COG - Earnings call transcript Q3 2018

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Operator

Good day. And welcome to the Cabot Oil & Gas Corporation Third Quarter 2018 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. to and conference CEO. like Dinges, to now President Chairman, would turn over the Dan I Please ahead. go

Dan Dinges

Thank you, to financial would our current this expectations. some quarter Shaun, executive you We that of morning's for and have measures. management good statements morning call, us do the table. at emphasize today's to forward-looking team for with Cabot number third a XXXX on I me we call. joining earnings may based non-GAAP of all. reference comments first like on will make Thank Also,

statements as financial most Forward-looking and this to other provided are well disclaimers, morning's GAAP reconciliations comparable release. as directly in earnings the measures

to comparable quarter of For income for XXXX, of $X.XX the prior-year generated the third million income quarter. for quarter quarter. compared for the $XXX.X was share net Cabot per of $X.XX the prior per share Adjusted $X.XX to share share, net year or or million third compared XXXX $XXX.X $X.XX comparable per per

of the the today. ourselves nine third new normal XXXX for the quarter. comparable prior-year we We've For this prior-year to the compared prior-year inflection in last flow in $XXX.X cash quarter compared cash was cash million from trend in with million point find now returned and cash $XXX.X quarter generation million $XXX.X flow the Cabot's activities XXXX expect was of quarter the comparable flow operating quarter. for positive be $X the delivering $XX.X quarter. free XX during million Discretionary million flow third million free given at compared of to generated free the quarters of Cabot the to $XXX.X comparable third XXXX, cash

sequential increased a third adjusted XXXX. this second As X% increase quarter the equivalent quarter, XX% relative day a month, relative represents to XX% which driven quarter to improvement year. basis divesture to basis, prior-year differentials relative was On $X.XX pre-hedge year NYMEX a comparable previously minus daily XX% natural by and quarter the for prior-year relative the a quarter. quarter the in production to of despite X.XXX this minus increase comparable Realized the last increased to Bcfe per prior-year $X.XX prices in decline equipment reported comparable production benchmark XXXX earlier daily an gas prices from X%

for excludes our posted Our cost below decline we other relative of were unit ability quarter. natural continue [hovering] the compensation charges Mcfe even and comparable as an generate prior-year which a quarter cost in strong flow to improve price DD&A to non-cash to the Cash unit XX% low cycle. levels stock-based per $X cost in cash

notes returned our and we repurchases million over matured senior resulting shareholders tranche also of in dividend of and that million a quarter $XXX.X the X.X% paid annualized July through in share million XX capital forward. of $XXX going off During to savings

XX in coupled of earnings points trailing months XX.X% with September employed employed and ended resulted for trailing of capital reduction continued over in a and Our capital to relative on XXXX. has return month improvement XX, basis the XXX XX in our the growth

months. morning's our of our press continued the the dividend announcement share our XX repurchase update, and shareholders to allocation of release in capital cash Our through highlighted increase this returning to execution last the in program commitment we third

as the we has is our payments Year-to-date XX stock levels repurchases flow of Cabot highlights dividend believe generate as value Our below increase ability to reflect confidence forward. expected in share currently dividend to free dividend going shares and payments repurchased the including while million trading continue intrinsic win strong cash company's year-to-date that to our well based returned reduced over outstanding million have reactivated on total our of X% in of shareholder capitalization. repurchase year to shares representing a XXXX quarter we $XXX X% yield since have Since by we second cash fourth quarter XXXX, XXX.X million of will share the almost shares. our for over our program shareholders market

As remaining our under a repurchase have program. XX reminder, authorized approximately share million currently shares we

our forward. to of maximizes ability to XX% level value to cash annually for commodity free of long-term returning our create over opportunistic financial our preserving shareholders. also this We believe our commitment shareholders flow our We payout provide still to annual while commitment highlighted remain to all shareholders firm going cycles flexibility

growth exceeds an expectation return on highlighted XXXX. during our to be our focus allow improvement capital successful, Our critical long-term four which deliver already The return capital capital. plan of of earnings significantly be cost should to infrastructure to Cabot's us for increasing with have in our completed on coupled continued continued employed we projects

finally While we projects, strategy together. I'd and the major progress pipeline major demand frequently on accomplishments specific like marketing and has today takeaway of provide to have come updates key in our on to development basin new Greenfield effectively provided details these these create and as

confirm was second happy power demand, placed Regarding the to of successfully during the we're service August. that in Freedom in-basin project Moxie week

volatility X,XXX service startups first the winter to prior of facility had service few is season megawatt months during for As great by in some all have with Cabot. a we the milestone placing the

Trains local X project phase. waiting December our Northeast complete December fully Atlantic area. its position asset are - X Cabot. additional testing mammoth are service will significant continue X, could and X,XXX as our this Moving we No connect market to the the Pennsylvania & Greenfield and October and Cabot to will to as project add the to in for facility this stream demand financial in in significant as for remains the we area. Energy the only for mile large-scale testing on and Pennsylvania new and Cabot's material this Sunrise power summary, service with on demand in to that XXX% project X In On fully operating we be megawatt projects an in anxious Northeast Lackawanna viewed efforts invasion X business. for two Train be power for area for Center XXX single the for basis X pipeline Cabot's complete placed Coast schedule complete to XXXX Trains Atlantic Currently to provide years the increase was service,

To X waiting the total day diverted XXX operating per to out Cabot day XXX commence With capacity. had XXX this pipeline allows already better gas per service from we On companies, successful and as full pipe seamless Cabot and third new provides transition to an Point foot million day an customer. million multiple per a recap, in-basin three facility customers significantly of filled on LNG October front, path new to now new markets agreement. pipeline a delivering million we to sources enabled Gas XX Point per for undisclosed per of the commenced day in Washington service, several secondly, immediately on our One, the direct while additional million Cove several over to X.XX sales day to capitalize realize XXX realizations. delivery sales for other an significant a of million pricing five triggers years. XX per per to with also towards Bcf new working Summit contract supply have Pacific Cove a a Atlantic cubic for million to and three-year Sunrise following XX-year To day events sale Light, start XXX we all sales day with southern for year sales its and to for been said, in-service Cabot. That Energy opportunity

personnel the part in in average duration. like event close XX primary shifted XXX the plant, its X.X and of add is that Cabot. transactions board With to million for these day our along Cabot with partners to per market close the I successfully and day, our Pittsburgh-based for power to for employees these frankly addition from the this thank are Personally might new per step in to years most has as supplier our today's I foot commitment not to from a unheard and of both change pricing for of of execution cubic pricing in-basin would temporary environment. nature pricing Bcf demand area XX milestone field mix

which risk will and move announcement construction lower rate transportation This to consist More million feel day production Cabot's for about new significantly This to of new XX% compression - marketing about our new surrounding of expansion for the primarily cost to of decrease project portfolio. project. to allows capacity the day come this the timing. per on South scale addition the down Leidy market XXX project of our our recent area. this additional a also the infrastructure. Moving pipeline and timing good We to on new DC Washington

day. net morning X.XXX into production XXXX. moving we quarter the of for update and guidance quarter announced Bcf also the full-year X.XXX per to fourth Now XXXX This reaffirmed our previously fourth

the markets Moxie realizations, our impact fourth $XXX adjusted growth sales full-year to XX% plant flow XXXX range new the Power of improved our XX% X% Based via of flow the to and volumes, share per pipeline. highlighting our we quarter our Atlantic forward cash during to $XXX generate our basis increased approximately reaffirmed Lackawanna the a on we Sunrise of Additionally the guidance recent and full-year to Energy budget approximately million to and on million. cash X% access for the million local free debt production $XXX Freedom of agreement of expect or and production curves, capital

driven prices October beginning compared X.XX have Atlantic project front, in-service Sunrise the of month in-service $X.XX. week significant prices Northeast of Sunrise. Sunrise to realizations prior of week averaged average Atlantic first gas during since by over local in fourth online, price local this the coming to On a we Atlantic to the of quarter improve of experienced average have improvement the the the since in an throughout the Cash the the prices with continue to $X.XX

local impact takeaway year of increase highlighting new $X.XX the the For reference, in-basin last and October area prices from cash demand. averaged

will debt a to of based This strong or allowing ultimately use provided on where also moving XXXX is land not plan. heading gas capital XX% to impact. trajectory This a season range morning of supply be capital preliminary We range this winter and million have basis. share upon XXXX budget operating a the large this we million to XXXX, XXXX. into end $XXX guidance production XX% natural demand does range Now the growth coming adjusted our within XX% which XX% of capital per will easily on to The of growth we on growth stronger production XXXX our $XXX macro higher for range remains for the could in overwhelm. target dependent certainly

drilling However, lower with if of returns while targeting comfortable winter end and a the on flow we're more than cash to our focus continues growth on disappoints, and maximizing free weather and expectations XXXX capital XXXX outperform $XX range area. note construction also million includes capital would in which I capital expiration win. our will result our approximately that in guidance a exit for of modestly lower capital pad

progress Currently to slower our market We market in of flow area $XXX million million sometime current will on capitalizations. resulting we on evaluation continued been of yield this than NYMEX lower price differential, realizations to than or have to NYMEX on free slowed below gas to year cash I first indications permitting make complete for in to XXXX. and $X.XX weather $XXX natural X% forecast cash the quarter our delays. latter levels expect for free forecast of a for the somewhat but current - progress of average our that be estimate the over part basis based XXXX our flow valuation in Based due has

and share per which return averages. both broader earnings generate greater competitive to growth would XX% when on the capital compared extremely program XX% of employed XXX than S&P this are over Additionally,

asset nothing As do has this highlight it quality. range let well relates first XXXX, or to to performance with for me that production

data two recently wells or and anywhere further completion in levels month laterals production I in in versus Pennsylvania our be the longer placed pre-shut production from wells the production in preliminary various completion back we at And These delivering the also the in on is times pads to February may rates offset once that that only of production. and result instead these August and a extremely includes six-month XX in efficient be shut with XX note a for would this capital wells state operation. depending rigs crews in that fact, and pads shut confirms program In of released existing guide pad three for to larger shut on returned back require location. to top state. current Cabot forecast of requires

forecast. adjusted lower Our Bcf expected original production growth in XX% share debt XXXX a XX% to is slightly two our per only basis net a day is base off of than per it plus on

when from amount free the by incorporating However, budget realized flow of our estimates expectations so in a our with expected our are our earlier is price line lower capital considerable projection. impact higher cash

for by excited a share. Shaun, healthy to per our the do be ability growth happy Free earnings flow XXXX and setup remain With we that combination and more generate about than So ROCE. answer questions. to I’ll driven of any cash

Operator

from question Instructions] comes ahead Leo. Go first Leo Mariani Our NatAlliance [Operator with Securities.

Leo Mariani

Just for bit a wanted comments little to follow your guidance on up XXXX. regarding

targeting obviously percentage just of explained big cash flow production just Cabot some Just the slightly spent there with lower slightly kind rationale. trying and here to money thought growth more to of of that bit sense you less generate But lower to much you’re shareholders. picture effort kind of free concerted of by get higher the a returning little is CapEx,

get more master capital to of the of part return So of of thinking a shift plan behind and lot that of just wanted a to kind some just this that. a

Dan Dinges

exactly we growth model years directing it’s to last a been the a that - versus our have of Leo attention couple model. Well value

has efforts highlighted producer out comment. I and on lowest a become and our return the Our capital in return been also to there to prior think our certainly shareholders cost capital efforts to is realized

in not a cash it, model value on companies component space in So competes I one return this only a react to capital put we into absolutely to the manage objective XX% zero shareholders, with the superior assets, of a returning it’s reason with modest release benchmarks will but our provide coupled to to supply if if a spend to XXX. both of broader market cash grow free it's our not in the having in And go shareholders. everything what capital return environment a manage plan our our price doing macro you able can commodity think be there to does the does and that to also think growth. has And environment laser healthy is to a along S&P that prudent in an the fact superior can We focused with we're see environment we way And that I continue space. we're favorably on the lines these flow balance few out our returns. of and to particularly of an

Leo Mariani

cash dividends to as you assuming into expect your potential And in just that gas consideration should stay prices continue So flow materialized. to we for guess XXXX I end our work to guess year? and that I work in strong way bump see in free even the goals are as program higher we up share repurchase next

Dan Dinges

event be is. areas Northeast it shutdown to I No, If to we been a of certainly do winter improvements think to think the in get the fact winter period do is to going have area. pipelines and it's needed a you commodity able and being couple we've interesting to supply in with going be the have putting there we in if storage this price where we're an

delivering And to market across York, energy suffer those to is for. we that get winter if of experience ability of do there flow we able but as be into they light cash to out going plan a cost a needed ability asked customers natural are our a get some on shareholders. in do We laid pipeline higher able has that or our in think improvement and that of up haven't pricing, the of the been a return certainly with cold New lack areas to to gas we we

Leo Mariani

of guess I some progress just frac talk design the Upper just generation in on Marcellus? lastly folks sort new the you about tests And can on

Dan Dinges

we’re talked that the gen-X our - which for have is design part our Upper position from We've expectation Marcellus have Upper completing. test the look Upper to early different we as program is that the are past. we what landing XXXX Marcellus production the on our said we distinct in exceeds we we Marcellus. deter of with that in accretive the our we we or don't most our that out number also Lower about curve. as than also that past While of our far is design the zone and going a We've indicated are put see that a the Marcellus indicated anything at of meets our And part

and position what production curve the we we’ve curve So we've adding we're will open be comfortable be be more with done more seen see with that the there what support early we everything And fit and our time. completions represent once out able with we that to to position. clarity and have more and supports production

Operator

Rice. from Please Charles with comes ahead Meade question go Johnson next Our Charles.

Charles Meade

another is question. This

decide it's maybe the of, of us as on incremental us. of you'd the local items is some that think to right your I NYMEX to gave thoughts on, to dashboard kind also, or up kind of internal your be way basis and you of an you also Can CapEx? are of simplify down is but detailed idea what delivering of will But dial it there kind data attempt Or volumes there dashboard an part guys price? or share give points be about the you the I think management there? where other dial it? imagine,

Dan Dinges

season you get have all we a winter softness have a the Charles, above disastrous and the It’s say, if you price. in

to where of as there not restrictions It’s they allow pressures well. just our to point to would up up asset continue for our it and pricing that environment. gas pipelines sense price bunch hits overpressure gas into have You have ramp going on natural the make a

a be that the market the which in going the be on anticipated. support to as a if the price supply possibility strong commodity demand might would of there would be there to winter the side is other the winter and challenge forecast On colder fact through

spend execute fashion. that very equation, think money. we here, His in would be be and move part We a Phil what timely manner to will deliveries is program demand will up forward who able efficient our our runs we North region. to a to ramp be will expeditiously Stalnaker the in their group continue will we of

if instantaneous we not season end we but rolling the it's XXXX the back up storage when to we Now support into rolling start our similar fact considered enhance capital the to what some of ramp season XXXX fully our you of production expected points capable Charles upping where and XXXX points winter the be spending up NYMEX see does of levels. possession want is it in our that all XXXX exit and brought and we into winter will macro

Charles Meade

then And bit little a on following up point. that

You you gave and before numbers after, if some how talk that And those said would But guessed. and to above before interesting how you XX me that it were the has anything color seems pretty see on. and and before those better basis about came you? remarks about was I could your after did surprised and expectations, you what local you there that I to your - gave, Atlantic in up obviously, then, XXX believe, Sunrise than prepared - versus dramatic have guys after, - that going

Dan Dinges

the and the Well, not we going only always of had have that's basin sunrise supply basin. certainly out take that Atlantic - was expectation to

to an of but being that Bcf incremental million Our pipeline full XXX day it we of capacity taken a that that out the X.X to was is Sunrise basin. get Atlantic XXX to be also million to had committed going

in the from think supply of result the improvement Bcf the basis X.X the day and in a a basis the base. direct a evacuated position is of I being enhanced of direct result

million X, Sunrise happened you Atlantic mentioned for on granular little different day transferred tell a quick of hours points. that us, XX two to already it So where was Jeff had than getting a XXX basin being a and how project commissioned price later little October out receiving the the at more to cubic supply basin we the were AM market has foot we and

to certainly our I'm less the reflected of price know with basin an in of others the dynamics that we early four But million, others having point effect sure because coming his has timely $X.XX were years. significant our the it and be was last had we but they're local quick it I don't and have evacuation basis. of improvement bread in the for other it going the NYMEX how along that's is in storage So guidance a reaching done the moved better XXX a realizations basis predictions being of been is where on a of XXXX winter expectation we the out

Operator

comes ahead, from Please Brian Goldman question Brian. Our Sachs. with next Singer go

Brian Singer

that greater - or other the that that. to maybe XX%. side expiration us the on and I cash expiration is be greater update extent and how flow There then going free commitments - be empty the glass full the at glass on look less for then Can think you than than commitment what's of committing to as that half share wow returning repurchase free that happen as flow the remainder a or returning shareholders. thinking is look XX% acquisition the an the can dividends part and of looking give to other XX% well of to than way would you're that people to would free slightly color half and side of paydown Certainly XX% here a some cash say, or company about add cash

Dan Dinges

at a can past you look long time. Yes, us you for the Brian followed and

we're slowdown bar What expect delayed that allocate side. we it allocate to data the complete makes think capital Scott's tasks comfortable at We incremental weather we it get the gathering to competitive that data. to we our certainly and what any $X undrawn when always high-class our of as that. I think sheet well, we sheet up billion what balance that first our with on didn't allocate now prudent $X.X opportunity that balance couch when data XX% think opportunity issue on then an and and high utilize position that that been pushed difficult flow started it. and sleep where managed we we billion in the sheet. at a - find and having facility subsequent right our tremendous the not well closed a at found if close Eagle cash a management quarter into of permitting just additional this on to we need we rather our Ford ability on balance when on to We’ve have to a effort We time problem see on have sold would but sleep we had capital evaluation We to our we’ll capital. our our area the that free gathering need with if of because sets We referencing, this about XX% the conservative problems evaluate to a part and balance business. an conservative and with we method and to our execute manage gathered of keeping We our we think sheet. project. first a there the have our an had our of fact answer to some gathering how has cash have I middle to we slow in in expiration is we the we would I The try latter rest night to out construction point drill have would down issues that in of shareholders build efficiency out, set that of the fact night completion in the way that cash did way that

that we past the on. budgeted to capital accomplish and for with project expect We call call we see that. - just we and we in appropriate begin don't - now XXXX million not with that XXXX on project that or in that, data it will Between want to day whether or and as on do move further the allocate compete or about refill we capital gathering it our $XX we’ll have for make a and can they we will

Brian Singer

Marcellus you about production flexibility right then follow-up in online? there to incremental in impacting bring that on? situation and constraints meaningful to And is be the what Can the any production So you the currently. there type whether that spending, what is talk is that which regards environment any maybe level What with should my - bring there's of production degree pressure would more heightened. without is in

Dan Dinges

what standpoint into gathering ramping would the Our couch a that guidance are our is a is system. conservative I - we guidance from up

that down personnel field wells of we is its guys pod we gathering bring the to efficient the issues a all not area another would that our as complete the scheduled along look Williams gathering Our kinds the to pod the kind production have ramp in where field efficient. an inner where way area of a production gathering in us production of at ways with We when much old on to the we production different would compare particular and the current area system to the associated trended area continues system wells. on well, allow to with our in bring look pressure make new within effect We completed into up well way balances into system in most for to system. on that the

that we out wells schedule drill as the a we way off we and drilling in So balanced number advanced completions of pad. and

effect completion and that offset you that's would sensitivities As we in we been look that’s laterals And go and industry in happening how is completions space. production production. entire with new bringing in its old close offset across industry. Everywhere have to the through this having on that pressure proximity of so the offset, mitigate or are manage wells throughout done frac new to you hits any wells everybody dealing close and laterals operation proximity to on our are you bringing on at shut

shut days think on to many we and a shut-in guidance period to in our have on guidance balancing shut how we've in and is had reduce of act we like we just well mitigated a our feel we how in opportunity best going forecast the effects you back on can or pad we through the wells. every bring guess been sensitized on we that that bring we’ve So have impact wells made again expedite and as that certain that's respect impact that conservative that. new I we’re managed our do to process. assure but But but or that And

Operator

go question Lynch. Doug. next from Doug with of Leggate Our America/Merrill comes Please ahead Bank

Doug Leggate

today. On touch as capacity. I made the the Obviously comments all for you gross so on do on you’re of timeline see to by could in of of you you your conditions the level? the you’ll get if couple growth there forward. production the the when growth that capital X you basically have Bcf I and think about above wonder constraints piece of go what do just line we and a sight of your quarter allocation in you of when lift out is market Realistically base kind think terms you've day And you laid given

Dan Dinges

in three-year, Well the X one Doug that would forecast. by first allow will a I’d day sure and into even would like lay I'm to the us that allow possible ramp - Bcf in start production market go earliest saying five variables that it’s a forecast fact to market many the great laying year, that beyond so if a timeframe. everybody four out macro see out up question us there year is But

in us pricing, allow in a impact it could With it a the a with it takes we oversupplied production And rig, growth. a another not said there in to to is side there Our that frac in bit grow the the the ramp looked assets is rationalizations the shareholder at better and we the point low-cost effect growth that that on prudently growth. crew, growth become by and think to whether variables time it's are sake of producer to for of efficiencies whether a that we up be any significant as sake tremendous on think value up going all market We the it's little on – the this on all might opposed and base other that. be our different, growth at might going a into others. by to I to negative companies that and decision being timeframe say it's and a I going and storage to the would of another participating be whether able business pricing, of operators weather, would for to that the reasonable it that out our might that stage the have. a that manner guide asset those the efficiencies to up for make – giving market growth timeframe kind happens would NYMEX create schedule and and If do time market it's everything at some of that consideration given supply those but ramp out whether capital back you rational what is have participate second we in and bring and some bring a is is a we

prudent because debt from basis. per back to growth on is guidance we our be years get of And out adjusted into back would out not that's the XX% think macro program to we're light a We value get reports XX% like think that production regardless a the cut is capital going which and were production back allocate okay guidance said this we consideration plus light that robust the to X value what into three I there. productive, in that we Yeah and it's market probably that its XXXX on to XX%/XX% we only a the get could hammered limb of know earlier. we years, XX% I we fact future prudent we come reasonable not because is say but that's if and a on in that could dialing of XXXX forecast proposition way to our though and XX% growth are, the some that's production grow felt it fairly brings four if fairly So but in take our in illustrates of of out fact influence our did to XXXX reports in that consideration not variables Even would think to and we share we to capital operationally in in Cabot did have its headlines Bcf the also the the we spend, some net XXXX. guidance even there out dialing influences we sort growth of forecasting step table. get and the

Doug Leggate

the how not number? what a the if story nature cash is look X production of all right in free Well take as that that than when the here would flow your Perhaps would one right one changing get form just company if wonder free quick gross something curious capital more way our but appreciate extraordinary. obviously be consider company did may Bcf idea really that you that the Bcf value I I and just mind wanted Dan pursuit you the is cash different comes your capital me some current the of and view goal ever you a answer to just as E&P not meet create the to you about like market obviously hold the and adjusted I the hopefully like exactly do what when and in the to to looking annuity seems structure get obviously at point. sustaining you it My day get valuation X your cash feel you shareholder look the a first because long to to a free if holistic trying very at just is that is to think the debt to you look and structure way. story follow-up to the like [indiscernible] annuity so of sustaining metric MLP story in metric I’m

Dan Dinges

try Doug what of expected our how current have know guidance what and question have infrastructure to in our trajectory you we growth great directionally, we maintenance capacity to or your to and that’s number our pick our required certainly capital we of Yes, in operate the get first X Bcf.

that we capital, competitive a deliver critical the out would on the your that favorably Our maintain $XXX you production. that there. when manage is Cabot to is back probably profile throw XXX. shareholders a when of that we is will will with expectation capital of our MLP to low in capital But compete swag are you to term in of the to It’s or that to of commodity used as flow that out be what And a a our maintenance any in I commodity that cash deliver talk it that there return sees and know I towards consideration get compared something at use and maintenance think, it on in capital on based are to there. takes return here's future. which guiding think generate extremely a of other own would an it consistently you to XXX level in commodity out you free yield to We're benchmarks cash to return at on a if your we are whatever maintenance S&P will a to other is say return the unparalleled going number above and about million back expectation is it's a envelope you Bcf maintenance With long - we still capital the that even looks that venture our $XXX environment is always want, million capital can a numbers industries capital that and lot that we price X going want. MLP generalist to able capital you production one, assets of distribution very

vision we that of And have. a our kind will all credit multiple then that think that we is get would I we enjoy. longer term

Doug Leggate

- long this. position, you move more was last Dan. consideration just sustained I - itself my cash guess may one. cash I one for the again, the if quick guess on I as free more I appreciate answer, tax-paying very speaks story a into Yes, Maybe

everything slowdown on quite ambitions, or given should Marcellus, the we you strong the anticipate on with up is your or are exploration do how obvious you still diversification front? got how what Given in you've updates of kind

Dan Dinges

Well, yes.

I've open at and that of first could do far the think ongoing and gathering compelling can continue we a shareholder the team own of the broad value. that Management You do. as enhance way expiration incumbent to upon might our and behind what to you and we data in And any myself ended it's vision expect referenced our I capital, is look XXXX. That updates quarter with what as

to investor bit on and mitigate street look from think you as Company though. to haven't that's kind because we have been Again, consideration diversity have that Again, back We've jumped out base However, that always not shareholder that make the if But we've value how always allocate had enhance in consideration. in perspective, on a make now our our historically of we far little might do obligation future, think made how and how see how just had one Cabot's jump. decisions I on that in prudent we're we or would and this to going only of to I it that decisions years any we've for a value perspective, we that lot effort that is spend might we viewed. risk faith continuously available capital. it's decisions or we our to create there also as

at value We to look the consideration, value proposition. have

Operator

Our Michael, Please comes ahead, Heikkinen next from Michael question Energy Advisors. Hall with go

Michael Hall

there it a was cash a free relationship that we but payout on curious relative Congrats payout things on flow any update. to has of first I good prices? should been the how of things, side maybe bit about solid to on gas covered few are the Is pay reasonable think on a Is way a more gas as higher or prices or color than you any gas about materially meaning, it? so environment hold to more lower that out increased of there, think prices onto even that? - higher willing connection to you XX%

Dan Dinges

of We've guidance. options of stick kind a for on that. with percentage that flow available generated we'll there's guided free cash and Well,

have You if wanted you available speculate, speculation. this to is which

a of prices discussion speculation If generated part, dividend. you cash. free to of period as but special think But went had of say, better I again and parameters. wanted work of on be to Maybe XX% far that's there'd within think it. XXX we But a time speculation our could free a flow the my sideboards one and otherwise. as we lot guide up okay, a where that way those talk towards But, look you cash at I still would commodity

Michael Hall

And buyback? term the that maybe more split of to I might a the guess that? mean Obviously mean split between draw about long on how look the I commitment than - standpoint. a dividend process I little the payout, like, in what's terms how and your requires we buybacks, What's if thought one were from payout, current dividends like other

Scott Schroeder

We're that. to going get granular on not

vehicles of in said industry want we've both then to those well. we What being dividend as that market aggressive get we like before, the of in down in is somewhere will on caught out time don't a As over future. a period this the little find equally a we our periodically and in self too have

dividend. the on approach measured a it's So

underlying, a commitment, then we dividend the I'll firm in presents payment forward that be a to of mindful made before see, as call, smaller the future. what had big We'll with the continue change As and so year and - ago in can go a dividend couple you we've increases or we methodical those step be the increases.

yesterday the new our see with comfortable to very expand $X.XX is As which right is more the we're infrastructure point moving flows cash with But highlight the continue all to fact inflection pipelines, this the you year could that projects, increases. $X.XX, the per dividend now.

Michael Hall

some longer around. there's on out market views on then the dated And gas

challenges call plus. XXXX potential that Some may it in supply-and-demand emerge,

also as continued overwhelms demand. As Northeast but growth in a supply particularly basin Northeast the that potentially

on kind free that broadly the or should kind and of about we of how think guys view what's then dynamics the supply-and-demand context cash a of in have flow dated You sense outlook? the long

Dan Dinges

I supply Appalachian build number on is gas recently function point, both going think a I've area commissioned you the already conversation. to as impacts Supply and allocated, certainly term topic basin allocation sides. supply-and-demand on I near direction pipelines in think and the some that the the be largest the a once is of the this out referenced and to infrastructure been at basin There's of I think side, get is going remain have the country.

rationalization I in be of think grow for I've growth future. consolidation there'll for said be the will don't think I in think sake to how I the And the be rationalizations. the growth. there'll there going there's think some of basin. opportunities I past, you into be

are are demand power I allocated to equation. with the get the have radar we in being maybe everybody's be is versus basin, screen, macro think that out power investors. on in-basin It's going construction there I the acceptable inflections. be pricing. market though to point that the we LNGs LNG, I opportunities it get priced projects now, some as demand the think of are under are been priced delay XX, maybe Ohio, deliver benchmark going exports there's to right some in-basin a approval there's doesn't be And - even fact But their the of maybe are returns done benchmark. NYMEX kind in there Not the There's become the we in on going be think a is a producer impact. But synergies We think The future. projects gas when going going think to they that's that have certainly coming. to require a lower part are maybe discussed cost a to what on think our area. where able to demand plant, Pennsylvania to to from in standpoint, to

in-basin forecast to If the of size them levels at those greater there, speed kind along you commission up and of and than them XX that are get you and that's you look up all projects at. that X.X that talk demand, particularly that think you And of think to be lot impactful looking rationalizations Bcf about. have people I I of going if a the is don't we're

industry that being So Cabot think I will it'll we'll to bit certainly acting the I and the little model price that prudently for managed a balance than investors. think and supply-demand value I a at and something manage accepts that manage point well think more be attractive able growth, if is be

Operator

Jane. Jane Our with Please comes ahead, from final question Trotsenko go Stifel.

Jane Trotsenko

free regarding your it's any free cash is proceeds, question Does or free and cash organic flow? tax flow free include first dividend My flow cash refund cash guidance if post an cash flow.

Matthew Kerin

Jane, this is Matt.

and forwards. carry our So the does credit assume empty of QX that XXXX refund guidance

current of As just far differ in as guide there's XXX% we refund. taxes XXXX, but assumes taxes that income the no our cash have

Jane Trotsenko

cash in And you guys don't include that the dividends guidance? free

Matthew Kerin

do We not.

Jane Trotsenko

It's right? pre-dividend,

Matthew Kerin

correct. capital. less That's It's cash discretionary a flow

Jane Trotsenko

of has transportation That's impact guiding on kind Atlantic Sunrise despite then gathering guys quarter-over-quarter that online flattish is processing are second XQ, early perfect. processing and per its since regarding I and line. Atlantic transportation expense question you unit And saw been to for the gathering Sunrise that and October.

in curious in see I of unit in we XQ kind XXXX? was expense I'm should So we pickup a surprised it XXXX. that didn't per see if

Scott Schroeder

guiding year $X.XX realized The gathering XXXX, gathering we're for against transport next No, our transportation don't you see netting in that up reason for pricing. line are transport. Atlantic pick we the is for that Sunrise the on costs sales

you transport deducting if goes So actually our from around in trans instance for are to QX, guidance that $X.XX for volumes they're the that deduct. the those and account reaching look for go on see York, New slides you'll $X.XX

accounted $X.XX So in for XXXX. differential guidance already our for it's

Operator

the question-and-answer This like for back to Dan concludes Dinges, to I conference remarks. turn now closing our would any session. over

Dan Dinges

is capital. sheet focus our have look how our managing same continuing We'll pleased style Thank putting forth. Cabot we've And of you, the towards shareholders. our forward do a does on to we what questions. number Shaun, we it that received there a and model and directed that and that am questions reiterate for thanks to I value for of allocate the are value Again balance

catching year-end you, the So, and to and on teleconference forward thanks teleconference. Thank look up again next quarterly Shaun.

Operator

everyone now Thank for today's attending may presentation you. conference you has The you Thank and now disconnect. concluded.

Coterra Energy (CTRA) 26 Oct 182018 Q3 Earnings call transcript