COG - Earnings call transcript Q2 2019

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Operator

Good day and welcome to the Cabot Oil & Gas Corporation Second Quarter 2019 Earnings Conference Call and Webcast. [Operator Instructions] Please note, that this event is being recorded.

I would now like to turn the conference over to Mr. Dan Dinges, Chairman, President and CEO. Please go ahead.

Dan Dinges

good all. and Chuck, you, morning to Thank Thank quarter XXXX joining us Cabot's second today for earnings you for call.

first everyone As usual, call based of I'd on members call this are to joining me make expectations. today Cabot's on morning, we our management forward-looking on current this - that the will several like this remind statements team,

financial well Additionally, measures directly statements and forward-looking non-GAAP financial some of measures, this most in our provided the comments disclaimers, are will as as morning's reflect comparable to GAAP and refer to release. reconciliations other earnings

share, we During the generating to second returning return per our on and strategic cash adjusted employed, free and quarter, capital them maintaining continue list low capital successfully shareholders, improving growth on execute leverage. I'll to flow, goals delivering positive debt

was despite quarter not experienced prices during this to the of of quarter second NYMEX achieved XXXX. industry the levels lower since has retreated which All the

million excluding million and income share share, or relative earnings Second per was per per $X.XX to increase or items quarter selected a on share; this adjusted prior comparable $XXX net quarter. XXX% $X.XX year represents income was the net adjusted $XXX

million comparable free for Free compared the a was of second cash quarter. year in $XX flow $XX the to prior deficit million quarter cash flow

delivered XX free We quarters. have now XX last for positive cash of the flow

for $X.XX. free flow to of $X.XX are Year-to-date, range $XXX we cash have average generated full million of $XXX NYMEX free on cash deliver an between on-track positive assumption $XXX million and we year positive to flow price of and based million the

compared basis quarter, average prior to the on representing a months end comparable increase XX.X% X,XXX of points. XX X.X% of of an as their months, XX trailing For generated employed of return we for year approximately the capital

prior of was expenses. our comparable increase of high-end driven represented and day and X.XX Bcf operating quarter The an to per year improvement higher prior relative improved levels, comparable prices, our of relative by lower at for was quarter. realized the the Production production financial XX% year guidance the the range to metrics in quarter

Natural gas of of before prior XXXX. realizations of increase compared below X% quarter. improvement year an to the per realizations $X.XX an comparable hedges were the price when were NYMEX, second $X.XX to compared $X.XX quarter Price Mcf,

Operating Mcf, expenses decreased to the of end XX% capital $X.XX lower quarter expenses primarily relative resulting the projects which exploration second to allocation from driven decision a improvement XXXX. was our per exploration to XXXX to by cease of at

quarter. of the of second end As the

$XXX and the balance one remained a over of cash the EBITDAX of with ratio Our sheet net on-hand of debt industry million times. to best in X.X

the second $XX.XX quarter, we represents a our price repurchase reactivated XXXX. the share weighted During of of shares XX% share shares reducing million we outstanding X.X to $XXX.X million; average outstanding in our second a in program shares quarter since this at reduction repurchased

or morning remaining This XX in an million increase our XX.X the has shares shares to current announced the authorization of by that we our program shares, authorized bringing Board million approximately shares. Directors outstanding repurchase X% of

full year range. assumption the implies XX% cash repurchases free our our our already of midpoint for year the the anticipated anticipated NYMEX share for dividend return with year-to-date a Our price at payments of coupled of flow

trading half the on opportunistic share blackout the of on in second given price preserving shareholders. experienced cash continued some active balance to be second support to return sheet of still the we continue capital while share the However, during we year weakness quarter to to period, repurchases future expect the

adjusted production to have our adjusted XX% we basis. per on a growth XX% For to range XXXX the year, growth or XX% of debt to full guidance XX% a share

quarter we simply completed the our from began the X,XXX average an increase a the laterals guidance on lateral for the part, operating plan small adjustment pad XX,XXX XXX most second year. additional feet length will an resulting the in is feet that stages X-well in change drilling to For in

I not was you these acreage? was add Bcf turned to in-line XXX too put our wells Slightly can decision want remain eight this this asked, delay, Frankly, date do shoes; yourself and our purchase and offset difficult. we on do plus schedule. over in you to or my

delay I took the XXX slight in Bcf. the

Our update risk for growth third it as - we actually absolute market additionally, relates further figures, potential volumes quarter conditions. to these

Specifically, again. third softest realizations the quarter been period couple has happen and it of the years of last could

maximum our So in-line. pace flexibility maintain the cadence and we turned to manage have decided of to

reflects XXXX activity pad. On the drilling laterals completion the long range of the our capital and program, this million million from incremental $XXX X-well to $XXX of

year-to-date In net addition, X continued are resulting faster from gains we plan than additional times generating originally drilling to wells drill forecasted. efficiency that an

capital We to disciplined committed are firmly spending.

rigs day are additional contracted end our year, the we the the rigs X as fully on to incurring rates so of through decision opposed drill of at the made However, end year. the wells to idle

of price X have year-to-date, NYMEX full months we range the now $X.XX. our tightened assumption to for to $X.XX year NYMEX settlements, we actual Given

million on to range share. and cash on of $XXX to XX% XX% earnings a of capital to we in expect employed, this Based flow, to adjusted NYMEX XX% growth free $XXX positive deliver per prices, million XX% return

issue few months number to still Given at variables closer usual. than XXXX as we the plans our results annual XXXX that understood XXXX, received amount year-end questions our a earlier storage the of we cost regarding the service over futures have we negotiations. preliminary guidance are for of There decided NYMEX impact of including get plans to and may year-end, become better and levels, our past will

environment. plan free believe flow, and growth of capital on a employed, for outlook combination price return on cash in per the share metrics lower natural provides gas based We However, our preliminary year. this best the current

a share plan Our is $X.XX. capital growth budget does from X% This of include or million employed of expected is XXXX a million deliver return production growth $X.XX. $X.XX on $XXX program rate operating exit-to-exit in This $XXX deliver flow, basis to budgeted range capital expected per our XX%. price X% X% to growth to a NYMEX X% debt-adjusted on a cash approximately to free XXXX at preliminary to of of

cash million of NYMEX a buyback $XXX approximately annual to assumptions, metrics stock, while $XXX continue flow deliver opportunistic these to maintaining EBITDA NYMEX dividend price both free fee to of to million to and below growth we Under XX%. debt expect gross $X.XX increased one-turn. and ratio At

the believe believe Not program only strategy more growth is longer moderate do shareholder maximizing appropriate is best growth for we given but supply this value your outlook the we this coming XXXX current for strategy term, years. in for company the the over also

in growth result absolute structure, of metrics as from as single and active in an a adjusted shares a improving over topline of debt our outstanding for next years. share share plan high come result reduction maturities can - levels cost a production couple the growth in in mid-single-digit program, debt due Our per resulting of repurchase reduction single-digit

obvious, of investors, to future oil own we opining cash generation of free the production presentation need continue materials we of risk for the sake. the growth for industry and the correct, for on growth the laser to focused outlook are both and the gas. and analyst across stating it's all the state given believe be on environment We are supply that flow that Particularly macro than rather aware At sector.

of share Cabot on growth see allocation improving disciplined positive to on for capital, track per can iron-clad we delivering growth it's at guarantee capital double-digit on deliver focused sheet. free record and supply maintaining generating and results an flow, of cash economic growth balance time. continue that no growth We will absolutely production expected continuing this chase could when rationale to Going demand forward, outpace

I'll with Chuck, happy answer that be to any more questions. than

Operator

Please KeyBanc. [Operator first Mariani ahead. Our Instructions] question from of go Leo comes

Leo Mariani

I those at CapEx there. maybe Would was could provide you some potentially be in a levels maybe but wells year a rigs could you based hoping the you budget talk rig the drop in XXXX, next guys point CapEx little color my preliminary it's under about the of potentially would a little on get to know bit a kind fewer some next reduction just trying of arms around of all contract; expect changes on to fracking year; I activity? kind just you more

Dan Dinges

CapEx like October referenced, your get granular little more get granular guidance to not as the early the I'd than question. dance lay to usually we we trying on bit normally call it's we've to on our Well, released earlier like more it would I as 'XX a and out. do.

that's near we're market morning dynamic best, this below and three deliver the The cash best what program. on do an free strip to continue flow, to trying $X.XX, we parts; price is months the moving solution saw is at lot we of efficient find a

program as really as moving a granular you it's So can on this premature appreciate. lot as a I at being the been because it's far XXXX little think time,

Leo Mariani

of what around basin, you supply-demand of and seeing maybe bit in Well, the Northeast just and sense. Yes, PA a give an couple could years? there us specific update of how sort maybe perhaps unfolding demand that you over on just specific dynamics commentary, next makes market more in out projects, kind little see certainly you're

Dan Dinges

basin we bit meeting I'll let little our on process, And we in on discussions demand Board had hop of had a and our Jeff yesterday, it.

Jeffrey Hutton

smaller the in-basin in call, priority are Yes, is projects We've to higher but the demand add smaller are starting successful projects they up. few in they the last aggregate the since here. been had

that good currently get we not I really into a low gas the of Bcf X.X does think markets, over have interstate thing.

market, selective in is that projects, tied it's We the lot there that a like of we're continue competitive a to would good evaluate to somewhat arena, to system. producers very gathering being projects demand have also

will opportunities So capacity from in better our quiet explain gotten up - being better getting there. it's I we've number and we're that regard. the we're a we how that bit evaluating business also on interstate of a markets, little model say

the we're We're pick where no over can market improve there some positions seeing rather will that haul watch be want some later, sooner that and we definitely on to than continue take very we the to still but think to side, we're up closely. we opportunities not out long capacity

Operator

from comes ahead. Brian next Sachs. Goldman Singer question The Please of go

Brian Singer

opportunity a more then, support talk And for of outlook on something about Can up that on you acreage the that to more - if following is you in guys your on Royal laterals. or what should out about think of? could the longer or one-off whether consolidation Cabot your or as is here see whether we play? could latest add that basin The that that would that do you you had that

Dan Dinges

start acreage beginning year; ongoing offset expectations that with bit a of end additional wherever have continue unique to of the certainly pad, and end each the acreage. years. others up On at the of but than process of laterals to shorter the program last we handful our actually might Brian has have we been or we either in open It's our little a

we're as discussing we We various some anticipate there it's acreage, in team of shorter some our laterals, on different through leased and way, are in acreage, his other acreage. laterals it's of up to able it's Phil some Pittsburgh of own and extend

there the I'm So to I other of continue in would say question, we to is and future expect that occasion would Brian. do your the some sorry.

Brian Singer

the in-basin on was not or It of your and more role consolidation thoughts larger Cabot or should a latest out-of-basin play? should

Dan Dinges

say - we and that mentioned interest There in have few not we have to and able Consolidation in. got we is offset is at areas where - would in available; strategy that we and lies six-county long-term be evaluate be interest the at the that real Northeast. and unique, would the fit acreage be in, look past, other look an to as areas up continue an there it's to area you our and the to would have a acreage the a is opportunities you

particularly low little should the it a it rationalize up a profiles So it's as or lot commodity able to the strip. industry return whole, of - to that this should consolidate experienced bit whole back it being of should just ways be - consolidate in some a a as in

we gas, back the commodity persistent And good if return in be buying cost at we natural a that; dividend. our challenge deliver is companies producer can going number capital it's strip, we shares, $X.XX given NYMEX we've cash flow, the what This space for free and with have. across of price on numbers are a to lowest employed, the double-digit

change. in this in we're now good this to have right and to shape, overall, So the the price projections is is going on but industry and space, something strip; not healthy

Brian Singer

if ask And one follow-up. could other just I

well lower a little it As is lot Could pieces decline what kind to guidance, capital you of and a it like XXXX that preliminary there. of underlying versus rate? for there talk Eagle about the Ford Eagle corporate And your with maintenance expectations moving performance; upper relates then, Ford juxtaposes you how seems your bit see etcetera.

Dan Dinges

Eagle Ford?

Brian Singer

gosh, Marcellus, used - second the I well, one. Eagle time Marcellus the lower that's sorry upper Ford, that have I'm my versus not

Dan Dinges

the That's past. a blast from

Jeffrey Hutton

the wrong call. on You're

Brian Singer

lower about that. Upper Marcellus Marcellus; exactly. versus Yes, sorry

Dan Dinges

Well, XX% know lower the you in you a balance million. to upper is million we wells wells know, slight and maintenance decline with difference. $XXX with as to --our might decline see our that a the is current the you $XXX in upper drilling assumption mid capital of tweak our our And

difference between represented lower any from is wells, the but a don't is on we changes we upper basis. the maintenance As and dramatic what the that capital go-forward see

Operator

ahead. Campbell question next Jeffrey with go The comes Brothers. from Tuohy Please

Jeffrey Campbell

the this cash wondering it was how coverage you if, and any coverage. I quarter, approximately factor still from when though cash increases? X.X modest free times dividend was Even contemplate in you dividend provided dividend

Dan Dinges

our and and is, at and doing. with also entire guess, the macro-environment, crystal strip Well, environment our what - realization is you ball actual look at know, the price best Jeffrey the we look strip

We efficiencies what protection coverage and that think in we committed We you have hedge will delivering the continuing of I that as - we might dividend gaining the And you've an expectations have at dividend with specifically ongoing increase in but know, just to of to the we where to cost - opportunity addressed, looking structure there. appropriate kind push we the our at that also exists manage that today. the look dividend are time. our have our we're that do not see at operation it down,

our do not our intent to entirely We back over is clean. We mind, that Keep continue to a the is that it more to in or timetable outlined are sheet a next the specific way manage to few but in dividend are delivers haven't shareholders. manageable - years. the really maturities balance

depends we near-term kind our realizations on it is that what anticipation see. of So of will the

Jeffrey Campbell

a whatever intend another else amount for? to or balance there buybacks And most sheet cash you do you share I that sheet balance for guess or want it of leave ask or the minimum the might use or of all to it Is you question. use on acquisitions to

Dan Dinges

Yes.

You position. leverage know our

frankly. way on are lot take way We don't risks. - manage We quite - manage that of for always a we that

in Looking this that a much $X.X at is we one-turn we're want comfortable How are at range. there, leave stage. entirely to we

us the comfortable a quite I yes, $X.X in range billion little have facility, now bit, frankly as so We move don't to there $XXX we're but and probably deviate million in. great And forward, and we of I cash undrawn, this - we're we work deal. don't range a like anticipate we'll that down

Jeffrey Campbell

the I appreciate of forward weeks. New couple seeing to We in York a color. look in you

Dan Dinges

seeing Right, you. Look Jeffrey. Thank to you also. forward

Operator

Rice. question Meade next Johnson of go Charles from The Please comes ahead.

Charles Meade

did, how I acquisition more Dan to there. the think give on little you you you a was team your that wondering and scale if you that of perhaps - but can detail, Is I - talking? for that you much you some - of the could about acres out price that laterals? - You us the put extended that laterals us how you extended it's that it talk something it where there is about meaningful? it. the many gave parameters acquisition we are

Dan Dinges

create in that been win-win. return acreage but the just program. developed more a opportune developed timely to a with I It allowed this to to laterals. have it enough was of to It's win-win to - develop be allowed is further just most a like million We time extension, was might their be able be that and an plus acreage acreage to have or $X.X the also the it owners able what - don't can there, out that and And exact. extend minus was cash

was good it just win-win circumstance. So a

Charles Meade

to if what plan. think then you're far And you But you touching but what's some I talk assumptions as early back Brian go can - it's points was of Singer can same and these people the that of kind like could of in about for the than one it XXXX for living have be the you're will from I you in as might productivity is in outside XXXX I that then cost think looking you things bank on I less looks about recognized know both well talk of - to service baked the kind because - environment you getting maybe XXXX? past. buck you in, using see you the your might in also be And

so... And

Dan Dinges

a turn Bcf We Yes. managing is frac it but line capital. not It's - that be a moved you rigs where little near-term great probably a and bit it's will, crews. question three because we and out beat a added if growth basis, these on producing is particularly we're you cadence production and up difficult three we're in day wells of know get that on approaching company and with that a two might

on bring lumpiness any given two on you a the for two, pad you or occur as quarter, So quarters look at matter. that any that might

forecast much, have You do much into effect, a soft if or And seeing slowly would with decision of day. bringing production particularly us, on it that feet an be slower on you we pad XXX cubics we was a cadence that a million pad timing flush a million XXX to i.e., slowly out we and the of for typically you that has bring that that bring pad, as more on on? forecast win - there add may just be to is and we it - a also bring we're the pad, that price a mind how conscious do and

example. an take slide schedule of how a to affect or as the program, in affects You a didn't it your days know it lot

pad expectation to our we in days. decided had for forecast four on that delay bringing So this a that program,

of that a a All seem but lot, Bcf don't like well that's production. right,

it look up, in a granularly shows if at so you it particularly quarterly perspective. So

numbers our there are very with the the I would right So comfortable the and that of results caution we grain salt, up program our -- got that now, are out program, of a with are you wells. efficiency

haven't any anticipate. averages fall-off We that on our of we seen

comfortable we're So there.

budgeting a as expectation far We cost increases As service a our that. we add always process. into do projections. always

course matter exception. and of as us a Just what little room. this that see. a that's is of And no gives and bit you If,

at going that we make to to current for the be the prices I take Cabot's service is, in diligently it's be However, to this looking what strip to light statement are costs would service of macro going environment very annual would see I where team. join -- that providers

and add We every are very with part on environment to we back we a I'll I and of -- seen have operations XXXX. into we out there that that today, and but the they provider we're pleased as have prices are arrived again going team, haven't pricing mentioned, efficient

difficult, the and between pricing a those ongoing it's now we're going of and year. the So environment have to end here negotiations

Operator

next comes Cowen. David Please The from question with go Deckelbaum ahead.

David Deckelbaum

of I managing was you in about your year. curious the think as just production this back half

where given here? $X ability curve in guess I is to, the are there. some was the be Just would leaving certainly production like curtailing you curve you is,

Dan Dinges

do we this and period because forecast of we We're half curtailed make of No, of know for of Bcf curtailed in not particularly the afraid we day time, back- kind in XXXX a of quarter have to the I the period past that of that XXXX, XXXX. took was a production when have, environment. for do half, we in realizations. and we we, second again, it a projections time our a

wells this the do We year. are at three and months now first end bringing side the our I screen the $X.XX. the forecast. timing managing of say the I'll do of can below our morning, between three We next months, at of conservative lean towards our production the the look and look

keeps if Well, that directionally it way. going

response worth long-term. what a on but and you to will operationally for of times, the act, do We within to how going and balance have way right we're will long term the we're is term, what's always trying the is right think our going stay fair we're we a our to what's on of hits but take and the in response balancing and difficult do guidance product short we the

David Deckelbaum

I of just appreciate in guess next of free I that. on coming are unit year outlook on from? percentage next ask just stuff for gas, this what basis the you like a, terms could I year the either savings most assuming and at total If cash cash cost where XXX

Dan Dinges

XXXX, we and a has cash it's over are expect our Yes, that -- $XX numbers kind so but we in a we a look right, forecast financing $XX reduce we forward kind of cost where is and little all. at and the from will rolling right as to which there. of DD&A XXXX continue reduction, at includes are The a

David Deckelbaum

is D&C could I more, I you of I slowdown just that guess, maintenance if about corporate level. that is allowed just talked just improving And the to see you capital going And the total one do given or into assumption think XXX that XXXX, XXX XXXX? in

Dan Dinges

That's And question. in Matt a been good granular has this.

you want to? Matt, So,

Matt Kerin

this some into whether something include subsidiary, lease start next But was That service it's is on million million that that's trucks is acquisition when there for our whether working Matt. at having we're think $XXX whether they're looking into of about new exploration. we I does David, guide about some certain needs as consideration to take for buying it's compression, $XX Yes, D&C some projects annual our everyone year non water million that goes that $XX capital. land

we've that in the talked as we D&C a to I about obviously result capital move lower going expect moderation to base in out would is and into So years. and which that presumably capital to do be X XXX in than lower XXXX maintenance the yes, XXXX significantly see declines

Operator

Energy Advisors. go Heikkinen comes Hall The Please Michael next question from of ahead.

Michael Hall

the $XX of what previously capital $XXX or million XXX disclosed to XXX. you in D&C? accounted of on annual I front, maintenance on it capital changed have of curious just for follow was addressed the I million there just of up versus that question, been to kind around is to that lot non maintenance A think as

Scott Schroeder

Yes.

we was assuming bit number out So, that or a ago service we've seen two Michael, environment price the were obviously XXXX time since of which pressure that service then. really from and years upward since the the put prices three troughs of cost there at we that little

we're trucks subsidiary. do like when XXX% for some to, service capital D&C looking have well that I because to type uplifts, $XXX of we I year a to they have compression spending some million Additionally, wells, ultimately We're us allow our drilling producing the $XX incremental program. program IRR that's into alluded ongoing this plus pad at production outside XX water non you're level and on of see projects are years to ultimately going mean XXX projects level, XXX at you but million just your and $XXX million wells capital producing completion

it's that XXXX. to little different relative from really and bit number apples a it's as an So oranges

Michael Hall

And understood. Okay, then…

Scott Schroeder

really production just of Bcf day degradation Let to running capital that's is of efficiency we're of type and well me just any X productivity clear, close is and between or a program be or this this the of seeing not now a nature operation. the reality This so anything. having

Michael Hall

I you. in for you guide? XXXX length I for changing given do And hear kind Yes, guys guys a that of and versus service disclosure, that what the environment guess the to well through cost you that alluded cost you then lateral play is latest how last

Dan Dinges

will, of incremental the we the year's on drilling stages, capital enough referenced and and wells his but of XXX through kind an you it’s -- the those example eight have efficiencies efficiencies guide the with I if mean, four the incremental in on time to completion our have this captured, program program to well an year. seeing program we XXXX. of at are add end was our Well,

efficiency of in can So that gains kind the way. you measure

Michael Hall

I well for per was that? lateral Yes, I specifically, like on curious have guess you cost given Do length. just

Scott Schroeder

some we're go against been a have we read Again, transpire bit the costs we assuming to we're as per in frankly next numbers odd we cost average for time see as softness and $X,XXX wouldn't a now go prepared year. those The for be the That's those the the into out year-end, and start to XXXX. this right just that negotiations. lock-in of down, to the we lateral surprised market, inflation, we Dan see quarters and figure little the assuming generally few But remarks, in about of being alluded now but to ramp-up foot. as between

Michael Hall

Okay.

Dan Dinges

And I world there. regarding gains lengths and to there. on that efficiency length I'll are out that some have there out the is that completions lateral add are confidence efficiencies with gains efficiencies and lateral all the see to and to to the able the out team available technologies the material our work that maybe and in on available there be

So, we look efficiency continue out gains be that new the forward to in to any monitor there technologies might or industry.

Michael Hall

that in level that what is here, some there depths is a you're apples there hinting was think? at, foot kind higher that peers would meaning kind do per structural You of, oranges it laying Southwest. Is getting of or involved I down that anything X,XXX the drive toward is good higher like, you and some the of

Matt Kerin

I dive, D&A Cabot in we as think did apples forever, and months, on from alluded to doing those all Matt that We're it's as think next because presentations. what but know deeper a mean hitting and and I in. where, you're where six the oranges. see we've been you ours I is

We and probably everything every that's going what's pad cherry difference it biggest single out aspects broke on has you and of in the piece. are picking ours excluding the some not if

in will everything other it. have - You in by we'll Cabot's areas and things missing some find

Michael Hall

All right.

Dan Dinges

there, see out that numbers I see don't be. don't out think and I We don't numbers there when react I will there Michael

Michael Hall

Sure.

Dan Dinges

in receive spreadsheet has That would we be be and different bolt I and of in manage. to will furnished Cabot, so nut every detail and able that I mix every with number can be will single assure will the the you to item a

Scott Schroeder

cost end what is. And of the the is for the the that total And the booked they card cost incurred. in what deck there finding report number of at regardless it the the ultimate day, is, IR is what XX-K headline

Michael Hall

enough clear point well Yes better Thanks. quite bit a your is that's recycle in you guys, as and I as out so appreciate it. you ratio deck,

Operator

with question next comes go Macquarie. Grigel The ahead. Please Paul from

Paul Grigel

as maintenance up grows was the there comment the CapEx CapEx the maintenance over that Following on items up time. organization go may

as of to decline should some continue expect that, rate the if at is well relatively offset flat as by Just that underlying declines rate. nominal the the corporate to growth age we CapEx were is within kind maintenance

should Just time two plus maybe out we maintenance to years or a heads? thinking three trying understand, on CapEx where be

Dan Dinges

these let him Yes and again in numbers, you digs color. Paul Matt, regularly give I'll the

Matt Kerin

If a wanted is misspoke, if to to to. the that we misunderstanding. was flat perhaps QX kind Dan XXX to our capital or just to you XX would a even But that expectation flat to probably be continue going from XXXX, I trying it maintenance decline. hold to million would lighter alluded are was more XXXX, moderated maybe into rate XX because XXX hold say exit I we than of level base Yes be levels that so XXXX the the have that million what wanted XX going was into to

growth be, assumes macro rate. and not year support from can a our our Now, plan environment already X% a flat the bit hopefully just exit-to-exit plan little hold obviously obviously if the we to would get levels for

flow obviously will maintenance X.X over much presumably, to higher base Yeah, that so be in if but will ultimately free production we'll time Bcf, of and level. the levels. is higher number And are amount, we of cash result a higher a at you X have much Bcf, growing whatever capital it

Paul Grigel

And guess of single is XXX it a one exit-to-exit you are, here of looks range in then Dan it's the CapEx that low maintenance kind to if you guys think digits. growth I a XXX back maybe and doing I envelope like level high at rate for

growth some lap, kind million as some million trade-off this nominal of growth. the of year for XXX from Just of to a XXX you

arrive did how its or to one at other guess back plus opposed realizing XXX/XXX program of initial or buy free maintenance absolute kind cash even CapEx uses for and growth - you another flow? I to true lower this as stock current a maybe

Dan Dinges

room sounds are it Yes talking like about Paul, you in it. our sitting

regard the what notes, out every day comments side out have in grown match. do supply rapidly. demand all I'm the today. I that we fully ought have as guide on supply in about group, enough has the to have single industry We would on I the that kinds there of stated my we many support There how hearing sensitivities to supply discussions is And our there

it to is the is shareholders. the We're absolutely XXX. best We're or production wrong or is landing market. thread return to small a price. case necessary out And a that’s to of We is it flat that part this on production going do deliver And if think its into what equation XXXX for it's growth the to that just whether environment. in to double-digits go Cabot in grow commodity with to be is the spot, trying Cabot in and best spot is using what this land needle

many the the reset manage. Is for three try much too mean to as two - crew going to at of If we're entire are for can X% with and don't year. rigs the Maybe two and that number. our crews, maybe I as as And kind get. grow the of good throttled look we frac it's to three we're far to And straight balance have back the the year, crews shareholders. we not And the Cabot three-frac we could. maintenance that we and go about rigs, as and but tweaking we entire we that what tried that's frac kind for what's then

Paul Grigel

CapEx No that's that inventory for at maintenance a day? right preserves real XXX Was of, fast that you save true kind and follow-up. that within went prices sub to one better of there maybe any if just idea it discussion a

Dan Dinges

discussion bit is long-term at for think cost there as and conservative little the of we for reaction out yeah, of and and we reduced and A going we putting was, over the a our do, what to sat the the profile what and doing we're around right into the we're shareholders. but right see what's kind don't wrong, was probably what's layer I production or be long-term - know under. budget. in like looking our being and is to table exactly again. under our for But prudently inflation Yes, we’re that numbers trying

Matt Kerin

we're extra only of Matt. off to I'd XX X,XXX and talking of logic, inventory about locations. this your add understand is Yes an Paul, wells XX really I base but

we're hairs type - really not of we're So that splitting over number.

both, luxury invest business a a here of grow value I think doing in in especially the the way. continuing we long-term when thread production we're the have to of on can basis looking the we at creation in and responsible needle way by modest per a share

do. others free flow cannot But cash obviously at still which most generate XXX

through of continue ample continuing we but return So to making sure long-term have about flow value both invest the think that balancing to cash free business, to it's creation also in amounts shareholders. we to

go we Keep incrementally in sheet also could a on cash back we that shareholders. that have to balance have could interest a pipeline in non-core shareholders. still asset to return we monetize And also mind the

coming think there'll to plenty return cash shareholders the we to be of months opportunities years. over So and

Operator

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

Dan Dinges

for Thanks, question how on in the update you. certainly appreciate in that low we to additional another a opportunity Thank I to Chuck. And look October. the give strip. we're through boardroom all going follow-up color. same the thank questions you centered commodity focus forward the to around We had manage

Operator

has Thank conference attending now for today's you The presentation. concluded.

disconnect. now may You

Coterra Energy (CTRA) 26 Jul 192019 Q2 Earnings call transcript