Earnings call transcript Q4 2022

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

Operator

Good day and thank you for standing by. Welcome to the PDC Energy Fourth Quarter 2022 Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded.

to Vandeford, conference Director like speaker to now Aaron today, of would hand over the your I Investor Relations. ahead. go Please

Aaron Vandeford

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

materially press Slide a appendix The website release The presentation also of actual today's could presentation. factors filed from financial XX-K. We Relations disclosures forward-looking X of our Form on available can that of that call, both differ Investor GAAP the forward-looking at found and be in the reconciliations, measures. statements, and appropriate the on including reference our are discussion cause to On and non-U.S. statements we results page will www.pdce.com.

CEO, over With that, I'll our call turn to Bart the Brookman.

Bart Brookman

good Thanks, Aaron, morning, and everyone.

company permit most extend to Great regulatory their our grew driving thank XXX% permits. Reserves billion groups. accretive Let a operations in barrels dividends as production highly share shareholders X.X of solidifying measure, our of to In to year-end team, already land me in growth. we a you BOE. most $X.XX May, almost the our of special drill the billion, was entire billion by solid replacement equivalent XX-year fixed reserves successful the record form cash year by as and sincere returned every company, PDC's closed XXXX reserve repurchases, position and acquisition, $X dividend we share for for this the reserve December, per stands specialists, core and compliance our and history, exceptional a past I XX Western to want record production million level of the free Wattenberg the which flow $X.X saying a oil open XXXX, group, over

deploying demonstrates long-term emission we the CAP, aggressive permit goals CAP development, And we hand approved more now XXX focus pursuing we the CAP permits company's over business Emissions reminder, XX% wells, XX Great obtaining A laterals, X The including Colorado. program emission of ESG and these years. electrification and for XX,XXX goals, through our our code in state of the reduction and out emissions XXXX expect in we gas development our XXXX, XXX% In XXXX. materially significant XX have approved OGDPs, a in through locations DUCs methane more results. life development aligned this acquisition, cracked beat acres, XX% on surface and reduction goals practices, mile for on goals have implementing permits best us with Based roll are in we with net and the year state-of-the-art this recently achievement, greenhouse reduction last to X the company, our intensity, outstanding to and even on within reduction Technically, in over near future. Western a plans. quality designs. facility emission

XXXX of the the on design, anticipated some this on million country. color will the of more success to levels, XXX,XXX in Lance Projects BOE per to will in capital in million, spend year. billion. is anticipate economic mapped low resulting successes, well are extremely and that's emission is, And these natural basins on $XX oil turn CAP, these at both the $X.X XX% in in projects the Within to will a projects be highly like company's the XX emissions and approximately gas CAP BOE We of most $X achieving a the the resilient cash drilling reduce or $XXX lowest world. flow story, the now emission day. by moment. XXXX while for from of will our some and the company greenhouse And of Free I'd XXXX compelling production be another attention be this gas, our plans aspect Building most production economic. provide

modestly the will reduce We ratio for and debt anticipate leverage levels year-end company X.X. of

post buyback $XXX dividend to commitment both lost strong. to to our time both commitment Our years, company shareholder in our to demonstrate million, basins. my operating of and done. fixed the record EHS announcement And $X.XX recent cash injuries, our free Texas XX% on per a safety, our the fixed authorization returning well congratulations And by remains increasing operations flow, share company's and job today, of returns. from approximately PDC's last and Colorado for signature dividend, commitment a a a and teams are five to comments sincere no with expanding the

the Now turn reserves I'll inventory. Lauck an call update Lance company's over and for on the to

Lance Lauck

year-end XXXX was Overall, reserve by important, barrels and generated which additions increased proved proved reserve drill in revisions. approximately This bit, reserve asset billion is increase XXX% our and the reserve we our highlights base which to through base. of X demonstrates oil driven This deliver approximately X.X X our Tier high compared equivalent. sizable replacement represents Equally of Great generated value and XXXX. XXX% and XX% Western sustainable acquisition material XXXX annual creation now Slide reserves, can our reserves an Bart. quality proved that of a proved our to very Thanks, year-end in future. replacement the and we one the exceptional by

the very resilient reserve highly again, declined is nature X price economic measure have gas, base. Tier of flat base, reserve reserves barrel a approximately $XX case. assuming proved value by of PV-XX PDC $XX like of of oil SEC case, deck another end we pre-tax only SEC from generated also billion. approximately I would to a highlight our a that the per At flat approximately $X $XX at year XXXX X% asset our volumes This, price the

to X. best-in-class take Moving our some additional now to and provide on detail X moment want a Tier inventory. Wattenberg Slide I

the With in position the SRC Western meaningfully Great core consolidated of assets, the our the and play. of assets, integration have now we

geographic We have XXX providing clearly windows. of subsurface a we're details provided describe field. economic than Wattenberg requires drill of year-end, more to economics, locations, inventory area. by in At by historically characteristics. our But more This our well in respective their we phase breakout the inventory Tier our economics identified X,XXX DUCs core order X have reservoir inclusive the by

of encompass this more phase highlights than slide including one As have slide, five geographic areas shown gas retrograde our windows, window a four phase black on This reservoir and oil distinct windows, four oil two a window. light reservoir window. locations our that

our For Plains a distinct to light and three window as windows. areas have black the well Kersey the area example, Prairie a window, North while as oil phase has Summit, oil

windows. Our retrograde Guanella is in CAP acreage primarily gas light oil located and the

slide, economics of EURs windows in and the core each our On across highlight the some the differences of next in phase I'll Wattenberg position.

X,XXX we breakout continuing our provide phase to approximately detailed a by locations on window. So X, of Slide

years tremendous of on a the economic economics, I development. line highly X,XXX want point permitting the inventory future CAP, gives into us over touching locations is which our are including our Before to year-end XX% of of sight permitted, multiple from Overall, derisked than out perspective. more how inventory

acquired phase Western. window the highest from Great in range that black Our permitted we is area oil acreage

our not opportunities want it's teams are we XXX% to was that various in transaction. the that working note While on inventory-expanding included permitted, original

pursuing structures lease and black risk in the also to minimal North, it's units in window We to these building plan areas in with the acreage permitting is surface in Our very around. permitted future. the permits due but our locations to oil forward rural located look less

The Northern barrels XX% barrels black highlights our range oil equivalent table in on the XX% in well retrograde slide X-mile reserves which gas for window to this laterals, approximately from with oil oil per window. XXX,XXX the with a XXX,XXX

of vary these return all and is on that oil gas. key deliver windows, range of oil to phase the rates XX% phase takeaway percentages XX% four $XX While and that internal mix economics based the $X EURs exceptional each windows from between

in start CAP in light is located development windows. that oil CAP As our we the in of and keep gas XXXX, assets Guanella retrograde the mind

also inventory. nearly These company’s $X phase economics rate $XX largest lateral in generate oil average X-mile an and a liquid-rich deliver but based of respectively, XX%, and will windows have gas. XXX% on gas they and wells of component, two the return some EURs These on of windows our higher again,

at While the the of has black lower EUR deck. the a oil highest which returns North still window oil XX%, it equivalent, XX% represents price same of XXX,XXX rate also at generates approximately cut barrels

to enhance economics, One final our this highlight strong of in returns. base Dave deliver oil gas all to allowing comments I comment, strong the will volumes. but that a cover for oil contribution want his NGL more and for next, provide phase volumes the windows

earnings handing section call in want the history. to to PDC call its over position summarize our strongest by that I sharing is today this Before XX-year Dave, in the of

have a We a strong great confidence financial in regulatory tremendous the environment. and assets, position team,

over now call of I for pass will to operational quarter. Dave some the the to the highlights cover

Dave Lillo

or day. I highlights for Jumping approximately in per Total for Boe Boe some operational XX, on production at the in Thanks, XXX,XXX million the Slide Lance. review to want XX.X quarter. the of came quarter

XX,XXX production for barrels Oil X.X quarter barrels was day. per or approximately the million

industry. event Our approximately in especially was accounting that that production production weather impacted for for from December was of many strong, MBoe XXX the the quarter when the hit

weather cold and did of contractors job and Colorado team Our amazing proactively Texas, in production safe. managing our the importantly, impacts extreme most an employees and keeping minimizing

guidance. we quarter side to [ph] slightly drilling the pressures. records; sides expense fourth to efficiencies, quarter both above completion the invested on capital approximately field-level the and The related our our tied CAP; to continued the continue investments the during inflationary million teams as equation, slightly higher increased implied the non-OC quarter, and for set On activity; was of $XXX

those in appropriately. As will XXXX are the the our XXXX shortly. budgeting, detail investments into in discuss we we we each more of capital plans confident incremental have plan look captured that Scott

per focus million G&A In quarter, quarter. totaled $XXX $XXX million three for an Boe. crews managing $X.XX the great field, two on the drilling fourth LOE during invested During approximately team And and quarter run $X.XX was completion all-in maintained or to and we Wattenberg costs. per the our expense the Boe rigs our

We and line XX spud XX in wells wells. turned

the came Delaware, million averaged of drilling operations. batch an manage oil. average $X.XX our cost focused our day, we in per rig our activity Boe, production XX% per maintain LOE operations. Boe quarter, workover to rigs highlighting approximately X.X For in drilling the Wattenberg ran XXX,XXX we of low In the to one of basin full-time operations at approximately the on level for the $XX field. And invested nature the in was base

activity workover Boe in in the and averaged per the LOE oil. XX% XX,XXX during reflective in day, quarter. of came Delaware Production the Boe the basin which $X.XX was continued per approximately Basin of at is

XX. Slide in I little field take to Moving provided call. dive upon and time a of into the the Wattenberg details some to operations more earlier want to build Lance the

has assets mapped economics, development Wattenberg Tier X inventory and years of industry-leading Our out.

highlighting on to be in outlook update an and Before the the our I are XX-well area. longer-term range line that Cordon beginning our line base, want our pads – Gus acquired XX-well to in in provide on turned with new in

and these Completions two report larger in quarter, meeting estimates. wells to we’re happy the activities that began on pads coming our online, pre-completion the are fourth

growth support number footprint communities we XX-plus are and our of the impact driving in while acreage the on process production to coming larger from before, reduce will that supports of discussed As Production surface planned where well second can efficiencies. quarter. wells online calls pads, into now the

our to view focus the in Turning basin. longer-term

plan. the This of upper component, bringing Our that tied top continue consistent oil development curve our than phase and larger XXXX incremental lateral supports lateral important slide, to turn strong remains development asset the our per multiple a historically, to our barrels supported oil recovery can on Tier CAP of and on Though is across the incremental to more five-year EUR XXXX in production, acreage. are only wells windows, very over online further yielding It economics. the X a foot durable, per graph by in core in have representative we our consistency note, a in will left-hand wells foot operations consistently are provide. XX line

well locations Finally, that breakeven such of to XX% I a without adjusting highlight highlighted, current these of inventory. commodity likely locations the Lance our environment. barrel in more-than-X,XXX approximately price want decrease depths considering $XX the per below prices would economic When

is this one inventory If differentiation long-term support that flow there was it. peers, resistant our is the model. that shows to in of chart changes incredibly amongst commodity of deep The prices sustainable asset projects cash our

on update I asset. XX, brief a Slide to provide on the Finally, want Delaware

workover two our to quarter, as operation ran we production. the During support normal rigs to part one of our base

continued utilizing we rig. full-time drilling Additionally, drilling one operations, batch our

on is sections. of drilling drilling the process where in the the before each anticipate batch sections each days this and the We intermediate surface the result of may of process The moving costs. finally wells to pad drill on we and drilling lateral reducing ultimately

field and and year, as activity resumed develop in XXXX A continuing on preliminary B focused program of planned is in the completion The Wolfcamp this the zones. January of to

evaluate We offset and C the will success. where operators third in Springs opportunities have Wolfcamp also had Bone intervals,

inventory. operations. Success in inventory XX XX have the locations, extend the life of end and core these our of our inclusive base economic would of At zones year, for in our accretive be asset identified the we years DUCs, approximately of

more pace, At represents this of current than operations. years three development

laterals other zones will location evaluation including before as additional shorter We and inventory improved additional require also our or count. pricing have core with contingent approximately them that identified targeting locations XX known in

I over call to Scott will that, turn Meyers. the With

Scott Meyers

Slide $X.X you, the and We $X been Starting for realized company. in on call, record pointed on has – already approximately while translated operating exceptional XXXX that cash an as expenses $XX already price Thank per flow, BOE, has came to XX Dave. pre-hedged for been PDC, approximately operationally a the and a approximately of free year out was in has at BOE. per billion received

approximate exclusive per with as Our in G&A cost Great BOE at the $X.XX came of expected of per approximately BOE, Western associated acquisition. the $X.XX

considering $XXX in This in the approximately investment pricing DJ cash in quarter, and the strong crew the fourth the during quite flow. the quarter. is quarter decline tied second fourth the free For planned increase of to generated we adding completion million

dividend XX% our shares details of program. we fourth base exceeding Moving In to our returns year, Slide the returned base our alone, by we XX% Ultimately, buying through returned few billion on a $X.XX dividend. our special $XXX the XX, I’d outstanding $X.XX like approximately buyback, share million post to highlight target. approximately $X shareholder and for quarter back dividend and

is dividend robust execute we Our locations. Great increase while underpinned XXXX by Western inventory that framework allowed returns laid flexibility the our has us in debt. It meaningfully to long-lived on base acquisition, earlier out of the economic the reducing

I XX, highlight to the strength balance sheet. Slide On our quickly continued of want

after We times. closing and by billion the year in peak we the ratio XXXX, $XXX debt our with During reduced leverage Great approximately Western transaction. million $X.X debt a the from X.X exited level approximately of long-term

near-term commitment in only due can is paid by flow. $XXX cash XXXX, which Our easily million be our forecasted free

share XX%-plus in to and dividend, repurchases if to and gas I flow $X $X million On world, target to return topic needed. XXXX Slide want systematic from committed our per outline annual our being barrel remain of a $XXX more return special guidance ability XX, the via shareholder adjusted able cash returning to in our to investment and Using cash to more shareholders XXXX billion the capital we some than and the guidance. generate flow free than anticipated of $XX shareholders of continue We return XXXX. post-dividend operations midpoint our a in

continue as repurchases shareholders’ return X% buyback our to anticipate use another XX% program and tool primary of We our in able being to shares the share XXXX. in to

per the dividend $XXX to shares last week, first we of X.X This returns increased increase marks We dividend per we’ve $X.XX quarter. our increase as year. of the XXXX. are since with already we week this announced consecutive Tuesday, committed increasing the from another to invested of announced million dividend and establishing share. dividend, a base to in million during second $XX approximately quarterly Through track increase have $X.XX record last Combined third annual million share our $X.XX the implementing repurchase

want Slide per detailed to day oil. which first of XXXX and XX, per billion on XXX,XXX capital in anticipate for to Finally, more We of investments XXXX’s year. provide I the XX,XXX barrels guidance to $X.X to $X.XX between day XXX,XXX generates half the BOE XX,XXX billion, of

plan In approximately land full-time time to three-rig XX% approved program non-ops; part and projects. ESG-related complete the in total capital XXX By includes XXXX. also CAP, plus infrastructure The one the spud for crew, capital company running invest Wattenberg we expects recently wells. the to approximately and budget a completion to a XXX of and field, our

invest part-time total In of running to XX% the a plans investments program completion approximately the group. a in the company spud XX by plan wells approximately to XX Delaware, and to capital one-rig We XXXX. and complete

million per the the quarter, in be day the the This begin per day of XX,XXX of and first range Wattenberg production activity half full $XXX invest to barrels to with to total first quarter. oil quarter, XXX,XXX in the the In in BOE level of second production between includes TILs and which XX,XXX being $XXX benefit In material to to to company total occur first that we quarter a and million more XX expects and in and all in invest company TILs, $XXX is XX,XXX production between in $XXX of per million production. the to XXX,XXX XXX,XXX the the per of of up day oil almost range XXX,XXX step Delaware than barrels receive second XX production. the the as of day BOE XX,XXX plans million, to

capable years sustainable a X flow rock-solid us To expand exited We our move in durable proved summarize and reserves, the call the to building year of cash PDC’s continued our approximately long-term balance inventory a for with we before projects execution come. strong a shareholders. of XXXX for equivalent our foundation to Q&A, free in X.X the billion helped sheet value success and Tier driving for

the over for to call Q&A. turn now will I operator the

Operator

Daoud first our come will And from Instructions] of [Operator Gabe question Cowen. Certainly.

open. Your line is

Gabe Daoud

a question. Maybe XXXX Thanks tax remarks everybody. bit maybe my the Hey the guidance? the for guide, just think could cash it’s give Bart, starting and little color for on just all us a you. you have – taking more cash you, on been prepared Thank I we you anticipating for taxes there can year. go-forward point little bit think Is we at least, to? this how for on had about And should maybe below basis? anything specific what guys, that a

Scott Meyers

for question. for us lined you up Thank for a of Yes, XXXX. couple Yes. the things

we that increased allocations, XXXX. was from our GW them acquisition Great of which One cost better-than-expected our in deductibility Western had

fall have been we not did any not on impact rules Great also us will And that our have then IRA NOLs. after we in We finalizing that did the put out, but doing analysis also new limitations Western XXXX. into

with finally, prices, we the that have be to more are in commodity And the fully utilized going NOLs lower just outstanding XXXX. existing

So in that us a XXXX of bunch long our lined lowering we way, are that for stars really a up bill. tax materially had

will to in and category we will IRA in However, XXXX. advantages, we those take not the able be likely be

for can as update on a still firm taxes probably XX give cash But to the I about things free this days, pretax we’ve fully is a in you number, we’ll guidance, XX% up as exhausted probably in of XXXX. think use what’s I we’re a give to So cabinet XXXX our formalizing more wrapped few XX% would I XXXX. cash good left as XXXX in flow

So hopefully, should XXXX fairly but minimal, XXXX material, you more expecting probably XXXX. for be what were should that helps. be

Gabe Daoud

that’s great helpful. color Awesome. Yes, Scott, super and

number think we point, guys. And years asset. of we and at selling think maybe do Permian But through now about left was gears we discussions the just one whether strategy? three two-basin maybe forward? guess, economic inventory. Thanks I in in Lance, exploration. there’s So should or just about a should how PDC maybe around we particularly core in how portfolio? assume potentially or the think so about think just then the noted Permian, always the But some that I that maybe moving upside switching inventory, guys you not for And as maybe prefers there

Lance Lauck

for and for company. that in Yes. good presence is that, the We value Thanks, back Gabe. there. really step very and a future I creation really two think appreciate important question basins strategically having

but for position when on locations, that third on only inventory, the this so Spring with very up testing thankful And look we’re the Wolfcamp XX And we’re XX that position. that we’re the testing be C that the position, existing to year. we see, and additional can shale going grow you our Delaware carb our Bone ways core to we’re as not at working

continue a a call can with teams ways, two to and together Gabe, drill or would one trade milers I look with putting we tackling other versus another milers. So our blocking for what and section company parties where

think So to are sustaining. look for continue always grow important it inventory the continue to those that we to make and opportunities

XX inventory probably couple manner the and say that is And as a itself in And do locations, by our for three adding us. those the let’s that it fits a we’re if together, this, price to one-rig test contingent we gas another years with comes sustaining work for then us pace. also with

to of we where inventory and So, standpoint, creates methodical criteria some we on our how of through look processes at that all side then, our fit shareholders. bring And process discipline fits that acquisition value for opportunities course, we’ll building itself. locations presents that on the the very additional of long-term sort it like has from a to have

we continue especially runway, do to we’re with in. look have So, a locations but patient. coming contingent longer that, the We at

methodical at and continue always acquisition follow how approach. we’ll so this be our we thoughtful And to look

Gabe Daoud

Lance, guys. That’s thank you brief lot a color. Thanks

Operator

[Operator JPMorgan. from our Instructions] And Jayaram next of question Arun comes

open. line Your is

Arun Jayaram

provide to you program Yes. at Good your the insights morning. Field. if more a Wattenberg little I on bit see wanted XXXX can

you retrograde give North-South general on us a areas black oil you sense I line XXX of think over activity the highlighted the between Slide this of the you, guys, condensate of TILs mix Can year. of the highlighted between part four field? have just that X,

Scott Meyers

to Slide you we’ll jump X, to reason And almost just XXXX. are enter I as I in actually, here. Yes. X. turning I our Slide wells be mean, see on can they why in And of that that XXXX could jumped jump the I’d DUCs all

from to all turn-in-lines So probably when I’d those DUCs. at you the of XX% going areas. look be that hitting it, see are our can say, we’re you

that the representative So, have. I areas across pretty different it’s we think

Arun Jayaram

do detail just could of your my of a to if next Slide we years. five flat foot. wondering think give completing footage expect call this is productivity, And around wells your the of growth your you window? But rate what’s is Guanella, your expected as be higher CAP about provided productivity per relatively productivity in a expect to area, like more you lot of over follow-up. we a company, helpful. XX, the oil of, you be and the us kind the of kind On longer-term as representative over XXXX? driving it, you mix of five-year overall the And higher was sense That’s that get into I XXXX

Scott Meyers

here I we’re a consistent. would really the NGL mix. CAP, that but oil it’s liquids at could increases Yes, this, there Guanella when say you the is what light gas footage, retrograde a to out And lot some to of and small staying when oil through we’re trying of going the point really lot going be to in natural as portfolio really gas, retrograde be and adding just in especially The relatively gas. we’re those it’s in is look

– "Hey, oil mix is you So total, like from relatively they’re of consistent." a getting could one standpoint, a from gassier a percent of staying are looking look, company but say, they

The NGL up. going So is gas it’s oil is oil percentage. per still that going in to probably oil and more is are still its get there being economics. little production and leads which we once It being we’re not But in clear. a and and XXXX, and great higher NGLs is well, to gas there, what little gas, going bit bit you down NGLs we a are maintaining want could growing be to make to growing flattish see, oil sure is XXXX oil

Arun Jayaram

read-through down the touch? year-over-year should is BOEs is your from And basis, but on your slide this production oil a XXXX, that maybe in relatively is Right. flat that stay a

Bart Brookman

think No, This don’t Arun. goal, is that’s I the Bart.

there’s lot XXXX plan are modest has still us. obviously, goals a to pull overall polish. production think growth for a of the still But levers I And we oil think achieve lot the of that. I growth, can

Scott Meyers

That’s correct.

Arun Jayaram

Thanks lot Great. a gentlemen.

Operator

from our Goldman Sachs. [Operator Instructions] And comes of question next Choudhary Umang

Your line open. is

Umang Choudhary

light thank Hi you inventory – taking this questions. for undeveloped permits point. update you and morning the XX% my that window. the you of development in Basin the and have the good higher-return multiyear oil current two for on follow-up DJ you inventory indicated thank And guess plans. for One, I questions you also have on your

this applying talked permits color in timing? additional provide You on Any you window. can about for

just to I as capital if – and development your – the how the wanted to has and the then get And efficiency around quickly area. your thoughts it in well impact lateral longer and

Bart Brookman

on So year then permits longer next or Dave, national color provide you and can two the laterals?

Dave Lillo

Yes.

in we So the is gas window of inventory. Currently, and talking for XXX hand, have CAP our lighter permits in DUCs, we’re oil half that the CAP have have the about oil our area we then OGDPs for retrograde the have we It’s predominantly area. XXX process our area. lighter CAP that in you’re describing more we the in and this now permits XXX

increase, pad, laterals longer programs, many As facilities more really from just our those the laterals miles more to at to pads, on we laterals forward. so two larger sharing per drawing wells and three-mile longer look drilling to continue an will There’s continue advantages economic going standpoint. and focusing

Scott Meyers

just Dave, other one And point.

I think in up. still go XX% really and to time we was five-year comment permit touch was look you by all drill light can’t window oil, his the that on that we that all this to because permit, OGDPs at couldn’t left it when there’s today

us max. Is XXXX in XX%, will which next, at they three into those of that be So take the permitted the years, activity. fair? over two of life, then, will have Because that kind window, the a I’m areas oil light three-year rest probably especially years guessing, our shelf XXXX, Dave,

Dave Lillo

is fair. That

So good about remember OGDPs, just when for years. that you three they’re think

to and them want don’t able be too and window. have you drill get them within permitted over that three-year So to your SKUs far not

the a XX-year rate with CAP is this other we’re strategically Now window, CAP all with that at and things and infrastructure the planning point. associated that

Umang Choudhary

get to how on your flow from payment for helpful. really balance guess And plans should flow around the And we drawn year. That’s and Great. a free revolver, thoughts of cash free currently post-dividend the this your – about which the wanted think just then capital $XXX allocation cash I XX% is the to the the upside million, towards between follow-up, on returns?

Scott Meyers

share going we’re primary say our when vehicle. looking would is Again, that, I Yes. one through the that’s to number be our this. repurchase

keep to monitoring. We’re going

to if We’re repurchase, achieve. goal. the going shares little some The top there That’s we as special to it yes, so I repurchases, we paying well. is year. entire think, share to what also but do but do if we’re buying some back remaining important we’re throughout a to pace debt, try off, of the only to XX%-plus down more that’s flexibility dividend the going through ourselves, share need more all The bit is XX%, is can

that debt right shareholder comfortable our we’re but manage $XXX year, throughout we’re million, $XXX the down balance year. get first years, is million still we’ll million are to returns of around next the couple I’d expect very it but level, So throughout ultimately our trying Again, the to over now. debt debt priority where and as that debt the go to $XXX down levels

Umang Choudhary

Got clear. it. Thank Very you.

Operator

Donnes next of [Operator question Bertrand Instructions] comes Truist. And our from

Your line is open.

Bertrand Donnes

guys. Good morning

more of group, good kind brushed you you year-to-date at that trading performance of I the discount the on to puts your payout, cash you’re a than strategy are the in still you that group. top and on of focused buyback higher just the still think kind XX% but

of of happening. a I there’s then prior the there. seen of Maybe coin was you then So lot gets sides think re-rating. there’s the process your some thought I we’ve and kind two CAP approved of and the a that And shares think of buy back kind

just what weigh multiple payments? cash the you higher see to switch do and to on Or wondering victory I’m So, your buybacks kind from you of more flag here? do need really at point go

Scott Meyers

discernible we Yes, and – and see very our supportive markets, the multiples at to buyback. look a we is still everyone talking through the we between the think on at still trend share look one – which investors, don’t and

I our for room are starting a the going the are growth. us stay track. haven’t CAP was mean, people undervalued. at at and that But Yes, been big So our I we’re think We still we looking to right approval. now think there’s look think it on with again now, digesting. name to think still that shares step for I names

move So, to I think for us room there’s still North.

with now, approach to the have aggressive we’re plan XXXX. an share to going look in for and buyback stay So

Bertrand Donnes

makes I’m It CAP, there’s great. your the lines here. follow read That’s up, [ph]. a And then pad total permit the trying a Wyndham to the bit called sense. On And in weeds. it’s

Nio normal. wrong. it forgive has So looks if like across little in XX about section, I’ve wells and your seems me tighter bit the the got it But that than a spacing

I wanted maybe get maybe So or to just an Wattenberg something special there? on goal the there was update spacing

Lance Lauck

Yes, a great that’s question. good. question. sounds Good Hey, Yes.

as over the So to continues we progress time. look at it development as Wattenberg

and And of the that as the per sorting well economics. that’s DSU. XX section the essentially that’s the history in shows deliver economics in spacing out strong a itself XX We’re well got well. to data DSU value spacing the you’re bring we’ve really what table lot exceptionally there to seeing And per right of

of than in going And what tighter upside few too, be mind was to some we’re test Niobrara and of just had look few a potential areas as SRC us SRC targeting There PDC tighter before to together. done well. even in will has could that And things that like. that some see of the spacings keep A one areas combined those that something the a the

the spacing of that that today. analysis our we well. of spacing you’re It’s So and curves works a it’s general seeing really that’s for And kind that there. all basis the have type

Bart Brookman

to this? little to Dave, color a you add want

Dave Lillo

end SRC, they think from I A’s of is going where and It over planned at a XXXX. came that Codell. be of lot Wyndham the Yes, drilled it’s to facility

it’s think in that barrel subject of I the So with package. Codell, a the gun and representative being the A’s Niobraras, the

Bertrand Donnes

we I’m should Is maybe one? year follow the maybe spacing Okay. of expect? good. is, [ph] that tighter started sure it maybe able And there to the that sounds end there any comparison is tests towards you’d give any mean, it’s I to or Lance if good. Well, that that up be off, the just are primary

Bart Brookman

the what oil continue Bert, you black I about the two, next the go to towards as we XX us northern can especially area. for year was XX Lance we or talking think, as to move through expect

You’re going more. test XX to that us see more and

Okay.

in more calendar will of we just front and expect So to drill obviously me, market. schedule the the all be that information without having to the that communicate

Dave Lillo

some Yes, there be might and think I spacings. comparisons on those

We’re the Whitney, going drilling really start [ph], with the to [indiscernible]. just Chalk Summit area up the the

our evaluate able we to could comparisons that always look you. good So to And spacing out our we’ll be backs some as be and to and at. production, there convey look

Bertrand Donnes

guys. Thanks for That’s great. update the

Operator

moment our question. One for next

TPH next question Company. Huang come will Oliver Our of & from

is line Your open.

Oliver Huang

details morning, for earlier. of within of phase are really to ability sort to given the the towards or windows my taking that kind drilling on around where gas of Wattenberg your up directed appreciate economics inclination question program just follow from trading any gas this I thanks more And your of Arun spot oilier prices within Good the all Is there the various you a areas portfolio. maybe But provided move and some everyone, at. even questions. year?

Bart Brookman

acreage the in child. of mow that the tackle term I’ll want we and doing and flavor. by general have Dave it, to parent the The child permit the in and is to electrification think that the think process other acreage And go we process, impacts answer I start systems we the the way are optimize corner to call permit parent the lawn. want basin, that way. as no. use the no it We at one Oliver, There it, planning add move we can and our to the I

Okay.

their job think done phenomenal team a I has the in planning. So

the Dave thing to foot of gas consistent, remind going revenue. reserves The to presented, just slide incremental on one all oil and is the is those lateral content, that the pretty you

And so gassier the the still wells. economics, even strong. in on poor probably They are gas prices improve incredibly

drilling flexibility of phenomenal. but the laid I don’t drilling in lot can Dave, that have so the a with I you shareholders it’s to value we’re did we I? is assure And think – programs delivering the out. the And way program the

Dave Lillo

of we it exactly hand. right. that’s out, permits in When in plan place our Yes, kind falls with this

will mowing area be range As rig ahead. in lawn continue, drilling we the the Bart said, one where

in The drill to other one Kersey. will continue

will CAP type our area in in one the area. other be The Summit

push there’s drill changes do really, to a our very slight to, really it’s stone. we we but any to at it’s So if point. plan And schedule modifications kind this this It’s point. can methodical need at in of set

Bart Brookman

the Oliver, obviously water the entail about all is pre-planned. remember, but planning that’s of reductions thing on also. some pipelines, and talked that pipelines pipelines and fairly that electrification, everyone gas oil And for call other the to I emissions and infrastructure significant

area So go say move we’re and for us disruption planning process. area the to drill going drill in creates and another a one to

planning. the another just the it’s component Wattenberg of in So in complexities the

Oliver Huang

That any for of Okay. I all didn’t a the back the yet. year for cadence And half sense. question, just second makes see color specific

pretty into exiting potentially you on strong XXXX, wondering that the So online thinking be I get coming if for kind XXXX? of there footing out the batch all in in just was of some color able non-productive more incremental we of ordinary and would large maybe put heading largely late of wells when might anything about year any on year to the that’s terms

Bart Brookman

really from – our before, mean, anything. I messaged I’ve haven’t changed what Yes, we

second completion said going the second it to of capital crew crew that’s your midpoints the as million, Wattenberg I’ve way. quarter, think our Just down. because are In the and today, XX completion and this about call down on Delaware

only that completion running Wattenberg that’s completion have fourth comes The quarter. the in third and quarter one back crew we the crew, really

CapEx you first obviously, the if quarter, a quarter you two step given the third quarter. fourth step should be quarter look third a from standpoint, From up second production a from and be should down So from a the we’ve standpoint, quarters.

production turn-in-line the still turning until fourth Delaware properties from second bit probably benefit strong get Delaware, as program getting quarter remain much crew the that from Third peak as and don’t the Wattenberg steps a on down from then we’re quarter our and XXXX. that third the from we’re will quarter we

give numbers delivers and of curve hopefully help a So goals. you shape our confidence in annual bit and that’ll to little the

Oliver Huang

Awesome. the Thanks guys. for time,

Operator

question. next One moment for our

Research. come Our will next Nicholas Pope from Seaport question of

Your is line open.

Nicholas Pope

Good everyone. morning,

Bart Brookman

Morning. Good

Dave Lillo

Good Morning.

Nicholas Pope

Bart, where on DJ? you were a was progression, something Maybe of more, about you What of the mile, I of bit we terms in these little more quantify and a little laterals. commented expecting – hoping two bit the wells that in XXXX of like to progressing the like maybe on size maybe average. mentioning look was could XXXX you’re targeting that kind talk three-mile kind you’re

Bart Brookman

that? more Dave, do you have color on

Dave Lillo

Wayne really two-mile both We’ve producing I which some would targeting the three-mile say very had laterals in the just terms, on we’re in are general Wattenberg. packages well.

coming here wells, year eight And that’s going up spinny this three-mile that have a another we’re drilling. package We laterals. be later to

called and a plan to wells. have hand another… another going try in where two on drill that that the we’re see There’s another of going to laterals formation what goes. longer limits also we’ll can called area We drill how test And really we to we’re package or the take to

Bart Brookman

And longer Is three? say exceed to Dave, laterals, we you going try that… when to are

Dave Lillo

a on couple we’re package, KX the on So wells.

going and four-mile We’re to laterals. target try to exceed three truly

going and If we miles, satisfied our test anything four run past we casing. can we’re can’t, be watch if torque to going to drag. And get that. very to we’re in Now will and three

drilling. of two-mile as outer We be testing two can limits So outlined target really, But we three now, that can. a plan on laterals we development to for where had moving be laterals. what will are out really did CAP, two-mile half, right where the predominantly to and a our we the moving we

the getting. some were We we results based packages that lane to at And we minute in before, on went for changed of the last our those three miles application.

get to don’t And rotary better costs right to and is look just and well economics doing better we you steel with us. So, further now drill and the technology because have steerables continue for your further. the phenomenally

Bart Brookman

a Colorado high add drill reserves emission baked centralizes the your cement reserves, have in through. today; drives the reduces location we surface design of it’s We go add is incremental of in one to extract the our reserves to up; of operating incrementally, X,XXX F&D it that also have work it to that the the But obviously the team kind in drives controls the level, and put and you facility relative your which it for capital, to the on day it steel project completion. you drilling. down; those on of and and – Nick, drilling all need IRR the team feet amount it

more making of forward. all better, towards cleaner, going it us efficient points just So

sense these need we the So keep And driving we make test. to the for will to be of are things what doing for environment, they they investors, make part and and sense value. continue it’s our to

Nicholas Pope

lateral. watch to It should be fun it. four-mile Got

mix So kind Looking of the here, all that you subsurface the – as of this at out. of a follow-up broke kind

here slight gas where NGL things kind And with of of handle to gas processing, of now lately. kind maybe I a in in about curious weighting kind uptick right worry the that capacity term. haven’t stand Just just heard much near

Lance Lauck

Yes.

Bart Brookman

will go Lance with Yes, this.

Lance Lauck

Yes. And Yes, – appreciate very question. valuable I the we into I’ll No, Nick. it. are good GOR, moving it’s And because higher CAP wells. very good. a area,

DCP infrastructure capture, a Midstream you lot working with from the have side-by-side time compression of with they’ve if spent kind done our utilize to So what we’ve and wonderful is, And of the that and with overall continue growth done job basin a we in them. of production. and to discussing of plans the order our their in from we growth to field all will, both with expand working

that And long-term are various have expansions with field. is line news sit them. pressures mind in really forecast, are out even five the production as of closely them are good some where to solid the the our in things order we working project from infrastructure very And good, in growth they and the the so years we provide very And we today, field. meet

and I So, plans long-term the there. we very as for have well that company, would working good classify

gas there that close natural with. to will, the takeaway far of chain, for as as if takeaway basin, ample part out you them of we as the stay more is basin. As out well another of NGLs That’s than the

that the And our all to so also. and Coast down the works thankful we’re for and how space Gulf all frac NGLs way for for

prepared. staying sits. we in way So sharing to but go, plans we’re and to we’re down where them spot lockstep pretty be field, the feel all good can our a that that the the More right market, so from in to they with

Nicholas Pope

thanks That’s appreciate right. everyone for the really time. Well, great. I All it.

Operator

for One moment next question. our

Our of question of America. Abbott comes next Bank John from

is Your line open.

John Abbott

morning, thank for you and taking good questions. Hey, our

now you Just sort are thinking of me. XXXX? ones How hedging few from about into a quick

Scott Meyers

We from protect the don’t philosophy. change really our we the case. downside company to look Again,

actually We’re debt hedge book. really have protect And trying the our we the to that the amount of cash with moderates percentage flows. we that on

time. year. over speaking, So, don’t prior have I like as feel hedges we down, to were much generally at coming layer we But continue in say, our would just we we the to be debt time, some same hedged with balance as nearly

a from make in layer protecting to less sheet hedged the were opportunistically standpoint, bit So to and but sure some us continue than we’ll in XXXX. balance be I percentage look we’re XXXX say, for the years, a and would little we in prior

John Abbott

for where question, see CapEx maintenance plan it’s our do the do then long-term but in you And that. DJ? growth, not you pursue Appreciate follow-up your as

Bart Brookman

Long-term is it’s... – maintenance CapEx

Scott Meyers

$X billion? billion? $X.X

Bart Brookman

Yes. Yes.

Scott Meyers

mean Somewhere X% I to as a we’re around X% now there? growing company.

$X.X my to away, we’re billion I far best $X would going guess. be is, between that probably billion my estimate but not somewhere So, was as through mean, that this, you’re

Bart Brookman

Yes. same And the range, through thinking just I’m probably in this.

few higher. $X.X basically you a have take for keep you some that Then to flat also We years. non-production to that in billion yes, into out. range, little [ph], And it our probably peel maybe built related have say, $X.X capital got to we’re billion what it does a

John Abbott

you Appreciate, color. for the thank

Operator

And Noel question Parks comes Investment Research. next Brothers and of our from Tuohy

Your open. line is

Noel Parks

morning. good Hi,

Bart Brookman

morning. Good

Noel Parks

touched can the we’re well, prices in on gas this have wondered, updated thoughts from talk seeing the bit of cycles, diverge deja specifically? of vu you on for the where I you environment you a and sort past oil do already. apologize in – any I market just current But if again outlook NGL

Bart Brookman

want this? do to you Lance, cover

Lance Lauck

Yes.

prices NGLs, I with propane on seen up, some pressure We’ve storage we’ve think pressure we filling where in NGL on well. prices. some now sit seen propane as right

overall prices the over the of also country as to It’s tied tied of lot agriculture. to time. well to kind think I a weather, are NGL the growth of

of reduction the of back But by it look in in around be budget two PDC think So, for for kind year so the using $XX right that Midstream, demand, in hopefully what pick increases them price, be range sort for per are gas to DCP for with barrel seeing may here or fees around paid of the up I to realized look of a general. that $XX way, now, out. which sort which, a to sort the for we’re includes we’re

now strong, natural on in part the that of bit XXX pretty is day. over is right oversupply Bcf gas fact NGLs per country So the a the little

of in and has just are being that there’s volumes. the increase that of supply liquids more gas, out increased So gas taken because the

demand for of are being the through and look overall NGL focus natural prices the how upon continued gas then based are country growth on the of So the supply that and time. –

So a in – little we go year strength be before bit here. another we’ll or forward prices, to the it may but some two see as NGL we that’s something continue monitor

Noel Parks

Great. Thanks a lot. Okay.

Operator

no like now I’m for Bart turn further at call to time. to would CEO, the back President Brookman, this that’s showing And questions and I remarks. closing and

Bart Brookman

not joining. those the on still for years. Yes. Thank who quality inventory only good our we color future joining and Tanya, of for some call but on you, you today. our provided everyone, for are our Appreciate plan XXXX us And the hopefully, outlook and thank and you,

Operator

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

disconnect. You now may

PDC Energy (PDCE) 23 Feb 232022 Q4 Earnings call transcript