Permian Resources Corp (PR) 2023 Q2 法說會逐字稿

Good morning, and welcome to Permian Resources conference call to discuss its second quarter 2023 earnings. Today's call is being recorded. A replay of the call will be accessible until August 16, 2023 by dialing (877) 674-7070 and entering the replay access code 908236 or by visiting the company's website at www.permianres.com. At this time, I will turn the call over to Hays Mabry, Permian Resources Senior Director of Investor Relations, for some opening remarks. Please go ahead.

早上好，歡迎參加 Permian Resources 電話會議，討論其 2023 年第二季度收益。今天的通話正在錄音。 2023 年 8 月 16 日之前，可通過撥打 (877) 674-7070 並輸入重播訪問代碼 908236 或訪問公司網站 www.permianres.com 來重播電話會議。此時，我將把電話轉給 Permian Resources 投資者關係高級總監 Hays Mabry，讓其發表一些開場白。請繼續。

Thanks, Ina, and thank you all for joining us on the company's second quarter earnings call. On the call today are Will Hickey, and James Walter, our Chief Executive Officer; Guy Oliphint, our Chief Financial Officer; and Matt Garrison, our Chief Operating Officer.

謝謝伊娜，也感謝大家參加我們公司第二季度的財報電話會議。今天參加電話會議的有威爾·希基 (Will Hickey) 和我們的首席執行官詹姆斯·沃爾特 (James Walter)； Guy Oliphint，我們的首席財務官；以及我們的首席運營官馬特·加里森 (Matt Garrison)。

Yesterday, August 2, we filed a Form 8-K with an earnings release reporting first quarter results for the company. We also posted an earnings presentation to our website that we will reference during today's call. You can find the presentation on our website homepage or under the News and Events section at www.permianres.com.

昨天，即 8 月 2 日，我們提交了 8-K 表格，其中附有報告公司第一季度業績的收益報告。我們還在我們的網站上發布了一份收益報告，我們將在今天的電話會議中參考。您可以在我們的網站主頁或 www.permianres.com 的新聞和活動部分找到該演示文稿。

I would like to note that many of the comments during this earnings call are forward-looking statements that involve risks and uncertainties that could affect our actual results and plans. Many of these risks are beyond our control and are discussed in more detail in the risk factors and the forward-looking statements sections of our filings with the Securities and Exchange Commission, including our quarterly report on Form 10-Q for the quarter ended June 30, 2023, which is also expected to be filed with the SEC later this afternoon. Although we believe the expectations expressed are based on reasonable assumptions, they are not guarantees of future performance and actual results or developments may differ materially.

我想指出的是，本次財報電話會議上的許多評論都是前瞻性陳述，涉及可能影響我們實際結果和計劃的風險和不確定性。其中許多風險超出了我們的控制範圍，並在我們向美國證券交易委員會提交的文件中的風險因素和前瞻性陳述部分進行了更詳細的討論，包括我們截至6 月30 日的季度10-Q 表格的季度報告，2023 年，預計也將於今天下午晚些時候向 SEC 提交。儘管我們相信所表達的期望是基於合理的假設，但它們並不是對未來業績的保證，實際結果或發展可能存在重大差異。

We may also refer to non-GAAP financial measures that help facilitate comparisons across periods and with our peers. For any non-GAAP measure we use, a reconciliation to the nearest corresponding GAAP measure can be found in our earnings release or presentation, which are both available on our website.

我們還可能會參考非公認會計準則財務指標，這些指標有助於促進跨時期以及與同行的比較。對於我們使用的任何非 GAAP 衡量標準，可以在我們的收益發布或演示文稿中找到與最接近的相應 GAAP 衡量標準的調節，這些都可以在我們的網站上找到。

With that, I will turn the call over to Will Hickey, Co-CEO.

接下來，我會將電話轉給聯合首席執行官威爾·希基 (Will Hickey)。

Thanks, Hays. This quarter represents our fourth consecutive quarter of strong execution since announcing the merger and forming Permian Resources, and we are still getting better every day. During Q2, we grew production by 8% from Q1 driven by robust second quarter well results. We dropped from 7 to 6 rigs due to the continued improvement in D&C efficiencies, and we continue to deliver on our return of capital framework. Our team continues to get better in executing the field, and we remain on track to achieve our full year and fourth quarter targets.

謝謝，海斯。本季度是我們自宣布合併並成立 Permian Resources 以來連續第四個季度的強勁執行力，而且我們每天都在進步。在第二季度強勁的油井業績推動下，第二季度產量較第一季度增長了 8%。由於 D&C 效率的持續提高，我們的鑽機數量從 7 台減少到 6 台，並且我們繼續實現資本回報框架。我們的團隊在執行領域不斷取得進步，我們仍有望實現全年和第四季度的目標。

Our assets continue to perform, as you can see on Slide 5 and from our Q2 production numbers. Wells placed online during the first half of the year are performing in line with 2022 results, and we expect consistent performance over the remainder of the year. This is no surprise as our large-scale multi-bench development philosophy has not changed, and we are developing the same targets in the same areas as last year. Said differently, our 2023 development plan is essentially the exact same plan we prosecuted in 2022 and what you should expect to see from us going forward.

正如您在幻燈片 5 和我們第二季度的生產數據中看到的那樣，我們的資產繼續表現良好。今年上半年上線的油井的表現與 2022 年的結果一致，我們預計今年剩餘時間表現將保持一致。這並不奇怪，因為我們的大規模多平台開發理念沒有改變，並且我們正在與去年相同的領域制定相同的目標。換句話說，我們的 2023 年發展計劃基本上與我們在 2022 年執行的計劃完全相同，也是您未來應該看到的。

On the operations side, our team continues to get better quarter-over-quarter by increasing efficiencies, resulting in reduced cycle times and lower costs. Our drilling department has further reduced flat times by optimizing our bottom hole assemblies and high grading our rig fleet. During the quarter, we drilled an average of 1,165 feet per day and set a company record by drilling a 2-mile Third Bone Spring Sand Well in Eddy County in just under 11 days.

在運營方面，我們的團隊通過提高效率、縮短週期時間並降低成本，繼續取得季度環比的進步。我們的鑽井部門通過優化我們的底部鑽具組件和提高我們的鑽機隊等級，進一步減少了停工時間。本季度，我們平均每天鑽探 1,165 英尺，並在不到 11 天內在埃迪縣鑽探了 2 英里長的第三骨泉沙井，創下了公司記錄。

Similarly, on the completion side, we were able to complete an average of 1,800 feet per day driven by increasing in pumping hours per day on our 2 dedicated frac fleets. Lastly, we've significantly expanded our water recycling efforts across both Texas and New Mexico. During the quarter, our completions team utilized 60% recycled water during its completion operations. To put our year-to-date water recycling efforts into perspective, through the first 6 months of the year, Permian Resources has already pumped more recycled water than both predecessor companies combined during all of last year. This not only advances our sustainability initiatives, but also provides both CapEx and LOE savings. We'll continue to use recycled water whenever possible in our operations.

同樣，在完井方面，通過增加 2 個專用壓裂車隊每天的泵送時間，我們能夠平均每天完成 1,800 英尺的施工。最後，我們在德克薩斯州和新墨西哥州顯著擴大了水回收工作。本季度，我們的完井團隊在完井作業中使用了 60% 的再生水。從我們今年迄今為止的水回收工作來看，今年前 6 個月，二疊紀資源公司抽取的回收水量已經超過了兩家前身公司去年全年的總和。這不僅推進了我們的可持續發展計劃，還節省了資本支出和 LOE。我們將在運營中盡可能繼續使用回收水。

This level of execution is a testament to the quality of our operations team and we'll continue to push for more, and I feel confident that we have the team in place to be able to execute on this goal. Now looking forward, we're continuing to work across the entire supply chain to further drive down costs as we head into next year. With what we know today, we expect greater than 10% cost deflation on a per lateral foot basis when comparing from the start of this year to the start of 2024. This paired with our asset quality and consistent development philosophy bodes well for 2024 capital efficiency.

這種執行水平證明了我們運營團隊的質量，我們將繼續推動更多，我相信我們的團隊能夠實現這一目標。現在展望未來，我們將繼續在整個供應鏈中努力，以在明年到來時進一步降低成本。據我們目前所知，從今年年初到 2024 年初，我們預計每橫向英尺的成本下降將超過 10%。這與我們的資產質量和一貫的發展理念相結合，預示著 2024 年的資本效率。

With that, I'll turn it over to Guy to cover financial results and capital returns for the quarter.

有了這個，我將把它交給蓋伊來報導該季度的財務業績和資本回報。

Thanks, Will. We continue to deliver on our 2023 plan with total company production of 156 MBOE per day, oil production of 84 MBO per day and cash capital expenditures of $371 million. Production growth of 8% over Q1 was a result of strong Q2 well results. The company generated adjusted EBITDAX of $492 million for the quarter. LOE was $5.50 per BOE, GP&T was $1.44 per BOE, cash G&A was $1.17 per BOE. LOE per BOE was 2% higher than Q1, largely due to higher water disposal costs following our SWD divestiture that we closed in March. As a reminder, we received $125 million of total cash consideration for that sale at closing.

謝謝，威爾。我們繼續實現 2023 年計劃，公司總產量為每天 156 MBOE，石油產量為每天 84 MBO，現金資本支出為 3.71 億美元。由於第二季度油井業績強勁，產量較第一季度增長 8%。該公司本季度調整後 EBITDAX 為 4.92 億美元。 LOE 為每 BOE 5.50 美元，GP&T 為每 BOE 1.44 美元，現金 G&A 為每 BOE 1.17 美元。每個 BOE 的 LOE 比第一季度高 2%，這主要是由於我們於 3 月份完成 SWD 剝離後水處理成本上升。提醒一下，我們在交易結束時收到了 1.25 億美元的總現金對價。

GP&T was higher than Q1 as a result of certain pads coming on and higher GP&T areas. G&A declined on both a per unit basis and an absolute basis driven by our relentless focus on reducing costs in our higher sequential production. We reported adjusted free cash flow of $80 million on a cash CapEx basis. Accrued CapEx for the quarter was $386 million, resulting in $65 million of adjusted free cash flow on an accrued basis.

由於某些墊片的出現和更高的 GP&T 區域，GP&T 高於第一季度。由於我們堅持不懈地致力於降低更高連續生產的成本，因此總費用和行政管理費用在單位基礎上和絕對基礎上均有所下降。我們報告，以現金資本支出為基礎的調整後自由現金流為 8000 萬美元。本季度應計資本支出為 3.86 億美元，應計基礎上調整後自由現金流為 6500 萬美元。

As we discussed in Q1, we have utilized the cash CapEx figure to calculate our variable dividend as we believe it better aligns with our focus on cash returns. We reported $0.14 per share of adjusted free cash flow on a cash CapEx basis and $0.27 per share of adjusted net income. As you can see on Slide 4, we are delivering $57 million of total shareholder returns in Q2. Our calculation begins with adjusted free cash flow of $80 million. We reduced that amount by our $0.05 per share base quarterly dividend or $28 million. We have committed to pay 50% of the remainder of free cash flow to shareholders via dividends or buybacks. This quarter, we are achieving that target with a variable dividend of $0.05 per share.

正如我們在第一季度所討論的，我們利用現金資本支出數據來計算我們的可變股息，因為我們相信它更符合我們對現金回報的關注。我們公佈的現金資本支出每股調整後自由現金流為 0.14 美元，調整後淨利潤為每股 0.27 美元。正如您在幻燈片 4 中看到的，我們在第二季度實現了 5700 萬美元的股東總回報。我們的計算以調整後的自由現金流為 8000 萬美元開始。我們將每股基礎季度股息減少了 0.05 美元，即 2800 萬美元。我們承諾通過股息或回購的方式向股東支付剩餘自由現金流的 50%。本季度，我們以每股 0.05 美元的可變股息實現了這一目標。

Turning to Slide 8. We remain focused on maintaining a strong balance sheet that supports strategic flexibility as well as our shareholder return program. We have no near-term maturities and well over $1 billion of liquidity on our RBL. We expect to continue to utilize free cash flow to reduce net debt over time. Our hedge summary is included in the appendix, where you'll see we have hedges in place for approximately 30% of our expected crude oil production for the remainder of the year at a weighted average floor price of approximately $82. These hedges are in line with our existing hedging strategy and consistent with our desire to be able to act opportunistically in the event of a downturn.

轉向幻燈片 8。我們仍然致力於維持強大的資產負債表，以支持戰略靈活性以及我們的股東回報計劃。我們的 RBL 沒有短期到期日，且流動性遠遠超過 10 億美元。我們預計隨著時間的推移，將繼續利用自由現金流來減少淨債務。我們的對沖摘要包含在附錄中，您將在其中看到我們對今年剩餘時間內預期原油產量的約 30% 進行了對沖，加權平均底價約為 82 美元。這些對沖符合我們現有的對沖策略，也符合我們在經濟低迷時能夠採取機會主義行動的願望。

With that, I will turn it over to James.

這樣，我就把它交給詹姆斯了。

Thanks, Guy. We are proud to report that we have continued to make progress towards our goal of being the lowest cost operator in the Permian. We strive to be an industry leader across the entire cost structure, D&C, LOE, G&A and ultimately cost of capital.

哥們，謝啦。我們很自豪地報告，我們在成為二疊紀成本最低運營商的目標方面不斷取得進展。我們努力成為整個成本結構、D&C、LOE、G&A 以及最終資本成本的行業領導者。

Slide 7 highlights our continued quarter-over-quarter and year-over-year improvement in G&A per BOE. We have lowered G&A per BOE by approximately 40% when compared to Centennial's stand-alone quarter in Q2 2022. This improvement in G&A from $1.95 per BOE to $1.17, resulted in an incremental $12 million of free cash flow for the quarter. Not only have we improved compared to our historical performance, we have quickly jumped to a leading position compared to our peers, but on a G&A per BOE basis as well as a G&A per operated basis, which is a further testament to our talented team and highly efficient operations.

幻燈片 7 強調了我們每個 BOE 的 G&A 的季度環比和同比持續改善。與Centennial 2022 年第二季度的獨立季度相比，我們將每個BOE 的G&A 降低了約40%。 G&A 從每個BOE 的1.95 美元提高到1.17 美元，導致該季度的自由現金流增加了1200 萬美元。與歷史業績相比，我們不僅取得了進步，而且與同行相比，我們也迅速躍居領先地位，而且在每個BOE 的G&A 以及每個運營商的G&A 基礎上，這進一步證明了我們的才華橫溢的團隊和高效運營。

Our team is always looking for well efficiencies across our entire cost structure to further enhance our free cash flow and drive value for shareholders. I'd like to close our prepared remarks today by turning to Slide 9, where we provide a quick recap of the goals we set out earlier in the year and our progress against those goals today. First, as a result of our robust and consistent well performance, we remain on track to deliver peer-leading organic oil production growth of 10% exit to exit or over 15% on a full year pro forma basis. Two, we continue to execute on all spectrums of our capital return program, returning approximately $200 million or $0.35 per share to shareholders through our base dividend variable dividend and share repurchase program. Three, through the combination of shared best practices and operational execution, we've driven significant operational efficiencies, which have lowered our overall cost structure, reduced cycle times and ultimately made our business more capital efficient. Four, we continue to optimize our portfolio, driving meaningful value for shareholders. Between bolt-on acquisitions and our active ground game, we've acquired over 5,000 high-quality acres offsetting our position in the core of the Delaware.

我們的團隊始終致力於提高整個成本結構的效率，以進一步增強我們的自由現金流並為股東創造價值。我想通過幻燈片 9 來結束我們今天準備好的發言，我們在其中快速回顧了今年早些時候制定的目標以及我們今天實現這些目標的進展情況。首先，由於我們強勁且穩定的油井表現，我們仍有望實現同行領先的有機油產量增長 10%，預計全年增長 15% 以上。第二，我們繼續執行所有資本回報計劃，通過基本股息可變股息和股票回購計劃向股東回報約 2 億美元或每股 0.35 美元。第三，通過共享最佳實踐和運營執行的結合，我們顯著提高了運營效率，從而降低了我們的整體成本結構，縮短了周期時間，並最終提高了我們業務的資本效率。第四，我們持續優化投資組合，為股東帶來有意義的價值。通過補強收購和積極的地面遊戲，我們已經收購了 5,000 多英畝優質土地，抵消了我們在特拉華州核心的地位。

We've also successfully divested noncore STV assets in Reeves County for $125 million, representing a significant premium to our current trading multiple. Lastly, but perhaps most importantly, we've executed all of the above while maintaining a strong balance sheet with ample liquidity, which will allow our business to thrive and create outsized shareholder value in any commodity price environment. We're excited about where the business stands today and feel like we have significant momentum as we head into the back half of the year. Our team has come together well, and we continue to execute on the plan we laid out to start the year. We're well positioned to generate robust free cash flow and deliver significant returns to shareholders, while maximizing long-term valuation.

我們還成功以 1.25 億美元的價格剝離了里夫斯縣的非核心 STV 資產，這比我們當前的交易倍數顯著溢價。最後，但也許最重要的是，我們在執行上述所有措施的同時，保持了強勁的資產負債表和充足的流動性，這將使我們的業務蓬勃發展，並在任何商品價格環境中創造巨大的股東價值。我們對目前的業務狀況感到興奮，並認為在進入今年下半年時我們將擁有強勁的勢頭。我們的團隊團結一致，我們將繼續執行年初制定的計劃。我們有能力產生強勁的自由現金流，為股東帶來可觀的回報，同時實現長期估值最大化。

Finally, as we put out in our press release yesterday afternoon, it's worth noting that Matt Garrison, our Chief Operating Officer, will be departing the company on September 1 for personal reasons. As I sit here in the commentary with Matt, on what would be his last earnings call, it's worth taking a moment to reflect on the tremendous contribution that has made to Permian Resources. He has shown incredible dedication and leadership to this company, both during the past year, Permian Resources as well as the prior 6 years at our predecessor, Centennial. Will, myself and the entire Permian Resources team have enjoyed rolling up our sleeves and working alongside Matt. He's been a great contributor, business partner and friend.

最後，正如我們在昨天下午的新聞稿中指出的那樣，值得注意的是，我們的首席運營官馬特·加里森 (Matt Garrison) 將於 9 月 1 日因個人原因離開公司。當我坐在這裡與馬特一起發表評論時，這是他最後一次財報電話會議，值得花點時間反思一下對二疊紀資源做出的巨大貢獻。無論是在 Permian Resources 的過去一年，還是在我們前身 Centennial 的前 6 年，他都對這家公司表現出了令人難以置信的奉獻精神和領導能力。威爾、我本人以及整個二疊紀資源團隊都非常享受捲起袖子與馬特一起工作。他是一位偉大的貢獻者、商業夥伴和朋友。

From an organizational standpoint, Matt's direct operational reports will report to Will Hickey going forward. With Will's operational background, this will be a natural fit and something we're all excited about as it will allow for more streamlined communication and quicker decision-making between the field and the CEO. In closing, I'd like to again thank Matt for everything he's done at PR. We'll miss him going forward to wish him and his family the best in the future.

從組織的角度來看，馬特的直接運營報告將向威爾·希基匯報。憑藉 Will 的運營背景，這將是一個自然的契合，也是我們都感到興奮的事情，因為它將允許現場和首席執行官之間更簡化的溝通和更快的決策。最後，我想再次感謝馬特在公關方面所做的一切。我們會想念他，祝他和他的家人未來一切順利。

Thank you for listening, and now I will turn it back to the operator for Q&A.

感謝您的收聽，現在我將其轉回給接線員進行問答。

(Operator Instructions)

（操作員說明）

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

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

Nice quarter. My first question is on Slide 5. By looking at this and even the last couple of quarters, certainly appears you all continue to see some very strong well consistency. I'm just wondering, can you speak to what's driving this? Is it the target of the key intervals or your spacing or completions as it looks like the wells continue to be very consistent, both on a production and GOR basis?

不錯的季度。我的第一個問題是在幻燈片 5 上。通過觀察這一點，甚至過去幾個季度，你們肯定會繼續看到一些非常強的一致性。我只是想知道，你能談談是什麼推動了這一點嗎？它是關鍵層段的目標，還是您的間距或完井的目標，因為看起來這些井在生產和 GOR 的基礎上仍然非常一致？

Yes. Thanks, Neal. I mean, really, I think what's driving it is that we haven't significantly or really at all changed any of those things you listed. We just -- we're in a fortunate position that we've got a deep bench of inventory to kind of keep doing what we've always done. So we're still drilling those same targets in the same areas. And we've made little tweaks to completion designs to try to drive some cost, but nothing that's had any kind of any change to productivity. So kind of the short story is we're just doing what we've always done, and this is what you should expect for the next few years going forward.

是的。謝謝，尼爾。我的意思是，實際上，我認為推動這一趨勢的是我們沒有顯著或真正改變了你列出的任何事情。我們只是 - 我們處於一個幸運的位置，我們擁有大量庫存，可以繼續做我們一直在做的事情。因此，我們仍在同一地區鑽探相同的目標。我們對完井設計做了一些調整，試圖降低一些成本，但沒有對生產力產生任何改變。簡而言之，我們只是在做我們一直在做的事情，這就是你在未來幾年應該期待的事情。

Yes, it's great to see the consistency. And then my second question is on the OFS cost and operational efficiencies. I'm just wondering you mentioned on Slide 6. where you've high-graded the number of your D&C services. And I'm just wondering, when you do this, are you seeing as much potential cost to place on the high-spec equipment as you can see on the lesser quality side, and what type of improvement or results do you all see? I guess what I'm asking is like, what's the advantage of going to the high-spec if potentially maybe see some lower cost on some of the lesser equipment?

是的，很高興看到一致性。我的第二個問題是關於 OFS 成本和運營效率。我只是想知道您在幻燈片 6 中提到過，您對 D&C 服務的數量進行了高度評價。我只是想知道，當您這樣做時，您是否會看到高規格設備的潛在成本與質量較低的設備一樣多，以及您都看到什麼類型的改進或結果？我想我要問的是，如果某些較低設備的成本可能較低，那麼採用高規格的優勢是什麼？

No, I think that's right. I think kind of across the industry, we've seen that costs have come down on the low-spec stuff first. And the hope is that we'll start to drive some cost down on the high-spec stuff kind of between now and the end of the year. Really, what we've seen is just our ability to kind of continue to reduce cycle times and cut days out on the drilling intent side, kind of more than offsets that site premium we have to pay for that equipment. But as we've always been, I mean, we're always kind of evaluating what that equation looks like, what the kind of overall cost structure looks like with high spec versus lower spec. And hopefully, we'll kind of continue to both cut days and maybe get some kind of cost reductions on the high-spec stuff between now and the beginning of next year.

不，我認為這是對的。我認為在整個行業中，我們已經看到低規格產品的成本首先下降了。希望我們能從現在到今年年底開始降低高規格產品的成本。事實上，我們所看到的只是我們有能力繼續縮短週期時間並減少鑽井意圖方面的天數，這足以抵消我們必須為該設備支付的場地溢價。但正如我們一直以來的那樣，我的意思是，我們總是在評估這個等式是什麼樣子，高規格與低規格的總體成本結構是什麼樣的。希望從現在到明年初，我們能夠繼續縮短生產時間，並可能在高規格產品上實現某種程度的成本削減。

And your next question comes from the line of Zach Parham from JPMorgan.

您的下一個問題來自摩根大通的 Zach Parham。

I guess, first, just on the production trajectory. You all reaffirmed the exit rate on oil growth guidance. Can you talk a little bit about what 3Q looks like, just trying to get a sense of where production goes from here?

我想，首先，只是在生產軌跡上。你們都重申了石油增長指引的退出率。您能否簡單談談 3Q 的情況，只是想了解一下生產的走向？

Yes, sure. So I think the expertise so 3Q will be kind of low single-digit growth percentage from where we were in Q2, and then slightly more kind of higher percentage growth from Q4 to Q3 to kind of ultimately get to that Q4 exit rate that we discussed at the beginning of the year.

是的，當然。因此，我認為第三季度的專業知識將比第二季度低個位數增長，然後從第四季度到第三季度略有更高的百分比增長，最終達到我們討論的第四季度退出率今年年初。

Got it. I guess just following up on Neal's question on cost deflation. We've heard others mention 5% to 7% lower year-over-year well costs in 2024. Does that number seem reasonable to you? Maybe can you just talk through what you're seeing on cost deflation now? And if you're seeing any substantial declines on any of the larger ticket items?

知道了。我想只是跟進尼爾關於成本緊縮的問題。我們聽說其他人提到 2024 年油井成本將同比降低 5% 至 7%。您認為這個數字合理嗎？也許您可以談談您現在所看到的成本通貨緊縮的情況嗎？如果您發現任何較大的門票項目有大幅下降？

S Yes. I mean, I think that we'd be at the high end of that range based on what we're seeing today, primarily driven by just 2-wheelers and casing. I mean, we can point to kind of 5% reduction based on the casing we're purchasing today, which will ultimately run in Q1. So we've kind of got 5% in the bag. And now we're starting to chip away at things on the completion side and kind of other kind of fine items across the whole AFE. So I think based on what we're seeing today, we've got kind of good line of sight to 10%, and I'm hoping we can kind of call back more between now and then and hopefully beat that number when we get to next year.

是的。我的意思是，我認為根據我們今天所看到的情況，我們將處於該範圍的高端，主要由兩輪車和外殼驅動。我的意思是，根據我們今天購買的外殼，我們可以指出 5% 的減少，最終將在第一季度運行。所以我們已經有 5% 的收入了。現在我們開始在整個 AFE 中削減完成方面的東西以及其他類型的精美物品。所以我認為，根據我們今天所看到的情況，我們的視線已經達到了 10%，我希望我們可以從現在到那時進行更多回電，並希望當我們得到時能夠打破這個數字。到明年。

And your next question comes from the line of Geoff Jay from Daniel Energy Partners.

您的下一個問題來自 Daniel Energy Partners 的 Geoff Jay。

I was just curious, there's been a lot of commentary on some of the other calls about M&A in the Permian in particular, with, I guess, sort of the notion that it's pretty picked over and that what's left, there's not a lot left in the till, and I know you guys are kind of all seeing on this front. So I was wondering what your sense of the land or land was there?

我只是很好奇，對於其他一些有關二疊紀盆地併購的呼籲，有很多評論，我想，有一種觀點認為，它已經被淘汰了，剩下的，已經沒有多少了收銀台，我知道你們都在這方面看到了。所以我想知道你對那裡的土地或土地有什麼感覺？

Yes. I mean, I think starting with the grassroots effort that I think our team does incredibly well. Like we're still finding great opportunities, kind of think smaller blocking and tackling acquisitions ahead the drill bit. And as you saw, we did that in this quarter. We've really done that every quarter for 8 years and something we're highly confident we can continue to do. And look, those are some of the most highly attractive, highest rate of return acquisitions that we can find. I think on bigger stuff, there's still stuff out there. I think you've seen a lot of transactions in the Permian. I think it's safe to say we're looking at everything. But as we've said before, we've got a really good business, and that sets the bar for acquisitions really high.

是的。我的意思是，我認為從基層的努力開始，我認為我們的團隊做得非常好。就像我們仍在尋找巨大的機會一樣，在鑽頭之前考慮較小的阻礙和解決收購問題。正如您所看到的，我們在本季度做到了這一點。 8 年來，我們每個季度都這樣做，並且我們非常有信心能夠繼續這樣做。看，這些都是我們能找到的最具吸引力、回報率最高的收購。我認為在更大的事情上，仍然有一些東西。我想你已經在二疊紀見過很多交易了。我認為可以肯定地說我們正在考慮一切。但正如我們之前所說，我們的業務非常好，這為收購設定了很高的門檻。

I'd say we've got one of the highest quality inventory bases out there. So we're only going to do deals that provide inventory that compete for capital. And I think the better our business gets, the harder that is. But looking, I think if we can find something that was accretive, and we were confident to make our business better, we'd be excited to pursue it. But I think at this point, we're also more than happy to stay on the sidelines and just keep working on our base business because it's so good.

我想說我們擁有最高質量的庫存基地之一。因此，我們只會進行提供可爭奪資本的庫存的交易。我認為我們的業務越好，就越困難。但我認為，如果我們能找到一些可以增值的東西，並且我們有信心讓我們的業務變得更好，我們就會很高興去追求它。但我認為在這一點上，我們也非常樂意保持觀望並繼續致力於我們的基礎業務，因為它非常好。

And your next question comes from the line of Paul Diamond with Citi.

你的下一個問題來自花旗銀行的保羅·戴蒙德 (Paul Diamond)。

Just a quick one. The -- you guys noted a 2% increase in LOE on kind of water handling expenses. I guess I wanted to get an understanding of how sticky we should think about that or if that trend should go forward? Or do you expect it to kind of drop back down?

只是快一點。你們注意到水處理費用的 LOE 增加了 2%。我想我想了解我們應該如何看待這個問題，或者這種趨勢是否應該繼續發展？或者你預計它會回落嗎？

Yes. I mean specifically, that's the SWD divestiture. So obviously, those assets are sold, and so that part of it will be sticky. But I think what you'd expect from us is that probably puts us to the high end of the LOE range for the back half of this year. But as we continue to kind of grow production and grow the base and just given the fixed cost nature of some of those LOE costs, I do expect kind of as you look out over the next few years, we'll be able to drive that down if we do continue to grow the base production.

是的。我具體指的是社會福利署的剝離。顯然，這些資產已被出售，因此這部分資產將具有粘性。但我認為您對我們的期望是，這可能會讓我們在今年下半年達到 LOE 範圍的高端。但隨著我們繼續增加產量和擴大基礎，並且考慮到其中一些 LOE 成本的固定成本性質，我確實預計，正如您在未來幾年中看到的那樣，我們將能夠推動這一目標如果我們繼續增加基礎產量，就會下降。

Understood. Maybe just one quick follow-up. You guys are dropping a rig on efficiency, holding production steady to up. Just on a longer term, what -- are there any bogeys out there that would have you bring back a rig for growth, whether in '24 or beyond is what we need to see in order to kind of make that move?

明白了。也許只是一個快速跟進。你們正在降低效率，保持產量穩定增長。從長遠來看，無論是在 24 年還是以後，我們需要看到什麼才能讓你帶回增長的裝備，以便採取這一行動？

Yes. I mean I think for us, we've been pretty clear. We're not providing any kind of outlook on to 2024 at this point. I think we've been really clear with the market that that's a decision we'll make as we get closer to next year. I think for us. As we've said for the past 12 months, any kind of decisions to increase or decrease activity are going to be driven by what maximizes midterm free cash flow for our investors. And I think today, it's too early to tell what 2024 looks like. I think with a low service cost environment and a higher commodity price, I think that probably leans towards growth. And I think if things go the other way, you could see us dial back activity. So I think today, it's too early to tell, but it's something we're constantly kind of watching and planning around, and we've got the right team in the asset base. We can react quickly as we put out a plan closer to next year.

是的。我的意思是，我認為對我們來說，我們已經非常清楚了。目前我們不提供對 2024 年的任何展望。我認為我們已經向市場明確表示，這是我們在接近明年時做出的決定。我想對我們來說。正如我們在過去 12 個月中所說的那樣，任何增加或減少活動的決定都將取決於投資者的中期自由現金流最大化。我認為現在判斷 2024 年會是什麼樣子還為時過早。我認為，在服務成本較低的環境和商品價格較高的情況下，我認為這可能傾向於增長。我認為如果事情朝相反的方向發展，你可能會看到我們減少活動。所以我認為現在說還為時過早，但我們一直在關注和規劃這一點，而且我們在資產基礎上擁有合適的團隊。當我們在接近明年的時候制定計劃時，我們可以迅速做出反應。

And your next question comes from the line of Subhasish Chandra from Benchmark.

您的下一個問題來自 Benchmark 的 Subhasish Chandra。

Two questions. First is, do we think of 4Q to 4Q as sort of being the benchmark as you talk about 2024 plans, is that sort of the math we should be looking at?

兩個問題。首先，當您談論 2024 年計劃時，我們是否認為第四季度到第四季度是基準，這是我們應該考慮的數學嗎？

The real frank answer is we put our Q4 to Q4 because we didn't have a clean, simple pro forma number that the market was familiar with last year. I think when we get to a place when we start talking about out years, I think we'll probably shift and start talking annual growth rates. I think that's simpler and cleaner. And now that we'll have a full year under our belt at that time, I think that will make a lot more sense. So I think Q4 to Q4 made sense kind of given the context of the merger. But as we look to the future, I think probably best for us and everyone else to start thinking annual growth rates.

真正坦率的答案是，我們把第四季度放在第四季度，因為我們去年沒有一個市場熟悉的干淨、簡單的預估數字。我認為，當我們開始談論未來幾年時，我們可能會轉變並開始談論年增長率。我認為這更簡單、更乾淨。現在我們將在那時度過一整年，我認為這將更有意義。因此，我認為考慮到合併的背景，第四季度到第四季度是有意義的。但當我們展望未來時，我認為對我們和其他所有人來說，開始考慮年增長率可能是最好的。

Got it. Okay. My follow-up, and we've seen this across multiple Permian operators is a bit of a declining oil cut, a host of reasons, but I guess, in maintenance that should be expected, I suppose. But how do you think about that for you guys in '24?

知道了。好的。我的後續行動是，我們在多個二疊紀運營商中看到了這一點，即石油減產有所下降，原因有很多，但我想，在維護方面，我認為這應該是可以預料到的。但對於 24 世紀的你們來說，你們對此有何看法？

I'd expect kind of flat oil cut if the kind of commodity price market looks like it does today. Obviously, we've got the asset base that if we saw a significant outperformance of gas between now and then that we could kind of shift development accordingly. But I think the base case is flat oil cuts for '24.

如果大宗商品價格市場像今天這樣，我預計石油價格會出現平緩。顯然，我們擁有的資產基礎是，如果從現在到那時我們看到天然氣的表現顯著優於我們，我們就可以相應地改變發展方向。但我認為基本情況是 24 年石油減產持平。

And your next question comes from the line of Josh Silverstein from UBS.

您的下一個問題來自瑞銀集團 (UBS) 的喬什·西爾弗斯坦 (Josh Silverstein)。

We've started to hear some more Permian offers go out towards 15,000-foot laterals even a little bit beyond it. I'm wondering if what you guys have done, what your average lateral length may be this year and what the inventory or some of the longer laterals may look like?

我們已經開始聽到更多的二疊紀報價向 15,000 英尺的側線延伸，甚至稍微超出這個高度。我想知道你們做了什麼，今年你們的平均橫向長度可能是多少，庫存或一些較長的橫向長度可能是什麼樣子？

Yes. So our average lateraling to date this year is 9,300 feet, which kind of fits. If you look at our position on the sets up really well for 2-mile development across the majority of our position. So I think that's what we've done over the last 2 years, and that's what you should expect going forward. As far as just 3-mile laterals in general, I think in the Delaware Basin, just given the overall productivity of those wells and how much fluid they make, it's probably slightly less efficient than what you'd get on the Midland Basin when you go that long.

是的。因此，今年迄今為止我們的平均側向長度為 9,300 英尺，這很合適。如果您看看我們在大部分位置上的 2 英里開發設置非常好。所以我認為這就是我們過去兩年所做的事情，這也是你應該期待的未來。就一般而言 3 英里的支管而言，我認為在特拉華盆地，只要考慮到這些井的整體生產力及其產生的液體量，它的效率可能會比米德蘭盆地的效率略低。走那麼久。

Having said that, we've got a team that can do it. We've drilled plenty of 2.5-mile laterals this year and over the -- kind of over time. So we'll keep watching it. We feel very confident that if that is the most capital efficient answer that we'll move that direction. But I think as a base case, you should expect we're kind of a 2-mile development company next year.

話雖如此，我們有一個可以做到這一點的團隊。今年我們已經鑽探了大量 2.5 英里的支線，並且隨著時間的推移。所以我們會繼續關注。我們非常有信心，如果這是最具資本效率的答案，我們將朝這個方向前進。但我認為，作為一個基本案例，你應該預計明年我們將成為一家 2 英里開發公司。

Got it. Understood. And then just on the return on capital and cash to the balance sheet. You still have the 50% plus return on capital framework. Just given that you don't have any maturity of that until 2026 and ramping free cash flow and stock is still trading at a low multiple. How do you balance the opportunity for share repurchases versus just building cash? Because obviously, you guys are committed to the base dividend and variable dividend, but just curious about upside and buybacks versus cash on hand?

知道了。明白了。然後就是資產負債表上的資本和現金回報率。您仍然擁有 50% 以上的資本回報率框架。只是考慮到到 2026 年才到期，而且自由現金流不斷增加，而且股票交易價格仍處於較低水平。您如何平衡股票回購的機會與僅僅積累現金的機會？因為顯然，你們致力於基本股息和可變股息，但只是對上漲和回購與手頭現金感到好奇？

Yes, sure. No, I think that's right. Obviously, the base dividend is what it is. I think on the variable versus share buyback, I think for us, that's just going to be opportunity set driven. We said before and continue to say that the default for us is going to be the variable dividend, but we expect to be opportunistic to kind of take advantage of opportunities we have on the buyback side. And I think we haven't seen that in the last year because the stock has performed really well. But I think as we see or if we see clear market dislocations or to kind of effectuate an organized sponsor sell-down, we're going to lead in hard to the buyback. So I think I think you got it right. I think the risk case is going to be the variable dividend. But over time, I expect we'll find some opportunities and should lean harden the buyback when those opportunities arise.

是的，當然。不，我認為這是對的。顯然，基本股息就是這樣。我認為關於變量與股票回購，我認為對我們來說，這將是機會集驅動的。我們之前說過並將繼續說我們的默認值將是可變股息，但我們希望機會主義地利用我們在回購方面的機會。我認為去年我們還沒有看到這種情況，因為該股的表現非常好。但我認為，正如我們所看到的，或者如果我們看到明顯的市場混亂，或者是為了實現有組織的讚助商拋售，我們將很難引導回購。所以我認為你說得對。我認為風險案例將是可變股息。但隨著時間的推移，我預計我們會發現一些機會，並且在這些機會出現時應該加強回購。

Mr. Walter, there are no further questions at this time. Please continue.

沃爾特先生，目前沒有其他問題。請繼續。

I'd like to conclude today's conference call on Slide 10, which helps to reemphasize our value proposition for current and future investors. Since closing our merger almost a year ago, we've delivered leading returns for our sector and outperformed the S&P. But we believe that our business continues to represent a compelling value as compared to both our high-quality Permian peer set and the broader market indexes. We believe that quality business such as ours with core assets, organic growth, efficient operations and strong financial positions confirmed to rerate to more competitive multiples, not only with our direct peers but also with other sectors in the broader market.

我想以幻燈片 10 結束今天的電話會議，這有助於再次強調我們對當前和未來投資者的價值主張。自從大約一年前完成合併以來，我們為我們的行業帶來了領先的回報，並且跑贏了標準普爾指數。但我們相信，與我們的高質量二疊紀同行和更廣泛的市場指數相比，我們的業務繼續代表著令人信服的價值。我們相信，像我們這樣擁有核心資產、有機增長、高效運營和強勁財務狀況的優質業務，不僅與我們的直接同行相比，而且與更廣泛市場的其他行業相比，肯定會重新獲得更具競爭力的市盈率。

By continuing to enhance and cultivate these attributes, we believe that we can continue to create value for shareholders while solidifying our position as a leader in the energy sector. Thank you, everyone, for your time today.

通過不斷增強和培育這些特質，我們相信我們能夠繼續為股東創造價值，同時鞏固我們作為能源行業領導者的地位。謝謝大家今天抽出時間。

Thank you. Ladies and gentlemen, that does conclude our conference for today. Thank you all for participating. You may all disconnect.

謝謝。女士們、先生們，今天的會議到此結束。感謝大家的參與。你們都可以斷開連接。