Earnings call transcript Q4 2022

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Operator

Good day and welcome to the Chesapeake Energy Fourth Quarter and Full Year 2022 Earnings Conference Call and Webcast. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Chris Ayres, Vice President of Investor Relations and Treasurer. Please go ahead.

Chris Ayres

Thank you, Betsy. thank fourth joining XXXX quarter operating and to call financial everyone results. Chesapeake’s discuss and morning, you our for today and Good full year and to have our to our a you yesterday. presentation chance Hopefully, press we had website release the posted updated that review

the of to goals, morning’s such this and existing future statements our beliefs, consist information, forecasts, will cannot projections be performance forward-looking statements, be including underlying During that making confirmed expectations, and we which call, statements assumptions by materially reference regarding statements. in are and our there factors a number cause actual in of will yesterday Please note forward-looking other the factors SEC results from including discussed release that to statements, filings. and differ identified press our

except applicable may required to required should to help periods and by financial no duty with not where except on comparisons measures, law, across We which also reliance any undue undertake such that forward-looking and by update peers. – statements. place refer Please statements you non-GAAP facilitate we recognize some will any

corresponding measure, For nearest to the be measure our that a can reconciliation non-GAAP we found use on any GAAP website.

on the and Viets. overview are Q&A. will Nick call Dell’Osso, Josh will brief and Mohit of the give Singh a then results to teleconference today Nick our we me up With open

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

Nick Dell’Osso

talk for about thank and yesterday. you our going joining announcements two key call. we we to morning Good morning, This are made

First, fourth results we quarter XXXX and pleased are outlook. our to highlight

Production a next was expectations in fourth assets. strong the and essentially ahead. EBITDAX for toward Ford Chesapeake. line The capital were we our finished significant exiting step in with announced off Eagle slightly year quarter Second,

shareholders for in and company October resulting Ford XXXX, quarter in billion date delivered adjusted cash in we $X.X dividends to the results the dividend of the record are we X and form buybacks. those flow, in free of Eagle effective delivering per $X.XX Overall, returned the a on share. Based asset sales, of for cash

black The was counties Ford runway second another yesterday assets in rock announcement on the and to Marcellus our of our LaSalle important This step McMullen and our solidify billion Dimmit, INEOS Haynesville premium Energy. returns the is sale oil Eagle of we as focus assets. $X.X and

to are in have drive our The We sits work come an we for at two progress the proceeds with to Ford shareholders value the years. buyback the In incremental forward ongoing to receive to-date aggregate, and by we over authorization, remaining after-tax strength complete from in to used will support reducing to closing at pleased look sales, balance Eagle to proceeds with made the next $X.X $XXX we process. sheet billion as over first approximately the be program expect million. few exit and completing million debt maintain our $XXX which our

We are the soft in the market and and strong from believers in the proceeds liquidity value sales. of the cash

an with from allocate manner advantage In the on be a to continue be addition to expect strategic ability will cash, countercyclical. key a our to in and eye prudent generate our as capital to operations we we value-oriented

the a the of Pro Ford XX the Eagle of position, will rich Brazos our a remaining oil and gas of barrels on forma and is black sale window cubic basin. approximately NGLs have the oil XX,XXX areas, million Chesapeake day feet which production of in Valley and gas day

we play, that well regarding for several actively parties We Upper results Austin engaged in have attractive months. acreage Chalk which these where the are and recent strong delivered prospective maturing include with assets, is

year-over-year affecting natural addressing remain industry lowering proactively with inflated. initial XXXX, As our allocation we the planned costs while for challenges our prices capital are gas service we macro

discipline capital the believe for allocation Marcellus and to capital activity and in reduce levels the prudent our year clearly we preliminary demonstrate step outlook and show Our the is Haynesville.

we we today. are never built experiencing is the Chesapeake volatility low for prices, for wish While

cost structure including CapEx balance repurchasing to saving our assets, shares. allocate capital investments, declines the have and We prudently, hedges sheet, production better allowing for modest and

rigs move the are we the in X X Haynesville year. and dropping the as Marcellus through rig in Overall, we

In approximately addition, our the return X% but our cash Year-over-year, Haynesville, profile. us be a Marcellus annual we to the as expect in activity and production reducing resiliency oversupplied decline currently we lower, modestly only in the flow drilling are and environment, our allowing near-term experiencing leading winter to in will CapEx North with we our completion America. market shareholder the slight maintain see the warm of continue and completion despite is are inflationary

find in Eagle including years, our taken of high-return, to bolstered today, Marcellus and X over the inventory position the important this thanks our as the Ford. last depth actions our several as which We exit decision ourselves Haynesville low-cost acquisitions, well to well-timed strategic

All you in this helps I and of cycle coming achieved and of in as and natural gas in the historically. to for allocate in continued our gas look happy in Reducing Chesapeake ensure industry years the the increase this positions from now growth forward to our value move to to we questions. through am address company prepare LNG us demand growth and export capacity. capture our today years consistent coming in progress to countercyclical activity capital cash for to on cash to a for remains manner, shareholders provide the your We results LNG demand returns have the and updating strong ready preserves many not

Operator

first from comes Instructions] go [Operator question The Parham from Please Zach JPMorgan. today ahead.

Zach Parham

buyback, guess Hey, just being the guys. talked with countercyclical you about buyback. the Thanks my for taking I question. on

the uses? potential a into and the how kind have sale about some those shortly can Brazos back proceeds and oil buyback, to coming window of plan closed, first thoughts debt half of when half of ‘XX year utilize give via you the reduction in us amount and significant the the you in of to going the proceeds You’re other

Nick Dell’Osso

yet. cash the have even don’t we Well,

plan lot of the announce a have pursue we the to other note don’t liquidity very around buyback that actions just buyback. specific will we to to So than

opportunistic expect the it. with attractive market to opportunities us to We it, want some conditions do be and to offer we

let the So be cash think market ample coming opportunity this work. put will is patient. in we us. the to there We to year come to We’ll

Zach Parham

Got productivity. for on And is then it. Thanks my well follow-up just that.

a industry, lot talk there has of the Within degradation about been of well productivity.

the a at give in future slide both us some productivity the has bit expect and maybe XXXX you so Haynesville, that’s Haynesville well like drawdown how Looking in trend in in you one years? in productivity and productivity you But state Marcellus it the ‘XX. did does general your drivers. seem of on lower and some in well color data, trended In could a highlight lower deck, just to the

Josh Viets

course, of recognize Zach. into that show Haynesville Josh. first. morning, This trends a data maybe off and drop the is Good XXXX looked as well. at did this the to We’ve we And address

at early history. that of impact months. X start starts see an XX on beyond will up really, But first to rates show like We X to drawdown are looks something strategies the to really, get out have and as gain looking you incremental time that production we months incremental in the an that

pressures. suspect remind other the And you, this impacted line in year. Haynesville just the The increased within to thing, some our I position is others that’s past

operating decade. think shale for over Lower in wells, been months IPs world. that we does the declines remember core line of Marcellus, within so we’ve year. I thing basin flatter with need the ultimately the drilled that In are lower lead first increased the through really to to And unbelievable and best that pressures We’ve XX XXX well is Marcellus our gas the over but the Marcellus wells these a the

I no thing, think, industry, different this as you having for trends back XXXX, in at were high-grade locations to look across XXXX, Chesapeake. the is other point The historical out to and really we

best And heart our a very absolutely relatively in modest so wells program we drilled the of core. with the

compare if the something And look actually were XXXX time so see on and think that’s and I XXXX par. results our to to you’ll you in frame, well XXXX productivity back

In slight productivity. lateral lengths, a adjust advantage see when you you’ll for fact, absolute an on on basis,

lateral forward that. by continue going by increasing are our our over we done XX% And and so years going really, laterals. so that’s last focus in extending Marcellus X going to to do is the be the length We’ve to

Zach Parham

That’s color. Got it. great Thanks, Josh.

Operator

The next go ahead. Please with Nitin from Mizuho. Kumar question comes

Nitin Kumar

taking Hi, I are at transforming Nick, $X. is pure-play breached morning gas going near kind the guys macro What the how both of with that company. thanks start our looking question. you this medium elephant for to morning outlook am you term good the and room, gas into term? are for more your gas Curious and the in a now

Nick Dell’Osso

And gas outlook hey, macro Yes, our morning. changed. hasn’t good for

happened the that we We dynamics bullish, We quite were by cautious been fundamentals, That that some demand a throughout outpace year. noted last set trending and gas been then very the winter we’ve going long-term low what’s to for up. exacerbated has setup pretty XXXX that and manner was clearly natural and in to demand. referenced been weather have supply suggested time are a has supply-demand

terms near interesting we’re In at term, of a I point. pretty think

their the We’ve know industry of our what to We’re program. hard changes will seen to handful changes make some a program, making others do. to the rest really of

capacity from demand ‘XX comes is expect LNG least really gas you year. export capacity be going shows don’t the we’re expand of And variables bit market, that’s do. structural growth going pipeline profile gas to about have should down at demand a end and We to is any that to the how show the into little growth market should You what for up to the where structural ‘XX until start to as on, to like production have really our you that Permian that up. so associated think because and and a oversupplied currently flat is in

But for. gas we’re that this below that. just the gas think nobody and dipped here really long-term note never by prices, likes a that it to then term. be not price to morning’s short can short-term low expect that will And $X in bothered that while perfect some We we we trends plan that, be level dip do do are timing I we and because is there would

the coming think strong. of very will is online that U.S., natural gas represent the in for shale fundamentals. with We competitive economics the are long-term demand are We that projects gas true the the demand, bullish incremental in internationally

end that. growth the world or remains in impact for see. long-term demand think have it actually gas would and could a We trend expect lot the of resilient natural of actually plenty to not what is whether happen for strong. don’t we war Ukraine we negative that the might a meaningful We think remain There around questions with regardless. that demand that gas We to this about get

and And can way shareholders creating great until then, in period beyond flattish through So XXXX. we where think we flows remain a optimizing we we and are way. a so can for manage the returns bullish cash along we do

Nitin Kumar

My could it’s maybe It spending. what as Great. And an the terms question in talk a for a little around pipeline? bit than higher that sounds Thanks ramping other of little for you starts just detail. drove we acceleration, gas we but that any specific like should is and exploration? milestones bit momentum that be XXXX. It expected getting to project looking up for about was that

Nick Dell’Osso

online pipeline come gone the far. is to The so project on has XXXX, quarter really contemplated fourth really, of schedule originally well as in

are has cash with changed total just The has partnership at calls And all. the the of bit. We pleased hasn’t our is all a momentum happened with very changed budget here. timing that

are we with investment. thrilled So this

Nitin Kumar

Great. guys. Thanks,

Operator

with Choudhary Goldman The Sachs. Please Umang next ahead. go question from comes

Umang Choudhary

for you thank and your the questions. on for thoughts morning good my sharing taking macro. Thanks Hi,

You natural in gas to flexibility gas non-operated hearing contracts do on you conserving to shifts? respond for changing partners the recent conditions, disciplined Haynesville you focusing inventory on what your to are have changes you can and gas from pricing. better cash free in service the in undeveloped prices? maybe And flow What to being highlighted price your touch

Josh Viets

morning, Umang. Good

calendar in the side, of first of absolutely in flexibility are service first the exercising dropping we the X On year. rigs year XXXX with half the the throughout months X

frac a side. crew the lot flexibility have of on We

rig year. dropping. course the We on as throughout be we year. rigs not through frac going of and really a pretty pretty work the modest we’re is and penalties something contracts, crews than those as X flexing will think It’s manage the between that’s But but that. those any to incremental on incur through date, that to to the term position go months well term to that’s the one longer course contract, actually in of do we’re a are And under that have some continue a that Only year. work to XX the we we We of going do we’re amount. less X longer remaining

non-operated pulling date. of to It’s Haynesville. As starting activity, signs are primarily – operators on been with in see up far the the back showing specifically the to some as rigs, privates we

ballots door to partners. new of non-op We from are continuing see come the some in our

so continue gas to activity. pricing And start going are that the we back with to expecting pulling to in But today. we’re the we monitor see operators weakness

Umang Choudhary

That’s turned it. than industry? at a Maybe for into data, Haynesville drilled well helpful. currently. if price as XXX wells more I EIA drilled and Got really you you that follow-up, both for wells uncompleted show look sales, quick expect and levels do the you mean to be these they At what uncompleted as

Nick Dell’Osso

growth DUC inventory believe count of inefficiency associated industry I’ll of that years. always bit Hey, we when the DUC take that, anything of couple build the Umang, Nick. it’s with And for When there’s than we bunch a the that, rig over at a were working don’t is more rigs thrown last that. build the in. little look

line. running probably probably the we get that turned is down there’s a then so bit. in have not we DUCs more probably are cycle we the activity, total we And cycle times many to So some been how this mature, are probably DUCs that think really little been that about think off and But aged, we increased slippage think how the inventory. is slowed likely working time move what cycle the DUCs they’re and in when take rigs the with time and and

a be turn completion and assumption. as our It producers on and back will that rigs, other those a see in DUC interesting It’s longer. or to drop allow DUCs their do words, wells attempt maintain in to cycle be those to they it little times bit line crews they sit count will do hold So for mix. reducing

through to a bit count so little DUC And we year. expect come that lower the

can just bring get You it down. can wells as those it to you new that think or there as think about not online are as choosing DUCs producers adding DUCs to the continue warm about

the I would and others we pull of prudent that say think economics to seeing it’s that do in same we’re we cycle Haynesville, see the thing. back the full capital, certainly

outlook that out. Obviously, investing that they strip a were But were think rely happen. don’t We’re making contango they in are the that money on what roll on prompt, I this some the to are have to a margins on Haynesville, the a where the are cycle stay capital activity that and the full all were not to we expect do lot would down basis but and morning in. to was you they nearly of for prices very different of shut contango and historically playing economic I if

reason. I think is for contango a the there

new there conversion I I be some activation so just much maintain those there as And expect of cadence. expect will of that don’t DUCs. wells same be will that to

Umang Choudhary

Thank That’s you. helpful. great. Very

Operator

of America. with Doug Leggate The Please next Bank go comes from question ahead.

Doug Leggate

what everyone. the Nick, the the sale us Ford on line if remaining can you Thank is And the can. can, pretty you looked what showed Cotton like so of wells you does value have out relative say of the asset about that to some far? the your that strong you. you implications Nick. you of of in through to the Hey, walk thoughts achieved extent sight, thinking sales Good Eagle the what morning, that on Valley,

Nick Dell’Osso

the to Doug, others well. say may Yes. in have will Hey, here as I things chime and some

First, not make the Cotton Austin the it’s to it’s sure just Upper Valley. clear Chalk,

Doug Leggate

my My apologies. apologies Sorry, right. that’s

Nick Dell’Osso

worries. No

thought And the how interesting a about PDP some that, value drilled of relative component engaged good buyers of upside of knew the people the pretty we as to thought we about have year valuation available. value the would that there. we last So and be with wells

the Chalk confirmatory the with I think we wells pretty asset. are associated attractive and value of that have the drilled upside

still putting are on an ton doesn’t up locations. in end that value A&D overall We market a of undrilled

patient wells here be those little a And come willing let online. to so have been bit we and

well We the these to have just public now. results released really

chalk understand a an with don’t those be asset understand look are what And be we’ll fits as investment. to in for engaged the them this like so interested rush. interested few And there to in wells But we staying if a parties. it quite and need

We of got in. have plenty coming proceeds

progress these we mean. the will incremental achieving great making interested we are But asset and thoughtful what result and are a actively strategically exit on still about getting We here. with what like several be and good feedback on engaged looks results parties this

Doug Leggate

with obligations is start you housekeeping ramification that’s to that it or from MVC us Mohit. question, want the the I costs, for that – production, there’s that this, for but I decline transport other looked costs a Thanks. so decline any follow-up type so apologies up don’t follow-up. So, My Yes, midstream some two are rumor a your maybe were my speaking. bit, have The of my I selling admittedly, for just there transport it ticking really if Thanks. to in related? were apologize kind are monies Haynesville, of a wonder

Mohit Singh

those Yes, Doug, at stepping None announcement is point, rich have concerned as minimum those and mean I MVCs package. Mohit. MVCs but to package historically the we Eagle that There yesterday’s our in volume that commitments. also, this so Ford for been have in into the discussed about good the are the is that some are morning, obligations way INEOS, is buyer ahead this production we of

we get to proactively bit looking to transport there through of – a contracts firm you that an and any volumes looking So from us is of when uncommitted overall, at you for the Haynesville, and you all and look those try start sales, that assurance volume that assurance we’ve portfolio, had, Doug, start this at point perspective. across get projection flow been overall trying and overall bothers obligation then But the quite when flow nothing building which the and up towards molecules. forecasting you’re

Doug Leggate

the Thanks, guys. Appreciate time.

Operator

from comes question TPH. Matt ahead. Please with Portillo go next The

Matt Portillo

all. with you morning, starting the added bit Good a Mohit, question, in to a quite out maybe see guys hedge book, just great XXXX.

your ‘XX. now, and curious in curious guys today? curve given public hedge in just looks position you’re to Just about you’re position your feeling are strength how thinking how about you in relative a ‘XX ‘XX coverage of your like the But peers,

Mohit Singh

pushback we as going of heard question, when that we for Thanks things should prices hedge Yes. that it’s when not – interesting lot our much. were up, a investors Matt. were from

stayed the is did we investment we Now capital before, is the the why as what that XX consistent making hedge. want decisions And and X we plan we to that’s described now, production. on our do flow comes on have to when months. certainty cash some on, hedge wedge Matt, we we’re Later production from

have what that about yesterday, last we’ve XXX our in you came since the So seen disclosure new of disclosure. out hedges added Bcf

and XXXX We XXXX. done both for have into that

exposure does So good it towards we commitment feel shareholder returns. us our provide underpins that the do pretty downside there have about we What is which our coverage. and protection,

Matt Portillo

the then an basin have quality. a and being in I whole, follow-up about Nick, the two takeaway as market. depth a and acreage public you of bit as positioned good one have peers terms well your as on you Perfect. industry in maybe or on, position talked of inventory of doesn’t a longer-term think just demand Haynesville the LNG a from question, view maybe a to meet of And in the surge coming

your time, Just curve in to portfolio, there wells to a to that you are something $X return. even in closer Mcf make view Haynesville over need curious how the $X the an cost

in running take going the as depletes activity your of the smaller the basin. some So I’m lot a to that cost Haynesville curve peers you of are curious maybe inventory think is in higher time from over if

Nick Dell’Osso

will U.S. think way volume in the curve, the market cost the I going the to Well, be the to asset goes growth Haynesville of the go in Haynesville because into is leading deliver way the LNG. of as cost curve

The Haynesville met the be growth going for in LNG required So best not to acreage you’re spot is by Matt. alone. very the on,

we acreage. Now own that others very do of couple and a best

of is in challenge love today. cost readily will development Northeast and play we a environment, higher more points is in that is Appalachia. areas best is room cost one in like to for infrastructure advantages you’re to developed. operate well price the think And have that. We more than with build-out going well. as win. market. to Appalachia, new cycle to Southwest see that there trend this developed developed are areas built areas best that United the and for of that these infrastructure wait Northeast seen all probably in higher area for exploration vast you that up relative infrastructure is exactly you we will Haynesville as have And we important pipe resources think cycles as to this built there cost thing We you’re structure, so full some point some past do including going those of away in U.S., an have less gas continue the a If think of to Haynesville cost where rising throughout the the will that return the We higher we probably the delivered you’ve would as going setting some to One the reasons Pennsylvania that the of be gas investment from think or saw massive we that have to States of

the to country the see on that there as change fundamental be to is a gas views think I new don’t is to see think dynamics Mountain the the come in close. the a from for But it political We’d is the going and that close projects and reasonable near-term, how given are like how hard social until the how maybe trend forms for of going really because product infrastructure. energy that and not forms until all needs of to And energy of natural And cycle to that’s being position infrastructure happen of investment does, they that the country, cost we’re this to can changed play which that just natural still works. is all gas. gas, it on overall we structure sits and see pretty that But in that we efficient likely in the needs our important of aside there does, but most gas. it great chance will we until an deliver really the game consumers U.S. lowest But activate out. cost online outcome full for curve company Valley, it have. a form it much for will not in that a think

Matt Portillo

Thank you.

Operator

comes Benchmark. question Chandra from ahead. next The Subash with Please go

Subash Chandra

Hey, the you that the you references Thank comment on near-term in or think might based imminent? I could are some conditions Marcellus be that the do have are curtailment curve. constraints and think you. there of physical think Haynesville, a that you fair Nick, don’t likely shape Is

Nick Dell’Osso

volumes, constraints deciding gas just it’s no in they physical in now, every had but Whether front to gas what season. be season. pull we us. some shoulder could of similar to shoulder idea going almost I we’re set curtail producers to economics expect will up back given or other to that’s us the the are to going sell And at price producers do, staring

So the up what We get full flow me to occurrence whatnot. and they the for But days, economic day-by-day, same. did a we set common processes we surprise that’s it have gas on wouldn’t decide get us. hour-by-hour, internally and to an certain pipes, if flow

do like just we year. We that this manage every year, will proactively

Subash Chandra

Okay.

point of then, Marcellus and economics part inverse suppose – the of additional relative to is versus That’s places, those Marcellus the your of of Thank be the of LNG-ready and there that too changes I that though investment we economics of where And CapEx? Okay. the Haynesville is a so strategy, sort the carrying I right, second, great, helpful. the superior, guess, may costs being you. two see

Nick Dell’Osso

in asking you’re in not Haynesville pull Do sure – you Marcellus? back capital think I’m we Subash. you me, favor of are more the me capital in if exactly more asking what the

Subash Chandra

Yes.

argue there, flat for Haynesville. Marcellus being I economics there dissipate, that fair? at guiding you is economics? case, superior, guiding that economics, think strategy? the might you’re volumes that’s I of flat point, And declining because think volumes – And allow not but to those some so if the you’re probably LNG-ready the if Marcellus but reconsider in it’s volumes Haynesville the you keep the Is superior which

Nick Dell’Osso

actually Yes, I don’t think right. that’s

decline at a Marcellus to a bit in the the Haynesville. it’s – pretty looking We’re a closer in with little of flat

that in So and say, then we optimizing math is the development rig the it’s one following call. the and else. logistics of now, would But gathering about in directionally, can I you spend economics much anything walk maybe how after Marcellus through the pullback the system it we we’re, the as managing right but pressures as is

So very there. flow change in modest we expect a

Subash Chandra

Never at? more on be a Okay. that finally, looking mind. That there cash and ton a just of hand makes sense, be sort number is should we could – we

Mohit Singh

is our since keep to like available on balance minimum facility, the minimum we’d revolving I I – that is we have which mean, Yes. credit liquidity, minimum, through ample mean Subash. cash hand the the

Subash Chandra

Okay, thank you.

Operator

go Brothers. The with Parks Please next Noel question ahead. Tuohy from comes

Noel Parks

Hi, good morning.

Nick Dell’Osso

Good morning, Noel.

Noel Parks

will costs after a the get transaction might rough you that in to that normalized G&A divestments quarter be a just I on the be for taken wonder, I Ford pacing things. thoughts we go of do don’t any divestiture if what might account? with just maybe have be if into the I wondered Just a couple the of a happening year. know through embedded the as serve idea like But might you are there we pretty are while. mix G&A, what with have Eagle

Mohit Singh

No.

do services have have with long place. U.S. in to material handful result transition agreement the a INEOS as of upstream a not We the changes very They that of in will our sale We do a business will have a be of business size. this

as And so will that organization. create be we they aiding them

have will all underlying will sort us as a to see take of while you’ll and we business So to result, our a play it that that. some for But through through. changes

Noel Parks

you with your slowing. signs And the how I’m when be a having curious, you around operators Great. where the language is some – a you well, market things, mentioned they be release to are out your count, – bit have to saw on have expiring, you might chance about and body maybe pricing. discussion guess from making far going test have to your rig as I’m fresh going any of as around sounding other in vendors some gotten services pricing. two I you next just curious, the case of for and also is adjustments test contract sort close to a just

Josh Viets

Yes.

somewhat simply this we’re at So point, expect on into of specifically, There that the the costs in some part we service inflation as year. back the not markets pull question with seeing commodity to much constructive, get just areas second we remaining date. softening to the are oil

One XX% in us the and inflation, look single about basis. things it’s look less But now, basis, inflation our as OCTG. we Marcellus a of is inflationary we But to low at expect inflation, year-over-year probably really Haynesville, we would estimates, to is those we digits. look cost we than point some in see foot to X% net at think that important the of on be year-over-year one expect on pushing to something the as per do our you right a to out at I would it

impact thing business. going is well i.e., again, are will year our inflation drill And doing about mix. it, X% up the year-over-year. to our this net a just that of to then cost out things that’s on So those basis, where of it’s we to lateral those laterals if X% And be what you extract one a going we’re longer to length think other is

of going XX-XX. year, last so towards So to This our Bossier. Haynesville wells in less towards the year, weighted Bossier. in for example, It’s Haynesville the it’s the in more XX% and be Haynesville the much the XX% tilled we were about

So that our also will inflation. impact

So at net corporate we is when at look a things in level, low single-digit. somewhere the that inflation

we side. any Now frac markets, have we’re start the we flexibility and sure, our until worked again, any contracts with as into softening flexibility, of we lot the think cost as least not work, probably at to on not in out half But a so year. material back as oil more we’re the baking seeing this go far I inflation of rebid

Noel Parks

a lot. Thanks Great.

Operator

Please comes go from Johnston Phillips The with next ahead. One. Capital question

Phillips Johnston

you. Hi, guys. Thank

the from referenced crews. to your slide First, your purposes, you sounds you that activity comments but rigs number plan in two but three for but the frac three the on crews, is what’s rigs in in of just plans the existing in dropping like frac frac It a to rig rigs two reduce maintaining and plans deck, and crew clarification total, side? frac release, on earlier your mentioned drop total, modeling it

Josh Viets

rigs, four – So we were crews at to between But we’re activity. reduce levels. do we as if activity to would Haynesville around current frac we and run Marcellus, our intend dropping run the plans have

Again, So be normally, in currently, one crew we’d the frac two. Marcellus. running we’re at

course second frac that dropped the we we of drop year with half the that the the third late today. frac the rigs of through as the as the time year quarter. do Haynesville crew We in expect will we’re today, So crew. work frac later some two frac second we’re we inventory for in will It back in then year, period later the come back the build of a that quarter. come would crew In the that And up in running running crews.

aggregate, – throughout gas course between in we frac two in so And the four we year. crews ourselves and flexing see do the basins the of

Phillips Johnston

the could catalysts. sense. recent your as achievement And see you what rating investment-grade before the Makes highlight directly ratings? value can’t to on Okay. XX, with your And maybe Obviously, you they Slide near-term you then control timing there. need touch agencies? conversations Perfect. upgrading still But

Mohit Singh

time remain We rate. and all seasoning Mohit. It’s rating and and from we divestitures, a that’s to which these need financial until the is agency considered continued rating what just and to time more just at cash that that. of of policy The engaged confident investment will of They is with more see like a they the influx matter we perspective. to this time financial engagement. expect Overall, actively continue remain we demonstrate. And it’s of positive matter agencies. get we closing the So of discipline, some

Phillips Johnston

Thank you. guys. good, Sounds

Mohit Singh

Thank you.

Operator

Nicholas today question Seaport from Research. final with comes Please The ahead. Pope go

Nicholas Pope

morning, everyone. Good

Nick Dell’Osso

Good morning, Nic.

Nicholas Pope

on you’re opportunities you – talk potential these cash close, to Obviously, are deals a bit Gas a of if hand, have low. I two little about for amount Haynesville, in fair going was hoping Marcellus, could guys M&A prices

is you you if able Just a curious factor? And structure what being are of there those go that’s target? that on any the add that both that or to of landscape out and because is side, not targeting, could something stake looks like if that also, the the XX% in areas, limitation Marcellus the additional you ownership limits

Nick Dell’Osso

factor. a Second that’s question not first,

and it’s non-negotiables. haven’t hard find said is away. something is therefore, chatter on question, how and our of years. capital. hard we along, When when I sellers really does have like last it set returns the It’s the us? M&A inevitably think and our guess. continue think trend their industry to bigger question, to that non-negotiables we’ve going of the you get landscape are values First forward think strategy M&A they as would is participate vocal think just hard We is generate matters. We in the has But interesting, that, all optimize what the buyers couple better look grading do the had assets, a you allocate capital which that. would you would structures for We’ve note that to M&A of agree that I how we industry been low, shareholders. upside to people that about we I’m that prices sure a rebound. cost in across as will high overall think important, meet and and bigger to allocate gone – consolidation And constantly around opportunity for plenty about prices you

there reason. for them to that that some to continue investor We know a volatility we some print be we’re presentation is in year, liquidity And our going and know we have this the market. to in going

expect stock. result attractive to to some opportunities in buy our that volatility also own We

stock, wants a the those truly non-negotiables, weigh we our is around factors if all And will answer of something will is good anybody M&A our will discussion, our weigh we so we own attractiveness of shareholders. it weigh to for engage that an in

And something that around, a But because a otherwise doing not, would always viable you’ll it forward. just it’s engage. if financeable. cash is you If is have find in is, believed will M&A than And won’t some the if different you’re not right way that. go you if it’s there pursue path we because out I’ve hard. we M&A, it’s

having all line to make of but stock capital capital necessarily the it accretive. cost and the has that in trade, in be your is sense. – it Deals because more M&A. be and way make to your reflected so with non-negotiables our And of it’s your price, very a cash capital advantage otherwise, it is, work which to that’s They cost reflected attractive again, is at have can to in you cash much having doesn’t just have do times,

buy to both by them creating wasn’t assets you sets that own. have can value for to its You on better consolidating thereby shareholders that your existing be into portfolio, of make able created

Nicholas Pope

down the XQ Got is the is NGL? the One the pretty NGL a for of about gas NGL related and that strength Texas flexibility on that for – South price to there item another – jump uptick, appreciate the guidance the that. seeing it. big a we’re thing why amount there I on in in injection. an Is guidance modeling, relative just or fair to expectation

Nick Dell’Osso

the with going obviously, has our But of gas a volumes are just amount we up NGLs had rich affecting we bit have then that the is look that. the at XXXX investments mix based last the probably We It’s you on may mix. a have area, fair probably year, and Upper Chalk we as pricing relative just XXXX. to in which in to follow-up of Austin little so assets a on that and

Nicholas Pope

appreciate all time, everyone. I the I had. Okay. That’s

Nick Dell’Osso

a lot. thanks Alright,

Nick Dell’Osso

all the Okay, thank morning. call joining for this you

was you liquidity appreciate forward have down a time. think value differentiate to in shareholders. themselves, market. this we everybody’s a strength is our is a in have, the we our flow, companies last the I there question. that doing how shareholders opportunity of time and We We we market. an think lot we’re really the and create like that it’s think positioned. really for overall the the that We When time look interesting cash that I the for think to

conferences So a Chesapeake. you being look talking we a out see look to to as and to value-creating lot. or all Thanks you really forward We at forward year over this the we for of important phone.

Operator

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

disconnect. You may now

Expand Energy (EXE) 22 Feb 232022 Q4 Earnings call transcript