CPE - Earnings call 3 2023 | Callon Petroleum Co.

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to Callon Petroleum's Third Quarter Earnings Conference Call. [Operator Instructions] Just as a reminder, today's conference call is being recorded. [Operator Instructions]

I would now like to turn the call over to Callon's CFO, Kevin Hangar. sir. ahead, go Please

Kevin Haggard

good the Apologies. link and little had hiccup with to morning, operator, We everyone. a Thanks, the webcast.

now we're a think all there and I will recording afterwards. in, be

me your in Gatto; appreciate our Parker. Russell COO, our we So and Callon. With CEO, today interest Joe are

We will the questions your end remarks. prepared our happily take at of

tab. We our earnings quarter are third will which under our on website release available reference the and Investors supplemental slides,

results could call and also Actual estimates forward-looking and factors that risk statements SEC presentation to materially will refer differ noted Today's include our to due plans. in filings.

refer non-GAAP facilitate our We to will believe and we peers. measures, help also across with periods some financial which comparisons

our both a available any to in corresponding website. the slide measures of on our our nearest to measure deck press earnings which we For and non-GAAP are release, provide reconciliation GAAP appendix referenced, the

turn now over will I Joe. that, the call With to

Joseph Gatto

results our free Thank posted to Cowen you, third solid are shares. we and generation, of reduce adjusted the Good quarter using debt marking repurchase morning, Kevin. cash flow that consecutive our for quarter, cash flow everyone. XXth

clear. are priorities corporate Our

We absolute are cash and free focused owners driving flow, program. to buyback our debt through share returning structure, cost on down our aggressively maximizing reducing cash

call segments. today's into I'll divide X

investments and guidance. First, and quarter capital with it with key line operating I'll total operating quarter below summarize was third financial and expectations production Overall, results. a good costs in

which I shortly. did we address to experience our However, will some production, headwinds oil near-term related

Second, safely efficiencies. the I'll cost operational cover sustainable unrelenting creating system our focus on and of driving out

generation dividends cost both terms into Permian prices and financial impressive pay on free and increasing gains, for breakeven of operational and our producing in is lower inventory. focus Our cash flow controls XXXX we'll

ongoing investments. to where time applied life value proven to capital sustainable inventory, a long-term of future and spend of an development real-time model. co-development on Next, then learnings our the This that process the of is want maximizes I of field benefits bit are

as Callon counter moving productivity to continue at trends. to We well see industry

in properly recognize over we near-term to with order returns to to that new need that we continue optimize balance model opportunities. However, information time with longer-term

conclude XXXX. Lastly, with will I early thoughts some on

drilling through Our expected of maximize XXXX enhancement free sustainable and financial X completions recent and to and in of capital value key gains allow flow will be the in us cash EBITDA. efficiency efficiency to both conversion are metrics,

with Let's results. get started third quarter

August midstream For in day. Oil averaged and Basin, about the call, Power first, XXX,XXX days and reduced temperatures the continued our The the July, as to ramp per as barrels experienced to in in factors: in and electrical extreme East. back key outages expected third due normal XX,XXX operating we Delaware and related per our Delaware to quarter, we production oil submersible into total discussed pump which impacted volumes September to well the areas time oil volumes the like BOE issues ESPs averaged shortfall downtime program is on the day. X order power related especially levels. sales QX

X/X projects recent related of XX of West, gas-weighted or XX our Delaware the Delaware most is second The About oil quarter factor our lines from area. in multi-zone to in West. third turn production were in the

our higher also have relatively a volumes. were will was impact wells The fourth from ratios While completions these oil basis than with from expectations, production in line quarter mix gas-to-oil BOE total recent commodity much an on on expected.

time events, program performance. and to from downtime enhanced a lift relative increasing note, Delaware was recently and recovery. production our we to improve to lower proportion Basin of will start reduce lift resource program accelerated expense ESPs longer-term uptime slated in This to additional change weather gas power an incorporate in XXXX that installs an previously As workover artificial over

procured is some negative see compression-related lift equipment the areas nearby installations quarter, don't where do In exist. in we fully to as and fourth installed impact gas production

don't up this our running and With the we forward. planning process, see incorporated into quarter this firmly to timing expect and program issue going

Overall, of XXX XX,XXX to we total per the to oil with in liquids. range day, per of in comprised expect XX,XXX approximately production production barrels the XXX quarter day, range fourth BOE XX% of

the turn part Basin, As activity, mix. and quarter we expect quarter our fourth our of line oilier Midland gross fourth our in benefit XXXX will in which to wells in XX the East areas, Delaware

remain capital full times drilling a unchanged, cycle investments by in fourth completion and activity hit in forecasted despite Our increase both and year upon minute. an improving that XXXX for quarter driven will I

are experiencing is we today's of cost the has this In improving the efficiencies adjusted clearly we our are to cost corollary efficiencies to conversion and deck, This EBITDAX capital the flow. of how that conversion show realizing today. we free The throughout year. are increased demonstrates cash we rate

structure. a few as lower to streamlining A organizational points G&A business additional of are solely highlight. and result now our on the the Permian costs focusing

to creating the cash This us increase results in interest upcoming in periods. lead opportunistically that $XX several off flexibility free quarter. business nearly adjusted the across kick improved to initiatives. share working generated in our We and efficiencies this program million are will projects sustainable We gave through land flow future repurchase

billion, structure. At period. $X.X -- We from million was total end, more debt and laser-focused reducing prior $XXX our on absolute quarter are strengthening debt down than period long-term the approximately capital

quarter Our allow through in the outlook stock year-end. to additional reducing buying will cash and pace free back fourth for flows keep with higher debt us on

development gas high-return acquisitions scale. benefited and locations. and runway quality have and now in added with oil are We We a Permian-focused recent assets of Permian from our the company long-lateral extended

recent In early Delaware wellhead by production oil terms pressures. coming encouraged our time are currently we rates acquisition, online, is and and project X-well our first of

you progress will here. keep updated We on

sheet in balance implemented We quarter. flow up and to adjusted shareholders. repurchase our our free return cash to strengthened fourth of shares materially have for XX% to We program a the use plan cash

very as cash use While valuation we are we shares on see of debt, a focused attractive reducing flow. our at absolute back today's buying

leadership teams. strengthened our team have our We and operating redesigned

to practices, synergies as Parker, operational benchmark and know team Russell Q&A. and to eager additional unturned costs of has safely to during sustainable is is share is stone he lower Our future making performance. no applying some business some our impact, performance assesses new experience an our his industry. about He against years leaving it more create talk I our highlights and drive enhance COO,

foot of wins and casing But through the times the we are drill cost on strings, as examples long early tailored which project the depth laterals. a bits to maximize going ability optimization our of being start, decreases returns. of couple Page materially include: developments through will a operational casing to of materials. per days the are design, a and forward realized have one, of lateral reducing We've this cycle value. presentation of X Reductions versus fit-for-purpose enhances provided Each drill in elimination

and time On efficiencies the we're rates side, tremendous XXXX in and of now and amount into entire approximately we've to pumping are XX%, realized additional wells day. X impact I to seeing our this overall relative we've complete forecast. budget. pumped anticipate completion an existing drilling of feet months. after operations have improvements The completed incremental commenced much This as effort, to lateral This XX,XXX making driving lateral increased in want repeatable organization realized staying We of combined year-end. as per per feet revamped and short while day been period hours within performance and possible. midyear activity thank by accomplishments these production, for will our demanded benefit all a the recent very These a our has more

X co-development model. of gears field well and shift life constantly discuss counter It years. been from has our development This the us performing our past and our productivity me over is differentiates industry. Let to approach thoughtful to peers evolving

and well learning a spacing provides ongoing our and codeveloped interactions to foundation maximize zones tailoring returns. great of We associated the continuous placement. have about learned projects for between deal This

South zone be This well our investments. area in For to to developed that improvement time, reduce as separately sizes NPV example, times project critical demonstrated proposition. recent our reduced and deepest our co-development cycle maximizing continuous us as target could facility our is allowing over overall Delaware

next by call early prior look of providing Consistent around XXXX. some early Let our formal up for me us year. thoughts wrap practice, from guidance today's with

on will cash First, we continue free flow. maximizing to focus

fund improvements and shares. these appropriately believe priorities high-value repurchase will We that capital flow cash to in across our debt our drive of cost top Our developments, buckets reduce allocating are capital.

down investments. with We capital will to our and be With over gains continue versus forecast per efficiency to XX% in in cost XXXX. DC&F less facilities, disciplined more drilling, completion recent and do average with very be expect well to XXXX we

addition, high-grading lower target investment allow within model to cash In will ongoing investments free us our flow. rates to enhance co-development of

of crew as cycle this activity we return year. from in production forward times the of early pulling the benefit as second next in second half 'XX initially completion trajectory as more than well Our in improving a are planned the drilling and year completion will

increases and and production high-return over share we debt areas In terms drive improve the to efficiency, focus coming expect improved oil we of outlook, capital to repurchases. point oil quarters also Delaware reduction that top line I'll mix as the we in our out an on as secondary XXXX Midland in growth will our drive be prioritize activity early thoughts on to Basins.

this as our in achieve half to activity our we've nimble the done evaluate original our reductions of to similar XXXX and remain in plan, year. will second we progresses, in excess increases program We of extent DC&F what we'll the

forward look taking your We questions. to Operator? in and your we company, investment appreciate our

Operator

[Operator Neal comes from Instructions] first Dingmann with Securities. Our question Truist

Neal Dingmann

question, it, Joe, for maybe Russell. right my to kind get first maybe of

things. talked Russell 'XX, could some these drilling, from there's thinks of a lot of potentially just hear lot he about savings I'd Just from? when just he completion highlighting a come love to looks and you at straight really where just XX% reductions

Russell Parker

drilling on little this average which be And is about And probably the upon all will to portfolio, on our little going X%, bit you're boils savings XX% completion way side that the talking a some side, There different out, casing average of DC&F. to the of on depending we And services. savings cost way of facilities. see take input really, savings shake across XX% as a of breaks already we strength. And started per the X% modify and X% It's I to we to actually, fruition as the plus a the on about what out, that it's well question. a single mix average appreciate a about digits, of down on that come about. XX% it bit

of standard mindset, But doing a of to really, from coming is change shifting way standard purpose. things fit for big a the from a kind

and that than at instead looking with of places, program longer. life each reduce much the money and have rotary bit looking where some sizes, run can we're drilling our we So tools individual streams, we longer conventional we casing hole in in at the save steerables. can doing keep we been reduce actually whole tools and what our location bit potentially And

And savings then completion facility -- not of unique that lot That's is on coming Callon. the sand. the on side, a to from

of some That's the on that probably completion from. logistics even is to that will We bulk unique Callon. goal. XXXX, stretch and bit coming a the the of where go little savings are -- we our further we we could into side as Now think be see

same the pump to we those a our envelope potentially X kind to the costs. excellence going ideas engineering really throwing time. reduce We're of help increase legs, stretch lot of As complete their the push team rates, there. We're to let really look of pads out at

for really, on then facility the fit again, once it's side, purpose. And it's

at model, years equipment one, with field of So lines We're less infrastructure to start actually, we've spent the have and lines, together, where it building can look more life little our a deal batteries, money. you. little facilities on-pad save over will and time a that a what also over integrating bulk flow up tank of we equipment, gas systems maybe harvesting the of but takes of that good using time, out pulling money us [ point trunk bit lift and our ] differently, two, building lines actually, while of an get

combination large of a the it's projects. So

-- folks kind of it. X all versus of it, I'd working we about today, don't taking take to a but have standard. on hours, If basically, lot a just whole and that time had that but through you But love fit-for-purpose you design of

Neal Dingmann

forward on up you time details, love take second allocation. is more just your just my And capital Joe, question that bit what would then some what or a would you wondering buybacks decide drivers Great Russ. I'm drivers the primary more definitely and the lean now the And primary then will Kevin versus a be on offline. go and on that the is growth into on side? allocate

Joseph Gatto

clearly that debt about of out and in in buckets there. our goals on investing adding have about a first X we them on stop. value, we We're way, Yes. program. very share the But focused Look, through reduction, also we in we've are disciplined terms the talked getting to put asset following base the serious repurchase

we we are efficiencies rates. to about talked those not So We of lot but a drag cycle have be reinvestment want Russell's cost here, times, efficiencies cognizant. to that also higher don't but perspective, only going a from us from to

high-grading balance to a can cash deliver nice and incremental more our on repurchases. reduction forward, to in between reinvestment rates share we find focusing by have So keep there set opportunity debt high-return deliver free in projects, our check, flow to going

Operator

question JPMorgan. with next comes Our from Zach Parham

Zachary Parham

that think change how more about wells Do Delaware give results color those your in have that of remaining a area? future area? there? you you add the development thoughts us you in inventory Maybe on how First, what kind gassier you well little West could from on seeing about these over you're some think

Russell Parker

take Sure. forward invest money particularly that of going surprise. places we no portfolio. nothing has West The news too. been to gassiest is I'll Delaware have question. a new. The of real lot part our good That's our That's

in to will going East our with going has help forward and designing, assets, we're at, mix we're property term, order as how to one, also a Basin, to, spacing, continue oil completing, as to developing up the that value. and going Joe alluded So structure the landing forward. near And the in lower we're cost look pull maximize then the Midland obviously, other

Joseph Gatto

West the we ratios higher on we we GOR had specifically said Delaware project, expected. think lot I a And than

of some attributed area that active think -- it's an is I us time. over to look, around

area. think we've But time. is that in So area. over learned attractive evolve activity that are got effects from co-developments some West likely lessons most still there Delaware of We to that depletion led project going But that some with an to forward.

the few probably C from thing in away the we're deeper more would take and So in putting less -- sticks one or sorry, be zones we less a a few B Wolfcamp that. that

we're will back we're our time. place, for some leverage very similar there's Western hopefully, infrastructure, incorporating different we heading in be our Part to is the But takeaways with sense there overall, returns a portfolio going area reasons. projects, gives program in infrastructure rotate development where But because our of across Delaware the there's over not Delaware scale have we're forward. designs certainly that but from you West, overtaxing to and of that

Zachary Parham

And it. Neal's just following then Got maybe on up question.

lower Can lot and turn if CapEx us a of XXXX talked CapEx simply complicated give You've you you about we cost about reductions the on next XX% look like is a Should year number they will? in thinking costs out be DCF. any than that similar Or of is think might what play just more year-over-year? that? it sense way lines

Joseph Gatto

side, recent from the months shown in really reinvestment the in could savings have getting than DCF first we more we've the we to pathway certainly everything well plan it But to quarter just into year. drilling a be wanted -- we in the critical year out we've for beginning yes, said, completion time down around mindful, to the is Zach, cycle here element jump in I XX%. We average that here, next building good But Yes, go Obviously, around give on of and had us that into is terms We of the as blocks activity 'XX. with with a do costs. side I start said rates. general. faster the how you taking want complicated on allows

our all cash free appropriately flow investments going of our to to objectives. we're moderate balance But

per the months, next oil-weighted couple to the able blocks times the of be cycle some with into again, trajectory fill you but next to projects. I going in in into certainly, So beginning holes good DC&F wanted some here a QX improved being year, of give we'll building going well, of the and lower

Operator

Huang Oliver from comes TPH. question next Our with

Hsu-Lei Huang

a Certainly, Joe, mean, and you around But been immediate lot number. maybe detail force the of to that meaningful of have How question. Is know beginning Or full to a to you these are cost working Russell. that that is expect in bit the made that savings? of I of see a in something around a start already that something is gradually? at certainly to just good incremental Neal's layer I Kevin headway on earlier follow-up that XX% initiatives and all we'd to kind date. XXXX? we expect should the all kind more

Russell Parker

it It's Joe already realizing the anticipated even mentioned extra earlier, the that neighborhood going where QX. -- we handful lateral beating midyear. averaging service the production through goes course, definitely we've that on, But as hopefully, year, are we're to should depending add and and in get spud budget of prices we wells drilling already were year at happening this projects actually into say, point, got in And are. rates it we're not us year, that extra on commodity QX, XX,XXX of of be completing now. to 'XX projects These that, I'd maybe and as our in to that in feet, another going about depends

we're see the fruition range and in and going maybe that next our now, facility more layer original we're the piece. X. already of is see, won't XX% still be cost to But X, one that stay we're the realize which to saves. on side, the to obviously, yet, actually. where biggest savings, the come obviously starting going some C par to That adding I D quite because to of don't QX, But able we're not to to one QX, cost within is into So already QX, digits, take And budget. time do these starting year. reason production is think to single you them the

Hsu-Lei Huang

so And kind a impact facilities? you That's of talking with the of kind expected already of just facility of existing? so well are another about, more the that's Would little trajectory just using Or that stuff side. Awesome. of lines of of the along overbuilding such productivity? IPs lines helpful. constraining the it just maybe change, it to more bit kind avoid to the follow-up Is respect all a more is production along

Russell Parker

of are similar part things existing, that actually we're see using IPXX saving you money. but which lower some some It's yes, That's ways places, might IPXX. in in a the

your everything structure higher. is build for IPXX, an you cost If

However, you rate of towards your it's at if IPXX. look return, building better an

year, wouldn't So exact over maybe an you the see in exact month, see you a different well it on an peak. might

data, over you available don't if see time. production a were looking But you'd think you'd difference more see of and publicly stable no, at quarter I probably the

some The other some some actually the will -- potentially actually places, changes of eliminate improve of talking pressure, in we're back place which our the design -- production or will help about reduce base. on improve

Hsu-Lei Huang

Awesome. than you're artificial in oil Obviously, could from that versus from just the that wanted of downtime And squeeze expected is to just out to see, more of quarter But revision less doing terms with the there within the the of what one if on West a any be the side? the just optimization I to of in accelerating breakout attributed subset some area could respect the lift guide. of wells came incremental downward sort QX there.

Joseph Gatto

majority Delaware highlighted West. from at what large will we The Yes. be

Operator

Derrick comes Stifel. from with Whitfield Our next question

Derrick Whitfield

on Congrats outlined you've quarter. the this improvements structural

Joseph Gatto

Thanks, Derrick.

Derrick Whitfield

to vertical Wolfcamp depletion I from development. upper the And development? simply [indiscernible] West the greater specifically, Delaware the gassier GOR on the learn past in does on ask Wolfcamp indicate a zones follow-up if to could a lean or with lower based connectivity you wanted higher Starting lessons? on

Russell Parker

how because sure learning not forward. looking future, involve apart, little investment as redesigned you great of to So into projecting going do acreage, is job, appropriately optimizes And a space forward. how still to it We're wells specifically actually to regional into dealing NAV impact say offset or happen what bit account I'd designed taking but generic your pressure with further order lower be yes, seeing the got may is your make lot doing your reservoir acreage. capital you're what spacing your completions, to in you've order also needs in But that. then to we're a there. on that that you're about a optimize that There's you're looking at NAV, when talking depletion at maximize may with going plenty the larger

bench-by-bench with from But going key sure communicating depletion from forward. offset wells the your that's learning at where to operators have what that where looking really, the say, you make this bench-by-bench, which I'd looking localized have you to is is features, appropriate increased geologic local capital what, optimizing see spacing, you're are

Derrick Whitfield

you post forward of spacing have have feel Russell, and this assessment look with what as in area, be And think guys to out do of XXXX looking kind enough that should to that for kind development you'll in you develop a set, good data that post XXXX.

Russell Parker

the we Absolutely. side, Well, and spacing, not members but how business structure learning see what only for at looking landing, really which time of quite optimize reservoir have and iterate team you us machine lot a around completion are and data models individual the really a more we simulation on purpose have another. actually we We're with actually accuracy unlock we've into company. past improve bench, doing than and the to and as help one different wells take the our in communicating takes NAV on how are a our per fit can DC&F started things handle really and analyze which bit a account we of of as to on different exciting many predictions other some change good to it

out what's being fluid called fluid zones a communicating see to with what really what and are figure like able zones doing other some actually We've typing experiments been doing exciting to fingerprint. actually by

the you technical your NAV but -- an this to all only our assets. it's same process used absolutely, incredible can space, focus not in be of optimize or So help learning everywhere, because your team, same the

Derrick Whitfield

side. Page could, X. final, going on if I'm One your work just on I to

development into XXXX, could lateral impactful you speak be X-mile to could how operational plan? out your in Looking

Russell Parker

how Sorry, you lateral. said, X-mile impactful

Derrick Whitfield

Yes. Correct.

Russell Parker

of part was record to show lateral, record time we Well, which first but only the time, there wanted Yes. saves just money. what actually not

terms our how we're we're probably say miles, figuring budget we but X working next for are year, and that possible. PXX where locations the drilling we'll we many that that still XXX, still extend XX,XXX-foot will answers I'd of places wells. In that could have be on out. But wherever looking

As matter XX,XXX-foot of we couldn't particular even fact one a in straight hole. drill location,

we basically, had, with So if with well acreage that almost we in had, to, we -- well returns. but drilled our the you maximizing order also we reservoir will, like footprint, or in optimize that our but an of these bend one, it depletion the dealing situation L-shape thereby a situations

So possible the we're U-shaped of landing, to shape, look to within order of be to lines to all at opening a be going optimize depth. kind lot well length wells. the of looking looking different We're We're art time our that. NAV concepts at terms and in in to but going at going also of our to

Operator

comes question with Scott next Our RBC Hanold Markets. Capital from

Scott Hanold

of? saw cognizant like base Delaware this couple And been to the what overall moving there Can learning jumping and is talk yet. hopefully, where Delaware But hasn't specific? calls Is And West that terms on. I've talk of asset regional in you're fits you your at what have other you around West been about just can this [ position going be that Or spacing -- more ] and about you'll this is something into forward? just a West inventory Delaware levels activity just large? in asked are of you that more like, there. your, all areas or is

Russell Parker

year, probably the next I'd be to heavily and forward the weighted So say, going in into East more in we're Basin. see going I Midland

tells little projects However, already is it, have some actually West. you And anybody in into continue little this, not at we've we doesn't That South map made they're do can't not, that Regional Permian. development If videos. then your honestly, cool it's and the within real as learn decline make in movies benches take the can building data. to you some modify all pressure and you plans. you account slated you're you money, That looking development just mean and your when it got plans means however. about to

look, the West what of process Permian, bench, apply So Delaware it's you specific throughout everywhere. in. area that I the you decline think, by and level same no, something all of is portion it's learned pressure Do see the we the you're depth, country that specific can by in that which

So same thing why which developing it's you're not to the a for asset, again blanket is back of I come when your Callon. kind answer,

do design, historical the to phenomenon, ought seeing want but -- same geologic diagenesis. in-situ start out with the same with every not not fit-for-purpose same GOR You -- degree, reservoirs our each the level right? at a it, not bench, same the because area is and same a same at history see You similar the not don't because the the maybe that with start out and

all learnings So can sorts and we the the produce different of that process results, reasons there's but everywhere. apply

our West then the part year. South those but teaser in and assets, more working things in the of where Delaware yes, -- make have come definitely asset where the I and probably basins, projects to to see in to longer even in do East weighted 'XX. lot In more money money, spending terms opportunity ourselves see that. That's a some next still of we Midland on us those we're We more the for or still investment the and of, on exciting spending term

Scott Hanold

moving to have talked to to is you all feel fit that and More a design that Okay. region certain you're that those setting where you then, partial and Or kind learning area. expectations? Or going answer and good -- some is be pretty about you a everything to of do the feel entering forward? you year specifically still got about specific good learning Do is you handle extent, is to to that a year? XXXX a on still there

Russell Parker

we We one, think I learn we But on and are. should you're always feel good where each Well, path. about learning. two, every

stopped and about does never or But that, and we dial of line. about what dial we've feel learned. we feel stop in If you never we've say where are, in of I learning So expect expectations the are. the tweaking wouldn't good kind learning improving. think organization We -- modifying, good I set current no, our on you where to

it you said, at new improve here, team. And where actually [indiscernible]. completion [ and things of that review on is this operators and then tweaks, little offset implement, look before little the again, each is and that focus another X of from we that little completion the business reviewed field pad, to return. from -- notch design each X%, rate improve. We we're time learning improve And a actually, X% with each we unit on to from each will try We weeks ourselves, all complete And working AAP each never out ].

X, Just like saw, X%. when you couple of could it there slide X%, deck the little was X%, add were X%, things do, in you X%,

structure. learning always Well, XX% XX% same where an there, be to rate of expect we about your of thing a us ongoing to learning, I'd always but generally, thing good stop It of keep cost takes spacing. that's might return, but a inventory role sudden, happens we But modifying. thing you XX%. all don't and keep have at Same should are, take feel with you're lot get say process. or to effort landing going we with I making texture that completion with And and happens [indiscernible] design. happens you been Same

Scott Hanold

extremely here cost very for focused that's might over the has consolidation you. this but mean obviously obviously, they few to #X, down. you Understood. getting getting become certainly, are Joe, operations months. be, mean, on where need I the And topical last one priority be the I guys

for as well. been years thoughts have guys -- over You number sort company to you in of on about involved of years? it the like see yourselves and a have the the you'd Callon Can it's where few next talk where consolidation on

Joseph Gatto

Yes, assets a obviously, that hit capital. iteration, all Scott, But out speaking, anyone people mean, inventory. cost seen better for bigger lot at of activity obviously, of companies high as and we've capital only with surprising of not there. been a that latest has who's time, be I'll level. over shouldn't are and this That happens pursue industry afforded cost some around this largely of this up a consolidation gone I business corporate that

and participated we're actively said, on us. as what's And that So laser-focused in over we forms we've happening shapes time. in around

you to have strong which things. I nimble is way that make the and spectrum be a One right we we're inventory, improving, to moving the options good forward. positioned boils And down we across sheet think have X economics, robust a which gives the balance sure that's that and to participate consolidation have. and in we having that

Operator

next comes Diamond from question Paul Citi. Our with

Paul Diamond

separately for ones the developed other quick In around be talked learnings me. you of benches. couple being able to A some from prepared remarks, deeper zone guys about

Just wondering if there? bit color you can provide a more

Russell Parker

not well a But which different we the with be long to opportunity we to didn't time, mix in to communication then we later bench if bunch communication, benches. it we're develop that late of this benches experiment fluid life see communicating wells in over We in have And interesting, needs life. see very term, basically which the early And that process, fingerprinted, samples -- which took of in of date. but the a over earlier several out figure did outpart apart our the wells over in time. we the you was you'd meaning each you the wells from that an to benches which at not really if from we're could that communicating, each fluid which fingerprint early you year which from a along use will, those potentially see from different all with time,

the impact are or reservoirs -- exactly of will which and that, whether order And So couple in communicating lower that different us the get companies it's be not time. data versus reservoirs how specialize that's drilling again you there's better to this, fluid what upper applicable, kind few a and pattern, wells where and order a reservoirs done come we've may process fingerprinting with develop which what of detailed, wells suffer understand but quite a we in through well it. in wells we're experiments or of it -- more lower of they because also help that we over which you're

how it. So did we experiment. -- but It was fingerprinting a that's fluid

Paul Diamond

more pretty that in? it areas was entire focused any Understood. Were is there Permian? geographic Or the much

Russell Parker

the may I'm acreage doing in but we South, our at experiment elsewhere similar was in That look referring some in particular experiments to 'XX.

Paul Diamond

Understood.

follow-up. had X, some one interesting Just D&C pretty Slide you competitive On on per spud and quick to kind data trend of rig laterals lateral. release,

going we how those diminishing somewhat and thinking get guys how trends you idea that? or linear beyond? viewing of Should to into returns you are 'XX forward assume guys or just wanted an Just about as are

Russell Parker

casing for be this, you'll any say. We're a tweaks, program, make the you hit but when not to with to exact casing some you your But it as think look more We're already as and and time of about tweaks tweaks the other of a later, lowest-hanging will design, all to maybe the little program, the be realizing [indiscernible] well of we off, [indiscernible] yet, say, like say difficult will fruit it. come as look early, at program streams I that make then I'd stream. exact-fit all save eliminating talk not end kind which -- may see sure. pieces dramatically [indiscernible]

year for you find open-minded more. same if or you but the range always I yes, it probably a the year. XX% you purpose, That's to are an we'll ], the that So QX, any But get said, and tweak science average [ design stop over which QX, were see continue at the in tweak first, like to we're already beginning our say that tweak, hanging fit your bit something. first. of it But never asset fruit and always end looks at trying. and little why on, out, biggest time, you obviously, goes impact lowest if savings draw I'd better I to looking XX% means as find -- in the that you But tweak and change, think you'll

Operator

Daoud Our with and Gabe from Company. Cowen next question comes

Gabriel Daoud

an top Joe, rates. of back growth had And goal guys free curious, how hoping, on mentioned go a annual could was basis. know I X% reinvestment previously, that that to just better you does rate mentioned maybe you think growth? line I just initiatives. is to production manage the I to cash But translate on you comment to the around X% lower

rate lower it's your thoughts. to So just I'm lower maybe does assuming curious over then time, that to equate reinvestment how number? but curious hear just

Joseph Gatto

Happy things capital What in we've and into high-grading here asset costs, mentioned about been realizing Gabe, improving on our all DC&F to going be of priority is terms earlier Yes, 'XX, to the that. really the talking efficiency going take base, times. cycle I

that and versus think forward. get formal good prioritizing flow as some guidance the we in will getting I capital We'll a 'XX. move meaningful growth. us are into efficiency term, headline production we near provide cash to more start, off obviously any But

realize Now hopefully, efficiencies, do going, these to better. we all get hoping

look the I over us with these we adding think here back time, reinvesting some things time the some in to asset activity time that's motion. in base at but give all additional put

Gabriel Daoud

curious, savings here LOE front. just Okay. you 'XX? there's then How a highlighted into you as cost guess there? And could out does obviously, did squeeze you think lot But the a on I more of Understood. capital good you job the, another LOE. on trends do follow-up, And of

Russell Parker

failure our biggest term rate. opportunity I long on LOE our is fixing think

-- rate say That expense front part lift of quickly. that's ESPs structure, where the that -- on artificial won't -- highest probably for is. happen account the value our opportunity improvement. -- about largest opportunity And I'd has for our days failure Our our some X that's of LOE the the high

but your in failure ESPs, even power power a size overnight in surface That You optimizing what of not outages. quarter. a what you're don't are, whole rate maintaining change host of electric or suffering only when terms comes they you're program a do a change fit-for-purpose the even artificial how lift, from facilities

So things of the at improve rate. million all failure wells host order to there's $XX whole which portion year. by there spend that But a of driven do you it's that that our have to a neighborhood in rate fail. is And

big 'XX that ideally time. XX%, years, couple half be a that of will down the probably it try But reduce can't single or in in by ours to that's and of So to focus if next we opportunity. the cut biggest see it widdle over in

to structurally some improve Otherwise, in just implement. are time some deal which But not places larger bit to a with longer focuses take that's Basin. chemical the our going in don't be say what improve we a not because I but do of can infrastructure -- -- as X are there. the got we're come other those take And to LOE. with sour our Basin, of our projects to those people take spend probably to primary But some only at prolific I'd fruition. that's like basically going on Delaware we little areas lot gas, of Midland looking course, will

Operator

time. There back now I Joe closing are any this no further questions the at to remarks. call turn will Gatto for

Joseph Gatto

and reach Callon. able Thank as look any more please And date that. exciting today to a things going months ground coming to always, the for over have in lot lot a a covered We'll the be out. and fill with forward Thanks of here all to We again. on you, keeping you with to up everyone, lot on. in questions, of interest joining

Operator

us. conference you joining today's concludes for Thank call. This

may now You disconnect.

Callon Petroleum (CPE) 2 Nov 232023 Q3 Earnings call transcript