Sitio Royalties Corp (STR) 2023 Q4 法說會逐字稿

Hhello, everyone, and welcome to the CTA royalties.Key for 2023 earnings call. My name is chat, and I'll be the coordinator for this call today. After the presentation, there will be a Q&A session where you'll have the opportunity to ask questions by pressing star, followed by one on your telephone keypad. If you change your mind, please press star followed by two. I'd now like to hand over to Russ Wong, Vice President of Finance and Investor Relations to begin. Thus, please go ahead.

大家好，歡迎來到 CTA 版稅。2023 年財報電話會議的關鍵。我的名字叫聊天，我將擔任今天這次電話會議的協調員。演示結束後，將進行問答環節，您將有機會透過按星號來提問，然後再按電話鍵盤上的問題。如果您改變主意，請按星號，然後按兩個。現在我想請財務與投資者關係副總裁 Russ Wong 開始發言。因此，請繼續。

Good morning, everyone. Welcome to the Federal Realty's Fourth Quarter and Full Year 2023 earnings call. If you don't already have a copy of our recent press release and updated investor presentation, please visit our website at www.SEDAR.com, or you will find them at our Investor Relations section.

大家，早安。歡迎參加 Federal Realty 的 2023 年第四季和全年財報電話會議。如果您還沒有我們最近的新聞稿和更新的投資者簡報的副本，請造訪我們的網站 www.SEDAR.com，或者您可以在我們的投資者關係部分找到它們。

With me today to discuss fourth quarter and full year 2023 financial and operating results as Christmas on a Sunday, our Chief Executive Officer, carrier speaker, our Chief Financial Officer, and Dr. David <unk>, our EVP of Corporate Development and other members of our executive leadership team.

今天是周日的聖誕節，我們的執行長、營運商發言人、財務長、我們的企業發展執行副總裁David 博士和其他成員與我一起討論2023 年第四季和全年的財務和營運績效我們的執行領導團隊。

Before we start, I would like to remind you that our discussion today may contain forward-looking statements and non-GAAP measures.

在開始之前，我想提醒您，我們今天的討論可能包含前瞻性陳述和非公認會計準則措施。

Please refer to our earnings press release, investor presentation and publicly filed documents for additional information regarding such forward-looking statements.

請參閱我們的收益新聞稿、投資者介紹和公開提交的文件，以了解有關此類前瞻性陳述的更多資訊。

And non-GAAP measures. And with that, I'll turn the call over to Chris.

以及非公認會計原則措施。這樣，我會將電話轉給克里斯。

Thanks, Ross. Good morning, everyone, and thank you for joining Citi's Fourth Quarter and Full Year 2023 earnings call before discussing fourth quarter results, I want to provide an update on our return of capital framework, which going forward will include dividends and the ability to layer in share repurchases, and I would like to share some exciting news regarding our first acquisition of 2024.

謝謝，羅斯。大家早安，感謝您參加花旗的2023 年第四季度和全年財報電話會議，然後再討論第四季度業績，我想提供有關我們資本回報框架的最新信息，該框架未來將包括股息和分層的能力股票回購，我想分享一些關於我們 2024 年首次收購的令人興奮的消息。

Regarding repurchases, our Board has authorized a $200 million share buyback program which provides an additional avenue to maximize long-term value for our shareholders. We remain confident in the outlook for our business and believe there is a compelling opportunity to repurchase our shares given this outlook under this updated framework, which is effective immediately and applies starting with the first quarter of 2024, we still plan to return at least 65% of discretionary cash flow to our shareholders and to retain up to 35% of discretionary cash flow for balance sheet management and opportunistic cash acquisition. However, instead of allocating the full 65% of discretionary cash flow exclusively to cash dividends. Like we've done historically, we intend to pay a minimum dividend equal to 35% of discretionary cash flow and allocate at least 30% of discretionary cash flow to additional cash dividends, share repurchases or a mix of both committing to a minimum dividend equal to 35% of discretionary cash flow provides our shareholders with the certainty of a minimum cash dividend that has a compelling size while avoiding the pitfalls of setting a minimum dollar amount of dividends. History has shown that fixed minimum dividends expressed in a set dollar amount for a cyclical commodity-exposed business turned out to be variable in a commodity price downcycle when companies inevitably cut their so-called fixed dividend. This introduces the risk of the Company buying back more stock when it has more discretionary cash flow above the fixed dollar dividend, which is when commodity prices and stock prices are high. Our strategy is designed to avoid having to cut a minimum dollar amount of dividends during cyclical downturns and to avoid the pro-cyclical and potentially value destructive behavior of allocating additional capital to repurchases during a cyclical upturn. If our new return of capital framework had been applied to the fourth quarter of 2023, our minimum dividend would have been $0.27 per share, which implies an approximate 5% dividend yield. This would have been roughly 300 basis points higher than the dividend yield for E&P companies and approximately 350 basis points higher than the S&P 500 yield over the last 12 months.

關於回購，我們的董事會已批准一項 2 億美元的股票回購計劃，該計劃為我們的股東實現長期價值最大化提供了額外的途徑。我們對我們的業務前景仍然充滿信心，並相信鑑於此前景，在這個更新的框架下回購我們的股票是一個令人信服的機會，該框架立即生效並從2024 年第一季度開始適用，我們仍計劃回報至少65 % 的可自由支配現金流流向股東，並保留高達 35% 的可自由支配現金流量用於資產負債表管理和機會性現金收購。然而，並不是將全部 65% 的可自由支配現金流專門分配給現金股利。就像我們過去所做的那樣，我們打算支付相當於可自由支配現金流量35% 的最低股息，並將至少30% 的可自由支配現金流量分配給額外現金股息、股票回購或兩者的混合，並承諾最低股息等於高達 35% 的可自由支配現金流為我們的股東提供了具有令人信服規模的最低現金股息的確定性，同時避免了設定最低股息金額的陷阱。歷史表明，當公司不可避免地削減所謂的固定股息時，週期性大宗商品業務中以固定美元金額表示的固定最低股息在大宗商品價格下行週期中會發生變化。當公司擁有高於固定美元股利的更多可自由支配現金流時，即大宗商品價格和股票價格較高時，這會帶來公司回購更多股票的風險。我們的策略旨在避免在週期性衰退期間削減最低金額的股息，並避免在周期性好轉期間分配額外資本用於回購的順週期和潛在價值破壞行為。如果我們的新資本回報框架應用於 2023 年第四季度，我們的最低股息將為每股 0.27 美元，這意味著股息收益率約為 5%。這將比勘探與生產公司的股息收益率高出約 300 個基點，比過去 12 個月的標準普爾 500 指數收益率高出約 350 個基點。

Turning to the acquisition, I mentioned earlier in January we signed a definitive agreement to acquire over 13,000 net royalty acres in the DJ Basin for$150 million, which enhances our overall dj footprint and exposure to areas with higher levels of activity relative to our legacy assets in the area. As with most of our acquisitions, this deal originated through a relationship with a seller we've known for a while seller did an outstanding job of piecing together a differentiated asset base concentrated in the best parts of the DJ Basin. This transaction highlights our proactive approach to portfolio management and prudent capital allocation by selling smaller scale, declining assets in Appalachia and in the Anadarko Basin, it had nearly six times next 12 months cash flow multiple and acquiring higher growth. Dj Basin assets at a four times next 12 months cash flow multiple. We continue to focus on optimizing capital allocation and generating strong shareholder returns.

談到收購，我在一月份早些時候提到過，我們簽署了一項最終協議，以1.5 億美元的價格收購DJ 盆地超過13,000 英畝的淨特許權使用費，這將增強我們的整體DJ 足跡，並擴大我們對相對於我們的遺留資產而言活動水平更高的地區的投資在該地區的。就像我們的大多數收購一樣，這筆交易源於與我們已經認識一段時間的賣方的關係，賣方在拼湊集中於 DJ 盆地最好地區的差異化資產基礎方面做得非常出色。這項交易凸顯了我們積極主動的投資組合管理和審慎的資本配置方法，透過出售阿巴拉契亞和阿納達科盆地規模較小、不斷下降的資產，未來12 個月的現金流倍數接近六倍，並獲得更高的成長。Dj Basin 資產未來 12 個月現金流量將達到四倍。我們繼續專注於優化資本配置並創造強勁的股東回報。

I'd now like to turn the call over to Doug Schmick David, our EVP of Corporate Development, to discuss the highlights of the DJ Basin acquisition and provide an update on other acquisition activities.

我現在想將電話轉給我們的企業發展執行副總裁 Doug Schmick David，討論 DJ Basin 收購的亮點並提供其他收購活動的最新情況。

Thanks, Chris, and good morning, everyone. We're thrilled to kick off 2024 with a compelling acquisition, which we hope is a sign of a more transactable middle market. This deal is highly accretive on both a near-term cash flow and NAB basis and checks all the boxes for what we look for in an attractive acquisition. The acreage has terrific geology, competitive, well economics and is under well-capitalized operators with great line of sight for future development. The primary operators are Chevron, Oxy, and so the talk through in aggregate were responsible for more than 95% of the production on these assets in 2023. In the fourth quarter, these assets produced approximately 2,600 BOE a day with 41% oil and generated $8.6 million of asset-level cash flow. As Chris mentioned earlier, this acquisition has a more growth oriented production profile relative to our recently divested assets from December 2022 to December 2023. Monthly production on these assets grew by 89%, a stark contrast to the approximate 7% decline over the same period of these assets we divested in December 2023. At year end, there were approximately 5.1 net line-of-sight wells and 9.6 net remaining locations, 73% of which were in the Greater Wattenberg field, providing visibility and running room for future development. We were able to underwrite future DJ Basin activity with more certainty relative to other areas in the United States because the comprehensive area plans, forecasts and oil and gas development plans, or LGDP.s, which are filed with the Colorado energy and carbon management commission and must be approved before development can take place.

謝謝克里斯，大家早安。我們很高興以一項引人注目的收購開啟 2024 年，我們希望這是一個更具交易性的中間市場的標誌。這筆交易在短期現金流和國民銀行基礎上都具有高度增值性，並且符合我們在有吸引力的收購中尋找的所有條件。此區塊地質條件優越，具競爭力，經濟效益良好，營運商資本雄厚，對未來發展有良好的視野。主要營運商是雪佛龍 (Chevron) 和 Oxy，因此，到 2023 年，這些資產的總產量佔了 95% 以上。第四季度，這些資產每天生產約 2,600 桶油當量，其中石油含量為 41%，並產生 860 萬美元的資產級現金流。正如克里斯之前提到的，相對於我們最近在 2022 年 12 月至 2023 年 12 月剝離的資產，此次收購的生產狀況更具成長導向。這些資產的月產量增加了 89%，與我們在 2023 年 12 月剝離的這些資產在同一時期下降約 7% 形成鮮明對比。截至年底，淨視距井約5.1口，淨剩餘井位約9.6口，其中73%位於Greater Wattenberg油田，為未來開發提供了可視性和運作空間。相對於美國其他地區，我們能夠更加確定地承保 DJ 盆地未來的活動，因為綜合地區規劃、預測和石油和天然氣開發計劃 (LGDP.s) 已向科羅拉多州能源和碳管理委員會備案並且必須在開發之前獲得批准。

The DJ Basin acquisition acreage has exposure to several multi-year caps and AGPs, which contain 26% of remaining inventories and represent a total of approximately 27 hundred arrays and 2.5 net remaining locations as of December 31st. These Castaños GDPs don't guarantee operate activity, but administratively, it is challenging for operators to deviate from these plans once they are approved.

DJ Basin 收購面積涉及多個多年上限和 AGP，其中包含 26% 的剩餘庫存，截至 12 月 31 日，總共約有 2700 個陣列和 2.5 個淨剩餘位置。這些 Castaños GDP 並不能保證營運活動，但從管理角度來說，一旦這些計畫獲得批准，營運商就很難偏離這些計畫。

As you can see on slide 9 in our earnings presentation for DJ Basin acquisition acreage is in the core of the play and expands our DJ Basin and arrays by 52% from approximately 25,000 arrays to over 38,000 on arrays. On a pro forma combined basis, our assets cover approximately 810,000 gross acres for 49% of the entire DJ Basin and 57% of the greater Wattenberg Field, which contains the best rock and is under the most active operators in the basin. These assets are prospective for the Niobrara and Codell, both of which are being co-developed across most of the acreage. Recent public commentary from Chevron, Oxy and so the talk regarding the DJ Basin has been quite positive, indicating that our assets are highly economic. They have also emphasize commitments to deploy capital and grow production in 2024 and beyond. With caps and GDPs, Chevron has underscored their dedication to the DJ Basin comedy that their acreage has high cash flow margin, low breakeven barrels and have permits that extend through into late 2029. Obviously, recently recently highlighted several positive aspects about the DJ Basin assets as well, including a 32% improvement in well productivity from 2022 to 2023 and 11% implied annual production growth for the Rockies and other segment based on the midpoint of our 2024 guidance. So the past recently disclosed with our 2024 DJ Basin development plan is focused on the highly prolific Watkins area or region that contains Box Elder. One of the larger caps on the DJ Basin acquisition acreage silicon highlighted much improved productivity in the walk-ins area in 2023 relative to 2022, resulting in a 10% higher EURs and 40% higher returns as of February 19, 75% of the rigs running the entire DJ Basin or on our pro forma position, an increase of three times relative to the rates on City as legacy assets. The rates on our pro forma acreage are exposed to 100% of CDX Oxy and Merdad total rig activity in the basin. In addition to the DJ Basin acquisition, we acquired over 500 Permian Basin generated from New Mexico in exchange for Class C shares of our stock in December. This transaction was with one of our long-standing relationships and as someone from whom we've acquired assets in the past, our consolidation strategy continues to be focused on executing relationship-driven deals versus broad auction processes, which we believe differentiates video from many of our peers.

正如您在我們的DJ Basin 收益簡報中的幻燈片9 中看到的，收購面積是該業務的核心，並將我們的DJ Basin 和陣列擴展了52%，從約25,000 個陣列增加到超過38,000 個陣列。按預計合併計算，我們的資產覆蓋約810,000 英畝總面積，佔整個DJ 盆地的49% 和大瓦滕貝格油田的57%，其中包含最好的岩石，並由該盆地最活躍的運營商管理。這些資產對於 Niobrara 和 Codell 來說都是有前景的，這兩個項目正在大部分區域進行共同開發。最近雪佛龍、Oxy 等公司的公開評論對 DJ 盆地的討論相當積極，顯示我們的資產具有高度經濟性。他們也強調承諾在 2024 年及以後部署資本並增加產量。透過上限和 GDP，雪佛龍強調了他們對 DJ Basin 喜劇的奉獻，他們的面積具有高現金流利潤率、低盈虧平衡桶，並且擁有延續到 2029 年底的許可證。顯然，最近也強調了 DJ 盆地資產的幾個積極方面，包括 2022 年至 2023 年油井產能提高 32%，以及基於我們 2024 年指導中位數的落基山脈和其他部分的年產量增長 11%。因此，我們最近披露的 2024 年 DJ Basin 開發計劃重點關注高產沃特金斯地區或包含 Box Elder 的地區。DJ Basin 收購面積矽片的較大上限之一突顯出，與2022 年相比，2023 年步入式區域的生產力大幅提高，截至2 月19 日，75% 的鑽機的歐元增加了10%，回報率增加了40%運營整個 DJ 盆地或按我們的預計職位計算，相對於曼城作為遺留資產的利率增加了三倍。我們預計面積的費率會受到該盆地 CDX Oxy 和 Merdad 鑽機總活動 100% 的影響。除了收購 DJ Basin 之外，我們還在 12 月收購了來自新墨西哥州的 500 多個二疊紀盆地，以換取我們股票的 C 類股票。這項交易是與我們的長期合作關係之一進行的，作為我們過去收購資產的人，我們的整合策略繼續專注於執行關係驅動的交易而不是廣泛的拍賣流程，我們認為視頻與許多我們的同齡人。

I'll now turn the call over to Carrie Osaka, our CFO, to discuss fourth quarter 2020 results.

我現在將電話轉給我們的財務長 Carrie Osaka，討論 2020 年第四季的業績。

Thank you that our assets continue to perform consistently with production from our royalty interests, producing an average of 35,776 BOE a day in the fourth quarter and 36,338 BOE a day for the second half of 2023, which is just above the midpoint of our second half 2023 guidance range. Our reported results included 82 days of contribution from our Appalachia and Anadarko assets. Because the divestiture closed on December 22nd, reported fourth quarter production was 47% oil. However, when excluding prior period adjustments, fourth quarter production was 49% oil. On a pro forma basis, our fourth quarter production was 36,623 BOE a day, including a full quarter of production from the DJ Basin in December, Permian acquisitions and excluding the production from the divested assets, horizontal rig count in the Permian Basin in the overall U.S. during the fourth quarter was down by 4.2% and 3.8% respectively. We estimate that 7.7 net wells for turn-in-line on our acreage during the fourth quarter, down from the estimated 9.5 net wells turned in mind during the third quarter. We ended the year with an all-time Company high of 53.4 pro forma net line-of-sight wells, including approximately 5.1 net wells from the DJ Basin acquisition number of net spuds as a percent of total net line-of-sight wells shifted from 59% at the end third quarter, 64% at year end, which is usually an indicator of increased near-term activity. We reported pro forma fourth quarter discretionary cash flow of $124 million, which included $8.7 million of incremental post October first, effective date, cash flows from the DJ Basin and Permian acquisitions and benefited from a 21% increase in interest expense versus the third quarter in 2023, our Board declared a fourth quarter cash dividend of $0.51 per share of Class A. common stock based on 65% payout ratio of pro forma DCF, which included an uplift of approximately $0.04 per share from DJ Basin acquisition and Permian acquisition cash flow in the fourth quarter. Similar to the dividend calculation for the fourth quarter of 2023, we expect to include post effective date cash flow from the DJ Basin acquisition in our calculation of first quarter 2024DCF, we ended 2023 with an $850 million borrowing base revolver and liquidity of $588 million. As a result of the enhancements to our capital structure made during 2023. We have better access to capital and are much better positioned to finance acquisitions going forward.

感謝您，我們的資產繼續與我們的特許權權益生產保持一致，第四季度平均每天生產 35,776 桶油當量，2023 年下半年每天生產 36,338 桶油當量，略高於下半年的中點2023 年指導範圍。我們報告的結果包括我們的阿巴拉契亞和阿納達科資產 82 天的貢獻。由於資產剝離於 12 月 22 日結束，據報導第四季度產量為石油產量的 47%。然而，排除前期調整後，第四季產量為石油產量的 49%。按預計，我們第四季度的產量為每天 36,623 桶油當量，包括 12 月份 DJ 盆地的整個季度產量、二疊紀收購以及不包括剝離資產的產量、二疊紀盆地水平鑽機數量美國第四季度分別下降4.2%和3.8%。我們估計第四季我們的面積將有 7.7 口淨轉井，低於第三季預計的 9.5 口淨轉井。截至今年年底，我們預計淨視距井數量為 53.4 口，創公司歷史新高，其中包括來自 DJ 盆地的約 5.1 口淨視距井。從第三季末的59% 到年底的64%，這通常顯示近期活動有所增加。我們報告預計第四季度可自由支配現金流為1.24 億美元，其中包括10 月1 日生效後的增量870 萬美元、來自DJ Basin 和Permian 收購的現金流，並受益於利息支出較第三季度成長21%。2023 年，我們的董事會宣布，基於備考DCF 的65% 派息率，我們的第四季度A 類普通股每股現金股息為0.51 美元，其中包括DJ Basin 收購和Permian 收購現金流帶來的每股約0.04 美元的成長。第四季。與2023 年第四季的股息計算類似，我們預計將DJ Basin 收購的生效日後現金流納入我們第一季2024DCF 的計算中，截至2023 年，我們的借貸基礎循環資金為8.5 億美元，流動性為5.88 億美元。這是我們在 2023 年加強資本結構的結果。我們有更好的管道獲得資金，並且更有能力為未來的收購融資。

Included in yesterday's earnings press release, we released our full year 2024 guidance. Our 2024 outlook is underpinned by the record number of line-of-sight wells on our properties contribution from the DJ Basin acquisition properties and the cap in OGDC. that the expansion and some higher interest wells are in process of being completed, we're off to a fantastic start to the year with the announced highly accretive DJ Basin acquisition, and I'm optimistic about improving trends in the minerals M&A market for 2024. That concludes our prepared remarks. Operator, please open up the call for.

在昨天的收益新聞稿中，我們發布了 2024 年全年指引。我們對 2024 年的展望的基礎是 DJ Basin 收購資產所帶來的視距井數量創紀錄以及 OGDC 的上限。擴建和一些利息較高的井正在完成，隨著宣布的高度增值的 DJ Basin 收購，我們為今年開了個好頭，我對 2024 年礦產併購市場的改善趨勢持樂觀態度。我們準備好的演講到此結束。接線員，請開啟呼叫。

Yes. Thank you, Carrie. If you'd like to ask a question, please press star followed by one on your telephone keypad. Now if you change your mind, please press star followed by two. When preparing to ask your question, please ensure your phone is unmuted.

是的。謝謝你，嘉莉。如果您想提問，請按下電話鍵盤上的星號，然後再按一個。現在，如果您改變主意，請按星號，然後按兩個。準備提問時，請確保您的手機未靜音。

Likely. Our first question today comes from Tim was then from KeyBanc Capital Markets. Please go ahead.

有可能。我們今天的第一個問題來自當時來自 KeyBanc Capital Markets 的 Tim。請繼續。

The motor folks who are beyond that. So the question I had my first question, I want to ask with the DJ Basin acquisition. When you look at things outside the Permian, is there a higher hurdle rate on given sort of less industry activity? It was just a simple sort of arbitrage, you saw being able to buy it at four times cash flow,

超越這一點的汽車人。所以我的第一個問題是，我想問 DJ Basin 的收購。當你觀察二疊紀以外的情況時，特定類型較少的行業活動是否有較高的障礙率？這只是一種簡單的套利，你看到能夠以四倍現金流購買它，

Fiserv, which backs on? No, there's not a we underwrite to the returns and we're able to bundle 10 fleets underwrite a lot of it all in all the basins out there and there's not. So we feel good about that, that we we do see an increase actually from the operators I mentioned earlier. And in the DJ Basin, we see an increase in activity and we do see them dedicate capital to that basin. And we'll see that Basin continue with returns. Our intentions are basins that they are at a cheap drilling.

Fiserv，哪個支援？不，我們沒有對回報進行承保，我們可以捆綁 10 個車隊，在所有盆地中承保其中的大部分，但沒有。所以我們對此感覺很好，我們確實看到我之前提到的運營商的實際成長。在 DJ 盆地，我們看到活動增加，並且確實看到他們向該盆地投入資金。我們將看到盆地繼續帶來回報。我們的意圖是讓他們在廉價的盆地鑽探。

Okay. Okay. I understand. I guess visibility of activities was what matters affect. Thank you. And if I could pivot. I don't know if this is more for Chris as a Board member or for Carrie. I'm curious with this pretty significant change in cash returns framework. But if you could talk about, you know, engagement with shareholders in the last few months as you came to this decision, the more did you do you think shareholders kind of wanted this? Or is this more an idea of the board feeling compelled to step in with shares where they were going to support the equity. I'm just curious kind of what what eventually got the board to agree to make this change?

好的。好的。我明白。我想活動的可見度才是影響因素。謝謝。如果我能轉向的話。我不知道這對身為董事會成員的克里斯來說更重要，還是對嘉莉更重要。我對現金回報框架的這一相當重大的變化感到好奇。但如果你能談論在你做出這個決定時的最後幾個月與股東的接觸，你認為股東們越想要這個嗎？或者這更像是董事會感到有必要介入股票以支持股權的想法。我只是好奇是什麼最終讓董事會同意做出這項改變？

Hey, good morning. And Chris. I would say that's not a a freight refined makes us because we think the stock is cheap. It's really fundamentally underpinned by our outlook for the business going forward. We did engage with several shareholders every time we make a short of asking questions about the capital return framework. So this was an ongoing dialogue with shareholders and at the Board level going on for months and incorporate a lot of thought multiphysics. We're excited about it because when we look at the way the business is coming together this year. I'm curious, as you look at activity out of the castles OG is in the DJ, you look at our record level of 1.8 wells overall and in a recovering trend in activity in the Permian in the fourth quarter, particularly in October onwards, that give us a lot of comfort going into 2024 the thing that we like about 2024 to unlike 0.3, we're seeing some fundamental shift in the acquisition market. And you can see that evidenced by the acquisition we announced this morning. So we're hopeful that there will be more of those this year as well.

嗨，早安。還有克里斯。我想說，這不是我們精煉的貨運，因為我們認為庫存很便宜。這確實從根本上支撐了我們對未來業務的展望。每次我們都沒有詢問有關資本回報框架的問題時，我們確實與幾位股東進行了接觸。因此，這是與股東和董事會層面的持續對話，持續了數月，並融入了許多多物理思想。我們對此感到興奮，因為當我們看到今年業務的整合方式時。我很好奇，當您查看 DJ 中 OG 城堡外的活動時，您會看到我們整體 1.8 口井的創紀錄水平，以及第四季度二疊紀活動的恢復趨勢，特別是 10 月份以後，進入2024年，這給了我們很大的安慰，我們喜歡2024 年，與0.3 不同的是，我們看到收購市場發生了一些根本性的轉變。您可以從我們今天早上宣布的收購中看到這一點。因此，我們希望今年也會有更多這類活動。

Okay. Okay. Appreciate that color. If I could sneak one last one in is maybe more for Carrie as we sort of bake this last acquisition in the model, you see net debt in a little shy of $1 billion leverage still kind of north of one. And given the successful refinancing of your debt, what are your updated thoughts on target debt target leverage? And how do you think about that 55% payout and maybe closing the gap with public peers that pay a higher rate? Thank you.

好的。好的。欣賞那個顏色。如果我能偷偷溜進去最後一個，對 Carrie 來說可能會更多，因為我們在模型中烘焙了最後一次收購，你會看到淨債務略低於 10 億美元，槓桿率仍然高於 1 美元。鑑於您的債務再融資已成功，您對目標債務目標槓桿率的最新想法是什麼？您如何看待 55% 的支付，並可能縮小與支付更高費率的公共同行的差距？謝謝。

Sure. Hi, Tim. This is Gary. We continue to target low leverage. You're right, we're sitting at above a little bit above 1 times leverage, but we target that low leverage to preserve our financial flexibility and our ability to be opportunistic on cash acquisitions and after cash acquisitions we're going to continue to pay down that prepayable debt to maintain that flexibility.

當然。嗨，提姆。這是加里。我們繼續以低槓桿為目標。你是對的，我們的槓桿率略高於 1 倍，但我們的目標是低槓桿率，以保持我們的財務靈活性和我們在現金收購中機會主義的能力，在現金收購後，我們將繼續償還預付債務以保持靈活性。

As far as the 65% payout goes on, I'll let Chris speak a little bit more about this, but we don't intend to change that that payout, right.

至於 65% 的支付，我會讓 Chris 多說一點，但我們不打算改變支付，對吧。

This second other than the way our capital return is going to work. We're going to continue to pay down that debt and keep that opportunistic flexibility on the debt?

這一刻與我們資本回報的運作方式不同。我們將繼續償還債務並保持債務上的機會主義靈活性嗎？

It's Brett. I'll just add that I'll leave it to our peers to comment on their payout philosophies for us. We just felt at our company size is appropriate to have the non-cash, retain that we do to manage the balance sheet through Sitel and protect the company instead of other companies going to make your own decisions. But at our size, we feel that 65% is an appropriate amount of cash flow to return to shareholders as we grow that number may grow but we're still far too small. We call that mine right now.

是布雷特。我只想補充一點，我將讓我們的同行評論他們的支付理念。我們只是覺得我們公司的規模適合擁有非現金，保留我們透過Sitel 管理資產負債表並保護公司而不是其他公司自己做出決定的做法。但就我們的規模而言，我們認為隨著我們的發展，65% 的現金流回報股東的比例是適當的，這個數字可能會增加，但我們仍然太小。我們現在稱之為我的。

Okay. And then do you have a leverage target is at 0.75? You just want to be sustainably under one times trying to think about what a steady state at a level would be?

好的。那你們的槓桿目標是0.75嗎？您只想持續嘗試思考某一程度的穩定狀態會是什麼？

Yes.

是的。

I mean, we're going to remain there.

我的意思是，我們將留在那裡。

As Mark said, there's right, and we want to have low investment. So we can be opportunistic when opportunities present themselves. And so it's not a big number, and that's really just an album. We'll take on a little bit of leverage on the balance sheet and the revolver for cash position, and then we'll pay it down after those acquisitions and we'll go to back up and pay down debt and repeat as you can appreciate it.

正如馬克所說，這是對的，我們希望投資少。因此，當機會出現時，我們可以抓住機會。所以這並不是一個大數字，而且這其實只是一張專輯。我們將在資產負債表和左輪手槍上使用一點槓桿來獲得現金頭寸，然後我們將在這些收購之後償還債務，我們將支持並償還債務，並按照您的理解重複這一過程它。

Thanks, everyone.

感謝大家。

Thank you.

謝謝。

Next question on the line is from Neal Dingmann from Truist. Please go ahead.

下一個問題來自 Truist 的 Neal Dingmann。請繼續。

Someone else. Thanks for the time on twist. My first question is on the expected activity specifically. I'm just wondering, given your great line of sight, you talked about all the line of sight wells. And then if you look at sort of the current rig count out there and maybe conversations you're having with your operators. I'm just wondering if you maybe in broad terms your debt could just speak to your confidence in the continued solid activity, I would call it well into next year if you're anticipating that.

其他人。感謝您抽出寶貴的時間。我的第一個問題是關於預期的具體活動。我只是想知道，考慮到你的視線很好，你談到了所有的視線井。然後，如果您查看當前的鑽機數量，也許還有您與操作員進行的對話。我只是想知道，從廣義上講，您的債務是否可以表明您對持續穩健的活動的信心，如果您預計到這一點，我會將其稱為明年。

Sure, Neal, good morning. I'll make a couple of comments and turn it over to Dax. So just kind of at a macro level, we did see the rig count decline during the year on our asset and broadly across the U.S., but that decline for us in the Permian started in June and continued until about October where it started to rebound. So we thought equity interest that continues to rebound and through the end of the year, and that's how we enter 2024 alternative index for more specific comments.

當然，尼爾，早安。我將發表一些評論並將其交給 Dax。因此，從宏觀層面來看，我們確實看到我們的資產和整個美國的鑽機數量在這一年中有所下降，但二疊紀盆地的鑽機數量下降從6 月開始，一直持續到10 月左右，然後才開始反彈。因此，我們認為股票權益將持續反彈並持續到今年年底，這就是我們進入 2024 年替代指數以獲得更具體評論的方式。

And now Thank you, Chris. And that's why I'm excited about our DTA acquisition. I mean, especially in the back while the recent positive top carry from the media coverage Novation. So the activity has grown by 5.9 net lines of sight wells running sort of most active operators in that basin sort of pause, Oxy and Chevron. So again, we have 9.6 inventory wells, not below that 2.5 of which are located with the cancellation fees, which is a new line until you have better line of sight to activity on those inventory. Well.So now that we're working very excited about that, he's a

現在謝謝你，克里斯。這就是為什麼我對 DTA 收購感到興奮。我的意思是，尤其是在最近媒體報道的積極頂部進行更新的後面。因此，在該盆地中最活躍的運營商（Oxy 和 Chevron）運營的井的淨視線增加了 5.9 口。再說一遍，我們有 9.6 個庫存井，其中 2.5 個庫存井不低於取消費用，這是一條新線，直到您對這些庫存的活動有更好的視線。好吧，現在我們對此感到非常興奮，他是一個

great update. And then just my second quick one on the M&A physically that maybe for you, Chris, just wondering, we don't see near like you all do the deal flow just wondered based on what you're seeing out there as mineral deal flow still is as active as ever, and you know, is that prices still get obviously a fantastic price under DJ. So I'm just wondering, are you are there rational other sort of priced assets out there that you potentially see?

很棒的更新。然後是我關於併購的第二個快速內容，也許對你來說，克里斯，只是想知道，我們並沒有看到像你們所有人一樣的交易流，只是想知道基於你所看到的礦產交易流仍然存在一如既往地活躍，而且你知道，在 DJ 的帶領下，價格顯然仍然得到了驚人的價格。所以我只是想知道，您是否有可能看到其他合理的定價資產？

That's the key question for 2024. And you know the optimistic I think plus up in Q4 were brought auction properties fail, and we like to see that because number one, we're rarely ever successful at our auction phosphates, but number two. What it does is it tends to reset expectations with those. And those the multiple broad auction sale in Q4 is really encouraging for us for 2020 for now as I said, we as a company in our history have executed on probably less than in all of our 193 plus acquisition through broad auction process. Most of what we do is through negotiated transactions like we did with the DJ Basin transaction that we announced this morning. We tend to have more sense engagement people directly and fund solutions and those conversations take years to evolve and that would when Bill will culminate in a transaction. But we have multiple trends, multiple conversations that are going right now and we're encouraged for 24.

這是 2024 年的關鍵問題。你知道，我認為第四季度的樂觀情緒導致拍賣房產失敗，我們希望看到這一點，因為第一，我們很少在磷酸鹽拍賣中取得成功，但第二。它的作用是傾向於重新設定這些期望。正如我所說，第四季度的多重廣泛拍賣銷售目前對我們2020 年來說確實令人鼓舞，作為一家公司，我們歷史上透過廣泛拍賣過程進行的193 多項收購的執行金額可能少於我們所有的193 筆以上收購。我們所做的大部分工作都是透過協商交易進行的，就像我們今天早上宣布的 DJ Basin 交易一樣。我們傾向於讓更多人直接參與並為解決方案提供資金，這些對話需要數年時間才能發展，而比爾將在交易中達到頂峰。但我們現在有多種趨勢、多種對話，我們對 24 小時感到鼓舞。

Great details. Thank you all.

很棒的細節。謝謝你們。

Thank you.

謝謝。

The next question on the line is from Derrick Whitfield from Stifel. Please go ahead.

下一個問題來自 Stifel 的 Derrick Whitfield。請繼續。

Good morning and congrats on your DJ acquisition and return of capital initiatives.

早安，恭喜您的 DJ 收購和資本回報計劃。

Thank you.

謝謝。

For my first question, I wanted to focus on your 2024 guidance. As outlined, your guidance implies maintenance level activity versus Q4, while a lot of site activity implies growth, how would you frame your production trajectory for 2024 for you guys expecting heavier tails in the second half based on Gary's commentary?

對於第一個問題，我想專注於你們的 2024 年指導。如前所述，你們的指導意味著相對於第四季度的維護水平活動，而許多現場活動意味著增長，根據加里的評論，你們將如何為你們預計下半年會出現更嚴重的尾部的人制定2024 年的生產軌跡？

Sure. I'll take that first and Gary feel free to supplement with any comments you have. So when we look at the line-of-sight wells ahead of the Fed, clearly at record levels for the company. The key is going to be this conversion to sale. What we saw in the fourth quarter, about 7.7 net wells turned in line and down a little bit from last year. As I said, activity on our asset rebounded through the fourth quarter. We expect that to start to roll through that first part of this year. And we have line of sight on and multiple wells, for example, coming in line just in March here. So there are specific instances where we have some ability to model in specific timing on specific interest that we have. But then for the most part, we look at 2024 and it's really being current on all the calls you've been on for operators really guiding to flattish to low single-digit type of growth in the Permian. And because our asset covers about 35% of the Permian Basin, you should expect our asset to mirror pretty closely what the Texas side of the Permian Basin does, and that is not growing at double digits, but it's still showing good and stable production in some cases, some modest growth, and that's what we expect ours to do.

當然。我將首先考慮這一點，加里可以隨時補充您的任何意見。因此，當我們觀察聯準會之前的視線時，該公司顯然處於創紀錄的水平。關鍵在於將其轉化為銷售。我們在第四季看到，約 7.7 口淨井井數持平，比去年略有下降。正如我所說，我們的資產活動在第四季出現反彈。我們預計這將在今年上半年開始出現。例如，我們有視線和多口井，就在三月在這裡排隊。因此，在某些特定情況下，我們有能力在特定時間根據我們的特定興趣進行建模。但在大多數情況下，我們著眼於 2024 年，您一直在呼籲營運商真正指導二疊紀盆地的成長趨於平穩至低個位數類型，這確實是最新的。由於我們的資產覆蓋了二疊紀盆地約35% 的面積，因此您應該期望我們的資產與二疊紀盆地德克薩斯州一側的情況非常接近，並且並沒有以兩位數的速度增長，但它仍然顯示出良好且穩定的產量在某些情況下，有一些適度的增長，這就是我們期望我們所做的。

Well, we're taking that and that's the only other thing I'll add to that. Sorry, I'll just add one other thing on the only other nuance to remember too, it's just that development on our assets can affect the annual production rates. And while activity can be constant, it just depends on what yes, our NRIs get developed.

好吧，我們正在接受這一點，這是我要補充的唯一其他內容。抱歉，我只想在唯一需要記住的細微差別上再增加一件事，只是我們資產的開發會影響年生產力。雖然活動可以持續進行，但這只取決於我們的 NRI 的發展。

Makes sense guys. And maybe looking at it a little bit longer-term perspective, given the considerable M&A we've witnessed across the Permian over the last six months with Exxon Oxy and Alan back, wanted to ask for your thoughts and the net impact it could have on your business and pace of development as those transactions were Texas Heavy?

有道理，夥計們。也許從更長遠的角度來看，考慮到過去六個月我們在二疊紀盆地見證了埃克森氧氣和艾倫回歸的大量併購，想詢問您的想法以及它可能產生的淨影響您的業務和發展速度與德克薩斯重工的那些交易一樣嗎？

Yes, good question be the operator mix for our business has really changed over the last several years. You rewind the clock a couple of years. You would have seen Callon, PTC, Noble, Pioneer and Arco and our top 10. And now it's a building with the Exxon, Chevron and Oxy, Apache, Diamondback and others who have been active in the consolidation business. And really what it's done is it's had the effect of putting our minerals being operating in the hands of bigger, better capitalized operators who have more sustainable program through a cycle. So I think impact number one is slightly less volatility in activity over time. And the and what we hope to see in terms of a treatment with operators, hopefully changing the conversation between operators and mineral owner over time as we have fewer operators to manage those relationships with hopefully just have a more direct relationship with them and they get better information as we grow.

是的，好問題是我們業務的營運商組合在過去幾年中確實發生了變化。你把時鐘倒回幾年。您可能會看到 Callon、PTC、Noble、Pioneer 和 Arco 以及我們的前 10 名。現在，它與埃克森公司、雪佛龍公司、Oxy 公司、阿帕奇公司、響尾蛇公司以及其他活躍於整合業務的公司一起建造。事實上，它所做的是將我們的礦產交到規模更大、資本較好的業者手中，這些業者在整個週期中擁有更永續的計畫。因此，我認為第一個影響是隨著時間的推移，活動的波動性略有減少。我們希望在與經營者的待遇方面看到什麼，希望隨著時間的推移改變經營者和礦主之間的對話，因為我們管理這些關係的經營者越來越少，希望與他們建立更直接的關係，他們會變得更好訊息隨著我們的成長。

Chris, if I could ask one more, just with regards to the $200 million share repurchase program, how would you compare the value of buying your stock today versus the value of M&A opportunities that are available are available in the foreseeable future.

克里斯，如果我能再問一個問題，就 2 億美元的股票回購計劃而言，您如何比較今天購買股票的價值與可預見的未來可用的併購機會的價值。

And it's an exercise we go through in every single acquisition evaluation we do. We look at the sensitivities of the potential returns of the acquisitions were evaluated and compared against our stock. And so should we make the acquisition we're contemplating or should we make the acquisition of our own minerals environment stock. And so it's an analysis we've done throughout time on our business and we look at it now and they have really compelling opportunity based on the dynamics in the market today and also with the outlook we have going forward.

這是我們在每次收購評估中都會經歷的練習。我們評估收購潛在回報的敏感性，並與我們的股票進行比較。因此，我們應該進行我們正在考慮的收購，還是我們自己的礦產環境股票。因此，這是我們長期以來對我們的業務所做的分析，我們現在審視它，根據當今市場的動態以及我們未來的前景，他們擁有真正令人信服的機會。

The other nuance here is that this is not an either or decision we can have compelling acquisition opportunities in front of us and we can execute on the share repurchase and Byron thought effectively buyer on minerals because the return of capital program has been such that the buyback is happening within the framework of the 65% returning capital to our shareholders.

這裡的另一個細微差別是，這不是一個非此即彼的決定，我們可以在我們面前擁有令人信服的收購機會，我們可以執行股票回購，拜倫認為是礦物的有效買家，因為資本回報計畫已經使得回購這是在向股東返還 65% 資本的框架內進行的。

Very helpful, Chris, thanks for your time.

非常有幫助，克里斯，感謝您的寶貴時間。

Thank you.

謝謝。

As a reminder to ask any further questions, please star followed by one on your telephone keypad now. Our next question is from Noel Parks from Tuohy Brothers Investments. Please go ahead.

為了提醒您提出任何進一步的問題，請立即在電話鍵盤上加註星號。我們的下一個問題來自 Tuohy Brothers Investments 的 Noel Parks。請繼續。

Hi, good morning. Why now I just had a couple of things on your one thing. I was wondering about there is oil prices, everything and too badly, but there does seem to be some macro uncertainty and decision out there about what the year is going to look like. I just wondered in terms of visibility on activity levels and are you seeing any oil hedging trends among your operators on either kind of uniformly across across the operators? Or is wondering if you're seeing any divergences different flows kind of take a different buyer at the apples you're trying to figure out what it is protected by patents against downside or tried to open themselves up modest potential upside

早安.為什麼現在我只對你的一件事有幾件事。我想知道油價，一切都太糟糕了，但似乎確實存在一些宏觀不確定性和關於今年會是什麼樣子的決定。我只是想知道活動水平的可見性，您是否看到運營商中任何一種統一的石油對沖趨勢？或者想知道您是否看到任何差異，不同的流程會吸引不同的蘋果買家，您試圖找出它受到專利保護以防止下行的內容，或者試圖打開自己適度的潛在上行空間

just from the operators. Typically, it's driven by company size and leverage just broadly speaking, you'll see smaller companies and companies with more leverage and markets that are organic, the proportion being more active with hedging. And the important nuance to remember is that the hedging program that the operators have engaged and has no impact on realized prices for Sydney. So we get the prices at the delivery point that the operator gets any sort of financial hedging they do on their side as they are now and we have the ability to hedge or not based on Libya.

僅來自運營商。通常，它是由公司規模和槓桿率驅動的，從廣義上講，你會看到規模較小的公司和槓桿率較高的公司以及有機的市場，比例對沖更加活躍。需要記住的重要細微差別是，營運商參與的對沖計畫對雪梨的實際價格沒有影響。因此，我們在交付點獲得價格，營運商可以像現在一樣進行任何形式的金融對沖，我們有能力對沖或不基於利比亞。

Right. Absolutely. I'm just saying I'm just you've been as you've discussed, we've had consolidation going on in the Permian different assets heading into different hands. And I'm I guess I'm in the process of trying to sort of picture just what what the basin looks like in terms of just operator behavior going forward and done? And I guess I'm looking thinking about the cost side and capital discipline.

正確的。絕對地。我只是說，正如您所討論的那樣，我們在二疊紀盆地進行了整合，不同的資產進入了不同的人手中。我想我正在嘗試根據操作員的未來行為和完成情況來描繪盆地是什麼樣子？我想我正在考慮成本方面和資本紀律。

We certainly haven't haven't seen anybody really going crazy with reactivity on either with an established footprint or are the companies that have been consolidating and done? And so I am I guess I'm curious to do you get a feeling from and the operators about some what they think about the inflation outlook? I'm just also curious if you're seeing any trends you're hearing and whether that attacking folks' aggressiveness at all

我們當然還沒有看到任何人真正對已經建立的足跡或已經進行整合和完成的公司的反應感到瘋狂？所以我想我很好奇您和運營商是否了解他們對通膨前景的看法？我也很好奇你是否看到了你所聽到的任何趨勢，以及這是否會攻擊人們的攻擊性

sort of the a couple of trends we're seeing. One is just continued march towards higher efficiencies for the operators that continue to get better and more cost-efficient what they do. And so I think even you see operators announce a slight decrease and rig counts post acquisition, oftentimes the best compensated for and that and even potentially increase by efficiency gain and applied throughout a larger program. And yes, I could make a comparison back to history. There's good M&A and that M&A for Citi. When we look at our operator base. The bad M&A for us is where two of our larger operators get together and flash the bind rate program, a fraction of what it was, but it was for either one of those companies standalone. And that's what happened with that. For example, with documented Darko, several years ago, the type of M&A that's happening today, quite good for us. Really have healthy companies getting together just becoming bigger, more efficient and more capital efficient. So for us, instead of the mineral owner, we like to see this type of consolidation. The same today and we're encouraged by for our business.

這是我們看到的一些趨勢。一是繼續向營運商提高效率邁進，讓他們的工作不斷變得更好、更具成本效益。因此，我認為即使您看到運營商宣布收購後鑽機數量略有減少，通常也是最好的補償，甚至可能通過效率增益而增加並應用於整個更大的項目。是的，我可以與歷史進行比較。有很好的併購，花旗也有併購。當我們查看我們的運營商基礎時。對我們來說，糟糕的併購是我們的兩家較大的運營商聚集在一起並閃現綁定率計劃，這只是原來的一小部分，但它是針對其中任何一家公司獨立的。這就是發生的事情。例如，幾年前記錄的達科（Darko），今天發生的併購類型，對我們來說非常好。真正健康的公司聚集在一起，變得更大、更有效率、資本效率更高。因此，對我們來說，而不是礦主來說，我們希望看到這種類型的整合。今天也是如此，我們的業務受到鼓舞。

Great. Thanks a lot.

偉大的。多謝。

Thank you.

謝謝。

As a final reminder that asked any further questions, please press star for my one on your telephone keypad. Now it appears we have no further questions, so I will conclude the call now. Thank you for your time today. You may now disconnect your lines and enjoy the rest.

最後提醒一下，如果您有任何其他問題，請按電話鍵盤上的星號來找出我的問題。現在看來我們沒有其他問題了，所以我現在就結束通話。感謝您今天抽出時間。現在您可以斷開線路並享受剩餘的時間。