CHK - Earnings call transcript Q4 2018 | Expand Energy Corporation

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Operator

Good day, and welcome to the Chesapeake Energy Corporation Q4 2018 Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Brad Sylvester. Please go ahead, sir.

Brad Sylvester

Good morning everyone and thank you for joining our call today to discuss Chesapeake's financial and operational results for the 2018 full year and fourth quarter. chance presentations our our that morning. a the release website had investor updated we you've to press review and this Hopefully, posted to

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

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

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

Doug Lawler

Energy in another by to morning of grow, we everyone. you, performance, and aspect examples of sustainable Utica our Resource our our The for WildHorse our year transformation. in and excellent as Thank cash strong business. further provide improvements of and a divestiture Chesapeake Development thesis our the acquisition operational year investment and Chesapeake has leverage, and of continues reducing flow financial free momentum advance good delivered defined every margins. are strategies competitive positive achieving Brad enhancing The progress

global LNG leadership, independent improvements growth amongst driven the and want related include cost experience significant attributes of Just for radically asset Significant and attributes of oil and and cash mid-stream assets the decades take cost sale. and/or our non-price amongst further and will oil geographically oil class margin monetization, deleveraging industry cost, adjusted growth growth assets three or feet gas to new These industry-leading efficiency our gas resources leading note robust expertise when and WildHorse deploy portfolio large exploitation supply assets for progress for cubic drive credit are delivery world powerful recovery by obligations XX% and independent further than acreage significant and these, and more creation technologies business value improved enhancing peers, absolute improving cash capital efficiencies. premium development and capability. Two to positioned and industry-leading XXXX pricing. with with our large come. second exploration net to peers, further diverse PRB our ratings, optimize inventory to XX% trillion of XX the Two key of a

capital unit drive assets already we our share. is team growth value WildHorse our are across these and we materially and top-performing of safety, have the $XXX,XXX yielding the I'm again impressive industry-leading identified, opportunities momentum a pleased net I'm oil E&P month Through improvements attacking the delivered operations. business point The high five we confidence excellence Importantly, performance our improvement oil per oil have delivering Led designated improving greatly secured optionality recorded acquisition over our our cash established we savings portfolio. our this bill And further able and and flexibility further well a adjusted million of implemented outstanding savings, by growth divestiture, has a a savings company. chain priorities. pleased to ultimately debt I that combination XXXX, than unmatched total income Through Chesapeake's ago, price unconventional since becoming enhances on goal in starting performance. year. reduced we that with River operational commitment business oil is results on will realization results. toward $X.X in by increase diluted goal team The capital foot. years we to Valley in accelerating health, capital EBITDA absolute our well basis equivalent net importantly per increasing produced our peers. a future sequential direct to Basin, as XX% year and of the Brazos indicator made taking result, while very and cost, $XXX,XXX by from Valley lowering across and the Accordingly, to that as accomplish transformation focus earnings per chain. of adjusted numerous Powder aggressively new XX% especially in environmental progress of debt production From strategic volumes challenging of XXXX, our now we pleased and safety $X company. while higher $XXX have of began once efficiencies providing negotiated oil a environmental net barrel generated cubic platform, deep progresses. per $X.XX was regulatory gas supply see as a first Utica eliminated stewardship and unit of within XXXX billion billion has profitability, the the we last we when to averaged Brazos and oil per averaged $X.X more $XX Chesapeake's diverse the I'm

in the day is and team. yield the anticipated we early increased operations Mine drilling completions time to completions by February the company's Burleson made two-stage Further, additional and XXXX penetration increase have to addition, program. a Sand In cycle through savings improvement recently commenced range per

cash As in remain debt todays' a release, as legacy cash serving central to earnings expect non-price meaningfully competitive reduce noted XXXX. our focus will we flow and be our advantage Capital pricing, related leadership cost recognized realize and efficiencies further while our improvements. in stronger our at we strip margin

We have decreased each anticipate since XXXX our and cash additional year reducing an absolute in production cost costs XXXX. our X.X%

drive of results. we In to improve driving innovative to cost operating continue operations, addition to and solutions out technology develop value our

reduce Ford For Texas a implemented the across the area solution example in new Eagle technology field we to downtime field. South digital

in down additional X,XXX an result, of equated day volumes recorded As to XX% oil XXXX, a Chesapeake which in a reduction every day. barrels sold controllable per

are XXXX. business and currently other discipline this Chesapeake capital since less We by flat continue put, oil it have more expanding across growth. in a delivering all keeping technology of we began been our simply fields deliver has And pillar the to Financial starts Chesapeake's expenditures mid-year. implemented units to relatively will business transformation. with of use This to with our while strategy expect still significant

free our further and We are reaching achieving sustainable flow. priorities enhancing reduction, debt relentlessly driving towards of delivering margins cash strategic

any price full highly and financial advantage energized are employees operations in commodity to in take improve environment. and our thrive X,XXX to position of XXXX and motivated, our strengths further empowered Our

to through building we pass to I'll progress the the momentum call Our and now Nick. excited we're share continued year. our with is move you as

Domenic J. Dell'Osso

you, and morning Thank everyone. Doug, good

of billion working full fourth focused cash outstanding, accomplishments greater and is improve ending the oil the at repurchase of quarter Our debt increasing and balance flow, balance used XXXX. the were we from Utica proceeds with year continue that sheet, margins we in year billion to $X.X sale to Starting XXXX sheet. the on production nearly outstanding of $XX and debt our was with end

structure sheet reduced million XXXX The annually about earning barrel expense with growth flow related have and in combined combined than along Ford to a mix on portfolio better XXXX. free years. flat $XX term recent total the GP&T unsecured again higher they barrel and return permanent tightened higher [indiscernible] our asset other profitability are our XXXX Despite increases million credit our structure, X% in of in higher asset in we're expenses. and mix this production margin and balance shifts XX% cost many will rating Further, our Additionally per These sustainable further these percentage. – in our to XXXX, refinanced to and strip XXXX. Valley for improvements improvements Brazos In G&A, planned synchronization and across reduction higher $XXX response capital on assets, cost further oil high our by XXXX to as we commodity our expenditures to cash lower of in Operating or are sales changes and our per reductions our to profitability upgrades. in had in XXXX. D&C decrease in while we and oil much board our as be led coming total pleased debt. loans approximately with approximately in the relatively NYMEX directed for PRB, forecast from equivalent be oils, assets, Eagle are oil prices the CapEx cost

relatively After gathering expenditure the part be equivalent, drag PRB, peer cost with of GP&T a rate. with sales cost in of the to our per we've their at to improvement primarily per in the cost. improvement The the for assets, be Valley addition portfolio the G&A. of the seeing low the average very $X.XX XXXX equivalent at group. several by the but other on Brazos years In the And due an Our the built also significant of forecasted is with oil profitability, XXXX GP&T million and driver GP&T gathering are to competitive transport $X.XX improve highly operating have which improvement system a to will competitive biggest particularly barrel barrel a for rate to capital being offset midpoint our $XXX and LOE are Utica third barrels year-over-year, we lower is basins. contracted

in to improvements both this We and efficiencies future PRB see continue in should volumes increased assets GP&T line cost Valley expect for further opportunities periods Brazos grow. as item at

pricing, better gain to access the expect to see We and through into XXXX. realized also markets improved year we as

On revolving extending terms. XXXX amended the front, effectively facility in the same credit liquidity billion our restated quarter, $X we at maturity its and to third

time billion being billion the Brazos the facility $X.X vice-versa. the the Chesapeake closing Valley and and the credit outstanding to we in we've subsidiary Valley an debt do not for assets Chesapeake in bonds assume WildHorse the on $XXX facility WildHorse entity $X.X At mean lead facility available Longhorn, the unrestricted Valley transaction, credit legal had chosen Brazos support Brazos and facility. in we Additionally, and approximately the million of on liquidity of credit

strip at enter hedge we than Mcf, natural hedged oil more respectively. We in barrel and XX% XXXX and prices, as our $XX.XX XX% XX% more XXXX than forecasted portfolio place, averages and including of production have of per at a production $X.XX and NGL natural forecast our with of robust oil per gas revenue gas

Lastly, our we've a approximately barrel about barrels $X Ford of Eagle volumes X premium to hedged of million WTI pricing. NYMEX per at

and improvement is basis to our pricing continue improve in also average continue we enjoy past The We gas has Marcellus Chesapeake believe and realized will the to in-basin our over year-over-year. significant transformation accelerating. a significant Marcellus five of been for

As for forward previously the questions. over With relaying you quarters. operator to in we will the progress turn our I the that, look to call coming mentioned, to

Operator

come Thank you Heikkinen Energy question will first Our Instructions] [Operator Advisors. Heikkinen, David very much. from

David Heikkinen

of about was GP&T taking lot all Sand side. improving guys morning assets Burleson well cost, but on your Mine then the And of think as cost you the do a you the path wells congratulations improving – WildHorse progress. well? to wells of well, big like integration. integration thanks how integrate on I total all the curious get turn as you what's task about are assets of just how a those your those kind comments – Eagle on turned what's I'm about trying work base then and and of and component the about Thinking that my TIL you heck made downtime as question. on hard Good do thinking your and schedule, the online that Ford, just per year, those the through how of on a know for improving

Doug Lawler

have all we We of off. is unit what around the with energy business in and team Valley Brazos what doing that it kick I'll amount integration. Dave. tremendous a see Thanks

on is what along what really that I put well Jason, Chesapeake close machine. we're attacking that most working put As you we integrate value operating excited the this I'll folks prior we've of on years of expertise would been that chain, related in some before side and supply to expect, see We've what whole immediate time it service on completion company hand our quality and Frank been cost as the wells we hallmark, in and and would we actually to the drilling see. into talented many just opportunity And place how as many to comment super we these as with what experience chain closing really it synergy has do and integrate the knowing notable and assets. and and

to pass you. with I'll guys So, these share more to

Frank Patterson

actually that months Dave, this excited get laterals we're much seeing, in the seeing fourth actually earlier, to the longer and earlier. moving a two see had could conservative were We this of longer is laterals honest We're we're to so Everything we things year. about able Frank. we're able minor to about to the We're start lift. we're year, relatively actually going we're that. good we side to to outperforming be in artificial production more and We're it few tweaks quarter acquisition. we excited But a to to you. be pretty pretty be on TIL in but seeing much, both management into what thought late exciting first model a we going seeing going the with the thought very response the

the that's prone. There have looked really deliverability, ground area and we oil the thing them, northern well is good field county in area. now in cut. pushing part, interesting modeled oil what that pretty and back cut, the some The north very looks WildHorse if really not a other model we as that south wells two the than to in have falling But the Washington of Austin identify we good is low good is as them, gas very prone better been which gas had Chalk done we

seeing exciting. we're really is everything So,

– of But is and going I are flag year. there. say We do. this accelerate you have a we're lot pace is work We're our not – that see is kind to what was to of going to there to think going

optimistic the we're next a X,XXX we'll up our And mine be thought. sand six to about in half needs be and up cautiously day lot we're a started running. somewhere than that X,XXX So, we weeks. which to is It The that's to definitely to full better of February, is going about tons needs. running our in four

of Great are going They came Jason other team a proud on changes, good optimization it that kind are I'd we have really along opportunities of lot field good things ground asset. in the changes. lot with – that that, there. So, the Lot Really off out With the like describe guys. of park. of and our those opportunities. knocking of base positive

Jason Pigott

the asset that's been Brazos out with whole existing to we that just on savings didn't first of to talked people source keys pick operate the I'll the capital We had. about team to to – basins, street have the this I hire. Yes. and and think some the go we've multiple we able is of one in we Valley

supply brought bottom-hole They up best rentals our which they were chain were and $XX,XXX. And we've $XX,XXX. changed equates hit and were the drilling when at our they able to to this to rebid some used systems up ground $XX,XXX. So, change mud assembly They of able some which the in people of daily asset team, which to add to running. and

they of are changes. business attacking big to get just aspect these So, the every

there of, well one and billion for thing for in renewal, I that, sand. of been sand be decrease that to of in $XXX,XXX really of advantage is going a to huge it's spread we as go We're advertised the running whole sand expenses transportation billion the be proving pumping in side, out from the pumping X haven't crew lot but on to completion frac of almost we've X on we as sand silently major XXXX. that decoupling mean which came will one pounds XXXX that's us. a On one up saw cost

that's and a going our $XXX alone. save those business. of on So, of this not a asset, sand the really for saving, it's to and We're portion million big supply the smaller gross just basis across attacking just it's in parts almost

the only us more really some So, We've we're We've the for about only those done huge parts and and bringing wells excited out Brazos. right now. more drilled to of we've plugs, well. only frac

there. We haven't completed well a and drilled whole

that. we're excited get we together, working the about when So, really whole system

On revolution office as the our both and software that is the it's digital mobile but we've We trying so talking in as optimize putting up some them, with maximum one operators fit a to basin, and Chesapeake just just the that from its us base by the change. for it's real. by base of of every we're that's focused we've performance our a plus to the performance and field focusing technology designed about flow think really about real been been culture complete and team. trying is amount of We've and base on part on our EBITDA buzzword, for hand our sometimes day both attacking and cash improved get the the seen focus

David Heikkinen

And then XX just there third XX every with timing up there going that's the Valley, you the to kind schedule, bump in there the here, wells wells the XX other of on quarter some you or that's steady the helpful. – is completion? pad, XX the had quarter, to Brazos of then just in That's is TIL spacing a is something on test large

Doug Lawler

fall just it's think the that with some Dave, in big The too of take completions. to and way getting just and to is to fast don't a of it's move. hands We're We can that's to their move timing want just opportunity of still there how going accelerate development I those those. honest to so, be going I out we Brazos think you teams are an TILs around bite. around pad

David Heikkinen

didn't sense. make that's just That helpful. – Thanks I guys.

Operator

Thank you.

from Our question SunTrust. Dingmann, will next come Neal

Neal Dingmann

with – about just given in Doug, next in you morning just could of you my sort I free of cash talk BOE, you current, show forecast you future the guess slight notable the per improvement basing in Good just your you show know guys. outspend a your how flow? light EBITDA know in envision model

Doug Lawler

ramp performance, of anticipate a the number assets, with priority gap have our that that we evaluating clear activity our opportunities we've continued strength and be fully up and to divestiture as and ramp we that flow gap focus slight that achieving smaller year. closed obviously up sales, XXXX generation cash operations, capital better very this overspend we with a XXXX will our will and indicated Sure, EBITDA that that's through our us in we've given for activity the the assets forward. the Powder, to that sustainable in of a free message that position and be is going be key and in that organically if out situation Utica sustainable in this of there the in we WildHorse been will we in I be positive the in further of in efficiency a strength through the XXXX close portfolio close will we on

So, upon heavily price. dependent commodity

extremely our it slight a free for and spend year, As focused – hedging underlying sustainable deliver we is flow. on position we a we're good to while we in business with cash performing and that over you XXXX see are are aware, this

Domenic J. Dell'Osso

that's really when just Doug being it is sustainable, the I'll about add Nick, us. This to key talked that

free to – we've can level a close last having and internally to what very flow grow generated in free cash acquisition are internally capital we in our do flow especially cash all our funds run within is that trying of program the of do get flow. of that the to and that's generate, and cash been to completed now, to the so, and couple And light years

free where being will focused growth cash free there, short we offsetting phenomenon we're satisfy really our going to actually We're the very we in to EBITDA. flow being incur at And cash being us really value growth have to have to puts structure or short-term, investors, and flow shareholders. going in shareholders this of to return is or without able so, be flow are cash a able cash It's important in we to future longer-term on. to not us to and to to term is stay available to and to cash generating outspend a not free what flow that values position, either cash generating of way returning there we future position continuing focused that's to through that, positive that we that flow when doing shareholders the cash flow impairs what a we're on or decline and is to stay get that get to shareholders, what level a when grow a cash generate value relatively an we're reasonable

Neal Dingmann

PRB Great certainly add Nick, of how appears just Could, infrastructure. is my the key to will the at a improvements how about improve you you'll and and that, will added Thank boost, you've of Valley. assets, look you. these talk in it just the one your growth follow-up on Brazos infrastructure these It significant how then two areas? infrastructure amount

Domenic J. Dell'Osso

there build system it to of as the oil way Powder, a have to comes pretty notes, Guernsey oil we're two all areas an Guernsey. of the so us. my When are gathering options. we number really about. of contracted It's for is I've in our to those going for the From infrastructure, exciting all so Yeah, in take out different excited that pipe on said

real-life to it we're and bleeding, long-term December, wide, on be the what pretty going so get good there we'll options. of pretty to pretty There was have and is differentials. of prices, was focused for a got we're likely evaluate we and time yield to markets and end that We access to Cushing in of differentials period At solution reasonable improvement all at there is those there to the seeing moment pricing. reasonable transportation January can plenty get but us where is

to we of So, pleased advantage the it be has from early trucking of gathering system is WildHorse way because a The potential new built the going to with building we're system, have then the that to Valley, access gathering to its system. be real markets really a the Brazos and up will that out to has for that was relied off-take team was us. And relatively the stages getting ready asset point. in most to the on production being this start gathering point

that off We where to obviously determine and parties whether out it's will pick bid, system they to not for or to bid left gathering up likely for to put there. build put out us that that will we a third

system, So, think out pipe, with of on trucking can premium of get once pricing. and get where reduce we Corpus we a the good marketers between optionality cost and places very we number already have get that we Houston and to and to markets some good can of we have believe the relationships

soon. a pricing a Eagle great can and As barrels we that you the over the pipe you gap Brazos the Ford systems them similar in relatively believe do, those barrels will to because same that believe have tied we don't forecasted to our us. expose close gets now don't right our tell Eagle We'll to Ford deliver receive structure price of kind we forecast, Valley price we see those prices have yet we can that I'll barrels into our time.

be in to on the time. there realized those for uplift over barrels So, pricing look

Neal Dingmann

details. Thanks for the

Operator

you. Thank

Meade, from will next Our Johnson come Rice. question Charles

Charles Meade

we've a Marcellus, whole team I ask I you and wanted comes there. your to up in a there probably Doug strongest hit some intriguing few find and the – know years. rate in pricing morning, about in seen record it I there guys Good of gross that not you it's particular that January, production up coincidental to you think and local the with

anything connected compression to I added there extent that a those you or can completions accelerate that explore, deliver do is guys have pricing turn the through up metaphorically is what So, along it or extent to to that you volumes dial strong a whether or extra and local to continues? lines coincidence wanted

Doug Lawler

know this The Frank both gas team to we'll and and in is are Marcellus Charles. worked asset well. it I it's look its this. have say you unbelievable The something productivity as efficiency. at globe and across assets as you And I Thanks attacking Marcellus and I Frank think and global about a the the unbelievable really, the get LNG its is it's really – that just have absolutely that to that not with it huge Frank growth deliver on could opportunity bit, opportunity just the asset. excited perfectly be macro fill in potential. and it let for and we there And and blanks because water, the little positioned I'll this world-class the about resource more

Frank Patterson

compression completion process the week to great relentlessly start the through of on the a drilling fill to in. so of first some we've been of entire just plus a across base lot to teams then the in that. Charles, which and well. is the But actually base have been pad example and have We're Marcellus and we've We continue the is that, process of able adequate company operators. spaced attacking in longer our the drilling working doing the top and have to landed our this offset team That wells. team spacing also spacing, been reservoir making and foot relative sure out XX,XXX of been

that around the talked in seen replicate real about lot a horses. high are update You IP that think of days on we've And the of wells, last XX has The been Bcf, JOEGUSWA These field. online the quick had were XX-days online X.X and made day million you a a has well a across rates. I'll we and already already for that they day had made one the come in X.X has the a XX XX flow give few that. out million we JOEGUSWA weeks, Bcf. really have can

doing sure the little to making some basically and you talk the what bit available gas can the about and a that is of up market So, market. to we we're have Nick opportunities guess expand opens I

Domenic J. Dell'Osso

from has in in in stronger there we shoulder terms our pretty summer to pricing we're so demand and have for seeing We – discussed, gas some seasons. other it the the year XXXX in demand will we to clearly going have did last that more market those of that hot that and seen there or markets. been power late points counterparty that years summers, LNG come I into still publicity couple a out. in excited of starting think in a LNG Yes, facility have last pipes early and deliver Caribbean we in-basin just and and lifted certainly good this the We've certainly that some previously summer pricing to the than a more export in local access of the XXXX prior playing confidence about but think got are is we're of up we online also we has share week better ultimately summer in years sign the the what to transaction that

some deliver others to that We pricing figure pretty to out we've a excited approached put that to to it to and get Having favorable. how that pricing gas with sharing a it floor by many offshore been we access trying have it in are well. upside that mechanisms is are place transaction does really associated Northeast as and see transaction, in-basin we structure about With and who markets.

there and continues there the a is access up. lot open to So to do

And the feel ceiling around we just discussing that how have have beyond that. and But above production. a grow production. don't modesty That opportunity pretty on was I over of talk see incremental an overrun everyone effectively us we opposed about at of a give will getting We lot market our begin what for they deliver absorb as better grow peers to there transaction that, market well, also rates what I And can we delivering. seen supply. that moderating you've as in think can good discipline to to up the with understanding in Northeast those which growth the excess are see delivering needs point at needs we market what many our the we

is a growth good to in next better I to the about opportunity several And have feel I steady that pricing over to for Northeast. the So the access in there market us rate think periods. available a

Charles Meade

this about helpful still thinking going regard, about Frank, the detail when running on other That's folks six in zones what zones just any all last test guys rigs, is anything it. talked five that in or others guys. I to of – the in in for Is change from PRB the about zones you prospectivity you noticed Turner. change you. guys the And the Got have are months? perhaps you any there

Doug Lawler

so still hard it's good Charles, off do we that. we to is next those batting to how around to that Powder zones. rigs get pull are

Niobrara We will some drilling some be XXXX. wells in and completing

I think to that's probably the next big through. work play

really we So are turnaround get hard the we capital there, to a rig we to but that plan I the some get and than another Niobrara. want queue, faster the rigs getting of check portfolio, to zones We'll Turner. but period today. just may time within end I small for we'll these of the in want It's that have around other maybe yes, already manage discussed. up bring we have are potentially to moving but on the though stay just to faster with our to of

costs on Our Turner. the down coming are

It's about play learning really real, we are think development lot us. a a to be key for Turner. get play modes, once that, into the it it's going We a I real

Charles Meade

Thanks, Brian.

Operator

very Thank you much.

from will Goldman Singer, question come Brian next Sachs. Our

Brian Singer

Good you. Thank morning.

you decline get now and that do XXXX? to play staying a see How yearend you let that there to is your Is decline strategically free cash seek you you do rate major there? that or talk about stay that flow getting you that inflection and say and rates Where mentioned. when changing As how that see there involving?

Doug Lawler

decline question, rate The strongly good very something is are a we focused corporately. on that Brian. That's

decline those how to and that's future our It is the The company few past help that the changed with what have that's comments. decline to for we As initiatives, of important focus you know of base these prepared that and is can there unchanged. really across what technology hasn't described profitability. number significant see lot excellent years. real including And the opportunity offset for something base of is driving technologies new on optimization our wells we optimization base really the in we there our a really country the

we improvement, that greater to You're going greater base. and the we XX% ways flow and margin XX% for as technologies program approximately year, help to our that continue per capital look free cash to volumes so expect in And these that's add and to deliver decline efficiency capture see the going those to position. to help

of thinking rock rock. in opportunities well. a we that that we we're the Texas, about, initial about you And are excited lot all through And the So several I of there and to across could a assets, think from good with we're such understand which of base South additional recovery of that. talk the talking to really there about as think our evaluation expect are the hundred, from IOR you add decline, have that when what using just super technical about, function doing if existing we opportunity value. with base these and you I be see and as further well really value And IOR technologies enhance not other and thousands about

to really, base there but add going opportunity, don't will optimization help – the lot additional improve are cash how rock further from changing, So our is that of perspective in that the the see our really about decline operations we value and flow. it's we free technically to with a

Brian Singer

should have in if perspective, of wondered I with From with your a you then lagged And the TIL CapEx schedule. showing – be and trajectory the CapEx i.e. CapEx company schedule that schedule matches is second from if by perspective the on helpful. the X, Slide to Thanks follow-up to step-up the regards I quarter if a actual to, a And quarter a QX. total a think low? the or had question third Heikkinen of trajectory high earlier David be TIL TIL there quarter I that

Doug Lawler

capital quarter see quarter. drilling keep in I third a lot be and when more first, mean, activity across function of in production. stand of because drastic I being the the we'll reflective going schedules a change obviously turn-in-line of in don't is see mind the to to be a I third and think it are the second and initial completion The capital

be for we strong And just that. in have, anything discipline read year likely that we as quarter, but the the really in the remember wouldn't past. high into focus Brian will third the is it proved I So, capital

Brian Singer

Great. Thank you.

Operator

Thank you very much.

next Jayaram, will from JPMorgan. question Arun Our come

Arun Jayaram

WildHorse I of morning. have Good do the a follow-up the to on question assets. integration David's

So the asset what with course expect us year along to of current I if deliver wondering could and perhaps CapEx. was expectations for in rates XXXX some over the you give you the

Doug Lawler

Yeah, Arun.

entered basically to was we the flat now, the the year. right what year relatively of end at on So going

First two County in had quarters end oil. some Washington end or of the this down year in the the as beginning last and the asset are not WildHorse of front look strong strong area that on year wells, wells that added strong. front of – gas but year there

into So to oil is then going be because start off Eagle flat move Chalk. to going it's pretty first but a and Austin going Ford into will rigs second the take in quarter, to the we all

into in fourth oil effort on So going quarter. this focused you're going very driving the quarter, volumes third asset and to see a second

the up as go So start oil through we year. we the see are going to to ramp

Arun Jayaram

had look relative just XQ Nick, housekeeping Nick. to the I street. question we And if at for Great. the numbers one

yet flow Your EBITDA look cash like consensus, above was about X% it lagged.

was the pricing? item when would I thoughts in well get And point a could reach your flow unusual is that I'd company wondering variance like anything to cash you flow if there assuming So, line the strip that as inflection cash think explain just and Nick.

Domenic J. Dell'Osso

And So ourselves a have profitability laid better in we've the much of pricing, are position XXXX what is for XXXX. there for Cash cash cash flow pretty question second to and point I'll in inflection flow production in flow, through level we higher focused answer strip level on higher first. a answer getting which of out today.

As a is the feel we there but at Doug before, about prices we lot pretty that commodity of good strip as dependence on noted today. there, sit

We quarter, looked the of delta a didn't as the any model ahead little other cash that, see time happy we like more call, any the see through EBITDA after that. we bit between a fourth few with that really did to of driver everybody's but you mark-to-market And that. up, not hedged different. across significant is a things On that on consistent and the call street the flow, maybe at driver digging spend

Arun Jayaram

thanks. Okay,

Operator

you much. Thank very

Jason will Wrangler, last Our question come Imperial from Capital.

Jason Wrangler

morning. Good

picking up think of in and talked you're I Just speaking and about in Powder looking maybe a rig had one one rig. the dropping the in River about Haynesville release you the at

XXXX that? pretty rig a we of and look you think assessment beyond now, at both that's should have laid Just as out fair you of going the it do how

Frank Patterson

company. our Jason, this capital capital opportunities best the allocation the is continually manage We we the move and Frank. within to

we Gulf one So this as today. We in went see Coast. is our it plan to rig

that We activation great It have a of commodity lot drill. a that just to costs the happens has locations to there today's of debt. higher It's be one asset asset. an in

as the doesn't keep year. oil other between capital the really to a the So of it around to we steady pace That's so and asset. wells When continually that best take many as We're think Marcellus are a could rigs efficient market the is in our bit look good. assets, a a you'll In we where little for at on we I keep production there. down long do as us rock that depending lot as in going kind we us. see a assets assets because slowing of move our flat oil is value see given which there

So you plan. our what initial out for here we laid is

absolutely here. four really do good a end budget capital that expanding about are at within want with I effective same team rigs about could and in the number want completion of might if realm we in our think I In talking for drop four we're that year much sense, down a four to but expand our we with not have that same that, five sure. Texas a with we And plan. of drilling wells a to of in rigs If keep am the what bought we is might managing six our rigs the capital four want the think we at laying and don't If We Brazos couple talking is am also today. capital our to our been would get rig, more South I go capital very number the original rigs. That possibility. five I really at out. within of to it's We see today level. how can good be plan, rigs we Powder. made plan on to we

value Mid-Con. where I So do the to we to We every take do and spend for said, efficiency see the a we company we and gain like But look money capital there. how can that at we is best is much the just allocation place need can the where week.

We rig. one have

get I rate engineering of is the these Mid-Con of other G&G reservoir we some kind think for good a analysis the until plays run that complete and there.

we I unless of proposition and commodities a off we better So change a or moving are there where take asset us don't to off really value see pursue. is for see us

Jason Wrangler

you much. the I Thank color. very appreciate

Operator

questions further the Thank you. queue. Speakers, at time, in we have no this

closing any So I'll to turn for it over you remarks.

Doug Lawler

mentioned joining across business. I everyone all today. marked our significant Thank thank the aspects and you you year and significant improvements was of XXXX transactions operator, Chesapeake for two as us upfront, for by the great a

about are the excited We opportunity.

are and excited We us. delivery business have of the that in we momentum front the about about excited

perform and you Thank we in sharing we Chesapeake through to results as If we are more progress should energy, believe continue the to believe look you. you in Energy to because forward year. going

Operator

much. and at gentlemen, now this concludes Ladies conference. time our very this you Thank

your lines Thank week. disconnect rest may You phone great a and you. have of the

Expand Energy (EXE) 27 Feb 192018 Q4 Earnings call transcript