PR - Earnings call 4 2023 | Permian Resources Corporation

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Operator

Good morning, and welcome to Permian Resources' conference call to discuss its fourth quarter and full year 2023 earnings. Today's call is being recorded. A replay of the call will be accessible until March 13, 2024 by dialing 877-674-7070 and entering the replay access code 855841 or by visiting the company's website at www.permianres.com.At this time, I will now turn the call over to Hays Mabry, Permian Resources' Senior Director of Investor Relations, for some opening remarks. Please go ahead.

Hays Mabry

Thanks, John. for year on XXXX all quarter company's you full and earnings thank joining the us fourth And call.

Chief and On Hickey the X-K results. Oliphint, with Officers; fourth release a and Will February our Guy quarter James Walter, an we call our Chief Form today filed Financial Officer.Yesterday, are reporting XX, earnings Executive

earnings involve and to that risk Forward-Looking call comments during today's the reference are also an of reasonable filed we tomorrow which the our SEC, statement and posted filings the risks expressed will they the that statements developments with earnings afternoon.Although We on our forward-looking assumptions, measures of our would with uncertainties are are of be including are is comparisons presentation actual to and and in that that periods sections actual Form could our and and note plans. financial guarantees across are based results like help expected expectations we our believe non-GAAP materially. affect control during many discussed to the performance may results XX-K, detail We Factors peers. also this to our these in or future facilitate refer website more Many of that may not Risk beyond differ call.I

are Co-CEO. or which nearest Will measure can will to GAAP presentation, corresponding be I the available non-GAAP any the website.With call our a we over measure earnings in to For turn on Hickey, that, release reconciliation use found our both

William Hickey

Permian year full an Resources outperformance, and of fourth another closing first under as name. out excited was results the operations quarter Hays. to deliver We're Thanks, our XXXX of quarter share able incredible PR to year

since highly past play to is, a we on the over good returns Delaware about deals, Permian expect shareholder demonstrate through low-cost the demonstrated efficiently XXXX, this PR's quarters business, inception.As and take pure we we across maximizing look how operatorship to assets, And to to value at contribute operating moment industry-leading on business how executing core continue accretive continuing walk PR. to X that all which value. we've want our just here think I to creation think I

metrics.QX PR's of creating highly all flow, Our focus expected the year. oil per the accretive the per production across midst things. exceeding the outperformed, an flow positioned transactions and and with team a cash and day, This on barrels on to is the per XXXX Resources outstanding share increasing XXX,XXX growth X able team the deliver completed fourth total that's continued on during generate of external to and November growth day And value and deliver to without quarter production the internal both operator Delaware, being oil development this was through share free acquisition on still XXX,XXX peer-leading relentless plan, equivalent closing per allocation In production drive has capital X, production of basis. of was to thoughtful able we attributable leverage.We're a cash Earthstone per production, beat Permian expectations. barrels outsized in to lowest-cost us share focus plan our our

legacy as planned. assets led most the the Earthstone higher-than-expected between legacy outperformance more in than we quickly board both a times synergies and significantly, First operational saw team and reduction on realized across PR assets.Second, downtime to Earthstone run

cash addition across capital was leadership the quarter.Our flow the while been cost mode decreases average drilling in per-well to $XXX legacy increased and contributing program capture higher and million decreasing costs bringing will quarter. maintaining allowed forward production activity, for quarter-over-quarter our in in able on $XXX proven drive integrating executing playbook our continued by execution, foot.In and overall controllable continued and aggregate.In believe to while the continue in shareholders. cash significant on Earthstone integration finally, to quarter expenditures fourth Even culminating its integration with LOE share XXXX PR days to despite line lateral outperformance quarter, structure fleets able adjusted wells in meaningful our rigs to largely increase operational driving producing and leading in legacy Earthstone and our $X.XX due team to flow, the into per to into report per synergy full low-cost strong Third our unit demonstrated focus to driven per the to in BOE year carry costs. cost the program, $X.XX a or PR costs value to business. fourth focus team the strong we efficiencies low-cost were seamlessly that to into on cash efficiencies per-unit also the Overall, we've plan, impress, program of with lower reductions, completion into of addition, optimization incremental free transition X% controllable program free discipline, portfolio

directly acquisition.Most a Permian ongoing high in which swap, many within of addition represents the to our in closing returning portfolio. the our core bolt-on one return after last and royalty just Parkway sizable Resources X of the non-core XXX the saw you our ground which added a assets offset series X,XXX XX,XXX X acres is transactions As game. core months This net acquisitions divestiture, net highest of over of $X.X billion a announced the notably, month, acres Delaware and add position, locations, Earthstone Basin acreage

last great path wells going material year, and key drilled believe that and additions to standalone efforts basis.We a of focus to towards Importantly, for inventory NAV, continue is replace on we when these be excellent you our type in execution value transactions on will combine from our the management us a smaller position, and all difficult stakeholders, deals inventory improvements more forward. proposition overall a than our of the portfolio

to per during the plan $X.XX base be cash increased are us a demonstrate return capital announced free and growth, able results share dividend QX our by of total shareholders flow to sustainable deliver $X.XX per dividend, share to excellent base we and to we next dividend quarter. to per share allowed excited as increase quarter.We base XX% quarterly Our $X.XX to of

paying share.As our our hit team phase $X.XX during an of quarterly $X.XX and all-in remain capture running price cash synergy total addition, the the to quarter, In the with shareholders mentioned both committed has with remainder buybacks. million of framework, of for the methods of we $XX.XX share share, per consistent of we via return free XX% to I repurchased again, shares returns and/or bringing we flow executed we once quarter.First, ground of at before, And aggregate variable an a the absolutely Earthstone the X per acquisition. fourth the capital variable to per dividend and incremental of announced integration of dividends

will of giving beat timeline that of level able in we be ahead schedule, original well high the synergy target confidence us are We to laid out August.

to because completion to want effort and that's it's well a add XX% X has initiatives per immediately efforts. improved that faster has gone completion our on shows drilling a the as has been and shared the acquisition, and closing amount And a XX%, XX already reduction results, drilling respectively, versus and with to Earthstone casing per XX not changing by the practices times. since returns high realized it's but equipment reduced of pushing were or closing, XX% out XX% in by drilling completion efficiencies, Earthstone around design.Slide rigs and shortening drivers, cycle to and historical not cost just swapping time largest well been have and and close legacy unified reality savings best costs small Two the second into at to both team.These that take costs stopped almost highlight graded realized improvements. plus those more up meaningful come.I improved D&C efficiencies of savings, have Earthstone the team Importantly, wells on across

same drive next cash to leadership allowed acquisition look peer on operations field couldn't optimizing update on Earthstone progress positive low to levels. more leading operations focus another also incredible to large has us results and relentless to-date and in in production the controllable providing many forward the also costs Our quarter.The to ways. team us with small maximize LOE synergies the pleased that We synergy be made cost front, allows

expected XXXX James will which cost, get basically plan, with than here to combined historical able Our despite cost all-in costs. the outline business PR's lower structure Earthstone in legacy minute, benefits higher to from a back

business Given running over low is critical free cash a share cash to strong cost to plan. turn it generation.With that, supporting flow nature XXXX talk to I'll to per free the James marginal of flow,

James Walter

Thanks, Will.

capital maximizing which allocation returns excited to discuss we're cost XXXX X, low share focused through efficient per thoughtful Slide cash to is free flow on and development Turning and execution. program, our

every minimize team location for amount I developments a returns a the work entire maximize from is company of or future result ensuring focus is want return in on and plan department Resources, to any at that tremendous Our to work Delaware this our to the Permian into high allow thank of Basin plan.Our degradation. went goal that the well while we

oil to the full and XXX,XXX to oil BOE Fortunately, our day drilled robust to between and well per between in drill as production what average XXX,XXX average productivity.For similar us expect areas, we XXX,XXX and and day. year XXX,XXX we of barrels zones, achieves to XXXX, packages inventory such, allows and similar total per XXXX, production

expect of allocated to during to and which the XX% year.Our half program the production of half XXXX of half $X drilling completion We approximately of operations. the and half the be lower the during full back consists in is billion, upper first range of the capital

XXX turn in and expect positions to The investments PR value year. beyond. that We drive XXXX is continue in balance to this to wells years line infrastructure primarily in

is difference and efficiency capital are and in our Basin like are to terms cost program find returns of prepared but effect today's to asset, structure other easy.Our This value to to lens for well makes up costs, put, winning the as extract the when percentage CapEx conclude with and of ability year a is that XXX cost such metrics. not of in or current input year, X, over and real multiplied a to our to create will expect today. our to higher Basin lower would continuing value the which elevated in particular hard proposition like we such changes designs, $X on which re-rate is BOE, base we asset Delaware tweak do emphasizing a business enhance Earthstone worth those team cost investors. much in to to XXX% Mexico is receive pure against increased or analyzing expect believe we XX, largely and continues half consumables, And every and single efficient deals slightly operator future tuning efficiency per With peers, mentioned, on large cumulative It's that program. come In represent which focused really our these find last to leading drilling assets.Turning reduce but billion individual a continues strong well X, by focused base possible.I'd is Slide our we as in new for drilling and to $XX adds XX. work helps only to Slide transactions on for a XXXX, always we announced, Resources capital looking basis the recent the proposition you ways a size improve. enterprise for and Midland in belief leadership execution remark dollars our the a to productivity value to growth maximizing be the remain given than our formation returns are cost to that companies. Permian we very value as reemphasize our to Since pressure the and on ways driven be related as better with quality as can more from multiples. to of XXXX.Our was the New delivered not flow also the our cadence, slightly have ours better sector.Thank and Delaware a in operations scale greater we acquisitions.As controllable the to drives well from and be better optimize This our we front execution, and structure compelling that cost on cash our our weighted.Our emphasis shareholders Simply some We outsized high operators cultivate the on outperformed same pumping to prices for production areas Resources, our part on successful do now We plan value business such By key to given Permian concisely these our to sits oil Earthstone, continue seeing continues of and well and outperformance cap attributes assets plays as input substantial Permian, and be cost lower it over per lay XXX. The development class every opportunistic an focused screens the a model free be position this than back came to relative sand, less, share there businesses that other with into point sector low such fewer portion at fewer higher on from looking Permian we in by largely result, we pricing with meaningfully of have these we Permian.It today. best-in-class a team key and highlight head for our of in accretive to a out to cap by S&P want and cash impressive XXXX.As quickly the legacy leader turn unit that some approximately into solely returning casing and for rigs the CapEx in room returning the the and expect business highest combination. we through of how Permian improvements value efficient assets Q&A. energy and particularly moved our solidify of getting for in focused leveraging core be to as now the and large as will

Operator

from from Markets. question comes [Operator the line Hanold Instructions] of Scott Your first RBC Capital

Scott Hanold

going X, guys, bring Great to we so, is at efficiencies, they're the in synergies to could the the fast the if where a to cost costs PR are those? that really cost now, those what right And occurring? good you you areas -- of like And how to give coming down difference legacy kind as sense Like at where quickly quarter, us Page be you the current than to see and and expected. what can you and down of PR costs, faster walk drilling to Earthstone turn casing? that you do well And can where is there? gets it how you get look

William Hickey

I way frankly, -- we we've would thought than Look, made here gotten we're think way I we've faster Yes. -- be.

big day X have a get of that rigs that could If months chew the how fortunate Earthstone last already They start to X you power. achieve X to we It's bore you design didn't through X our well before had backlog able months. the -- running effectively the think come, out that. pricing our Earthstone we going casing.So more up, to and build think not picked across to post about bit position. of implemented all able just them a we of cost of equipment. to And implemented kind such go what's casing all design we closed, were that's reduction efficiencies dramatic in and it's we've X. in kind were we're swapped casing kind stuff We already of We've if it's the the of just our

and more to over a to drive or of that X trying frac swap there out our on X few months. side. efficiencies where we're to kind that But done and to than time.We'll get the drilling continue kind rigs have to, we'll just we're more in got we've of more either So standards to have up to halfway we've get

cut be from I'd time really cost So the able to the both well feeling say also get to there. we're that quantum we'll dollars of about good the and Earthstone absolute

Scott Hanold

of year. coming that obviously the wells the as current seeing with and looks going count into you budget, -- we and you count? pulled XXXX would performance kind about guys XXXX rolling faster, a -- your you just that? efficiencies And your level activity rig higher you reduce guys allow a of sort Understood. it question pace if through maintaining year the keep But a few think you to really better would just well it's and year. efficiencies year? like all next next you at of into keep through if the Or pace on produce continue So And will next it's

William Hickey

X quantum there's interest is think throughout working of think of focused just running thinking answers Kind the activity, I'd dollars kind year, both as our see rigs, and business continue total to first, as to budget? say little up we around we're rigs number And around and want down about reinvest. give. move of as we're I we're in optimizing bigger XX that the the pace the to rig larger think kind a I'd say we swap that I'll about cetera. pads, you just follow of dollar got but gotten out just much also year and Yes, could on kind of I'd as as et around moved bit, this XX activity.I better XX fleet more how what kind bring we've that's optimizing say of you of today. capital has we

we because kind the you and ahead that we'll doing long-term they've per been and are year consistent a at profile $X lowest yes, see on unit good, to been value go the opposed focus get to relatively a things as I'd it into very, we'll focused and then, spend -- billion.And wells on we the around things, towards ever we basis. the you capital kind of on take business, months very X on highest if you'll lean ever in So going are we X more speaking, quarter-to-quarter are cute capital returns what ago, costs just budget the or our bring QX basis. But case-by-case of more the of some think like to bring say get where willing the they efficiencies they've end to are a these and are as historically to the -- total wells I extra on, -- when a quarter, add were weird of not?

Operator

comes question from next Your from line Truist. Neal Dingmann the of

Neal Dingmann

first question right My just to going is at productivity, well Slide looking XX.

more just just Specifically, I'm Lea is year wondering continue child wondering mix I'm how in only as down and not repeatable as we And year Texas? throughout but go you 'XX? into -- or Eddy then maybe had? Counties, to wells plan same of the you you've or this this always production, assume is sort into next Will, Should more

William Hickey

very, kind And it's 'XX because all got, No, 'XX can similar. lined of I specifically basically very, think it'll 'XX, of be similar we've a kind to out. to speak very well mix. I very schedule already very

really XXXX, Our development XXXX, from methodology XXXX. hasn't changed

future kind we the it seeing And marching to right to of 'XX. that pads of methodically kind see you're sure of in seeing make 'XX.Just flatten and -- position, degradation. this again you're the expect efficiency. out are the join across in capital minimize And any to 'XX size Now you kind I'd

No the no news kind quiet, of So good for news for it on us to is side come. well should productivity years the story. be

Neal Dingmann

second on for hear. James, then, fantastic your game. just And my ground well, to just is It's -- on you,

Earthstone very it even larger great to degree here a Because was efforts been grassroots that speak certainly big like have and you the continue provide? and which trades the notable, done can bolt-on that of will seems upside you've some While job, recently? a to deals, deal

James Walter

But we of think an accretively business all incredible doing back slide places deals, incredible obviously went in that have of We've game awesome. looking I release aren't kind put looking. got in a ground the the are to add through Yes, I January there our up in people in team, land acreage Delaware day team is detail. here. that development out every an lot a that that

but So really XXX I added think just last did. year to think acquisitions seen that's XX,XXX position.I you've piece cool I some a almost acres little this, a can of our are. stats. drives net our we mean, of different secret a I'd than continue those lot something the think PR sauce I we that But way deals. small in it's peers say to value do that

'XX the we're continue know, right feels still at deals pipeline prices. And right the 'XX. get can for good the done to You confident think I we really and

Operator

line Your the next question from of Gabe Cowen's. comes from Daoud TD

Gabriel Daoud

year you you in looks was what and that project could what on on after guess pad refresh hit the is talked size first the our where just size year year. is like I the Delaware. the increasing last like going if pad kind just about overall Delaware? size just for or obviously to to target relative the this I this the highlighted memory spacing going wondering you'll would And you of be then in I

William Hickey

mean, wells nothing it But I acreage couple some more higher calls slightly larger we're year change isn't just than year wells the we the methodology, this pads.So acres and anything will than for that. it's wider this pad, really It's drilling or a last keep development factually than up with fairways that in which correct this size consistent a philosophy. pads of slightly year year. of of as larger from be in look than more being bit It's per year. where development to it a really the perspective. just, got spacing But at calls we're that ends kind the change development Yes. bigger that the of footprint of wouldn't couple average for were view we pad last I any was our we've before, more we drilling, had a as maybe a

Gabriel Daoud

And about infrastructure What should little that maybe that just we it. spend Understood. a And a of I could a you kind then and in is capital? level XX% expect of projects? infrastructure bit as talk Got 'XX on beyond? guess similar follow-up, non-D&C Okay.

James Walter

what catch year this build of it kind some is on Earthstone out want stuff some really to stuff some up where just kind it's way. and look, little bit of the a batteries No, we of is, side, go PR the is

like of cost little with really catch a Earthstone, And side this really, spend. kind on up of or kind have had.But always to we've of for good I infrastructure gathering that like one-time of back year a and forward, capital continuing probably I Mexico, think there's know, little percent bit of we're that in incremental it kind we're a in the that, more of as takeaway some make bit So don't New to look budget to something you nature. a sure as of XX% total on

Operator

the of from question comes from Your Parham line Zach next JPMorgan.

Zachary Parham

and at about of First, all? heard processing maybe you that's been tightness And issue see this as all you've from your a program you anything an processing natural for talk headwind. been 'XX some about Has this the as gas in peers issue how some far we've if standpoint? Mexico a impeding New managed

James Walter

any really and No, part we're issues going the processors both we're said Texas.And foresee of gas and historically, anything of calls basin. don't never in transporters and midstream biggest partners had of in That's in fortunate Mexico in we've best past of New kind and looking really mean, kind that forward. natural back New got the we've Zach. right We the a it position on Mexico. long-term in I that the some fortunately

position I just right foresee think issues the to of the But on places. midstream right that's partners kind in side. have any in don't first whatsoever we the being the

Zachary Parham

follow-up just my on taxes. cash is And

color XXXX. in you taxes you cash years? million cash in and trend Can to how got $XX future us taxes some in You XXXX expect for at give in on

Guy Oliphint

Yes. tax I course to beginning in getting cash mean, 'XX. payer we'll closer start normal a

'XX which oil we have We obviously. using we're a today, of meaningful beyond. and NOLs cash start taxes have to to in price, we'll more and But portion trending 'XX in sensitivity some

Operator

Huang line from TPH. the comes next Oliver from question Your of

Hsu-Lei Huang

sustainably if you was LOE incremental lower guide good of help ago provide And so XXXX ahead standalone to have integrating done kind the might details understand a from to drivers X quarter. the just quick, all at just to so able business? wanted both with But of you Great Earthstone obviously better some moving being be of job where for the the the see all just and figure looking schedule. QX us Earthstone assets months or for

William Hickey

change I -- was kind think step own. where down have a things its it think the of mean, big of in that have some it. kind I'd headed. or that Yes, was from are that of credit one, coming there's drivers that that maybe some on to -- we've LOE applied I quarter-over-quarter I kind kind team improving slight that best we're working and of accelerate the X some was practices -- helped on pre-close. is just LOE their X Earthstone things give say, and But it LOE was

failure X we're the we're -- practices artificial of addressing we water are disposal a how kind rates side blanket a and that run at don't not see little LOE. forward ESP set.We've that you the each probably the well denominator blanket of of side. to Delaware, stuff other the then of will PR And well suit. needs, they area be company, of we've the there.I benefits to a go QX see really we're to that same pad been the -- on and the helps. to a the pretty there's type sticky And to Kind we lift to and PR in the bit kind overall It's kind And we're kind challenge not of and go close lower It's is not and would on which It's put tailwind bigger going company. of lift times spago successful.If help So you over production LOE the very company, we're ] out a area. quickly. that's go profile a blanket because a different kind wells across right really doing lift for. built -- [ secondly, every in optimizing a got every for may what really just think what gas starting are more of engineer give right lift better we're obviously call the best

which lot that there. the disposal water we areas do way. offside in wins, Look, go the water in -- tackle disposal we that were where of I side side the water I water So it. some there's bigger to for with some a quick LOE didn't on to right solutions in kind contracts to of recycling had solutions we'll come think or really, really a Earthstone us. on wells and stuff that had or have We've But more respect water. good good expect tie can continue

Hsu-Lei Huang

helpful. that to But those kind laid That's this legacy just already of drilling into out be to for to improvements wanted much I see maybe at that certainly realized been taken good of with that definitely off year? business, mean, for have the room looking still well completion PR the to of D&C kind future how towards all starting just of for a right see some follow-up. Okay. And understanding running solid Earthstone. and the bat budget has efficiency you there's converge the benefit when cost account the

William Hickey

is taken It into account.

get hopeful we try take of achieve doing Obviously, we to expect But from that between synergies I'd and does all we're get year end. say to have more. to-date we on, into the sight of of kind what to to account achieved now and the everything it. So budget and expect have line

Operator

from question comes the ROTH Mariani next from of line Your Leo MKM.

Leo Mariani

bit here Obviously, Whether had you production I fourth It's wells can some quarter, benefit? extra a get extra more non-op strong hoping detail. was did little some strong I'm in volumes. very, provide mean, growth But more and there's -- line versus I you you very oil very during quarter just was quite And both mistaken. in my this turned and perhaps that total you that a had I few a in few maybe guess were last. understanding wells on?

you the could a there? on color bit provide maybe just So dynamic more little

William Hickey

be just biggest online just I'd Leo. the legacy and even well we some Yes. I it would outperformed wells the our to mean, Earthstone PR I The quarter tried in outperformance. wells the the address brought in of say expectations. script, driver

So that's beat on volume to going the Earthstone on make some -- is of change we balance be made up for were less be quarter.The in half progress material assets the QX, kind to of more able than the to of kind downtime step going downtime. of a in

we exact had with lastly So numbers. and wells for did then don't we the of we couple than It what into And really more being, of was what know seen budgeted a QX of bring better historically, of runtime on producing which just helps production. -- fracking expect quarter. wells.So, couple the the I with some days we've to kind be into and in faster XX% wells were to And effectively amount assets some And the to X. going 'XX. didn't again, Earthstone that's drilling meaningful quarter we faster that expected be XX% day start were.

kind that just of quarter. into So activity brought some the

Leo Mariani

be XXXX, little I at that half expect then color. course a during And you the mention low in helpful? a 'XX production first No, of guys quarter Would front looking I'm expect Okay. Just is the decline helpful be bit any year. in to did a of generally of you it guessing all weighted And bit color build would a think around the of generally cadence of have and you just to bit CapEx and kind kind is that. a that's throughout you of that terms maybe on to year? production little mirror

James Walter

CapEx is little you half back was But it's said what swings. not said a you pretty is it's -- weighted. half it kind not production right. think how giant weighted it's Yes, and bit just modest. I bit little I'd it's say But is right. of a front

Operator

comes the from next question line of Leggate of Your Doug Bank from America.

John Abbott

This is on for John Abbott Doug Leggate.

The on is Midland first question position. just your

that do on Just what current of is And the Permian your also position? latest thoughts that you given assets, just continued in frame? interest is what your with production the and possible then position time what

James Walter

Yes.

about of is day a great flow oil per position it's And Midland XX,XXX the cash day. BOE and XX,XXX barrels So business. about a

and where good a we've cost, team our are Earthstone declines, in the low really et cetera. team think got I PR low place consistent

So we having it. like

to-date asset pretty on of this first say the done just excited couple I'd side. that the of has our year, -- we're think wells half team what I cost on a and about doing

boost think value and meaningful that asset.But Basin-focused I time been business, the energy focused. a that there are think really where reductions a of our to long-term, are we're we've there could of majority cost big I capital, Delaware over be the some clear the and our that's our

term. we're look most strategic time all think But it, a asset, other I'd that's of value don't road, in if at of ways we the better with type the I than to as say anything Midland do there's we I'd to we're asset down do that understand say kind the more But think probably ears. So all. I if XXXX over thing extract near anything Basin owning to like going

John Abbott

not than of for focus about mean, follow-up it. maintenance Appreciate it is long-term million for the how about business? of CapEx? look do midpoint you at think maintenance then How And your several guidance, I less dollars CapEx think sort that. our while your question, sort you long-term your necessarily, do you of hundred do

William Hickey

be of you're for that's think months, of where CapEx you or if calling maintenance what you're just going were the QX kind peg X all production I last where the level QX kind predict integration said. of given we I and right. to hard in be acquisitions and -- then -- think Yes, maintenance. we'll exactly to what to of peg kind I over kind But in it's a mean,

million the $XXX less midpoint that. guide, something about it's than think of I like

Operator

Annis Your next from line Stifel. of from question John the comes

John Annis

quarter. the on strong Congrats

was field practices primary your around what downtime? the specific what to question, digging first the downtime, of minimize into were in source further And my implemented you've it? Earthstone's comments some For of

William Hickey

One starting kind is And on There that a team measured Try there's measured to is it's done said. bit them failure a quicker. just of a lower or day Look, have And thing little not turnaround lower kind bit a hours, to down, a or just attack week a longer. that. think is of ways get do progress It's a of time rate, be go to when in wells that or weeks.And I in failure day is, little measured in the in I are over you best on tailwinds X and some has although the of some problems rate. X these second on downtime. sticky takes the what little months. Earthstone of good a The address most of asset. last easiest job to well the that fails

time picked things head kind on to set to the fruit, in that of team kind it.And people were a way first PR the were of so, things and like do part the where we think succeed. we've And of hanging I jump become we that. PR stepped So up at really low the Earthstone the into have excited up team

go times, and of I think to where now way time. hopefully the lower LOE run kind get is improve really increase start we'll which run is to best

John Annis

Terrific.

production. the and heavier referencing water For Delaware you operators? being a little quite my biggest What's sense costs, follow-up, of impressive, other the it's cash terms Delaware between peers where stack Slide you in X with against and up in especially delta of your

William Hickey

We've one old a keep be don't us really other horizontal in I helps what general, production, lot down. to have got think clean, which compared -- operators relatively cost of wells. to we helps vertical is I mean, new

a it's of of kind we have vertical ours. cost that increase great wells then the have We of think asset don't I great a assets. structure.And lot

like think HXS that in you places that. few We're very statement a nothing on some high places sit within any percentage. we're cut basin think the if a whole of average, have although Basin, it's treatment, the assets there's more like where fair that about Delaware the -- in oil water oiliest places So in a not on I or that have

of is what core then, the basin.And do. look, we in basinal of kind this are the We

We operator. G&A lowest controlling can we the are on the on LOE side, be side the try lowest on that control. We the cost D&C to the We lowest the things a and low focus the on side.

shows think what here. that's I So up

James Walter

an permeates impactful our And add team questions what's we on think what management, I a the I incredibly But cetera. of we -- et spend mindset. right mindset way awesome down culture soon ownership top, that the that that gets only is think ownership ownership the no the incredibly right stock, with real honestly I entire through more field things is the a mindset answering is organization they it's we've field of probably work that management, time, lot the talked Permian kind getting think Like to to go lot I'd hard done.So the really in at but that field, I have that do and as the of no to proud in a ownership, time fix wells and credit. where thing as of kind don't waste and about the they enough waste effort business think Resources run in

Operator

from Your next line Diamond from question of Paul comes Citi. the

Paul Diamond

on one quick valuation. a Just

potential You versus peers to and those you larger. for opportunity talked re-rate sized similarly about the

type what that Just detail to of get bit get close you you on gap? to kind see a -- more to of anticipate want your catalysts or think

James Walter

us -- about it's I I Yes, think for all mean, think I execution.

at the other caps, albeit I has large I a continue lot as over think smaller quarter re-rating can the a quality plays think think its out, we looks other more like in, pure execute Permian year I scale. on market realize time business, -- started But out think our that I quarter and than to the to we in, of happens own. year

of kind cost Delaware. and it's the And for operator think important in the to too to lowest most be miss. I execute us to continue obvious thing is the

Paul Diamond

Understood.

quick a follow-up. Just

the is expect XX%. can guess going cadence the go 'XX an coming on integration late guys and I'm get know forward 'XX the in of some understanding beyond? you on We view quantum guys to I Earthstone. and about full captured trying from you like of more improvement, that D&C think the already forward, you you As

William Hickey

I about it. think it's different of think ways X

kind costs just, on area. by coming the then time real And the order.And cost we based does What year the mean the PR of year. well costs resources assets are absolute on don't short where legacy legacy with in there on legacy what well Permian these today. over converge think XXX Earthstone PR be expect I to Earthstone we that's months to expect a that the foot we costs? specifically about for is this that's D&C and we're this And out or PR for really way center talk anymore. guide seeing laid those what is It's its

deflation. we're baking or So further in further not efficiencies

of the again, or I there's those bit think step in gradual expected No recently and of last of think we've quarters. made to we'll cost. kind of little of changes -- years.But kind of get of each decrease a the more coming kind we're kind a seen more of ton four in -- the I over hopeful progress gradual see

Operator

One. the from comes question Johnston Capital from line next Phillips of Your

Phillip Jungwirth

last New productivity, other follow-up Is factors this of just in the XX% productivity Neal's year? there your average year to First, function in towards are the X, a on with X% question on Slide Mexico percent versus Delaware. an versus year well that your going show increase of driving geographic Or activity you mainly expected mix the XX% last that? shifts

James Walter

well factor No, biggest there. be mix will the

spot You're on.

Phillip Jungwirth

I assume all guides, in right? 'XX taken your that's

William Hickey

Yes.

Phillip Jungwirth

Sewell reserve change And in Netherland report. year-end 'XX year? between expect rate significantly that decline end just last this Okay. your XX-month And decline question, now assumed to of and PDP just you the next would then that

William Hickey

quick? real Sorry. that repeat of that What's you the second part question? Can

Phillip Jungwirth

Yes.

reserve said I'm significantly -- assumed decline this expect you change Just for rate that and the that And Sewell PDP year? decline between of report. the would your rate Netherland just follow-up, looking in a to then now end

William Hickey

having I of not offhand to BOE decline. And change? growth had Every especially but kind Netherland says, should, the say, low year like we're a report significant we expect low what it's XXs, is mid-XXs Yes. can't years in I say on it which reserve can last say then do it where the we of Sure. what amount to year. Sewell's I

be will sure I'm between going now year significant, shallow yes, but super that You'll that not to see out it's and that will arrest. decline slowly continue to end. decline

Operator

Your next from Benchmark. the line Subhasish Chandra comes from question of

Subhasish Chandra

map you of type think to? out dollar out, I per the you XXX-ish transactions, threw XX,XXX think do location acres the has metrics The what worked

William Hickey

haven't kind we of that published -- smaller haven't these especially intentionally transactions. of lot We and a

to But direction. you there's gets and vest to confidentiality the probably the I important right dollar some in I'd that keep if say to millions, low be is in the think some there. pretty single-digit going that dynamics frankly the location per tight competitive are

Subhasish Chandra

kind Yes, integration into we guess yes, they are And 'XX? the of should then on flow That's I costs, at see directionally. cool. anything all done this secondly, point or

Guy Oliphint

About the the $XX in million first half of year.

Subhasish Chandra

Another $XX million?

Guy Oliphint

Yes.

James Walter

then And done.

Operator

to back time. further There call no at Walter will I James now are this hand questions for remarks. the closing

James Walter

and In is. forward closing, plan speak QX how Permian I just our business XXXX we say for results 'XX want our go our that to just good themselves believe and demonstrates

the As call execution low of and the that continue story. Thanks and to year returns track in to cost record for we year consistent believe our generate build to joining out. we lowest operator Basin, Permian in everyone Delaware Resources we today our as are cost the following positioned the significant for shareholders

Operator

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

disconnect. You now may

Permian Resources (PR) 28 Feb 242023 Q4 Earnings call transcript