Expand Energy (EXE) 3 May 232023 Q1 Earnings call transcript

Company Profile

Participants

Chris Ayres	Vice President of Investor Relations & Treasurer
Nick Dell’Osso	President & Chief Executive Officer
Josh Viets	Chief Operating Officer
Mohit Singh	Chief Financial Officer
Doug Leggate	Bank of America
Scott Hanold	RBC Capital Markets
Zach Parham	JPMorgan
Josh Silverstein	UBS
Matt Portillo	TPH
Nitin Kumar	Mizuho
Bertrand Donnes	Truist
Umang Choudhary	Goldman Sachs
Paul Diamond	Citi
Noel Parks	Tuohy Brothers
Subhasish Chandra	Benchmark

Call transcript

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Operator

Good morning and welcome to the Chesapeake Energy First Quarter 2023 Earnings Conference Call. [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, Andrea. thank first joining operating quarter and to call results. everyone Chesapeake's discuss XXXX morning, you our for today Good financial and and Hopefully, our we chance a to the release posted yesterday. you've that updated website to our materials had press review

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

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

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

over Nick. with that, again. So turn you now to thank I it

Nick Dell’Osso

quarter then questions. right and other morning your I'd our few our to like execution call. thank to some for strong a all and minutes to I'll joining accomplishments Good take highlight recent get and you of

having and focused on buyback strong peer-leading and in capacity sustainable solid IPXX Operationally, Marcellus gas we through year deliver dividend offloads our start. strategic in a returns and treating from XXXX. free program XXXX, capital We benefiting Haynesville to pillars Our from in the new which seeing both flow [ph] cash fund on with put maximizes off to improved turned executing in place remain about line our disciplined Haynesville program. our gathering productivity incremental XX X% and wells, is

CapEx complex XXX our is expectations in our we in than feet averaged of all-time of the the which completion footage X the acreage on from teams drilling drilled and strong acreage heels ahead very We execution geologically of X operator. where this southern Haynesville per offset position. the wells day portion XX% per on quarter is of slightly our fastest faster closest day

deployed to that pumping we've continuous XX frac. our Haynesville technology a wellhead enabled record teams consecutive addition, on In pump hours a a

$X.XX the of we adjusted year-to-date, million face we've when already $XXX dividend $XXX a cash translate for flow, million shareholders. to for per with $XXX more buyback the quarter. will a returned to of share generated market, When combined total about asset volatile million than which free sales our of In program,

our markets on also to to and progress We make pricing. our production be important to LNG-ready connect and international path continue

and operational per great step up provide capture first will agreement LNG our X of incremental JKM, strengths agreement financial for approach a tons to beyond. by and the of million online our indexed important Gunvor Chesapeake. ultimately coming to is a share of leverage meaningful XXXX Our an to LNG The example to capacity annum

our the mind in this of As market position pleased point year. we're volatility continues for to with at investors, very be top

has $X.X balance sheet billion. to is strength which of environment. before, only As with of thrive starts with sales I've said This the Chesapeake closing Ford stronger gotten initial for our in Eagle our this the X built

another with buyback on this $X.X greater than million program, This cash X fund liquidity. billion hand purchased billion since is to have to million we $X As billion shares of ongoing last under of than buyback we call available XX, total $XXX bringing our available $X.X cash of authorization remaining. our greater and under our which April

which We in primarily a rich have engaged our remain the the We're credit a portion gas Fitch positive BB+ actively with of to play. other upgrade position Eagle the pleased remainder regarding is with to recently parties of received rating outlook. Ford

at below is now our are foundational policy We rating improvement. our we investment X conservative grade cash strength Fitch, with the optionality to financial scale, continued of notch attributed and

capital our program. to Turning

XQ decline and guidance saw, our in to This D&C both in the and as in our decline the approximately our frac which approximately year on our decline was to low expect production full Haynesville we the the we [ph] and Marcellus. of rig capital you Haynesville we As a came for of the on Based and Marcellus midpoints dropped crew XX% the of capital part guidance, end why quarter-over-quarter. a from capital and natural year plan production today. is reiterated gas guidance X% Haynesville

to our flexibility additional in program the Marcellus and to it. an financial gas previously low markets, warranted executing year We as in is and approach reducing built use ahead, adjust were strength by We this quarter, Haynesville the to we price and in environment our competitive including program third We a all rig market will conditions. disciplined our believe we capital maintain continue intend thrive in to as our announced.

thanks Eagle pristine of to market our of runway by the to confidence our and remains Ford persist, do strength sales, rock outlook and our in flexibility provided portfolio, sheet the financial the balance added current our long-term the returns best-in-class premium volatility our Despite asset expect which we execution, unchanged.

over call now I'd to like to turn questions. the

Operator

from America. our Doug of first And [Operator question Leggate comes of Bank Instructions]

Doug Leggate

remarks ask actually you guidance to release then activity. kept the being or your your about comments press talked about guidance And and prepared unchanged. about you've to prepared CapEx in adjust first you in just your want I your Nick,

please. [ph] capital you can maybe as or activity a walk for adjustments? your activity nonoperated what it there what And choking Haynesville. well. to wells follow-up, that? things in make So any you whether would the seeing through take down, particularly assuming Is or slowing of us things through walk slow could lower or to I've an you sign are some, that, I'm those add-on you it got whatever, perhaps down be in

Nick Dell’Osso

that Thanks Doug. really impact We've activity up we're reduced perspective, the that the the XXXX. we Sure, we're market not certainly for the of activity From that's this at allowed last activity with to constructive this year. for pleased maybe at further should set there, think fall are bit a our We think make follow have predicted come which that a out curve coming on know we decision. reductions right it's the activity production And The pretty be more looks way premature moment. now. are pretty XXXX throughout that's but an through, it XXXX should constructive to if in the an than reductions the question. to year present perfectly going contango contango has point And bit.

to So for our XXXX. capacity we want maintain productive

Now production in the managing near market. how of to and our term, in think we the managing lot have our flexibility exposure we about a

it. we we've already sense that makes it defer can of not to a First, we importantly, of -- doing a course, have go and any or any to in line further forecasted cushion. turn done. in in haven't than decisions or us turn of whether place we we lot have they every to that time as make we And nice our more that But hedges line well well give of

line, are the will little -- in this take offline a shoulder we rely we I real turn production months. contango having the do think where as productive prudent through is and to make price curve things on to choose it's We've in to a we completed, choosing positive making to a in environment some that. the again, done to some Haynesville have And can a the season. like it the that them activity But and And are are on of and flexibility off turning those use we decisions to standpoint. to prices of the volumes. [ph] it. beginnings NPV couple go are already plan an little we We've during lean through hold need not the now the really can do in and all for line. going bit weak we'll of from that do wells curtail low is decisions and keep seen and to summer, We're we a the decisions if maintenance These financial that strength

off, with the the shape to longer-term activity So XXXX positive, we looking in other sit would as where and change we we're definitely is. see its where then today. pretty we words, keep more. we want change it But saw happy fall longer-term we more If curve activity curve or

comment to seeing productive perspective. I'll we're that on-off capacity. Josh maintain from we So on an what ask

Josh Viets

through pickup many see Quarter-to-date, the those saw in to little proposals. starting kind door proposals, well first at first right a some that hearing of the through tend them proposals And maybe as of XX that absolutely bit the we XX% pulling back the also, of with Yes, partners on seeing level. third-party as Seen well join we're are come activity. a of our to we're same up quarter. we We pullback of year.

our expect slowdowns part represents of It So see year. program. the activity pretty in do of a non-op the to our through minor we course

the to of have that good in already $XX We with million allocated a portion spend roughly that quarter. first

Doug Leggate

drops to rig to would you like activity? for could the Haynesville wonder that Josh, look I anticipate rig you summer? What translate

Josh Viets

Yes.

that our notices we signaling see contractors So some based are year-to-date, rig date, come think partners to drop. XX take with for to is continue we'll that non-op out. XX we but roughly receiving to This another probably seen our our also intel just X even we've think of they're upon of rigs place rig again, probably

as that to to notices the contract we any have we obligations lot and think then they may just through in fulfill up a had. And is end attempting So XX maybe summer. total with of associated the the rigs operators of get providing

delay that's maybe a a little we see, bit of here. So why

Doug Leggate

you're the Great. My just but quick share the buyback at there. I'll proceeds, on reset amount in got given the your that on pacing that congrats, fact, thinking a wondering of you follow-up in Ford whether, authorization -- is all, the of the Eagle And might about it Nick, might start left. of using getting leave of how environment? cash cash I'm got of buyback sizable door use terms a in you've authorization point, some that first you want you've one. to when

Nick Dell’Osso

We're far. with XX% Ford upped We transaction. originally came started with that so pace Doug. over we've this We've the question, We $X the of well We the that buyback. first of out billion. authorization now. Eagle $X billion Good the year following again completed closing achieved happy Yes. pretty of to

this complete authorization. an want incremental said of runs to since seen end million in bought the rush X authorization You've We don't the year. shares We the call. be to through last a our

we're time to So on doesn't I it but to be ratable. focused that frame need ratable. not necessarily be It expect would

we'll to opportunities ongoing more times. expect and we have program have so And we aggressive an to at think be

lean ourselves. so again, try flexibility And into we'll we've to, provided that

buyback how address authorization would shares to we the us ongoing phase like clearly of and that. want this do free I back expect ability and flow an see a authorization buy our We an we'll how would think this out to goes further get like program But bit I continue when have the that that. before after and our to -- continue this we to next through I having company to We to idea likely cash having with the minds. think there. is little decide on the

Operator

Scott The comes question Hanold next of Markets. Capital RBC from

Scott Hanold

point an or very with some little some M&A bolt-on for this can the time. opportunity that off I But that If optionality any you bit And If out of cash cash? that just opportunities mean any here. with your I -- do has of weak obviously, and Yes. bit market now. taking at do in gas a I Is curiosity, last be see cash to private kind -- bolt-on use of that companies, that their to little on opportunistic. balance take ballooned appreciate along to pretty nicely there commentary. a accretive rigs right just acquisitions

Nick Dell’Osso

Scott. question, Good

I think X separate these are really very questions.

what authorized buyback. We that an We'll important have We on believe use buyback. projected. through follow it's we to

can sort in have field. real not that look front. current We especially just follow about or proud to pursue don't then Separate conditions. we it so financeable. buyback. of on way we absolutely wanting pretty track in If somewhat we'll think they're continue acquisitions are for think improvement them. forward you think the consolidation. M&A sheet overpay would lot [ph] from our We are I anytime there, a the to they're of assets good would balance the companies believe market our relative do in out you buy market they're think non-negotiables, talk view you think of having any realities our can we that, to stay you consolidation down by of execute A&D about having where the and buybacks. do maybe, well things, other cash synergies are and hard. there that as those not then up the that an that about say on doing there's under wanting market but in thus driven acquisition, about always under and record hard, We of And an to to far holds any I conditions value theoretical done in that sellers are We engaged a is where separate assumed opportunities from because operational when we

your is deal important think it market market? Now an that element good capital. decision makes a out incremental deploy know in clear about how cash, if or have to what's capital think the whether today? having in the it about what does it's attract we What more new we of is the than you but is you to go our there capital, is have cost Yes, and worth of the to capital to should rather the because if of certainly, cost And that meet cost us worth hurdles. financing not

a that having it's in justification that point of we flexibility around. said, having that So, around a to own. that I its and say But flexibility our on not has deal maintain liquidity, to cash doing a The to kind continue is fantastic that something cash for want of business, stand deal. that

Scott Hanold

contango form some pivots my fair gas but but looks thoughts interesting obviously, your you that's talked Okay, there it did more add on market And the your is aggressive? like? again of concern enough. given I not caught the overhedged? you view is in think mean, be on the contango, that hedging? get market does what the would about of kind hedges hear And question why how follow-up gas macro. Or bullishly You your the in of to a macro the

Nick Dell’Osso

is have into to things. volatile. the trades beginning We program a think a takes put 'XX, against what really and collars those timing to even last from for account volatility shape the of we inevitably you look protect we for that upside. all that wide a we Well, throughout and hedging timing able yourself an uncertain look, downside inevitably is relative think put some of contango where and lot trades some different I we've on pretty 'XX in to place market been to know we in capture to methodical allow sit today. that but going a in way. where And But from a approach in be to continued We're will 'XX of the year, encouraged way, at uncertain methodical productive

And to a think to methodical right We think so I going continue with we're it's answer approach. and been it hedge works. the

Scott Hanold

you what like market, ball the just a it Or the what gas of think contango. your do your view curious, current you sense? say? is And -- have Okay. on position I'm does just of kind makes Chesapeake's crystal Do

Nick Dell’Osso

Yes.

going of a will coming let's the demand them. the of that, demand plenty But have Xs online. with volatility there But to the These demand That's to they think But that internationally are the [ph] lot right for I we're volatility a is contango U.S. will ton volatility. be also come we of and There's as about I -- on recognize match have plenty be yield unmet structural There have be a LNG future. represent of comes of to off in so curve. prepared that a up low bring online, just in I current true price lumpy they we right growth. that of the to export now. not will LNG and a sense. prompt projects going the capacity the that. lumpy makes excited to that's mean straight capacity to to lot know

well So that the that our business through of should volatility. lower in drive we assets environment, at hold and have points the up where of are curve cost end these

holding prices. low we're quarter past of see can rest hold how this year and how the for You up up the very at we

a work prices every So business We'll bit. when you our to We'll through cost go up try that breakevens well continue to structure. hold will our back to drive up know our lower we on day. continue

team Our to is do that. motivated

And and costs thinks productivity. Our through me, you equation. both We every about drive actions for And and most manage our sides you those the your is that important that through your team that, day to that that of do outcomes. lowering way think volatility. about increasing

how Hedging it component way that of to stay is to is an important volatility. best think cost end the curve. the of But about at manage the you cushioning low

Operator

comes next from The JPMorgan. of Parham question Zach

Zach Parham

costs. I first, just on guess

on in and the be And starting what later You drop. we any talked to of were cost Are this the magnitude see about expectations 'XX? rigs you deflation going Haynesville coming that to with maybe into some year that off any deflation? could thoughts

Josh Viets

to certain sector lot this OFS of [ph] just is some Yes. definitely are the driven a basins. starting crews seeing We're signs And is we're year. maybe were in minor also maybe end And gas the seeing activity about by shale U.S. course, with pullback that the XX%. that develop this relative in this that frac starting seeing out. rig around to areas. of to we're Zach, we And come costs seeing of Josh. flattening past across trends in We're declining all down where the counts

peak, to that the pricing? at it Haynesville think year. drop Permian. few indicating out I as does We're providers I are some this I and around may anticipating impact And listen XX. into as think relocate that that XX service remains some such of of basins you to the was think to this to as of how its their seen equipment by the willingness be down as of end areas the gas

as signs positive. creates that uncertainty very say little I'd So are pricing the of bit just a but impact that how might

improved well providers. kind We've this well. We're operations our as used some service upgrade of seeing time as of to

So that's timing are paying I again, potential just cost some and the seeing upside would cost materiality say overall probably the structure. reductions. uncertainty dividends just we change But anything around for us it's right too early to now. yet, given But of just just in that the

Zach Parham

color, return from dividends buybacks. thoughts Any maybe of E&P Josh. that seen buybacks. of for more [ph] favor away one for focus cash peers from programs shifting on shift on the in Thanks program more dividend Nick, We've base you. their your some variable to away

Nick Dell’Osso

We'll do continue Zach. right we're now, doing to what

Our we as down move lower with through prices. coming year this free is cash flow, obviously,

any And some -- lot all worked as investors to buyback We buyback. so We're a discipline implied we'll cash far. well in some would of varying think we'll the liked the the far. variable favoring but future we continue it think the that. with to return to this not it's pretty we're I'd and to I've keep sense, if doing. makes Otherwise, dividend, it. dividends continue of said so We shareholders. that get monitor cash with do sense We've dogmatic the to investors come And to down feedback the balanced really so it. most doing what along, sense. there's We makes from to of it we've makes have continue think use having love change continue done We about about what with what say we'll there we're we the

Operator

Silverstein comes The UBS. from next question Josh of

Josh Silverstein

the decline activity planned Haynesville some and in as of I and the Marcellus in dropping little lot volumes the know about there's both flexibility will bit. XQ program. which talked in You a a XQ

are You activity and some activity XXXX? that efficiency improved activity second Will talked how level to you the Can you of of sustaining thinking that that sustain cost kind pace. add gains. you about about half have But into back?

next So how looks year? just curious that into

Nick Dell’Osso

good else add strong activity Josh, All a would if market back. we next we equal, see year,

X Haynesville. Our X to to about rigs program Marcellus between and in stay the requires somewhere in the flat stay in X flat rigs and

dip as be is So growth with we we do. to leaning into the that at oversupplied. we a to makes is are the market that, sense. below some back level right modest the That's ramp concept want And point, healthy, maintenance when that market know the the when thing to we into to ability that

some see yes, We plays want would how back add at XXXX wait there we're we So point not and out. but to yet.

Josh Silverstein

lower part Got split the program a it. you this the And for then almost have year, between as roughly XX-XX Marcellus. and of Marcellus upper

to zones of Just activity how and knowing X part upper bigger between the base? see wanted inventory think Marcellus shift the is well how upper a going is productivity that the going may you forward,

Josh Viets

Yes, I'd program this designed is, XX% XX% that about is Josh, to lower, say on upper. the be year, what

than [indiscernible] We extend when have schedule expect there Upper our year at the and less lower That so But the years, on the foot. trend what that return focus less least. the to XX% historically. next assessing than tend opportunities that where to lateral drilling we we has lengths couple we about capital XX% try more say, to up is the to again, probably clearly, really would on XX% of per and true productivity to average seen to is I we've overall to Marcellus for efficiency. hold

really we being to the the and you And our remaining the lower compete able account take bulk of upper inventory. with for laterals, productivity so when see that you longer

remaining today. continue gotten been the lower we that We've look results that inventory. pleased so the And we've to forward we with spread really have with that conjunction our and developing like in

Operator

Matt next The from of question Portillo TPH. comes

Matt Portillo

side. quick X questions I just the on infrastructure have

infrastructure. potentially year, could us in infield an going trying and quite the infrastructure field processing know constraints how that of better picture and and XXXX? few progress Just about how last treating just give were XXXX update a you the there Just guys on get level. around at are to a curious you things I of feel if curious expansion

Josh Viets

Nick and Yes. been that's with is also both that benefits to in we referenced we've Josh. an made chokes. seen our of is allowing to X% TILs that pleased that's which This to his it's think really comments lot and have improvement how in our up system we're prepared starting today. with seeing pressures our directly that had We've but that lower providing on XX-day the show and IPs more a the fact manage base [ph] the progress to in the production [ph] us attributable optimally we've our gathering

now to the little guidance the is which into of opportunity to adjacent production have gathering occurring that impacts is our we in reasons as bit systems minimizing were one Haynesville In third-party more and offload across the we gas those a of see the that, on field, outages. third-party addition ahead treating we maintenance of

again, really space production the we going matching pleased really, have So from is in the be to to working ensure We're to progress capacity made. our midstream expect we've continue that with the that we asset. that

Matt Portillo

maybe that an you as if could update a about start just then feeling if into And mean what out through question could the year. if curious the progressed and us for infrastructure follow-up might 'XX of flattening as around Haynesville a you're a takeaway Momentum, to it 'XX and just expansion to growth basin Perfect. And how we speak basis, see from to give then next going you Haynesville on the progress moving perspective project the forward? there, especially

Mohit Singh

Mohit. Matt, is Yes, this

punch part first the On Momentum the on project the line is track. is so question, your of

the progress actively securing in everything project on in the that's of with are ways of and track. monitoring needed terms We and terms engaged momentum and equipment in get to is of there other all pipe service right the

still track. As in-service XXXX is that's and guided, we end have the date on of all previously

with pleased that project pretty progressing. how it's So and

at develop. think [ph] On are around overall NGI projects about it projects up the essentially, built continue of be our to of in pipes, Giles the We picked [ph] to one second which build, system part different built, gathering them, and will down of question is LNG the which think it we complex. are same momentum bring time. that the to to being several also Haynesville I other infrastructure will long-haul your at know When allow tailgate production being closer of being

So at there's news the pipelines environment least be enough is those good can of Louisiana built. friendly -- is we more the of think kinds that in

with which The all going different happening -- that other are is which thing built. is is in conjunction these facilities liquefaction being

So what that's about that, gets I contango, look the we all And macro. us the bullish think, of when reflecting is that. at gas natural

to when as we Overall, we'll Nick earlier, comes it. and as And our said ready into are be through, setting deliver up that demand business to be LNG-ready.

Operator

from question next comes Kumar Mizuho. Nitin The of

Nitin Kumar

rates the getting I'll Commodity rising. and packages on I Ford, done. X the guess Eagle prices volatile congrats are have first on been a interest start bit [ph]

EBITDA estimate last had with assets? with Just piece, prices? quarter, that million. was And any $XXX thoughts the on the progress What's the commodity now about the that said I you think last asset rich of lower gas

Mohit Singh

Mohit. is this Nitin, so Well,

first the question, dialogue of On active part there. parties in we your so with interested remain the

You us, well. in prices challenged. actively volatile, we remains with interest bodes with that then has that news financing good have throughout that have engaged volatility buyers rate the equally been the market and process so all The dialogue been correctly commodity been have environment seen referenced is

have right are we to price. hold along, on all asset we the said prepared if to the As to we get don't

the we that. table of and are those continuing options to through all are So all again, on work

question this your part the is about it's year for around second $XXX at the asset, what point. of guide you we million would for On EBITDA the

Nitin Kumar

the guess in mentioned talked Great. bit contango the I little you've you LNG. Nick, gas curve. And a about

maybe current seem some towards of there's on some pulling of slowed thoughts came Freeport And Just the LNG [ph], demand. since to Golden end down on Things near-term March. and bit the talk [ph] gas expected. little Pass feed than earlier maybe then any been gas have a

near-term the just now? LNG what a guys more So on seeing from you're look

Nick Dell’Osso

by proprietary projects of than hearing It and move we're encouraged different we year we're great don't those the guys as think anything progress. don't making of here along are we're making sounds we it. moving hearing. and hope a there. in encouraged into like Seems to result, show demand you like have is I but progress. Golden It as Pass new plenty like We're have what through U.S. sounds up anything by Again, Global next is great Venture 'XX. all

Operator

question from comes Bertrand Truist. Next Donnes of

Bertrand Donnes

following the comment want breakevens year grow Xs sounded on into would clarify the that It still in but on pivot profile the 'XX. strip, production you to at your incentive 'XX up match like the above the dropped handle of you're that back Nick's implying [ph]. it's in maybe currently high level that kind at of end $X could above as the Just potential you're production or your still because if I to grow if $X looking

Nick Dell’Osso

to for don't of year of have we're not and the the you give looking to think we how an yet because about scenarios capital answer Well, plans year. we for we're all to XXXX set Bert, of at information the set ready our kinds full exact allocating

and All we're is have at can where we all the help show if strength contango to is bring we or And we and We we the today to a can in prices back today level lower seeing is weaken 'XX, keep we that prices encouraged believe where back it see flexibility. grow by level And convey that they of can the I'm by put further. contango position that or activity low it approach to as activity trying lot lower strengthen, in 'XX. a it highlight if that in changes market trying I'm underpin have we're we that that the a in and really encouraged to contango. that is we're ourselves should either

that Now change happen many could things that could and between there's those now still then outcomes.

get closely decisions to capital end it And to so how make year. we'll we'll of we 'XX for allocate as watch and the closer about the

Bertrand Donnes

that higher before to feel think your follow-up. XX% you profile. I pick of to why don't do that the through to want total On level? walk a Could that color. limit pricing indicated Great maybe kind maybe why And with LNG, of you've or level comfortable your international then, you XX% you you exposure

Nick Dell’Osso

represented by be export about the would capacity. say said we've It be a XX that the of capacity would of magic today, come it projects be U.S. ultimately be but range. that we And a way have higher, that would which the be for -- depending of that The little U.S. should little that LNG range to probably not up. be think XX%-ish export within the could I on we think present Well, about a could we there's with in number will show as demand XX real U.S. market up less exactly

to would the XX% demand And to keep us so that going we to on feel like match exposed international balanced of the U.S. the the supply international pricing production if is to XX% would drivers U.S. pull our that from pricing, in and exposed of what's that to is

we'll there the a take don't a the a come we to in lot to industry. really pleased that's here. progress about It's a contracts they We're in So, you've us rush that together. a lot We're while learning get way as slowly. we've going about place made. move to the good -- seen learning the to want with players start. fairly think We these be We're

as a move And we makes change, think So we'll that time, And is to it. if be change sense long-term meant that it now. through target. to we for needs

Operator

comes Goldman next Umang from of Choudhary Sachs. The question

Umang Choudhary

talked more love term, You today countercyclically but towards weak prices prices your long Gas thoughts you like and you balance the more improve. and on optimal when to lean repurchase thinking sheet share to forward. are gas more plan the have price around obviously, would environment volatile leverage going cash about would

Mohit Singh

Yes.

it sheet about I the are. in Umang, just way this of I'd to is that Mohit. is The a the think, about you pristine like it what way. think maintain to We of think is in also The that. way it it terms We love think we would balance pretty is boundary love condition. conditions

we kind We to have that one debt turn said want and to to. EBITDA get of the would of previously net max publicly that is

is the might In end good. lower bit leverage terms of be, I of little mean, what a

on the depends all are in what it So point you cycle.

EBITDA have So mentally potentially we it off turn to at it want if low pay said, to lower to want would you're be debt you're flexing net south we go in you certainly closer one think exceed I allows but the the that the the cycle debt activity notionally us in in when net as you it when leverage one the are X would is, and cycles at don't we turn we things being, the of have conditions, trend to versus point boundary EBITDA max about we to year. then the the the if point -- -- through generating more high down keep to to the and all and logic cycle the EBITDA kind shed the

leverage what So we be. to should the of the to it think that of the through kind X in tend X would cycles. optimal of more max within turn, flex terms And

Umang Choudhary

Very around Nick point for are cash the earlier the position it lower. another but made when also to helpful. up also the prices for free both flow was right, And breakeven reducing company, cycle which

Be of and you any your Beyond efforts improvement LNG-ready strategy, see for longer potential areas breakevens where marketing further term?

Nick Dell’Osso

within target more it's work would locations on Umang. just to we field. We've say what we've to to I laterals. do, how on continued work continued of longer We've continued the

every efficiency here not the process the that continue It's a [ph], just everyday thought just We efficiency the make of tried part bit lower, both. matters. to on that while to of work And our we've the equation, that's of the about driving of side around drive higher. it's drill productivity completions, about of one bit something costs to

Josh Viets

a is Haynesville hard our the well course, cost, for really starting Yes. our overall in really, Umang, But reduce working water breakevens. infrastructure we're talk and deflation. say operating our little just opportunities would to I of to material about there. now margins We're earlier we impact going tailwind a us. also some inflation clearly, about bit provide to to which talked has that's pretty a and

points add And so just that I of on a to would just couple those are that.

Operator

Diamond comes next Citi. Paul The of from question

Paul Diamond

question. quick a Just

talked guys you [indiscernible] the of operational efficiency that So some improvements southern about recently. you have in seen

think a get head there? those my is [ph] should still of as linear much in how we bone you track? progressing to further Or along Just around -- the DC wanted I how guess

Josh Viets

for a I say, Haynesville and over we've Paul. mean the track. in decade. the are, a well mean, Yes, I just I been those progress to linear continue operating Marcellus would

I the changes so have big And think step made. been

really away service I earlier, mentioned so looking about And it's we upgrading detail when teams and Part But at drill at the of [ph]. inefficiencies continue and front. incremental improvements our engaged faster, we can. in just chip is, to the that we thing as how said of wells cheaper, completion the our level around on are safer could same our lowest providers be

about And so more was it daily do business it's how a our we than make discussion efficient yesterday.

Paul Diamond

pricing set think basin that one just some takeaway in we in potential should or other talking something longer pretty split infrastructure? is in? whether quick risk stone? Or locked based And or Haynesville there it's Understood. constraints relatively that between term, Is modularity is on is the about Or more Marcellus. and follow-up,

Josh Viets

would end how a basins That's respective the crew the in to our return pretty position depending does out a there. earlier the mean the given in on and I Marcellus, maybe up the are strength our fluid out. just decision the to overall point it gas Marcellus. clearly, frac in of going I year be within lot to of playing stronger markets pull the is But

were simply reasons the demand to in second want be of weaker weakening then wells that of the line completing situation environment. the setup that first seeing One through end the is them into didn't into we quarter and and we turning the we did a of quarter and

And so bit quarter. second until ourselves little the down actually in see we'll a

I again, we'll period in XX with that just to again, short-term time end that, And view, be that that market represent that's coming conditions. think [ph] a local but tools impact long-term around will just up line. a due somewhere simply market weaker acknowledge in necessarily doesn't to of

Mohit Singh

prompt kind think of only on I the thing I you that, our which as baseload as down add up you should to allocation capital allows we're That depending because flex is of with Marcellus think asset. Haynesville of or it. should best the what flex we the to the maximize pricing. engine And think us Paul, would is to seeing

Operator

of next comes from The question Parks Noel Brothers. Tuohy

Noel Parks

them signs service high, the about with of and that seems the need the a get [indiscernible] if to able they LNG be environment. for builds safe the no gas even the be if It service in relatively that equipment, check to to price I on to out like are wanted industry to little bit of it in are the additional rig upward would of would appetite that demands if pressure supply costs fact of of service out rolling an among order forward. on for And static. around sort stay inflation, in industry fleets that Is I vendors the new say the thinking there there for forth. sort larger in still any on so something context was going

front. can capacity relief on I no you equipment that wanted the check signs of sort on So as still just to tell, any far overall as

Josh Viets

I mean high rates high-spec we Yes. last the really of saw end No, clearly, and year, the rigs frac through utilization fleets.

to not we the to operational associated realize better As starting them are strong that example with efficiencies what a even they equipment. deploying of service seeing use [ph], and is, think cost signals example the fuel e-fleets any we're into providers, are dual those. of I the efficiencies new probably is I could or talking we're seeing maybe out capital the But

piece come seeing bring those that some when in into they're are of older in, out So again, equipment, we units. generally, most the cases, that start fuel efficient, to less But they market. diesel of retiring the means

that see. which inflation future why that that's so industry operational the any from cost But we remains we across to as longer the turn headwind term, can potentially on drive service with little for think remain could providers best a service the additional bit partnering service tight, efficiencies focused think in offsets I in help that us overall a sector capacity So of do create standpoint. a I

Noel Parks

oil Great. the of on any struggling of And the I tick of -- updated with a Gulf relatively have the from a on and bit. longer-term that you puzzle we the in just have gas guess, wonder, gas few near-term of thoughts months have sort more associated remaining Do terms had as in in supply the sort to what strong might of, or impact terms piece I LNG. Permian by

Nick Dell’Osso

to think how the prices the think with to we are about going Noel, we are constructive, east Generally, gas. that full. associated of the remaining model Permian That's from how oil built pipes be kind to

Operator

Chandra The next Subhasish of from Benchmark. question comes

Subhasish Chandra

-- follow-up follow-up view. on rig a Haynesville the Just

to accelerate we the through the trough think another third that's rig to incur of that's your could early quarter, And Curious visibility you [ph]? any another what XX it's termination Chesapeake, end? could if down whether your in drops the current or stuff macro if to materializes, instance summer. summer all that and dependent sort So specific really for willingness see end rig of pressure is a penalties prices contract your on on

Nick Dell’Osso

All good questions, Subash.

and going curve and think curve changes. we X do think I rig a see are on reliant projected longer-term into drops be beyond late months. the don't of see If prices, I longer-term moving. you changes. going rig to drops hit curve just think the are I summer, think summer front see -- from holds you're should don't if to prices going storage fall the then November happen on further than come that crash a XXXX currently the moves I rig you what up, But fall really of well down, should

with scale relationships navigate reducing We to it set we we for As penalties have about and under rig usually, providers that a contracts. far rigs willingness we have navigate that. contracts, big have staggered as and because any can we our of our can are think

that cumbersome. you where make not penalties incur and would we that so like maintain could decisions to And try flexibility be

Subhasish Chandra

LNG-ready direct Okay. LNG current some LNG it the And ample -- of because have you Nick, on I on exposure. your like clarification guess, strategy coverage seems

growth. -- that lines, does not I and level of think it the maintenance, -- LNG-ready some it between is mean reading So means

not like production bit mean local or but that does satisfy guess LNG sort Because you've is down, think like I enough the than said exposure? of exposure. more you willingness desire lot your a So to -- you'd to boiling a have I yes, more a question But more. more direct have maybe that

growth why at So all?

Nick Dell’Osso

Yes.

growth and be concept of eventually years that think I contracts and under that of supplying as gas message our we've comfortable priced our if in consistent production to company to help to the in want growth. to the with XX% it. to few to pretty next being being in XXX a is do position to been we around LNG-ready position be concept the far LNG-ready market prices. supply towards of XXX Bcf have clear of we can to total XXX, approximately we're XX% attractive, over international to want place. from want the economics out being be in The the -- connected XXX, decision that in is right We a we or U.S. choose are means that today the And future. XXX growing -- a market as that infrastructure, then the That grows, the

Operator

session. like over Nick conference to for back to This concludes would turn I our question-and-answer Dell'Osso remarks. the closing any

Nick Dell’Osso

the time the to second Thanks, again. again, morning. looking of forward the we're Thanks everybody, for half Again, this here. year

market generate again to all see of we'll throughout to couple the it. volatility our in of lot and flexibility. have flexibility plenty there's We summer think make As the be going we business. And engagements everybody months. over the through like we to go Thanks through to months, next use that points cycle. shareholders to we of in look these a the other We and intend and of time that your decisions of the conferences good for for returns forward we continuing at

Operator

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

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