PDCE - Earnings call transcript Q4 2021

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Operator

00:00 Good day, ladies and gentlemen, and welcome to the PDC Energy Fourth Quarter and Year End 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time.

As a reminder this conference call is being recorded. 00:18 I would now like to turn the conference over to your host, Kyle Sourk, Investor Relations.

sir. begin, may You

Kyle Sourk

President and a CEO, On President, Bart Officer, today. press Senior Chief you morning, Lillo. have issued that we Lance call, accompanies President Financial our Vice and Meyers; and Brookman; and Scott Operations, good Thank Dave today's This posted morning. release we Lauck; of presentation XX:XX Executive remarks Vice our

www.pdce.com. are disclosures GAAP financial XX:XX measures. XX:XX reconciliations over XX-K. available to found The our today's the and call that the also Form appropriate on The in Slide presentation. of press appendix our turn our and of statements page and X CEO, be filed Brookman. will I'll website, that, the With can on we presentation Bart On Investor call, forward-looking reference Relations We release both non-U.S.

Bart Brookman

X:XX and Thank everyone. you, welcome, Kyle

four have topics exciting to morning cover. busy We a with

Petroleum. Great First, the Wattenberg Core strategic of and the highly in acquisition Western accretive

doubling Second, a base shareholder for return dividend. framework refined including top-tier of our the PDC,

results outlook. And XXXX last, Third, the consider quarter. strong the Western and I XXXX acquisition. from very company's terrific Great impressive an Now what fourth regarding XX:XX the and XXXX

million private It market. that drilling PDC placement million of begin our next an reserve and approximately day, forma our is PDC's of hand, per inventory, $XXX by BOE will this as team is approved a reserves permitted. of flow as emission the a favorable of PDC be our I an reduction funded pursue let at to is Now oil touch natural billion employees of of on per brings not bigger, price approximately competitive represents methane and but increase been getting have PDC Production our checks as shareholders. a let cash our all goal undrilled PDC thanking estimated XX,XXX let in on flow, who our XX% towards enables honors metrics, barrel free The acquisition enhances company. deal an a free are all equally and and generation strategy. just billion today's the switch tremendous stock. X the shareholder Western pursue me XX:XX better. of sheet. proved $XX,XXX to It acquisition, extremely share, returns, we brings of The some cash with getting outstanding the This scale which cash X group. DUCs balance worked revolver G&A metrics, and a details on shares early desire by the acquisition $X.X these on gas returns. the or locations that additional PDC shareholder and and are executing free financial includes accretive purchase undrawn transaction give transaction almost Great Since the it important and key acquisition goals. improves BOE XXX capabilities, It cash me XX:XX including deal price pro utilizing complement step mix, this existing ownership we and the proved XXXX, everyone flowing team intensities boxes. well PDC, Overall, will barrel, It several quality XXX of their key It closing XXXX, at me approximately LOE. for also in XX:XX on year. fully our XXXX emission greenhouse accretive Let to but merger flow clear is per locations, our about highlights.

basin, lost time years an three in injury teams, operating job. our to congratulations outstanding a either First, without

ended Pro of leverage the cash reduced this share year of forma, per we the X approximately a flow the of capital $XXX We dividend also a and ratio approximately greenhouse targets. focus X.X We dividend $X.XX just debt a $X.X free X.X $XXX will share, $XX anticipate fourth After introduced $X.XX million in per the times. operational spend XX:XX our ratio from accelerate. returned we XXXX, with be to paid base on just debt to and million. cash special under of expect momentum gas free a end at million we year launched share. quarter shareholders, under We and new and repurchased million shares leverage billion aggressive year, financial to generated generate we transaction, flow. approximately continue assume times. a During will nearly our In emission and $XXX million $XXX methane

to cover provide doubling the our acquisition. call. closing quarterly $X.XX me base will some returns, which start recently Meyers I the by later how detail am Board in pleased Scott shareholder of in highlights I the upping to that Let and approved it around XX:XX saying per want upon more our share planned $X.XX to our dividend

not company. if is strides Last making the the and We to to important, at the that, of current quantitative and details to framework, to increased we financial sight more improve through also $X.XX outreach our made emissions be including XXXX, XX program months refreshment, Board the also charitable company performance, to great call end to these XX% community We've shareholder have included post-dividend on approximately turn define XX% over flow members of to we XX% ESG and reduction by past a shareholders the dividends, or level. In and our and annual capitalization. plan the our approximately buyback repurchases of planned share ESG efforts. XX% relations XX:XX XX:XX the returned losing XXXX. authorized over progress three Scott fully further program With Meyers XXXX $XX billion the execute million our diverse year-over-year year industry-leading of the in on addition plan With board XX:XX reductions return is ESG including metrics invest our I'll continued greenhouse free improvement, governance We of to on the repurchase for gas giving needed. cash here. including outlook is market methane team special intensity regard extremely and programs, in

Scott Meyers

Bart. execution the many accretive us for strategy we're today. ways, success positioned of Thanks, XXXX this financial our acquisition In announcing and of XX:XX

On billion $XXX debt of by cleaning successfully flow our the went million. bottom cash past see Slide we've lowered our of in sheet made can up our as the XX% X, much net how XXXX free to from $X.X approximately we progress in toward reduction you XX% balance debt year. Approximately just

XX:XX ratio focus will our mentioned, on much to times. of resulted return As of debt a executing In in this XXXX, we end Bart year new along but shareholder way. be plan our reduce the still leverage X.X framework,

commitment XX:XX flow systematic acquisition and of where started. in manageable X.X one framework, time. Based we a closing Under our second ratio the to returns. of successful Next, right cash special our we shareholder annual needed. a repurchase or return XX-month times of dividend shareholders capital reduce year-end, our consistent meaningful and free expect a if we project our we post-base this leverage our to new to projections, quarter, trailing via will to committed be returning on share XX% by Assuming a dividend very the to below back at are essentially

XX:XX yield base at yield mentioned, per closing, prices. to between share. $X.XX X.X% X% expect $X.XX and per equates a dividend equates an As to and between X% a dividend Bart On X.X%. the today's our increase we This Upon annual basis, again doubling we're this to share. to to

it approximately our to billion. the market moment, to a exhaust focus 'XX. and current ability when base in see our share to our is program, of XX:XX we fully our authorization you'll increased to in equates time order As returns. grow sustainably to authorization XX% to this Board Next, dividend execute year post-base comes intend shareholder $X.XX by over our primary XX% cap, our end buyback This

On of worlds. bottom in the various price we capital a initiatives manner tried the which in execute return quantity to articulate will in of our we slide,

as but Sitting We to in a aggressive post return today, just our all environment, back bullish take months. base share prices, look shares share aim first four As Said a to here you repurchase $XX. associated in of over highs. repurchase obviously XX expect is at a increases we're commitment this at and can in see, meaning to with commitment the with modified the XX% approximately at a of our meet PDC look the implementing dividend. Last, predominantly equity per of the program. X% capital honor program program, retire buyback to long-term share buy is to of XXXX, procyclical budget. XX:XX XX:XX dividend back to we've of our average today all to look to XX:XX we'll a acquisition avoid invested $XXX likelihood months month. we repurchases for overly through special we our trading dividend XXXX differently, buybacks, we Since five our Shifting it an price where in million the outstanding next with pace approximately the million shares price

XXXX. deck. we provided level to the invest $XXX of autolyzed throughout see we detail production in compared approximately more is expect font on in in can go Dave million but blue XXXX and ranges You and on the couple $XXX would both the standalone PDC capital can see slide pro slides, asset which you as just forma, will a into to million

of obviously, of equates industry or $XX estimate increases is XXX,XXX is $XX a the per The between this inflation. month third first year. approximately million of And similar XX,XXX it's additional back day. plan day standpoint, million $XX per to completion adding standpoint, we and the the second generate fuel next crew From of to barrels a a between last circumstances. began the Round half in handle of From messaging bridging of XXXX a gap drilling numbers, back us to the and so. pro expected labor. steel, whole We the adding effectively to forma around and oil piece facing production capital in is XX,XXX years the an XX:XX BOE to million. rig part-time in Next, for the the year. DJ and a on a in XX:XX August rig this We plant set

year a our full XXX,XXX forma ranges and in XX,XXX per to day XX,XXX barrels day. XXX,XXX production see of BOE pro You'll to

story producing in second tell BOE closing the XXX,XXX the barrels and between 'XX, the oil. we second doesn't between expect anticipated to full XXX,XXX obviously XX,XXX half this the In of due per quarter. and day However, XX:XX and XX,XXX to of be

this our starts it seen 'XX in basis on to really show on can year acquisition which is 'XX, projections, its full strong be teeth While a XX. very to Slide

XX:XX see the and minutes. cumulative benefits slide, on NGLs charts going couple we're few a dividend standpoint, deal and you'll each financial the total our held to cash gas, free the returns. right-hand solely Looking Lance free cash a 'XX on of and the as the shareholder outlay of benefit the of at in flow focus 'XX $XX.XX year. table other for on Here, $XX metrics on From $X touch oil, the will flat side assuming base to we're flow, a

see, flow are cash free As increase $XXX you projecting below an cumulative can we in at script, current million. well of approximately pricing our two-year

figures total performance to the second figure obviously simply increase total quarter. our $X.X intent our the the reduce in XX:XX our in in per outlay. stand-alone of XXXX, through reflects scenario PDC equates the While cash of program, free the bake to XX% cap. flow the benefit is nearly which buyback the XX% base while In these will dividend, to forma current pro Neither of cash of share payment $X.XX terms share billion market beginning of

the new dividend XX% to dividend more and the and example the are ability shareholder cash benefits cases. pro total the look the continue simply the of of of in base us increase dividend way standalone as increase of per the shareholder to also XX:XX our framework This this directly time. to projected returns examples leads than which the this is you and each forma hopes projected by to to bake clear our case, projected it, flow our XX% and between No outlay over the plan figure. our to neither a added acquisition over in increase to increase return share we matter post-dividend one base However, time. at Finally, free the

with operations worth on All of XX% based cap over these projections two market country. shareholder our returns prices well mentioning is XX:XX the total current in you next efficient estimates byproduct impressive, the While in currently locations it's most the in the years here a that some of all, of see highly below again certainly are market. are economic

to this while free that, With Our on shareholder our projections, team Dave turn over I'll framework. Lillo. executing cash call flow XX:XX to impressive the return is excited continue delivering

David Lillo

is million. provided our of well program the a Wattenberg acquisition top XXX,XXX to XX,XXX Slide finish at environment of of bottom day get XX:XX on next bit level quarter our per strong million, of Scott XX on $XXX in for for the the a cost made plans the already quarter service to add Thanks, and basin of continuous end less total production call full Obviously, several non-op Slide our this on of investments XX,XXX important XX: program production Fourth sense Scott. $XXX in We winter of the rig a more mild Capital XX,XXX it's expected stand-alone next forma XXX,XXX came and for the XX, the and quarter in activity to per ranges due to on much XXXX the from a release. pro but focused Delaware. we PDP a the than approximately of year our above in second our incredible at touched XX day lift years, XX:XX in success press to both you in highlight planned the of standpoint. strong more and within color XXX,XXX to oil performance, and and planned and Moving barrels and our artificial came for of the our BOE detail XXXX. the month. in can guidance

XXX% per Here, capital that Anticipating know compared XX% is investment approximately reflects XX:XX of a you foot span. see year increase all this can equates time to same We $XXX a the up the crude a to for costs million planned year. almost $XXX of well at ago.

increase XX% XX in X-mile reflection will seeing For drilling our Those drilling seen a This costs day. same XX%. spud a XX:XX XX% stages steel of recently same little XX:XX in in entire economic days a our currently we're than our drilled and a XX year, However, alone In total XX% AFE. the be of laterals than steel of accounts team past release for we cover reference, As Lower challenge, to offsetting average. XX% inflation new XX. are still compares from much more the and time costs our our of is is Currently, spud class more these rig of approximately of to Lance year. our some five total will over completed AFE realizing that the the in at world real per of moment, we've last the efficiencies wells a of most the projects in basin.

of also our to laterals, e-fleet In transition certain addition in plans X-mile to A’s and to the areas crews electric frac while team rigs our Niobrara testing field.

generation, continued moving emphasis free permits, the Before operational been cash to flow the slide. advancements the to comments can't XX:XX much this forma past While want pro assets on corporate core on of year in rightfully ignored. has be attention I the highlight on and

place. DUCs, acreage. throughout either immediately generate are range to We of and Looking all in map it's at used to range area on on fully permit to this see, our give few or an the area identified area existing a compete XXX area an slide, can side having you're overview XX:XX areas. Lance added important par locations the permitted our but that surface of what the for existent minutes, we've in the this to note will legacy with in seeing returns incredibly right-hand capital you wells the expect

to rig completions add investments, capital close. we and expect year In XX our terms around of and up additional an to program pick post full activity

Shifting We expect and forma in update our investment this to capital process. Slide to an year of result OGDP a CAP XX:XX approximately pro full million. XX XX $XXX provide gears, and

before our CAP year As Guanella application everyone for our we is just end. submitted aware,

see, process over want involved location analysis, of The can of There impact CAP everybody far. is the the a currently including of plan XX:XX given with For on comprises development other so XXX% at of and and the this long number the date At only designed alternative on. document you of in But gas XXX% to I the a this reference, responsible future of stakeholders, will analysis not was noise wells XX,XXX-acre variety remarkable. offset meetings approximately truly XX be a and is country, if commentary process to reduce way variety keeping electric pads. power tremendous go still a glimpse of X,XXX more know local of We've water this operators. key energy XX:XX collaborative steps will evident. appendix location, with footprint piped, The of a you provides planning benefits which accomplish presentation. with your project rest agencies this eye of thank each to state the thorough is in the produced made are the in this many in oil development and cumulative we a on a materials. municipalities, emissions. little a minimal as XXX each as a Colorado, pages PDC, Guanella of

road to Slide ultimate we tough few on regarding a time touch XX:XX quickly to plan to update here approval I'll year. it's predict map updates throughout the XX. the the While frame, OGDPs. shown consistently Moving

OGDP. First, the Kenosha,

XXXX slated plans. see in wells tentative additional OGDP through and line time, with that on in to This recently the approval Secondly, currently we're to completeness be frame. COGCC side, not are date a queue. XX:XX the now until can hopeful the we've have passed represents future determination At right-hand you for the phase turned May. the hearing added another project As this Whitney XX XX project has an wells. to These time the wells in permit

moving XX:XX the our the is to Our is our applied completeness has want a a continuing provide the demonstrate to permits not Great actively Broe assurance hopes sticks that XX Next, project Throughout from also the This and take all hand. the of Western of the of XX:XX our a map in on XXXX, is lid passed risk plans under OGDPs of converting but acquired approved course OGDP. intent here that to to that in slide. and forward, to show team phase. locations well County at flow XXX track stock. premium our bottom I off permit determination is Adams the attention call new identified rulemaking Finally, to the record we to

Lance can a regard. the these see, Delaware is XA into for XA. an there we was provide. permits it for to felt haven't progress Colorado throughout continue more of approved needed Form necessary X, future year a making currently XX Finally, permit past, for of our permits and shift in call locations our over each regarding locations we've bucket development above Form the as in In through XX:XX we it bit incorporated you other gives team other will a to update has in meaning approved locations on the future level -- of disclose. XX:XX this in overview XXX are look the XXXX in detail fully a Form for are There These XX avoided is area. all color XA. acquisition, subsurface equipment, all now also this beneficial permits. Once ground. permit Again, this well we XX activity. surface as to locations turning the DUCs, As with case, a permit But need just a before the approvals are to gone planned which wells A us the this the similar facility Slide the for all we

Similar of slide. Wattenberg $XXX the million. time cash important we of gets to XX XX time being than capital it with the Delaware XXXX, investments to to free a XX:XX we cash highlighted drilled rig the While run clearly plans part contribution Similar by XXXX in XXXX some approximately is completion $XXX our the exceeding flow total and in XXXX, the in crew, majority of Wattenberg, operational exciting full to flow more of orange bottom $XXX recognize million resulting free projected million and really capital, box each of in the at to plan completed. a wells have

U-Lateral that in in section, more we First, months. includes and drill XX:XX they back a end Wolfcamp of are wells wells one as in the u-laterals, underway. color line which our spud wells are with total which completions are project, to three lease exactly These equivalents flowback A is three existing sound. the were project like as standard currently B. the reach in These XRL XXXX in are A six shaped of Wolfcamp U in and this other Look and laterals upcoming wells and on the for January the

year We area Second also this the basin. formation our Bone current to would inventory successful, year-end plan If year. these the our in be central test in to each Springs additive projects of

Wattenberg Importantly, our our in wait a digest and blocking extremely basin. as results the is and months, the focused on in tackling team we coming well acquisition

it a With acquisition is on and forma acreage expansion Lauck inventory for the for being. XX:XX Our Lance time PDC. trades, over I color will on bit turn acreage to opportunistic and that, organic the pro adds attention more

Lance Lauck

just XX:XX Well, disciplined approach thanks, restate to through the call, value-add to important pursuing opened as it's Dave. Bart acquisitions. our And scale

a free very economic locations threshold and strong provides the long for time, a outlooks. and area cash high share I'll minute. the portfolio. acquisition criteria The per to and to delivers already criteria. the finally, this all multiple This be this how third XX:XX has our over while and cash the the in flow, first financial continued share strong second PDC in by provided accretive which same price correspondingly at this with key term commodity metrics, our Scott increases across maintain market, key share sheet. rock shareholder PDC delivers quality, of economic touch our core Then The per on is Wattenberg flow were highly acquisitions acquisition with high have to and in enhances free our more acquisitions, XX:XX balance we've slide absolute the returns. starts As and those value

next expect Core in scale this the Wattenberg accretion The price building and million $XXX including of the of $X.X realize XX:XX over purchase we on and this XX detail slides, you'll PDCE consists to highlights plus shares placement net few financial a So the billion of more 'XX strength acquisition, of the million common 'XX. acquisition. stock, see of $XXX X approximately Slide core million private cash of the debt. assumption of bit

to or by middle On see the some year-end. the of transaction. a of Western ratio below As X.X at page, Scott expected this our shared be comfortably our remain Great closing below of on transaction undrawn this and time earlier, key with can leverage anticipate cash at time revolver or you'll to as acquisition of X we projection our as XX:XX support the benefits hand is

pro XXX has Great SEC First, milestone of is a company. PDC's our barrels of million equivalent be reserve year-end reports, own billion Combined SEC year-end 'XX proved barrels for as Western year-end engineering an equivalent, expected SEC reserves, which with are the X.X reserves significant forma to estimated 'XX.

day about XX% Our a Wattenberg with MMBtu. of flat The is based our oil SEC billion XX% mix. oil meaningfully accretive Next, value BOEs XX:XX proved per barrel and is nearly of per pro liquids. and pricing product $X.XX forma of Great pretax mix XX% Western produces mix oil per on PV-XX base our to $XX XX,XXX $XX reserves

blue core the Finally, fits map shows color, well right XX,XXX the net Wattenberg position. acres which our in very on existing the with

the very is in area much and very County returns. located delivering economic Northern Adams core competitive range of new Our strong in also the field,

only XXX Finally, transition Slide permits identified permits, our approved Slide in County this have as known metrics our the existing bottom area, Adams area and As all detailed in and is greenhouse you'll with another intensity. see place shows and accretive Form locations XX:XX to to XX gas are the a XX, the while to emission fully or we breakout the Of table, of inventory approved either provided new acquisition we status. surface by our locations Range XXX XXX permit of Sticking earlier, acquired key the the locations, secured Great subsurface such they to the Western's permit Form X We been XX:XX XX subsurface permits working routine to and only these approved need the nearly now pretty long-term planning We Historically, for locations look typically County, and column. file post Adams securing we already surface has move COGCC XXX to for that or approach that the permits the area. as DUCs XX a permitted exercise approximately with days require the financial XAs XX Form Xs. approval to XX appreciate for forward having takes in locations. submittal. permit unpermitted to fully

sign we received Western Form that plan Prairie of past recent XX Xs of in XX the received from state. their this Great continual area in to locations area, XX:XX Additionally, noting clear approvals are and XX approvals Summit these now just in table reference, X are locations. week. the reflected are flow Form acquire worth week, not PDC's permitted it's the in unpermitted locations For last fully permit our a of standalone and Both

price which Wattenberg provides demonstrate IRRs of both strength look focused the inventory. our commodity This Now two X upon as permits as of the While approved outlooks, key the approvals. also PDC let's strength these expect work his has well the been with we take of graph portfolio. on a based economic financial new bar our as tremendous at doing the resiliency team OGDPs projects and our Form and outside secure see tremendous XX:XX CAP our Dave to are

the per at $XX.XX of return locations barrel, per $XX cost return Great X.XX from rates this most of our $XX immediately XX:XX our of rate XX% generates barrel that oil, our in the brings XX% acreage X XX:XX pro midpoint well, forma new this in per above X and premier NGLs, pro inventory the again, inventory and for pricing add structure at area value It's well flat returns. Assuming low Tier of XX competes capital. like or projected an complementary as breakevens, all and per has clear assuming the XXX%. strong internal current cost contains demonstrate some Tier company. structure, Slide inventory with to between our X,XXX $XX our $X believe meets that Additionally, nearly current that we for our we providing internal see $X.X of estimate and NGLs country. million analysis of Mcf of as several range our have that graphs the that the criteria to at acquisition right With returns this forma Western

of depicted production importantly, well. BOE we growth of on material on but to cash deal reduction First close, acquiring our a jump 'XX oil this on number on second PDP transaction our meaningful basis. think our about The XX% of higher fronts. we the very XXXX G&A low predominantly XX:XX of we XX% and equity scale on half per a of our production basis, in Due production. gained overall a a BOE as all, a This And run rate gained growth timing drives about improvements LOE assets combination makes the of this accretive as through metrics to basis. and

flow benefit graph estimates pro of per program, comprehensive forma finally, our further PDC relative bottom Slide XX% the stand-alone This free estimated proposition with levels. EBITDAX of share slide group, screens then XX:XX basis, improve by our well buyback estimate the share industry-wide our Neither true right these pro XX. cash would for we an numbers. XX% which approximately Importantly, summarizes per On of the And our forma to include to planned value shareholders. in compared 'XX yield XXXX. compared in a share EBITDAX extremely improve on a to peer our

Additionally, after-tax work how above net nearly asset shows our total return over share our trends EBITDAX for thank teams times. coupled in shareholder investment model the creates graph metrics, of projected our in program, supports XX% XXXX return PDC company all, utilized existing to The our their EV XX:XX and driven times an X level of capital we to extremely at to Q&A. is where digest peer for our operator is and inventory undervalued I outlined lot the all be thesis. which and call data projected XXXX, stock there's know aggressive in tremendous earlier Bart All is materially for acquisition. along want to on XX:XX the to of new last to peer an this acquisition, turn median the value quality yield. financially believe internal Scott median our framework are yield a versus high call. on the group compelling relative happy of significantly this with repurchase multiple 'XX business with the quality X screens just We These

Operator

XX:XX of JPMorgan. the Thank Instructions] comes question you, from Please line Arun sir. [Operator ahead. first show Jayaram our from I go

Arun Jayaram

XX:XX Good cash question is the morning, My gentlemen. return. on first regarding outlook

$X.X cash and in billion $X.XX XXXX, returned You've 'XX of buybacks. outlined of including billion

be we to delta dividends? your we bit balance the buybacks cash expect should and If quite the free dividends? variable the math So about that we reference is should strip. the above of flow here how deck, below deck split your base a should in between about is and the think how think And that is

Scott Meyers

Great I part share the Arun. is that's that $X.XX the look going think a Yeah, XX:XX and spread two-year really really billion. we're we over at that question. the to The spread buyback, when of to that plan important would strategy period.

be in well. we I dividend back we be but buying and number a know When want don't to plan you bull at years. that of post-base buyback. point we lean do outline on do total 'XX each to that we're throughout you the a is through little think towards case, different reflective that it get don't our when can going is also hit end the the mid-cycles, in to the shares. would this towards We we base. more systematic, grow goes special believe, look we dividend of fully in we we the we We to the the Page yet, 'XX, expect that be don't special the to We dividend, to share But what we're will XX, full that's year. on set able up continue bit of what tried the us. the towards XX% can as to for process then to So environment, the when end of just game for deck the look be more we systematic price that less a up, buy kind the when keep And to year of want but so in into

Arun Jayaram

just Great. one XX:XX follow-up. And

can give based you X% XXXX outlined to X% production pro 'XX forma to and On XXXX the the preliminary the similar growth $XXX million And have and that the billion? from Scott? baseline full oil total But $X growth. on second the half you Is program, or is us to rate capital the year? to that, guys similar

Scott Meyers

similar, say to the year. more XX:XX Yeah. you say we're doing of going in half I would similar the be it's when -- to second what

range mean, have So if clearly, of I activity. for extra you look at four capital an an to all-in 'XX, we're months going

four we on full in that rigs year. it's three mean the months, Now doesn't full DJ but plan running

adds a capital up alluded to bit that see that Plus in 'XX. XXX completions, to going So of Dave you could little completions. XX

rate somewhere capital and I'd million-ish million, $XX second XX similar adds, that or the So million, half is. in $XX year between burn what very $XX capital spend to of neighborhood, the say

XXX,XXX, in growth of number for look X% As to second far as 'XX. X% production, if sorry, half to I to XXX,XXX would look rate that off that at say, the have -- you us base run

Arun Jayaram

Thanks Appreciate XX:XX a Great. it. lot gentlemen.

Scott Meyers

XX:XX Thank you.

Operator

from line go Truist. XX:XX Please next Dingmann Thank of comes ahead. Neal from I you. question the show our

Neal Dingmann

morning, that Really was the all maybe on just and first had Scott, congrats payout. deal. on the question XX:XX for Good I

just have talked free -- I'm You of minimum cause a about the guys push obviously wondering now a to cash flow. you great me, over closer We've payout is of think XX%, XX%. bit level? flow cash crazy -- and free XXX% to others down little some seen what of levels a XX% to all that I post sort what remain to you would high

wondering, have obviously going cash certainly you I'm free So flow. to balance sheet, the strong have you're just great

I'm wondering payout? sort that think of of internally. in site going you part about what's So degree more drive are When the to just that,

Scott Meyers

XX:XX do to number debt But environment. on to bit our of a are tried able bit one, adding the with Yeah. that down. we that, transaction, little pay No And different of that to Slide say XX like be problem. we to continue I we'd this a to in would books, and

Our a end that $X to billion. $X there being bit don't is a debt back to having company. we thing. goal get get always a is good down in to billion out the we We see again, down back 'XX, debt-free about But of 'XX that little to permanent when by ourselves think of

avenue XX% I could environment. just year. when that even measure you that going a that down lower to what price XX:XX probably through first we as through this quarter-by-quarter down extra kind paying for up bearish whole But probably working in new that on be that basis. of very going is least ourselves the once see structure debt we're on feel you're we'd around call get measure debt at that going than billion, our got. XX% We environments. look that's year, So us would say, want to more. don't $X think, debt, still and down to again, I some ourselves this, to to XX%, we the XX% a we sound our And We're we more But at that aggressive is stay of

one So and little least, the you year, But makes sense. little that's end a a the bit higher that that's up bit that so have could to we'll less. one at of by true quarter, number, XX% quarter

Neal Dingmann

XX:XX Bart, guys. very And Thanks, you Scott. crystal one then clear. No, maybe, of second, for

Slide like areas your against up I of the if you your sort question is, My on that and rank would just you really is add question my Delaware, or -- Wattenberg Western would hours. I'm how slide? Just XX, by wondering locations well economics that add Great others these specifically. stack on

Bart Brookman

don't in the the that to hunt. but be that XX:XX Yeah. bar XX% think chart. are the I number, highlighted Neal, XX% locations on of the Dave, probably be Great in Western have exact IRRs. I range in they'd Delaware right middle would

David Lillo

pretty close, yes. XX:XX It's

Neal Dingmann

you. Thank good. Very XX:XX

Operator

comes show ahead. go I you. line Thank our question from from next Michael Stifel. XX:XX Please of the Scialla

Michael Scialla

for Yeah. that? Great to morning, an exit Good to ask Western was correct wrong, I'm the XX:XX How while. the you a that, on think say Hi. Congrats I done. came getting was deal I looking the if me guys. competitive about how thinking about, deal wanted for process

Lance Lauck

other can We evaluation, details say, This apart opportunity. of this the And lot assure a right risk and a it go is probably teams XX:XX the our that real around in had just than we this really of very they the there I the We just Mike. Yeah, ensuring you, cut to ways. competitive provided long nature analysis look, at the that look at a process did can't we valuation. good job Lance. multiple had in right into arriving

by the there midstream marketing also is here. And X providers teams. So midstream well standpoint, a from again, done

standpoint. midstream also it from some basin diversification brought a So

Bart Brookman

XX:XX team we Lance's negotiation we're Western, and group the fair, happy Mike, PDC this their team. the parties, on obviously, as But the at point, here. Yeah. and good just constructive product is I'll add, -- end with Great I view to ownership all it very and a

Michael Scialla

Yeah. XX:XX

ask to wanted on permitting process, I And Okay. Lance. the

You process typically Adams the XX subsurface other locations of XX-day said permitted? to getting that's kind what's County is there? of the in from done, the timing And Once getting XX a process. what's those

Lance Lauck

acquisition. lion's XX what approved I'll David County additional Western permits that's all they've start time the that I'll And is has in locations the for takes secured Great turn surface it is Yeah. XX:XX But the that as on and have it Adams XAs valued the thing well. comments for over remaining done think these to this neat the really getting that then some that share and I the of we in in past.

it's comments, days. the frame, minus COGCC with us, And in XX-day those subsurface the permit. said running type for been But state, it's probably or more to for XX to now a time a plus we'd the filing So in approval have say months. XX over last few like and the our get prepared

to permitted and permits those are have we're we drill. once approved, So

So time. approved at that fully it's in point

David Lillo

XX:XX Yeah.

you permit, the construction. number XAs permit. go established we are permit. in think to surface XA, the wells a a of the that XA is are that just then wellbore So about which when the And There's back

have even back and Oil make in go make the sure sure that with and right file that the we them to place, casing we we cements place previous that So in point, years the that Commission, the and right Gas work and been the big problem which type of we're the in the subsurface those sands the at really all things, last a under protecting rules. permit hasn't freshwater but new a

Michael Scialla

guess would do get the but take if if the sorry XX, next move terms frame, in time in of to those question, or land XX-day in I could queue drilling you those -- those follow you that I another up process? then XX:XX up where think would

Lance Lauck

for a they've XX:XX on a over upon few been today, the waiting Great sit to that the filed a Yeah. Based I have we're for at been the mean, but permits months. program couple build of Western where assets, state we 'XX little now into

So there's a few that. more coming that are from

already as and in there So Michael, the a permits spot pretty look coming that you go, are good well. there's much to we'll few more and approved we're door that that ready that be with I shouldn't in at are too the a have program, 'XX longer, think as

this really program if down, 'XX you a will, for us. managing Western got think done So Great process and good we've well that has pretty I buttoned job

David Lillo

agree, XX:XX Lance. Yeah, I

and the the our permits be they side on And working approved program side, XXX out Western have of will drilling we lined with the we're DUCs kind off hand. in the their rest legacy through legacy and On have XXX two permits, which with then rigs running side, Great of year. our

we're think shape, good real I confident. in So

Michael Scialla

you guys. good. XX:XX Thank Very

David Lillo

Thanks, XX:XX Mike.

Operator

the comes you. ahead. Thank from Please Dechert go line Steve of KeyBanc. next XX:XX show question from I our

SteveDechert

XX:XX Hey, guys.

for this Thanks. deal? on Just time want first to little get Weld the County more with outside a color of stepping

Lance Lauck

Yeah. XX:XX

Lance. the County, done a permitting got is and shout by looking really From comfortable really it's dive our operating here. to teams the Western we deep real pads with County deep And to with County each the Adams perspective, permits process team this has we continuing drill. there those and to Adams in did and a continuing getting and at Adams opportunity a that of So of place the great out dive Great on work Northern took and our into coming just regulatory that real one actually

And our so the prior looked at opportunity. from talked to we've about of I think this around was our having a one comments That areas we earlier with time look perspective, at. long key that

just of well-established to the with didn't the that that, of just And valuation a for file approvals. surface have consisted and long-term day, then paying end so process permits at very for permits here the the the the acquisition DUCs, subsurface approved permits with those

So at arriving all came in that feel very the we together well valuation.

Bart Brookman

XX:XX Steve, Bart. this is Yeah.

formula Great in did this obviously, on far and and in this Just community But community end. very PDC and for, we as in and PDP. we're us regulatory County. DUCs the value really to the said, he to of charitable Western going build responsible permits taking time the approved the on the we project understand add about most put to paid the to the we relations, being relations also, what of And Lance, we the it for really the aspect is felt will obviously the and apply as tremendous as including in their also Adams environment researched county what giving project operations probably to involved good the was

Steve Dechert

XX:XX Got it.

so XXXX? Okay. year-over-year the And activity on a stand-alone little on Is that Wattenberg, bit or less versus a like XXXX then it correct sorry, Great. -- basis. looks there's just

Lance Lauck

quarter. the think I When those somewhere XX close I number the think were I some bit mean -- wells, a third it similar. it the -- is to one XX locations I'd the of look it's most little you length. of call at to of lateral in we in mile completed fourth third in had XX:XX and

plus footage, count little look little total X%. total But makes line completed, or count well turn that So a less. miles bit or it's minus the at when you a

Steve Dechert

it. XX:XX Got

Great. me. That’s Okay. for all Thanks.

Operator

Oliver comes Pickering, from Tudor, XX:XX Please question I [Operator from ahead. Thank show next our Instructions] you. the Holt. Huang go line of

Oliver Huang

could in on sizing? that taking all provide on for of implement some Good has the design, look Great might asset level And lateral whether or quick assets, it's morning, you the that questions. real and color spacing Range area, been the my thanks on completion on pad all spacing XX:XX or you Western operating One changes the the to any base? lengths

Lance Lauck

Yeah. is Lance. kick Hi. over it XX:XX David and there. This start I'll to I'll

teams per the Field. spacing that evaluation, opportunity. And was in wells numbers. uses cetera, we to within resource upon work of that that's into really work section assess lot of acquisition poured approximately lot our have et it's of here is those what our type the based was in done So we XX that Wattenberg BD what recovery, a in the a this our drive home range utilized the PDC And to that used curves,

the spacing. be so are through curves that how pads many may on type the And again, XA opportunities an wells depending permitted as ultimately that of spacing. on based may can find have you that to drill There that increase we in type opportunity as of a what to the areas the says far few

we'll now something we and continue that that's more to that get teams So involved. work

Bart Brookman

was XX:XX the is cemented Western. permit based Great originally that opportunity on That increase by

Lance Lauck

Right. XX:XX

XA, So you surface it that's two-way, in permit. point that every every exactly get under how drill many to In a made. that wells that's good says Bart and that

an approved total to consider that greater down opportunity number in the than extent spacing per additional provides that was the that the to so XX XA XX. And beyond the wells was section PDC

Oliver Huang

And the XX:XX some color DJ the wondering second Delaware the see question, into the in longer-term Great. if announced fitting be minimal perspective? my business to given all greater morning's a you focus and deal Delaware, in able color. just provide following how you scale the That's helpful for this of on the in terms might

Lance Lauck

Delaware I'll turn value. great and as Good. Yes. on We're this, No, the XX:XX it but to like that's on Bart well that thoughts position. over question. generating share some then we good

at it's to rates with about, As much the the Bone Second we Dave U-laterals, test life. smaller the Bart inventory Spring, that test. got may couple we our to that talked the programs But have the year time, there a from about C much, a expect same this year, next talked of of clearly, return test Wolfcamp generate

the is good we things free the there's to do mean, some And that level. over to think at sustain I So can bringing asset we really continue cash flow asset time.

it's fits economic that well And so one portfolio. it's our and our in portfolio

on, and there. the deliver that to our sense mean, But his numbers integrated look that Western to we'll find on makes for the for today. So bolt-on that as right I here on in company the to this we're Dave about continue opportunity, ways values now, is opportunities into talking again, comments some add focus are Great to wonderful getting all company incremental

Bart Brookman

just XX:XX the proud couple four Oliver, Right now, what Lance add inventory years. Yeah, plan the a of to team. of approximately really and to out got we're terrific we've saying. got years of was next We've for mapped

in we're seeing right now results the everybody early basin. to the going is by think really excited I some be of

got, overall, expect and some can we're added excited opportunities inventory several about. tackling on on as you to really and that And and going on. acreage the to So us Dave's on Dave really then blocking X,XXX ads. that recently organic we're focus team noted, the you focus to inventory

confidence. of flow lot the a company. think, is, of got said, the free we've as XX% about cash So I Dave And generation this for

Oliver Huang

time. the for Thanks Great. XX:XX

Operator

XX:XX Michael I line from Please next comes from Scialla Stifel. the question go ahead. our of show Thank you.

Lance Lauck

XX:XX Hey, Mike.

Michael Scialla

on the bar know I says in XX:XX to still some Yeah. they have on other private high M&A. just I wanted everybody basin. ask a

would do, anything opportunities existing I else to sense those and to But even mean base, do any that in other privates. I largest the consider any look your make Great with perfectly obviously guys seem You sense asset DJ? to you Western think think fit of are it's there at? does make the

Lance Lauck

area of because said an barrels the remaining at companies, field. that's per really day largest private have position this of core of XX,XXX in they that companies, you equivalent and Western the when was Great acreage You of remaining XX:XX the clear the oil the really, look at

the one. just operators just getting basin of on focus there. with mean, forward and really we why as continue the the one the came to, in the in key one. over people getting stood course, team opportunities company. There normal place this private I are really for But integrated, But look both one all in we other best the time. to our this to us those out executing reasons getting top So in look the the our on for in at is Great to potential But all this just be we'll future. pushed to processes continue time, our at is -- this Western our and at place, on opportunities cleanly this same this opportunity

so And one. deliver our to this for look us focus on really this priority That's results and opportunity and our focus. from

Bart Brookman

integration technical press Mike, deal. planned let on excited and that we this just side, bit, the to and some mapped about. court have me now add the out. We to XX:XX this aggressive permit on program little we're obviously clarify, full have We've an really And talked a Dave just got a the of of things

we think XXXX focus for I PDC. at want So execution/integration to an the market look as

Michael Scialla

a XX:XX Yeah. of sense. makes It lot

process for one more the permitting Just wanted to the OGDP. on Kenosha ask, Dave,

of got expect County to COGCC up variability a But do process? kind I kind you're hearing the hearing? Weld And that Weld with see from potential you after then for how -- much, guess, from timing frame guess COGCC You've of time that the May in targeting know you I coming what what's I want that move for that. anticipate what hearing, I there? and to County then

David Lillo

to confident Michael. to about locations the XX in Right us. pretty and we're add Yeah, Kenosha now, going OGDP, XX:XX that's

have that. We of informed the XX% for consent

everything be away our that will to to And Gas good out going date we I with more we're Commission. back it real commission We've and the that traditional think this been to permits in forth hearing. hand. I May hopefully, point. a confident do talking We've had X. that hearing feedback of up is walk on And and So feel XX Oil

Michael Scialla

you. XX:XX Thank Sounds good.

Operator

you. Thank XX:XX

the from Pope Nicholas next go Our comes of Please question Research. ahead. line from Seaport

Nicholas Pope

morning, Good XX:XX guys.

Lance Lauck

Nicholas. Good XX:XX morning,

Nicholas Pope

the how have. guys have could of the versus XX:XX follow on kind and when of tough are in inventory opportunity with the the I you where the wanted little just is. DJ I chart kind returns Permian Delaware attacking possibly rigs the more compete focus -- probably kind the you with, bit and the activity the in to mean would returns I of of amount on see look and a little up a generating at in to you acquiring or DJ. be organic adding It's guess, inventory bit DJ I what adding the

acquiring I put the into how to incremental asking in I acquisition? so look more does seems of in the I back kind Delaware. the trigger really, the -- And it at what spent I I'm dollar, mean, better this the if mean, beyond is guess, guess, mean you that organic activity DJ, I versus

So what be? would that trigger

Lance Lauck

XX:XX Yeah.

that's two of We I that see think midstream risks really the company there's that something whether always think time. basins. take that from we value other be opportunities our having to you long in a or we because at positioning. And in standpoint, can states look can like value And over a just portfolio different that assets the enhancing arise. it's constraints whatever different and

year. end day, base the So additional the inventory, a it's the David for looking company. I of is that got of think a testing got Delaware highlighted this at the that at our we're foothold things that production solid we're It's good and

But we're again, on and someone out -- opportunity to like going where for think the that can company. this on mean, in year. corporately that at the we make results to because the -- have in drill say, just is else's for our always come focus right as land opportunities spend there about well. and manage XX:XX free farm Are this solid integrating going cash I to we're is time, Great very Delaware. and probably that sure deliver So way I same it and we example, flow our would those that, capital Western at look the model our could balance

several into knowing this for the and our strong still are we key it and value asset that company, go factors portfolio So delivers having very again, a portfolio. things a think still there of But that. that makes something is part

Bart Brookman

to adds just of XX:XX Yeah. this. couple and Nick, a

a obviously, We regulatory in also the permit have new flow. Wattenberg, environment with XXX in

Wattenberg of obtaining acquisition in the accelerating confidence years capital But in Obviously, drilled we at have now. pace. but life is be We get through right permits, will XX a some in the acquisition. that comparable spend inventory Wattenberg. to our probably The XX

inventory the for So we there. our runway didn't extend really

there's So regulatory having And a the balanced the capital value looking operations, basins. risk for our to. we're always in strong at both that delivering shareholders balance of then balanced the obviously,

us for course. stay reasons of variety to a there's the So

Nicholas Pope

it. XX:XX the Got I appreciate helpful. That’s time.

Operator

XX:XX Thank you.

Our Please line Jayaram last Arun the comes ahead. of JPMorgan. go question from from

Arun Jayaram

XX:XX Yeah.

real quick a like the doesn't synergies. It any look deals really follow-up. Just highlights

call it, was the being I synergies. really maybe could about But benefits some not talk on by, Scott, it's if you wondering Lance, So front from assumptions maybe synergy aggressive or under-written transaction. potential the on

Scott Meyers

have not private some sitting compared I out that run will what more there to the but there, the XX:XX to Clearly, are that to G&A it's but you is add numbers we're operation operators, tell there's Yeah. production we the reductions, getting. on additional the with

BOE on like see slide, you'll Lance's think down. go do G&A per I does So

will You issue rigs operating three and ours think we there nuggets and of bit of and with just some a was of we'll up LOE opportunities running, where mix consistent there's where as little some overhead, year, in time, stacked the this pretty see pretty 'XX. it over office it his job barrel strong. as LOE drop in a having of their that cost merits but more and a always Dave of was they here the bit with thought there go additional That's savings a through do I'm 'XX less and team little themselves, practices I well. deal find field there, little do on do, kind sure the we having on one and

the metrics little bit, I'm a but be the will in rest I there ourselves. think much So of still sure pretty

Lance Lauck

price touched Form there's even things valued a CAP than the going we XX:XX may additional OGDP section one we've Those discussed And that already And per density be that -- XAs. we standpoint, more Arun, earlier that haven't is on we well. there's process again, what Adams just there, XX beyond too. haven't the and locations touched the the find County, of on as would wells from areas in we more some approved drilling on

drilling things of his have mean, David on So just time. we done there's and amount timing stuff. find that along we'll things and work I pace a in think team those clearly, over tremendous efficiency and lines and

acquisition price. of itself didn't lot manifest that time. stuff a just the it underwrite I think We in over to there's will So purchase

Arun Jayaram

Thanks a lot. Great. XX:XX

Operator

At showing to I'm Mr. time, to in Bart you. this I'd for further remarks. back like Thank the XX:XX questions call queue. Brookman, closing no turn CEO, the

Bart Brookman

XX:XX And return shareholder Deane. you and framework framework, Yeah. Thank Thank transformational Western in Great day a great our about cash hosting flow excited call. for obviously, you, acquisition. free the very the

joining as come for integrate thank and to call. everybody more So the we we

Operator

today's This you you. call. Thank XX:XX participating. Thank conference concludes for

disconnect. You now may

PDC Energy (PDCE) 1 Mar 222021 Q4 Earnings call transcript