PR - Earnings call transcript Q2 2024 | Permian Resources Corporation

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Operator

Good morning, and welcome to Permian Resources conference call to discuss its second quarter 2024 earnings. Today's call is being recorded. [Operator Instructions]. At this time, I would like to turn the call over to Hays Mabry, Permian Resources, Vice President of Investor Relations, for some opening remarks. Please go ahead.

Hays Mabry

thank quarter for earnings and the us Britney, second company's call. you, you joining all on Thank

On the Chief call with for Walter, August our the today we an are Will Executive X, second and Hickey earnings Officers company. release Guy quarter Form Oliphint, filed Financial reporting Yesterday, Chief Officer. X-K and results James

comments the plans. call more We an earnings including which XX-Q note we forward-looking today's beyond during reference like expected involve also detail uncertainties Many presentation to our our that the this risks to earnings and are risk is in posted that be our the with discussed and call. I factors many that during are statements that of SEC, the of in sections could of will are actual to risks our this would forward-looking afternoon. Form control later and website these on results filed statements and filings our affect

believe the future performance Although facilitate periods of our on differ developments that results or financial to they actual materially. We measures and guarantees expectations may assumptions, across non-GAAP based we peers. help also not and refer are expressed comparisons are may with reasonable

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

William Hickey

consecutive support maintaining by production raising to guidance year continued quarter in our Resources Permian results second that the other for quarter, Hays. strong us the while guidance ranges. improvement Thanks, during second operational efficiencies deliver highlighted full

perform today. Texas more OXY of M&A, a accretive which very level accretive some Barilla we inventory significant while that sharing capital. continues competes week, operationally, high Additionally, last on for the forward immediately in to detail to on team added the PR we QX the Draw executing acquisition and at high-return look highly from core Delaware announced

quarterly with day into equivalent production XXX,XXX results, exceeded expectations, XXX,XXX oil Moving announce total day. per per barrels oil to and of of QX production of oil production I'm pleased barrels of

including and Our attributable times, field performance. strong performance efficiencies, consistent the strong multiple the cycle well times run D&C in to accelerated was factors,

feet hours averaged day drilled in in over company XX example, both For per for which are we day a X,XXX per pumping QX, records quarter.

per a guidance for the consecutive February. Notably, quarter, result, our year in direct barrels increase guidance business. to our total oil to oil outperformance guidance compared As amounting year in a our raising of our we're is of this day per initial oil day full of increase a base X,XXX when barrels X,XXX second of result

change Given no a also the are cost with efficiencies, when by increasing compared improvement approximately CapEx to XXXX, guidance ranges. guidance XX D&C our XX% drove wells to our which we TIL QX XXXX in strong

Additionally, driven by and we increase this market. switching particularly the an gas strong due saw NGL current primarily in gas performance quarter, to Permian to which processors, recovery ethane was gas

due one cash we've date. in to a costs equipment reduced and failure. low the Workover significantly quarters the QX QX to rates had side, lift were is in per cost On downhole failure on of cost strongest reduction

to recently We quickly implement and optimize to improve wells, of drive continue equipment best able acquired all we're our to and practices our efficiencies.

expanded costs. reducing to we've while efforts Additionally, water also our use freshwater minimize recycling

expectations. a As of QX LOE our result, $X.XX exceeded

or of free in quarter share. of quarter. BOE and cash and million the $X.XX flow per CapEx on low million $XXX cash G&A in Strong per focus cash cash million per the also operating controls resulted $X.XX production in of share of $X.XX cost results reduced relentless $XXX adjusted Our $XXX cost supported adjusted flow or

Turning Slide to X.

noting of It of $X.XX secondary the worth quarter $X.XX capital in and comprised per in offering. our XX% X.X during of equity variable high that dividend an This we and Our with recently repurchase the share facilitate XX% our total This share. $X.XX share, extended shareholders PR. delivering shareholder to private per May of dividend return Project a reduction private with connection a is a helped in ownership was was program base from our Allies million period. all-in a of of peer-leading PR alignment initiative, between over quarterly that shares per today, returns equity

fewer remaining secondary now turn we With frequent X that, much sales. expect I over oriented long-term shareholders significantly the it to to forward, Going be and more with will less James.

James Walter

OXY. and for highly approximately in lease existing Draw of of time extremely This Thanks, a keeping acres XX accretive X,XXX assets eye acquisition of we as that $XXX our approximately been identified legacy July the Will. part a County share have Barilla million County. and that Texas on quite announced Grassroots Draw These position with The of miles offset well existing [indiscernible] Eddy line are acquisition footprint. net in position. XX, fit consists acquisition Mexico, New Barilla assets assets On we County an Reeves our long was acreage the our Eddy with ongoing our

purchase volumes. The the an to and midstream and with infrastructure XXX value reflects to EBITDA by gas consists The or provide at which sales X.Xx miles development additional an further multiple free surface XX% production go-forward flow of base attractive operated free and with repairs cash point portfolio of handle of margins over asset and locations $XXX high immediately that the long-term future. assets XXX of ample asset enhanced yield. million acreage for flow capital. oil, lateral via is profile, and some capacity infrastructure to compete gathering enhance a over in comes acquisition pipelines that price water optionality attractive NRA a cash the asset. The support third-party These PR long The of

over PR's the midterm provide shareholders confidence proximity term. our near to operations and our incremental that leading cost returns be of we able and term, long the from structure existing attractive drive will

be strong It base XXXX. to for all continues breakeven. as low flow that Turning strong founded that has priority margins PR, to leadership the starts all the with cash maintaining way a sheet business and since balance We world-class been and drives our asset predecessor it in top back we a Slide low-cost X. highlight

Our leverage, our and commitment long-dated maturity demonstrated to by is our low liquidity profile protecting balance position. maximum sheet

borrowing we Also April, week, XXXX further Last over million a we our $X.X we RBO that and to the issued $X now executed industry. $XXX to of the prices. maturity. the a us $XXX This current forma mid-cycle largest $X.X the to accompanies fully elected the bonds base for acquisition, commitments capital OXY RBL's with from pay million Since have ensures our upsized commodity RBL we equity of making $X in $X provides of at and this than billion down billion in extending durations. approximately bond billion redeemed OXY that our offering and off access pro finance our billion, April, notes have bond lower paid closing billion liquidity

from a barrel. XX,XXX hedged support and maintained low We've S&P. We've for Moody's $XX have the cash XXXX $XX expected also to per In at hedged for barrels of and generation hedge approximately consistent leverage. flow free upgrades remainder per both XXXX to a strategy day of we over barrel received oil July, at XX% production

in the and attributes strong the execution quarter over while is size call sheet without eighth accretive the operational all to operational cumulative leading formation that billion liquidity Xx, this our public We acquisitions. QX the peers consecutive to point grow XXXX. any have Delaware leverage balance highly in effect with operator since The PR's and investment-grade by with strongest substantially allowed approximately activity as us our business of scale credit most a and have free excellence growing we have flow through comparable share have cash over transactions XX% we marks ratings maintained the Basin. as our company track of $X investment-grade at furthers targeting combined record per our XXXX. Since the leverage. This our of of own increasing XXXX, Those of in

increase Slide and turn our We execution, is both production previous our are on guidance lines other in guidance maintaining of continued proud highlighted by ability team's all X to ranges. which while

which guidance of majority X outperformance week. by Slide outlined impact We not The the OXY last guidance revised increased the X% we of on continued does the this business. include from our have base of oil announced Barilla comes acquisition now our year, the Draw

an have and that fourth for acquisition to operational XX,XXX of industry-leading approximately QX reemphasize investors. close track long-dated expect in flow XXXX quarter. to today's prepared to on PR, remarks our on record our excited to and free high-return be We driven strong will continue is XX, the up structure, discipline we're to underpinned cash business add which strong leading growth by and I our value during financial together for of concluding performance, late breakevens a year shaping day returns. a our low very build is where leading strength for inventory The proposition and shareholder be cost we per share investors. Slide BOE

XXX the we returns for Xx. our XXXX, best-in-class have sector formed delivered the over outpaced Since was by company in and S&P

session. back shareholders Our has in for our you than everything maximize to we will rerating our accretive today, execution, we transactions doing tuning financial to material and Thank can driven a year performance rather discipline by been over multiple. and and remain forward. operator of it for the turn for anything We last question-and-answer primarily to committed value going now cost low the

Operator

[Operator Instructions].

question from first with Securities. Neal Our Dingmann Truist

Neal Dingmann

this think speak once your I'm My about activity is specifically, closes. about D&C all production? your you activity asking the how to just you goal cycle given would guess that the wondering, Or continued to year? remain anticipate stable maybe Draw quarter. you're operating of D&C improved is Nice question sort incremental once maybe thinking closes there And could you what first the growth? I'm efficiency I production on Barilla lowering times,

William Hickey

have plan Will. stands the kind is I'd this rig and today. Neil, say the count today count frac of we to Yes, is maintain it that as

will So we've material The picked given seen XX kind we is here efficiencies. into foot we've wells little we're drop a obviously about year. a basis, kind what bringing the the on a think in per be pretty these position that in well incremental of just pace of bit, cost fortunate up

our kind is think to CapEx within kind with So current keep activity in keep those the us range. reductions our that let plan well up of and well cost per of I

And I we half Barilla we I else back will QX, in close be then but is of that something Draw, pad substituting a Barilla are think current kind Draw plan or this drill QX. of the it going for year scheduled as Barilla to was think once Draw on today more

than early to too of really 'XX, a kind more So it's of adding think tell. swap it incremental out as And then activity.

of kind lower thing I costs, productivity think kind as of that widget that the as one flat is clear well efficiency cash is is CapEx with is been. the our of reduced very ever capital and good it's business

change of against that's backdrop that's week step a obviously of commodity the bit of taken kind or two. a change little least in at the But or prices last a

of see a make the in then and how we'll out decision on the sense So those over months 'XX. for coming business quarters and makes all play kind what

Neal Dingmann

I my market And second hear on question is the then Will. Yes, think likes acres. to that, royalty the

have for another those are of or in position, minerals those mineral shows these on be all a there any upcoming XX,XXX. acres to targeted maybe the asked days? guess, of deck, now I around you minerals there, Specifically, is reason much assume some it activity Is there. Can monetizing think, these I will given acres high how the consider or we prices thing material on

James Walter

great Yes. No, on your appreciate question. that. that's a point I

nail part head allocating think we're we're I that's always as rigs, look, rate about say, portfolio important of on royalty of business. capital that our that. projects of areas. of thinking the kind and hit And think where that, the big you of to rate highest an return highest a our to part I is focused send I'd return on

how important can't I economics is to think we that and understate efficiency. enough capital overall driving

how of be step rates a returns change compared real projects. return the think, of and that given to that capital do NRI to in efficiency. XX% an is on kind XX% a impactful think though, and I the we business see of could kind I

the on important don't I returns. just our today, footprint. of our kind doing too us anything system monetize It's longer-term and especially see to that position to overall operated

we we're think and No in to monetize really to it portfolio. our love So plans it. immediate have glad I it,

Operator

Markets. take Hanold question Scott next Capital We'll our RBC from with

Scott Hanold

you're mix activity you're I not of in a going sort Draw. think give -- even Look, lumping pace to having Obviously, mean the any Barilla activity Barilla it XXXX Draw? well again, know of now is and we at performance. back think Draw good Just pace like at guidance, but some do efficiency, -- operational Barilla assets? your Do in to in good current to even seems in you those in are you right adding -- that adding I pace with activity generally activity leased without current loading maintenance

James Walter

Yes.

I Barilla per year the that think increased the the what's don't in think Draw. X to less flexibility. of we the maintenance what's great to over under right we that, pretty that being pro more has It's a be something position would meaningfully I us frac can more. a quarters. per growth, it the number definitely think, drill a lot a And given count we've -- kind with I of look just can XXXX kind count, rig count case we X wells we forma for at a rig current are maintenance or last very rig close than like right it's and as gives in probably But couple that more able of fleet do percent lot the a case. increase, of

a rig the growth we we a more it's amount grab can if maintain is current obviously, we'd to yes, kind bit up your of want But to If we count. answer engine, of question want than probably today. to equipment. dial And small the maintenance case more growth go little

Scott Hanold

Okay.

And successfully cost. general of then and integrate on hear. kind M&A quickly, look, to to sticking Great Okay. cut just guys just have assets you been able landscape

prepared at the liquidity couldn't but I the help good that. your combination most your about of a Colgate talked So And been very couple you in notice very, comments obviously, having times and of have Centennial. amongst since

at you a the what things do appetite right acquisitions bolt-on see now? what this versus from front larger case small point? And on your to look, M&A So is do

James Walter

of to the of up say in down strength great do reference related cycles M&A. out cycles and anything think that's focused point. our I I liquidity. and Yes, more a I'll would we're point consistency kind the on probably than business to

most our create to part that protects these value balance ability to the it to it us sheet of allows strategic business I important cycles. in not and acquisitions the think our that is go protects down

a was that in point one. good do think question main we make I trying So the think I prepared were those remarks. to the M&A is

same the founding. I'd had M&A say Look, towards our we have have we attitude since

and we our business will we think make can drive long-term evaluate and do that I value continue to to for at better things look creation shareholders.

got said and business we really inventory think Austin-based I an it a lot, but opportunity set. we've with reinvestment attractive a

has do bar better we anything So make our actually business to really is high. and the

we'll anything evaluate out to there. and continue everything think I that's

our got think every track to at really scale. a do M&A ability record I of demonstrating we've great accretive

I think today for on probably opportunities. us, the more smaller focused

be it's lot Permian spend seen big of continues coming we've a to But nothing highest we them return set ground think as I opportunities we'll it. we as for assume shareholders. and opportunity and see to that game evaluating effort. and come decision a of the But the where will rate time Resources along, that bet for we right the be pipeline safe down make I think

Operator

next Freeman We'll question Raymond with take John James. our from

John Freeman

quarter. Nice

trying on disposal more of closed? stuff a sense the long room PR to we take LOE The first side that agreements, on improvement of side. to there that LOE is you all I'm you of Legacy that how a closed topic, like on just D&C that of you was SWD much there gap on Earthstone And before and gap running have quarter, kind feel the the I basically but get relative Earthstone process gap a felt last kind know still that cetera. how does Legacy curious, recycling, the et PR, basis Just kind between

William Hickey

a PR, we've was an as of gaps think side failure add And from good overall quarter on cost some in I Legacy little on QX failure behind just the of of from down. cost QX it. on mentioned an seen. in side We LOE perspective, the really as ever closed the a the extremely assets to Legacy color rates I be quarter answer. even prepared kind our A strong like that, good an kind then remarks just LOE from to were had would Earthstone also per short both -- our we workover but -- is

having less to it's we've over work been So we and wells do, when cheaper. been

rate and And you failure then et also goes a up, your of goes weather up, like is really QX just mild QX, it's usage quarter, hot good was if about more cetera. a summer. think And this typically, chemical

think expectation more the is to, answer is $X kind is we Earthstone I go of right kind is different some done. my because half is the the PR of in forward. rate think question, same say, but The range. looks not to than of Legacy so plus run LOE bottom to And probably guidance But run like a QX out do go-forward $X.XX PR rate that like $X.XX our I put closer integration probably the

John Freeman

And from not necessary Perfect. budget And follow-up all the was obviously, XX% any 'XX plan. of trying then M&A side. really just just on high-level basis, get remain But active if my non-D&C on question. this you'll I'm to details a and year,

So move assume side, so at just been because percentage stay of But a percentage run directionally, this was we like closer it moving it M&A the bit is historical starts year? current target. that, probably you've on a or would the does this to kind of of to of kind active that XX% as rate little maybe the of non-D&C

William Hickey

a a of used It's integrating what all you integrating the relative to do non-D&C dependent, I quite what we're Earthstone deal incremental to mentioned. step that kind we're change as kind and bit to. piece of or was think

don't what in. the know exactly in 'XX. XX% Draw come mover. saw I needle So down a huge Barilla from we quite not That's it will brings

So that's I little normally, going maybe don't bit. that to we from offset fully a expect that are not that's but where

-- it of not XX% closer I'm will historically. going to and kind So we were answer, where a but to be less specific give than

Operator

our JPMorgan. next Parham We'll take from question with Zach

Zachary Parham

ask on well costs. to wanted I

You were just well per potential drive think versus of at $XXX Can down year of talk the in underwrote address foot guidance costs how about quarter the further? full your per this well trend $XXX half cost will that you foot. second the you guide year maybe and to the

William Hickey

Yes.

the think efficiency I got look, driven. So XXX% way almost $XXX to is we

rig day. We our more during So mostly accretes bottom averaged drilling per given price feet on feet of like to line. per the straight majority X,XXX which the just a cost per side, all rig on day that day basis, QX, the on the

think it per are that foot $XXX where run cost the of kind call on feet side. I is Like I sticky. the we inflation outside service think lot new of deflation day, a that's is X,XXX rate. a or of

amounts small innings still there's early U.S. of kind efficiencies basins. to The in is go to Delaware still think of I relative get. onshore Basin other

And we'll when QX to to going to get from but you're predict keep change so a hard QX. we had like step getting it's better,

rest with service at then per of to opportunity side. the feet year us cost drill see across hope more recessions, continue should And the less of as rigs. we wells think point, per the of Like we're a the day, I lies little on would bit drill all industry some I is as seeing more

there's stands at internally. than say it today, I'd in how quarters, and know don't coming more but down about So the we're kind plays it of probably likely go is how norm that's it here the to see from as thinking least exactly new up I $XXX it out,

Zachary Parham

the to of NGL guide from a follow-up, wanted gas volume And the particularly just on here, kind I and side. on ask

and of the quarter gas higher this total Just expect sense ethane volumes all due to had extraction you trying to that a year? think NGL of pricing. volumes to you Do back reverse trend will at the in I weak from more half here? get how

James Walter

of in and increase PR kind seen biggest quarter prices. an change, the think recovery gas basin you've for given poor is I mean, this as really I ethane the in-basin across Yes.

more gas And and approach end year. could out. as reversion think the I kind expectation future market play I think percent kind internally of do price trends you should is gas our a as oil. that on NGLs to I recover this of normal the of think a well be

Operator

from MacCurdy question We'll Pickering take our next with Energy Partners. Kevin

Kevin MacCurdy

the the little I that particular hoping to X,XXX in that maybe you on Eddy I deal bit those of acres to was shine OXY ask, County. added and recent wanted overlooked a you attractive the area became in acres could acquisition how was more was you? light why part

James Walter

question. a That's great

efforts this the think goes our we've basin. really back pursuing Mexico the been and in activity sides that New robust to all and Texas grassroots I of

opportunity at there or to here part that, OXY kind And long-term as owned here, knocking fit a public this team a which are of several a OXY. is basin titles on County for identified in sets that acres, point. earth, that it fit doors, as on actually part available good of we'd Our what you running ton part of out that, constantly of that thousand see not the Eddy I'd of realm say aren't a we strategic for of good sense made thought the the

around deal. those able acres OXY, for we which win-win including and is the in discussions as were So a Barilla this both to propose Draw, us we having were potential

it came how that's about. So

and think team. exactly tend over for work us the what years. find good that's the been both And OXY can I They've happened win-wins we've to great got with do we to really OXY, them, a here. with as we relationship and

Kevin MacCurdy

acquisition. And increase follow-up, expected the last bolt-on believe your million by mentioned supposed to in XQ. CapEx a was Great. to $XX conjunction as I in that you you quarter close budget with

your reiterated you guidance. quarter, This original

make we internal the were does And that your last clarify, that in additional still included XX part I what wanted reads activity is CapEx that expecting extra up of me is think just lower I to to lines? quarter. than plan.

William Hickey

Yes.

the lot plan. answer of the a still you to is is asked. yes So what in The activity

of is of incremental last and in billion million our be that we've are call seen the, kind in and chipping time the TILs. actively kind drilling dollar We budget. asset, was included $XX that at XX is County quarter Eddy the bolt-on real our is to on reduction what What away that on per going a midpoint add foot to it, $X completing

range. kind billion $X.X billion So we're our $X.X of still to within well CapEx

went I $X.XX are now the a of billion. per dollar foot you basis chipping are math of right. kind to at of saying is range and making think that see billion billion, get were to us we feel back slowly real And to drive We seeing we'll very even is to billion, comfortable kind what back the sub-$X is. us that time, kind we but reductions where billion. down. enough on away the or We will it what kind it think $X closer here $X $X leave that we're of continue within think don't and $X I close well I

Operator

next our from Mariani take with question Leo We'll Roth.

Leo Mariani

deal. wanted a some just Obviously, you on little ask the I to are bit that picking infrastructure up Barilla guys about Draw acquisition.

seen low marketed on sort priced of then secondarily look attribute something here? perspective, curious asset of monetize guys might the and of of very kind Permian. price if attractive you seems of economic a this getting a good auction acquisition, do just the deal future? versus what guys just in like kind you And deal other deals from an very the to that's in Just on kind near the to fully that the we've kind Was it

James Walter

this more first I to of to your on hands doing not we commit there. spending I kind this shareholders kind details anything get do answer business. of how in focused before for think, I the capital. will our creation have But acquisitions assets. That's on and actual get past, closed think in our around question. divest got midstream to deal the Sure. we're seen infrastructure, midstream like we think more That's we Yes. value I core

I point we not probably by system. But midstream think divest some a any least that's again, part good the a in imminent at of the chance at means. So future,

then Barilla to And back Draw.

part deal marketed, The be a that prior piece like think, our The thought I But that to to blunt, I success our Texas Mexico was is of just we us piece answer on a both broadly counterparty very the peer-leading yes, on could part that process. like a our found than New the well-run be Mexico anything for here. was mentioned deals think cost attribute and we So more else, proprietary structure. New we win-win this not. I

and lower I with that peer-leading win in-basin footprint D&C LOE, deals, the offsetting this Our came I not and anything allows is these the think, our us deal, think, synergies to else. what

Leo Mariani

that include Okay. with you that. up with bit the I I closed little small second bit. little the in more guys volumes said, in guide And going picked just appreciate a half. from to That respect was it to had being bolt-on Barilla then I you second of quarter. And oil oil the second bit know kind production, guys then some it obviously, guess doesn't guess be production, I slide flattish half. little acquisition, a in includes expected the the the Draw a you the previously said that production maybe but

on in be second Looking like half it looks might small oil. it at the actually guide, the up

of up probably But kind range the small a obviously, verify, XQ there's somewhat the from year? for oil say it's in it is to to Just the guidance. the levels of on rest wanted of fair

James Walter

Yes.

flat I that's of stand-alone the production of from year the here, a basis. is to pretty profile first for the I'd half. think flat on kind rest say

of profile I OXY but see kind right to here think growth If the you way factor were to that you'd flat QX, obviously from approach some it. is QX, in in in

Operator

our We'll question take next Cowen. from Gabe TD Daoud with

Gabriel Daoud

for also you thoughts on could the for Midland something that any Just be have a updated me. Is if Basin that time? over one divestiture quick Curious a position. candidate

James Walter

mean Midland one the think for a I Yes. us. was Basin different I

to our business said continue been be kind our in Delaware will continues and I where performance around focused. focus means our say to always That's of Basin. of to think cost on be time think the of structure our the activity year. portfolio. productivity focused. focused and this as strategic we're development our our improve we've But and has has to core that and and it get continues part understand hands And M&A again, what I'd fully in where continuing basin better. the trying do kind I the asset, is been That's both we're to asset that

I today. think it like having we

flow that like the brings. cash profile it We

I Midland, and price at I to probably anytime not point, do it strategic make the may this not something think soon probably in sense with commodity think environment. some but

Operator

from next Paul We'll question take Diamond with Citi. our

Paul Diamond

one. quick Just a

expectation the that's that of to your understanding ongoing I given in degree around to just in and playing going strategy, especially basis? beyond. impact wanted you that some Waha that, So hedging market your see out the volatility like how 'XX also to get in an and pricing how decongest all would the kind and

James Walter

Yes, think think, mean from I that QX. everybody does expect get the I market like, to I we better the sure. of lows

online absolutely capacity to I as forward. that. critical going volatility look pipeline back hedge our part going additional I'd we think basis year, of think do will forward. gas think and intend alongside hedging and Waha I I that. Hub of for And say kind case strategy, is think of half help coming about basis should this probably continued the is an

Houston at sell is, other we can sold I market. that be time? and initiative our how of think strategic markets is think gas another -- team and we kind look, for more Waha XX% gas midstream over about the big how I of beyond in diversify this to our quarter part going us And of important

game. long that's And a

to at goal Ship for gas XX% I cetera, get continue and is built, to to play that's out. of takes our priority for think think ultimately time than only to us. But going Houston a to contracts be the sell Channel, new really more I that to is it pipelines roll et

Paul Diamond

And Understood. follow-up, then pretty it. the quick Got been about space, activity ground a with volatile. know the just flurry game. spreads a asset of late talking I across of bid have of as kind

rest see year? your now you the going get kind to the of take where wanted they them Just and sit on of through

James Walter

for sense a opportunities make structure I cost cost advantage, able but think with of extremely and that us. think I earlier, low to find I we're mentioned this small still our lot

out is market non-op of think and kind said, that there. that robust for -- similar I deals smaller a really kind there of

always able still found say we've We disciplined. So things we that structure, think our fortunate we prices get bid this in able I to market. but we have like. even to things been done because cost really we're to And be we're competitive, I'd not remain of

Operator

We'll take of our with next question from Bank Noah Hungness America.

Noah Hungness

into in high-graded I down do It's wanted And What it's -- last is from on year. to what the inventory? has DC&E breakeven? to does structure. XX% mean, improve. inventory, have ask cost your I any continued does cost inventory then I guys' money? mean your structure or your there derisked Is impact on that's this moved it to been or all's your

William Hickey

the and is inventory our on money, the is way classify speak. it inventory -- we in of kind about already so side, to I Look, the think think inventory,

deeper I think the into what CapEx, down this we maybe drive kind in really brings from does, the it continue as is of to money. and to down it money marginally LOE just drive

that a CapEx at direction and our is in about we we into cash just always curve X whole to start years to don't this do inventory that X took But reduce cost with. and not the I of money the shifts change flat material brought absolutely or reduce price, just going out that's were that. them how it think think money commodity is So a like the

James Walter

which about a you more that versus on zones, impact that, zones some targeting developing secondary as it's economic bigger not think will the problem actively And taking do the economic. it's secondary economic, that so I today not important that very I have or from we're to The primary we're something strong taking zones it of It's it's a uneconomic have. think today more economics to good today. to economic think are -- really

Unknown Executive

breakeven, to and efficiency kind inventory we're XXs productivity And breakevens. to and base changes, 'XX of at at of on talking mid- program? And maintenance the high the attractive capital for about given structure. We really our what have we're the a dividend low cost

Noah Hungness

Barilla on Draw. And Really my question Got color. appreciate that you. then is next

how when of on proppant over the spacing your either you versus OXY like take that. should loading all's was or asset, or developing guys You development how about we philosophy think anything kind maybe --

William Hickey

XX benches foot do or between solved or subtract wells those Wolfcamp Xrd rest and on Bone or historically add about the don't well the kind Southern that of call they Wolfcamp well, historically. materially A We on there this of B it, well, here proppant, stage is different Like crazy. X,XXX really Spring at how of develop may Spring pounds I A, Bone point. bit it's Sand Honestly, per Sand little a a but Xrd think being spacing, Wolfcamp the Delaware nothing

is into to shales. the had of development. some see just we'll Xrd B Wolfcamp in north success the east on developing kind this of Shale, I bigger shales, of to in that change in the start co-development just of Shale to We've and asset think Bone the the Xnd Bone loop shallow the you'll

of is step in of as But zones. change. and won't the a resource kind just think other So kind optimized some we those about PV the what issue per looping it material be recovery of

from our a et the biggest be it cost will step LOE think change will an CapEx be from I structure cetera. perspective, under done perspective

Operator

Jay our take from Jeff next question Energy We'll Instructions] with [Operator Daniel Partners.

Unknown Analyst

percentage QX Well, say just I Because kind what an I What basis, said remember seeing And PR in in changed that of a you're differently? QX? you Because would back I about in significance QX? that what QX? QX a us there efficiency change bit I gains to on to big efficiency you just was gains heard if Legacy like kind do the want of I single-digit on help of right, the exactly and a between think step think circle gained you you understand points.

William Hickey

is faster that which answer. be always you we've side. call the is from easy bunch QX QX year side mean I'd curve time were than It's say the the say of is, of of in what we and the a things. efficiencies the a got to the it, an the is think but of on now seen QX, of cost, combination QX majority we I XX% CapEx it's got savings some of things. the And just of from QX, were And to I'd that never drilling the going there? it's little came and X into on from How 'XX. we're last to QX. If and lateral change in majority about time majority we add up of that

fastest. really constant the and sure a in rock to are good the have then laterals between team kind make productivity our but we GEO also enhance really, place to and of relationship drill in making kind but bits, tweaking putting BHAs, And and we're always whether motors, One, second, sure changes, communication, our breakthroughs in working cetera. both happened to drilling right month-over-month QX. they times And the team on kind QX the from are those you hit tweaks and that's there we're all of optimizing to of step and the be when see that et improvement, quarter-over-quarter continue of combination big you what

Operator

next John We'll take with from Wolfe our Research. question Abbott

John Abbott

Just for a ones couple me. quick of

How So XXXX this about hedges, side. you started Or you at you on backwardated do are more? do from you you the did the here? your thinking XXXX looks like point given add add it just add oil hedging to Do strip? more

James Walter

these about I over little XXs, Yes, was the ago, noting placed when the ones all a for was worth of hedges, a we good today group referenced new I we in favorable a month and that maybe that kind environment. that's mean, think price these it more spot a it's question. hedging

the everything number ensure strategy to we I future of sheet down to thrive and commodity can one, balance continuing can is of hedging Now we protect be, our kind and think cycle. do to

we the sheet feel is that needs really where to good it balance be think I today.

especially years, market you just commodities if to meaningful be think if the in in to of positive. see going see out additional opportunistically we probably hedging, those it's a change I kind the

see it's current more at layer immediate nothing pricing. of kind in on largely you'd XXXX, think hedges probably us I but

John Abbott

that environment? Appreciate deals also been something in optimal environment -- getting mean the are here, getting you you given deal Can with also thinking here. I it. days it there's a seen Is about your deal on that time, last a necessarily this at Midland to volatility what's of over a mean questions commodity lot about I we've environment? period just get the is more of previous the And commodity of M&A mentioned potentially actually done couple just this this difficult? How the the done? assets. not do you given impression

James Walter

it mean, volatility, what -- of no, I X get But harder think right, lot seen I kind Friday today, Yes. especially deals there. different of kind we've I to makes a think you're questions of to Wednesday, this done. kind

sellers to good always spreads to I the going apart. feel in pricing getting of we timing higher is our about of I line. think, push and deal, and volatility the kind buyers drive that that But think last bid-ask finish look,

continuing material today actually execute as X getting aren't in our closed really this on engaged focused anything OXY We of scale and biggest and deal to priorities.

a there's lot So it today. sleep -- now of over

quite just generation price cash that with a for [indiscernible] pricing gas from in Midland cash potential the and larger Gas for obviously a and Basin, while has free pricing step and percentage been a in suppressed basin the NGLs asset that, revenue I and environment. flow modestly now. change better the think And okay. has come has in NGL gas that's really I that remained think free from just of

really that's in is say or there we're of what pricing. interbasin referencing I'd for So improvement kind gas looking the just

Operator

We program further no on Walter the to questions have line over back at time. James closing the this any I'll for turn remarks.

James Walter

our call gotten to story. do All to and start great over to the structure Thank consistent with XXXX, cost continue value having the that, Delaware of to same, remains plan we for long lowest Basin. joining you. following the goal Thanks to Permian right. term. in Well, the delivering maximize the a shareholder And off the for Resources primary results build our today record on for everyone to track

Operator

your Thank you. program. you participation. This today's Thank does for conclude

have time, and at any disconnect may You wonderful day. a

Permian Resources (PR) 7 Aug 242024 Q2 Earnings call transcript