COG - Earnings call transcript Q4 2019

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Operator

Good morning, and welcome to the Cabot Oil and Gas Corporation Fourth Quarter and Year-end 2019 Earnings Call and Webcast. [Operator Instructions].

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

Dan Dinges

Thank you, Gary, and good morning all. us call. Cabot's joining year quarter for earnings XXXX you today fourth for full Thank have management do I the me today. team here with would make remind this I our to on like call, this current everyone expectations. morning, statements forward-looking that will based on we first

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

history, reserves reported while income, Cabot For expense its of free in company per record best net posting XXXX, operating cash year levels flow, and unit. flow, cash production, proved operating

flow, employed $X.XX production the key of XXX% $XXX in XX%, of debt of at XX% all-in foot growth to cash per increase of XX% And our our free proved in XX% flow. and share, And reserves. and in cubic a to capital year include million XX% per our a operating far in through return increases exceeding to XX% repurchases growth reduction year-end quarterly in of least unit net an target capital of XX% annual per increase in returning and X,XXX reduction of This in share free our Some equivalent dividend a combination share. expenses cash of for earnings a a X EBITDAX. flow, of per highlights return X.Xx adjusted cash shareholders the on represented return

us fourth generated providing strength of And expectations the net a $XXX per to flow, to declining million over gas the of ended allow quarter million $XXX $X.XX while cash XXXX despite fourth free challenging year a quarter for coupled flow. quarter our all million share in fifth of natural by capital for free on return to to amount adjusted cash a standards, still we the with of the of financial of our think, also cash good a very meaningful XXX% sheet, free or while and will balance with of Specific which flow year. continue We I to returning consecutive cash shareholders. shareholders, income prices, market. 'XX, $XXX

release, it Upper On of test test across front, further from We the that results which generates of per yesterday's approximately as of designs. a upper years, exceed number the assets we placement basin. X.X return an the highlight last Bcf. and and wells two a the limited annually these in Marcellus believe provided average distinct to operational Marcellus We X,XXX completion continue our to incremental our the majority lateral delivered to of interval results Marcellus, that upper plan EUR optimize

-- X,XXX our to decade. Marcellus, inventory made it. on X.X years much larger to size moving per However, the our this modest primarily few In full past recent decade, over part is measure the latter the growth XXXX development of to if relatively the the results foot the of assumes ability in development also measuring regarding with XX with the warrants This EUR of upper reference wells. before a the in the life decades continue average life, levels to line to X sample the drilled which of price to release, across date, Bcf all through Marcellus of environment future, on which we Marcellus of provides are focus of Lower our Upper over consistent remaining is our a inventory into plans which over return

results in that across while would acreage inventory to we the are of still very concepts have to tested position we have Marcellus, our early concepts Upper seen life, these and testing The phase. encouraging. our is Lower the to incremental addition date be In other multi-decade the

on Moving in adoption XX% maintenance plan, the previously announced we which for year-over-year. capital official disclosed XXXX month, capital plans spending XXXX. included a this million, of reduction representing our Earlier program to our of $XXX

corporate reduction has on been and our allocation, the strategy philosophy. disciplined around to further acute focus capital we believe in centered capital that commitment always Our demonstrates this

the a level At repayment. capital deliver capital further debt flow of our to million that. full can XXXX is free investment environment. modest market our current the amount on delivering price, net return returns while is of of employed of capital an for too of a million plan this foot This expected also is or X.X dividend, plan future free to for providing flow on XX%, Our free up to $X.XX NYMEX program projected production while the is expected of programs generate day, cash to many represent enough rate NYMEX appropriate to average based cubic cover curve. per cash average the shareholders plan a not XX% to excess cash current Bcf to year believe We $XXX generate $XXX in flow,

XXXX reductions market However, conditions are we if will and natural further for outlook continue to prepared market assess warranted. to and in XXXX discuss the the gas capital spending

XXXX weakness during shoulder experience quarter quarter, and first Our season. guidance and production first modest includes pricing spring expect declines given for second in which experienced in we the is to the believe sequential prudent the in the we've

half improvement forecasting curve. the in second currently in across of NYMEX beginning prices the production in an future are corresponds We which the year, increase with

to for the similar to gas to prices any to too remain likelihood look adopt I we were foreseeable lower commodity while XXXX, throughout and the it's next continued volatility guidance, issue a natural expect year, program if of future premature given the prices year formal As would us

most recent one natural gas and future. ultimately, a demonstrate challenging the forces this that the markets are across to lower while could sustainable supply prepared balance of for in we not I move price we in levels more natural are add should prices would continuation prove market a in and fully country the also at activity that sustainable natural gas believe these gas environment, XXXX be history. current

we balance and capital Giving sheet, to assets committed flow However, lower combination market positioned repurchases, while strong giving to combination free our dividend our planning position. pay continuing a our cash model business environment, the later is to of outlook, current navigate leverage share of continue low-cost return believe remain uniquely our also through at and through down shareholders fully to this we opportunistic to year. and to debt maturity our

current XXX. the to the to the exceed on strip our levels predict may at free While capital 'XX, when for and cash it's expect prices improve to return impossible we yield that even and 'XX flow the prices S&P medium of expand

more answer questions. to that, with I'm than Gary, happy And

Operator

Instructions]. [Operator

Charles first comes with Rice. from Meade Our Johnson question

Charles Meade

a year? two question. like of first, years on I a When X the Lower run XXX inventory, talk about of under starting go-forward have that Marcellus. you 'XX the both I rate just questions, wells is, that more is on XXXX-XXXX the inventory. on of This Or guess, of XX%? But the more is housekeeping with rate

Dan Dinges

of Charles. average two, an It's those

Charles Meade

your X,XXX could where you for And EUR how guys Lower the of the several ago relative arrive wondering number point more I'm we at moved a now, up the far times wondering back if mentioned Okay, -- whether your but question of are offered in I of are now. completions a think there a Marcellus? you of at look per the Marcellus. but us maturity. where okay. of was much helpful. optimization. be there? along you time years optimization characterize completion And feet on prepared how obviously, And to Marcellus how going history, could the on little you the in just might Upper you But you lateral path -- And Upper X.X% left, optimization, and Or it's the your But perhaps see you that where placement I no bit take promises, appreciate in comments. your and if then That's release, what you

Dan Dinges

and where of facts so Well, on in Upper the just One, we've how the efforts at XXX we tests Upper placing Marcellus. as Lower we in still Marcellus, or referenced, the first in we've the Compared XX Marcellus. and look drilled we're the a only to Marcellus. completions. wells And on tweak lateral Lower set

some early-stage the those completion Marcellus Marcellus, the data had generation just cap. that particular the gathering we XX% Upper with are that -- drilled in completions were early-stage we we at With Upper time. that completions, With wells

the As in seen we learned and have apply continue moved in to forward the lower we've it to the upper we've upper, we with trying utilize to results what the some tweak wells. of

or the whether what trying the determine applicable in upper used lower not to -- the it's With we've in and rock.

the upper, is to the reference, a just as anywhere is XXX from, in thickness point The feet upper. from XXX of say, almost -- anywhere

ice of be So the important lateral thickness is in placement to going pack. that

well interval. higher maximize effectiveness the thick put part laying We we in and and asked the and stagger ask have of at that of -- in referenced can to at One we to And of the lower and doing the sections of so. if that return the look forth part was wells deck question, the different drainage, see upper test by so various do need upper we interval. of we looked

Marcellus, the of were low. effective bit XXXX Couple because little the -- of good laterals not and little a wells we're in a that bit hindsight, that wells too the and wells laid those that we low we not in laid Upper got too

you designations we our over our where laterally, that for could And might development go had per that that than to couple lower fourth an we going but In extended bit extended we feet the had unit Charles, with little length cost lower -- that that lower. and average it's certain a have lateral questions curve, process with the far and look learning of lengths things year, could the the implement new was unit by drilled I'll lengths. to little others -- cover lower. last us some of maybe had example, but is lateral the when the quarter so certain we XXXX, looking sizes other bit period for designation X,XXX answer. here, at lateral that gain efficiencies, of in lower, the We lower, that But little different us I'm bit this in to the and of nevertheless, with that. Pennsylvania have the continue a therefore, the the And the at In in approved your long-winded at legislator like allowing legislative time. only -- a have upper we're point, in the to foot that

only thick In section. the our I when very the points XXX,XXX at upper mentioned, entire expectation a upper something take like only there's acres, section, section, there in are in that XX upper, it's look you that

the gathering undeveloped tweak information and with the entirely what in that we're than look upper, or the area drilled going looking longer our lower. us up to help allow it's facilitate to we're now the So in this at the development at all, lay plan when the going you in and it's probably over year to a by laterals that there. to trying way we laterals trying us and out upper section. landing do When approved new legislation to plus that It's out will XX% laterals PAA minus the lay

to as narrow the upper we're realized that opposed out So per so in the realized to the the in in upper the profile, its we what more is going our lower. that the return we're than we development that see XX,XXX, And layout, lower. we on XX,XXX to create EUR is with on going going to that foot that well own lateral between the efficiencies, delta anticipation the in it lay gap

Charles Meade

a Dan, of as it I'll I -- it details. appreciate but call the lot useful you long-winded, call long

Dan Dinges

Thanks, Charles.

Operator

Singer Goldman Brian next The from with is Sachs. question

Brian Singer

adds and impact on to can kind try reserve the may the comment the start adding see that wells Or to reserve you isolate the of drilling on revisions? reserve And color the and if provide that that upper wanted of lower I drivers of have could had? any well? effect report could just on you you and year-on-year

Dan Dinges

hits. revisions kind revisions hits. learning impacts the in the the make saw our to our of drilling, lose wells we with we X,XXX knock 'XX, that or the we frac curve foot comment, kind our out learning off latter it now these reserve some in see year, part future, and of on of we 'XX. the in a in turn drilling We child, not temporarily of we we wells there and when had that some wells PDP -- this with Steve by Okay. Lindeman. I'll how some frac Brian, some the -- take And of proximal But our and have can down it that mitigate some some lost affected parent and of beginning the curve, of of I'll

out, that One learning drilling completion results through this guidance mitigating versus proximinal do to we've taking in of our proximal in program curve a time, look curve future is laid is learning at to the existing our now things period the with helped able factors been our our all that is and consideration now that our have of drilling the to it's our initial be wells. designs. going expectations And improve at looking all of

We reduction have looked in levels helped at that the fluid our considerably. has

at in has that on stages helped looked increase the per We've offset clusters the also significantly effects.

we're in placements in also, to as the the upper, also, the of at placements taking lateral benefits where I've see mentioned, in and development. but proximal looking are We impact lower we're lateral

plugs offset bridge using and We've of also mitigated out that perforation hole fluid the laying We wells. accommodate levels retrievable have how our pumping tested the impacts cluster. sizes on also has we're been to

work helped we So took some on did of off, to off reserve handful of some impacts forward. then taken But side, this experience wells revisions some of those over revisions, a off and the reserves wells. those gone your about back of PDP wells, all through, really we has PDP. going which the we've mitigate particularly that say, on haven't some on, -- those on and point, We

kind bookings. let to and you a add of handle Steve So level, that's higher of I'll our some reserve how

Steven Lindeman

didn't associated the Bcf with positive be PUDs. our longer PUDs data revision of what had discussed, 'XX. a we parent-child had Dan's laterals and combination lateral XXX categories, into a of effect we length. stimulated Okay. we of And then those a That's revisions see average for Brian, drilling were occurred some just the with that or effect wells relationships, our XXX Bcf increase the negative in XXXX of in that revision associated booking divide to would in that realize the per into lot

relationship. gains indicated, Dan some was steps of as XX that mitigate short-term that bookings or number on. to out. we've then was XX% remediation there And indicated, should offset future taken parent-child improve the this to negatively And line line back turning like a pressure But the from in and about to pads roughly as Bcf impacted pressure of come levels Dan field in

Brian Singer

the mentioned My color. Lower in the upper you going the delineate be back years That's has But to you on Marcellus? to and Upper from do you the that lower the a going that the earlier, co-developed versus as medium- once Marcellus longer-term percentage-weighting your Lower contemplate follow-up some Great. based perspective inventory. X really about is guys how fully helpful out or plan? a think Marcellus comments Marcellus, And you Upper playing of ultimately is

Dan Dinges

an lower mind in into volume full-developed -- keep comes of of when go where lowers gas you development going would we're kind or of the the we into the of we -- this plans Yes, things and as the the But say pad a development. area, Phil have have let is a pad, is and system. will gathering XXX of going the in from now stage, so one with area say, that on on, our to our I'll that answer, he I system, future local right header amount gas maximize at the back back

large So away going pad, area. from the when marketing on we're particular group, is Jeff, to that is allocating always bring allocating, a always

past, to As mentioned gas move we've have multiple the in we around. options

there uppers But how wells. be bring additional allocate gather some But lower I from be going on -- is mixed Phil? there in to the future, that's in the moving the as those believe of developed developed. to we mixed up data away I You'll with to and points. that majority lower it's think, from going

Phillip Stalnaker

is, correct, the that's the get lower Yes, primarily go-forward on said, out. plan Dan. I developed the focused is Dan mean and it like is

upper try then plan on optimize but the lower as really move the We to focus continue will to again, to test some our as possible, to up much have is upper. upper and the

Operator

The from Tuohy with Jeffrey question is Brothers. Campbell next

Jeffrey Campbell

of is is the exercise, response? or to contingency I'll thought up kind more a ramp nat question if of to I'm volatile question continues for but it to down possible it. explain My gas why years, is program a design The market asking be activity in first

loss lower is a calls that is such every maintaining activity, can increase there asked with efficiency reticent to that this to the E&P increasing prices? the but their Or says whatever state steady respond should activity because level lower And -- I listening prices the most be at preferable? activity to same all

Dan Dinges

we're is, this answer today, ahead Jeff way, our for Phil allow be need to and to to X have amount move and -- looking the can able Phil wells be going you gas be out the we evaluate but say, about gas program of me coordinate pressure of the It's bringing, delivering let two, knocking having to we up. effects order gas it about need certain sites negative Williams in programs, going building that to be if the we -- ahead on when marketing get talking and off. higher appropriate correct line of program lines compressor this, growth I'm our to side Jeffrey, future to certain and at and Well, a to me out out you without years, will, to areas, to

ground site at, are along permitting with equipment the the So on guys necessary. and looking designing ahead on the way do logistics sites, personnel side, to pad of course, pad the construction, of they Phil's out trying these roads,

two off down. to is ramp cut and to some had to first you hell you little up, stranded bit of line. it's capital and pull less them the say of those at head So had, paying you you up frac I rate if up on a a say, But and to maybe easier and but until a challenging but is would available except or crew bottom kind It year that, weren't have in nick the yes, teed ramp-up, now, string ramping the more time. a going difficult just the were more lot from strings ready

Jeffrey Campbell

that no, to going briefly. Yes. Well, thorough answer. really And appreciate back I just was the Marcellus, Upper that. a

Is conceptual particularly to ones. of question a that provide the Upper you kind returns eventually the Marcellus longer maybe ability the about, Particularly development commensurate Just Lower the will development? longer expectation on existing pads, with Marcellus laterals current drill that here. talked with the

why not, first, if of And and in them than trying the the Lower that inventory exhaust the rather Marcellus inventory Marcellus all way? Lower life to blending extend

Dan Dinges

Well, XX we the upper, now opposed Marcellus to deeper a program. you prudent first it's count It's the -- to develop wells. it's have the as to our maintenance right the suspect. XX Lower prior program, might -- well that in is as XXXX Take

a have how We mix or... wells have pads XXXX? of program do -- And program. in XX in the that many upper our we for

Steven Lindeman

XX. XX,

Dan Dinges

understand in when the further get for you future. in development, drilling now, that program, back of more rate return, designed we years handle and Plus XX, back. Jeffrey, program. a maybe program rate, lower. how deeper. come into that this And darn on certainly of bringing move upper current -- pads augmenting it's develop point, get my we through lower that the good it. of deeper pads plausible pad efficiency XXXX the to uppers. in development our of our That's opposed -- up going providing and of XXXX, the drill as the fairly, think is we for remaining utilize more longer zones we as fully XX about develop our I that ways might about in rapidly. a again, about minus here more in the X X -- have, to we to we to opportunity comment a your develop to the to to at just best we concept, out the runway Kind uppers or of right your or a use we is And things the and the efficient pretty try years, the for That's lower lowers tool as can all the there entirely than as And to the gas, having

Operator

Holly is next from with Weil. The question Stewart Howard Scotia

Holly Stewart

we unique as talk the just some balancing Maybe returning holding dividend well times? first pretty cash, about commodity shareholders, to just capital buyback, thoughts to Scott, we're updated given around can some as the maybe in

Scott Schroeder

thanks flow to we're dividend remained But -- returning the to the our of cash Yes, covered of shareholders. a all function how the is exactly be NYMEX is of XX% to you least level strip looking above. going for -- free at The question. very we the obviously, going obviously committed at said. We it forward. much like is what by Again,

which, that to same other is plan in to I our Dan's there, two if about small would pay $XXX cash add is that which opposed makes reduce end a in who thought environment, would The bent sense were have debt part of we buybacks appropriate. with flow on next sense. makes time, the be bent up and cash is X not strip which because to cord little free another ask, a leverage going I and lot going years, use we'll you knows my just the opportunistic thing I'm further when But it to But at off, this to the in going. where our maturities million, of

Holly Stewart

Will longer help And it the Charles on drilling reference longers more your terms Yes. this lower? that drill more of -- in That's it question. lower? in I in you mentioned legislative you the helpful. Dan, Will to the you to laterals the allow maybe change then, in upper. mentioned know response to

Dan Dinges

lower in now confines, we've development where not in Phil are had upper the laid the in of the wells, guys available look the the so that us because the have lower we when upper. we virtue will the Yes, lower longer the drill will. that doing to place opportunity you limited drill his development as that's we case certainly be is where it past far when every to the And lower, we yes, longer pads, to laid and have as have out chance it opportunity, so. opportunity taken at in it out have with the a right we readily laterals a But by

In fact, we long pads, the one of these recently, was the this -- year of drilled? length drilled last we what

Scott Schroeder

a had depth just We measured feet. total XX,XXX of

a that So well we recently just have that was for drilled. us record

Dan Dinges

Yes. That's the exception making that that, are because of we have but the what where I effort. mentioned, we just to do opportunity

Holly Stewart

Well, that. Okay. follow-up maybe on to just

You average, I longer be that an mentioned is than lowers it guess, on sort of XXXX? foot XXXX the it -- for XXXX, will in much

Dan Dinges

-- be will -- it will it see Matt, Matt? be, what No, let's

Matthew Kerin

Our I north somewhere think. term XXXX X,XXX, expected of average for are to lines

Holly Stewart

Okay.

So modestly longer. a bit little

Operator

with question Josh Wolfe Research. next The is Silverstein from

Joshua Silverstein

on the -- to and CapEx. couple a ask the Just potential just maintenance of questions on levels

currently How does to you're You prices willing are. would could where now? just depending CapEx work you decline? maintenance to you maintenance how willing be mode that further, into if the you reset cut? bar you mentioned on cut And CapEx lower? at Are much go Do that right

Dan Dinges

Yes.

in be the a months. -- was during this particularly, you and a below Josh, return -- period that off We history and gas Bcf shoulder gas when we be prices particularly our what a took gas the deliver we'd We low, and were curtailed to aware past, see day, to in sustainable. Our 'XX I think lot might profile would not we're of as expect need X.X market. the the going at over just extremely to

at for and out currently rigs, have level on rolling X and point we started at we looking time. in So have maintenance our our we XXXX, forward, rigs with X plan in this

rigs to that we've -- to the of and go down that going we're rigs. One guided X

in One that of time and that'll rigs way large working laid its has a pad, of large it's March. off be the down and been pad, on some

the that dictates, at But need. need of contracts if provide providers do But plan flexibility our service would coverage we're service also or we we that that need macro would looking us fact, environment to provide be. that if, contracts our the absolutely in all our the and amend

Joshua Silverstein

some decline would just changed focused then company? to at right Or right add a now, single conversely, staying the feeling to are? the has add corporate exposure? that price you where recently, is your there given And inventory for in you asset basin, strategy guys some around had what opportunity it. slowing this other Got all want basin Or pain we've single about you volume

Dan Dinges

two-part second Well, question. -- I'll the first. answer the

some the the always have on that the how thorough our M&A, In enhance boardroom do we oil deal all look around with market, with. meeting -- the the having that how had the very is versus the We very, wells. space, discussions We strategic programs. We at good dealing week. the their guys they Board the continue. we how they're will and look going this the -- value. asked, in at had in shareholder shareholder the And at That every gas. gas value. We oil we've in in We on us they're had just discussions look pricing maximize questions as future, the that you about activities area commodity how meeting with of dealing are we both expectation discussed on guys the macro issues Northeast,

the might west own if what Chesapeake operated. if of areas is or XXX% has But assets are that you do there part would cumbersome. also. XXX% uniqueness you we the there. And really multiple those beside an we have It's they're in -- partners operator just area state. us, in not up to wells it's could you're had are southwest where we up of transaction, do operated. us. our those creates its and They're that There's to about difficult And those of the if those wells, assets good wells. the drill that drilled And some M&A

to of going that conversation maturities stressed up they lot with all deal point just is production balance are time. those at part having of trying of M&A on of the that this admittedly southwest a the difficult. in have state. coming extremely type companies in and You they're the their programs some and And on have through But sheets

-- at understand a area the circumstances make that have dilution a the capital right you out have profile look gas the either out you allocation. or at being to capital you'd that now the there's to price are also compared the delivers all natural the sense. that frankly, When But there. there it drilled programs and look now, in very, you that are dual you split right being And allocation that wells that strip that all might commodity you price for have future, at accretion go drilled Cabot on would when return the might strip and very quite oil into, look the the for you good

I difficult done to work would it's do up have X would, time, also one at to That's we times, dial that levers environments it all proposition. a But line all at to X commodities make why Absolutely, a and So day. every to had operate in it's if benefit? think, together stars the not it trying in also. and in get come

Operator

Advisors. Hall Heikkinen with next The question is Energy from Michael

Michael Hall

maybe character field? substantial it compared broadly variables the more it program the surface program there's it other any to be infrastructure the that access how guess XXXX just relates changes in make a kind as on of just of I the XXXX the would particularly Any the little note different. location I was if to program, design, curious, program, to completion in

Dan Dinges

'XX, drilling when thoughts going kind either look comparing their in our get 'XX, Matt I've how and you're of late or Phil program, at of proximal talked the together answer we let by look about, drilling about at our 'XX on like we a that changes Yes. to implement program But had if some completions, of if program result innings, our it. questions, you already to a design, 'XX to you And which laterals, I'm as to technique things drilling. mitigate on

learning of and answer in questions, we So program of our numbers. curve and that was some those 'XX our to designed some our up showed had

the drilling for wells program XX proximal that get XX and in the mitigated program. the develop the Josh asked, longer that we how with lower. now PA ahead learn in -- the can our PAA created We how were the in had maybe of while lot compared legislation by concert of in that and we the our wells, 'XX, In only the upper had and a now about upper designed we we We've what 'XX, to we a But because XX into upper. differences about the then record Cabot. daylight to or wells by designed ago, the XXXX for numbers upper a the decision purposely when that opportunity lot X we working and We've to though we the wells, year gathering mitigated try for have we that a had at of look of we presented specifically for you some did. data even laterals concerns

to pads of when all ready our things program placement also XXXX of in to wells the the in we are then field, that going area a over different and of 'XX. the slightly the less well of have be queue we'll is be compared jump in some our the we're to field in drill the XXXX is of And the drill because locations going they that slightly uppers enhanced to geographic going going pads have and the to

is be do to 'XX. program lot of areas anticipate to an we enhanced So going a XXXX and

Michael Hall

those it. the and just Or in color. That's helpful appreciate the productions some clear, And of 'XX? kind 'XX in XX just into? in were to I of all upper, that the tailed be were

Dan Dinges

both Yes. Drilling, most part, and started 'XX and the it's XX. 'XX, 'XX, almost then for in

Michael Hall

helpful. just of kind sequential you in half. the completions. then you What decline about color the we here first Obviously, there? it. year talked on are of the provide timing start housekeeping Okay, just And Any kind the turn-in-line appreciate can like the of here? look I that's counts as

Dan Dinges

We'll have we're we'll fourth incremental bring and is second approximately -- the then various April, Yes. count June. second quarter, why -- first on we're quarter, XX-or-so anticipate quarter, percent second we as turned the the another total first our -- And referenced And May, In months in we an quarter, so the fourth quarter, of in reason years quarter. forecasting the or as bring going in XX% wells percent reduction total of we're in third well wells. then those turning at quarter, in for and of in the third in quarter. majority we in turn-in-line that kind And our in, the quarter, start about first XX-something quarter. then impact XX% scheduled to the our of that's

Operator

Energy. question next from with is The Simmons Harrison Kashy

Kashy Harrison

earlier well follow-up on performance. a just to quick So discussions the

basis? program, similar longer-term maybe about to performance expect more on think you XXXX, the XXXX be a So as should adjusted we lateral well levels XXXX to the

Dan Dinges

the It development, look account have mind, a program. to have XXXX -- into keep you our example, take If wells be wells located. unbounded offsets that at more -- being going where to is for you. well wells as than if offsetting we that program our proximal have which the you depends program going forecast on or the And are and development to bounded can by our XXXX drilling in is

see see XXXX less you'll an maybe average, had on to XXXX we in XX% an have say, to will So than XXXX, lower. XX% of in you the XXXX in assignment -- might EUR about just a basis,

Kashy Harrison

it. Got

need that years growing to from sure of various so as now? meet a about X% And incoming be whack Dan, how move market to operators question, just the just forces think make repeat Okay. in out get Appalachia X%, XXXX, you rate and XXXX helpful. That's then do you Do the think beyond you once Haynesville second as demand? X%, think to at my gas natural X we in -- growth that by gas the medium-term don't necessary you the doesn't about work appropriate market, my

Dan Dinges

going a about we realizations and our and and why have for market Everybody in Everybody dynamics, often, head gas. we oil my macro discussions both scratch everybody and the and boardroom looks the -- in I supply-demand in opinion environment, often has an their reasons the it. any in has today looking grow the the at they the market that at live reasons into on might what's today. that be this majority going the that will had by years, -- are market. now, anybody financial strip be why point, would I And know be don't future, vision you X numbers a would the into I your is a the there it from what dictate X drilling wells about to as out that into current to perpetually the think into growth years measure if

sit know that I think sheet and attached and positions been we it capital. chair transportation arrangements to volume reasons the concerns. from yield I reasons -- be and to it how reasons in minimum know there. negotiations to do We me balance is at for firm maybe are midstream midstream. difficult decisions -- going there's why debt out out there there's that are affecting you changes how manage I value is in behind every it. might dictating a upstream and and There in to the shareholder has different a volume as separations, things commitments There's return. been can a way look that allocate

that us, -- earnings point to and able and so at profile still free to we there's else NYMEX, flow, been even that can cash nobody an We've and $X the that generate fact statement. generate we'll make a

push up at marginal to drill profile inventory losing level maintenance think prudent your up drill core to it don't a all at we it's because it prudent don't of capital this use it proposition. out and We at environment. a in return think are all a We and even is particular

to balance we're We're manage strong. sheet to our So dividend. going keep going our

future. going as capital out have and will we're what see as to there and current maintenance in to manage and in mentioned, has reduce the growth towers also have Scott the we foreseeable opposed reduce environment to the we our As debt further

rationalizing growing market into So I is time why hard a have a today. industry

Kashy Harrison

these a it. off rigs to -- see basis. on hopefully, we start That's Got weekly the And come of very helpful. some some of

Operator

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

Dan Dinges

Good prevail about know questions, fielding this like are in 'XX at confident been that's -- way know not questions trying this to going we're our the have early I cautious But time. this to all this the I mornings. grow sustainable, balance do into again, is point Gary. rationalization all had is Matt in some Thanks, market had hope our the And noise. has great there gas sustainable market that just question-and-answer market. macro program. for last I and push this outlook into that think, I sheets has and 'XX, In not questions. out our our the to the demonstrated, answered

long-term We're to way our of of hopefully serve maintain appreciate man navigate. take position stewards shareholders, and the advantage and a we to be And our capital. are sheet, going the our in shareholders we going think the best space our last standing, in balance would good our we're that to position, be

for to are So thanks, patience, I hope forward you our XXXX. again, for XXXX. your all looking

Operator

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

disconnect. now may You

Coterra Energy (CTRA) 21 Feb 202019 Q4 Earnings call transcript