COG - Earnings call transcript Q4 2018

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Operator

Good day, and welcome to the Cabot Oil & Gas Fourth Quarter 2018 Earnings Conference Call. [Operator Instructions]. Please note, this event is being recorded. I would now like to turn the conference over to Mr. Dan Dinges, Chairman, President and CEO. ahead. go Please,

Dan Dinges

directly I and today Allison, With Thank for call, team you today that to Thank this on Cabot's good Fourth us morning's financial measures current Cabot. as and statements other of provided members for as several will well based make Call. some morning's first our forward-looking forward-looking Quarter joining on earnings statements financial comments like are measures, of to emphasize you, we executive comparable the in this most reconciliations Also, are expectations. morning. may GAAP would XXXX me reference non-GAAP release. Earnings disclaimers

third, and in we this a financial share that debt-adjusted to and generating some very laid increasing delivered to had exceeds you that capital maximize on reserves positive to on: XXXX our while As secondly, flexibility. of and cost flow; the that free employed return year, all on XXXX. our growth strong successfully we focused improving time strategy may generating sheet out production we a that for capital report laid and repurchases; out to recall, per maintaining happy share was for of capital; balance cash return delivering last dividends have I'm through strategies shareholders fourth, first,

free highlighting company adjusted per excess XX%, The For a the year of during period weighted generated cost year capital a flow, relative cash XX.X% capital the company year. competitive generation of representing in that that in there average that highlight and our a year, return an the employed debt-adjusted exceeding to return Most respectively. of fact are on an prior of market. third E&P this earnings basis year, the the equity return to the million cash positive on which would sector in is free S&P XXX XX% average capital, we relative CAGR delivered can XXX%. points. of consecutive across the importantly, company of I the share broad in compares flow growth improvement generated XX.X% in is and per for that production and far XX% This share capital to favorably XXX reserves a returns prior company deliver increase $XXX on generated

our to shareholder XXXX. Additionally, now have our shares in outstanding reduced since shareholders, capital by quarterly XXXX. over we by $X twice repurchasing share of exceeded equity a over and initial program over yield including our we our represented Also, billion increasing expectations million dividend over X% XX in X% holders. to returning shares This repurchase restarting

considering Lastly, When maintain approximately company over we delivered by a strong Xx. of continued reducing year-end $XXX debt balance for debt-to-EBITDAX of the the and of stakeholder reduction, cash dividends, a ratio total XX% our combination year. a to stock repurchases of levels million, commitment -- yield in by resulting debt sheet demonstrated the

share to these delivered highlights, in by per In XXX%. adjusted earnings addition growth we

it around combination while despite of a maintaining relates demonstrate base, free Our energy return results generating the cash on and return natural for as specifically capital, gas negative investment-grade compelling to sheet. year sector sentiment growth, that flow, is Cabot balance capital, the the of

$XXX income previous million. quarter per delivered free fourth quarter was cash Cabot exceeding Cabot's fourth per expectation $X.XX specifically income the million. was XXXX, in from flow As $X.XX quarter of and or share. $XXX or during of of $XXX million company discretionary quarter cash share fourth flow $XXX it while also relates the million, our in $XXX of to of the of fourth net million operating the cash activity net $XXX the generated million XXXX, adjusted

gas natural 'XX improvements were the our production, these price realizations improvement cost to structure. significant of of quarter fourth by a relative and All stronger driven in higher

unit is from dry quarter, In I exploratory represented area. in One specific company's results in in operating to want the unsuccessful history. exploratory drilling second expense fourth lowest hole the resulting cost cost our fact, the highlight XXXX we incurred

expect result, a any allocate capital time. at we exploration to As do not incremental this to

development Let's equivalent, move Eagle per cost of XXXX. acreage on position increase per to These despite were trillion MCF Cabot results America. year-end finding XX% MCF. of reserve Cabot's improved all-source property reaffirm natural Susquehanna cost Marcellus-only gas $X.XX and reserves XX.X over while all-source asset in the of County discussion, $X.XX and in year, development company divestiture cubic XXXX, North reported our total in foot our the lowest-cost an finding our year-end were as Ford

X.X reservoirs Upper results reservoir Marcellus of previous relative characteristics to distinctive it To several earlier-generation feet have Marcellus is: many history completions. remains X,XXX today, the lateral the wells EUR While the of reconfirm outperformed Gen-X from Marcellus, questions generation-X Upper Upper wells As our the the during own to resource Marcellus further of aware, of incremental which has on of in the Marcellus, our this results completion sample regarding per our tested XXXX reservoir. average during Marcellus answer demonstrated, distinctive Upper North its production these production the XXXX with most one we design placed potential the America. a Based on you Marcellus economic Lower wells Upper demonstrate are Upper

build combination $X.XX on realized natural have by lowest the of the this -- came the views in we highly quarter of and conviction of the to the remaining been projects to flat below of even in Upper slight these coupled The pricing gas comparable basin, reconfirming new we in Marcellus with in which XXXX XXXX. again, is have NYMEX and the takeaway prices population working addition have a of and NYMEX. life asset. significant to of wells a Upper Once marketing previous NYMEX, fourth drill of years. to multi-decade year, hedges inventory year the plan world-class Cabot's Gen-X our Marcellus and production before the All prices to higher seasonal update. was right. complete our driven exposure markets the to long-awaited to relative our the our that reservoir from Upper to by success our year first Much reinforce to capacity quarter and be level for Move completions, expect on by a full differentials, nature XX% -- demand improvement results, this on distinct wells. now fourth Mid-Atlantic, quarter, history, we've improved continue for been a realizations at since our price work a driven quarter sample or each larger prior Marcellus Our extensive premium small

hedges impact the full For the year, our still weighted to average differential $X.XX. be expect we before of

hedges On curve. morning. our million short-lived winter these front, on We utilized anticipate layer this website hedging which of generate additional we rally based over in posted to on basis $XX this the our the NYMEX current the and forward we will hedges, year, revenue

to cash will market in during protect continue be flow our anticipated hedges year. layering opportunistic and free the in We rallies for to order

commentary Now XXXX. for I'll provide

updated share budget XX% or debt-adjusted resulting XXXX we of production year, basis. on full per capital million, the XX% a $XXX growth to For our in

investment the direct guidance Our decision returns market focus from our We community maximizing production capital have on our an believe preliminary and growth feedback over and line the free and industry the it to top is end on free of the strategic target of and range shareholders conditions, an flow flow. we result cash current we leader -- lower return deemphasizing growth. while sake capital, broader have continued of leader that the prioritizing and of industry in been for and cash

Our the last echoes October. year the our commitment reaffirms updated quarter from earnings third and program our to philosophy for this call commentary

to we actually rally, from market. witnessed the more remains heard bring the count despite rational certainly points winter-related NYMEX that to the increase last have October, in rig the have Marcellus, said, fully meanwhile, Haynesville our approach peers early a backwardation. the slight allocation of a and in that Cabot call in since stability data Utica strip to in the rationalization supports XXXX, appellation With We capital and imply capital

to While we it across the part is believe in and for material-based growth the are due and higher outlook our us as cash opposed funding demand to incremental outsized cautiously flow, large -- significant optimistic for supply U.S., we resulting returns an XX more declines for prices from months, free utilize additional to growth. shareholders prudent production on the plan capital next demand to conservatively additional of

we $XXX which $XXX generate on account third flow million free and X% a differs implying -- flow, free million a we below I of is of million cash in conservative February. of price highlight, and cash we on expected a for XXXX, As and of assumption using. are from when the NYMEX the call, for flow free settlements instead of Under NYMEX $X.XX budgeting purposes account based to this are discussed we strip current the slightly $X.XX would approximately NYMEX assumption, between million $XXX to for taking -- result, actual was January a $XXX more higher cash which consideration expect yield. in $X.XX using $X.XX million this assumption quarter that to

share share XX% would especially least call, are our calling resulting NYMEX, XX% on total growth cash the to and a assumption, these million yield X%. quarter return XX% between of assumptions. XX%. trough per million flow and growing on broader the in XX% earnings equity adjusted compelling XXXX in NYMEX program a flow, midpoint, at adjusted are free at per for, these through XX% We and between very the minimum $X.XX share employed return which to capital At to $X.XX deliver and a we of market, free the shareholders in between our a annually implies between some believe and highlighted expected repurchase, Even under prices metrics commodity growth a which side return XX% and of cash at flow relative of employed. also, we As yield sell and is between XX% of X% and program our on dividend capital free $XXX to this $XXX plan third earnings combination shareholder XX% deliver cash

is think of type growth to important the our to going in highlight I to disciplined it assets generate cash the this are we also bit. reinvest drill free via while flow, that continuing of

released budgets the seen XXXX -- significant year-over-year flow We excuse will reduction capital imply -- numerous we have neutrality. target that been in free sector to in across order we me, cash numerous spending have

strong in some, XXXX be reckoning a price to that a program is from limited there to capital flat capital deliver for lower the for Xth balance XXXX, assuming and an could day the designed, foremost, program is for However, first and of XXXX. In our contrast, investment, are realizations XXXX, sheet. a pristine on free while year cash flow generate employed than capital maintaining return to improving all consecutive

expect XXXX, allocation, in We continue earnings growth production flow to share cash and resulting deliver disciplined in capital per to by growth. in driven measured

in from reduction share our per resulting should continued program, accrete the buyback our further outstanding, Additionally, metrics. shares

is resulting I a and have the lowest but that in as that assumptions value S&P on and summary, the there Our transformed decision the balance capital will all other strategic market. our is into disciplined return in that ultimately natural believe our returns to and can be combination message shareholders compelling cash growth only industry, much flow allocation share has also metrics disciplined much a and committed across so in specialists to intensity, believe for extremely to and generalists gas energy when free metrics, not allocation reduced and company headcount even lower compared the and more per lowest-cost in the alike, for deliver a employed, growth assets the share we sectors help year to efficiency generate capital that important to only industry-leading financial incremental more send both a the highest continued is competitive Cabot do our capital measured per to with the growth capital of program. and In to the XXX. capital create under have price industry effort We are producer it capital investors, with

than with So happy I'd to it open be questions. Allison, more to that, up

Operator

[Operator Instructions].

Our first of Singer today question come Goldman Sachs. will Brian from

Brian Singer

shareholders. maybe think at cash returning And to plus do been You've see the free to have in least that, shareholders, come the of what XX% comment flow. it to think cash on the of flow How the down right upfront plus the XXXX the, also of of as at here to seem relates or end at XX% on as the year? manage free committing very cash of sustainable return about balance balances, to kind the capital cash you as to you could trying and plus you you about least

Dan Dinges

Yes, down, two comfortable it cash Sunrise, buildout, with our that deliveries with not that -- those on by flow was the with an was felt plants to our just infrastructure and -- reality. brought design, the into cash a grow a that infrastructures balance those Atlantic power we commission ability but our assumption, not

form then $X.XX So felt dividend layered in $XXX that drawing then deliver is whether only of sits this free what the We'll decision we funds past, not the buyback. cash come, the of done in and fact, do realize we going at our leave the today, we've at in in but of of balance shareholder. flow our anticipate of the or the intent lot generation twice with the intent, the we're cash a Brian, it's base cash if million on not confidence last make that, we've cash some to a above we the dividend sheet. back comfortable repaying which to that we level with the if generate, to increasing the to the of or assumption, strip it's the $X.XX, would 'XX, that realize we kind not and the plus and down with But flow year something buyback. it's in our Right of now, balance the a debt $X billion -- and a $X.XX,

Brian Singer

be or that's you teed for a the chalkboard, are up I And greatest that's midstream would anything latest of then update timing front. if various on the coming possibility. know the just on the projects Jeff my great, that's and and don't follow-up is new but if onto that

Dan Dinges

Yes, Brian Jeff, to I'll flip over it -- to Brian. I mean

Jeffrey Hutton

but if that relatively I additional we months in over midstream are I the think projects think the us yet, PennEast. some don't front await out last reached can a there with of of the been the midstream, lot still a into it's you this on some projects. I in. quite on lot of Yes, few we're out that movement as domain interested has have new laid public ruling tell

Pennsylvania, being developed demand that gas that -- been even but just additional think projects in-basin maybe basin. Northeast that corner I exciting as not viewing. to bit Additionally, activity, is the There's we're watch importantly in that's more the a in additional, quite of in project County of keep with And Susquehanna are to well.

Brian Singer

New projects, on gas Can New to I move ask, the those to new the Jersey, dare are you talking the Yes. Northeast markets? Southeast or about markets, the ask, to York markets to I

Jeffrey Hutton

few don't the New down next think, so think those -- additionally, will them Pennsylvania up we'll Yes, I talking But think months. the given on a York anyone be building New both, or I out either the the pipe in into do South. couple of I about Jersey and back pipelines, gas of has moving and into

Dan Dinges

I'd I it on Yes, move of only there a from New results the new also experiencing he that it of like the housing. assists crusade gas how to it take to that Post to, of would Jeff New the questions, expand that have on it's out that an there, where against to me Cuomo on we his point think of issues I interesting is not simply farm but work colleagues out like but the and want the and we projects would also small there would the time we the point Brian, of alluded is there. on meaningful on of my pipes balancing York to in-basin of to article that is gathering starting development it of I'd that out this York that add natural not referring is the long-haul continue like beginning some up system. gas in today, like was hurt starting to maybe point think -- our that to to number basin, some up of I standpoint businesses, hurt from the basis are experiencing also And as would the not have would here tailgate yes, in while

think And largest all are I turning in to of that New York March away New including of clear it's it, businesses utility will beginning applications from be York. and going gas this, that they accept the with longer representing kind for natural no that's XX. hookups,

of doing from continue it'll companies early -- in policy all And there. these that business I are think have I is a the New evacuate signs to creating that significant a York. think calamity

Operator

from come will Brothers. Tuohy Campbell questioner next Jeffrey Our of

Dan Dinges

on. move Let's

Operator

The Michael Energy. Heikkinen of next Hall question will come from

Michael Hall

guess, at a volumes I the say. guys the was the really seems stability market, your curious, view the XQ into are adherence to you that looking on pretty let's Was a -- on approach capital as Just to your leaning on just function winter clear of it I strict like discipline? guidance, aren't market more take

Dan Dinges

program. Have our scheduled

time the the various get just at Michael. they lumpy. on various on completion, all the come year, have done a we pads different and particular at When gets of And little times pads. bit completion it it -- sequentially, We times, our drilling --

And in the design quarter. we so no where there's on master first are particular

Michael Hall

opportunistic you you And curtailed sort full are to kind put, do way theoretically period? better house up could of And the of given a for volumes lack have you any accessing market? in Okay. running for I any that of of open guess,

Dan Dinges

on on patch, things completions to production volumes while that. would wells our adjacent The are are pads. curtailed, like in are are some and surrounding going of completing We that help adjacent We're do producing if what we wells No. frac surrounding -- avoid to that volumes can. shut existing hits that the will, you be

a not of volumes, as having block and industry the don't I that. far -- as we curtailed have So but has anybody that, anticipate do in

Michael Hall

great. mine Marcellus. on there last how will much the the I'm on Upper That's then Okay, just just with is any the XXXX program guess are incremental do helpful. completion I And just allocate you And think exactly associated productivity? changes Marcellus? in for Upper curious, in design you

Dan Dinges

had that the XX me, handful kind I of whether in for drill, scheduled we -- of Michael, the on the front have a key drilling now. good completions. Marcellus Upper ones and right We of pool just the we of don't in sample that's completion a status the -- have but XX, of 'XX, have exact we're count wells of that we'll a

Operator

will questioner Rice. next Our come Charles of Johnson from Meade

Charles Meade

I pick up. to wanted

that, You touched explore I in delivering market, to volumes it delivering all me certainly on at into how -- the the Northeast. years. improved look on a your question, at little -- but looks a attractive wanted more bit for slideshow the you Atlantic has this guys volumes I your looks When bit you've to that few the most in it but last -- earlier basis volumes the the And when look it a more. than of Sunrise, these have moved up local looks I on to has

like so that are you're not -- on you've doing to your keeping And shareholders. electing is cash low, -- more looks you to read CapEx or because do guys you you guys it doing -- to return my but guys committed are and what are

incremental of went delivering the the the right you all now? was but it's local into talk market look the that something evaluation volumes to can know I through about at time, how you So look decision? you you how

Dan Dinges

of and Atlantic the long-term to were And coming is, the that Sunrise couple of pricing. those basis. price were one we to knew that were contracts in-basin basin going commentary better I'll out But quick we we with fulfilling of out than flip volumes comment on, points basin, a with transfer to on make Jeff

So we're doing that.

were contemporaneous the also new have -- the the only drastic the an not about gas question a power in did the still basin. that commissioning improved and molecule and moved Sunrise plants. On of other with that differential. enhanced saw every we that with basis that backfilling. narrowing We these -- the Atlantic of We we saw And on we power selling into improvement but the by dramatic plants, that the infrastructures improvement to fairly

but comfortable by component and free buying that metric having also gas, uplift to and So cash the per back of allocating of with the volumes growth, moving fits growth and we're a think measured outside our basin. and maintaining we're throughout capital shares our feel we what rest we're just we a accomplish that improving allocation realizations trying only not back share having producing our and that basin that some on gas where to the

Jeffrey Hutton

weeds Without marketplace the the the getting too what was in into much on this, Sunrise, expected. far we -- we Atlantic pretty reaction

large fill course, did Sunrise. redirect a volume Cabot Of to other amount from of pipes Atlantic

I the of other half, Atlantic were On directly. volumes into the Sunrise, delivered Leidy being other hand, guess, system the those

And large system so basis projects. we Leidy saw we not a projects, well. the of Leidy lighting influence And time, what a in-basin well other the as but then as that as Cabot amount of in at that gas number other have fell Cabot-related producer-related was system, back leaving pipelines the then same just along but into the gas leaving

in storm So the perfect in and somewhat for the fall, basis it this PA. of was a very Northeast way, good pricing a

Charles Meade

Got it.

Upper terms on codevelop you? mold well I need if Lower with you things -- of you or development surface on locations you to guys see back that of perhaps the What save see ask and to costs need before what Dan, nature? to leases for whatever the those also guys could do productivity and and metric metric Upper decided Marcellus, -- then, You those Marcellus Marcellus would in from the and

Dan Dinges

of I'll Well, a make couple comments.

since do just of distinctive. you we couple it's one questions I'm number, not regarding our a a a of level know -- Marcellus how example. Upper a to going our First, received regarding I'll make comment comfort give And number and

Lower area you one laid how we in that do. our Marcellus two Marcellus had feet, time. put this wells Lower that had give Upper get Upper conviction Marcellus X just Lower of the to feet two We problems experiment examples those period of recently, two an wells Marcellus I'll wells number Upper were example had on time. that over XXX We we Marcellus completions could that in we that XXX on but an are wells have laid our happened have It not a example understanding cum-ed extended the going in have I'll that we been And -- two Marcellus wells that so -- from we XX Marcellus specific Lower wells. for people feet prior these have this XXX give that context, in two We a we to any from we to two had do be the -- this -- chose wells produced long two to you, give that Bcf. most Marcellus. each completed you, producing we Lower And

early caution Those laid that's wells production I'm going curve Bcf Okay, here X.X from fitting bcf. I'm per have of little again normally saying Upper on cum-ed wells expect. two Upper came Marcellus And X.X a time each had XXX per that comment from X,XXX wells Upper with as those we're Bcf on what going but on data, to a go that very curve to. XX came those so to Marcellus Marcellus fit the fit not we you X,XXX. and two The wells actually a two curve. feet Marcellus wells, might Upper

couple EUR. ask this might X,XXX there's Bcf, giving would've about Marcellus. it, feet Charles, what XX away had example we over of Bcf, be So confidence That X.X have If you just any I'm nobody we comes place about been seen the where our X.X, issues, XXX-something level. it I Upper and a take produced from from would don't our of forward. hope point some an and poster,

So box question? of What was commentary that. that's in rest the -- so your

Charles Meade

was... what Well,

Dan Dinges

been -- wants Scott his hand to so... Scott's raising

Scott Schroeder

kind But concept. the to would of be what word you Charles, of to playbook think and [indiscernible] West the point Texas, go the I back the out at taking cube -- a --

The Dan's be do thing takeaway do plays is to this our time? all we of is part other that want the in that into capacity we no do The downside still come example back, we're the the and pads and mold that is do right degradation there them to lowers that now the come and do at came constrained the And the while get when going back is market. wouldn't to what And uppers in That's because field of we be focus and highlights point What -- the mentioned of we then addition to primary later. to back. only in the wouldn't able the stuff. most uppers kind of you that is cost uppers we're efficient that all then to where it. -- gas the lowers building being and on because can really how

to filled there again What put never the So there's we do out pipe of efficient that a be to the initial side production. instruct Williams That's lost equation. after huge not want that is not from efficiency. lot of a don't just will

the kind dynamic. of that's So

Dan do as to terms do for -- X a develop in few science part these most efficient what will in think I program. going or outside think We highlighted We earlier, handfuls the the We'll do of the to doing. or pad did the had XX X that's we full that -- some number forward. latest do the X like of it's -- purposes, continue program. and test, maybe full where in XX we're 'XX 'XX of still we science project science we'll But

Operator

Seaport come Kelly next The of Mike from will question Global.

Michael Kelly

just revival project the that of at on expressed in that I guys in to and an on with check just out wanted that least perspective some wanted the this sort thoughts. you your Constitution get week of to pipeline. article your RBN had hope and

Dan Dinges

to in a ruling Well, that some have that a there, the favorable next. in the is what Constitution. there's if had in maintained a and get And I Constitution. happen out favorable consideration pattern. that FERC case, D.C. to our And still ruling favorable fact Appeals we have waiver is Circuit -- Court Circuit fact-patterned the the take didn't a case, might ruling similar sense with movement guess, pattern of do D.C. fact efforts a The of maybe you Constitution's in was Court And the we think again consideration. Appeals on we has to

-- to we'll continue time and hope have at on another time addressed, some work maybe to at that. we we in point So this have

Michael Kelly

Like that? Okay. next look for? Any extensive timing on us for the step is to what

Dan Dinges

of would Yes, from that we on hope might we Mike. that that uncertainty, would think have this. consideration I'd with or that some have the would additional I -- something be from the I speculating, opine -- 'XX first sometime the half all courts, FERC But in

Operator

next question will Mariani come of from Our KeyBanc. Leo

Leo Mariani

that little of how you to look much guys of to sense are what how a in get like? of out want much And know you anymore on you don't had need work out a get to not you -- much to XXXX? the mean, history nine have EURs wells old come curiosity, and Upper better of much too now kind Marcellus, what I said see of a wells think how on the history this yourself to the I handle you on you Just guys, I think in need Upper do harp wells you ready trying point at I give sense XXXX kind EUR think, on you those of frac-ed do here to some production of with you you give defined Marcellus better estimates. how it. some that but But

Dan Dinges

of year, the are a 'XX year -- need none a and wells yet. X.X year We old them are

Leo Mariani

wanted plays I look of or side. sort to now, guys tremendously your get plays. got I I to this you've build here a either a is of Okay. to bar. kind to you right return high mean, That's helpful. year abandoned Obviously, other a try get at just just appetite recent next is which higher-rate on company? continue pretty of continued late. just want the to I I other of sense to guess, for sense, effort looking turning to a of a thoughts kind Cabot exploration your And the obviously, there guess at of opportunity

forward? going that about think we should how So

Dan Dinges

now, in any interest Yes. we exploration. have capital Right additional allocating no to

today So the is, stand. we where answer that's

Operator

will of questioner Lynch. Doug of next Bank come America Merrill from Our Leggate

Douglas Leggate

if exploration go-forward obviously basis? being you you your Are on the an used next? I'm What's on us going give today. stick Marcellus beyond just to update wondering could a ambitions with

Dan Dinges

the -- exploration You not heard and going allocate not anymore where to to have might call, we're are. capital time, answer, we but might've previous this kind of been that's at

Douglas Leggate

it I'm going and more outlook. you view just-in-time a resilient not idea prognosis are, see Will just model it? us we out. of the leave did I have in things your there. the that. And that production apologize. miss really quite right the is we was think you forward, going quick I'll probably strength fourth your because we that I some the obviously, give after first fact, playing your plan on if wondering guess, to on I a the time. -- for haven't some one, saw, asked I market really were gas sorry, just that of quarter opinion My follow-up And Okay, the could bear folks how

Dan Dinges

in today Couple January, little see our -- October December back that be parts or up a and in though that is, in is response. a reduction reduction that flattening place, that production in think taking there's least rationalization area, of prudent be shareholders. industry October. that's the Appalachia to And area. at that, even at can a We a are look were is a the -- is rationalized the that to current, a there in think in But couple moving up imperative in bit -- seems signs of a parts there's there it way than moving it more I market rigs of in way for did long-winded -- in from and all one, I working I

So up in hookups. seeing equation, side a York taking talking Boston demand new there gas not increasing, that optimistic that means the going utilities incremental facilities. demand is that another of natural demand up commissioning and the be Boston would is in X to application about and for there. in now a the need in When -- for up additional natural area. that New That are the there's gas We're be But needed is X in I'm or looking at Bcf the helpful. of up by offshore LNG day going

So in by up there I'm encouraged area. incremental demand that particular

the your fact all think value on of going of the would on focused market at equation, be side growth that dividends -- Doug, So to opposed if proven and keep of returned with buybacks, in the the that that from form help as to expectation it's I in cost. that and at then that's there's shareholders meaningful, -- and value some is is also that reward there assist to

the is better I there, renewable also part insecurity the delivery the out to challenged. gas. part footprint of going so of look is on your a Otherwise, natural plays this that be a natural of But energy role of gas I be to responsiveness on natural And equation. the any think gas of all think forward of

Operator

Trotsenko Jane will next question of The come from Stifel.

Jane Trotsenko

three in well the the results you please drove the of the it's the crude was to if I above XX% due expand curious And It rate. could the on what XXXX? existing increase year-over-year like wells. Dan, average reserves is just in year in increase outperformance run looks

is results else been that have well like something particularly the explain that? it or recent would So strong

Dan Dinges

in I'll is he I'll Steve And Thanks -- him responsible and right. here, All reserve that. our question. and is the let for Lindeman cover for bookings,

Steven Lindeman

what laterals reserve year our So had report. revision a modeled longer part was 'XX we of drove in drilling of most this than our

lateral progressed, time's As upped we've our length.

pipe range. that feet. average And X,XXX-foot were was wells the our we drilled about X,XXX Our in

Jane Trotsenko

we you it. to the over that XXXX expand time? sales 'XX? do on XX% think a of Got fixed-price volumes Got you Jeff, should how it. could And my account And that Is bit Okay. sales little those second plus for pricing expect please in place for then evolve as take it mix for well? is will in something question Jeff. the

Jeffrey Hutton

Matt. grab real quick sure I'm thank to -- I'm Jane, the because table you, going

on asking change in portion? -- on NYMEX about XXXX the You're the

Jane Trotsenko

Yes.

So sales. you have fixed-price

And term terms or in those to quarterly of that evolve just sure basis. a but how not time you that me that sales, an seems pricing? volumes are I'm it over So annual if curious sales portion and maybe those I'm over on will roll term are

Jeffrey Hutton

Well, course them. in our of of fixed-price some a that's on of combination Okay. fixed-price forwards contracts that the portion, have

fixed And XX%, price, so going static. remain forward, that will of that piece

is just the from opportunities in we've However, marketplace. of another part seen the fixed-price

I some to would to advantage expect we that of have some continue price, will pricing that. convert So index-based to or fixed NYMEX be to dynamic. take we opportunities If

the or can't on elaborate a forward So we 'XX 'XX. of target moving that going in really more one is 'XX, that

Jane Trotsenko

pricing I Or volumes And of it see. pricing, those well? Is comparable comment think you should that as we in can I -- see. terms terms about -- are on of how priced? 'XX? to in it should them

Jeffrey Hutton

Now basis we into the NYMEX, -- looking that's how built the to forward. overall calculate overall differential

moves it around. So

Operator

this Mr. and gentlemen, remarks. our to time, session. conclude turn this to I'd like Ladies over will question-and-answer the conference At any for Dinges closing back

Dan Dinges

Just briefly, Cabot. I everybody's in appreciate interest

this I interesting bit is in talk are we very to well value think, I about a And come gas company. release or And made. on what is the can think type we performance that hope but is make how I the on our only company I not morning's what financial comments is, it E&P does natural what particular has report, deliver a because we flawed at interesting, on reflect does shareholders it a have and in that report mean it's And do done, strictly is pad creation. an shareholders. it much a just yield press zone not certainly, have about value not has but what the our a little we've interested and that that the of talk -- to release looking the agnostic we're a getting with hearing

Allison, And conclude call. the interest. I So appreciate that, the we'll with

Operator

you, now everyone thank thank concluded. today's for The conference has sir. attending And presentation. we And

now disconnect may You your lines.

Dan Dinges	Chairman, President & CEO
Scott Schroeder	EVP & CFO
Steven Lindeman	SVP, South Region & Engineering
Jeffrey Hutton	SVP, Marketing
Brian Singer	Goldman Sachs Group
Michael Hall	Heikkinen Energy Advisors
Charles Meade	Johnson Rice & Company
Michael Kelly	Seaport Global Securities
Leo Mariani	KeyBanc Capital Markets
Douglas Leggate	Bank of America Merrill Lynch
Jane Trotsenko	Stifel, Nicolaus & Company
Jeffrey Campbell	Tuohy Brothers Investment Research

Coterra Energy (CTRA) 22 Feb 192018 Q4 Earnings call transcript