CDEV - Earnings call transcript Q4 2019 | Permian Resources Corporation

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning and welcome to Centennial Resource Development's Conference Call to discuss its Fourth Quarter and Full Year 2019 Earnings. Today's call is being recorded. A replay of the call will be accessible until March 10th, 2020 by dialing 855-859-2056 and entering the conference ID number 7679910 or by visiting Centennial's website at www.cdevinc.com.

At this time, I will turn the call over to Hays Mabry, Centennial's Director of Investor Relations for some opening remarks. Please go ahead.

Hays Mabry

Rebecca. you, Thank all quarter you us the on And full for year fourth and XXXX company's thank joining earnings call. call Officer; Chief Presenting and Officer. Smith, the today Papa, Operating Mark on our our Chief Chief Executive Officer; George Financial our Glyphis, and Sean are Chairman

reporting and Production XXth, February operational our Centennial Resource release results a earnings results with an Form for Yesterday, year X-K for LLC. filed earnings we full the company subsidiary

reference our also call. during posted will an that We today's to website presentation we earnings

You can on presentation our website at www.cdevinc.com. homepage Presentations find the or under

more I beyond the would factors annual which results forward-looking actual the including earnings control our ended that SEC like statements forward-looking in to during and are with our our are for of affect in and note our was and of filed are detail plans. the uncertainties that risk call and could XX-K the comments many year Many filings that of Form risks the SEC involve section statements risks yesterday. this these with the also XXXX report on discussed

Although not of performance we on actual are expressed differ and may or guarantees results developments future they assumptions, believe materially. expectations reasonable the are based

refer non-GAAP also our peers. measures facilitate that help across may We to periods financial comparisons and with

our the any measure, release on presentation earnings in measure or a available we be reconciliation use can to are For found non-GAAP website. GAAP the nearest corresponding which both

I'll CEO. that, now call to and with And Chairman the Mark over Mr. turn Papa,

Mark Papa

Hays. earnings fourth call. quarter morning to welcome Centennial's Thanks Good and

strategy update well I'll from year-end including plans. discuss our guidance. emanating financial operational assets And full current call will the our macro and will be my XXXX presentation follows; results an then and view, and results macro, saltwater this succession will efficiencies our provide of management's year as Our and sequence then follow first disposal George quarterly Sean with the reserves. recent monetization on

to George our financial review results. I'll Now, ask

George Glyphis

with strong fourth XXXX Centennial Mark. you, quarter finished Thank results.

averaged reference barrels production As day earnings up XX% period oil the the was prior of barrels over period net net which can and approximately year which Average QX. XX,XXX slide on XX over the presentation, was production day XX,XXX quarter and per per approximately totaled prior XX% X% year and oil you X% fourth respectively. the above for QX equivalent up

QX Revenues totaled a to result approximately $XXX price XX% higher compared primarily production of which a increase million was realizations. and as

price for the Excluding to oil $XX.XX was basis quarter barrel the Centennial's impact of per in compared hedges, realized $XX.XX QX.

equipment expense in to earnings reductions to per call, LOE the a and labor electricity, $X.XX by Shifting to increase mitigate unit have initiatives initiatives in per of from XX% as preliminary decreased barrel several we of lease QX. on the costs. result The positive. last identified been primarily chemical, costs, results operating incurred those barrel QX during rental,

GP&T for been increased cash $XX.XX up settlement a primarily would $X.XX barrel. decreased G&A by barrel barrel per result per have was charge, per of contract lastly G&A one-time X% as Cash QX quarter-over-quarter per expense non-recurring Without this $X.XX. $X.XX barrel charge. to which and X% DD&A a was to

to we quarter, XX% to common attributable Adjusted LOE. $XXX million, totaled million. GAAP recorded the For QX, of up stock net our $X.X Class from A EBITDAX due lower revenues income approximately and higher

to CapEx. Shifting

compared rigs During for six five to QX. ran we QX, rigs most of

XX million approximately only XX during more D&C XX $XXX wells respectively in compared gross to wells compared to the spud completing and of we gross quarter, wells CapEx during QX. increased prior XX Despite quarter. XXXX the X.X% QX, For completed

because This down of was million approximately significantly $X spending on to within a facilities continue infrastructure Facilities in XX% see incurred keeping during the our original which In QX, and XXXX. infrastructure range. lower capital, down QX, guidance which in million, side. decline $XX we from and land infrastructure expect us as capital totaled million was approximately will QX trend $XX we significant from

achieved QX, incurred and to achieve On of our levels. $XX in million $XXX consideration total for a based and approximately in compared million assets Centennial X% sale in the XX, represents a $XXX payments February to of purchase believe Overall, that million divest $XXX WaterBridge saltwater comprises of decline be total Reeves purchase out additional which current marked our period. signed the We to paid fourth over fourth on our up capital incentive consecutive cash activity during reduction a County Texas and quarterly million are agreement reasonable a upfront if price to The would $XXX with disposal in expenditures primarily incentive CapEx. we quarter two-year million. payments

are water assets, gross interest of SWD four which half pending located Texas. associated divested of of on XX operated slides These The nearly water consists Centennial's dispose in and in assets volumes Reeves detailed approved XX, currently County. Centennial's all and infrastructure wells, permits non-operated in wells, essentially and

which, is QX, the proceeds leverage expected be our solid $XXX metrics. borrowings to facility, will of repay after-tax our closing Upon revolving cash already end used under at credit million of approximately further reducing

proceeds essentially these funding making gap associated program, any will with development us cash flow plug for XXXX. neutral Additionally, our

half broader Centennial's with significant water flexibility provide Delaware of divested The WaterBridge's disposed WaterBridge produced in is Southern historically a County. our will System capacity to needs. company on has volumes nearly longstanding market of service volumes into rate closing, the our and Reeves and incremental combined will assets additional XXXX if a which partner disposal is send guidance. to After already the disposal incorporated Centennial's LOE doesn't of WaterBridge, water pay Centennial

On a In redetermination position note process. December $X.X our It base. liquidity of elected view liquidity and million $XXX regard, million our on to At approximately XX, million is capital commitment borrowing borrowings slide based position. of and credit insulated important the $XXX summarize had $XXX biannual base borrowing an total to the as we relative $XXX facility structure million XX, we our cushion upon our that has we billion elected commitment. that to liquidity somewhat

statistics. months times. X.X Turning net like to first that in to Also, and to remind on with December the significant providing maturity XXXX, as at flexibility. quarter of financial first debt illustrated XX I'd was book XX% capitalization was is EBITDAX to Centennial's last slide us everyone our XX, net debt leverage bond XX

moving on on to into XXXX spend Before XXXX fiscal guidance, to X. moment to I'd put detailed like which year is a context slide

day $XXX million we D&C million At at our upon predicated oil You XXXX the will range. six-rig midpoint year at that growth that production represented oil of forecast spending a ago per guidance the XX% barrels with XX,XXX midpoint, capital program. recall a that volumes time, at to a $XXX had

of wells six-rig rigs ran XX original September fact, as a guide during early midpoint D&C growth result efficiencies. completed million dropped raised and occurred that all initial over which the we of of year. capital of we In XX% through and original oil midpoint XX% when of production XX with is the Ultimately, instead program the twice production gross to the We guidance. a we guidance at versus five generated increased $XXX X% approximately

more than and more to quality. in year. turn degree acreage of expected capital Essentially, efficient higher the a which a most had particularly us deliver half is profile the our and in XXXX second operationally of attractive much This a allowed efficiency in well also we got growth function production much of

reference guidance now on slides I'll XXXX which XX. can XX you to and turn

decided to we demand in rig to our Given X April order locations rigs oil the beginning prices, X oil recent reduce capital and in weakness have recovers. drilling to from count in preserve until

all for rigs run of Reeves midpoint a complete while and X% will gross X allow we in year, the in leasehold allow us annual is County. to X will at and production infrastructure the requirements majority plan For New meeting program build-out of This Lea expected in the to of rig our in spud wells oil This allocation Mexico, growth. to and County XX Texas. drive

heaviest a at $XXX earlier midpoint from come D&C CapEx XXXX represents the our be reduction quarter XX% standpoint. it a in that year, which QX surprise as at a rig result levels. higher the is for will activity CapEx as from the XXXX of Notably should million no estimated

we program expect production generate per midpoint day. XX,XXX to total, In oil barrels this D&C of

a is as which XXXX. Finally production percentage expected XX% during what with be total oil to consistent of saw we is

capital is which at reduction is estimated million million XX% $XXX the or other midpoint lower at and a levels. $XX infrastructure compared Facilities, to XXXX

$XX our is to $XX the Finally down we spent million million is which million CapEx XXXX. land $XX from budget in

fees the our from our LOE Turning the that costs. partially disposal of is to of are midpoint barrel is which estimated by reflective per portion in unit sale. water impacted higher SWD Texas $X.XX volumes water At be to

cash Additionally, is GP&T G&A estimated $X.XX $XX, at at midpoint and at DD&A $X.XX.

the slide to can our You XX. on how summary table XXXX in reference compares results that actual

review to Sean that turn the to over call With I'll operations.

Sean Smith

This Thank quarter you, Centennial. of consistent execution George. for another strong was

result to quarter, the As our a efficiencies driving well do tremendous as continues we job highlighted a gained down field. of last in team operations costs

As slide by we've year. last seen release spud XX fourth reduce XX% X, able been our quarter compared to almost to to the on in days rig average on to

achieve target during window, the Importantly, we XX-foot remaining time XX% to able our XXXX. inside were this, while of the of of entirety

compared period. XX% per completion quarter prior quarter an cost day the over resulted stages these Overall laterals fourth average X.X by stages on side, XX% increased XXXX-foot the well for year-over-year Similarly efforts day. reduction our during per the year in pumped we've in to our to

into and a efficiency. longer improvement with larger Combined size, material in translated our this capital has laterals overall pad

believe Importantly, XXXX. point for are we additional be this there CDEV a will primary of gained to focus be and in efficiencies

IP-XX approximately in of on Sand targeting XXXX-foot equivalent a Upper Bodacious Reeves per Bone Spring per delivered oil per Now and quarter results using or Third average barrels intervals. turning for staggered day well. the drilled to County, pad lateral XXX laterals slide The approximately in XXXX-foot the of pattern barrels of X-well was A XXXX the of Wolfcamp oil an pad X,

Spring in them paired with Centennial completed Wolfcamp a the majority Sand Bone XX Third Texas being A. XXXX of during Upper with Overall wells

viability the inventory on of This the have with the Spring Spring par with proven our our only these two of Sand. to not highlights Upper most been have Bone results importantly We but additions A. Third Third date Bone zones, Sand Wolfcamp our quality co-developing

a Approximately this later, companies with zero essentially Third Delaware of one entry reservoir the Bone when As Spring the techniques. zone Basin we develop Sand wasn't developed of ago top-tier too a reminder, we've costs. were to with for Southern Centennial completion few long this years two into modern in it the area

barrels spaced pads consisted the of of in an were and A drilled the approximate laterals The XXX X,XXX Wolfcamp Upper in barrels day Prewits achieved with per three of per to of approximately well. of Drilled per lateral X,XXX-foot Texas, IP-XX equivalent of of XX,XXX-foot Prewit wells an equivalent Also oil barrels X,XXX-foot average Nicholas each oil Lucy per Lucy at spacing. X,XXX average our or IP-XX usual Nicholas per oil and almost reported wells XXX-foot with the XXX day laterals day.

was of XXXX Now wells Sand. an oil. to The New per State laterals equivalent test Second pad wells IP-XX as and day Mexico operators upper turning Bone four another XX the X. barrels on historically co-developed is targeting of this four oil with over lower average Airstream this Spring or portions important have day This slide area per XX,XXX-foot of with the approximately These delivered of per in section. X,XXX barrels targeted interval previous Com

effectively. draining Airstreams the us pattern section this the portion wells six co-development on drilled representing a more of per spacing approximately believe were while per more accommodate to We reservoir wells XXX-foot section. Notably, our allow will acreage, at

The almost Duck of IP-XXs Spring and barrels and per oil shale equivalent Hunt of XXX targeting Second consisted X,XXX-foot wells per Combined, well. intervals. Third day X,XXX-foot of Bone approximately these Second or the of Spring oil average pad Bone of X,XXX barrels Sand per day four wells delivered per First, lateral

replaced lower slide XX. XXXX. commodity $XX approximately oil per a million XXXX cost was year a end at reduction just At three as end represents on $X.X a end Boe. year Total XXXX drill XXX% equivalent approximately prices of basis from increased production over result Shifting XX% across organically of at billion, reserves our of F&D approximately value streams. all XXX which a to barrels primarily PV-XX bit year our to reserve proved of proved We

items important Now turn note. few like before to it are to I back over there Mark I'd

while reduction XXXX represents growth. almost an positive year-over-year plan our oil displaying overall budget Our XX% capital still in

rig front well in On a also by of is material but count, this reduction driven the a decline D&C partially in the function costs.

is down CapEx outcome facilities and the other several Infrastructure, is year-over-year initiatives. and XX% of

lines or or result we the of be of longer gathering construction that responsible of wells a system's divestiture, our small large As will SWD CapEx associated whether for no SWD the incremental be diameter drilling it pipe.

capital Combined In tank dollars on also CapEx. existing further much saving more these to expect make XXXX, reuse tie cost us facilities savings and pads into we batteries existing efficient.

just plan be Our important. has also many obvious, advantages might that arguably XXXX less as but other

for going to but not not at that would also first dropping to By mention preserve capital, otherwise market this we're quarter First, the grow end rig produced price a of growth's growing high-quality suboptimal in be only production a not will in that a currently volumes inventory environment does just the incremental growth. sake. oil value not

as Centennial also continues it drilled organically different XXXX X.X X swaps over focus or additions, XX. replaced on be times year times each approximately inventory trades. inventory whether on shown was drilled last from replacing to organic as our slide no year inventory we our

forward. continue it currently going While be this to for might be not market key the Centennial in rewarded will

as look bit. changed Centennial's you go and back as our has goal presentations not If early XXXX through a

to the We oil entirely from is basis. where our an cash reach quality, our is which the our has annual ability on moderate any results evidenced funded these while And guidance. well by don't base question there's and think on point providing flow certainly are program execution I development annual to our consistent with to through growth goals. of determined operations regards asset asset our deliver

wrap-up like long-term the would succeed saying Board I while the such look am driving continued I excited truly value Mark execution, a personally to to I'm for and this as forward lead opportunity. stakeholders. to and by CEO I'd organization like to for Now, great honored to thank how

With that, over the call to I'll Mark. turn back

Mark Papa

Thanks, Sean.

regarding oil Now, strategy. macro them Centennial's XXXX oil global the and apparent I'll regarding the our some XXXX picture picture. provide to also management succession. discuss thoughts things relate supply-demand I'll Two are

business balance is First, simple. over million demand be one And global will years. response than U.S. production growth. Coronavirus-induced oil likely low this year-over-year current day growth XXXX We're preservation to less per year. be prioritizing will price the plan less second, than barrels past CDEV's oil sheet

budget time still production XX% to a amount small allow CapEx frame the occurs. in achieve our year. we growth. market overall approximately within is production growth a reasonable Our rebalance the until plan than and U.S. preserve to will that lower Again, global last to expect We balance believe sheet slowdown of we

expect everyone the we're reasonably multiyear four this exceeding year saltwater contiguous a estimate that XX,XXX monetizing U.S. and each disposal CapEx our drilling while essentially program in our acres year. the the within to flow one remind original arguably with By I'll five be a target, system rig reducing the we heart our best strip. of companies of record cash of shale a forward oil from neutral we track have production on current to basin that staying few based

clean a any quality, sheet, management companies that's balance that, strong I'll shale CDEV our wells also a a or spacing feet. note many we've get-go, pattern has good execution, had at aggregate well Texas not unlike From debacles. the acreage you combination. operational conservative other When spaced XXX and

you all press replace our be management, X. will Shapiro, our VP that as to have to and be I Smith will nonexecutive will COO. I'll announcing management June Speaking from Sean promoted seen take think release Chairman; me changes be promoted place and will retiring Garrison of Matt Geosciences CEO; of Steve

XX I'm a expected, to consistent develop plan. I behind Clearly, spec career as but confident to need the four I'd a We're have I've everyone, me. come because my I I oil with fortunate I'm I'm age in XXXX, until team market an retiring didn't equity years company the stage. as years E&P valuations staying likely step off and to this XXXX. I original started stay when And told where simply, for reached old. in

of XXXX. days I role. regarded Some remember of CEO functionally his from Community. ConocoPhillips Resources, since with buyout well in Investment Steve job may and you of He XXXX. the the his CDEV member until Board CFO where great a been with was of do the Burlington XXXX. Shapiro he believe, of He he'll March has as Burlington company running by and much Smith in very Board the joined has in been October XXXX by Sean Centennial since was

XXXX be Garrison significant been drivers been inception. assure closely of since with seamless next Matt this with is CDEV growth alumni since one is who's production and working the over to the we've achieved an the EOG months of has I'll that this transition. team three a

Q&A. Thanks for now to we'll And listening. go

Operator

Matt from line Instructions] with [Operator comes question And of TPH. you. Thank the your first Portillo

Matt Portillo

Good morning, guys.

Mark Papa

Good morning, Matt.

Matt Portillo

to industry able strategic a from flow capital pricing. that are free towards Just allocation to cash for question move allocation Investors are under generate capital a strip perspective. looking strategies participants

XXXX, For back these neutral crude remains XXXX levels, at as But paring the and a we a we outspend beyond, expect towards the saltwater further disposal. look cash into capital you out of with backstopped should depressed if $XX program?

Mark Papa

if prioritize pretty it's say, say XXXX And CDEV going very to of it environment. In crude or Yeah. that kind we're really, It'd I production think would growth. odd very, likely. think $XX the I $XX that a sheet is again remains that at over balance grow oil be well. to in $XX, Certain production in environment really will

I've to articulated. would that picture go back macro Again, the that

production out that oil under say I the $XX a production that would in in to zero if price and environment. that growth year-over-year be so say we're XXXX slowdown say year. certain go U.S. XXXX this going the I'd I'd environment. growth that's think you you in or significant to you're U.S. price see happen play to $XX that at far probably

expect supply significant in demand. would global one So, tightening a

in zero before of think U.S. I prices. you'd production many see go could don't too you with rise a growth oil year-over-year So, years

be a we that CDEV, significant growth be preserve wouldn't there oil U.S. year-over-year would balance too would we global that production before that So slowing prices. that and thesis under you the years with increase see the in would an sheet in many work at that would

Matt Portillo

bit? my question, little provide million That's of as spend dig mature then just on bit about you as very it facility over capital towards? And could you curious spend is just the a and color Thank as second relates starts time, helpful. should Any where picture you. going asset spend could we a start to capital bigger XXXX? to capital more at the incremental to into -- $XXX as the if you think how facility that drill And and question the more that

Mark Papa

do to that? want you Sean, Yes. field

Sean Smith

Matt. for You bet. Thanks asking the question

So, infrastructure material and in as we talked about pretty facilities it's decrease year-over-year. spend

So, we're the asset. of maturing certainly seeing the benefit

On what's the that tank costs think we're year going there incremental facility side, and are and allocated those wellhead includes We needed up some last at to re-existing batteries really so there years by to hook the what prior. seeing back into utilizing facilities well. like the savings things and from do that was

gaining efficiencies nice some there. seeing we're So,

On spend several -- we a as the young where is side up. infrastructure enough over But the well to infrastructure developed as still to years, will. you been asset we've pretty the this set able we're if position previous

reduction basis, nice annual infrastructure is spend an on there in So to a from XXXX XXXX.

to that substation bit year, to needed needs was spent be Mexico the of do we've A development. a last have to that about talked in portion of but infrastructure a XXXX. our where full few still bring is electrical needs spent be We to go include, the calls, we previous before spent outstanding live. part there's of New that be items remaining to as will that that little And are then that in up second portion in

the lion's XXXX. infrastructure the where spend that's of share is So, for

Matt Portillo

Thank you.

Operator

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

Scott Hanold

congrats first successful and your And long Mark thanks. Yeah, on career.

hope future think to and well point on asset been an I in you the your endeavors. industry leadership has Your

Mark Papa

Scott. Thanks,

Scott Hanold

and picture Mark sell maybe potentially when hedging You about happened moving CDEV point to us is start your occurs? did gets environment? market view you how couple -- your after, a oil this what's its to view out. bet. that change then Can on you My give -- about first late the given a assets look on has George, question would And which think balanced. them you talk in want over forward to on develop more macro talked Certainly, last maybe view you at you bigger the And and want of the you years? but

Mark Papa

Yeah.

the On sometime situation on we like were absent where this this the the year of being $XX the likely seem we me macro second balanced year. coronavirus, verge would were to half half in Scott, second it to there of in see that of the WTI

lay view. the on and Now the in into XXXX situation I it's balance likely you think there probably my coronavirus pushed

we XXX,XXX likely year what U.S. XXXX think is to million going XXX,XXX barrels X.X we're day see than is I XXXX And and less day to the considerably going year-over-year probably production so a that that and barrels from down XXXX. maybe happen to in considerably then slow a growth in XXX,XXX saw this

going going ability see short XXXX And oil think believe stabilizing to of balancing so I U.S. the us that likely. which structural in to all a there to I grow a XXXX is as we're and any production change in think than or of see don't of $XX we later no total

we U.S. additional that can this weak months balance at add ability and then weaken sheet XX – me small time period So the playing we're XX the some It's located acreage high-growth at where pricing but significant and grow CDEV and balance next signals a year-over-year company where a pretty as go that we permanently shale position have have in oil strategy basin, and see best U.S. to company be time when is the way. significantly say. inventory strategy, we the preserved small arguably to a during CDEV a over in let And production weaken strong growth sheet the the that watch frankly we into simple. have

prices. much And longer is of I months put a tell XX XX but oil whether you over XX these to simply be I that months, that can't months strategy. than period low period or So think is going don't our it's

that hopefully question. answers your So

Scott Hanold

Has views the changed? just Yes hedging it then. about And hedging Good. your does.

Mark Papa

turn this a since we it's oil. around time to is tell exactly hedge it's going when can't this to in I'd say at time at hedging, – period good not least The probably not

So I at any be tenure that my which we'll don't think not during long. is hedging least oil

to anti-hedger. been how I So the notorious strategy good see been maybe from that's a that's wants Sean transition not but organization. I've that well Maybe that. been as you one play a move a change change I can may move that after that's mean philosophy might away I leave. good

Scott Hanold

too Right. we on – early spot that conference Is puts save quarter the it you call? it on one that should one or second the for

Mark Papa

Scott. I'd say for probably call okay. the that conference May Yes,

Scott Hanold

Fair enough. And question. my follow-up

we'll Your the well the that completions had you coming XQ? in only on robust come those? in Can what or XX give had? in caused you of the little timing in Was extremely you a think size to a pads it you color can you're high online of but such completion I quarter doubts that. it – Was role model was what expecting relative what play

Mark Papa

Sean? Yes.

Sean Smith

have that. thanks question. look building to. a along comes the don't pad we Yes the some development, and certainly of something there's not with past that's when It practice just Sure. up in lumpiness that Obviously, for DUCs. that wasn't certainly We haven't doing you're inventory DUC

online. completed just a were fewer QX completions had of really being pad to versus the we wells So and brought timing related QX, when in

nothing just So positioned really was a there. timing thing. strategically It

Scott Hanold

Thanks. Understood.

Operator

Your the America. with from comes of question Asit line next of Sen Bank

Asit Sen

on the best your all Mark Thanks. retirement. Good morning.

per congrats be XXXX. prepared foot X, XXXX budget appreciated? pad CapEx lateral be Any and pad nicely or thoughts you slide Sean about that completed on will larger imply? XXXX size. the DC&F And would role. you views talked Sean on in talked in size about new missed. does was length the lateral remarks long on What your Because Your down

Sean Smith

yeah. for question out the Sure I'm again. pointing that Thanks and

the we X from well beginning year. thought I where pretty is reduced we a at the the slide from operations side of things think you the of were ended up going of a significantly where of accomplish pride what to we cost will year to representation end great if we

size, if of it's think of difference just roll good in maybe things. going a at a XXXX on split per that the pad that's guided our by forward. done at combination team I continuing forward That's some things basis view operations driven working the bottom-hole way reuse costs with have think is what that of really we've how existing of we've majority technical you efficiencies really systems decent I forward kind the mud field. foot team. drive a we and of look And to Obviously and assemblies whatnot. got D&C facilities a Obviously there of then with drive looking the our and

really the I geology, has drilling think working identify really we're to helped that's going. been avoid effective. as any with But teams, engineering technical reservoir et and us cetera hazards those

that shown been And that we've I efficiencies think to able we've drive pretty materially year-over-year.

those into XXXX. those guidance. do we I forward, lower baked that's our costs Going to But on of think until there none is opportunity execute more some throughout XXXX

Asit Sen

beyond And estimate for the substation infrastructure it. you to post the of spend? thumb disposal one spend. spend Got Can recurring a discuss a water for and rule you. electric good XXXX post George, quick on Thanks thanks. Sean, update infrastructure

George Glyphis

-- there the is be tend thing there little challenging more bit side infrastructure a to The lumpiness on facilities. to Yeah. does relative

difficult it's to give you good So, that. frankly a I number said on

had think -- a I generally XX% approximately last that good I going forward. think referenced of call split that's And I infrastructure was the of on rule historically. and quarter's thumb facilities relative XX%

adding incremental monetizing CapEx the cost. on a lower is go-forward basis. which have we on say some XXXX, SWD system requirement substation, would I will power In that Although obviously the

really come those tough do down. I predict, So think it's time costs to over continue to but are to going

Asit Sen

you. Appreciate. Thank

Operator

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

Kashy Harrison

my Good for question. and morning thank you taking

like what was that property looks just also pertains wondering you. related Thank the was talked if about just through K, one acquiring any XX,XXX acres the looking million of in color could just then to? -- was there proved wondering, all was share Permian first my it about a $XX additional So section you looks that there on And what Basin. to? Was where about net it unproved acquisitions. I you like

Mark Papa

Yeah.

-- one. second On And want George the of the part first you part I I'll first first on don't or question. of check might that part someone that that. know of to fielding field the the I'm

play did you exploration working K we somewhere relates manner that acreage to what time Kashy. in is Permian in looking our And on the information we're on drilling Good the play. still it I'm your disclose the and that's homework just that existing to acreage -- that. confidentiality plays there the looking you record in this and know particular half prepared of like we're to That on relating for don't answer track at reasons, stand consistently EOG, So in that's K still first circuitous a this job. exploration acquiring acreage if at We'll to mentioned that new plays. year. is I'll for Yeah, testing my all sometime the be in the it And Basin. something

for if of that the see you George, second particular can So half -- want you to field it, field question?

George Glyphis

course I include but we've the Kashy. have describing of the what front the some smallish in some mentioned, last will think, leasing me. I and activities you're acquisitions Sure, also Mark don't of of part of But, year. done K throughout just organic

of -- of drove no kind driver different So a compilation but one the things. nothing that number,

Kashy Harrison

then, there in I the what Got XXXX, for just D&C And the the non-op? spending helpful. fronts. would to percentage that does of XXXX? most of both allocated XXXX to of release And entering the on a track D&C comment, it. opposed in -- how I was most That's comments curious, as was be Thanks in that think, on operated spending non-op. was

Sean Smith

we're than for Kashy, XXXX. taking a X%. think, it think And with for I less XXXX was view consistent I that

Kashy Harrison

of retirement. best for Mark, that. in Thanks And luck Awesome.

Mark Papa

Kashy. Thanks,

Operator

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

Neal Dingmann

Prewit, Yes. on nine question multiple Bodacious slide -- just Lucy more such the My you're pads the new first on as as this Southern doing targeting will year such And these the position. results. wondering on some or your more congrats I'm centers of do the on where here, the of in pads wells all sort multiple formation? multi-zone target Delaware the you envision focus one of just

Sean Smith

the question. for Sure. Yes, thanks

off in both pad reservoirs it of us combination doing it will going I develop in that, of definitely of a the multiple shown that, I is a those. to forward, And asset efficient Mexico New think think what most But the successful. is that, allows be single way. we've

of forward. development large that our certainly, will be a So, going portion

Neal Dingmann

follow-up My $XX Or the about towards? -- that on bit is land CapEx a is it $XX activity, on what holding given the HBP? is directed any issues of Or little George million has acreage? million part of is talked to second existing acreage, most on question just Okay. what that in maybe slow there

Sean Smith

one. that take I'll Mark,

small a that land position But have sure our that is we our do with our making of we can held to together. budget majority the portion rigs. goes So, acreage retain of the

us of and the in our will the that allow two And beyond. XXXX think, I so, combination to together position keep

Neal Dingmann

Sean. Great. Thanks,

Sean Smith

you. Thank

Operator

question Will next from Thompson line comes Your of the with Barclays.

Will Thompson

XXXX? You're potential morning. cadence production XQ us good Matt Maybe rig or re-retirement XX congrats and maybe a carrying can off Sean fifth to be help through the completions, your promotions. the Hey, strong Mark, through coming with understand on April. you'll and on for congrats a Sean George, you

for versus question, that can mentioned maybe in still half? oil be at was four set it you for would but oil comments any be then, provide would growth second it's targets CDEV What I one How a half And XXXX? that does helpful. rigs. And growth color in reasonably the moderate can know a that up prepared tough

George Glyphis

tough quarter. Sure. rig dropping the end a Yes, But, it I we're think, I is of first question. think, at a the

a be we'll year, the of balance program. the so, four-rig And running

there annual be an think, we can have don't give give assume quarter, capital of quarter, from of Obviously, And will first midpoint we think guidance. I to view, running. of I lumpiness. highest bit is because point going guidance. you the in the year. We be our a So production for a quarterly But for effects then forecasting but our you'll also the see that production see rig of what we are little extra QX, you'll

some from So assumptions I statement. think you generalized can that make

Will Thompson

less of stack curious my any about net Would Just shows about XX-K there? PV-XX XX per Okay. With further your or per flowing in -- implies XX thoughts Thank then to current on value billion enterprise back consider offset that's $X,XXX selling your WTI. the part acreage outspend? some than acre. inventory you at $XX,XXX math PDP, barrel $X.X And the that indicates you. around

Mark Papa

this field little acreage got no. outspend a Will, not and Yeah. any of at Western to mean, I'll acreage we any acreage I caught up cover bit that We've Likely, our question. significant our point. sold pretty we -- well on was that during fringe XXXX.

now, just core. acres the tad a XX,XXX have, And we than is that XXX% much pretty which so say is I'd less right acreage

unlikely selling option it's So County using we're acreage any try and County be looking cash at equilibrate sales neutrality. of we'll not consequence. acreage either at And in any of flow or to juncture, this to Reeves Lea the

Will Thompson

Okay. taking for questions. Thanks my

Mark Papa

Okay.

Operator

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

Leo Mariani

macro in some follow-up Mark Hey, in rise kind thoughts of little articulated hopeful prices you comments Wanted XXXX. a and the guys. on that bit of a oil to

to my Just oil consider Or XXXX? in of wanted in just CDEV adding here? would the half we say get kind with or price put rig? not there's sense to four existing whether get another rigs of a If an the XXXX, you recovery -- of flexibility were second stay considering

Mark Papa

third-party Well, we've $XX mean, forecasts be some certainly have the to be to of forecasts, by certainly if out we the forecasting look will mean, there -- quarter up. you at fourth picked there's rigs I are available I there barrel. are going WTI be And that the a flexibility.

back rig. that to So consider we adding tightening would to where occur, occur, a certainly where say that that I'd

probably XXXX. so, we in if XXXX that our possible that in see up consider we'd But change and as then likely firmed articulated XXXX in to XXXX. firming change late at most a XXXX, Even juncture, and back That's making this the tightening would say, in -- then continue that with the indeed we've to tightening and XXXX, and we the we likely the would this through and program we prices oil scenario XXXX expect at be see I'd stand prices of. capital in program pat a probably it's opposed rig oil kind until if make to adding the scenario most

Leo Mariani

terms Okay. for the of thinking That's helpful sure. over there, color in

G&A you Just $X.XX a guys per Boe, cash just over the on XXXX. in guidance, in, came question

$X.XX, I in to go you XXXX are up, that $X here. saying guys say, to could think

kind basis. moving per-barrel a a you're on up little of So bit,

going rigs sense get be I a wanted have that what might thought of be driving guess to G&A up maybe really would XXXX? that? wouldn't Just in here, with less, I

Mark Papa

George? Yeah,

George Glyphis

Sure.

did amount I very a of think XXXX. of modest we hiring, during the course,

But there's of So levels. that. a little bit well increased associated staffed I cost for current very we are think with

charge out G&A. a XXXX for saying you still and contract our of at dollar that back a at an least and roughly think factor if There's I per mid relative is in rates QX a small the $X bit to was look Boe, And our per that on for peers if there to very million But settlement Boe step QX, there. in offset basis. midpoint $X.XX, the which well there at we're dollar cap you

the very that are We towards much end metric. lower of

I efficiently. run think to philosophically very tend lean we and

cost while we little very we've where of increases, company the overall standpoint, from So on historically, seeing bit a G&A. are is well I to a think relative been placed,

Leo Mariani

I big year-over-year in cost just of you guess per color. on big the helpful said guys reduction? F, drivers And maybe half reduction, That's think was main lateral the which primarily the XXXX, that caused and to Okay. second I that were D&C the get foot, well

Sean Smith

that field I'll Sure. one.

middle that portion I last service year. couple was a of Obviously, of bit a think was of came things. -- of a that down it at little costs But half kind it. in the

the it The in we're the was seeing greater portion that really efficiencies of field.

you down. completions. avoid had and drilling your potential I any we've identifying you of can it earlier, the think, get Delaware Basin combination, now and our portion said experience wells our of out, days to just those, drilling where more to reduce in with in takes these technical that we understand as repetition That much I what teams hazards, when

all And so, our cost. combination efficient, that in us be to has that much D&C the of allowed more

Leo Mariani

you. Thank

Hays Mabry

thanks, Great, in do more questions Q&A? the Rebecca, we have Leo. any

Operator

There are no further questions.

Hays Mabry

free Well out lot. can everybody Have in disconnect. with time, Well thank day. everybody great at this And I'd interest great. feel a for their like Thanks reach any questions. a Centennial. to to

Operator

you Thank participating. for

may this time. You disconnect, at

Permian Resources (PR) 25 Feb 202019 Q4 Earnings call transcript