then cloudy can will back, third as

think about see very run try you guidance we quarter, parse we downside the get that. then and 'XX, the a the better rate out push additional for so for may I So after run But Maybe and from as third I'm there. the into that in initial even encouraging towards annual rate. improvements year, the feeling good forward

Gail Nicholson

you per costs? costs. versus I X-mile the do lateral lateral you Can you XX? in cost the And very well X.X-mile mean foot cost, have per foot laterally looking improvement is then then food -mile made how impressive Delta, trending on about per lateral guys envision lateral, talk a at between those And just just what

Clay Gaspar

we and XXXX. Gail. were interesting varies a over number at it's on the It's we're So one that time time,

was miles. I think side. it maybe high half was Delta the $X.X for That million on even

the probably really you things are really, to as low it compress maybe compresses side, when down, think $X.X I million on tight.

X-mile So say you X-mile further. the and between. can't compress not some but well X All those X.X to in have if are to you maybe compress, on fundamental as start still that million any well, numbers $X.X right for those basic variable, you're obviously approaching X.X somewhere then and well, costs

Operator

with next question Our comes Mariani Keybanc. from Leo

Leo Mariani

a follow little bit to I on wanted up shut-ins.

I quantifying quarter. barrels job did a the good think in second you XX,XXX day a guys around here

the third quarter. that you to guys able wanted Just of be quantify in get to number a might sense

sounded prepared It there Just shut in ins like July? was some from lingering here comments. your

Clay Gaspar

question rigs. a to further at to back. or with. three these We've It's one have on the stack bringing reliable going work your a going work. how we bring whole run seven of We're most a them above best, go four lot you do measured you we're beyond, that work excess of to when six, much normally and background there's or is work prefer run and elected go? over or over the very things to we up six. then eight been And back work quicker. where five kind crews you to then five of of If companies or We've accelerate And

of best cleaned tail all us offset to so for cadence. normal we way still operations course, a in And we've certain there back would Williston, have a back every wells. the to with. up. downtime we're fully rate, August, for includes most And run say certainly of the maybe I that's keep I of say back you the kind be of Permian normal that of of should we just end and would up In the background pumps normal which failing by

being you quarter So as the maybe you it I the third second and translate then of numbers think would halfway through if articulated, quarter. say, the that kind of we

back. got of coming to kind You that that wedge

get maybe you you follow can work in up call. through him right probably David I on could direction. And the the that think if that with

Leo Mariani

happen free good really done to certainly articulating have maintenance If that into allows flow. a year, the we to of a going get to putting wanted area, see kind we're cash guys back next feel would $XX I comfortable higher what case. some into have growth, you as level think forgot got an to forward? sense prices, say If $XX I we the if business admin WTI job you just guys meaningful

Rick Muncrief

where at really think one. Leo, think about Really closer our $XX a to I the, growth we're that's a have you'd bit just a more. before helping sustained little quite be to today, we good

start we and few we've what had management get back the been only to has other headaches pullback several virtually and rising about or faced commodity and reason prices, team years at to as work you you to last with one You every for where start other. see think seeing

get we time free and a would everything I approach XX% fast. we'll nice position hedged cash, be XXXX. a So our Well, $XX it moderate very very more probably just it's have be If I think, volumes and a to and a $XX. some about a and Stack tempered have do some hold range, a little that. that do in for of have

us in that how $XX, at it out see crude, the least for of which quite So plays of a you see event is of possibility. out. $XX, We'll bit $XX upside all to, the not realm

Clay Gaspar

the situation does I and XX of rebounded see point kick that. there. we very movement just it'll next it see to aggressively. take course, XXXX of rebounding can step. kind move to to we is part need one to throughout from sure of well if quickly downshifting to didn't Leo, easier where sit a our may some from commodity price, then we do to like the we today add it's for be reverse XX, think seems next, And the strategy us XX, that it's stationary In some make but to found overall That's some case I up, activity, quickly once that as

Operator

Grampp with Our next Jeff Northland. question from comes

Jeff Grampp

maintenance Or maintenance of it exiting about be keep we Permian And in end declined that you one both 'XX. the words, the for question of at, program rig kind Bakken you to kind kind on think a basins sufficient is bit. growth the do you'll should for and Bakken mode? think in flat? -- had some with more, being little in is other that I And specifically, a that's honing CapEx production on of

corporate mode? So it's on kind maintenance of

Rick Muncrief

see just may one base Yes, that team, production a managing be probably of looking early if modest schedule. and look certainly, then But decline you in that of have with in coming like over we'd worked. I that decline we reality up shifts a the start little would is have But all talented the part caught up that shake to didn't and what completions we think a in rig with very play, rig like. that's creative is one of XXXX. I think manage And growth, bit with get ways is certain at,

Jeff Grampp

at concessions at kind it kind I called of that type of plus reference side, clawed of on question in cost to, to the like, second on know quantify on already, looks Slide some referencing XX% talked Is sticky kind and your kind half back XX% point get again, service internally looking number. there of way I that a of it's another just that depending a And versus X that driven pricing guess, point, might but time? reductions, whether is we've that bit

Clay Gaspar

the that that's see, deflation, second is we're bit not have really much about just less kind back, of a of service will I progress that year, We commodity excuse the more the a lot moved how to up $XX make and or in that operationally. between the move $XXX,XXX time just just and that think there's we of Felix assets, what the me, a Stateline change there. for is additional on and certainly we little some side seeing service know have lot call example, for the And to at a that, opportunities world. probably we moves, continue that of about costs half and upside a it that today, Felix do on $XX, costs But $XX,XXX needle -- we've what changes

philosophy. specific 'XX, in it's deflation two maybe changes you and points that second of operational 'XX, of the that half So, I would reference half one-third say thirds first

Operator

with Thompson Barclays. comes from next Will Our question

Your line is now open.

Will Thompson

sales I'll level share in baked been sounds has more you net like send like also XXXX This some sounds ask to but still upon, directly how touched present And can benefits XXXX? programs. DUCs you many that into the some It but are people just setting and mid maybe in maybe carry us a there's 'XX, can versus I base decline Felix lot Wilson? production high mix understand base between selling this think believe what these year, this year, make later last help of and you XXs I flesh to talk that struggles decline bringing XXs the about quarter dateline XXXX

Clay Gaspar

it. to sure first make I question, Back to want just asking understand We of I the number -- about the

Will Thompson

XXXX in sales XXX, XXX-ish. net that a It's in

Rick Muncrief

let's circle I that Dave with you some you back get this and multifaceted you after in question let's make you would model, some recommend call Will, for can do good your if and and right? get the work asked we sure on that

Clay Gaspar

issue of would where we're enough with Clearly, I we're guidance. flattens, support. one supplementing How talking new that's not can And capital. some information decline we're the thing kind the wells. ending that you is about just appreciate so maintenance we're Directionally, year. that not, we've ready caution base given to

not the per to it's bit I a numbers of basis, now. right rough into a pretty till's even We're quarter preemptive? little I think going probably on details get that's think

Will Thompson

Clay terms then CBR And in the of project you interesting the highlighted. zone, and

the Stateline clearly the me wrong have ask how to returns about, had to Stateline XXXX. anything? pay recent project optimizing at project I pivoted zones a as how I'm sample Pecos though argued guys to change three well and your correct And seen WPX and You do results. to State if And least, dividends well continues versus us Obviously, inventory. WTX certainly development target that as program? we've you two how want think But maybe to the

Clay Gaspar

I areas difference. Stateline Well, our and for no state-of-the-art of think all

hydraulically what about connected, do. make what's sure we think to want and in it we As and terms of

Let's we want drill say, and believe don't A, and in maybe a the upper A, connected. even We that A, Y X, lower go six B, to hydraulically months, the the upper up partially to years and lower you're that Y, now ineffective And or later, back really, and try it's X, come completions. because have very year, two going years, depleted. reach three A, that

of sand Second or line you're touching, you're how the map of much the really fracture when landing the Third with the to Bone is this it's, say, you the of different zones line when in is the the the Bone interaction in understand there. Bone growing. even stimulating, you're interaction Bone Third study there, really how part So versus When Third Y, how and there third owner growth, are things and X,

the I getting on is hydraulic think really a a information so important most the connection. what we're is better And much picture

that's zones A A, on. we A, three And upper or the one we're in of we've Springs, go two, you're three stimulate condemned tested upper right now a it not so are what's B we to and talking landing at there lower and when with there? in Typically potential Y, X, excitedly in, the about we've in is, kind A the focusing drained also talked where And really we lower go in least to partially And zones? our about hydraulic position. sand. we're interval for the very Third out that legacy what leave line. the zones Or on specifically at figure it's Bone is another maybe Do really and and But depending four, connection another that the in ourselves landing the trying effectively essentially three process. landing

there looking favorable very down looking one at we're zones And So a today's my price return. the as and an D, these importantly, all of way every to an actually the the I at into second deliver bone, up way opportunity all mentioned, opportunity there.

understand, really it And the connectivity, focused and big and that it's taken vertical on so of scope project, the this one but what Pecos we State want really beyond how understanding is project time. to

Operator

Daoud question with next from Our Gabe comes Cowen.

Gabe Daoud

foot me sorry next per of assume or XXX squeezing XXX that in that if quick I a Did for Thanks XXXX you and per The does the million for clarification the say well that assumes and D&C? to in cost just Permian it. foot for back half missed the XXX capital expected year.

Clay Gaspar

XXX flat, upside directional well. yet. Again, next It's as fine tuning through the all to way not year the we're just a of year half just think kept that that we number there's second the Yes, Personally, number, but look. the flat price. commodity flat a I

Operator

Portillo from last question comes TPH. Matt our with And

Matt Portillo

of space on in your curious provide maybe and you just in was be trying and I Clay. of also and rate Stateline Stateline to that the as that some change evolved productivity the kind any improved XXXX before for might wells better you've have get landing, timeframe? upstate a design, on your versus question running on recovery around able a acreage? around of might been tighter the probably that Just spacing to targeting is some how wells sense the XXXX, contacts This of the those And wells? that's of you

Clay Gaspar

as and drawing appreciate the 'XX XX, are XX 'XX, that Yes, in to it question. the maybe in lag kind Matt, getting of just on board, actually all. month when a you there's wells really all early the know, probably queue come I we from producing it's Remember the when online conceptualize

art six, steady excited means. we've or say latter the four the somewhere that area XXXX we're wells a we is in about I along space, in state and seeing, maybe five we're that year. summit we a Stateline way, mixed material seen of had the zones we of four I'd really landing probably definitely progression, probably bag, what it, have productivity on summit true. testing what we uptick those five, wells a So that per a But there in were is part the correlation mean had really

an little $XX recipe pricing optimize have you in prices optimize and world, returns commodity to it's tied XXXX or in today's different knob, interesting and you than would certainly to value a XXXX, so back AKA might it And pricing.

understanding to monitor but price, We right connection to better today's we're to also the latest projects we really little we're from is think the getting So 'XX. about implementing recipe, longer just vertical need term team, we're equally how that we're today's to these late decisions bit the these in seeing understand about decisions that. excited which offered what's well, we're trying as We've see wells, guidance a that not that, into technical the correlation, making, a running trip, and commodity important.

David Sullivan

positive. today Folks, time we a safe appreciate ask and Have you your Take stay just good care. that week. stay and

Operator

call. for Thank Ladies this you conference participating. concludes and today's gentlemen,

disconnect. may now You

WPX Energy (WPX) 30 Jul 202020 Q2 Earnings call transcript