Diamondback Energy (FANG) 20 Feb 192018 Q4 Earnings call transcript

Company Profile

Participants

Adam Lawlis	Director of Investor Relations.
Travis Stice	CEO.
Michael Hollis	President and COO.
Tracy Dick	CFO
John Nelson	Goldman Sachs
Derrick Whitfield	Stifel
Neal Dingmann	SunTrust
Gail Nicholson	Stephens
Asit Sen	Bank of America Merrill Lynch
Ryan Todd	Simmons Energy
Tim Rezvan	Oppenheimer
Mike Kelly	Seaport Global
Drew Venker	Morgan Stanley
Jeff Grampp	Northland Capital Markets.
Jason Wangler	Imperial Capital
Charles Meade	Johnson Rice
Leo Mariani	KeyBanc
Michael Hall	Heikkinen Energy Advisors
Eli Kantor	IFS Securities

Call transcript

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Operator

Good day, ladies and gentlemen, and welcome to the Diamondback Energy Fourth Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time.

As a reminder, this conference is being recorded. I would now like to introduce your host for today's conference, Adam Lawlis, Director of Investor Relations. begin. may you Sir,

Adam Lawlis

[ph]. XXXX and conference Tuwanda Energy's to fourth quarter call. Good you, welcome morning, Diamondback Thank

During our website. call President investor are presentation, today, Stice, and we will can Travis Dick, found reference COO; be and on CFO. Mike Diamondback CEO; Representing Tracy today which Diamondback Hollis, an updated

and that may those to from actual filings could During condition, plans, indicated operations, results factors. participants forward-looking businesses. in caution relating concerning that due materially differ make performance, SEC. can company's you statements We forward-looking are on this conference a Information call, to statements results these of with objectives, certain the the the the financial future of variety be these factors company's found

non-GAAP GAAP release the the reconciliations In addition, measures. now afternoon. Travis we The Stice. measures our earnings be will appropriate found issued in yesterday over to turn I'll certain with call make can to reference

Travis Stice

and over XXXX of the the day including the closing net closed doubled has producing the part another the Adam. effect acquisitions acreage to with as giving platform Basin of you, We Central core and successfully which the listening production Energen XXX,XXX on growing three majority Welcome, XXXX after everyone, which combined in XXX,XXX XX,XXX year BOEs Delaware the Energen, December now Diamondback. XX% merger, acquisition our exited position. we thank Diamondback acres are best and grew along net working without which acres transformational quarter, the fourth of Permian Assets, the call. to per over year another of in conference merger. core year-over-year are the in to Strategy. of Basin Permian Diamondback our you for for Thank quarter our large fourth nearly Midland Diamondback's was

volatility developed over shy oil reserve XXX%. equivalent our ratio for to billion and almost was two Our a the the two of flow dramatically three year-over-year at XXXX of cash as replacement quarter. reduction our the capital highlighting result was in combination merger This flat $X.XX was F&D against and and months. the just are completion reacted Commodity as the closing cost prices drilling essentially of reserves for organic philosophy core subsequently and barrel $XX.XX, our this by up crews dropped quarter possible a of Diamondback course efficient the year-over-year X was structure. outspent and XXXX rigs fourth announcing for as quickly F&D improved Drill quality XXX% last the and in bit activity barrels after we of acreage declined operating over a operating

budget our year-over-year grow expect Moving larger also that capital XX% previously XX% we all operating described paying to XXXX, production versus we cash within and did to still flow. December than dividend we in expectations XXXX, trimmed while in

costs in As are Michael all explained than and our projected closing reflected XXXX. later faster his synergies merger, are in capital more operating realizing in Energen the call, detail after of we in expected budget which on

and held in point we at on working and Diamondback assets remaining at XXXX. Lastly, the are actively so some to expect mineral down dropping do the to Viper level royalty

Mike. comments the I'll these over turn call With complete, to now

Michael Hollis

Travis. you, Thank

but cost practices. Basin benefit cost, casing to designs, Midland for The foot our of Turning laterals, the last over well buying most lateral expected actual in to savings synergies as XXXX secondary acreage, XX% implementation immediate power on not foot, as with on of Slide associated Energen X primarily scale primary team Energen is when XXXX. some early August. an and save well both Delaware presented per the has the attributed learned, X% Also size, well calls save through originally improved efficiencies to presentation. to Energen Overall, these the update highest actual and merger XX, through $XX been multi cost the the versus between XX% primary with count efficiencies, anticipated. of versus completed what Legacy greater than implemented value year, service our to we early pads, have cost, Running Basin move announced time to savings results best what give capital the design well synergy on the bucket. for Diamondback the due we foot XXXX, per Delaware merger completed scale. we In Based Basin a per Energen XXXX our are lateral and only well reduction longer secondary enough Diamondback the improvements expect This announcement was Energen’s guidance merger XXXX foot cost the Midland from cost. savings. in in In Basin, $XXX into primary and to on was realized during almost Basin million $XX versus quarter by of larger presented the for almost expects synergy also to due we seeing midpoint service of achieve $XXX synergy $XXX, and originally of completion due to Midland a expect Again, we or practices completion second well we to by cost Diamondback concessions. best to decrease benefit

$XX page synergies in reflected X, the of to XXXX our on anticipated, million are Diamondback of than has earlier As expected fully realized guidance. million all $XX which seen G&A also

in with combined, line we more and these updating have mineral capital, and progress. ahead, even synergies Looking we operating, synergy to of midstream look forward initiatives sight of the scorecard

complete, now over With turn these Tracy. to the call comments I'll

Tracy Dick

items diluted adjusted $X.XX for and quarter per net derivatives, was non-cash and you, diluted $X.XX fourth Diamondback’s our income Mike. share. other share net was per XXXX income Thank

costs cash LOE $XXX $X.XX and for and BOE, were Our $X.XX consolidated EBITDA BOE. operating adjusted of $X.XX the quarter per was including our of G&A cash per million

infrastructure and $XXX midstream. on Diamondback During the million and on property completion $XXX non-operated spent quarter, drilling and

$XXX properties its we outstanding of of fourth year million $XXX drilling and cash, infrastructure resulting with the billion credit ended of in liquidity. million ended facility, million $X.X revolving XXXX Diamondback on in borrowings midstream. the For XXXX, quarter under approximately and billion standalone XXX spent $X.X on completion in and non-operated

Board Diamondback’s February cash share for XX, dividend of Directors Finally, per record declared business at to quarter of fourth line common XXst XXXX. XXXX please close the of shareholders open questions. payable for on the $X.XXX on February a had the of Operator,

Operator

line John Instructions] first question with Goldman from comes Sachs. [Operator the of Our Nelson

line Your open. is

John Nelson

congratulations and team to velocity the capture. Quite of on Good morning synergy impressive. the

Travis Stice

John. you, Thank

John Nelson

on in up is Starting, maybe view and share Travis, repurchases your with about share the particular count pecking order your capital in XX%.

year. XX% in last Your stock is about down the

just company XX:XX about as thinks both free repurchases, the with that in potential monetization mind curious flow. share with proceeds cash how So well as

Travis Stice

the we certainly all in is to what shareholder have within of then, initiatives. conversations continue Yes XXXX, to flow time. the cash friendly Street, can we've shareholder the appropriate John as and more do exactly share in start the generation point on grow focus of focus returning on seeing initiatives bandwidth friendly to in that first, free on I we on our I through meaningful repurchases, those we've But, progress that's and to that get we the our going continue key cash form and of things before with Wall occur investors. going are such continued past what committed the what to as signaled do. And that's to we're it's to XXXX, focus dividend, think the significant think, a to But dividend, increasing

John Nelson

of today. be you something of enough. if kind bit philosophically, average $XX $XX guidance strip original the prices second cash continue flow above question target bit guess kind would a potentially all I type targeted oil I And WTI company around that Fair remain to then or stronger? a to to think going neutral. We're price the a commodity on

Travis Stice

strategic perhaps rigs December is No, the we're $XX that's represented term But this redeploy addressed pivot we beyond think I that I one back that we've to flow think in a specifically, into Diamondback made year we the for point, commodity point long XXXX free that at to coming, price going XXXX flow of the our not cash a pivot waiver could call, I think, cash improves which and that good all I the out ground. into to our pretty look was year this strategy as look a at barrel in this back at half shareholders. returning at going this maybe laid again we that add that know as got you to And We're two about. began our start and talking us free well. to dividend returning significant that with -- increasing John -- start by

even the pivot to and we're we've prices look improve. -- that's that and we've we're continue to committed that that made commodity as at So

John Nelson

Congrats again on the Thanks. quarter.

Travis Stice

John. you, Thank Great.

Operator

of line with the from Our next question comes Whitfield Stifel. Derrick

line open. Your is

Derrick Whitfield

and morning Good strong on Thanks. congrats a and quarter all, outlook.

Travis Stice

Thanks, Derrick.

Derrick Whitfield

that regard with synergies could synergies, your to would and to it Perhaps X secondary be think other those Travis, million aggregate? for in exceed fair

Travis Stice

of We on put a of in and rolled we August. We've to acquisition our into lean in scorecard scorecard. all Slide and synergies we call investor and a that in there what we X synergy continue together, our to it's going on described It's delivering we're to call deck, we're midstream talked And my Viper these the all working that look, back improve metrics. are on the dropdown assets the optimistic comments, can about all I'm prepared continue that to in. from the

delivering those -- on all scorecard the these in to are in on we've and materialize already additional secondary that synergy talked this going behind what those as a telling August. these story to market XXXX. But continue tremendous look really these about things we're we'll synergies around going beyond traction above forward we good got to So to update we're synergies and

Michael Hollis

the what's on the with we financial synergies of cost and minerals the and trade And the other important the Derrick side. that Energen midstream on the more are on really business. the Yes, I base merger mentioned, side synergies is execution think

predicated the execution where we’re most today. operation and So deal that’s on focused we and side the on

Derrick Whitfield

Delaware the on result your particularly does the allocation to if Great. decline attributes you And view the guys to well at strong a How given of over that's well area Pecos, then, that in capital the that Spring Bone regarding announced shifting shale that change all? interval.

Travis Stice

Well, excited value we’re the and a original reason acquisition. zones excited inscribe we any about or to didn't a that the that's certainly couple we're is Delaware zone

as monitor quickly returns and the I we cautious, react we’re stuff. zone, more or mean, define So, drill schedule dollars we’re the rate results. zones, we’ll this seeing results. we allocate so we further to dozen that to we’re half always highest do a like greater but a excited really be And we’ll probably on we’ll if get think good those we that got And just year I positive going of return of

for news it's It’s we’re all inventory Pecos good it's good around. news that news count bringing and in So, to good it's table now because our County. unrecognized the a upside

Derrick Whitfield

Great. taking strong questions update. my and Thanks a very for

Travis Stice

you, Thank Derrick.

Operator

Thank you.

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

is Your line open.

Neal Dingmann

Could all. of I had morning, bit a how question Travis, spend. for the for spend. on bit -- sort I the Good this around in first a mean, you of trendy a think just FANG -- see a year forward? higher in talk of is that now year. guide my infrastructure you bit have the corporate-wide last you I know you going And infrastructure

Travis Stice

Yes, Neal, this one. I’ll take

of the Our how infra for areas was did doing the million have in for a completely spend I pads we decline much and that on drilling we’re primary business should was budget build million separate first one going trade, to If is meaning be had XX%, waited the forward. on a over XXXX. overall than no time that more a to is going existing midstream and undeveloped us half Energen mean, spend The expected. are midstream we XX% acreage $XXX the battery and probably a the in then wells. and in batteries total in that’s bit year. reasons and infrastructure side. results hopefully midstream and $XXX spend XX% half bigger they the higher But to lot Infrastructure back

Neal Dingmann

you the to plan. enough when question, overall I the the about I in And press one to do the deals. just do of of changing two you more from that? rig plan count But that sort that or just you of how that balance? guess, release look to adjust mean, first refraining at frequent of outspending definitely cash with more balancing activity versus then, obviously be your Travis, or how sort you flow I this keep appreciate Great that. continuity plan, stability balance mentioned

Travis Stice

execution. Well, we one efficiency make don’t is the the interrupt we’ve is sure machine. really really got outstanding the thing of to our That's known that for, Diamondback Diamondback

Neal, token, the that done can’t either. year. we by that machine. four we in years, so we not disrupt an can’t But aberration but fourth quarter And We’ve had same outspend the last cash flow for

we last just we completion makes run of stop it how dropped sense -- And multiwell to we to quicker multiwell part a would've – run activity year, stop and quarter the that We’re but at on on all business. pads fourth – mid – mid a no on in pads. actually finish were

that take This that But from we are looking price OPEC committed don't see for. account the outside known is capital collapse. you to announcement we in. XXXX that's typically discipline. and a that Diamondback, in So, we’re since mantra we demonstrating been subsequent what the That's the into and fall of the the

Neal Dingmann

good. Very Thank you.

Operator

of Stephens. Gail The Nicholson Thank with you. next the comes from question line

Your line open. is

Gail Nicholson

Good morning.

Platform. the that of working on that Basin how looking of around at there LOE and other potential are in kind then will XXXX? to improve trend sale next future Just LOE And the kind Central your XX of outside Are things further aspect? the you thoughts on of

Travis Stice

our Yes. it and is question, but that heard tomorrow we’re lean Gail, to answer today. someone actually to let what Mike into try always LOE going I’ll you’ve these make me to before barrels that versus produce play lower this say until

to I'll that. Mike give So, answer you to let LOE. on we focus real always the But

Michael Hollis

as it increasing of Absolutely, it's a well. we Gail. two dollars again lot health on attack on volume, are that Again, we fronts, spend. the But

things bringing well learned job there's finding that around. Diamondback we've other do again together, from and folks, done better, So good we've the to grabbing way we're as a the so synergies as and today, and really areas that Energen things of ways implementing Energen

to spend volume. hope gross we production what dollar as lower So, see a growing is amount as well a

an today. kind the our about Basin idea of for LOE you So, Platform $X.XX to Central give accounts of

basis the LOE, assuming But come it's Platform be assuming guide. we going that on can again, of all in implement today. slow our So a working the would go-forward sale Central again of a Basin initiatives we're that nice to of off a drop on

Gail Nicholson

Viper, maintain at the Great. level a And is when go-forward you that down want you Diamondback's at guys on looking just into basis? Viper, a there then potential drop ownership in appropriate look to

Travis Stice

Gail. Yes,

cash certainly assume Diamondback a cash enjoy much I flow, that XX% the for as as don't transaction I business to company think company free to it's any And fair owning generating we possible. see the of need owning if in of Viper, parent back that there. is parent take

Diamondback think So, is increase certainly post to down. ownership and Viper its drop looking I the

Gail Nicholson

you just XXXX some up Great. prospect doing And one last one, how several portfolio brought ago kind guys activity in the fits into . just today? quarters the curious that appraisal and I'm Limelight of

Travis Stice

this going Yes. to the middle year. sometime We're it of in test probably

Gail Nicholson

guys. Thanks, Great.

Travis Stice

you. Thank

Operator

Sen Our Asit Lynch. next question comes America from with Bank of the of Merrill line

Your line is open.

Asit Sen

morning. Good Thanks.

etcetera? you long-term wondering of then, supply And think one from questions, buying my two scale question. synergy. short-term you contracts? first about contracts more mix Mike, specific I've you're increased mentioned rebidding and I That's are thinking on could the and So power differently just on about you the talk chain, efforts that now incremental about how

Michael Hollis

Absolutely.

again, didn't So, well. the we all the two entities looked apart, and at went vendors use we when as of through same services we and

so difference. -- change you out it's have both in what we've we whichever and Energen price change we getting partners one the looks gone ones seen roughly seen, seeing commodity business increase bidding Again, scale, package, to Diamondback number and swapped charged. through did and an hard back tie on that in size the actually that we're gone we've with if vendors what change we've change, the the in price with back of we were to for went that associated what so to stand-alone services larger is roughly the Again a the and are in and service decrease So and side. initially a seen that size grabbed a in just and day have that And it scale. better we larger Diamondback and some that, like appeared and asked of it's quality, is XX% down, we've prices

on keep how in book do general, well-to-well. more as a thing we're and have we what of contracts But far year just long we we right any on other things. we what keep with of long-term hedge as have a up services, like we now, we again, six Now, plan most tying on looking at we to a hedge, months

Asit Sen

Okay. toward use operation technology more do a seeing one Thanks. where perhaps plans talked you style, the And, as picture in you see you forward? you're economic as moves quarter, update the industry question, about? Travis, most what in last on far going could dual and us are the of Delaware, big excited In of in you manufacturing rigs fuel about so benefits

Travis Stice

come listen, the of efficiency have industry question. are Mike real-time that that wells the these out inside the let Yes. we manufacturing Permian. fuel barrels going make I'll we in of called things whether all to here our are artificial And make actual fluids, zone, that's producing talk the and media, in drilling any and to our a up as manufacturing let feedback more the our the the a particular going to about transport a I'll which we industry are think the the things all to efficiency operations, the but specifically the steer believe change intelligence, in large answer in proppants, and these way to for process technology dual more to in dual fuel Mike and can the impact huge transport bear. technology business advanced operations technologies that we happen those way it's chance

Michael Hollis

we running Asit, frac the fleet. So currently dual two are fuel

running I we dual fuel. believe five fuel, have rigs currently dual So

and making the sense, where it today. converted, where So it availability makes moves any sense those already it the equipment we're again, to do we where makes have

the On things side, we're our seismic how of answer technology, land doing mentioned the use implementation data the how on and real-time the all these is analytics basically data our of of new ago, from side, Travis of second complete those we drilling all wells. the we course, processing of yes completion on a to steer

the those of or had to expect. seeing hopeful last see to them is than in very don't what's things which not faster but have two, you would what guide progress a yes, we But we're today any great answer today, change we here we're of decade the for is So, going we're coming, changes coming. because we've

Asit Sen

the Appreciate color. Thanks.

Travis Stice

Thanks, Asit.

Operator

you. Thank

comes Todd line Ryan Our next question of from the Simmons with Energy.

Your line open. is

Ryan Todd

Good. that's shifted think Maybe question, -- I high-level a this -- about that quarters point? -- cash move conscious timing just or of you've the How over do the you've flow about your toward free talked And broader greater for you think toward you've Is toward mean, with whether competitive you target for Thanks. it plays you organically focus for yield generation how somewhat portfolio? happens cash it last reasonable of within the to effort you flow out market? targets it flow how longer-term make free a generation. cash the a you free couple got whether the do at that

Michael Hollis

some us and really to to into that and beyond cash made as in both happening organically, continue company XXXX why the about excited beyond? combined and It's future. we that with we’ll to one but flow happen. mentioned look generating I activity and process to flow in cash the significant do be starts comments I earlier generation XXXX free mean add our that's to a pared cash flow, -- in free will mean, still that probably increase as as it's conscious it's to but I really we new really back has so also of going two effort going be just what this we've that's Energen we significant rigs, We've

Ryan Todd

historically point. basin how closed the successful environment you had consolidator Thanks. a M&A consolidator. just strategy I cash would and M&A stock-driven cash-driven Any very would this Maybe free you you part appetite mean, material of and deals, characterize overall And as comments is as a potentially part to some you the would a it previously? -- previously, than the deal, at that use of mean, I that know the I follow-up to in less and more that, be use still to how allow but commented on it you've the fund was the to opposed to deals strategy great? is cash of that been

Travis Stice

Yes.

bolt-on So we're we specifically so focused continuing drill we we're trades to small efficiency to continue units with Diamondback and these operating longer that. on right sure make and greater now do laterals what them operate and can is to to do

business swaps assets. really the acquired other into that focus really some of and development is to continued acreage The the focus doing that with on digging we're now trades Energen right scattered we

what business living within terms that's -- a are or think behind an so land it, on undeveloped it, that is we all buy able days wells respond one And us. accretive flow doing be for And in I a are think to that to flow on to there's with trying organization acreage being those and now obviously on a days the teams right sense, particularly, trade. that, perspective, the From real it's of is cash of cash development not two it's operators front. our quiet little macro our M&A real been been reason

to don't we rate look there. see always we out our doing is we're lot that any an -- right for bottom those for deals of try and but shareholders can on those Diamondback, trades. value, focused bolt-ons the to line unreasonable have to to look the now deals -- of So obligation small And the

Ryan Todd

that. appreciate I Travis. Thanks,

Operator

you. Thank

Oppenheimer. Our next Rezvan of comes question the from line Tim with

Your line is open.

Tim Rezvan

folks. Good Hi. morning,

of your XX question on First on deck. had is realizations I slide

guidance in you're first of to some XXXX, and more talk quarter I but because to if you differentials. guiding exposure of assumptions wondering, you the have I could second through guess, the XXXX. kind about gave was appear Midland tighter You second quarter-by-quarter of the XXXX in quarter

have talk that broadly underlying guidance? you are assumptions just about of sort this what maybe kind So of

Michael Hollis

Tim. Yes,

the basis as are on So core Friday, for can your assumption last the strip as days couple that the ago as of use you a prices use so and a of market assumptions price.

couple differentials Midland the coming significantly and narrow. the pretty months Now to of projected it's past stay in

a of deals at our of end first quarter. couple the So, the off roll

deals differential in end One quarter. down the of our goes the of at first

playing of got So is expansion and what any looking We window was large side we -- enterprise to once on [Indiscernible] we signing realized the do differential NGL stopped fixed deals. how conversion.

leaving be gone takeaway our So that was market, majority to exposed XXXX for to market Midland that the XXXX. the happy barrels we're that expected exposure Midland to the of in of as and we've through kind crisis

Tim Rezvan

next appreciate industry. is the guess the of Okay. you had helpful. now. on transparent comp has I Director of could for That's put that. in I My and one of more always Diamondback question kind Travis, discretionary if formulas honest hat sort

capital for understand Company appropriate comp about thinking Board and return you future? of about talk if is where flow are management? medium-term the now can the has all over cash matured employed to and the at discretionary generation, the on trying how what kind metrics As senior as free about priorities of you talk Just kind --

Travis Stice

of on We've and three since that's tenants, beginning. cost built around operations your of Diamondback appreciate I us been very execution, best-in-class and Tim, transparency, comment core the low transparency. kind part

because focus were comp but the apply we to I one and transparency changed comp same away Tim, the in Really, from metrics appreciate in that did the we I what the companies we comments. so, reserves. to So I your executive do think comp, volumes XXXX, of in growth organization, and everyone first not it's we just think,

from measures. efficiency In capital those we scorecard for measures. efficiency returns, return our fact, and other removed on them employed instead measures And or with replaced entirely are returns those proxies

future. in still So, things focus we for scorecard the to continued is the for anticipate class. to And the are again to important, back investors our has and forward high not that Board our execution think keeping -- which that returns going I come our we've set generating and we've yet metrics the best set pristine operating not while in XXXX, the

It's the the so years. well the gone us -- And that's last think we've several the I in that's served go we -- continue -- way over it Board way to XXXX. to I anticipate

Tim Rezvan

Okay. Is clarity, high talk good on about And about Can you that all talk return that employed? those things? returns that -- mean, just is you to of cash you little for more margin? what Is capital investors. --

Travis Stice

for that our -- Well, return And we XXXX like. we a as so the able of the in on see measures put denominator use proxies measures did the build efficiency track for record capital we what numerator them and look were we employed. return being that could so, to

think if longer I quarters return several the last of most we've measure. for our investor presentations that, all in employed sure, not capital for than included on

it's So -- XXXX haven't what be for is to going but investors. decided to again, we going look focused toward our like, returns certainly

Tim Rezvan

the Okay. Thanks for comments.

Operator

Thank you.

Our next Mike question comes from the line of Kelly with Global. Seaport

line open. is Your

Mike Kelly

a guess the I'm give Travis, opportunity. more could for frame just on mineral be little I Thanks. how impactful bit just to you trying potentially get morning. you guys? really of color or Good sense guys. hoping could I this Hi, was a dropdown

Michael Hollis

amount prior Diamondback about probably deal significant deal. at Yes, Diamondback level net adds the just $XX the so The $XX Mike. I parent X,XXX at the It's still flow. that acres mean there of another still is of held level. to cash million owns to Energen Energen million a minerals or

we're size So right deal. that to trying

and I Diamondback very both be sizable type near Viper trade, and meaningful billion think it's dollar to to going trade.

Mike Kelly

more you'd that following versus of I or appreciate should to be more Viper you deal would Okay. -- think -- weighted like on thinking cash. the kind correctly to would Viper It about that of of share that. question Gail's how about take shares sounds I mechanics this. that? on I And Am

Travis Stice

we had -- that point. exactly how to -- realize probably good got -- a we're assumption we've Yes. on those but We've going really at this Board some that's value, conversations

Mike Kelly

curious the et there on shifting in Great. just levels, put And just results pretty for activity talk about like Okay. cetera. line, what Northern And look the game the the gears looks could plan then Northern Delaware, wells to awesome. we expected Delaware Maybe XXXX.

Travis Stice

release, and in quarter's I'm are it's one those four portfolio, the area, not wells. four delivered is best focus wells quarterly that of but really which those the I excited this now Yes. the anybody's probably stuff release, in managing in honestly That's well after results quite that acquired things [Indiscernible] we Diamondback's we understand about in and

there per those ever of Those wells are XXX the -- best oil I drilled. were over foot. we've some think are the barrels

those as So, there is quickly -- that as allocation get can. as obviously capital we to we in can as area going put much

Mike Kelly

of on have acreage Are Maybe Got around a kind there? exposed that. number much comfortable giving you you it. quick just a follow-up ballpark how

Michael Hollis

kind of probably going total acres to or four or probably talk in XX,XXX there. quarter just rig rigs that I'll the in we're area. It's XX,XXX run five count,

Mike Kelly

guys. Thanks, Great.

Operator

Thank you.

comes Our Drew with question of the next Morgan Venker line from Stanley.

Your line open. is

Drew Venker

wanted targets on I about sheet about Viper everyone. talk appreciate and can leverage? that you hoping comments and the flow it's that how strengthen think maybe and further but talk leverage maybe to you up for how you're free be if balance how you your had to too made, early cash returning still to Hi, plays your and stake about guys specifically you'll follow cash, to

Travis Stice

to want lever that's times any X parent company dividend flow the parent go our we still I should one-time a our basis, our proceeds don't toward sales, also of the from asset proceeds, a times midstream leverage the think subs cash opinion. but to up We Drew, two want or either. true to in at below maintain from debt about consolidated at return free on any or shareholders come company, whether business reduction minerals buyback

Drew Venker

Thanks.

Operator

you. Thank

Markets. comes of question Jeff the Northland next Capital line Grampp from Our with

Your line open. is

Jeff Grampp

you're number. morning, guys Good almost now noticed provision nice I years drilling upward on inventory had like It XX the inventory. a guys. pushing looks you

inventory tailwind good So, level high you how inventory for that for a to can maybe level thoughts level guys? of feel you look or opportunistically monetize or do right of some the just that's guys on wondering, you just

Travis Stice

given some we're of price commodity our but inventory, the Jeff. at dispose to with the up very that that of look would clear any end years actively that process of inventory We've drilling not is Platform Yes, today XX we the Basin working Central inventory environment. on point, the grow of is back strategy the been this remaining for At and and ongoing. certainly on sale prune certainly

Jeff Grampp

little little at put guidance can you out you -- sneak peek guys the the well to appreciate what's a maybe great. envision just well So look what playing through the maybe side, you early like have? out, that. then kind to that then talk an maybe flows that cost XXXX XXXX? how baked on relative of -- All and current kind year and things end, of I guys that how do looking XXXX into guys kind And guys into you right, Great, at bit how compare some just to curious how bit a guidance the numbers costs of

Michael Hollis

Jeff, baked the seeing guidance. we're today well current our into costs is that pretty

to all seeing it's what is now we're forward, today. going much does. what with depending right typically in be upon we're But having price going conversations Now, folks activity oil better

of working initiatives today in -- the A So, we and the but at we assume right quarter, some stay of throughout that planning year. on now, is couple event. should timed-out have we're what we're and working cost softening fruition other have the year. some to lot well some service initiatives What we've will will about we the the what today, for half depend on that come cost next Again, to flat. talked have going the over second to synergies we're happen happens basically for next But on or least. it's

So we some see down throughout change very activity slightly there's level. cost the well year in coming other unless

Jeff Grampp

housekeeping sneak I can Really the you if All of are guys today? right. can producing helpful, assets what ballpark just kind And one, platform disclose Mike. an

Michael Hollis

to X,XXX a day. barrels X,XXX

Jeff Grampp

All the guys. Appreciate time, guys. Great. Thanks right.

Michael Hollis

you. Thank

Operator

you. Thank

question next Imperial Wangler line with Jason from Our of Capital. comes

is line open. Your

Jason Wangler

everyone. morning, Good Hi.

just company on year the now as forward? goes on one comfortable profile bit but little the is Obviously, the obviously, moves already, the do be a call opportunities kind of side. hedge debt is hedges? get higher lot but a working curious Just bigger guys you'll that hedging about should some the the basis as you of like but overall covered, where on on. the Where had The now, we just thinking be

Travis Stice

Jason. Yes,

protect total I our production, shifting it's exit-to-exit we did big billion position become together -- XX which rigs number disclose capital it maintain was a toward required we -- about to let's hold changed think of In as this capital. $X.X of acreage bigger bit kind now the our strategy company. become and of to is the billion $X.X has past, minimum a a

that look for hedge a price. go-forward investors both I probably oil on think and going are to to basis, everything above growth to that we and then maintenance capital, is the exposure

Jason Wangler

you. I I'll appreciate back. that. Thank it turn

Operator

you. Thank

Rice. comes Meade Charles the with from Johnson of next line Our question

line open. Your is

Charles Meade

Travis, Good team and your morning, there. you

Travis Stice

Charles. Hi,

Charles Meade

inventory your of a wanted actually particularly I and kind at to Slide of picture big question your about look versus peers. you XX more

would that have So, up you which I count even converge likely have I way imagine or per inventory converging ways your more can the industry. guess, the what be but lower I'm up increasing your industry guess with you be? curious, you that's would down or with to one to location -- two with, that [Indiscernible] a guys foot,

Travis Stice

is way count, a we because the always that always that industry we away. things our they'll Charles, in take typically in lot communicate, production of that be the location guidance conservative we've reserves, and to managed things way want happened

to most industry. negative locations that's indications in our drilled pertains you've tightly be -- add them performance coming being well be one revisions too a allows those as inventory back. And technology the negative taking to to those revisions are first I in lot So out it's walking taking locations count, seen this to start particularly it year, our wells think attributed away. easier results performance those reserve it a reserve of as and is And and going numbers auditors is of there as experience, well, the to than to locations inventory start

comfortable of we very call are our the view at what an we least have inventory. looks on So, worth earlier calculated sort like of an XX-year inventory that someone a actually

a bunch form So, need locations don't to a of start just on in compelling of adding a the map. we sticks feel

add results we well and dictate. where comfortable we'll technology now and as we're are So, right

Charles Meade

and more the mean to on you Does lead backing general thought to some mid-to-longer quality did better probably less months push for seems term, – and productivity was is inventory then that in case me or further you… it then that XX individual a little there's you in to would same they ago. -- yours. see generally a up to maybe are more guys, get near that to that, just like spacing, it. like way little that that it And not close results speaking, but do Got but more six going this and would It in well Travis, if the the industry not the term, or nine

Travis Stice

That's right. think That's it I the absolutely. Charles, about way

Charles Meade

kind talked Southern some curious, that in the just of it. be got to I is Got active more, Regan are Got I'm development it interests makes you're that strategy the more about in one if it. you of grow or whether a trade and and that in assets Lee, activity you're trade the of those far-flung prune middle sneak of kind Upton trying you've or And or now seeing? fairways lot then could kind sense.

Travis Stice

to ranging have acres eight we acres or a combination, right XXX probably It's plus from trades swap X,XXX [ph] swap. Charles, now active nine

with grow going executed year drilling, keep get land as as XX, prune teams, about the Central and BD lateral X,XXX feet Platform, inventory So, all but lengths and as the on Page number lateral average we've working well the our successfully that is per this options Basin on us long our can real to talked that strategy. table, we we prune on up up, are average

Charles Meade

Got for guys. that it, thanks detail,

Travis Stice

Charles. Thanks,

Operator

line Our KeyBanc. the comes next of Leo from Mariani of question

Your open. line is

Leo Mariani

prior around the Hi, stellar you team own if guess, could wells bit little guys. completion I by drilling and Wondered FANG you of with guess recently your methods on these color drilled, done more I Energen their that done sort by whether I acreage. and or guess four, there the Energen techniques? the wells a give guys with those completed for those

Travis Stice

where at to already Leo, completion philosophies drill for And would is very thing as happened again the combination the wells wells little we yes, in were spots the and but great chose the they where well, right the a about had after drilled the landed in and that land Energen. actual very we so, -- similar similar by the have we close.

some the of groups we operation again, now had time, but a So again that collaborative already effort. merged by

Leo Mariani

helpful. That's Okay.

reductions was Energen. you I versus just As things a doing what on sense whether the Energen completion maybe of out different some are trying or to laid you bit clearly cost a guys get doing, was and not side material

results? a methodologies not or completion little whether to trying get might leading also designs to different better of Just be some in actual a sense or the

Travis Stice

No.

on that combined in is synergies is we're and the think organizations results acreage. where landing seeing confident size on the real on I actual that that, trade cost of benefit Energen well the we so side, and we're the points. The perspective, the beauty that's completion two had design saw But so, rest. cost a on eye-to-eye the

Leo Mariani

you putting these seems production, your seemed given kind Okay. two sure, it are guys very looking 'XX or or weighted little of was for mid-year year. That like the XXXX. strong kind Is weighted it guess sense. production certainly bit to just cadence kind fourth back-half stepped particularly And at kind in companies you during throughout that fourth quarter, up in of the wondering the of could growth into momentum makes of a if ratable fact more pretty I I it nice year? the quarter together talk is the

Travis Stice

important performance, Yes, are there I'll few QX tackle there. I Leo. the think because a points

base XXX.X day significantly QX. we Our was year presented business of above MBOE the production guidance full in per

business barrels X,XXX XX,XXX QX trade. to giving the Energen the outperformed So without effect base day to in by a

was very that important. think I So

doing gave in combined barrels combine we XXX,XXX XXXX, the was about to day we together. ahead number a that two companies a December, Looking once the business

through grow to ratably expect We year. basically the

the exit-to-exit CapEx so being is going be pretty we acceleration a some XX% toward as the half, see or but very us. to D&C for think important through of I back with year consistent number kind

Leo Mariani

guess guess below. which per very bit lastly basically help just quite G&A, Okay. guess couldn't quarter cash $X.XX I below BOE, a is I I $X for And your around this number is helpful. on your to was notice fourth guidance per year BOE, That's

made or number bit type the of thinking is maybe early of have that? pressure like if kind to it in any severance a be that you we upward guys should closer little payments So, year

Travis Stice

All right.

just I because between through a and like be to pick industry-leading number in and an $X say, shape. the it's you $X.XX can under good year, $X think number. We that such

Leo Mariani

Okay, thanks guys.

Travis Stice

you. Thank

Operator

Thank you.

Heikkinen line Hall question the next Advisors. Energy with of comes from Michael Our

line Your is open.

Michael Hall

One as time. situated all the have this activity in over where combine you point? people you kind step-up substantial Appreciate of addressed. Thanks. here just pretty much of staff hires? and How had Are on on [indiscernible] kind people the with are lot you now of on thing that you the are front? side a mine came been new you of How the set the of A Obviously I companies. equation. all guess Energen at two

Travis Stice

and Michael. I are operations we've there right Yes, rolled in in Birmingham The and so that mix think employees a employees. Midland organization into Energen in for there are is that just our then XXX got here sat transition that some

here as too. City Birmingham Midland well close. taking we to we into of functions as some from were both care folks Birmingham then move to Oklahoma to offices and the that still is there some So And get office base enough wind in fortunate back

can to are industry continuing that headcount pointed leading We've we but got every continue [indiscernible] we going So, G&A, as to add -- find to on in out. draft athletes the to quarter. we're increase a look best the

Michael Hall

to All right team. join [indiscernible] the

is curious granularity kind in have the we side, operating areas kind areas? should kind -- much I have just about, of you the How you from just a the each how yes, these just of perspective? guys think rigs count extent where of to in provide more of of each the sub rig Midland can split of on, other like The in any the particularly Basin those

Travis Stice

Energen say, and of of gets between Basin Glasscock be rest Midland year Northern rigs total rig the Reeves XX wells The to that XX and the Midland the year, rigs, will positions. XX Basin then I'd in will we're And run and to define Basin about in and block rest the and in of a count wells going to be for our I'd Northern Midland year. Delaware and Glasscock XX% Basin Midland four with for those total or the Yes. Pecos County about you the rig probably split so wise the Basin to XX% in for a our area. County the X.X and ReWard to half wells County XX

Michael Hall

best Okay, are that's of just the grow strategy. super last opportunity would side Where prune on you the think of helpful. have say growth trades one or for I equation these it more the look you If I might, year next and you that to swaps, most the little these the as sub relates which the areas and blocky, likely guess? course change do to over of

Travis Stice

you look think, of trades we're I mean, series North I and at what in Trail Yes, Spanish blocking did up. with we a now actively that

I Basin lot and there our position the properties non-operated for around Energen working prefer there think a trade think we're block is to in -- up actively our Delaware still [indiscernible] you have non-operated area do legacy position ReWard work and position cost and to of around some position. to Northern that non-opposition structure, be operate I going that certainly Energen given we to

Michael Hall

All congrats the solid much, on Thanks right. very quarter.

Travis Stice

Michael. Thanks,

Michael Hollis

Thanks.

Operator

of Eli the from line Kantor [Operator IFS with comes Instructions] Our Securities. question next

Your is open. line

Eli Kantor

good Hi, morning, guys.

Travis Stice

morning. Good

Eli Kantor

What additional of the to compete locations increase out you you help comprise intervals locations breakdown relative Spring? other Spraberry Slide locations operated and capital big are split for in break detail will this development give How locations locations across are on various our other you other the those the intervals non-op? Wolfcamp, gave some inventory those the couldn't Bone and category? on XX. what I notice your versus Can within the percent of

Michael Hollis

one. take more and Midland and Wolfcamp more Wolfcamp C Basin it B I'll kept in Yes. the for inventory had than we exposure did Energen Diamondback that did that. than to

piece. about other XXX well. makes the of good that a is a So, And up locations amount category. comprises Non-op good that as non-op net

had locations Delaware Delaware Energen and don't that the we where Southern have Avalon on Basin. Brushy Canyon the Now in some side,

Eli Kantor

this of Rattler. terms monetization of in then, And upcoming

being equity percent various the and deciding show. about You talked you the of ultimately made what considerations

Travis Stice

Eli. It's about look we online. we’re and that can to going at SEC SX the talk on No, on file filing with

Eli Kantor

Thanks. enough. Fair

Operator

call like this over Stice, to closing at for questions further any now showing to remarks. Travis the turn not I’m I would back time. CEO

Travis Stice

everyone participating in today’s call. to again Thanks

you using any us the provided. questions, got information please If contact

Operator

Ladies Thank and gentlemen, for that concludes participating. today’s conference. you

a may You Everyone disconnect. have day. wonderful now

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