LPI - Earnings call transcript Q4 2018

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Operator

Good day, ladies and gentlemen, and welcome to Laredo Petroleum, Inc.'s Fourth Quarter and Year-End 2018 Earnings Conference Call. My name is Mark, and I'll be your operator for today. [Operator Instructions].

As a reminder this conference is being recorded for replay purposes. It is now my pleasure to introduce Mr. Investor President, Vice Hagood, Relations. Ron

sir. You may proceed,

Ronald Hagood

Thank you, good morning. and

Chandler, and Randy Officer; and Joining President, and Reservoir Karen additional Greenwald, are well of and Chairman Operations Chief Vice Chief Officer; Chief Officer; Engineering; President me today Vice Vice our Foutch, management Executive Jason President Executive Rick Financial as as Senior members Buterbaugh, team.

the Litigation reasons, actual of safe XXXX. statements making harbor results goals, those this provisions Act company's let variety control. of are be a during many forecasts the we'll of be that describing assumptions, forward-looking Private me The these today's including statements, for Reform beliefs, you Before Securities forward-looking remind which may morning, intended These are we from differ covered expectations, begin our of and by beyond our statements. call, to

measures In its income net these measures. of to operating release GAAP addition, net non-GAAP detailing issued full and news a the and results news company and adjusted financial included reference be year to financial we'll quarter which are release. and Yesterday fourth Reconciliations are XXXX. presentation adjusted income for afternoon, financial in yesterday's making EBITDA, non-GAAP

page the to will call. We refer during today's presentation by

to have over not Randy If you turn www.laredopetro.com. Foutch, at or on and news this the website call you release Chairman copy Executive do a may of presentation, company's it now Officer. access I the Chief will

Randy Foutch

and by strong year Laredo's Laredo XX%, for production a of thank XXXX and joining sheet. Thanks, and We successful you morning, Conference balance by proved Quarter reserves value measures. the grew by XXXX for Ron. Call. XX% our Full Good Fourth maintained was increased a many total Year Earnings

keep to unit completion And consecutive costs well of drive XXth quarter operational continued in helped low LOE in investments efficiencies, expertise below check. keeping field we as our and infrastructure operational delivered Our our previous costs drilling $X.

Laredo. be which the for transitional positioned for a is year well Moving XXXX, company will forward,

last flow development, quarter, to development about asset shift returns and XXXX on drive talked efficiency was cash accretion. value our needed we strategy, executing capital which well on adjusting plans a to inventory and our by spacing in as we versus capital As operating and are improvements in align focused activity with expansion wider committing expenditures focusing net

As are we approximately shift, execute our and expected discipline we by cutting completion reducing significantly exhibiting this XX% drilling our versus by cadence, XXXX. spending capital

we We acreage service and for produce to are of strip full within namely, at anticipate both XXXX this flow a $X.XX operations cubic barrel cash avoided expected and million our per the Henry price advantages that a production accomplish is long-term of feet held XXXX able and gas. long-term we of operate short- WTI deck we contracts. natural will strip for per to company, have as we've of $XX XX% Slowing by in year Hub

slowing XXXX day, corporate and XXXX, to any including able this environment, levels XX,XXX begin capital will total oil savings. from and of fourth barrels our Additionally, ultimately Once executed moderate both we we believe development plan maintenance our to keep decline and rates, levels. have in being reducing anticipate we grow whole additional XXXX of annual in per mid-XXs not quarter cash oil within production flat a in live XXXX flow reserves approximately production

sustained We prices, through of increase made assumptions can Upside cost we realized, among reductions. commodity within to be savings these cost barrel well the we we levels in start to to purposes, plan absolute operate our and debt, cash in a cash versus As staffing cash implementing fashion. type realized flow feel second with wells. flow half conclude, our per expected of curve, adjust we to in be productivity numerous have or capital additional adjust means. service disciplined reduced need this better-than-anticipated an workforce activities pay value excellent we expense have always operational To the strategic the utilizing done, flow revised our as that G&A to range Should including the complete to XXXX. option could precipitate regularly stock repurchase to or service execute prices further shareholder additional oil down drive flow be have mid-XXs shift excess cash for we other

increasing our shifted focus wider and on program have We efficiencies. returns to to spacing capital development

and our budget controllable that operational an We our flow. are reductions capital to reduce turn update. discipline expect will G&A as slows. I the with exhibiting as over activity expenditures we call now And cash aligns XXXX for in operations our capital costs further we Karen

Tommye Chandler

Randy. you, data, through including walk our PDP type our some to off, reserves start curve. and rates Thank of To decline I'm new going

Turning to Slide X.

You updates to as the can year-end our reserves see XXXX. of

on As has of specific year-end particular type In results production to wells. steeper for process, gas see tighter our forecast, these negative and history and you on additional a production we B-factors reserves reserves meaningful wells incorporated no natural revisions we to for including BOE oil reflect this reserves EURs curve, production data higher to of and with basis. oil positive effects our can conjunction part reserves estimation, both our our were more revised estimation declines developed overall content Slide NGL X. which negative and process, ongoing with additional historical led to change gas our from and undeveloped spacing changes on recent revisions also on locations. The XXXX the This on the oil to

life for note. few A of Here, we curves. and are revised the showing first type historic that important are comparison to well points of over a the years X a the

EUR, production the approximate a XX% well's an is XX% in first in over years oil XX-year of over there first-year the of the there life. was decrease a decrease decrease life and while approximate X% an only well, First, only X the oil

the similar first type revised in dynamic curves. years. Second, XX% very in the recoveries first type previews increased for This total and the revised X curve, drives the year return of the in and XX% rates

In infill of some to related respectively. productivity rates, limited and cases, changes our curve on for developed show of have rate for Laredo's and in X most assumptions decline data. Slides corporate points decline highly the on in the type productivity production revised some locations oil, assumptions addition assumptions areas X areas landing and are based to that, for and total

XXXX years. the As tightly rate, it brought type over XXXX previous years older past the we the moderate as not drilled decline lower. next in oil spaced curves, significantly year for oil oil slower and a are as to projected development production higher spaced we this on couple relates to fewer wells few Compared rate first X to both new and revised of expect wells and pace. tightly decline, that decline the get demonstrates wells drilled Slide is the at

However, total, pronounced. expected in subsequent result wells for for dynamic. for production that higher lower There it couple is to X type approximately is the curve. that In of through oil X, tightly are rates a become this be from years the the revised years more decline spaced that important than XX% implications

move And show productivity I the spaced factored note, rates on time. as negative rate our of oil reduced corporate The oil we we will decline oil Slide to get begin previously X. tightly I as wells corporate First, into impact that will this through impact lessen decline expect older. the is to the moderate mentioned we already

than this that positive in is completing we and point implication should complete to important as production for The second tightly later widely XXXX. the quarter the wells wells. spaced oil emerge wells type within revised in spaced The of the the finish inflection higher expectations oil spaced productivity years five for of curve begin second tightly wells current XX% the expectations are approximately for widely spaced first

operations. Turning now to

activity we completion will operating flow. within strategy goal, four two this strip XXXX, and barrel to of Randy our WTI, As per the the quarter have adjusting cash of beginning To we be pricing levels were in we earlier, At shifted crews. fourth accomplish XXXX. operating rigs of approximately $XX with our explained

commodity Slide maintaining drilling and our XX. of cadence prices, requirements. interest working progression achievable XXXX This part to planned and above operational for levels due strategy activity pricing through optionality potential strip in including to in by large flexibility illustrate strip and quarter both pricing. below drilling completions high of We X minimal in of Laredo's drilling and Turning different is completion

you We traditionally paying rig also have see on moving the we year as termination second XX, We or early of any how can service adjustment Slide contracts. to we our without signed will be And half XXXX. less. make penalties were contracts rig this of a by structured able to because of X operating

expect to number second will become be operating to the XXXX you chart, efficient can and cash to of in to front XXXX, expect work On XXXX, half The which currently gross strip XXXX. completion again of average to are half the wells, our much to DUCs of expect continue and complete cash built make flow. costs, gains current the completed of to we well crews, expect generated. plan previous complete In our completions X based and pricing, crews. and reduce On once pricing Should loaded. potential cash in in flow in, see the be service with completion scenario, levels longer to then subsequent able approximate company the of We focused we years XX capabilities. stressing of down, minimum adjust for costs. our keep to have we we in to generation. more XX, on the how down activity is XX of Should gross beyond we cash-generation breakdown year we XXXX. year. program you completions capital illustrated will one what program At upside this Like a should wells are first on a we continue the completion align the Slide X-crew to move front-load to be provide wells to in can XX be strip controllable completion activity we X capital efficiencies example the costs expect prices to the will XXXX. we crew our X-rig, complete adjusted since see can Conversely, strip XX, flexibility to had more drop Slide at we be out year would flow Using have we additional can and activity

factored pass in controllable the opportunities to XXXX on of prices we Rick into oil progress further savings made the these now and in for completion cash we progress believe beginning update. at levels. our there G&A have of LOE are as expense mentioned, our savings Randy financial the illustrates been costs. make year, on budget have but has we we the negotiated have remain benefits actual expect activity call by at our XX cost We the And Slide large if levels. driven as infrastructure. continuous prior align to investments down, a over I part, staffing for we will more

Richard Buterbaugh

Thank Karen, our year morning. quarter flows and statement full XXXX press good of and in operations yesterday. release issued included Fourth and were you, cash

expect report on this afternoon. file We annual Form to XX-K later our

which there self-explanatory, the and where items than quarter company's a by our price slightly primarily equivalent cost per total realization DD&A. fell are more barrel to XXXX quarter of the in our fourth fairly $X. some Depletion, outside of XX% depreciation explanation DD&A that was of fourth This typically may of metric depletion, guidance of $X.XX is compared Although oil guidance couple driven the amortization categories represents or previous in and helpful. be

derived is in As production, the depletion our undepleted you period reserves know, cost base pool. full from and total

cost our balance, representative not properties, that additional movement do calculation. we prior proved Laredo, is excluded assists reserves developed rate the total million, carry at our reserves continuous booked X into a as as the undeveloped our to activities. cost since is years, cost reserves of XXXX, calculated in X% XXXX. in property about from year our only in This Annual For only property at reminder, development are X% year-end a unevaluated net XXXX represent proved assets changes cost the PUDs unevaluated the pool. activity property which minimal full being drilling equivalent for but pool. discussed those of our large costs to we classified of XX% our depletion a we at undeveloped. depletion year-end about unevaluated of unevaluated and very of during months into full about transferred of has resulting our Karen about in $XX year-end, And evaluating in provides Similar knowledge results that reserves

at to You drill the us we staying the will beginning recall locations proper booking flexibility true XXXX, significantly locations our our guidelines. that of appropriate in cadence reduced and to maximum most to the undeveloped SEC enable while

realizations, was our that XXXX expectation and were gas months into incorporated $X.XX were Henry December of negative time, a actual month guidance realizations, benchmark, At a we respectively. were natural gas simply of The basis This price $X.XX, provided amounts. and negative of below the pricing negative At used we $X.XX, natural Hub. a other XXXX a and the basis Henry for negative of which our X guidance how and function prices. well WAHA derive basis we $X.XX guidance Hub of XXXX of for the XX% forecasted outlier is respectively. and our strip and a WAHA at November November X December of the in we Actual XX% move quarter WAHA time, fourth initial

any date based guidance, price our use product actuals of the all upon this strip. appropriate to We dynamic forecast applies. and For realization

added our free to the to for is activities. Looking cash balance translates program, oil XXXX quarter. inventory in limited outspend development structure will with the benchmark anticipate to which the of in the first flow-neutral will this the cash us the PUD our downward activity half expenditures of million of program feet full is year, annual investment oil a and an activity primary uncompleted This cash a about strip be move prices coupled premise is past and the while activity long-term we balancing pricing per on capital high natural of booking to reduced crudes, believe make company the wells. this of contracts this completion then upside future, to on for that years, of and adjustments the of then $XX approximately with flexibility cash enables of quarter an completions that limited XXXX flow hedging of $X.XX in XX% and that a cubic and increase. half for million per HBP our with flow basis. $XXX rigs expect drilling our balance based barrel gas, structure price the operating the for and a strategy approximately incur this on The percentage, create protects flow budget of do portion into flexibility in provides all key Unlike we of operating first enough occur XXXX. Consequently, A the component cash of flow. from if The of of substantial second We in approximately we generate spending oil year. program. program large budget second retain Using

hedges costs. to hedged we cash controllable targeting year focus achieve flexibility operational puts or full to neutrality of we of In in average including paid have have and committed that production we're on we XX% XX% and cash an financial to strike continue premiums summary, our flow and for believe price anticipated XXXX as XXXX approximately the $XX.XX, deferred. of We those are oil approximately not with

we no for with our financial flows to anticipated a appropriate capitalize for significant strong We open questions. foundation the three have of cash due you the a to opportunities, which program would on consistent time, debt lines hedging for provides protect have any this liquidity company. solid years, at we Operator, and a please have all structure

Operator

Instructions]. [Operator

Goldman of Sachs. of question Singer comes the Brian first from line Our

Brian Singer

more questions Two curve spaced new with the of regards and widely timing type the the to wells.

give It or the XQ many online maybe activity XQ? wells us XQ, or seems CapEx of the quarter second your that's like disproportionally the what would can you widely remind spaced come XQ, and you by course and expectations year? XQ how As are over slow for half, in just us

Randy Foutch

-- I'll Dan, so I off the of of let wider and start you -- give wells it's then number came we the Karen with in Karen through or but we'll think end inventory spacing. and that 'XX work the process in

Tommye Chandler

kind kind first wells role those in well we wider finish be count least move through finishing quarter up as the this current quarter. that into XXXX, of in the time. that's in then the transition the up, completion as towards we So And wells We've will spaced the got activities. then of as coming we're we plan, XX completion-wise quarter, second numbers at

would we'll XX that the So the after completing the wells that of internally. remainder be be

Brian Singer

it. Got

the wells, And where I to asked Okay. kind if online? saying have what second really follow-up what's you're history, the all, these have my year And you first is then if -- see you it's that walls testing? the spaced ones longest is you're do to at Or Slide differentiation X will on will of wider that be start already have the XXXX-type more to from relative online? see you that the event? rate evidence? of in of results we lower seeing may a Is that spaced tightly any that you late in hocker decline be when would you the wells see a you'll terms Or have

Randy Foutch

for Yes, early claiming as we've landing we've But so on as Brian, time matters so liked, specifically? forth. and you to long information never had said production that we of We've for on some and points relevant. history being do and address lots Jason, -- know, different want you a said

Jason Greenwald

is sure. Jason. Yes, This

answer production In terms much we've wells, wider years. on of spaced how is the several got history

were do what going-forward with back we're to going in XXXX, consistent on particular, significantly planning So into basis. a those

going So that's at the production got, history least XXXX. back that we've to

Operator

And our Stifel. question from next with comes Derrick Whitfield

Derrick Whitfield

that D&C Karen's up either in ask your XXXX? broad since revised is pick possible on your punitive is But earlier Brian's comments, curve of light Karen. on for Randy efforts I'll type perhaps question optimization or and this And it based overly

Randy Foutch

or another. way tried push and data -- not middle-of-the-road play be to not one the We've and

the get the the to the X we took to doesn't when not, at we've upside. data us think Obviously, at data is how mean straightforward years we tried today, some I time. materialize. That of see X conclusions completely it. to you are But that these look gives where perhaps, there's curves, conclusions and this the be

Derrick Whitfield

then speak discussion, on to in low to could of improve the And PowerPoint most productivity new Understood. about you if side plan And current the Could type development the been your of you test the of and density cost I focused the expected wells? what of tweaks equation? it think has costs these curve. that

Randy Foutch

see always Yes. there that last used is came know costs. in kind as but of we've numbers, on same we We're costs took give did factual. that we service I'll the in was We let that perhaps using, Karen that We about some of done. approach softening months. couple some that because the

have projected Karen, service additional do you any numbers. not We costs want of in to... our But

Tommye Chandler

the efficiencies, quarter in continued Yes, our to also working hard and with reduction, improvement, the look providers structure. trimmed thousand service completions there quarters continuation a couple service some last quarter, through of of couple at so good -- cost savings, drilling the well costs. on see so some last we've to a to seen again, progress off cost overall We've hundred continuing make then

of water spacing, volumes, to at at we optimization volumes continue around kind sand continue completions optimization broader As look we'll look to the and others.

prices So There and be that to on that. service more certainly expect good depending there's commodity and to working costs work may continue. costs progress well and potential make to keep still we'll continue on the we

Operator

And Joe comes our Allman next question Baird. of from

Joseph Allman

way see filed is respond suggesting this it, morning? data X first the the could XX And SailingStone My things. I SailingStone question to is you

like lower. tune of So first G&A lower be to thing XX% the would

return be cash focus on -- on return and of would free return capital while Second prioritizing capital. flow

fourth aligned would And alternatives. Third thing a plan management strategic with compensation thing that pursuing plan. be the with reasonable business is

Randy Foutch

of this there. has XXD I'll long-time in stop And Capital input. shareholders SailingStone communication their And and think just morning. did value a we engage They we with I our Joe, shareholder. file lots a been

Joseph Allman

Got you.

the final optimization. return you to optimization expect spacing moving kind Okay, question optimization? NAV you're is, you Are I optimization? Or of on ultimately go moving towards my the terms slides the NAV the to? plan, of rate of know of return of and where your in the are do you rate then one towards showing

Randy Foutch

that we there call fair reserves trying really effort had. going and what third to degradation quarter were were the the the NAV, amount going We were to drill in focusing of strategy added on announced, were all we -- inventory. better felt spacing that wells. for inventory substantial some continue us we spent we announced it shift over about. a productivity. We has Joe, broader that time -- a But to in then and that's rate-of-return for while for that we go talked like NAV recognized while not about maximize quarter that just is had in third that this And and We

Joseph Allman

And you. one. clarify Got that just to

right is XX NAV you're originally, wells know, section the Randy, now or potentially like per had I our X I approach would looking So have wells. X section. think per at to wells XX ROR And optimization

to are moving actually So you X X wells per to section overall?

Randy Foutch

going. you that's think themselves to about. what directionally think where some There I I Yes, lend directionally, But that's are X. probably should we're zones that think

Operator

And question Richard Capital from our of comes next One. Tullis

Richard Tullis

the I XXXX, about out the rate. flat that? looking for would years to associated sort mentioned be specific oil would you to with keep price would those likely What be able you for associated be you budget? of what CapEx exit two And D&C XXXX, oil with thinking Randy, XXXX know

Randy Foutch

that that's that years pricing going makes basically out flat think said just D&C We and we next we I of used used couple -- in kind the costs strip relatively of -- those years.

some that could I enhancements I the fact think production that, referenced strip we're pricing, costs, some type better are basically prices. including on things the curves, there's service using performance of again, and but including there that including be --

XXXX the we is I think the same the program. XXXX message it the that is the program, about way modeled as

Richard Tullis

the drilling then, for And the between split zones program? secondly, XXXX helpful. that's rough Okay, what's

Randy Foutch

The about the pretty much upper going and XXXX focusing is on to program, be XXXX We're middle. drilling flat.

lot lot a have inventory, a said we've lot, a we client we have As of inventory. of

Wolfcamp, I be think going XXXX is but and Upper it's probably towards Middle a weighted Middle. little to the more

Operator

of Simmons Energy. Kashy from comes question next the Harrison line of Our

Kashy Harrison

the corporate you reductions cost release 'XX. So half anticipated of last and press the second in remarks the highlighted in night, prepared

Rick, Randy a of for planning what either So us you're G&A on was basis? of just sense a could wondering or if I dollar you reductions give in terms

Richard Buterbaugh

of Yes, 'XX is activity. price, of commodity takes talked that that that the which Similar we we our to saw changes we a XXXX do. operating going changes drives to amount If and activity would flow, significantly our about, when to We're drop activity the modified place. seeing with that, are dropped associated may G&A rig when what at that the The the that costs of balance in this in end timing XXXX think cuts with appropriate or saw the going in that. the Kashy, significant in we you Rick. relative lot Randy be you a service see, with we as be prices modify of programs, completions cash to commodity rig I costs along activity

Kashy Harrison

could Karen then, Jason, wells, walk Got my for between in was -- lower initial results analysis or the just one in a on results B-factor which question, if ultimately B-factor? missed but for initially? resulted spacing? employed do So we historical appropriate just might this expected follow-up a and us the guess, I And through be what that actual you. ultimate the the And was and second you gap the employ higher understanding in I -- maybe my wondering the why

Randy Foutch

crack take that. first at I'll

results tight was history And inventory the that definitive the the and 'XX where think drilled then do quicker. production couple close was They you those initially, of eye-opener. NAV thinking pretty that drilling spacing, much I saw As saw pretty approach, to... we want deck in we really that Jason we we in try a was to tracked where show out-years. the is

Jason Greenwald

broadly recent spacing current with emphasize data is our pick production data having we harder up of been more denser bit take all had come we've about drilling, production Yes, what I interpretation. some about, the talking the more that in for I that additional is just to at And that a on little was with time. guess, us to quite talking the would look the thing the up Randy

Kashy Harrison

-- I wells, going we new guess the was have were I to B-factor wells we higher -- a be oil be we we in to And understand wells because these a I on spaced so these what more the get the comparable to was a should trying on past. production even curve. had new higher thought in higher theory wider terminal guess,

I'm to mean, longer-term in get understanding we what just that's trying so where this. at I with is recoveries -- just is, in I'm Basin the -- our of right the production Are evolving shale So now? going Midland really I'm overestimating really more

Randy Foutch

I speak And can our had our fact, And said is X increasing that as that's is slides which think Page to we -- us, it a GOR in to that I said years in -- about and think, out -- I over I don't our properties. forward-looking yes, want for is I we we've interesting, curve, that lot this on years. understanding. X, ages, production gassier, this that's showed think we've would get our

we on, Now what are I that and pushed today. It we've think we've Page a curve gives where X. of kind taken is that's forward-looking done we out and you think,

Operator

And Panjwani Holt. Sameer Tudor, our Pickering, question of comes from next

Sameer Panjwani

a since So update. it's gotten while we've I inventory been think an

regarding some spacing? to a remaining you in between difference Maybe upper assuming section correlate potential locations and the the thoughts Wolfcamp, could high end the new So low and share spacing Middle XX-wells-per design? end

Jason Greenwald

question, good that. a that's And appreciate Yes.

Jason. So this is

spacing that changed On development the figures in approach current total, talked those our hasn't -- total locations. and about the X,XXX total in figures. past the have inventory recent figures, we are those And hasn't that figures,

Sameer Panjwani

Okay. between clarify just that's And the to that, Upper and Wolfcamp? Middle

Jason Greenwald

that's No, zones. all

that, that's so X,XXX to just -- locations that's the And X co-development. section clear, make and so that's sure that's per X,XXX,

Sameer Panjwani

then And curve Great. okay. Okay, type conversation. to circling back the

I the is up Just XX%. in in cut trying XX%, between type this that to oil this recent The I second your time reason been cut asked and the oil in think reconcile the reserves, up memory is your difference curve, has adjusted.

So saying? I'm curve of sense what comfort to reserves just of with the the get go-forward trying kind level your are a relative to

Randy Foutch

Rick, you to... want

Richard Buterbaugh

reserves in that included mind that in Keep in wells the production we've early not the drilled were life that does Yes. at those 'XX. back there and wells got the include and the are remaining of XXXX reserves

new oil in book seeing bookings and in from is you on day some of type Since the minimal a reserves. you amount X so PUD the receive front not So large be the end-loaded in oil be the which tends really higher, amount in you're Page well, that a curve reserves. what saw of just X, the amount that's you do produced of lot to more off the don't is and benefit and going of as of a we oil PUDs, total a to

Sameer Panjwani

Okay, sense. that makes

oil PUD curve? cut type in be your essentially, line would with So your

Richard Buterbaugh

Yes.

Randy Foutch

Yes.

Operator

our line And Gregg Brody from the of comes America. of Bank question next of

Gregg Brody

You might would that? mentioned -- you 'XX. the side you of some on D&C to similar guidance the XXXX what can infrastructure on look as Did spend provide be the spend part like

Randy Foutch

Rick's now have and better us, that in think you to and got -- a lines. said tanks couple but reduced. behind effectively, for but time set always basically numbers is is We've the I XXXX things infrastructure years spend our

and us to past, spend. LOE. And that again to spend So myself, to very we've, repeat very there really is that infrastructure have very, some efficient has operations infrastructure led in efficient the

will somewhat XXXX be to think XXXX. similar I

Richard Buterbaugh

would begin then be 'XX was be would corridors. some -- the existing And of see some down. we into some where That be 'XX newer areas, years, that I it following expanding expect our will expansion acquired to the acreage in of come to would and

begin Randy expect infrastructure and I similar very dropping 'XX, would be the again. to 'XX said, So and then as

Gregg Brody

And detail all I appreciate here. the

us can as and you're you Just Maybe flow? an thinking helpful. prices about your update there, do give you excess credit you be cash that'd managing I'm curious what about with profile commodity how navigate

Richard Buterbaugh

have issued. There's operating you note million none meaningful the on credit $X.X drawn any flows, cash little $XXX in The Yes, outstanding XXXX. of would billion which has not we -- borrowing within credit million aware, long-term that of with fact line. are million that expect base, that. to on over change see to about I are we've We $XXX we dedicated that, revolving facility, side, is two as which our which $XXX prior have associated due do to

liquidity no we price we're any debt And comfortable amount we're a environment. the years, well at fluctuated so have, even for tests commodity very due so with that credit that is today long-term where that are covenant we there the within with three below of in facility, fact

Gregg Brody

more all plan you leverage specifically you target this that. -- types your through was I What a metrics? through are appreciate of targeting are meant How about those I thinking here?

Richard Buterbaugh

up, at make a a and sure that -- trailing had when deal And flexibility lot times how with even it. was moving we -- at could flexibility. net projected had either our or -- we on looked to plenty debt always of of of debt that we EBITDA We've

much over around As that be you interest saw when targeting, we outlook, significantly, divested flexibility. of have still X. really, we of Medallion outlook the multiyear a debt But reduced we would in think our we and for the

You may that. X.Xx, see be up it opportunistic to certainly move and but below stay

to my we similar credit fund so quarter that will level bit repay As stay a very outspend would at the then the you remainder a see to that XXXX facility, off now. comments, that would such first expect of and our see in of I XXXX we little over of but mentioned you of an what in

Gregg Brody

Got of reserve as it. the And result expect the a borrowing to change revisions? base you don't

Richard Buterbaugh

The borrowing the value based upon base of our reserves. is really

'XX. primarily that's be saw, with associated the going reserves, versus that focus proved you the developed gone the to has with value of As associated primary up value actually year-end Since credit -- facility. is

really at not there to still that fall, is that's time to We was the deck that. above group the prices that group base is base is always and is cushion be the would the comfortable so to what billion looking determined commodity of upon and But set I'm go I price last borrowing the upon at that the to be that. Now that kind very chose push approved going dependent and at think use. based going with really bank $X.X go that overriding

we're looking if we adequate at. liquidity it down, Now even more given programs comes that than still would the have

Randy Foutch

get 'XX. significant at and mind crude that. And went over least comforting through we're does flow on in to protect and all because Rick it where that line floored the is our degree of to upside a cash keep Gregg, at our hedging something, on credit XX-something the us the we And

Gregg Brody

then just follow-up. And Great. one

going NGLs stay gas You gave should how you expectations, and XXXX the some to flat. it's into sort think how in of give terms growth? about we oil production Could of insight

Richard Buterbaugh

going the a expect in pretty expect variability on On be on stay flat. which basis. coming a XXXX. driven going to flat be similar that There's and about. BOE but we made completions and always to some similar quarter-over-quarter basis basis, we would We yes, when a on XXXX, versus be on average, we've very we rate come as fairly run BOE a again we on basically NGLs, and the our exit always to that that see amounts to those is have But -- don't between breakdown number completions quarter, on of by are those in talked on a gas

Operator

Coker question next & Noel Parks from our And of comes Palmer.

Noel Parks

the been at management the still at this development, has bringing pretty when the point Or thing in your resolved? thing issue that One online? much looking you're wells choke of is

Randy Foutch

We spent we of that that results positive. a were fair on and doing some saw amount time

mean. I we bit, on back what dependent reverted little saw to general, a of the that think, some was spacing, it and time they frankly, after was in quite period

in I at. still have, we're looking the we think the it my still I we're got and but side, in production do going process flow-back management completion to across-the-board way. still don't the drilling So we've the any address choke what on remarks, side really and know on we on efficiencies didn't I think side,

Noel Parks

Okay, great.

when flexibility? Just Did to specifically rigs? you're decides of rig rates? of far as day with your to there table as count, might they wondering, where looking some come talking wondering couple vendors, what for a I when the with a about headed company of you're get held lot you bargain your the the having was them, as improvement, sort Or onto you you're costs service rig seen was talking

Randy Foutch

long providers and service Laredo of pumping, our It's lot dialogue think between I on pressure interesting that. on rigs, of parts all there's but in we've a and relationships that had not just our on

take pretty forthright shareholders. think so and we've care we And of is headed. And explaining to their in are where job their we're where I been

pretty continually. a debate healthy there's on almost goes So that

almost time. -- not on activity, a think that's That's do bid not we out a of it's process continually. a that but fair goes I point in amount

Tommye Chandler

obviously, One of operate clear within we've to flow. said, is about cash here, for the, as very XXXX being Randy -- what our strategy

So potentially we very our and get, the across hard -- just a our across so the having savings services. more service with dialogue more ongoing discussions geared to all working we're providers The that really are very we're activity that's can towards that. much have of

Noel Parks

what deck line. Okay, about one minute last ago last banks? great. borrowing And with happen what the mentioned the recall just the price Where stand thing, a redetermination, do you to Do a credit you brief the there's was? base

Richard Buterbaugh

going price in the Each to own Appears to fall. of back their in to be within individual the group $XX use deck. the That's is $XX. be, last range round, going the to

Noel Parks

as not the They saw Okay. time, at words. strip we the had gotten sort other as suppressive of in

Richard Buterbaugh

each the their to what to banks own. they going because use bank on going not to use I'm Exactly. speak is

Operator

this to closing would now to And back further for time. turn like call I'm Hagood the Ron remarks. at not showing any questions I

Ronald Hagood

a today. us Laredo, joining for much your We appreciate interest in have very and morning. good Thanks

Operator

for have program, thank you and may great participating gentlemen, disconnect. a conference. Everyone, all you today's does the in day. and Ladies conclude This

Vital Energy (VTLE) 14 Feb 192018 Q4 Earnings call transcript