COG - Earnings call transcript Q1 2019

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Operator

Good day, and welcome to the Cabot Oil & Gas Corporation First Quarter 2019 Earnings Conference Call and Webcast. 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, today’s event is being recorded. I would now like to turn the conference over to Mr. and CEO Chairman, Dinges, President. Dan sir. Please go ahead,

Dan Dinges

the all. Thank based our joining for earnings remind With members everyone to like this current would first will you, and good call. make of several are call Rocco, that Thank me team. us to on XXXX I first you quarter morning executive morning's today we on Cabot's for statements forward-looking expectations.

would reference non-GAAP measures. of some our comments Additionally, financial

directly enjoyed most GAAP well earnings as start Forward-looking are reconciliations in financial to statements and disclaimers provided the measures other release. as to Cabot a XXXX. comparable this morning's shareholders have solid

our first quarter, and our in commitment the income operating adjusted the to levels of unwavering net and allocation disciplined cash from flow, and production During the cost operations delivered cash by control. flow, we Marcellus free underpinned capital record success continued

flow quarter The represents earnings and excluding relative flow the net full-year XXXX. from income, net the $XXX per quarter $X.XX comparable to per greater comparable the $X.XX cash share. free the was million, was or share first in million adjusted adjusted XXX% million increase per items income for approximately selected the Free share or $XXX quarter. a $XXX prior-year first quarter amount our than and generated which was for prior-year cash was X.Xx in This

S&P over months Cabot's the the comparable XX a This increase ROCE average prior competitive the of XX% employed capital an over relative trailing compared of of generated highlighting X.X% the equity on current to months, basis return of broader the positioning we for XX exceeds markets. points. representing for For trailing of XX.X% the ROCE XXX, quarter, to X,XXX the as end

price Natural the quarter realizations for quarter and of above production an the Mcf, driven XXXX. per were prior-year compared for end Production X.XX and prices to increase an improved comparable of levels, when $X.XX of of lower success day quarter of billion was gas the operating high relative increase the foot expenses. our higher cubic first guidance realized by Our XX% XX% per represented range quarter. the to was

hedges expenses of were $X.XX our since and to the was which a per differential Operating to operating quarter XXXX. primarily the direct improvement Mcf, before $X.XX DD&A comparable below realizations expense. decreased expenses, second best prior-year by relative driven price Our NYMEX, quarter, interest lower corporate-wide X%

ratio significant strong sheet the $XXX free over our on of the financial we flow cash million net the shareholders Given cash and for during period balance generation flexibility continued to highlighting quarter, of of X.Xx the to EBITDAX return a ended debt with year. throughout capital

in of months. increase XX% the return capital last we dividend dividend share This increase to an is annualized yield. in our $X.XX front, fourth basis, announced representing a per X.X% a On our XX on the

to continue cash be our years, a We competitive methodically over to is free dividend generation coming expect with A intent with able time to we'll dividend yield broader markets. an lower the of year growth dividends even lower our through and a share remain flow significantly support natural should occur. cash assumptions committed prices this opportunistic minimum shareholders returning to this free dividend increase the the to our certainly to to under of repurchases. over flow grow We gas that fully XX%

of is have year, blackout the in calendar repurchases executed it the on for material share we four have the period Given early been of still year-to-date. we and not months year in any first majority the

natural impacted continued significant year have fully and prices shares outstanding we to we price. have throughout gas more our continue that on reduce that especially the weakening to expect to if active negatively be a flexibility financial much our front, in However, share see

for operations our the quarter. onto Moving

compared production Marcellus XX% the prior-year to Our comparable quarter. increased

in March, week of of were placed XX we were the in quarter, the wells that XX the During including on month. turned last of X which the wells all line production,

during Bcf resulting to a on sequential to per wells additional X.XX the second the XX day guidance quarter at quarter, range. of midpoint X.X to We relative in X% an range Bcf first increase a place or the of expect production quarter for production the our guidance

which On weakness spring we front, during demand the have season. dissipated pricing the natural forward in the weather-related some has curve shoulder experienced gas in as expected April, is

summer However, that the be for feed increases to export the and LNG current Mexico coincide driven with gas demand weather-related price upside we to may potential would in strength the there from believe exports levels by facilities. demand also continued in this

last we the current and production the budgeted The on price. strip a Haynesville, quarter settlement supportive we the three quarters price NYMEX $X.XX in approximately of which for fixed actual hedges these year, average implies be for should Northeast downside of revenue fourth quarter, a directly deals, the locked growth our to of million from to combination slowing expecting a year. supply April of over price standpoint. including are some risk. front, we prices, have price with hedging on potential Lastly, second through expect from of Through XX% is for providing and in volumes of in a generate line our the which $XX prices mitigation Based

Cabot's happy $XXX significantly increasing interest our overhead result the strategic sheets at low X% by costs. markets midpoint controls, cost closing, I'm our growth questions. metrics. of strongest And in range. is paramount XX% discipline lastly, of In without improved cost per of of to XX% higher differentials of million has our the answer to now growth transportation improve XX% we a capital to competitive the have I'm budget NYMEX of $XXX the expect to adjusted allocation and continued which employed a share one capital our or supported marketing For the the in with latter on of flow the direct on us proud earnings many on one plan, has At expense, to basis. commitment to continued gathering growth the report to capital than efficiency capital that, costs entire feel history, field, reaffirmed that before, I allowed share on as XX%, driven per we best guidance year-after-year, budget strong and truly times the stated implying quarters and a million, in year, any They yield and Rocco, XXXX free properties and operational access our maintaining of free $XXX and deliver cash debt-adjusted divesting share price is per XX% is a accents which flow capital of more $X.XX return industry. XX% cash for but production a our and which full-year, balance strategy million returns in to including of new to the focused and delivering of

Operator

sir. you, Thank

the question Mariani session. ahead. Today's first Instructions] from We question-and-answer KeyBanc. will [Operator of go Please now comes begin Leo

Leo Mariani

it you're wells Hey XQ guys, on just a in versus quick more production XQ. question looks on quarter like your bringing growth, second

helpful. of little XQ. you a on also XQ come the would Are lot late the thought you around a kind color guess, lot higher in in be that Just tie-ins late? be of would I Additionally, wells maybe those have the that a bit given any of growth on quarter. seeing I well will XQ came

Dan Dinges

May. May that's and have are scheduled kind of that middle for those Well, a number the we'll of wells

latter out towards part So that's the quarter. pushed of the

As and we bring we systematically, bring wells. on we bring the production them don't plus as on these – we on of wells the out unload

we'll or the in bring So towards third the even we still quarter the see that we'll quarter, the the of on of say them and increase the quarter. them middle majority part of though latter probably bring

Leo Mariani

Marcellus color you've had to performance now the kind a further Any sure. wells? view in Okay, very terms couple more helpful that of of for those update well Upper months

Dan Dinges

No, similar I've that it be a made previously. comment

the get our production Marcellus. would seen you is there We early curve, what we the continuing necessitate currently drill wells but Upper year. we true production statement that. throughout seeing we're frankly, going pleased X.X we're prudency to in above we're anything the firm our we curve, and time if that, to deter EUR be holding this have a with do on curve quite will representative for we're But to out before That decline section the not expect have that that production what as with expectations would and more as make

Leo Mariani

that of guess, lastly your sounds you of like due the helpful. in just just obviously, there. bit stock less comments, on maybe a talking to of think kind happen that growth? about, more year? talked I kind of really get to right, little a that's quarter. blackouts when Is very realistic Clearly, this had dividend. that S&P some the could the restrictions you guys something buyback, kind of it your kind I measured was sort a of just to of the on focus you're end competitive All expectation you It the that robust of on do of the ramping guess, by yield about some dividend that

Dan Dinges

the had in. to focused buybacks. aware the in into and our all also period, months of on just first Yes. the all pricing and want we were this you part a had with first We discussion about first go. it the let We was look of where into the into you dividend we're in blackout warming quarter, We prudent and December noise, coming thought we early our is had when a early the think quarter at during whole strong the in that coming had as Board quarter, settle increase. lot to shoulder that We and some directionally

free our we discussions first have is our on as dividend to allocate I occur we through our of out our giving XX% we minimum the before is And on certain position with going flow year-end. Board to dividend and But felt feel and and comment buybacks. form we'll buybacks back of the to this continue year, So of increase. objective laying cash increases comfortable our capital in how go a want the for quarter –

Leo Mariani

the Okay. color. Thank for you

Dan Dinges

you. Thank

Operator

Mike Please today And of Kelly our ahead. next Seaport Global. comes go question from

Michael Kelly

in now guys Cabot, on kind what a I'd operator, a the of kind right and really commodity, has period a on your has Great, your to increased thanks. Cabot's adding hot Dan, any to a is consolidation role as general is question, get Thanks. levered love take leading look one thoughts space but and and and you obviously kind the at of consolidation. be if portfolio if just industry been really been I topic of diversification likely of county one are

Dan Dinges

Thanks, a what of to located going assets be, the on M&A to lot chatter and think at I look how side. – single a When you'll We're to the sword. assets the regulatory and single we're basin, gas the our I of It's we expectations there, America. – is hear edge continue single probably Mike. point think but natural North two where your in commodity, there we're best it's environment, with

numbers our reflect think and that. I financials do

at at strategic looking that manage able look been both that. to and level, same take we has it can you any those are would same the we jurisdiction, risk I made just decisions can value assets, the and still working level, We're Cabot strategic Board through how deliver from to in or the comfortable and the deliver that beneficial what profile of comfortable commodity with consideration. commodity with we always deliver make financial think we're shareholders assess environment a we've it price comfortable with expectations with manage also and So we're to regulatory would results. that being when And decision maximum long-term

job for it's if evaluate if and it's to it. two job my is good value for to three the and the to So the good deliver my one, shareholder, shareholder shareholder, is

of out think one and very a delivering on and macro degree best on strategic. companies if the doing we with with So organic and what looking I that it's growth of delivery you delivery. value strategic, clean have through consistency can sheet, to increases level doing that's shareholders organic and level there a a it's find balance growth, we're dividend If it's high and buybacks a

have is paid direction, look we significant cards then the if value with enhancement I'm and happy again, other in it. any there we're So at to

Michael Kelly

fairly gears Great. differential, significantly. narrow Appreciate that QX, the bit. to a color. it's little Shifting the great see

color XXXX Just into the maybe and on get you thoughts head that you XXXX even differential as wanted throughout Thanks. the beyond? of how see your rest say and to on differentials trending

Dan Dinges

Yes. handle Mike. let And Thanks Jeff that. I'll

Jeffrey Hutton

we enjoyed what basin Atlantic expected Mike. Good morning, demand [indiscernible] were Yes, differentials came after the Sunrise up QX a so QX. projects on, we in good ramped certainly

a widened and has it year, Looking balance we're now. did more at little maybe shoulder bit. out months expect and We basis QX more volatility the a the of right seeing short-term little the in

world same as I in applies NYMEX the well. think volatility the

So downs. expect we some and do ups

They're XXXX. beyond way still that, encouraging. what and way experienced it's tighter out we and XXXX, Looking better XXXX in than

and we here see necessarily here build decline, with more as trend to And frankly, So in-basin we the do others to we're and pleased well. expectations the And stay projects I moderate, type demand it's differentials. the we're stay. certainly growth think these but are, production not with as our quite

Michael Kelly

the hear. to Great Appreciate color guys.

Operator

from next our And Rice. Charles ahead. Please today question of comes Meade go Johnson

Charles Meade

four-part, it the look early Good you XQ little or on year sense bit part you? morning, makes could year-end it or sense I to it of going the blacked guess, your you more what's out, there. be for blackout and I that Dan detail, with periods, reporting whole if of team XQ, but insight give a your to like, is us makes wonder lot me a that the

Dan Dinges

As far blackouts concerned? as

Charles Meade

Right.

Dan Dinges

a Well, we it have our that's blackout. allow we few notice parameters into early for year-end personnel, our dissemination a of including the consistent to insider Board, as to and release numbers conservative up provide in the data the the, days gather we release and – a we for the quarterly numbers, leading you put post bandwidth all and of as

going So at what will be that some time next be to is of free time. and do to to quarter we period second week want do open

Charles Meade

it. Got

and open that's going So you, you different of I were us? is majority XQ give going is to where message the from I'm be to three-month the this window which guess trying is to

Dan Dinges

exactly. Yes,

Charles Meade

people most seems the if what that's of rank and Got tout progress you to breakout Haynesville, point in it. and could to you thing, expectations a you operators are you that I spending, through from you're but comment just and or the this activity And my the your prepared to the elaborate in what expect guess going are Marcellus, your for then seeing second go up about sense comments on – it question, a you're the that view ditto of in holding back Marcellus and in play-wide seeing made so not what that kind you're in growth from they're if confirm similar how year? back maybe seeing,

Dan Dinges

fairly crews level particularly we group we of good number We six our activity, like and monitors rigs, county have the – in, get for, there up feel expectation, frac that focus the equipment that good of the and a would in on. fairly area completions be coming

comments certainly I bearing agree conditions allocated. a look when fairly our a fall continue. are quick of shoulder has that allocation at on you there we capital see, months the and with comment rationalization benefit industry. your think Particularly of off good information early we you've So some seen weather will because capital that the that intensity the that prudent the and and I certainly and think by on comfortable And with and is and going feel that of is it

and the numbers period bit affects which a that We season production maintenance little second also profiles our with affects certainly quarter forecast, of into also. come this

that we So will count the I indicates there equipment that think don't, we're also. rationalization some and – just be of

Charles Meade

Thanks added Dan. for that color

Dan Dinges

Thanks, Charles. Yes.

Operator

our go today ahead. Sachs. And from next Please Singer question of Brian comes Goldman

Brian Singer

you. Thank Good morning.

Dan Dinges

Brian. Hello,

Brian Singer

or of on local moving Jeff any from latest Can the subtracted later demand projects update or earlier, out schedule? us give you or the are that pipelines midstream chalkboard, the the region added

Dan Dinges

Jeff. turn I’ll to Yes. that

Jeffrey Hutton

Nothing very being would Hi. key very Good a in of maybe timing. number right out looking in-basin our we but of Obviously, We on were want add to different the hard find at our course, guess, that selective approach. I there I announce two today on We also the right morning, Brian. demand. things. project, to radar. areas were very, it's scale,

there also are want is right around. of the for lot it, to find factors but project and we going We community, into a looking the

X.X added that. leave there, that in But additional and there, and We kind out. well half, up projects leads to see play the at six-county on but but it as last was there's Bcf have of and I the area add others think demand at are something get it a are the been and of a lot of I'll we like prospects. going continuing I growth might how that we'll side, up of power in-basin of power about lot of course, year in a those calls lot

of in-service from that June see I along their on publicly point moving FERC begin Talk that infrastructure, a away terms we've filing the about November to permit problem they the bit why open In June. Publicly XX pre-filing, a move submit projects houses just completed about I'll see think a PennEast, nothing they us to said to talk and you all project, in these sometime XX, on at this will in New to staff have DEP project. notice completed Jersey little with. will

I are think they said have complete also in Pennsylvania. they administratively

So that's good.

see we'll anywhere DEP once as at a they'll could and as be point. construction the they stated months from Also that their permit. it's they've it year projects how That's on this it XXX So six about believe soon treated submitted. get is and the out start to final I

Brian Singer

you is more and that for the and the to areas see areas try then Great, would figure out range cash are certainly for relative you thank of to through expect notable and you you, the the shareholders. do to to go as focus competition you. XX% increase other cash? my return how key key year minimum here, much the What potential follow-up is what dividend the of And the Dan Board, management as

Dan Dinges

to debt. all maybe wants cash keep biggest that Well, the for He that Scott. competition is payoff

Scott Schroeder

Yes.

Dan Dinges

be in says There some – and floor go broader up forth the most what it that that level the different it be. employ get in between evaluate you management. dividend X% be when and buybacks third-party a perspective, ratchet it seems But back a yield and consistent opportunistic and to standpoint, the we there process evaluating ahead the putting buybacks is are There kidding seems doing can on to to the that effective want council that. process And on the market and and a program are it of comes aside, from be would dividend employed to the just our to in is buybacks. to

that discussion in have we the when cash three – this So our it had free flow we've last and point again at time at Board years.

now We clearer Marcellus we Atlantic picture just as was going out. is Northeast the the the landing again just differential we our and commodity with are area, the moving a last be, October with with of the Sunrise, into predictability our to of the where to commissioning space and in asset, wanted differences certainty point think the measure

A decade we back long-winded bit of Board And meeting. conservative Brian, on having clear in don't free for and Could flow taking to back answers now a of Sure, possibly messaging all we but give just to know give up being a so cash of right a flow, that it more we you representing how now the going will point And future? a our time maybe with about specifically, broad talk in buybacks that that the comfortable in and share consider delivery change the think including is a aspects a able dividend it, capital. gradual we're just comfortable XX% in street and I terms, we buybacks. I it the comfort increase. thinks could, little this if Board also of but over deliver messaging we do every step right path that we're that dividends that because to say And do than opportunistic though cash that. we're at

Brian Singer

That you. is helpful. Thank

Operator

today question comes ahead. next Howard of Scotia Holly our Stewart And from Please Weil. go

Holly Stewart

gentlemen. morning, Good

Dan Dinges

Holly. Hi,

Holly Stewart

been tools move any sort first provided recognizing NYMEX around at kind are substantially $X.XX key level than when different the we maybe better strip were different kind Dan, they have know forecasted metrics this substantially thoughts I pricing, of updated you've levels, your of at but one and obviously of depressed activity your should below similarly prices? financial just,

Dan Dinges

Yes.

and to environment. have in year and we've any return capital a the there bandwidth if Cabot the be and used reaction way, knee-jerk for think mechanism I that projections there's that macro We $X and return keep particular make point on Cabot our XXXX. below I for $X.XX not we the going is as to going shareholders macro to $X.XX we're from an make bandwidth that to the out average I of $X, allocation, and that money moves end look but cost I'm below can the self-correcting the $X.XX to peer confident to to at group is understand it's there low year, impact any the deliver I lot have need a our understand made an going the and if of metrics I have know going our knowledge with below I some it gets not you but to money we'll think understand think fairly our the and substantially stressed because my a during in be continue below we amount significant where on go, at to going earnings mind even to strip of

Holly Stewart

of Sunrise. that forward for Yes, you'd know mentioned on Jeff, there one just move we've previously talked equity understood. And mean, Atlantic and final on Jeff I I project maybe about your kind to Sunrise. investment then Atlantic see looking

maybe thoughts investment? on of updated So any that divesting equity you're

Scott Schroeder

is Scott. this Holly,

asset. it's we opportunity either going it's kind that and we'll going with very not in seat forward. we be when As to to one be one yet feel the continue still marketplace Atlantic for result Company, was they're determined, Sunrise, to pipeline we and of and the at well, the explore both long-term that but our positive as served part part to of be a monitor table us and the Look said when Constitution have going we decision-making right, to of sell assets our obviously, to process or motivation invested the

We're this to more now, of assessing kind right that So come. just time. at

Holly Stewart

Thanks Great. Scott.

Operator

Campbell comes Please Brothers. today next Jeffrey of our Tuohy And from go ahead.

Jeffrey Campbell

Congratulations strong Good on morning. quarter. the

Dan Dinges

you. Thank

Jeffrey Campbell

was just, the XX. just that nat would it it My looking was generation greater I if was been that first extra was something was boost that narrow in you've XXXX price looked free have you Slide relationships from like quarter first got at wondering question cash the enjoyed the quarter else? that than on very differentials the expected or this gas

Dan Dinges

It our of was realized expectations price and differential, a both, the it in did we ceded combination it see the narrowing significant combo. was

Jeffrey Campbell

you Lower is best, some your gas for show opportunities clearly realize dramatic another Northeast acreage other and to was Okay. dry Marcellus assumption question. Appalachia oil there are areas When in higher the Cabot ever level of exploration, dry gas or improvements. that it basins. within wondering that is at in like be it M&A and always asked other other Thanks. And are kind I seems look if about I be but starting just would is about PA

eye keep you So I something wondered that's if an on.

Dan Dinges

benefit, standpoint if would single you of of monitor be commodity. it deliver it all asset get at gas the out we frankly, keep feel do the activity indifferent. financial we the how or decision The quite the any look strategic agnostic, commodity. we Yes, from opportunity, significantly can like natural comes same consider If returns or and through if do eye more we mitigates to on an at or then what of If oil asset, the capital basins we we're made investment monitor allocation a we we've up it. and there

it If jurisdictional but it you only PA. also do also differential, not out also oil out is is a the of of the be probably consideration would basin of get also an confines commodity which

both, at anything. metrics look and of but we we two one, financial the what deliveries is occur So if three would did

Jeffrey Campbell

much. Thanks Okay. very

Operator

Advisors. question our Heikkinen Michael Hall And ahead. from today comes Please go next of

Michael Hall

morning. Good Thanks.

Solid quarter.

Dan Dinges

Michael. Hey,

Michael Hall

the how hedging was forward little strategy thinking about time? progressing and evolve just might How out? philosophy if curious talk you keep the guys you as how path bit of you hedging you laid thinking payout that about guys over I could and kind just on about maybe that a you've and are

Dan Dinges

with in of to prior went of The we market we and defensive hedges the virtually we currently hedges. took where that as hedges that. the advantage We of and some we felt like that have point. Obviously, to was we weather So no prefer into some XXXX responded up the ramped we inflection offensive had stand.

and – opportunistic, we have be to if what on us. have by in just in the deliverables is limited will fact provide would depth we The the lock of will We hedge runway that it. of promised somewhat market that the some

necessarily out it's a the go good can that but there see. You would ways, like not to always at point price we

numbers limits that it then improves continue mitigate. opportunity go, there we we layer it a is not if our to will but regard, that appreciate line of it lot we in in and depth if So see and participation, do market then we that our macro and helps to where think the

Michael Hall

mean time on that? towards hedge any thoughts NYMEX there are minimum at in sense. additional differential these targeting Okay. level of on That bias a makes versus I that or over you is kind guys of of a kind hedging

Dan Dinges

Well, we'd to If that that low minimum. the little hedges maximum it of try our market same going how reach There's point, achieve hedge would the of we forecast books, from the going a volumes we because opportunities added we level that we do have under to Michael, way, on then might have would in come where to the and today get prepared that and look be and bit really we to we it now get we we certainly are place those flexibility. points and be like that like looks every we get opportunity think that majority at set no different true, with hedge to back to a have haven't that position my we we in fact we're can to. index try to, a going minimum. to would our on not and our our to is not if we we to We're in market no hedging If we If minimum minimum the achieved the us, we though that. a would an holds and active to lock lot also. then improve see to market give no

Michael Hall

sense. of also I the shut-ins, assumptions the running as like? the about look What's productive was on of as maximum out? offset, like pipelines, kind makes maybe side, at things of like would that you relative those build on asset think like completed of potential across we as you just well that mentioned look do How how kind think capacity kind about to maintenance That along year. lines, the things downtime then that things curious quarter-to-quarter, And wells well you we downtime should about think on average, you operational

Dan Dinges

build might we that the the maintenance and downtime as a whatever known or though dates number, scheduling percentage be and of pegging say be. that forecast maintenance set operations a XX% of will roundabout case that and our into pipelines Jeff downtime through and preventive for provides does some the Well, include are incurred

answers incorporate that our your question. forecast, that we into sales So if

Michael Hall

sense? of scheduled XX% well and like things maintenance deltas, that shut-ins, does I'm Yes, operational buffer it's versus if is kind if a make offset, assuming for how much I just potential like that overall, known that mean also

Dan Dinges

Yes.

We have during consideration. into fracking the on might – we that we an shut-in operations, our the take wells historic offset offsets a of offset well effects look timing that and are

Michael Hall

it. guys. Appreciate Thanks Okay. That’s helpful.

Dan Dinges

Thank you.

Operator

our question Cowen. comes Deckelbaum next David ahead. today And go Please of from

David Deckelbaum

questions. Dan, for Thanks morning, my Matt. taking and Scott, Good

Dan Dinges

David. Hi, Thanks.

David Deckelbaum

you year? over now the How maybe for minutia, long in benefiting a year next where I little this that, into you costs you guess, balance the do laterals. even that time. of here? mean well going progressing – I keep you that some about think a prior footage more footage flattish but did plans that from Just you on in cost see And progressing your as of allow through inflation longer just for do bit sort see could costs and How

Dan Dinges

pumping David services. the a and before end costs now between components tied of the Well, contracts. and relatively cost. flat rig annual anticipate We Yes. mentioned Majority we as our both biggest the service are up in year, of

fairly expect cost. flattish we So

try we like and that. like We lengths the in past there, the to lateral in kind and different, do have But and efficiency that ideas we'll zipcode hopefully, continue the any the prime do, we've new right geology, that's but continue on up they the to that and that trying successful in our had out out the can, we feels out been which from region increase now made if continue guys can at the feel operational we doing to to ready – the and squeeze implement our We'll in past. their North several not in only we've we We the geography there progress efficiencies and continue that we're not we've try past. do to there of all gain for everything to process an the based time. standpoint learning it

David Deckelbaum

going the you efforts how you case corporate of around XXXX? projects of for that the your or some as into appreciate kind that guidance to sort impact year. of or the up at I the for the guys at see use you that. relieve into in-basin demand Do Leidy, as some level look of the reaffirms of – still base or or some going that And you you sort differential other of shaping XXXX see differential reduce

Dan Dinges

Yes.

we the We have were with area about comment similar a have similar conversations XXXX, we going in up of and ties macro expectations that projects by we our Jeff's area the will and and position in the what on it of into projects, woods. into the and anticipate in-basin stay are back do to the having differentials that on the feel given going anticipate what we strong operators at today. in be be same it guidance in-basin today others to demand overall that our rationalization range some we equipment are least demand like are We ties neck and think the having to also in

David Deckelbaum

Appreciate the responses, Dan. Best of luck.

Dan Dinges

David. Thanks,

Operator

go Please ahead. comes next Simmons today question Kashy our And Energy. of from Harrison

Kashy Harrison

and for taking thank you my morning, Good question. everyone,

Dan Dinges

bet. You

Kashy Harrison

be Pennsylvania Dan, what that wondering So on about and your a down you in I slowing is well. just you might some down, one, Haynesville was both but more confidence highlighted quick you color slowdown talked gives and one if the expectation that what you gives you share Haynesville me, slowing Appalachia for earlier the for just confidence as

Dan Dinges

at you in aware of and and XX into into anticipation look in a be the ongoing you the allocation end particularly private increase in it the continued when to we're this several of idea increasing Haynesville and continued majority levels And from a of Well, right spot would of approximately and day soft price we or if equipment because sector. at you're commodity the the of the it ramping there or allocation out idea the private as price that our of the it had level strip with up whether the point think the going the IPOs the driven seeing they time and at a gas that operators right that Bcf operators higher production there through seen operator get that private reduction XX.X in PA, XXXX bet and now look my get you with natural contribution mind well perspective so I activity production bet of are at activity a at area objectives up. now, be opening and would as

an move was driver. that less we think combination, that now. forward driver right bit it's as do the could activity will at I at a an and little there I still But that a be be is in there that activity levels think likelihood activity

Kashy Harrison

on quarter. me. That That solid a Congrats was makes sense. it from

Dan Dinges

right. All Thank you.

Operator

ahead. next our Please question Jane Stifel. of And today from Trotsenko go comes

Jane Trotsenko

full. pipelines? Jeff. see how curious I Sunrise Tennessee and Atlantic have spare question much Millennium running is morning. capacity for I'm available do obviously you a on Good

Jeffrey Hutton

from kind volumes Okay. quite added projects it XPress take demand other years a of some obviously level, new and you some – capacity to anything on that kind spare capacity of the in pipes power X.X in demand and PA Millennium. bit headed up Transco from Tennessee a plant Northeast Rover then look Columbia some Southwest high and New over Sunrise majority it there just And number a and of definitive of take It and little and that varies removed is Millennium at of now a York. couple look a probably before I all from Bcf, the growth and the that difficult at in interstates, the Nexus in-basin from mentioned. the Well, but on the the spare a bit PA last are on added production adds the and putting competitive because out we it at you look believe offset were new these of projects and any we new was

but Bcf X moving X number, of is ballpark. a to a out spare is not of capacity is, Bcf it day So the

Jane Trotsenko

how appetite you production have does the basin, curious I'm that just Cabot helpful. exceptionally given numbers grow in That's much mentioned? to have

Jeffrey Hutton

all going but because Obviously simply market's is both motivation a has motivation XXXX, is on better on to our up obligation even more side the for in a is rightfully February that and in that one and because who is and We, growth you fill sale vacated moderated time lower I out of looking just a that Cabot did when ago, a each on time. of not growth. Cabot the guidance plan outsized – fact bit what capacity was price come things chase look the back more of the with that, we're the profile little you picked in It's of – point at on other right going future is at this of to side of production lot Cabot's into so new While, six to coming growth and answer Sunrise timing think Atlantic of months moderate the capital not those the but the that at of growth. points. projects,

market allocation we defend any right very But to them We've front see now if those plan in will a question to any industry flat starting kind push our said backfill capital time way. the no at it indicated the volumes has point. growth shares. is earlier as sitting, There everybody's an in either of places. hold way this before, certain macro We disciplined our reinforces and in in our great at us of peers and growth to for point change from in profile this grow discipline push other or

Jane Trotsenko

of is the trajectory the This what is that pricing, very that backwardation. in In The earnings why the backwardation production I'm and or to pricing. offsetting a trajectory right. asking a have growing offset years, curve obviously forward forward good production then have forward following kind just answer. very I'm curve needs pricing of flattish maybe pricing? is, is this see if backwardation over and the just growth as curve curious are we you thinking forward we in moderate curve And that reason backwardation keeping terms often the guys earnings in we of result the more

Dan Dinges

we in good with basis capital particular our perspective, that growth the allocation organic and and We to augmenting and X%. feel we said, basis. yield think we around to we on at market. growth We program the capital and per that on plan growth confidence stage on, a broader of Scott that on as one a perspective from traditional landing from for what point a and shareholders, amount attract level return that of the program deliver, having dollars we generation share with XXXX, cash on a plan and plan that shareholders with a a outside which like give be measured able is to this measured incremental We allows back is growth flow additional investor anticipate will compete of think energy to we that

two our doing mind. three a with design uncertainty in attached this – crews. frac without with and program. rigs issues We're from and our to having standpoint So Keep

So and very results are very, is the complications, very low operation the consistent. our

be lines So along we've discussed this we feel into to side decade. to financial How the again able that that is the do good that. we about we'll continue next and manage

Jane Trotsenko

you from much. That's so it me. it. Thank Got

Dan Dinges

Thank you.

Operator

to question-and-answer And Mr. our and I session. turn gentlemen, conference final like this back for the to remarks. ladies would concludes Dinges over any

Dan Dinges

can cash free if and growth, news, Cabot Thank all comment. from allocation, capital dividends, good future. you that this share the news your expect in and disciplined a The production earnings you same you, and Rocco, morning of flow, interest the Cabot assuming more buyback, like in like is closing you increased for that, thank good the you as

quarter. the and again thanks visit next So forward look to

Operator

you, has you sir. now concluded. We Today's conference thank And today's thank attending for presentation. all

day. and may your a wonderful disconnect have You lines now

Dan Dinges	Chairman, President and Chief Executive Officer
Scott Schroeder	Executive Vice President and Chief Financial Officer
Steven Lindeman	Senior Vice President, South Region & Engineering
Jeffrey Hutton	Senior Vice President, Marketing
Leo Mariani	KeyBanc Capital Markets
Michael Kelly	Seaport Global Securities
Charles Meade	Johnson Rice & Company
Brian Singer	Goldman Sachs Group Inc.
Holly Stewart	Scotia Howard Weil
Jeffrey Campbell	Tuohy Brothers Investment Research
Michael Hall	Heikkinen Energy Advisors, LLC
David Deckelbaum	Cowen & Company
Kashy Harrison	Simmons Energy
Jane Trotsenko	Stifel, Nicolaus & Company

Coterra Energy (CTRA) 26 Apr 192019 Q1 Earnings call transcript