Diamondback Energy Inc (FANG) 2023 Q2 法說會逐字稿

Good day, and thank you for standing by. Welcome to the Diamondback Energy Second Quarter 2023 Earnings Conference Call. (Operator Instructions) Please be advised that today's conference is being recorded.

美好的一天，感謝您的支持。歡迎參加響尾蛇能源 2023 年第二季度收益電話會議。 （操作員指示）請注意，今天的會議正在錄製中。

I would now like to hand the conference over to the VP of Investor Relations, Adam Lawlis. Please go ahead.

我現在想將會議交給投資者關係副總裁 Adam Lawlis。請繼續。

Thank you, Joe, Good morning, and welcome to Diamondback Energy's Second Quarter 2023 Conference Call.

謝謝喬，早上好，歡迎參加響尾蛇能源 2023 年第二季度電話會議。

During our call today, we will reference an updated investor presentation and Letter to Stockholders, which can be found on Diamondback's website. Representing Diamondback today are Travis Stice, Chairman and CEO; Kaes Van't Hof, President and CFO; and Danny Wesson, COO.

在今天的電話會議中，我們將參考更新的投資者介紹和致股東的信，這些內容可以在響尾蛇的網站上找到。今天代表 Diamondback 的是董事長兼首席執行官 Travis Stice； Kaes Van't Hof，總裁兼首席財務官；和首席運營官丹尼·韋森 (Danny Wesson)。

During this conference call, the participants may make certain forward-looking statements relating to the company's financial condition, results of operations, plans, objectives, future performance and businesses. We caution you that actual results could differ materially from those that are indicated in these forward-looking statements due to a variety of factors. Information concerning these factors can be found in the company's filings with the SEC. In addition, we will make reference to certain non-GAAP measures. The reconciliations with the appropriate GAAP measures can be found in our earnings release issued yesterday afternoon.

在本次電話會議期間，與會者可能會就公司的財務狀況、經營業績、計劃、目標、未來業績和業務做出某些前瞻性陳述。我們提醒您，由於多種因素，實際結果可能與這些前瞻性陳述中所示的結果存在重大差異。有關這些因素的信息可以在該公司向 SEC 提交的文件中找到。此外，我們還將參考某些非公認會計準則措施。與適當的公認會計準則措施的對賬可以在我們昨天下午發布的收益報告中找到。

I'll now turn the call over to Travis Stice.

我現在將把電話轉給 Travis Stice。

Good morning, and thank you, Adam.

早上好，謝謝你，亞當。

As Adam mentioned, last night, we released a shareholder letter in conjunction with our press release, and this is our second quarter in a row we've tried this. I hope you find it useful. We believe that, it not only increases the transparency directly to our shareholders but also improves efficiency, and those of you who have followed our story for a long time know how important improving efficiency is to us.

正如亞當提到的，昨晚，我們在新聞稿中發布了一封股東信，這是我們連續第二個季度嘗試這樣做。希望對你有幫助。我們相信，這不僅直接增加了對股東的透明度，而且還提高了效率，長期關注我們故事的人都知道提高效率對我們有多麼重要。

So with that, operator, let's move right into questions, if you'll open the line.

那麼，接線員，如果您願意的話，讓我們開始提問。

At this time, we will conduct the question-and-answer session. (Operator Instructions)

這時，我們將進行問答環節。 （操作員說明）

Our first question comes from the line of Neal Dingmann of Truist Securities.

我們的第一個問題來自 Truist Securities 的 Neal Dingmann。

Nice quarter.

不錯的季度。

Travis, my first question, maybe get right to it, is on service cost. and we've heard a lot of chatter about. Significantly, could you speak to maybe the current rig and frac rate environment today versus a couple of months ago? And maybe more importantly, what are you all assuming the change in cost for the remainder of the year, and how this could impact the '24 levels?

特拉維斯，我的第一個問題，也許是正確的，是服務成本。我們聽到了很多關於這個問題的討論。重要的是，您能否談談今天與幾個月前相比當前的鑽機和壓裂率環境？也許更重要的是，你們都假設今年剩餘時間的成本變化是什麼，以及這將如何影響 '24 水平？

Neal. That's a good question.

尼爾.這是個好問題。

When you look at our business partners on the service side, they have always been responsive to declining and increasing rig count, and the Permian Basin rig count continues to decline. And with the discipline we're seeing across the E&P space with the reluctance to increase spending, we believe that we will continue to see as often in cost on our -- from our friends on the service side.

當你觀察我們服務方面的業務合作夥伴時，他們總是對鑽機數量的減少和增加做出反應，而二疊紀盆地鑽機數量持續減少。鑑於我們在整個勘探與生產領域看到的紀律以及不願增加支出的情況，我們相信我們將繼續看到來自服務方面的朋友的成本增加。

Now with that, that's only part of the calculus. The other part, which we view more as the variable side, we continue to drive cost out of the equation with increased efficiency. And like we talked about in May, we also see continued input costs coming down on steel, cement and other items. So it's hard to forecast into the future, but we definitely believe that we're going to see a softening in many of the costs that we've seen from the first half of the year. And we also continue to rely on the organization to do things more efficiently, which they continue to do quarter-over-quarter.

現在，這只是微積分的一部分。另一部分，我們更多地將其視為可變方面，我們繼續通過提高效率來降低成本。正如我們在五月份談到的那樣，我們還看到鋼鐵、水泥和其他產品的投入成本持續下降。因此，很難預測未來，但我們絕對相信，我們將看到今年上半年的許多成本有所下降。我們還繼續依賴該組織更有效地開展工作，他們每個季度都在繼續這樣做。

So Travis, is it too early to call any deflation for next year at this point?

那麼特拉維斯，現在判斷明年是否會出現通貨緊縮還為時過早？

I think it's premature to call it deflation from where we're headed at the end of the year, Neal. I think high level, we entered the year in the Midland Basin in like in the low $700s a foot doing complete and equipped costs, and we'll probably exit the year in the low $600s a foot. Again, we're not calling for a cratering of the service market, we're just calling for a rationalization of it where costs, when we went up into the right for all service lines and raw materials for 7 or 8 quarters, and now that's coming back down to earth a little bit. So we can kind of enter 2024 and rest of 2023 in the low $600s per foot in the Midland Basin. That feels like a pretty good baseline for 2024.

尼爾，我認為從我們今年年底的走向來看，現在將其稱為通貨緊縮還為時過早。我認為在高水平上，我們在米德蘭盆地進入這一年時，完成的完整和裝備成本約為每英尺 700 美元，我們可能會以每英尺 600 美元的低價格結束這一年。再說一次，我們並不是在呼籲服務市場陷入困境，我們只是呼籲在成本方面進行合理化，當我們在 7 或 8 個季度提高所有服務線和原材料的權利時，現在這有點回到現實了。因此，進入 2024 年和 2023 年剩餘時間，米德蘭盆地的價格可能會保持在每英尺 600 美元的低位。這感覺是 2024 年的一個相當不錯的基準。

Great. Great point, guys. And then my second question on capital spend. Specifically, it looked like you slightly increased the midstream and upstream CapEx guidance very, very slightly. But I'm just wondering, are you able to give a little color on maybe how this will be allocated both for the upstream and midstream? And then potential benefits with this slight push in cost, especially noticeable around the midstream, but I'm curious around both, maybe any benefits that we could see from this upturn?

偉大的。很好，伙計們。然後是我關於資本支出的第二個問題。具體來說，看起來您非常非常輕微地略微增加了中游和上游資本支出指導。但我只是想知道，您能否就如何將其分配給上游和中游提供一些說明？然後，成本的輕微上漲會帶來潛在的好處，尤其是在中游地區，但我對兩者都很好奇，也許我們可以從這種好轉中看到任何好處？

Yes. I'll start with the upstream. We drilled a lot of wells in Q2, right? We've drilled a record amount of wells, 98 wells in the quarter. That would imply we're drilling almost 400 wells a year versus guidance at 340. So a lot of pipe in the ground, a lot of -- lot of footage drilled, almost a little over 1 million -- 1.1 million lateral feet. So it was a good quarter operations-wise, which is why we're slowing down the drilling pace in the second half of the year and building a few DUCs. So that's kind of part of the main bump on the DC&E side.

是的。我將從上游開始。我們在第二季度鑽了很多井，對吧？本季度我們鑽探了 98 口井，創歷史新高。這意味著我們每年鑽探近 400 口井，而指導值為 340 口。因此，地下有大量管道，鑽探了大量進尺，幾乎略高於 100 萬至 110 萬橫向英尺。因此，從運營角度來看，這是一個良好的季度，這就是為什麼我們在下半年放慢了鑽探速度並建造了一些 DUC。所以這是 DC&E 方面主要障礙的一部分。

And then on the midstream side, we have a lot of infrastructure in the Midland Basin that most of it is -- does have extra capacity. And if the neighbor needs water or needs to dispose the water and we have that capacity, we will spend a few dollars to connect to that person. So a few unique opportunities came up in Martin County throughout the last 3 or 4 months, and we're going to spend dollars to get a lot of barrels, and that's high payback, high-return midstream spend.

然後在中游方面，我們在米德蘭盆地有很多基礎設施，其中大部分確實具有額外的容量。如果鄰居需要水或需要處理水，而我們有能力，我們會花幾美元與那個人聯繫。因此，在過去的三四個月裡，馬丁縣出現了一些獨特的機會，我們將花費美元來獲得大量的石油，這是高回報、高回報的中游支出。

Our next question comes from the line of Neil Mehta of Goldman Sachs.

我們的下一個問題來自高盛的尼爾·梅塔。

The first question, Travis, is just on the M&A landscape in the Permian. And maybe you could talk about, do you see a role for Diamondback to continue to be a consolidator in the basin? And then also provide an update on the asset sales, if that program has gone very well for you guys?

特拉維斯，第一個問題是關於二疊紀盆地的併購情況。也許您可以談談，您認為響尾蛇公司是否可以繼續成為該盆地的整合者？然後還提供資產銷售的最新情況，如果該計劃對你們來說進展順利？

I'll take those in reverse order.

我將以相反的順序進行處理。

The -- if you're talking about the deals that we did earlier in the year, they've been seamlessly integrated with absolutely no issue. I will say that both of those companies we acquired were running more rigs than we're currently running now, which again continues to be the trend as you see acquisitions occur, operators that are acquiring or dropping rigs as they focus on increased profitability.

如果你談論的是我們今年早些時候所做的交易，它們已經無縫集成，絕對沒有任何問題。我要說的是，我們收購的兩家公司運行的鑽機數量都比我們目前運行的鑽機數量多，這再次成為趨勢，因為您會看到收購的發生，運營商正在購買或放棄鑽機，因為他們專注於提高盈利能力。

The landscape, Neil, certainly relative to what we've seen in the last couple of quarters. There's just really a few opportunities out there, I mean there was a rush primarily on the private equity side to the deals into the market. And relative to what we see right now, it's very, very limited.

尼爾，這種情況當然與我們在過去幾個季度所看到的情況有關。那裡確實有一些機會，我的意思是，主要是私募股權方面急於進入市場進行交易。相對於我們現在所看到的，它非常非常有限。

As to FANG's role in M&A, we have created a lot of shareholder value through M&A but our discipline has also been noteworthy as well, too. It's not important to win every deal. It's important to win deals that make us not bigger, but better, and so we'll continue to always hold ourselves accountable to that. But I'll go back to my earlier comment that relative to what we've seen in the first half of the year, it's pretty parse on a go-forward basis.

至於FANG在併購中的角色，我們通過併購創造了大量股東價值，但我們的紀律也值得注意。贏得每筆交易並不重要。贏得交易不是讓我們變得更大，而是讓我們變得更好，這一點很重要，因此我們將繼續始終對此負責。但我會回到我之前的評論，相對於我們在今年上半年所看到的情況，從未來的角度來看，這是相當解析的。

Thanks, Travis.

謝謝，特拉維斯。

And the follow-up is just optimal capital structure. We've talked about this in the calls over the years, but just how do you think about what the optimal cash level, leverage level is for the business? And it will help us sort of calibrate the return of capital profile for company too.

而後續的只是優化資本結構。多年來我們在電話會議中討論過這個問題，但您如何看待企業的最佳現金水平和槓桿水平？它也將幫助我們校準公司的資本回報率。

Sure. The leverage obviously moves around with the oil price, but I think having a leverage ratio of less than 1x is appropriate for the size and scale of a company of Diamondback size. I do think also the building a little bit of cash on the balance sheet continues to make sense in order to be opportunistic for share repurchases in a countercyclical way. But those are kind of the 2 inputs that we build our capital structure and return model around.

當然。槓桿率顯然會隨著油價的變化而波動，但我認為對於響尾蛇規模的公司來說，低於1倍的槓桿率是合適的。我確實認為，在資產負債表上積累一點現金仍然有意義，以便以反週期方式回購股票。但這些是我們構建資本結構和回報模型的兩個投入。

Please stand by for next question. Our next question comes from the line of Arun Jayaram from JPMorgan.

請等待下一個問題。我們的下一個問題來自摩根大通的 Arun Jayaram。

Travis and team. Both of my questions relate to CapEx.

特拉維斯和他的團隊。我的兩個問題都與資本支出有關。

My first question is on your updated guide, you're guiding to an $80 million decline in sequential CapEx in 4Q versus 3Q, which you're pegging as the new baseline. I was wondering if you could help us understand the drivers of the lower CapEx in 4Q versus 3Q?

我的第一個問題是關於您更新的指南，您預計第四季度的資本支出比第三季度連續下降 8000 萬美元，您將其作為新的基準。我想知道您是否可以幫助我們了解第四季度與第三季度資本支出較低的驅動因素？

Yes, Arun. I would say 4Q versus 3Q is a combination of lower activity and lower costs going through the system. As you know, we're a cash CapEx payer, so we can see a few months in advance what CapEx is looking like and certainly coming down in the outlines.

是的，阿倫。我想說，第四季度與第三季度相比，是系統活動減少和成本降低的結合。如您所知，我們是現金資本支出支付者，因此我們可以提前幾個月看到資本支出的情況，並且肯定會在輪廓中下降。

I would say generally, that's probably the low end of a baseline for the next year. I certainly think that a low $600s a quarter kind of run rate feels okay, $600 million a quarter run rate feels okay for 2024. It is on the August 1, so we're going to put that in pencil see where service costs shake out. But certainly, things tend to be moving our way from a well cost perspective. I gave some kind of cost per foot language earlier in the Midland Basin down to the low $600s by the end of the year. Still feels very achievable, and that kind of sets our targets for the upcoming year.

我想說，一般來說，這可能是明年基線的低端。我當然認為每季度600 美元的低運行率感覺還不錯，到2024 年每季度6 億美元的運行率感覺還不錯。那是在8 月1 日，所以我們要把它寫在鉛筆上，看看服務成本會在哪里波動。但可以肯定的是，從成本角度來看，事情往往會朝著我們的方向發展。我早些時候給出了米德蘭盆地每英尺成本到年底降至 600 美元的低點。仍然感覺非常容易實現，這為我們來年設定了目標。

Great.

偉大的。

And kind of stole my thunder here on the second question, but your 2024 outlook is to drive low single digits oil growth. I know the Street is now modeling around $650 million per quarter in CapEx, but it sounds like you're comfortable, case as we stand here today, at something in the low $600s.

關於第二個問題，有點搶了我的風頭，但你對 2024 年的展望是推動低個位數的石油增長。我知道華爾街現在的模型資本支出約為每季度 6.5 億美元，但聽起來你對我們今天站在這裡的情況感到滿意，在 600 美元左右。

Yes, I'd say that today. Obviously, still a lot of things to shake out, but I think the quality of the inventory that we have coming up as well as the high mineral interest in the core of the basin, and completely undeveloped sections and units feels like a very capital-efficient plan. We've kind of been highlighting this for the last couple of years. The guide on in QP transactions provided a lot of undeveloped inventory that we can bring a large-scale execution machine to, and now we're seeing the benefits of those couple of deals.

是的，我今天就這麼說。顯然，還有很多事情需要解決，但我認為我們即將推出的庫存質量以及盆地核心的高礦產興趣以及完全未開發的部分和單元感覺就像是一個非常資本-高效的計劃。過去幾年我們一直在強調這一點。 QP 交易指南提供了大量未開發的庫存，我們可以將大型執行機引入其中，現在我們看到了這兩項交易的好處。

Arun, just as a reminder, we've been guiding for kind of lower CapEx all year long in the back half, and we're seeing it play out now. And as we laid out on Slide 6 of our investor deck, sort of a forecast by quarter of what that looks like.

阿倫，提醒一下，我們全年都在指導下半年降低資本支出，現在我們看到它正在發揮作用。正如我們在投資者平台的第 6 張幻燈片中所展示的那樣，這是按季度進行的預測。

Our next question comes from the line of Derrick Whitfield of Stifel.

我們的下一個問題來自 Stifel 的 Derrick Whitfield。

Congrats on a strong quarter.

祝賀季度表現強勁。

Thanks, Derrick.

謝謝，德里克。

Staying on 2024, now that you've fully integrated FireBird and Lario, what is the right base level of activity that would support the 2024 outlook from a rig and frac spread perspective?

停留在 2024 年，既然您已經完全整合了 FireBird 和 Lario，那麼從鑽機和壓裂價差的角度來看，支持 2024 年前景的正確基本活動水平是多少？

Yes. I'll kind of highlight what we've done in 2023, and that feels like a good baseline for the forward plan, not forever, but how we think about capital allocation. We have a business where we can run 4 simul-frac crews efficiently, right? And simul-frac crew on the completion side completes about 80 wells a year. And for us, in this new business model of capital efficiency and profit value over volumes, we're focused on running the most efficient plan possible which would be that 4 simul-frac crew plan. Absent a major change in commodity price, that's -- the plan is the plan, and that allows the teams to plan their business and also allows us to execute at the lowest cost from a CapEx perspective. So kind of that 15-ish rigs and 4 simul-frac crews feels like a really good baseline for us.

是的。我會強調一下我們在 2023 年所做的事情，這感覺像是遠期計劃的良好基準，不是永遠的，而是我們如何考慮資本配置。我們的業務可以高效運行 4 名同步壓裂人員，對吧？完井側的同步壓裂人員每年完成約 80 口井。對於我們來說，在這種資本效率和利潤價值超過產量的新商業模式中，我們專注於運行盡可能最有效的計劃，即 4 人同時壓裂船員計劃。在商品價格沒有重大變化的情況下，計劃就是計劃，它允許團隊規劃他們的業務，也允許我們從資本支出的角度以最低的成本執行。因此，15 台左右的鑽機和 4 名同步壓裂人員對我們來說是一個非常好的基線。

And Derrick, just to add to that, this profitability model that we've been demonstrating now for multiple quarters in a row and the industry has pivoted to, I hope we have been able to demonstrate that volume growth is an output of efficient capital allocation that's laser-like focused on profitability. So as here on August 1, as we're entertaining questions on 2024, the volume growth will be an output of efficient capital allocation that maximizes the value for our capital allocation decisions.

德里克，補充一點，我們現在已經連續多個季度展示了這種盈利模式，並且行業已經轉向，我希望我們能夠證明銷量增長是有效資本配置的結果這就像激光一樣專注於盈利能力。因此，正如 8 月 1 日在這裡，當我們回答有關 2024 年的問題時，數量增長將是有效資本配置的結果，它可以最大化我們資本配置決策的價值。

Understood.

明白了。

And as my follow-up, I wanted to touch on well productivity, which you've rightly highlighted on Page 15 as a positive. When you look out to 2024, how do you guys think about well productivity relative to 2023? And then how does that project over the next few years? It feels like you guys have a very deep portfolio that has quite a bit of stability over the next several years.

作為我的後續行動，我想談談油井生產力，您在第 15 頁正確地強調了這一積極因素。當您展望 2024 年時，你們如何看待相對於 2023 年的油井產能？那麼未來幾年該項目的進展如何？感覺你們擁有非常深厚的投資組合，在未來幾年內具有相當的穩定性。

Yes, Derrick. I think generally, we feel very confident in the forward outlook for productivity. I think that's going to be a unique position in North American shale. We've been -- we timed deals very, very well, and we've made the shift to co-development 4 or 5 years ago now, and that's resulting in very steady productivity. You can see within 1% of 2022 levels already in '23. And I would just say flat feels like the baseline, and if it's better than that, that's one for the good guys.

是的，德里克。我認為總的來說，我們對生產力的前景非常有信心。我認為這將成為北美頁岩油的獨特地位。我們一直——我們對交易的時機把握得非常非常好，而且我們在四五年前就轉向了共同開發，這帶來了非常穩定的生產力。您可以看到 2023 年的水平已在 2022 年水平的 1% 以內。我只想說平坦感覺就像基線，如果比那更好，那就是好人的基線。

Derrick, we continue to lay out on Slide 16 in this deck what our inventory looks like. And as I look into the future, I couldn't be more confident about the long-term quality of our inventory. And in fact, that confidence in the future business plan is part of the reason that we're confident in being able to increase our base dividend. I mean that's, to me, the clearest indication from management to our owners about the future of our business and the quality of our inventory, is our ability to continually increase our base dividend. I think our quarterly CAGR for dividend increases is around 10% since we initiated it in 2018.

Derrick，我們繼續在本套幻燈片 16 上展示我們的庫存情況。當我展望未來時，我對我們庫存的長期質量充滿信心。事實上，對未來業務計劃的信心是我們有信心能夠增加基本股息的部分原因。我的意思是，對我來說，管理層向所有者傳達的關於我們業務的未來和庫存質量的最明確指示是我們不斷增加基本股息的能力。我認為自 2018 年開始增加股息以來，我們的季度複合年增長率約為 10%。

So I hope that helps.

所以我希望這會有所幫助。

Great. Well done, guys. .

偉大的。做的好各位。 。

Our next question comes from the line of Charles Meade of Johnson Rice.

我們的下一個問題來自約翰遜·賴斯 (Johnson Rice) 的查爾斯·米德 (Charles Meade)。

Travis, Kaes and Adam and the rest of the FANG crew there. .

Travis、Kaes、Adam 以及 FANG 的其他成員都在那裡。 。

Good Morning, Charles.

早上好，查爾斯。

Travis, I wonder if you could drill down a little bit on the improved cycle times that's allowing you to increase your gross well count for the year? Is this something that's -- I can think about a few possibilities. Is this something that where you have a couple of rigs that have just increased their performance? Or is this something that's more widespread across your whole rig fleet, like perhaps a bit selection or something like that which is letting every rig just to get through the laterals quicker? What's the driver there?

特拉維斯，我想知道您是否可以深入了解一下改進的循環時間，這使您能夠增加今年的總井數？這是——我可以考慮幾種可能性。您有幾個設備剛剛提高了性能嗎？或者這是在整個鑽機車隊中更普遍的東西，比如可能是一些選擇或類似的東西，可以讓每個鑽機更快地通過支管？那裡的司機是什麼？

Charles, I wish I could say it was one individual piece of technology that's transferable across our entire rig fleet, but it's much more subtle than that. And I'm going to let Danny give you some specific examples.

查爾斯，我希望我能說這是一項單獨的技術，可以在我們整個鑽機隊中轉移，但它比這要微妙得多。我將讓丹尼給你一些具體的例子。

But we get this question a lot, and it's always phrased in different ways about why does Diamondback do what they do, but the answer remains unchanged. It's the culture that we have that has an extreme focus on cost control and efficiencies. And the reason that, that's important to our culture is because when we make those gains in efficiencies, those gains become permanent in part to our future capital allocation decisions, which makes us more competitive for the same dollar that's that we're competing with relative to our peers. And it's not -- again, it's not 1 or 2 items. It's thousands of items that are decided upon every 1 of these rigs. And look, we have a healthy competition among our rigs and completion crews that we incentivized monetarily for efficiency and cost control measures.

但我們經常被問到這個問題，而且總是用不同的方式來解釋為什麼響尾蛇要做他們所做的事情，但答案仍然沒有改變。我們的文化非常注重成本控制和效率。這對我們的文化很重要，因為當我們提高效率時，這些收益在一定程度上對我們未來的資本配置決策來說是永久性的，這使我們在與相對競爭對手競爭的相同美元上更具競爭力。給我們的同齡人。再說一遍，這不是 1 或 2 件物品。每一台鑽機都決定了數千個項目。看，我們的鑽機和完井人員之間存在良性競爭，我們通過金錢激勵提高效率和成本控制措施。

And Dan, do you want to add some specifics on that?

丹，你想補充一些細節嗎？

Yes. I think we've seen certainly our year-over-year days reduced by some measurable percentage. And what it boils down to is the team's measuring every little thing they can on the rig and measuring which way those operational metrics are trending. And when one's not trending in the right direction, they attack it with a fervor that is unlike anything I've ever seen, and that continues to output year-over-year improvements in execution.

是的。我認為我們確實已經看到我們的天數同比減少了一些可測量的百分比。歸根結底，團隊正在測量鑽機上的每一個細節，並測量這些運營指標的趨勢。當一個人沒有朝著正確的方向發展時，他們會以一種我從未見過的熱情來攻擊它，並且這種熱情會繼續帶來執行力的逐年改進。

And this past month, we had a couple of wells that they've drilled at their all-time records for us at 7,500-foot laterals that were sub 5-day wells for just over 4 days of TD. And those results are remarkable, and we don't talk about individual well results a lot, but those are the things that we continue to do in the day-to-day of the company that can continue to drive our execution downward.

上個月，他們為我們在 7,500 英尺深的支管鑽井中創造了幾口井的歷史記錄，這些井是 5 天以內的井，TD 時間僅超過 4 天。這些結果是顯著的，我們不會過多談論單個油井的結果，但這些是我們在公司日常工作中繼續做的事情，可以繼續推動我們的執行力下降。

Charles, just 1 add to that. We just completed our quarterly reviews several weeks ago, and the teams present to us levels of details of measurement that Daniel was talking about, which is almost stunning to me, but we do it almost every quarter. And that is, they measure how long it takes to physically screw pipe together for 300 times for every trip they have to make. And in that measurement of just simply screwing pipe together in 5 minutes versus the next rig over that was 6 minutes, you think doesn't matter. But you do that several bit trips, bit runs per well, it adds up, and that's the level that our organization focuses on efficiency. And we have a lot of Diamondback employees listening into this call this morning, and I want them to hear that I'm proud of that work that they continue to do and deliver those results of 4 days, 7,500-foot wells that Danny just alluded to.

查爾斯，僅補充一點。幾週前我們剛剛完成了季度審查，團隊向我們展示了丹尼爾所說的測量細節級別，這對我來說幾乎是令人震驚的，但我們幾乎每個季度都會這樣做。也就是說，他們每次都要測量將管道物理擰緊 300 次所需的時間。在測量中，只需 5 分鐘即可將管道擰在一起，而下一個鑽機則需要 6 分鐘，您認為這並不重要。但是你這樣做了幾次鑽頭行程，每口井鑽頭運行，它加起來，這就是我們組織關注效率的水平。今天早上我們有很多 Diamondback 員工在聽這個電話，我希望他們聽到我為他們繼續從事的工作感到自豪，並交付了丹尼剛才提到的 4 天、7,500 英尺井的成果到。

Thank you, Travis. It reminds me that's saying what gets measured gets done. .

謝謝你，特拉維斯。它提醒我，這就是說，只要衡量，就會完成。 。

But second question, and this kind of gets to the capital structure question. The -- I wanted to ask how you view the decision into the trade opportunity that the share buybacks and the no buybacks? I'd like to see those no buybacks, and it looks like you guys did some good prices, but sometimes that could perhaps get lost in the -- because it's not technically cash returns to shareholders, but it is a return to shareholder. So how do you guys approach that look on buying back notes versus shares?

但第二個問題，這涉及到資本結構問題。我想問您如何看待股票回購和不回購這一交易機會的決定？我希望看到那些沒有回購，看起來你們做了一些不錯的價格，但有時可能會迷失——因為從技術上講，這不是股東的現金回報，但它是股東的回報。那麼，你們如何看待回購票據和股票呢？

Let me talk to you about how we discussed it at the Board level. The primary form of shareholder return is in our base dividend. And we put that in place to be not only a sustainable, but a growing base dividend. And as I talked about earlier this quarter, we increased our base dividend another 5%. And so as you look into the future, that base dividend will remain of paramount importance to us, and we believe that we have that base dividend covered down to $40 a barrel of oil. So I'll just give you some confidence as to that base dividend.

讓我和您談談我們在董事會層面是如何討論的。股東回報的主要形式是我們的基本股息。我們將其落實到位，不僅是可持續的，而且是不斷增長的基本股息。正如我本季度早些時候所說，我們將基本股息又增加了 5%。因此，展望未來，基本股息對我們來說仍然至關重要，我們相信我們將基本股息降至每桶 40 美元。所以我只是給你一些關於基本股息的信心。

The second piece of the equation is share buybacks, and share buybacks are determined based on our future expectation of future cash flows and turned into a stock price so that we can measure where we want to repurchase shares back. And so you can tell from the last several quarters, the fact that we've leaned in all of our discretionary free cash flow after our base dividend to repurchase shares. And in a general sense and not specific, because everybody wants to know what stock price we're using, which we won't say until the quarter is behind us. But the lower the stock price, the more you get share repurchases. The higher the stock price, you tend to purchase less. So I hope that makes sense.

等式的第二部分是股票回購，股票回購是根據我們對未來現金流的未來預期來確定的，並轉化為股票價格，以便我們可以衡量我們想要回購股票的位置。因此，從過去幾個季度的情況來看，我們已經將基本股息後的所有可自由支配的自由現金流用於回購股票。從一般意義上講，而不是具體意義上，因為每個人都想知道我們正在使用的股票價格，直到本季度結束後我們才會透露。但股價越低，你獲得的股票回購就越多。股票價格越高，您購買的股票就越少。所以我希望這是有道理的。

And then anything left over from that calculus, Charles, is going to be distributed in the form of a variable dividend because we made a commitment to our owners that we would return 75% of our free cash flow. So I hope that makes sense.

然後，查爾斯，這個演算剩下的任何東西都將以可變股息的形式分配，因為我們向所有者承諾，我們將返還 75% 的自由現金流。所以我希望這是有道理的。

Our next question comes from the line of [Tupas sanjov] from Benchmark Company.

我們的下一個問題來自 Benchmark Company 的 [Tupas sanjov]。

The first question is how you think of oil cuts going forward into '24? Is that a function of maybe the zones you're drilling or just spatially where the acreage is located? Or perhaps other factors like gas capture, et cetera?

第一個問題是您如何看待 24 世紀的石油削減？這是您正在鑽探的區域的函數還是僅取決於面積所在的空間位置？或者也許還有其他因素，例如氣體捕獲等？

Yes. Good question.

是的。好問題。

Listen, we're allocating a lot of capital to the Northern Midland Basin where it's very oily particularly early time. I think we kind of guide people to 59%, 60% oil. I think that's probably a fairly good baseline for the next few years. In a world where we're not growing as much, that oil cut stays flat and comes down slightly because the oil declined a little faster than the gas piece. But generally, we had a couple of higher gas cut wells in the Delaware Basin in the beginning of this year that boosted the gas production as a company. But overall, kind of high 50s, 60% in a good quarter would be a good range for oil cut.

聽著，我們正在向北米德蘭盆地分配大量資金，那裡石油非常多，特別是在早期。我認為我們有點引導人們使用 59%、60% 的石油。我認為這可能是未來幾年相當好的基準。在一個增長幅度不那麼大的世界裡，石油減產保持平穩，並略有下降，因為石油的下降速度比天然氣的下降速度要快一些。但總體而言，今年年初，我們在特拉華盆地擁有幾口氣產量較高的井，這提高了公司的天然氣產量。但總體而言，在一個好的季度中，50%、60% 的增幅將是一個不錯的減油範圍。

Right. Terrific.

正確的。了不起。

And the follow-up is, I guess, on asset sales. So they've been largely midstream. How do you think the market now is for upstream assets now that oil has returned back to $80 in the bid ask? And in the cash flow statement, I think there was $140 million, $150 million of asset purchases. Just curious if that's just a flow -- overflow from the first quarter on deals announced already or just immaterial acquisitions?

我猜，後續行動是資產出售。所以他們基本上處於中游。鑑於石油買賣價已回到 80 美元，您認為上游資產市場現在如何？在現金流量表中，我認為有 1.4 億美元、1.5 億美元的資產購買。只是好奇這是否只是一種流動——從第一季度已經宣布的交易中溢出，還是只是無關緊要的收購？

Yes. I'll take that 2 ways.

是的。我會採取兩種方式。

Generally, on the purchase side, we've been doing a little bit of leasing as well as a little bit of netting up. We try to make our asset teams involved in [BD]. They're making offers on undeveloped interests and those non-op pieces that we don't own in our development. So they're doing work there. We've been looking at leasing some of the deeper rights in the Midland Basin across some of our positions, so that's tied to some of those purchases in the cash flow statement.

一般來說，在購買方面，我們做了一點租賃，也做了一點淨賺。我們嘗試讓我們的資產團隊參與[BD]。他們正在對未開發的利益和我們在開發中不擁有的非運營部分提出報價。所以他們在那里工作。我們一直在考慮通過我們的一些頭寸租賃米德蘭盆地的一些更深層次的權利，因此這與現金流量表中的一些購買相關。

And then on the divestiture side, we've divested a good amount of what we deem non-core acreage and acreage that doesn't compete for capital in the next kind of 10 years of development, and have received some good prices there. I'd say we're on the sidelines more on the divestiture side today outside of what would be a very unique offer. Instead, we're more focused on the noncore midstream type divested like the OMOG divestiture we announced this earnings. We didn't increase our non-core asset sale target. We certainly have some more assets that make sense to sell, we'll just most likely be tagging along and not controlling the process.

然後在剝離方面，我們剝離了大量我們認為的非核心面積和在未來 10 年的發展中不會競爭資本的面積，並在那裡獲得了一些不錯的價格。我想說，除了非常獨特的報價之外，今天我們在剝離方面更多地處於觀望狀態。相反，我們更關注剝離的非核心中游類型，例如我們宣布的收益中的 OMOG 剝離。我們沒有提高非核心資產出售目標。我們當然還有更多值得出售的資產，我們很可能只是跟隨而不是控制流程。

(Operator Instructions) Our next question comes from the line of Leo Mariani of ROTH MKM.

（操作員說明）我們的下一個問題來自 ROTH MKM 的 Leo Mariani。

Want to talk a little bit about production here. So second quarter, a very nice beat versus the guidance. I think you guys said that you kind of drilled a record number of wells in the quarter. Looking at third quarter production guide, it does indicate that on a total basis, production should be down a little bit this quarter. Can you just help us kind of think through that dynamic a little bit with kind of record drilling last quarter, but production is coming down? Maybe you guys are kind of holding some wells off in terms of turning them in line until later in the year? What's kind of happening there?

想在這裡談談製作。因此，第二季度的表現與指導相比非常好。我想你們說過你們在本季度鑽探了創紀錄數量的油井。從第三季度的生產指南來看，確實表明從總體上看，本季度的產量應該會略有下降。您能否幫助我們思考一下上季度鑽探創紀錄但產量正在下降的動態？也許你們會推遲一些井的使用，直到今年晚些時候？那裡發生了什麼事？

Yes, Leo. I kind of see -- we kind of think about the oil guidance is what drives the decisions here at the company. I kind of see Q3 as flat to maybe up a little bit from Q2. But Q2 was a very good quarter from a completions perspective. The drilling side doesn't really drive the production profile. We were probably building a few DUCs in the back half of the year to set us up well for the next year. Completion cadence was also high in the first half of the year. I think we completed 89 wells in Q2, come down to kind of 80-ish for Q3 and Q4.

是的，利奧。我有點明白 - 我們認為石油指導是推動公司決策的因素。我認為第三季度與第二季度持平，甚至可能有所上升。但從完成情況來看，第二季度是一個非常好的季度。鑽井方面並不能真正驅動生產曲線。我們可能會在今年下半年構建一些 DUC，為明年做好準備。上半年的完成節奏也很高。我認為我們在第二季度完成了 89 口井，第三季度和第四季度大約完成了 80 口井。

So I think, again, the production is the output of smart capital-efficient decisions. If this was 2017 or 2018, we'd be stepping on the accelerator and spending more capital. But instead, we're focused on generating more free cash flow in the second half of the year and returning that cash to shareholders.

所以我再次認為，生產是明智的資本效率決策的產出。如果是 2017 年或 2018 年，我們就會加速並花費更多資本。但相反，我們的重點是在下半年產生更多的自由現金流並將這些現金返還給股東。

Okay. That's helpful.

好的。這很有幫助。

And then just on capital here. So kind of looking at kind of where you guys were in the second quarter. I mean, it looks like that's going to be the peak. So we should be expecting CapEx to come down, I guess, both in 3Q and in 4Q. How much of that is kind of related to service cost? You just talked about fewer completions in the second half, but is it really fourth quarter where you start to see maybe more service cost benefit? You talked about going from low $700s per foot start the year at a kind of low [$6s] by the end of the year. So are you starting to get some of that benefit here in 4Q? A similar number of completions, 80, should be down kind of a fair bit on capital here in 4Q? Just help us think of that a little bit.

然後就是這裡的資本。看看你們在第二季度的表現。我的意思是，看起來這將是頂峰。因此，我想我們應該預計第三季度和第四季度的資本支出都會下降。其中有多少與服務成本有關？您剛才談到下半年完工量減少，但您真的是在第四季度開始看到更多的服務成本效益嗎？您談到從年初每英尺 700 美元的低點到年底將降至每英尺 6 美元的低點。那麼您是否在第四季度開始獲得一些好處？類似的竣工數量（80 座）在第四季度的資本上應該會有所下降？請幫助我們思考一下。

Yes. I think right now, we're seeing the benefits of the raw materials decreases coming through the system, mainly pipe, cement, diesel. And now, it's kind of after this call through the -- into Q3 into Q4, some of the true service side rolling through the numbers. As we mentioned, we're a cash CapEx payer, so today, we're paying for activity in June. So we kind of have a good forward outlook that CapEx is coming down. I think the cost per foot we're seeing on wells put in the ground today is lower even than Q2, and that's all going to translate to a lower average well cost in the -- at the end of the year.

是的。我認為現在，我們看到了系統原材料減少的好處，主要是管道、水泥、柴油。現在，在這次電話會議之後，從第三季度到第四季度，一些真正的服務方正在滾動數字。正如我們提到的，我們是現金資本支出支付者，所以今天，我們為 6 月份的活動支付費用。因此，我們對資本支出正在下降抱有良好的前景。我認為我們今天看到的每英尺油井成本甚至低於第二季度，而這一切都將轉化為年底平均油井成本的降低。

Our next question comes from the line of Paul Cheng of Scotiabank.

我們的下一個問題來自豐業銀行的Paul Cheng。

Two questions, please.

請教兩個問題。

One of your large customer is pressing about how much is the EUR recovery way has improved or is going to improve based on the work that they are doing. Just wondering that -- Travis that in this debate, I mean, are you guys looking into that? Or that -- what does that -- based on today's technology and commodity price, is it economic for you to pursue trying to substantially improve the recoverable way? That's the first question.

您的一位大客戶正在詢問，根據他們正在做的工作，歐元復蘇方式已經改善了多少或將要改善多少。只是想知道 - 特拉維斯，在這場辯論中，我的意思是，你們正在調查這個問題嗎？或者說——那是什麼——基於今天的技術和商品價格，你追求大幅改進可回收方式對你來說是否經濟？這是第一個問題。

Second question is on -- yes.

第二個問題是——是的。

Why don't we answer the first 1 first.

我們為什麼不先回答第一個呢？

I think Diamondback is really a technology company that produces oil, and we spend a lot of time looking at improving EURs, we spend a lot of time looking across the bench line of what competitors and peers are doing. There's not a ton of secrets in the Permian Basin, so if there is a better mousetrap, we're going to find a way to do it. I think our advantage is that we can do it at a lower cost. So generally, we're constantly pursuing, improving EURs, improving recoveries, improving technologies. You'd expect us to be on our front foot there. I don't think we're going to spend a ton of dollars testing that, but would instead be a fast follower on anything that looks to be working.

我認為響尾蛇確實是一家生產石油的科技公司，我們花了很多時間研究如何提高歐元，我們花了很多時間審視競爭對手和同行正在做的事情。二疊紀盆地沒有太多秘密，所以如果有更好的捕鼠器，我們就會找到一種方法。我認為我們的優勢是我們可以以較低的成本做到這一點。所以總的來說，我們不斷追求提高歐元、提高回收率、改進技術。你會期望我們在那裡佔據先機。我認為我們不會花費大量資金來測試這一點，而是會快速追隨任何看起來有效的東西。

Yes. I mean based on what you can see today on the technology and the current pricing, is it profitable that you pursue such activities?

是的。我的意思是，根據您今天所看到的技術和當前定價，您從事此類活動是否有利可圖？

I don't think it's possible today. I certainly think there's some people spending money to look at it. But for us, we really want to allocate capital to the best returning projects that we have today. And that for us is high-return, multi-zone development in the Midland Basin.

我認為今天不可能。我當然認為有些人花錢來看它。但對我們來說，我們確實希望將資金分配給我們今天擁有的回報最好的項目。對我們來說，這就是米德蘭盆地的高回報、多區域開發。

Great.

偉大的。

The second question is on the (inaudible). You guys have been very successful, continue to lengthen it. I think the third quarter is expecting about 10,800 feet. Based on your existing land position in your portfolio, do you think that there's far more room for you to (inaudible) is going to be able to push substantially higher than here? Or that we are pretty close to the max, unless that there's some meaningful portfolio changes?

第二個問題是關於（聽不清）。你們已經非常成功了，繼續延長吧。我認為第三季度預計高度約為 10,800 英尺。根據您在投資組合中現有的土地地位，您是否認為您（聽不清）有更大的空間能夠大幅推高比這裡更高的水平？或者我們已經非常接近最大值了，除非有一些有意義的投資組合變化？

Yes. I think it's a risk-reward decision, Paul. There are certainly some areas where we can drill longer. I think -- but I think generally, the way our land position is laid out and the way our acreage sits today, that 10,000 to 11,000 range feels about right on average. We'd rather drill a 15,000 footer than two 7,500 footers. But I think today, we'd rather drill two 10,000 footers versus one 20,000 footer. So I think the drilling guys can do it on the drilling side. There's no doubt about that. But it's a risk/reward decision because if something bad happens at 18,000 feet, that's an expensive mistake. So we'd rather continue to get wells down at 10,000 feet in 8, 9 days consistently versus risking a 30, 40-day well when something goes wrong.

是的。我認為這是一個風險回報的決定，保羅。當然，在某些領域我們可以鑽探更長時間。我認為 - 但我認為總的來說，我們的土地位置的佈局方式以及我們今天的面積，10,000 到 11,000 的範圍平均感覺是正確的。我們寧願鑽一個 15,000 頁腳，也不願鑽兩個 7,500 頁腳。但我認為今天，我們寧願鑽兩個 10,000 頁腳，也不願鑽一個 20,000 頁腳。所以我認為鑽井人員可以在鑽井方面做到這一點。毫無疑問。但這是一個風險/回報的決定，因為如果在 18,000 英尺的高度發生不好的事情，那將是一個代價高昂的錯誤。因此，我們寧願在 8、9 天內持續在 10,000 英尺處打井，也不願在出現問題時冒險 30、40 天打井。

Thank you.

謝謝。

At this time, I would now like to turn it back to Travis Stice for closing remarks.

現在，我想請特拉維斯·斯蒂斯（Travis Stice）發表結束語。

Appreciate everyone listening in this morning. Good set of questions. I hope you have a fantastic day. If you've got any questions, just reach out to us at the number provided.

感謝今天早上收聽的每個人。很好的一組問題。我希望您度過愉快的一天。如果您有任何疑問，請通過提供的電話號碼與我們聯繫。

Thank you. At this time, that concludes today's conference. You may now disconnect.

謝謝。至此，今天的會議就結束了。您現在可以斷開連接。