Expand Energy (EXE) 30 Oct 182018 Q3 Earnings call transcript

Company Profile

Participants

Brad Sylvester	Chesapeake Energy Corp.
Robert Douglas Lawler	Chesapeake Energy Corp.
Frank J. Patterson	Chesapeake Energy Corp.
Jason M. Pigott	Chesapeake Energy Corp.
Domenic J. Dell’Osso	Chesapeake Energy Corp.
Neal D. Dingmann	SunTrust Robinson Humphrey, Inc.
David Martin Heikkinen	Heikkinen Energy Advisors LLC
Doug Leggate	Bank of America Merrill Lynch
Robert Alan Brackett	Sanford C. Bernstein & Co. LLC
Arun Jayaram	JPMorgan Securities LLC
Kashy Harrison	Simmons & Company
Daniel Eugene McSpirit	BMO Capital Markets (United States)

Call transcript

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Operator

Good day, and welcome to the Chesapeake Energy Acquisition Announcement and Third Quarter 2018 Earnings Conference Call and Webcast. All participants will be in listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please also note, today's event is being recorded. I would now like to turn the conference over to Brad Sylvester, Vice President, Investor Relations. ahead. go Please

Brad Sylvester

a and posted our Rocco, operational everyone. you investor you've Thank for release our Thank the our and today good website to joining updated had Hopefully, quarter. call XXXX that and to discuss for review the press we you, presentations third morning, chance to Chesapeake's results morning. financial this

factors proposed WildHorse Please including will statements be statements that for statements. and expectations, and benefits call, transaction of morning's expected the statements assumptions forward-looking the the this to goals, Development note timing making that our completion existing our transaction, we that reference of regarding with will information, be beliefs, materially of Resource forecasts, and there results such cannot recognize future applicable factors in and consist discussed to actual including other law, help Corporation, not comparisons to are some statements, duty During filings. cause confirmed should release performance, and underlying by of the number which in projections, the differ the non-GAAP you required refer our such undue by measures, may identified except reliance and as SEC forward-looking on financial which statements, no update earnings from statements. periods our we forward-looking to any across We undertake today with that Please place peers. also facilitate a

Frank our Nick the begin the financial the before operational Dell'Osso, corresponding to today for website over we nearest call With call Pigott. a reconciliation For Doug Lawler, over on and call, and release. Patterson, of a earnings Q&A. GAAP will then can for Doug and any our teleconference results, me be are turn non-GAAP we and review measures on Nick in the measure found turn our use, and Frank to the Jason

you. over teleconference thank to will now with So, And Doug. that, I turn the

Robert Douglas Lawler

transformation over little today. began of of Energy. our you five morning, and Chesapeake board for and business A Thanks, joining directors, thank Brad. leadership major years Good employees us team ago, a

During demonstrating and all shareholders. determination for business, our we improved passion, value to commitment, our this drive have fundamentally tenacious period, of aspects a

We preserving unconventional commitments costs, assets have with reduced more by industry-leading while in extremely portfolio all billion, obligations $XX billion, and $XX billion more and cash our day is Today leverage by $X special debt than complexity, legacy and acquisition decreased eliminated strategic about I'm eliminated our delivered efficiency, speaking than WildHorse in significant more to company. than world-class capital of annual total price Resource Development. commodity the challenging a an be of thrilled a environment. for you significantly

is at is engines position existing powerful in Eagle there our our shareholders, build Ford the investment upon our opportunities our enhance of and ability oil and unconventional is value WildHorse ratio very are natural believe this sustainable future is and multiple in drive and through delivery oil increases WildHorse tremendous expertise. uniquely from net Powder the free near-term proven accelerates priorities to that grow greater our an Further, pricing accretive assets two River a complementary at portfolio. upside WildHorse significant an create NAV. for further Basin powerful The in and and portfolio, our margin opportunity in X anchored Chesapeake of enthusiasm. flow incredible gas, excited We the the gives our stock our of We with of value to position The improve of times. EBITDA leverage to our this our strengthens ability debt to to combination development about only us strategic our attractive assets acquisition EBITDA positioned a transaction profitably investors. improvement, growth and for cash Chesapeake weighting to in and while XXXX thesis financial the value reduce depth compelling growth

than double by XX%. of oil to production expect We overall our mix the accordingly oil more production end to increasing XXXX, our while

with EBITDA balance of $X.XX assets by we margins project our will from boe an the period, oil The during on margin XX%. that approximately financials impact our transaction, over grow an have in growth this Importantly, improvement also will enhanced WildHorse per and immediate sheet.

efforts of improve has strip are incremental Ford the has two which XX% XX% over spreading prices, Eagle the transaction debt will accelerating we access premier this to This our in acres expect premium alone WildHorse EBITDA our Coast Assuming play, Today, pricing. XX% next the to one acreage enviable EBITDA undeveloped. XXX,XXX of years. de-leveraging the by positions, created by ratio, across to current Gulf approximately approximately

runway of the highest we equivalent long development strategic one opportunities improving E&P our operator assets, of future with of us attracted per the to in is competitiveness and very oil also pleased as barrel any WildHorse's the While priority of EBITDA the United margins increasing by are the our independent States. of our alignment

is our basin in further capital a the efficiency performance by believe the profile there the in operator we consistently enhance to our cost WildHorse's drill and leading the at the demonstrated foot lowest none. build complete to opportunities Additionally, basin longest of second in are to Eagle ability is and laterals per Ford the return and the asset. upon numerous impressive Chesapeake is

will record operation. and Our track the material of geotechnical all expertise across proven provide aspects great confidence operational deliver savings that we

driven operations overhead. over provide expenses by impact achieving and million years oil Reservoir additional expertise truly and expect are and longer our the which through with Ford corporate savings Centers, technical be capabilities, in efficient create five $XXX legacy will we also to Specifically, options, capital the downtime of by improved oil expected redundant our be to we ability laterals Operations annual Further, enhanced average our as $XXX our and not an additional scale costs. the eliminate in well complementary sheer value to Technology operations our of realized as demonstrating but fit Support the to savings completions, only The and through existing chain our elimination Eagle our supply anticipate position. of and service million through field to the the transportation first logistic of drilling operating lease completion field

upon free that our positions. Marcellus in update We portfolio, provides and to to Ford to to I asset this Frank optimize further transportation now We'll the of of pass a but pricing access flow and closing premium will completion oil Houston activity XX% look transaction, the which Christi, assets and our flow full plans drilling assurance to within PRB, LLS MEH company current a cash provide our additional Corpus update of and our this will XXXX into our high-margin scale. from expect on both and our Haynesville the operations. be Eagle we in continue on over generate on our focused us will call while synergies

Frank J. Patterson

Good Doug. morning, Thanks, everyone.

Also, and that's on commend delineating They've a development job of this have excited would turn We right strong elements like stage. is to of with really really the also putting subsurface and WildHorse not that the building majority already lot a play a over operations really slate a entering team an We're Eagle now done of result production model side. morning, started a XD of the position and that XD, work WildHorse understanding a reprocessing get foundation. a a for [indiscernible] and is a we've doing. We're the acreage we blank covered to loose starting of as better been now I together get product. acres strong just play to XXX,XXX subsurface regional our solid As acreage the incredible the the team on with Ford. petrophysical in actually

of We combined available with and All data the from we the core has a model the wells. well historical been with ties fluids domain have analysis and very, existing data well gathered from this have working the and very that room. public performance productivity

the will full additional in-house for core this with development quick. pretty to analysis With development plan. curve field will learning a as on pressure testing We data quick fluid drilled, be allowing capabilities, wells and transition augment are our very the fly

Eagle and Texas, basins, hit our Ford the well as from learned South ground everything the take as we we'll running. As other

reducing value We greatest completion will for contiguous position. acreage laterals, drive optimizing towards to longer spacing this moving drilling of the focus and and out on costs,

Chalk see footprint in the acreage portfolio a our also access look opportunities. appraisal potential one and This additional premium the to on the engine gives direct forward in with and markets We in third oil Gulf Austin second a us Coast. to

To-date, the Turner. Now, on We're spacing on our a Powder in drilling focus five program. Basin. our River been has appraising rigs and in quick tests update and the running current

third into now rapidly XX% have the We about are and the sequentially. quarter XX% prospective increased XXXX our development Turner XXX% and acreage of entering stage. of Production has delineated since

again and reach to an day production forward, in XXXX. approximately anticipate barrels XXXX rate Looking double a in XX,XXX net we exit of then

monitor extremely plant XXXX. and rig, But X,XXX-foot the oil logistics the pressure $XXX coming our a the acreage on Our our the this, will on of operations, the proven shown adapt execution and to teams months. the our of with and discuss flow barrels averaged adding Ford, model. oil the the completions common these strong after Niobrara of to gas importantly, anticipate no to portion and degradation continue the slowed per approximately confirming wells western program, geologic tests cash rates the unlock drilling maintain in the to of continue oil Turner done we likely have final day. million and growth, wells to and spacing section, barrels spacing flow currently September in us our value our of X,XXX in objective make XXXX. day expansion. strong flooding production as acreage oil spite We're production transportation northern In challenging to with proud spite recent We'll In days of wells facilities a efficient oil other sixth well per position. we deliver three I'm and of by as more having completion on decision the stacked And facilities XX% evaluating Nick's agreement, In October. condition. between field X,XXX asset XXX work step-out a in in of of which free in targeting we've more Parkman he'll Eagle With and allow new focusing are of cut, XX-hour these online.

our our to drive day. We're every cash well, see and drive and to laterals improve we completion performance completion to designs. performance continues count costs In moving asset our value making continue the in focus spend free capital higher continues progress Shale to plan and every we the in Marcellus strong extended XXXX larger flow in currently we for from But on as see we reduce teams forward our portfolio, Our our to dropping. margin rig opportunities. and Haynesville, continue

As continues Chesapeake a more I'm it over to going With stronger and Nick. to that, turn result, to grow competitive.

Domenic J. Dell'Osso

Thank third progress good these you, With we our to improving Frank, and our our on morning, of today's our cash reducing strategic quarter will accelerated. results believe acquisition of We're our make with leverage, pleased flow. planned regarding and priorities be sustainable reaching WildHorse, priorities announcement margins, continue everyone. and

and extending December the maturity acquisition, focus amended our Frank's results. will of we Doug I September revolving and the restated date September, from on to comments facility Given In XXXX our XXXX. on QX credit

of loan. term annually proceeds remaining loan In current transaction we of unsecured lien second previously-announced a The use our of save based sale the closed XXXX second rates. through term have lien approximately X.X the afternoon, on addition, our called the refinance notes $XXX company we and redemption million lien both outstanding tranche our and will interest to $X.XX the billion issued notes. XXXX bonds Utica and the and refinancing Yesterday

will year, year. the had the versus our company's profile we billion maturity closed, of to expect that reduced exit have started expected number to we With liquidity we At XXXX. billion, XXXX sale within the a due of little By well maturities $X through the $X end we over XXXX, the over better profile. of believe the look beginning Utica as debt significantly when we

as targeted asset However, to debt look we generation, conditions as that well cash to potentially when are opportunities maturities sales, market for refinance through so. the longer-dated maturing retire will do flow constructive

on the very production were During our active protection forecasted mcf. XXXX gas XX% gas and over downside third $X.XX of we per hedging in at XXXX currently quarter, have we

certainty basis oil are in our to hedged a exposure of third oil of over $X also now modest $XX our and a average oil current added with just hedge XXXX Gulf over at we We've premium swaps a hedges Gulf Additionally, Coast barrel. a also to and a XXXX over WTI Coast barrel to our over started portion of $XX per barrel. oil XXXX

We that are compared Marcellus of beginning Northeast to now Sunrise basis over the increase third our will the next Atlantic basis, last year. believe service we for in to and pricing by several as see to in-basin significant average realized With quarter improve Marcellus in in continue $X.XX quarters. improvement Pennsylvania, gas tightening the our demonstrated

portion We into entering have for pricing LNG further a third of agreement long-term with a strengthened our supply Marcellus a by our recently realized volumes provider. party

gas structured driving the Chesapeake long-term prevalent U.S. to and We purchase by as contracts become export resulting expect the natural on both these increasingly of for focuses and more gas physical demand secure the demand for markets. access types industry, global consumers higher to

half second in-basin agreement approximately at of crude for we've via Finally for finalizing oil the pipeline market truck to via to Guernsey. the PRB, what or which beginning the the quarter take market XXXX in current volumes trucking oil to sales transport a cost Guernsey paying gathering a will crude we rate that's our are been close in one-third

evaluating transportation further We Cushing, options take to are to also volumes long-haul Oklahoma.

to assets we WildHorse future planned on acquisition leverage, the stated, be close, Ford, now acquisition the higher announcement on return and for focused our Doug positive focused the improved toward WildHorse on CapEx the our To oil smaller achieving PRB the shareholder a to company we margins position higher in our margin highly of gas. XXXX, assets As Eagle returns. and of our we amount capital remain priorities and executing We majority reducing activity flow. of believe and look including will of and with believe cash increasing vast of of be planned will sustainable our directed that

assets structure Doug discount years as and to attractive stated. benefit an have with currently First, oil and our peers an many both creates it cost immediate for to positive and by portfolio develop technically producing advantaged tremendous our adding to at Frank approach

the equitization transaction a obviously relatively ratio has is relative a the much stand-alone. improved provides low. balance combined WildHorse's sheet. obviously addition, In our Therefore, significant EBITDA to of debt Chesapeake to company

transaction we using free judicious grow opportunity. As from equity only it with profile, margin and cash project these We assets significantly for we'd years said think adding portfolio. an I'd always high right our believe for this over shareholders call like operator asset for look to to from value questions. our and forward be We time come. the with about would such turn with is additional to that we a strategic flow opportunity, that, our much significant over improved the this the value creating for With to

Operator

Thank you.

We SunTrust. question will now question-and-answer Today's first Dingmann begin the ahead. comes from go Neal Please session. of

Neal D. Dingmann

mentioned rigs that Could in I the be Good morning, slides, WildHorse just around six is running have some out might as question don't Nick, at XXXX of was the four oil PRB of Doug, you call expectations in Looks bigger X – know but know mix, level slide Ford. each have yet, on looking you talk how you the five the and the think the what higher around based going guys. company Doug. at Congrats now you Eagle of you to to looking on details in plays – expected maybe or just I two the running? right – great, I prepared my from maybe just and I there, slide well Frank for as you kind and delever deal. on the full

Robert Douglas Lawler

Thank ask Sure, give that detail you I'm allocation. Neal. going Yeah. And rig to around question. to the Frank for the

Frank J. Patterson

this Neal, Frank. Yeah. is

going What delivery program. of solid is right do be July Turner, think on stay rigs five-rig forward. those our want don't will in I Powder plan And think the running program that Powder. focused to a we that disrupt now, of So will I the are the as that we

five-rig maintaining bit continue So, opportunity to there and the four-rig be of that running opportunity rig to Powder. may there out five-rig have regard program, much We the program techniques the don't a stronger bit a a we get of test idea a to been they've With to asset, expand we would believe the a program. additional be today. could WildHorse actually know bring to can zones they sixth in we after set see the rigs I we down program. how so apply in to to in and potentially create bigger operational little some five-rig little a going start with expertise fleet We the

forward. running I information – a program. a the So, moving will have gathering growth and back we I drill a we of Marcellus don't lot two rig would and wells third rig there's said, which that program. move we some of know in next rig the a that to we'll be taking, couple bunch couple potentially a have year. we of as and of But Marcellus going into in plan probably Oswego information of will that – the rigs We a that's dropping we one core rigs, expand the to rigs. kind Initially, still MidCon in in to Haynesville, be as

Neal D. Dingmann

Okay. And lastly... then just

Jason M. Pigott

This is Jason.

Neal D. Dingmann

I'm ahead. sorry. Go

Jason M. Pigott

just to one. that on I want expand

us XX the of at Ford. in days versus we feet XX for a XX,XXX fun WildHorse's One X.X is days for a We had great drilled per things well. X,XXX-foot quarter almost to Eagle well

the synergies one the and this a to play. horsepower things more nearly one see as is. our a – footage. our operations, wells So, in Chesapeake center, rig the can technology we ops that's we get of bringing count is rigs mean, that fast which more fewer I of the with twice about of we're current drilling some from of We drilled the lot lot what think

Neal D. Dingmann

that, undeveloped about the you large a Doug, X or here is Doug, or particularly of think just that or X at is initially? of to really for really a or if follow-on because these assets, you And slide when of through slide Jason. maybe which you then There's two what here both. piece what just just X, of, that's one at at with combination? is it I'm component things looked or stuck looking synergies this all any wondering, looking Jason, slide out here you on add and you takeaway of undeveloped. it got area focused that And – initially it wondering, because maybe Jason, Great I'm of walked because then, the sort one I'm there's or

Robert Douglas Lawler

is those Thanks all for objectives you Yeah. Neal. contiguous at really hits It's WildHorse what that synergies And about major the on cost the This just strategic of drilling it we capture. can begging Chesapeake. And weapons question, that for things. as we to with all acquisition it. offers, the large completion when Chesapeake deployed can the a asset side, do position look we excited are such of the acreage be on and

noted and and the experience as expertise, drilled in completed noted, we or Our X,XXX more – we in there. wells presentation, than I drilled

gives So, of adding accelerating undeveloped. it's having complementing and to XX% XX% all objectives a It our to and I noted. tremendous that us runway strategic just while

Neal D. Dingmann

the Thanks. guys. agree. so all much. sense, Thanks Makes I

Operator

next question from comes today Advisors. And ahead. our Heikkinen Please David Heikkinen go of Energy

David Martin Heikkinen

for Good my question. morning, And guys. thanks taking

some of you kind guys or did pulled in their identified think the seemed you familiar I'm kind you work quality as well WildHorse as any that results, concentrations there the if their forward? anything guys acquisition. and that well we is if familiar recently decline far morning. the step on When we step-out became about on more assets with there distribution or the of quality that should acreage First but through or this a as curious was drilling just be to of not well as

Frank J. Patterson

question. thing. Yeah. Yeah, Really recognized this we Frank. is same the that Heik, appreciate

well a degradation to I due tight a think is you're seeing too what spacing.

response Ford. wells we're and out within created It's XX% lot the to this coming really the is poor that the may potentially it's portions through have are of think going acreage, work proper on tighter well existing There Texas acreage, this be the XXX acreage, What is gone acreage. I bit when tighter that, in pushing feet it we spacing? acreage is point. greater. got within analysis, may a at with be together the undeveloped feet. look spacing of plan South the of As this ties a the wells. of current to be through just the one I performance. Eagle and we are and PVT not or little X X,XXX the to that much reasons tied to really analysis, than And be our model the you're think necessary XXX number parts In back or delineation of volume saying, a well historical XX% in that some XXX This the like you remapped wells there seeing and spacing all

a of spend will this, out, time out wells And lengthen completions position. appropriate lot and we'll acreage of a effort value So, on put the and think space the maximum I we properly drive it. this

David Martin Heikkinen

That's helpful explains definitely and things.

catch of Powder, in numbers. your What quarter I second quite gathering the your the is agreement the boe dollar Nick? per On XXXX, didn't change, costs

Domenic J. Dell’Osso

Yeah.

So than will rather gathering to an move line, we trucking. oil

it'll of to half basin. so than than today be barrels And paying trucked selling we're have we're currently what in less

a again would – trucking, we all So premium barrels the to and the then to a then, a that what is than less less we half. dimes we're which couple in-basin pipe dimes. significantly today And a by going than of way will up get cost Guernsey do for to market those few

Dave. significantly. So agreement our isn't netbacks The should yet finalized here pretty improve

a improvement. don't but a barrel have dollar I precise so, per more you, half it to know give And is we than

David Martin Heikkinen

trucking starting per costing barrel a as point, a maybe on basis? What's dollar

Domenic J. Dell’Osso

Yeah.

sometimes in we're of little a dollars $X, neighborhood a the today bit more barrel. So

David Martin Heikkinen

Thanks. Okay.

Domenic J. Dell’Osso

this so, under going be to well half. And is

David Martin Heikkinen

Thank helpful. That's you.

Domenic J. Dell’Osso

Thanks.

Operator

Doug comes Leggate go today ahead. America of question Merrill Bank Please next of And Lynch. our from

Doug Leggate

everybody. Good me hear you okay? Can Thanks. morning,

Robert Douglas Lawler

We can.

Doug Leggate

how of potential think the transaction And about monetization balance what's opportunities? in I'm your any of Yeah. view the Guys, stuff. of Does does you the Good asset portfolio. this rest the the across so, and just what way if core would change curious base? to noncore

Robert Douglas Lawler

look growth well. between on excited the would the When Doug. Thanks, portfolio, allocation, and the just It's in comment at engines attracts a of the very, infrastructure company. the basin. the and cash Frank flow to very capital the us. the WildHorse for strong to as we look strong for Marcellus competitive generating phenomenal at capital as limit Yeah. Powder we play. very economics, are available oil asset the asset It's that the Interestingly, be a

our tremendous of, five very portfolio world-class is is and us unconventional years of flexibility challenging As want existing and price you're legacy assets. But encouraged us other in Eagle across value. this asset the aware, that capital it's into or environment we Eagle such has despite Doug, Ford, also note and that we assets been will that this is that to through competitive and that shared capital, we it our What the the the have very the environment gives asset, issues a as allocate know of potential it to the just be of commodity portfolio. for all strong the drive greater very asset had comes past rest this this tremendous growth that Ford, – the the assets just with portfolio. we in not strength learning, by And proud the we've is that how attracts from a single portfolio is commands our resources our

want our allocation to capital we So reflected efficiency, reflected costs, direct as capture our that's be the to in you Do capital value. to where that add will and capital greatest operating been continue in anything, Frank? our it to

Frank J. Patterson

Thanks. No, that was good.

Doug Leggate

to going consider we be the just stable forward? a portfolio combined So should pretty that clear, model is

Robert Douglas Lawler

That's to greater and our to to levers all at business. portfolio all And improve absolutely as highlighted, from mind, continue value that will look right. in capture keep continue opportunities, we we've

keep our mind enhance our business look value for the and that for So, we is evaluate planks of to further opportunities shareholders. one will to of in development and strategy continue

And going completing engines yesterday, powerful portfolio having capture forward. optionality of strengths so, value growth oil the that to us tremendous gives the the of two the divestiture and gas Utica successfully

Doug Leggate

Last the how managed you help as wonder on the But River, And you today. of At deep see industry the could de-risking to a Powder Can to some along of relative I One, touched the this quickly spoke Brad, as your just just on follow risk very at in final high point very just understanding idea that? my us Are phase how the you've is one just has quick level synergies. you the up? I'll previously time Terrific. or in what I the it have gone obviously about to you we you've establishing numbers upsetting if Frank, quickly. two can still or we drilling those that give in to backlog de-risking suggested? you Should – days? still on is synergies we early it to still the expect the Thanks. deal is go And leave there. give ups.

Frank J. Patterson

over to synergies. the Yeah. I'll pass Nick handle the Powder it for and question

probably in year. that still and position room to we're Powder We the acreage be working we'll I the entire expand across that delineated side, Turner. footprint said, our have XX% On next footprint expanding as some through

The phase, land to the starting spacing pad to on. real which want is going what We're question drilling are we will to development So, move process. absolute we is into that have in already answer the we Turner. basically the that start

of As we've talked to decision wells is on Doug, section move of section. the and We're before, the that industry three landed four made more that. we to haven't in kind per per range wells

and Mowry, out What derisk. coming Our two Niobrara that those more on activity wells things and we there's section. more the still the have do current the to assessment per industry and are is has information us helped is

year. pads the be actual to we I acreage our in huge a we've have – be already drilled. the that is and they the – on With test could go fracs, next our want going what The and top We that's get portfolio We've us. is Mowry on you question Nio, with Nio a The efficiency. Turner talk lot of other to really, we there, some wells develop know or with where unlock each Nio years and would commercially we we that that because done couple do have really and it in needs Mowry, to like entire can wells spacing that. footprint to Mowry of of that and make Then that would move we can and Nick, to cover we next synergies? think the the is, work drive boost larger in between we're something and spacing that,

Domenic J. Dell’Osso

Yeah.

about investors So, very here income we this But income statement out Doug, The today tremendous from this we to comprises synergies be in for a G&A. are – the well often transaction that slides for synergies capital synergies. value essentially upfront. the believe savings justified. understand case there'll synergies us, what synergies are synergies, the and versus we posted are hard broke synergies that We in are Think look, statement give significant in them. to

redundancies, We savings corporate from that obviously alone. and so not will have any a there's lot of

in to know and addition our do that, feel best assets the what's to with assets, things We've and able available downtime own LOE, within our we'll be that there. improvements and that. delivered diligence with have managing comfortable the some – In know we things done that practices very

on touched capital and have this. side, already the On Frank Doug

foot ability of materially and given the costs with we've drilling half completion wells approximately success a XX,XXX-foot lower scale the per had we the completion have, Our are deliver basis. on drilling and that costs the laterals and operations just that to at

and asset about number coming Eagle included the are think terminal. the to additional, had. gives of have to An portfolio the our to of that entire sort can us legacy ECHO Ford excited things us element there's we to is And terminal They're front have as that as in market position, Christi Those to synergies we be deliver that access of we right about think real. then transportation touch WildHorse the access out we these so, which access that are feel. about well to in marketing. pretty are very of both When synergies Corpus and in we worldwide the know that you Houston that Houston, today. are And and we're significant not we more

we two those that We currently pipes for. have today excess across pay capacity

and with of our premium to very balanced work so Coast we – further midstream Coast Gulf Gulf and of pricing a flow bit Chesapeake market these directly premium believe given a deliver pay little barrels for that reservation for that it pricing. can get that to us, we partners, a cost with and we It's so do charge to available these capacity barrels we into pricing gain And access to little today. can incremental

excited means. have gathering that the preparing that system what oil WildHorse a an about they really very good in to field begun in we're has done build and job project. So,

us and to up for and a that's So, just there's deliver to ton pick to on. thing here a continue great way under do. And will be

and are these So, better identified assets, of to with and that know out the record we've pre-closing, performance things considerably more costs that of do here. delivering producing track our we there's our

Doug Leggate

the getting all And Doug, the appreciate answers. Guys, on congrats, deal done.

Robert Douglas Lawler

Doug. Thanks,

Operator

And Bob Please next question our comes from ahead. of go today Brackett Research. Bernstein

Robert Alan Brackett

working? Good window? black Is the gas Are Hey. wet on a had oil for the Or is some Is the how it combination? WildHorse. window the about oil I to you about thinking window? it it question morning. volatile think inventory

Frank J. Patterson

fluid the the All the appropriate is for above working you're spacing This at All that type above. with. Frank. the

with. a designs. value if we a context, about which we're curve with, talk areas spacing but data, type more That'll as all ascribe and good ascribe and pretty have we single match area, lateral we potentially type completion multiple pleased and at strong get we evolve really every now So, like we see that in I it different right model but curve want you history really lengths different it to to said,

Robert Alan Brackett

I annual is is year, around $X number of XX% well think should billion I in to you if think if rate WildHorse's the and million to terms per see about CapEx of $XXX capital that And a $XXX million run efficiencies, savings? the XX%

Frank J. Patterson

That's there that will Yeah. again, going a And and to reasonable. be aggregate into larger pieces whole. it's here

Robert Douglas Lawler

anticipate levered time we great been Reservoir to that and if in that Technology that's by cost it of delivering basically the performance Bob, we portfolio. we the highlights asset. we And deck, from the and execute value have Eagle our that previously, you you operating take in center efficiency. – operation D&C capital those is in strength you operating our learnings noted cutting a And, half the Ford the that see something just of across at is Center, shared delivering on And and can savings the which by of our as in the slide that, page really what XX, look for

hesitate would on I capture So expertise. on experience what of to put limit based and scale and whatsoever any sort the that can efficiencies our we

Frank J. Patterson

additional Frank – the to We're that. casing is requires potentially going string. an work Bob, to WildHorse fair be this through acreage again –

wells the we and Texas, Support still our mitigate drilling we keep savings, more to South in effectively styled longer they're wells primarily So these bottom Center to see in zone, on different wells. drill sidetrack able Operations and and stay as huge basically being through need but

Robert Alan Brackett

And a still taken and delineation in arguably factory sort would an mode? of this to sort eventually they mode of exploration were get or a

Frank J. Patterson

They drilling in That's a sense. were correct. wells step-out

always we've when across in some get development really and can development. some And you we down. go that more than we confidence into shown go you our is – that drive doing, So well. that's what challenging Once costs we've as we're portfolio into

Robert Alan Brackett

Thanks.

Jason M. Pigott

(XX:XX) opportunities side. Jason. other It's on There's the completion

quarter. for So, averaged about day eight Eagle day complete a the in example, six we Ford half per per stages stages and last and they

more So, when you're those pumping go day, per charges getting done down. stages

some not the as to operations are So can that our efficiency those we bring drilling, just with on but also table well. completion things only

Robert Alan Brackett

it. Appreciate Right.

Operator

JPMorgan. ahead. Please today question go of Jayaram Arun next from our comes And

Arun Jayaram

on wondering of the in Good have morning. that could is? acreage give Frank, Obviously, thoughts are geologically, bigger thoughts an risks you here that the I acreage footprint how terms any footprint. see on the deal? big sense some you was us what of be any core maybe they the And big you a could in what but of terms core have of a perhaps if

Frank J. Patterson

Arun, Yeah. job area. a hard to delineating They've describe a done quite really good it's big core. the

is type not and a as an far It's and the of very piece Today, the rock what across we on But have might XD. have as we But laterals reprocessed on at this, once as we'll structure there a The that drilling see going a we we're because be is areas we in look drilling to pretty that that. risk don't reasonable we as want completely the So, reasonable have and the of faulting to we good know and something that much a and But that. from opportunity, today, the it's better fluid what quality. risky handle not amount see just a area. at significant perspective available as core and things a we to handle you look as rock think get commercially of longer will this quality this depth. looks acreage pretty as a position this, as like it to don't drill. does factored

Arun Jayaram

Nick, flow. was generating a the amount in you for the cash free Ford flow talk cash point you to you Eagle together, – XXXX. getting about significant have of for guys Eagle points the you of accelerating the asset? assets do the Great. free the Ford two When you maybe some guys you flow of free cash is could And see one characteristics this put made

color on So, some versus maybe wondering if stand-alone basis. provide the that just Chesapeake you can

Domenic J. Dell’Osso

Arun. Absolutely,

have positive. the us in you that when free here, be place our Eagle think of to in cash portfolio base Ford, established a that's puts asset So production very large a what about have we and flow

a to about River free are cash from if other terms bit in this little maturity you You asset, think Powder perspective. they're each flow where a think our of more about similar they asset,

we pretty of flow production, into margin free cash the asset right what a over likely XXXX production which becomes So there of an is a our a very we and doing this with activity, then, about, level now rig ramp oil oil it it's in of The in XXXX, five double production double push similar our in grow expand count flow that cash in XXXX the about during run which high profile position, which when from that it, basis is year a plan be if again level at the synergies the rigs free current then profile what will way Powder, year And that on XXXX asset, that over cash is continue just think five cash WildHorse Powder. rapidly investment positive to so and XXXX annual that and see Powder going this on quickly. asset continue flow have going the in very you we've cash at the we're the talked in again and grows similar will grow you flow very, as would from relatively we'll and quickly. then positive becomes cost on. we the your With to to see the to and flow vastly be as profile free rapidly it you

we a sooner flow cash restoring does result. us a so, really loss is, flow place be And Utica, for dramatically XXXX and where from aiming as as that the Chesapeake free the a excess for year cash position where accelerates in what will puts this much we've that were been have to we

and and most in it for guidance do here and our deployment market shareholders. with the higher for together assumptions and And the the capital our return on the one efficiency of But our asset, absolutely is cash have delivers you give to opportunities cash desire of a way to on significant around out is the profile, ahead that clarity how time profile deal. of everything or our timing that able this of driver of shareholders this optimal full of the that. growth be rolled-up to we'll So, comes the to margin profile, depending closing, more

Arun Jayaram

very is final sophisticated perspective question have that Doug, any Any in NGP, on equity a and obviously private Great. thoughts supporting transaction. this player My that? you

Robert Douglas Lawler

us that as are invest I extremely and I'm Absolutely. major have with thrilled Chesapeake. they and in believe a shareholder to to partner excited NGP

large are and all We drive things shareholders. and NGP demonstrated think what to in confidence. to value will the And further driving other to that that and stock the hold. about to WildHorse the NGP all that by excited of shareholders. Having percentage of together forward our that's do on to their board we'll value pretty significant continue shareholders representation the And speaks looking I we're they to our

Arun Jayaram

lot. a Thanks

Operator

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

Kashy Harrison

everyone, morning, questions thanks the on taking transaction. and and for Good congratulations Hi. my

Robert Douglas Lawler

Thank you.

Kashy Harrison

just and ones really just the So on question. quick me prior building two from

the you So, Nick, a you for it's combined a XXXX flow could entity more be entity? the more timeline high-level can get you free of talk flow combined free cash neutrality of on think thoughts neutral. trying to think event, Do about some the when Just cash XXXX of event?

Domenic J. Dell’Osso

event, a to cash with We've very be going in were and like that Yeah. this putting where position cash-on-cash away been great the the return, like delivery are and flows to we're that along Kashy. XXXX doing returns a of we us an so projects high-return shifting year Utica some a this to that But shareholders. again, profile looks growth investment It capital way more of for was in certainly restoring stating all asset from that the asset this. the confidence XXXX gas with that

our cash the but that dramatically of similar this will So, timeline get the it pretty with we is flow and transaction. grows magnitude in confidence there generate when we

Kashy Harrison

on synergies touching maybe, a again. Frank then, and And the question for you. Got just

– what the guys like when synergies, is, you believing. it's terms kind market seeing it comes of is in to were So, saying,

second half where or so, longer on transition in those so something you of that then capital more the to the do and corporate something is laterals whatnot that the side? asset, we'll And capital get start start we'll you to see to moment starts XXXX, when it to XXXX maybe think Is see impact side the from you synergies? it on manifest

Frank J. Patterson

perspective, bit as as out we to transition sense. making start can start play tag completion to and going think drilling let right I changes from that soon with make the like seeing little we're the We'll talk as a changes synergies and I'd But him as the front. about soon my Jason here. up and team

on side. completion and those drilling see the first think, I changes, You'll

So, about go. I'll kind we let talk Jason would of where

Jason M. Pigott

– Yeah. learning those Eagle just about Ford. what's Chesapeake from us I the great it's not for mean, is

on challenges with that in example River Powder for a basis. drilling have deal we daily We

but advantage a So drive us is all for efficiency. pulling definitely the that together, longer real laterals

critical will department in the allow drill and to laterals. longer just land the be units us together So putting those

well see XXXX that which and So we fully should, start be third and by running. the to quarter, should up into

to So quickly Ford saw to there. the immediately operations, front. completion and Haynesville very We gains some drive from expect frac the into Eagle on in crews moved synergies those performance

So, side those monitors and XX/X. an we on away. look are that some that the have Support side, which we drilling Center Operations completion drilling of we right And things see all our

being So there's monitor from our able to wells benefit an immediate live.

analytics data that that could team before have into they occur. spot problems also a We Operations is us tied that Center help Support

should or there's year the to our these the $XXX things We've just just sand areas. with WildHorse, happen sand necessarily So, not see to in across expect million company by – seen regional fairly next really those quickly. but sand own improvements also the in of a supplying in reductions sourcing. going And lot cost we

gains company in the of lots coming So, across forward XXXX.

Kashy Harrison

one it. added this one's more to for – just When leg actually, in think the more Ford. another Northeast the in. And Doug. if so the you've Eagle about sneak Got I you And could stool

holes some there's you some within do and WildHorse on the western there's the know operators so area yourself up the And a County in on consolidator build to side. on side, see disposition, Burleson on? I eastern that nearby as both

the in area? think of you'd Northeast about in that do interested something Ford it So, you how that? terms Is just consolidating be Eagle

Robert Douglas Lawler

bolster assets, Sure, can we our question. And where our type in and it's opportunities or for around a from captured that position, of can we any our synergies bolt-on scale. be of great opportunities look absolutely,

goes broader additional value can greatest opportunities more and drive question and of have. to and around create really synergies and which around an and actively to from we to And will that we experience business drive expertise we look comes So, And from our our that in our that value management use value. program, how how portfolio. drive will the at assets that we greater we the develop active from development a continue mind means that back in portfolio keep greatest assets the

a uniquely as got a it other excited and and can it further asset of will with asset WildHorse. be be business integrating the you And we challenge So, strategy. integrate our value. that to about we're we've think we're absolutely at this today, to for expect going do development always in that business forward part and that positioned will put drive machine looking opportunities And we work, Chesapeake big

Kashy Harrison

for All the right. That's guys, congratulations for and me. time, it Thanks again.

Robert Douglas Lawler

a Thanks Yeah. lot.

Operator

go question ahead. next Capital Markets. today of from our BMO McSpirit Dan comes And Please

Daniel Eugene McSpirit

questions WRD from Eagle Good morning. folks. company bring at will the their time observation. quarter the on presentation. two, intended acquired? curve curve back do type investors earnings, of corporate potential early removed on the the more you, resource single type that one to help more guide two the of curve, guess company then second Curiously, type I XXXX? One, provide the WRD to Thank Ford curve as than what one was will in than And

Frank J. Patterson

data could This as available, Okay. What became by is type Frank. I not happened believe it single was be defined curve. a

the from you more across black field much in the to basically south go move volatile you a oil general, a volatile to in As south. to from a oil north oil

already us look into sense. see very will multiple you broken similar up think it type I got in We've curves. a at So, it

change on discussed across that as well. GLR is; the spacing the well also especially the but side slightly the design what performance change completion will So, will we've and field means one, as

This Eagle the one in changes of a no it's than It is a that play. is the not across our area. type Ford reservoir. So producing reservoir different

area. type We our have in the philosophy of same producing

have and of in we side. have oil, on differently manage oil, the drilling quite black we have we those field. gas portions And completion We the basically condensate volatile and

handle in So us think asset way. see you'll this I the same

Daniel Eugene McSpirit

Thank And on decline Ford acquired well Eagle year PRB? to a legacy rates the did first it. follow-up the you. and as new how Got what to was compared that,

Frank J. Patterson

Eagle Ford to by going have the spacing. wells improved So, actually the appropriate decline legacy rates

have wells And see still are the seeing to a going to we're going play, see rate. But going but us. information What a because reservoir those than working the you're you're you're a of sand. today tight all too see don't actually time. In and that PRB, decline a we're – high asset to think with we're those there are spacing, that's being to So, that flatter we change play. information decline early I silty in shale in in if the actually see over across provided is the curves drill you the WildHorse too you a

the the drill to South think you If appropriate depends to very pretty reasonable similar going you're style. space, what seeing probably on completion decline, you're in a also It see Texas. I

fields So like used all this. one work is of that It – is changes. bottom size there's to And not fits all the doing line. all we're in

we're seeing. is So, behaving what with very to would not what expect. It we abnormal comfortable we're

Daniel Eugene McSpirit

And synergy last – project the in-field – complete well one Will you reductions here. and just Understood. then, me and already WRD's cost potential sand are discussed estimate? that in forgive included if company savings one you the that

Jason M. Pigott

at get or not something can also it we'll regional but continue core Yeah. to we mean, can similar necessarily sand use same our – The we sand is either I that business, price. evaluate. the it's at –

So our cost can the performance. operational necessarily synergy – across quickly. included can We again, this reduce that actually to those cut not We and a isn't see modify can But get fairly sand operation. board. degrade designs, which that's increase in well expect and completion synergies

So those the are the in versus we things Ford WildHorse. that do Eagle differently

quickly. things So, all those taken be type fairly can advantage of of

Robert Douglas Lawler

top – of an excellent that, asset sand on it's And add mine is the to I'll have. just

it out being and completing flexibility. lot so, of And gives us a operational

utilized portfolio mine and synergies create to the capture to value will looking the capture we're across So and and fully optimized sand be that value.

Daniel Eugene McSpirit

one you on the earlier, last where the it. The cost to just add that mentioned string one casing Understood. well? that And does Got here. additional

Frank J. Patterson

front that. out, and a string, portion Austin necessarily minimize in to run Giddings And It's a the that portions work takes. you basically have the across this you of it actual entire the field clean time It's Eagle old do not pressure that overlies In in to allow back to Chalk drilling. run pull not expensive. field, the line have The we'll the the liner just case drill the matter don't you across to I then Chalk the well, number is Austin is through what field drill up the that of we'll a liner area, running higher into of time is of me. the – just just we'll and then go a acreage. That and Ford. to

Daniel Eugene McSpirit

ahead. And again Understood. thanks go –

Jason M. Pigott

for to say earlier. mentioned spread we're really just consider nearly about the I'd time wells five I Yeah. is important twice drilling you long as days mean costs, rig faster. rates that when I

So, $X,XXX huge that and a foot us. a incremental huge $XXX to ours shouldn't be again, gap The per lateral. foot those there, costs is between

So, us opportunity I for improve this in mean, there's lots deal. quickly of to fairly

Daniel Eugene McSpirit

for Very Thank And answers Thanks all color. for the again good. and you. the luck. good

Robert Douglas Lawler

Thank you.

Frank J. Patterson

Thanks.

Operator

back the Ladies any remarks. I'd and session. gentlemen, this concludes Lawler like question-and-answer closing Doug over to turn for the conference to

Robert Douglas Lawler

Yeah. Thank you.

that significant competitive on This shareholders makes you assets. very joining excited our to could or to more the excited future. achieving value opportunity for We're years about more team for it. like to progress the in I financial for and all of our work the leadership Just sharing and shareholders WildHorse Jay acquisition the we to go come. presents and our congratulate asset. for encouraged across deliver itself strategic to portfolio company goals. parts positions the WildHorse our in combined and forward to about strong you closing, to future. accelerates Thank be It with really Chesapeake's I'd with progress more other towards excited you. Chesapeake call, look and transaction the metrics building the we're near premier these and an Thank about Graham of our not our outstanding And

Operator

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

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

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