Q1 2020 Earnings Call

May 8, 2020

[music].

It it at this time, all participants already know listen only bone following the presentation. We look adopted question and answer session.

Brush up the investment community will have the opportunity to ask questions and can join the q. at any time by pressing star one.

Members of the media attending and listen only boat today, you may quote statements made by any of the open to representative however members of the media, which <unk> others more speaking on this call today.

Operator: However, members of the media who wish to quote others who are speaking on this call today, we advise you to contact those individuals directly to obtain their consent. Please be advised that this conference call may not be recorded or rebroadcast without the express consent of Ovintiv.I would now like to turn the conference call over to Steve Campbell from Investor Relations. Please go ahead, Mr. Campbell.

We advise you to contact us individually directly to cocaine their consent.

Please be advice at this conference call may not be recorded rebroadcast without the express consent of okay.

I would like to turn the conference call Overture, Steve Campbell I'm Investor Relations. Please go ahead Mr. Campbell.

Operator: I would now like to turn the conference call over to Steve Campbell from Investor Relations. Please go ahead, Mr. Campbell.

Thank you operator, and welcome everyone to our first quarter conference call.

Steve Campbell: Thank you, operator, and welcome everyone to our Q1 conference call. This call is being webcast, and the slides are available on our website at ovintiv.com. Please take note today of the advisory regarding forward-looking statements at the end of our slides and in our disclosure documents that we file on SEDAR and EDGAR. Following our prepared remarks today from the leadership team, we will all be available to take your specific questions. Please limit your time today to one question and one follow-up. This simply allows us to get to more of your thoughts and questions. I'll now turn the call over to our CEO, Doug Suttles.

This call is being webcast and the slides are available on our website at <unk> Dot com.

Please take no today or the advisory regarding forward looking statements at the end of our slides ended our disclosure documents that we <unk> and Edgar.

Following our prepared remarks today from the leadership team, we will all be available and take her specific questions. Please limit your time today to one question. One follow up this simply allows us to get to more of your thoughts in question all now turn to call over to our C.E.O. dug settles.

Steve Campbell: Following our prepared remarks today from the leadership team, we will all be available to take your specific questions. Please limit your time today to one question and one follow-up. This simply allows us to get to more of your thoughts and questions. I'll now turn the call over to our CEO, Doug Suttles.

Thank you in good morning, we very much appreciate you dialing into day for first quarter update and I hope, you're healthy and surviving staying at home.

Doug Suttles: Thank you. Good morning. We very much appreciate you dialing in today for our Q1 update, and I hope you're healthy and surviving staying at home. Today, we are living in unprecedented times, both in our daily lives and in our industry. Over the last 2-plus months, we've been managing through a challenging combination of events that is one for the ages. As shareholders, it's important that you know we are in a very good position, and I'm very confident we will come out of this even stronger. While we didn't predict this situation, we did plan on volatility. We deliberately built a business that has massive flexibility and that allows us to be very dynamic in how we respond. The immediate actions we are taking positions us very well for 2021, and we will talk more about that on the call today.

Today, we are living you know unprecedented times, both in our daily lives and in our industry.

The last two plus months, we've been managing through a challenging combination of events that is one for the ages.

Shareholders. It's important that you know we are in a very good position and very confident we will come out of this even stronger well we didn't predict the situation we did plan on volatility.

We deliberately built a business that as massive flexibility and that allows us to be very dynamic and how we respond.

Doug Suttles: We deliberately built a business that has massive flexibility and that allows us to be very dynamic in how we respond. The immediate actions we are taking positions us very well for 2021, and we will talk more about that on the call today. Our Q1 financial and operating results were very strong. Clearly, a lot has changed in our sector since we closed the books on the quarter. We'll focus this morning on how we're effectively using that flexibility we've built into our business to manage through these challenging times and how we see ourselves positioned for a recovering world.

The immediate actions, we were taking positions just very well for 2021, and we will talk more about that phone to call today.

Our first quarter financial an operating results were very strong we delivered higher than expected production for less capital, but clearly a lot has changed in our sectors. Since we close the books on the quarter.

Doug Suttles: Our Q1 financial and operating results were very strong. Clearly, a lot has changed in our sector since we closed the books on the quarter. We'll focus this morning on how we're effectively using that flexibility we've built into our business to manage through these challenging times and how we see ourselves positioned for a recovering world. We will not only survive, but we'll be positioned to thrive, and I know we all hope that that day is very soon. I'm joined today by other members of our team who will help with the presentation and be available to answer your questions. We will reference the slides we issued yesterday and take your questions after our prepared remarks. The market is certainly challenging and something none of us could have predicted.

Focus this morning on how were effectively using that flexibility, we built into our business to manage through these challenging times and how we see ourselves position for recovering world.

Doug Suttles: We will not only survive, but we'll be positioned to thrive, and I know we all hope that that day is very soon. I'm joined today by other members of our team who will help with the presentation and be available to answer your questions. We will reference the slides we issued yesterday and take your questions after our prepared remarks. The market is certainly challenging and something none of us could have predicted. I told someone recently that while we prepare for a black swan event in our risk management process, we never thought we had to prepare for a whole flock of them.

We will not only survive, but we'll be positioned to thrive and I know, we all hope that that day is very soon.

Joined today by other members of her team, who will help with the presentation it'd be available to answer your questions.

We will reference the slides, we issued yesterday and take your questions. After our prepared remarks.

<unk> certainly challenging in something none of us could have predicted.

Told someone recently that while we prepare for a black Swan event in our remote management process. We never thought we had to prepare for a whole flock of.

Doug Suttles: I told someone recently that while we prepare for a black swan event in our risk management process, we never thought we had to prepare for a whole flock of them. Fortunately, we have the flexibility to rapidly adapt to changing market conditions without incurring fees or penalties. We are adjusting our activities in real time to ensure that we get our optimal outcomes today, as well as position us for 2021 and beyond. You will find in today's deck that we have outlined potential scenarios for the remainder of 2020 and for 2021. Although we are not issuing formal guidance, it's important that you understand what our business can deliver. The recent reductions to our cash cost and the meaningful gains in capital efficiency have enhanced the cash flow outlook for 2021.

Fortunately, we have the flexibility to rapidly adapt to changing market conditions without incurring fees are penalties, we're adjusting our activities in real time too sure that we get our optic optical optimal outcomes today as well as positioning for 2021 and beyond.

Doug Suttles: Fortunately, we have the flexibility to rapidly adapt to changing market conditions without incurring fees or penalties. We are adjusting our activities in real time to ensure that we get our optimal outcomes today, as well as position us for 2021 and beyond. You will find in today's deck that we have outlined potential scenarios for the remainder of 2020 and for 2021. Although we are not issuing formal guidance, it's important that you understand what our business can deliver. The recent reductions to our cash cost and the meaningful gains in capital efficiency have enhanced the cash flow outlook for 2021.

You will find in today's sick that we have outline potential scenarios for the remainder of 2020 and for 2021, although we are not issuing formal guidance. It's important that you understand what our business can deliver the recent reduction store cash costa into meaningful gains in capital efficiency have enhance the cash flow.

Outlook for 2021.

Our stay flat capital at a 35 dollar war price is about $1.5 billion.

Doug Suttles: Our stay-flat capital at a $35 oil price is about $1.5 billion. You'll recall that this is about $700 million less than previous estimates. More on how we get there later in the call. As the COVID-19 demand impact became apparent in oil markets, we immediately announced a series of actions to protect the health and safety of our workforce, maintain balance sheet strength, and preserve liquidity. Over the next several months, we expect that oil prices will be weak and volatile. Although encouraged by OPEC+ cuts and the swift actions being taken by producers to cut capital, defer completions, and shut in production, the COVID-19 driven demand loss is too great to quickly overcome. It is encouraging to begin to see the green shoots of returning demand.

Recall that this was about $700 million less than previous estimates.

More on how we get there later in the calls.

As the covert 19 demand impact became apparent at all markets. We immediately announced a series of actions to protect the health and safety ever workforce maintain balance sheet strings and preserve liquidity.

Over the next several months, we expected old prices will be weekend volatile, although encouraged by okay, OPEC plus cuts in the Swift action being taken by producers to cut capital differ completions and shut in production. The covert 19, driven demand loss is too great to quickly overcome but it isn't.

Doug Suttles: Although encouraged by OPEC+ cuts and the swift actions being taken by producers to cut capital, defer completions, and shut in production, the COVID-19 driven demand loss is too great to quickly overcome. It is encouraging to begin to see the green shoots of returning demand. We are laser-focused today on the things we can control and are using the tremendous flexibility we built into our business to make sound decisions consistent with our market views. Our priorities today are crystal clear.

<unk> to begin to see the green shoots of returning demand.

We are laser focus today on the things we can control and are using the tremendous flexibility, we built into our business to make sound decisions consistent with our market views.

Doug Suttles: We are laser-focused today on the things we can control and are using the tremendous flexibility we built into our business to make sound decisions consistent with our market views. Our priorities today are crystal clear. There has never been a more important time to focus on efficiency, both cash costs and capital efficiency, to get the most out of every dollar we spend. This is something we are very good at, and we have a long-standing track record when it comes to innovating and creatively finding new ways to enhance margins and reduce capital costs. The entirety of our workforce is solely focused on safely doing this. When this crisis began, we announced we would reduce cash costs by $100 million, and today we are doubling that to $200 million.

Our priorities today or crystal clear, there's never been a more important time to focus on efficiency, both cache costs and capital efficiency get the most out of every dollar. We sped. This is something we are very good at and we have a longstanding track record when it comes to innovating in creatively finding new ways to.

Doug Suttles: There has never been a more important time to focus on efficiency, both cash costs and capital efficiency, to get the most out of every dollar we spend. This is something we are very good at, and we have a long-standing track record when it comes to innovating and creatively finding new ways to enhance margins and reduce capital costs. The entirety of our workforce is solely focused on safely doing this. When this crisis began, we announced we would reduce cash costs by $100 million, and today we are doubling that to $200 million.

Enhance margins a reduced capital costs.

The integrity of a workforce is solely focused on safely doing this.

When this crisis began we announced we would reduce cash costs by $100 million and today, we are doubling that $200 million and we expect the vast majority this will stick with us in 2021 and beyond in addition in the first quarter, we substantially reduced well costs versus 2000.

Doug Suttles: We expect the vast majority of this will stick with us in 2021 and beyond. In addition, in Q1, we substantially reduced well costs versus 2019, and now we believe they will be more than 20% lower in 2021 versus 2019. The steps we are taking today are maintaining our strong balance sheet and preserving liquidity. We have the flexibility in our business to do this quickly, efficiently, and without penalties. In Q2, we immediately cut capital by 60%. We went from 23 rigs to the 7 we are running today. We reduced frac spreads from 8 to 0, and we did all of this without incurring penalties or termination fees. Our 2020 cash flows and balance sheet are supported by our strong hedge position.

19, and now we believe they will be more than 20% lower in 2021 versus 2019.

The steps, we are taking today or maintaining our strong balance sheet and preserving liquidity, we have the flexibility in our business to do this quickly efficiently and without penalties.

In the second quarter, we immediately cut capital by 60%. We went from 23 rigs to the seven we are running today, we reduced <unk> from eight to zero and we did all of this without incurring penalties or termination fees.

Doug Suttles: We reduced frac spreads from 8 to 0, and we did all of this without incurring penalties or termination fees. Our 2020 cash flows and balance sheet are supported by our strong hedge position. Successful risk management is a part of our track record and is designed to manage balance sheet risk. In addition to reducing cost and capital spending, we also entered the debt market and repurchased a portion of our 2021 and 2020 and 2022 bonds at a discount, lowering our debt and our interest expense. Recall that this is something we did effectively in 2016.

Or 2020 cash flows and balance sheet and <unk> are supported by our strong hedge position.

Doug Suttles: Successful risk management is a part of our track record and is designed to manage balance sheet risk. In addition to reducing cost and capital spending, we also entered the debt market and repurchased a portion of our 2021 and 2020 and 2022 bonds at a discount, lowering our debt and our interest expense. Recall that this is something we did effectively in 2016. We have substantial and firm liquidity today. Note that two credit agencies recently reaffirmed our investment-grade rating, which we know is a key advantage in today's capitally constrained market. With the extreme volatility we've seen in oil prices, we are actively managing our production.

Successful risk management is a part of our track record and is designed to manage balance sheet risk.

In addition to reducing costs in capital spending. We also entered the debt market every purchase a portion of our 2021 in 2020 and 22 bonds at a discount.

Lowering our debt and our interest expense recall that this is something we did effectively in 2016.

Doug Suttles: We have substantial and firm liquidity today. Note that two credit agencies recently reaffirmed our investment-grade rating, which we know is a key advantage in today's capitally constrained market. With the extreme volatility we've seen in oil prices, we are actively managing our production. Because we operate substantially all of our production, we have almost full control to shut in the right wells based on variable cost, market views by areas, differentials, and the extreme contango in the market today.

We have substantial infirm liquidity today and note that to credit agencies recently reaffirmed or investment grade rating, which we know is a key advantage in today's capley constrained market.

With the extreme volatility we've seen in oil prices were actively managing our production because we operate substantially all of our production we have almost full control to shut in the right wells based on variable cost market views by areas differentials in the extreme contained glow in the market today.

Doug Suttles: Because we operate substantially all of our production, we have almost full control to shut in the right wells based on variable cost, market views by areas, differentials, and the extreme contango in the market today. We have a thoughtful approach to shut-ins and are confident we can quickly return wells to production without reservoir damage or lasting impacts. Most importantly, we are protecting the health and safety of our people. We seamlessly deployed our business continuity plan and removed to remote working with our team, effectively managing the business from home. We are now beginning to return to more normal working aligned with national and local guidance. We also implemented safety protocols in the field where we've now completed over 45,000 health screenings. This has been very effective. We've had no known cases of COVID-19 in our field operations.

We have a thoughtful approach to shut ins and are confident we can quickly returned wells to production without reservoir damage or lasting impacts and most importantly, we're protecting the health and safety ever people, we seamlessly deployed our business continuity planned it removed to remote working with our team effectively managing the <unk>.

Doug Suttles: We have a thoughtful approach to shut-ins and are confident we can quickly return wells to production without reservoir damage or lasting impacts. Most importantly, we are protecting the health and safety of our people. We seamlessly deployed our business continuity plan and removed to remote working with our team, effectively managing the business from home. We are now beginning to return to more normal working aligned with national and local guidance. We also implemented safety protocols in the field where we've now completed over 45,000 health screenings.

From home.

We are now beginning to return to more normal working aligned with national and local guidance. We also implemented safety <unk> protocols in the field, where we've now completed over 45000 health screenings. This has been very effective we've had known cases of covert 19 in her field operations our goal was.

Doug Suttles: This has been very effective. We've had no known cases of COVID-19 in our field operations. Our goal was not just to maintain critical functions, but to effectively run the business. I have to compliment our team as we haven't missed a beat. These priorities give us tremendous resilience and position us to thrive during the recovery. Although we are certainly prepared to make additional cuts to preserve our liquidity and protect the balance sheet, we also believe we have to do this in the context of a recovery. I'll now turn the call over to Brendan McCracken to discuss our Q1 results.

Doug Suttles: Our goal was not just to maintain critical functions, but to effectively run the business. I have to compliment our team as we haven't missed a beat. These priorities give us tremendous resilience and position us to thrive during the recovery. Although we are certainly prepared to make additional cuts to preserve our liquidity and protect the balance sheet, we also believe we have to do this in the context of a recovery. I'll now turn the call over to Brendan McCracken to discuss our Q1 results.

Just to maintain critical functions, but to effectively run the business I have to complement our team is we haven't missed a beat.

These priorities give us tremendous resilience and position is to thrive during the recovery. Although we are certainly prepared to make additional cuts to preserve our liquidity and predict the balance sheet. We also believe we have to do this in the context of of a recovery.

Will turn the call over to Brennan Mccracken to discuss our first quarter results.

Thanks to.

Brendan McCracken: Thanks, Doug. We had a very strong start to 2020, with production ahead of plan and both capital and cash costs below budget. Our Q1 cash flow was $535 million, and operating earnings were $27 million. Our production was 19,000 BOEs a day higher than expected at 571,000 BOEs per day. This outperformance relative to our budget was primarily due to both strong well performance and faster cycle times. Our Q1 crude and condensate production of 215,000 barrels a day was above budget by 7,000 barrels a day and was up 4% year-over-year. We also produced over 1.5 Bcf a day of natural gas in the quarter. We remain one of the largest independent crude and condensate producers in the sector today.

We had a very strong start to 2020 with production ahead to plan in both capital and costs costs costs below budget.

Or first quarter cash flow was $535 million and operating earnings were 27 million.

Our production was 19000 be you use a day higher than expected at 571000 be always per day.

So performance relative to our budget was primarily due to both strong performance and faster cycle times.

Our first quarter crude and condensate production of 215000 barrels a day was above budget by 7000 barrels a day and was up 4% you every year.

Brendan McCracken: We also produced over 1.5 Bcf a day of natural gas in the quarter. We remain one of the largest independent crude and condensate producers in the sector today. One way to think about our production mix is that we produce the same amount of crude and condensate as Concho and the same amount of natural gas as Range Resources. We firmly believe our diversified portfolio is a real advantage through the cycle. Our original 2020 budget plan was to invest $865 million of capital in Q1.

We also produced over 1.5 P.C.F. the day of natural gas in the corridor.

We remain one of the largest independent crude and condensate producers in the sector today.

One way to think about our production mixes that we produce the same amount of crude and corn and say as concho and the same amount of natural gas is range resources. We firmly believe our diversified portfolio is a real advantage through the cycle.

Brendan McCracken: One way to think about our production mix is that we produce the same amount of crude and condensate as Concho and the same amount of natural gas as Range Resources. We firmly believe our diversified portfolio is a real advantage through the cycle. Our original 2020 budget plan was to invest $865 million of capital in Q1. As a reminder, our original guidance called for us to front-end load activity in our base assets to maximize operational efficiency. With continued efficiency gains, our actual investments in Q1 came in 9% under budget. Total costs in Q1 were lower than expectations at $12.17 per BOE. As we'll cover a bit later, we expect to continue to drive savings in both capital and cash costs through the rest of this year and beyond.

Our original 2020 budget plan was to invest 865 million of capital in the first quarter.

Brendan McCracken: As a reminder, our original guidance called for us to front-end load activity in our base assets to maximize operational efficiency. With continued efficiency gains, our actual investments in Q1 came in 9% under budget. Total costs in Q1 were lower than expectations at $12.17 per BOE. As we'll cover a bit later, we expect to continue to drive savings in both capital and cash costs through the rest of this year and beyond. Our realized hedge gains in Q1 were $150 million. Our total liquidity today is at $3.4 billion.

As a reminder, original guidance called for Us to front end load activity in our base assets to maximize operational efficiency.

With continued efficiency gains are actual investments in the first quarter came in nine per cent under budget.

Total costs in the first quarter were lower than expectations at $12.17 <unk>.

We'll cover a bit later, we expect to continue to drive savings in both capital and cash costs through the rest of this year and be on.

Are realized hedge gains in the first quarter were $150 million.

Brendan McCracken: Our realized hedge gains in Q1 were $150 million. Our total liquidity today is at $3.4 billion. During Q1, we went into the open market and repurchased $100 million of our 21 and 22 notes for $89 million. These transactions included $90 million of senior notes with fixed rates of 5.75% and $10 million of notes with fixed rate of 3.9%. The impact of these repurchases reduces debt, lowers our interest expense, and extends term. In early March, we immediately adjusted our investment levels. We dropped Q2 capital by 60% or $500 million. We understood the importance of moving fast, and we had the flexibility to do so.

Or total liquidity today is at $3.4 billion during the first quarter, we went into the open market and reap purchased $100 million over 21, and 22 notes for $89 million.

Brendan McCracken: During Q1, we went into the open market and repurchased $100 million of our 21 and 22 notes for $89 million. These transactions included $90 million of senior notes with fixed rates of 5.75% and $10 million of notes with fixed rate of 3.9%. The impact of these repurchases reduces debt, lowers our interest expense, and extends term. In early March, we immediately adjusted our investment levels. We dropped Q2 capital by 60% or $500 million. We understood the importance of moving fast, and we had the flexibility to do so.

These transactions included $90 million, a senior notes with fixed rate so 5.75%.

And $10 million of notes with fixed rate of 3.9 per cent.

Be impacted these repurchases reduces debt.

Whereas our interest expense and extends term.

In early March we immediately adjusted our investment levels, we dropped second quarter capital by 60% or $500 million.

We understood the importance of moving fast and we had the flexibility to do so.

As Doug mentioned, we did not incur any penalties are costs to make this change.

Brendan McCracken: As Doug mentioned, we did not incur any penalties or costs to make this change. In April, we restructured our hedge book to further insulate us against lower oil prices. Today, we are fully hedged on oil for Q2 with more than 200,000 barrels a day hedged at an average price of about $42 a barrel. The majority are in fixed-price swaps at $41.50 per barrel, and the remainder are in costless collars between $50 and nearly $70 per barrel. We have a hard floor at $42 per barrel. We also have 1.2 Bcf a day of natural gas hedged at attractive prices. At today's strip, our hedge book has approximately $1.1 billion of value for the last three quarters of 2020.

In April we restructured our heads book to further insulate us against the lower oil prices today, we're fully has done well for the second quarter with more than 200000 barrels a day hedged at an average price of about $42 a barrel.

A majority are in fixed price Swat at $41.50 per barrel.

And the remainder or in Costless callers between 50 and nearly $70 per barrel.

Therefore, we have a hard floor at $42 per barrel.

We also have 1.2, B.C.F. a day of natural gas headset attractive prices.

Today's strip or hedge book has approximately $1.1 billion a value for the last three quarters of 2020.

Brendan McCracken: At today's strip, our hedge book has approximately $1.1 billion of value for the last three quarters of 2020. We traditionally hedge WTI roll as part of our risk management process. As a result, we have mitigated more than 70% of our roll exposure for the balance of 2020, with the financial hedges at +$0.25 per barrel. This is quite favorable relative to the current market. Our teams have a history of effectively managing risk in our business, and this year's hedge book will generate critical cash flow through this period of low prices.

[noise], we traditionally hedged W.T.I. role as part of our risk management process.

Brendan McCracken: We traditionally hedge WTI roll as part of our risk management process. As a result, we have mitigated more than 70% of our roll exposure for the balance of 2020, with the financial hedges at +$0.25 per barrel. This is quite favorable relative to the current market. Our teams have a history of effectively managing risk in our business, and this year's hedge book will generate critical cash flow through this period of low prices. Given ongoing uncertainty, continued market volatility, and the potential for production shut-ins, we have suspended our 2020 guidance. However, in today's presentation, we provide some near-term scenarios to help you better understand how we are managing the business. These scenarios show a compelling case for 2020 and 2021, and are supported by our performance and the decisive actions we've taken.

We have mitigated more than 70% of our rural exposure for the balance of 2020.

With the financial hedges, plus 25 cents per barrel. This is quite favorable relative to the current market.

Our teams have a history of the effectively managing risk in our business in this year's hedge book will generate critical cash flow through this period of low prices.

Given ongoing uncertainty continued market volatility and the potential for production shut ins. We have suspended are 2020 guidance.

Brendan McCracken: Given ongoing uncertainty, continued market volatility, and the potential for production shut-ins, we have suspended our 2020 guidance. However, in today's presentation, we provide some near-term scenarios to help you better understand how we are managing the business. These scenarios show a compelling case for 2020 and 2021, and are supported by our performance and the decisive actions we've taken.

However in today's presentation, we provide some near term scenarios to help you better understand how we are managing the business.

<unk> scenario show a compelling case for 2020, and 20 2021 and.

And are supported by our performance and the decisive actions we've taken.

These are difficult times, but we are well position with a strong culture of innovation track record of delivering on her objectives.

Brendan McCracken: These are difficult times, but we are well-positioned with a strong culture of innovation, a track record of delivering on our objectives, financial strength, and significant flexibility. In particular, we have a well-established capability to drive down costs and relentlessly enhance efficiency. I'll now turn the call over to Mike to further discuss our cost reductions.

<unk> strength and significant flexibility in particular, we have a well established capability to drive down costs and relentlessly enhance efficiency.

Now tend to call over to Mike to further discuss our cost reductions.

Thanks, Brendan we get pushed on all parts of the organization to safety reduced cost.

[Company Representative] (Ovintiv): Thanks, Brendan. We have pushed on all parts of the organization to safely reduce costs. We have a track record of constantly innovating to find efficiencies to drive down costs and enhance margins. Over my career, I have seen our industry get incredibly efficient during the downturns, and we are doing it again. Our company has a culture of operational excellence. This extends across all aspects of the business. For those of you that have followed us for some time know that if we put a cost target out there, we hit it. Our track record here is second to none. Our teams came through for us again in Q1. This is a direct result of our culture, which is unwavering and defines who we are and how we operate.

We have to track record of constantly innovating to find efficiencies to drive down costs and enhance margins.

Well from my career I have seen our industry get incredibly efficient during the downturns and we are doing it again.

[noise] accompany as a culture operational excellence.

Extends across all aspects to business.

But those of you that followed us for some time.

That if we put a cost target out there we hit it.

Are track record here is second to none.

[Company Representative] (Ovintiv): Our track record here is second to none. Our teams came through for us again in Q1. This is a direct result of our culture, which is unwavering and defines who we are and how we operate. In our appendix, we have summarized the key elements of our culture on a few slides, as we believe this is an often understated advantage. Check them out when you have a moment. Here's the big takeaway. The cost savings we've generated to date, when coupled with the reduced legacy costs in our business, translate into an incremental $300 million in 2021 cash cost savings.

[noise] Akeem scheme through for US again in the first quarter.

This is a direct result of our culture, which is unwavering defines who we are and how we operate.

Inner appendix summarize the key elements of our culture on a few slides.

[Company Representative] (Ovintiv): In our appendix, we have summarized the key elements of our culture on a few slides, as we believe this is an often understated advantage. Check them out when you have a moment. Here's the big takeaway. The cost savings we've generated to date, when coupled with the reduced legacy costs in our business, translate into an incremental $300 million in 2021 cash cost savings. These legacy cost reductions have no risk. They're simply expiring contracts and commitments. It's important for you to understand our ability to generate free cash in a low commodity price environment. Today we're providing some information to help you get there. We deploy cutting-edge technology with an unrelenting focus on innovation. This could not be more important as we fight to reduce costs and increase margin.

We believe this is an Austin understated advantage.

Check them out when you have a moment.

Here's the big take away.

The cost savings we've generated today, when coupled with the reduced legacy constant or business translate into an incremental $300 million.

2021 cash cost savings.

He's legacy cost reductions have no risk, you're simply expiring contracts and commitments.

[Company Representative] (Ovintiv): These legacy cost reductions have no risk. They're simply expiring contracts and commitments. It's important for you to understand our ability to generate free cash in a low commodity price environment. Today we're providing some information to help you get there. We deploy cutting-edge technology with an unrelenting focus on innovation. This could not be more important as we fight to reduce costs and increase margin. At the end of the day, the safe and low-cost operators with scale will win. Our proven ability to constantly innovate to deliver improved results is core to our culture.

It's important for you to understand or ability to generate free cash in a low commodity price environment.

Day, we're providing some information to help you get there.

[noise], we deployed cutting edge technology with an unrelenting focus on innovation.

Could not be more important as be fight to reduce costs and increase margin.

The end of the day.

[Company Representative] (Ovintiv): At the end of the day, the safe and low-cost operators with scale will win. Our proven ability to constantly innovate to deliver improved results is core to our culture. The key is to make sure our near-term gains translate into permanent economic advantages for us over the life of the assets. Our Q1 operating performance was exceptional. With today's focus on macro events, it's easy to overlook the good news occurring at the field level. Well, Ovintiv is a world-class operator everywhere we operate. We're consistently at the front of the pack. We lead industry in terms of cost per foot and well productivity, and we have consistently achieved this without upspacing infill locations and sacrificing future inventory. We had a great story of progressing efficiencies in Q1. In fact, our drilling completion cost performance was 9% better than our 2019 average.

To save some low cost operators with scale will win.

Are proven ability to constantly innovate to deliver improved results his cord or culture.

The keys to make sure are near term gains translate into permanent economic advantages for us over the life or the assets.

[Company Representative] (Ovintiv): The key is to make sure our near-term gains translate into permanent economic advantages for us over the life of the assets. Our Q1 operating performance was exceptional. With today's focus on macro events, it's easy to overlook the good news occurring at the field level. Well, Ovintiv is a world-class operator everywhere we operate. We're consistently at the front of the pack. We lead industry in terms of cost per foot and well productivity, and we have consistently achieved this without upspacing infill locations and sacrificing future inventory.

[noise], our first quarter operating performance was exceptional today's performance.

With today's focus on macro events, it's easy to overlook the good news occurring at the field level.

Well vintage is world class operator everywhere, we operate were consistently at the front of the pack, we lead industry in terms of cost per foot and while productivity.

And we have consistently achieved this without up spacing info locations and sacrificing future inventory.

Oh.

We had a great story of progressing efficiencies in the first quarter in fact or drilling completion cost performance was 9% better and our 2019 average.

[Company Representative] (Ovintiv): We had a great story of progressing efficiencies in Q1. In fact, our drilling completion cost performance was 9% better than our 2019 average. It's critical to note that we achieved these efficiencies before the recent oil price slide. We're now forecasting an additional 10% improvement on cost in Q2 and throughout 2021. Much of the savings we've seen to date are expected to be permanent, leading to lower break-even projection and our higher cash flow outlook for 2021. In each of our core regions, we lowered our cost to drill, complete, equip our wells, and reduce cycle times.

It's critical to note do we cheap these efficiencies.

[Company Representative] (Ovintiv): It's critical to note that we achieved these efficiencies before the recent oil price slide. We're now forecasting an additional 10% improvement on cost in Q2 and throughout 2021. Much of the savings we've seen to date are expected to be permanent, leading to lower break-even projection and our higher cash flow outlook for 2021. In each of our core regions, we lowered our cost to drill, complete, equip our wells, and reduce cycle times. This means we're stretching capital investments further, pushing down break-even costs, expanding margins, and enhancing returns. Our new lower expected well costs for each of these plays is shown here. Notice that we have also shown our pacesetter costs. We're using well costs for our planning purposes that are higher than our pacesetter results.

Before the recent oil price slide.

We're now forecasting an additional 10% improvement on cost and the second quarter and threw out 2021.

Much of the savings we've seen to date are expected to be permanent.

Leading to lower break even projection and or a higher cash flow outlook for 2021.

In each of her quarter regions, we lowered our costs to drill complete equip our wells and redo cycle times. This means we're stretching capital investments further pushing down break even cots expanding margins enhancing returns.

[Company Representative] (Ovintiv): This means we're stretching capital investments further, pushing down break-even costs, expanding margins, and enhancing returns. Our new lower expected well costs for each of these plays is shown here. Notice that we have also shown our pacesetter costs. We're using well costs for our planning purposes that are higher than our pacesetter results.In other words, we have high confidence we can deliver these estimates because we've already done so. I will now turn the call over to our COO, Greg Givens.

Or new lower expected well costs for each of these places shown here.

Notice that.

That we have also shown or paste that are costs.

Using while costs for planning purposes that are higher than or pay set of results in other words.

[Company Representative] (Ovintiv): In other words, we have high confidence we can deliver these estimates because we've already done so. I will now turn the call over to our COO, Greg Givens.

We have high confidence we can deliver these estimates because we've already done so.

Altering the call over Torsiello, Greg Givens.

Thanks, Mike.

Greg Givens: Thanks, Mike. We saw impressive gains across the portfolio. In the Permian, our well cost dropped to $700 per lateral foot, and we expect them to be just above $600 per foot going forward. These costs are industry-leading. One exciting innovation in our Permian operations is the adoption of simul-frac completions. This involves fracking two wells at the same time using a single frac spread, reducing cycle time and saving costs. More than two-thirds of the wells turned in line in Q1 were completed with this technology, and we achieved an 18% decrease in our frac cycle time compared to 2019. We continue to see big gains in the Anadarko. The rate of change in this operation is nothing short of phenomenal and clearly demonstrates what an experienced operator with the right culture can achieve.

We saw impressive gains across the portfolio and apartment are well costs drop to $700 per lateral foot, we expect them to be just above $600 per foot going forward.

These cost or industry, leading.

One exciting innovation or permit operations is the adoption of <unk>. This involves frakking two wells at the same time, using a single <unk> producing cycle time and saving costs.

More than two thirds of the wells turned on line. Two one were completed with this technology and we achieved an 18% decrease in our product cycle time compared to 2019.

Greg Givens: We continue to see big gains in the Anadarko. The rate of change in this operation is nothing short of phenomenal and clearly demonstrates what an experienced operator with the right culture can achieve. We have recently turned in line 13 stack wells with drilling and completion costs of less than $5 million. That's $3 million less or nearly 40% less than Newfield's legacy well costs. These cost reductions are a result of faster drilling times, increased pump rates, and innovative supply management solutions. I applaud the team for continuing to drive down costs and improve margins in this important play.

We continue to see big gains in the Anadarko a rate of changing this operation is nothing short of phenomenal and clearly demonstrates what an experienced operator with the right culture can achieve.

We have recently turned in line 13 stock wells with drilling a completion costs less than $5 million.

Greg Givens: We have recently turned in line 13 stack wells with drilling and completion costs of less than $5 million. That's $3 million less or nearly 40% less than Newfield's legacy well costs. These cost reductions are a result of faster drilling times, increased pump rates, and innovative supply management solutions. I applaud the team for continuing to drive down costs and improve margins in this important play. We have made the Anadarko hugely competitive with every other basin in North America. Our capital efficiency story was also evident in the Montney. We're optimizing our wellbore construction, increasing time spent pumping, and reducing downtime in our operations. We put a lot of thought into how we are shutting in wells to preserve future economic value. We are voluntarily electing to shut in production as opposed to selling at the low netback prices offered in the market today.

<unk> $3 million less or nearly 40% less the new fields legacy well costs.

These cost reductions or result are faster growing times increase pump crates innovative supply management solutions.

I applaud the team for containing to drive now cost and improve margins in this important clay.

We have made the Anadarko hugely competitive with every other base in the North America.

Greg Givens: We have made the Anadarko hugely competitive with every other basin in North America. Our capital efficiency story was also evident in the Montney. We're optimizing our wellbore construction, increasing time spent pumping, and reducing downtime in our operations. We put a lot of thought into how we are shutting in wells to preserve future economic value. We are voluntarily electing to shut in production as opposed to selling at the low netback prices offered in the market today.

Our capital efficiency story was also have and the Montney were optimizing our World War construction, increasing time spent pumping and reducing downtime and our operations.

We put a lot of thought into how we are shutting in wells to preserve future economic value.

Voluntarily electing to shut in production as opposed to selling at the low net but prices offered in the market today.

It is important to know we're not using the value over hedges are shut in analysis.

Greg Givens: It is important to note we are not using the value of our hedges in our shut-in analysis. Today, we have about 65,000 BOE per day shut in, of which about 35,000 barrels per day is oil and condensate. This is a combination of shutting in wells and deferring production in recently completed wells. We expect this number could rise in June. Our multi-basin portfolio is an advantage here as we manage curtailments real time, recognizing not only benchmark prices, but regional differentials, and differences in the product mix. It is a highly integrated approach between our operating and marketing teams. We are simply electing to store our oil in the reservoirs. We do not expect any detrimental impacts when we turn these wells to production. That's something we can do very rapidly once pricing conditions improve.

Today, we have about 65000 B.L.U. per day shut in which about 35000 barrels per day as oil and condensate.

This is a combination of shutting in wells and differing production and recently completed wells.

We expect this number could rise in June.

Are multi basin portfolio is an advantage here is we manage curtailments real time, recognizing not only benchmark prices, but regional differentials and differences in the product mix.

It is a highly integrated approach between our operating in marketing teams.

Greg Givens: It is a highly integrated approach between our operating and marketing teams. We are simply electing to store our oil in the reservoirs. We do not expect any detrimental impacts when we turn these wells to production. That's something we can do very rapidly once pricing conditions improve. I'll hand the call over to Corey to discuss our liquidity and financial strength in more detail. Corey?

We are <unk>, Oh, what can distort our oil in the reservoirs.

Do not expect any detrimental impacts when we turn these wells to production and that's something we can do very rapidly wants pricing conditions improved.

Oh hand, the call over to Cory to discuss our liquidity financial strength in more detail Cory.

Greg Givens: I'll hand the call over to Corey to discuss our liquidity and financial strength in more detail. Corey?

Thanks, Greg.

Corey: Thanks, Greg. It's extremely important that you leave today's call with a firm understanding of our credit facilities and the bulletproof nature of our liquidity picture. We've seen some recent sell-side reports that don't quite capture this accurately, so we provided a couple of informative slides, and we'll spend a few minutes on this topic today. We have two facilities with substantial headroom, one in Canada and one in the US, that provide total capacity of $4 billion. These facilities were just renewed in January and are not subject to any changes through mid-2024. As we can attest from past cycles in energy, there is no greater asset than liquidity. It is the oxygen that provides the staying power to the business and will get us safely to the other side. Here are the facts.

Corey Code: Thanks, Greg. It's extremely important that you leave today's call with a firm understanding of our credit facilities and the bulletproof nature of our liquidity picture. We've seen some recent sell-side reports that don't quite capture this accurately, so we provided a couple of informative slides, and we'll spend a few minutes on this topic today. We have two facilities with substantial headroom, one in Canada and one in the US, that provide total capacity of $4 billion. These facilities were just renewed in January and are not subject to any changes through mid-2024.

<unk>, it's extremely important that you leave today's call with a from understanding of or credit fits facilities and the bullet proof nature or liquidity picture.

We've seen some recent sell side reports that don't quite capture this accurately. So we provided a couple of informative slides and we'll spend a few minutes on this topic today.

We have to facilities with substantial headroom when in Canada, and what in the U.S. that provide total capacity of $4 billion.

Facilities were just renewed in January and are not subject to any changes through mid 2024, as we could test from past cycles in energy. There is no greater asset to liquidity is the oxygen that provides the staying power to the business will get a safely to the other side.

Corey Code: As we can attest from past cycles in energy, there is no greater asset than liquidity. It is the oxygen that provides the staying power to the business and will get us safely to the other side. Here are the facts. We do not have a borrowing base or annual redetermination process that is underway today with many other companies. Our facilities are unsecured and are not reserve-based lending facilities. We have no cash flow, EBITDA, or leverage covenants, which in today's period of low prices could make reductions in activity levels and supply curtailments very difficult.

Here the facts, we do not have a borrowing base or and you'll read determination process that is underway today with many other companies are facilities are unsecured and are not reserve base lending facilities, we have no cash flow eat it or leverage companies, which in today's period of low prices could make reductions in activity level.

Corey: We do not have a borrowing base or annual redetermination process that is underway today with many other companies. Our facilities are unsecured and are not reserve-based lending facilities. We have no cash flow, EBITDA, or leverage covenants, which in today's period of low prices could make reductions in activity levels and supply curtailments very difficult. We have no onerous covenants, and this provides great certainty and optionality to effectively manage our business like we're doing today. Although it's a great advantage to be rated investment grade in periods when access to capital is constrained or expensive, access to our facilities are not contingent on this rating. Be assured, we will work very hard to keep this rating, and our actions to date demonstrate our resolve. Our market capitalization has no impact on the facilities. These facilities are backed by nearly 2 dozen of the world's largest global financial institutions.

And supply curtailments very difficult, we have no onerous covenants and this provides greater certainty and optionality effectively manage our business like we're doing today.

Corey Code: We have no onerous covenants, and this provides great certainty and optionality to effectively manage our business like we're doing today. Although it's a great advantage to be rated investment grade in periods when access to capital is constrained or expensive, access to our facilities are not contingent on this rating. Be assured, we will work very hard to keep this rating, and our actions to date demonstrate our resolve. Our market capitalization has no impact on the facilities. These facilities are backed by nearly 2 dozen of the world's largest global financial institutions.

Although it's a great advantage to be rated investment grade in periods when access to capital is constrained or expensive access tour facilities are not contingent on this rate be assured we will work very hard to keep this rating interactions to date demonstrate our resolve.

Our market capitalization has no impact on the facilities piece facilities are backed by nearly two dozen of the world's largest global financial institutions. All these entities hold an a minus credit rating or better.

Corey: All these entities hold an A-minus credit rating or better. The facilities have a financial covenant, adjusted debt to book capitalization. It's based on book capitalization with a $7.7 billion permanent add back for non-cash write-downs. This add back is locked in and is not subject to redetermination. The tables on this slide show the calculation and the ratios at year-end 2019 and at the end of Q1. Our balance sheet is strong and resilient, backed by the deep liquidity profile I just highlighted. By design, our maturity profile is long-dated and staggered, with more than 80% of our long-term debt due in 2024 or later. It is an advantage today to be investment-grade rated, and two rating agencies recently affirmed us as an investment-grade credit.

Corey Code: All these entities hold an A-minus credit rating or better. The facilities have a financial covenant, adjusted debt to book capitalization. It's based on book capitalization with a $7.7 billion permanent add back for non-cash write-downs. This add back is locked in and is not subject to redetermination. The tables on this slide show the calculation and the ratios at year-end 2019 and at the end of Q1. Our balance sheet is strong and resilient, backed by the deep liquidity profile I just highlighted. By design, our maturity profile is long-dated and staggered, with more than 80% of our long-term debt due in 2024 or later.

<unk> has a financial covenant adjusted debt <unk> capitalization, it's based on book capitalization with a 7.7 billion dollar permanent add back for non cash rate downs.

This AD back is locked in and is not subject to read determination. The tables on this slide show the calculation and the ratios eight year in 2019 and at the end of the first quarter.

Or balance sheet is strong and resilience backed by the deep liquidity profile I, just highlighted by design or maturity profile as long dated and staggered with more than 80 per cent for a long term debt to 2024 later.

It isn't advantage today to be investment grade rated into rating agencies recently affirmed us as an investment grade credit.

Corey Code: It is an advantage today to be investment-grade rated, and two rating agencies recently affirmed us as an investment-grade credit. Our two maturities in late 2021 and early 2022 combined to total about $1.25 billion. There may be opportunities to refinance these maturities if attractive rates are available for an investment-grade credit like Ovintiv. However, our facilities have ample capacity to take out these maturities, both extending term and lowering our interest expense.

Or two maturities in late 2021, and early 2022 combined total about $1.25 billion.

Corey: Our two maturities in late 2021 and early 2022 combined to total about $1.25 billion. There may be opportunities to refinance these maturities if attractive rates are available for an investment-grade credit like Ovintiv. However, our facilities have ample capacity to take out these maturities, both extending term and lowering our interest expense. Maintaining our significant liquidity and limiting the use of our facilities to run the business is extremely important to us. As both demand and commodity prices recover, we fully intend to run our business free cash positive. Longer term, we are committed to running our business with a lower level of absolute debt. I'll turn the call back to Doug.

There may be opportunities to refinance these maturities if attractive rates are available for an investment grade credit like have been too.

However, our facilities have ample capacity to take up these maturities, both extending term and lowering our interest expense.

Maintaining our significant liquidity limiting the use of our facilities to run the business is extremely important to us as both demand in commodity prices recover we fully intend to run our business free cash positive.

Corey Code: Maintaining our significant liquidity and limiting the use of our facilities to run the business is extremely important to us. As both demand and commodity prices recover, we fully intend to run our business free cash positive. Longer term, we are committed to running our business with a lower level of absolute debt. I'll turn the call back to Doug.

Longer term, we are committed to running or business with a lower level of absolute deck.

I'll turn the call back to duck.

Thanks, Cory let me discuss our scenarios for the remainder of 20 and 21.

Doug Suttles: Thanks, Corey. Let me discuss our scenarios for the remainder of 2020 and 2021. The capital efficiency improvements, reduced cycle times, cash cost reductions, and outlook for lower legacy costs in 2021 have significantly enhanced our future outlook. Recall that we used to refer to our stay-flat capital case in the low $2 billion range. Today, this number is much lower, around $1.5 billion. Although we are using the flexibility in our business to manage shut-ins, we are confident in our ability to exit 2020 at about 200,000 barrels a day of crude and condensate production. Under this scenario for 2020, we would invest approximately $1.8 to 1.9 billion. That's more than $800 million less than our original $2.7 billion budget.

Capital efficiency improvements reduced cycle times cash cost reductions in <unk> outlook for lower <unk> legacy costs in 2021 have significantly enhance start future outlook.

Recall that we used to refer to our stay flat capital case in the low 2 billion dollar age today. This number is much lower around $1.5 billion. Although we are using the flexibility in our business to manage shut ins. We're confident in our ability to exit 2020 at about 200000 barrels a day of crude.

Can compensate production.

Under this scenario for 2020, we would invest approximately $1.8 billion to $1.9 billion.

Doug Suttles: Under this scenario for 2020, we would invest approximately $1.8 to 1.9 billion. That's more than $800 million less than our original $2.7 billion budget. This is a significant reduction, but it maintains scale in our business and when coupled with lower cost and better efficiencies in 2021, results in a strong trajectory for the company. I should note that these investments generate quality returns in a $35 WTI oil price and $2.75 NYMEX gas price world. For 2021, this scenario has us investing about $1.5 billion, which maintains 200,000 barrels a day of crude and condensate production.

That's more than $800 million less than our original 2.7 billion dollar budget.

This is a significant reduction, but it maintains scalar business and when coupled with lower cost in better efficiencies in 2021 results in a strong trajectory for the company and I should note that these investments generate quality returns in a 35 dollar W.T.R. oil price in two dollar and 75.

Doug Suttles: This is a significant reduction, but it maintains scale in our business and when coupled with lower cost and better efficiencies in 2021, results in a strong trajectory for the company. I should note that these investments generate quality returns in a $35 WTI oil price and $2.75 NYMEX gas price world. For 2021, this scenario has us investing about $1.5 billion, which maintains 200,000 barrels a day of crude and condensate production. At $35 WTI and $2.75 NYMEX gas price, this scenario would have us free cash positive, including our dividend. It is important to understand how we are thinking about the future and that you know just how resilient our business is.

Sent Nymex gas price world.

For 2021. This scenario has us investing about $1.5 billion, which maintains 200000 barrels a day increase of crude uncompensate production.

At 35 dollar W.T.I. into 75, nine makes gas price. This scenario would have us free cash positive including or dividend.

Doug Suttles: At $35 WTI and $2.75 NYMEX gas price, this scenario would have us free cash positive, including our dividend. It is important to understand how we are thinking about the future and that you know just how resilient our business is. This is not formal guidance, but this should give you a sense of how we're positioning the business, not only for today, but also for 2021 and beyond. Before opening up for questions, I'll quickly summarize today's key messages. First, we think it's important to balance the challenges of today with positioning for tomorrow, and the scenarios we've highlighted certainly do that.

It is important to understand how we were thinking about the future and that you know just how resilient or businesses.

This is not formal guidance, but the should give you a sense of how we're positioning the business not only for today, but also for 2021 and beyond.

Doug Suttles: This is not formal guidance, but this should give you a sense of how we're positioning the business, not only for today, but also for 2021 and beyond. Before opening up for questions, I'll quickly summarize today's key messages. First, we think it's important to balance the challenges of today with positioning for tomorrow, and the scenarios we've highlighted certainly do that. We are confident in our ability to exit 2020 with 200,000 barrels a day of crude and condensate production, and then maintain that level through 2021 with far less investment than previously thought. We can do this because of the substantial efficiency gains we've captured, and we continue to improve. Driving down costs, like we demonstrated in Q1, will increase our 2021 cash flow and enhance returns. Our track record here is quite strong, and I know we can deliver.

[noise] before opening up for questions I'll quickly summarize today's key messages first we think it's important to balance the challenges up today with positioning for tomorrow and as soon as we <unk> certainly do that.

Doug Suttles: We are confident in our ability to exit 2020 with 200,000 barrels a day of crude and condensate production, and then maintain that level through 2021 with far less investment than previously thought. We can do this because of the substantial efficiency gains we've captured, and we continue to improve. Driving down costs, like we demonstrated in Q1, will increase our 2021 cash flow and enhance returns. Our track record here is quite strong, and I know we can deliver.

We are confident in our ability to exit 2020, with 200000 barrels a day of crude and kind of say production and then maintain that level through 2021 with far less investment than previously thought.

We can do this because of the substantial efficiency gains we've captured and we continue to improve driving down costs like we demonstrated in the first quarter willing to increase our 2021 cash flow and enhance returns are track record here is quite strong and I know we can deliver.

Third we're advantage due to our flexibility we intend to use this flexibility as the options. We <unk>, we have across our multi basin and multi product portfolio to make the right near term decisions that will put us in the best place for the long term.

Doug Suttles: Third, we are advantaged due to our flexibility. We intend to use this flexibility as the options we have across our multi-basin and multi-product portfolio to make the right near-term decisions that will put us in the best place for the long term. We are laser-focused today on preserving liquidity and maintaining our strong balance sheet. Although the timing of demand recoveries are uncertain, we do know that it will occur. The world needs our products, and we intend to be positioned to thrive on the road ahead. Lastly, our team has a strong track record from the field to the office. We have a tremendous history of improving efficiency and hitting our targets, and I'm firmly convinced we will do so again. That now concludes our prepared remarks, and operator, we're now ready for questions.

We are laser focus today on preserving liquidity in maintaining are strong balance sheet.

The the timing of demand recoveries are uncertain, we do know that it will occur the world needs our products and we <unk>, we we intend to be position to thrive on the road ahead.

Doug Suttles: Lastly, our team has a strong track record from the field to the office. We have a tremendous history of improving efficiency and hitting our targets, and I'm firmly convinced we will do so again. That now concludes our prepared remarks, and operator, we're now ready for questions.

Lastly, our team has a strong track record from the field to the office, we have a tremendous history of improving efficiency and hitting or targets and firmly convinced we will do so again.

That now concludes our prepared remarks in operator, <unk>, we're now ready for questions.

It's time, if anybody has a question.

Operator: Okay. At this time, if anybody has a question, please press star one on your telephone keypad. Again, that would be star one on your telephone keypad. Your first question comes from Asit Sen from Bank of America. Your line is open.

Telephone keypad on that but <unk> on your telephone Hmm.

Question comes from.

Bank of America.

Thanks. Good morning. This slide 10 is very useful I just wanted to circled back dog on the scenario you are highlighted on maintenance capital of 1.5 billion could you share with US again broadly with display would be between pardon me and Anadarko money.

Corey: Thanks. Good morning. This slide 10 is very useful. I just wanted to circle back, Doug, on the scenario you highlighted on maintenance capital of $1.5 billion. Could you share with us again, broadly, what the split would be between Permian and Anadarko, Montney, and the base assets? Perhaps a decline rate improvement embedded in that and a level of DUC assumed at the beginning of the year?

Asit Sen: Thanks. Good morning. This slide 10 is very useful. I just wanted to circle back, Doug, on the scenario you highlighted on maintenance capital of $1.5 billion. Could you share with us again, broadly, what the split would be between Permian and Anadarko, Montney, and the base assets? Perhaps a decline rate improvement embedded in that and a level of DUC assumed at the beginning of the year?

And the base assets, perhaps he declined great improvement embedded in that and a level up duck assumed that the beginning of the year.

Yes. It that was that was quite clever I think you got about four or five questions in there, but let me see what I can do with them.

Doug Suttles: Yes. That was, that was quite clever. I think you got about four or five questions in there, but let me see what I can do with them. First on the distribution of capital, I think at this point, I wouldn't wanna guide or give you any indication where that's headed because we have a lot of flexibility. I mean, we have a portfolio, I think that Brendan highlight that produces not only a lot of crude and condensate, but a lot of natural gas and NGLs as well. There's a number of different distributions across the portfolio to get to that outcome. Of course, it's a bit early to make that decision, but when we've modeled it, we can see multiple ways to get there.

So first on the distribution of capital.

Think at this point I wouldn't want to guide or give you any indication of where that's headed because we have a lot of flexibility I mean, we have a portfolio I think that Brendan highlight that produces not only a lot of crude uncompensate, but a lot of natural gas and they jails as well. So there's a number of different distributions across the port <unk> portfolio to get to that.

Outcome and of course, it's a bit early to make that decision, but when we've model that we can see multiple ways to get there probably are your duck questions very important as well, though because we actually envision x. thing this year with a fairly normal number of Ducks. Currently we are building them because we've shut down all completion activity.

Doug Suttles: Of course, it's a bit early to make that decision, but when we've modeled it, we can see multiple ways to get there. Probably, your DUC question's very important as well though, because we actually envision exiting this year with a fairly normal number of DUCs. Currently, we are building them because we've shut down all completion activity. We would expect to roughly exit this year in that scenario with about 30 DUCs, which would be what we would normally be doing year-over-year. I may have left something out, so if I didn't cover everything, please.

Doug Suttles: Probably, your DUC question's very important as well though, because we actually envision exiting this year with a fairly normal number of DUCs. Currently, we are building them because we've shut down all completion activity. We would expect to roughly exit this year in that scenario with about 30 DUCs, which would be what we would normally be doing year-over-year. I may have left something out, so if I didn't cover everything, please.

But we would expect to roughly exit this year in that scenario with about 30, ducks, which would be what we would normally be doing.

A year over year may have left something out so if I didn't do anything please oh.

[Analyst]: The decline rate.

Asit Sen: The decline rate.

Oh declined rate, we actually see it moderating.

Doug Suttles: Oh, decline rate. We actually see it moderating both on BOEs and on crude and condensate production by about 5 percentage points. Varies a little bit between gas and oil, but clearly, when you move off of growth into a stay flat case, your underlying decline starts to moderate as you have fewer newer wells in the portfolio.

Both on B.O. ease and on a prude uncounted sake production production by about five percentage points varies a little bit between a gas and oil, but clearly when you. When you move off of growth into a stay flat case, you're underlying declined <unk> starts to moderate as you have fewer.

Newer wells in the portfolio.

Thanks Dog in a big picture question for you if I may in a low price environment would you be revaluating, you were well spacing and or completion designs.

[Analyst]: Thanks, Doug. A big picture question for you, if I may. In a low price environment, would you be reevaluating your well spacing and/or completion designs?

Asit Sen: Thanks, Doug. A big picture question for you, if I may. In a low price environment, would you be reevaluating your well spacing and/or completion designs?

You know it's a it's a good question, but I think is is highlighted in the prepared remarks, what we've been able to do across a portfolio is actually demonstrate that we can give very competitive well results well actually using our keep approach, which doesn't sacrifice both future locations or this really value.

Doug Suttles: You know, it's a good question, I think is highlighted in the prepared remarks. What we've been able to do across the portfolio is actually demonstrate that we can give very competitive well results while actually using our cube approach, which doesn't sacrifice both future locations or this really valuable land that we hold. I don't believe it is. It's constantly shifting and moving as we learn. On completion design, I think what we've shown typically our completions have been staying the same or growing, yet we're still driving well cost down. An example of that would be what Greg highlighted with the simul-frac approach we're now using where we use one frac spread to simultaneously complete two wells at the same time. I don't think it would.

Will land that we hold so I don't believe it is it's constantly shifting and moving as we learn and then on completion design I think what we've we've shown typically are completions have been staying the same are growing yet we're still driving well costs down in an example of that would be would be a what greg highlighted with the <unk>.

Doug Suttles: An example of that would be what Greg highlighted with the simul-frac approach we're now using where we use one frac spread to simultaneously complete two wells at the same time. I don't think it would. In fact, in a few areas, we're still looking at increasing the size of the jobs. We think we can offset that cost with efficiencies.

Approach, we're now using where we use one frank spread to simultaneously complete two wells at the same time. So I don't think it would in fact in a few areas were still looking at increasing the size of the jobs and we think we can offset that cost with with deficiencies.

Doug Suttles: In fact, in a few areas, we're still looking at increasing the size of the jobs. We think we can offset that cost with efficiencies.

Okay next question will come from crank party from I.B.C. capital markets.

Operator: Your next question will come from Greg Pardy from RBC Capital Markets. Your line is open.

Yeah. Thanks, Good morning, I'd definitely a number of my question is taken in that first one it was it was a good summary.

Greg Pardy: Yeah, thanks. Good morning. I definitely have number of my questions taken in that first one. It was, it was a good summary. Maybe just a couple of follow-ups. Just on the decline rate, Doug, then the 5% reduction, what would the, what would the reference case be there? Like 30%, 36%, 37%?

Maybe just a couple of follow ups to some of the decline rate than the 5% reduction what would what would the reference case be there like 30 36, 37%.

[noise], Yeah, Gregg, we've we've historically talked into high thirties, it varies a little bit by product, but it would for instance for for oil it would fall from the high thirties to the mid Thirty's for be always it falls from Canada.

Doug Suttles: Yeah, Greg, we've historically talked in the high 30s. It varies a little bit by product, but it would, for instance, for oil, it would fall from the high 30s to the mid-30s. For BOEs, it falls from kinda middle 30s to low 30s. it does vary a little bit by product. Part of that is some of our legacy gas production is on lower decline 'cause it's older.

Middle thirties to low thirties. So it does very little bit byproduct part part of that is some of our legacy gas production is on lower declined because it's older.

Okay.

Greg Pardy: Okay. In terms of the sustained capital, it's kind of a dumb question, but that's on a BOE basis, or is that really just kind of targeting the oil and condie that you mentioned?

In terms of the sustain account was kinda dumb question, but that's on on on a daily basis or is that really just kinda targeting the whale inclined d. that you mentioned.

Yeah today, it's really targeting oiling condie. It we would we might have very very small gas decline in that but there isn't a huge difference in in that scenario between be always increasing condensate yeah that <unk>, because we have we have quite a bit of flexibility in there and that's why the question about distribution.

Doug Suttles: Yeah. Today, it's really targeting oil and condie. We might have very, very small gas decline in that, but there isn't a huge difference in that scenario between BOEs and crude and condensate in it, because we have quite a bit of flexibility in there. That's why the question about distribution of that capital across the portfolio, we can get there in a number of different ways, depending on what commodities and regional pricing is doing.

<unk> of that capital across support fill that we can get there in a number of different ways, depending on what commodities and regional pricing is doing.

<unk>.

What's your next question will come from Bryan singer.

Operator: Your next question will come from Brian Singer from Goldman Sachs. Your line is open.

Box.

<unk>.

Thank you good morning.

Brian Singer: Thank you. Good morning.

Can you give us a lot of <unk> color.

Doug Suttles: Good morning, Brian.

Brian Singer: Can you give us a little bit more color on where the shut-ins are by area, and/or what the, what the proportions are? What oil price would you need to see to both curb your curtailments, but then also go into growth mode relative to the 200,000 exit target?

I'm weird.

By area.

Or what.

Portions are and then what.

Oil price would you need to see to.

Serbia Curtailments, but then also go into great.

Node relative to the 200000 exit target.

Yeah, Brian in you know once again, one of the advantages of of having a multi base and portfolio.

Doug Suttles: Yeah, Brian. In, you know, once again, one of the advantages of having a multi-basin portfolio is we can use not only what the benchmark prices are doing, but what regional diffs are also doing. Today, when you look at what's shut in today, a much larger percentage of the Uinta, Bakken, and Eagle Ford are shut in, and a much smaller percentage of the Permian, Anadarko, and Montney are shut in. The biggest chunk is in our base assets, and largely that's just driven by regional differentials, a little bit by the cost profile. As to what price we would return activity, well, it's two things.

He is we can use not only what the benchmark prices are doing but we're regional diffs are also doing so today when you look at Ah what shut in today, a much larger percentage of the U.N. to block in in Eagleford or shut in in a much smaller percentage of the Permian Anadarko in montney or or.

Shut in so the biggest chunk is in.

Our base assets enlarge that just driven by a regional differential is a little bit by the cost profile as to what price we would return activity well. It's it's it's two things on.

Doug Suttles: On shut-ins today, most of our, a reasonable portion of our production that shut in, is clearly doing more than covering variable costs today, but we've just decided not to sell those barrels at today's prices and effectively store those for the future. Because as Greg mentioned, it's not only shutting in wells that we're already producing. We've chosen not to bring on some wells that we've drilled and completed, and other wells that we've recently drilled and completed, we're producing at very restricted rates. It's hard to put a precise number because diffs have played a very big role in this conversation. Also, the product mix plays a very big role.

On shut ins today, most of our reasonable portion of our production shut in is clearly doing more than covering variable costs today, but we just decided not to sell those barrels that today's prices and effectively stored those for the future because as a as Greg mentioned, it's not only show.

And well is that we're already producing we've chosen not to bring on somewhere else that we've drilled and completed another wells that we've recently drilled and completed we're producing it very restricted rates. It's it's hard to put a precise number because <unk> played a very big role in this conversation and.

Also the product mix plays a a very big role and as you know our portfolio as everything from wells that produce 80% of their production is oil to and other places. It's it's 15 or 20 per cent. So it's hard to give you an oil price because it actually matters would gas in a in jails are doing.

Doug Suttles: Also, the product mix plays a very big role. As you know, our portfolio has everything from wells that produce 80% of their production is oil to, in other places, it's 15% or 20%. It's hard to give you an oil price 'cause it actually matters what gas and NGLs are doing. When we restart activity is also the same answer. At today's prices, we wouldn't do that, but it's gonna vary by region, and it's not just oil price dependent. It will also depend on what gas and NGLs are doing.

Doug Suttles: As you know, our portfolio has everything from wells that produce 80% of their production is oil to, in other places, it's 15% or 20%. It's hard to give you an oil price 'cause it actually matters what gas and NGLs are doing. When we restart activity is also the same answer. At today's prices, we wouldn't do that, but it's gonna vary by region, and it's not just oil price dependent. It will also depend on what gas and NGLs are doing.

And then when we restart activity is also the same answer at today's prices, we wouldn't do that but it it's going to vary by region and it's not just <unk>. We'll also depend on what gas in in jails are doing.

Great. Thank you and then my follow up trying to get a couple a couple in but not as creatively as others.

Brian Singer: Great. Thank you. My follow-up, I'm gonna try to get a couple in, but not as creatively as others. Can you talk to the oil mix in the Permian and Anadarko Basins as you see well performance moving around, if well performance improvements are coming more on the wet gas side versus the black oil side? On natural gas, would higher gas prices in those basins or in the Montney impact and influence your interest in drilling more gassier prospects or in shifting capital that direction?

You talk to the oil mix in the in the community Anadarko basis, as you see well performance moving around well performance improvements aren't spending more on the web addresses the black go outside and then on a natural gas higher gas prices.

Eight.

Or in the Montney <unk> influence your interest in in drilling more gas your prospects or and shifting capital that direction.

Yeah, Brian in terms of the product mix in in the Permian, Indiana darker it's relatively stable. It's it's not moving around a lot. It it does very little bit by zone in by County in the Permian in of course say she moved across the window, but that's not shifting dramatically. Your question on gas prices is interesting.

Doug Suttles: Brian, in terms of the product mix in the Permian and the Anadarko, it's not moving around a lot. It does vary a little bit by zone and by county in the Permian and, of course, as you move across the window, but that's not shifting dramatically. Your question on gas prices is interesting, and we're currently studying that. At what point would the wells you target shift based on product pricing? And I don't wanna give you a precise number, but clearly, there's a number of people who are getting more bullish on natural gas prices.

Thing and and we're currently studying that at what point would the wells you target shift based on product pricing and I don't want to give you a precise number but clearly.

There's a number of people who are are getting more bullish on natural gas prices and of course, what that does in a play like the anadarko or the money. It just makes them more attractive because would still get the liquids production, but we'd get an even better price for the natural gas it could make a difference on <unk>.

Doug Suttles: Of course, what that does in a play like the Anadarko or the Montney, it just makes them more attractive because we'd still get the liquids production, but we'd get an even better price for the natural gas. It could make a difference on capital allocation at the margin. We're studying that today because as you probably know, Brian, as you move into, particularly in the Montney, as into some of the different type curve areas, you actually get higher rate wells. You get a lot more gas, and you may not be giving up much on the condensate side. It could drive it at the margin. I don't think it'll be a huge effect, but at the margin it could make a difference.

Well <unk> at the margin, we're studying that today, because as you probably know Brian as you move into particularly in the Montney.

Doug Suttles: We're studying that today because as you probably know, Brian, as you move into, particularly in the Montney, as into some of the different type curve areas, you actually get higher rate wells. You get a lot more gas, and you may not be giving up much on the condensate side. It could drive it at the margin. I don't think it'll be a huge effect, but at the margin it could make a difference.

It's it's into some of the different type career is they actually you actually get higher rate wells you get a lot more gas and you you may not be giving up much on the condensate side. So it could drive at at the margin I don't think it'll be a huge effect, but at the margin it could make a difference.

Mhm question comes on <unk>.

Operator: Your next question comes from Arun Jayaram from JPMorgan. Your line is open.

Okay.

<unk>.

Good morning, Doug I I know you guys employ a rigorous capital allocation process just wanted to to see to get you know give some more thoughts on the 2020 scenario you outlined today, though the one eight to one nine.

Arun Jayaram: Good morning, Doug. I know you guys employ a rigorous capital allocation process. Just wanted to see if you could, you know, give some more thoughts on the 2020 scenario that you outlined today, the $1.8 to $1.9 billion. You know, what kind of oil price are you thinking about to support that level of investment this year? Maybe talk about what would drive that to be a lower level of spending if prices don't, you know, show some recovery in the back half of the year?

You know what kind of oil price.

Are you thinking about to support that level of investment this year, and maybe and maybe talk about what.

What would drive that to be a lower level of spending if prices don't you know show some recovery in the in the back half of the year.

[noise], Yeah Rooney the.

Doug Suttles: Yeah, Arun, if you look at that scenario, it would broadly be supported by something we see in the strip today. I think as Corey highlighted, if we see weaker prices, we're clearly gonna focus in on the balance sheet. The intent here is not to use up our liquidity. I think in a scenario that looks not too broadly different than you see in the forward curve, it feels reasonable. If we found that prices aren't recovering and they're weaker, we would ultimately pull capital back. That's why we've described it as a scenario as opposed to guidance. We have to see, but I think it's not broadly different than what you see in the forward curve at the moment.

If you look at that scenario it broadly be supported by something we see in the strip today, but I I think is is Corey highlighted if we see weaker prices were were clearly going to focus in on the balance sheet in in the intent here is not to use up our liquidity, but I think in in a scenario that looks not too broad.

Different then you see in the forward curve it feels reasonable, but if we found that prices aren't recovering in their weaker we would ultimately pull capital back and that's why we've described it as a scenario as opposed to guidance. So we have to see but I think it's not broadly different than what you see in the Ford curve at the moment.

Doug Suttles: If we found that prices aren't recovering and they're weaker, we would ultimately pull capital back. That's why we've described it as a scenario as opposed to guidance. We have to see, but I think it's not broadly different than what you see in the forward curve at the moment.

Yeah, and the second question is that could you talk a little bit more about you know your wall costs are now you know trending below your peers bye bye bye quite a big margin.

Arun Jayaram: Yeah, the second question is, could you talk a little bit more about, you know, your well costs are now, you know, trending below your peers by a quite a big margin as we study this on a per foot basis? Could you talk about what's driving that and just broadly what's influencing, you know, the sustaining CapEx to be, you know, 1.5 versus call it a $2 billion rate, you know, before the downturn?

We studied this on a per foot basis.

Did you talked about what's driving that and just broadly what's influencing the sustaining cap x. to be you know one and a half versus called it a 2 billion dollar a rate you know before the downturn.

Yeah I wrote I. Thank you for the question I mean first of all I'd highlight that you know there's only one company in the world, who who's drilled and completed more horizontal wells with a multi stage for acting. So we have incredible experience. We think one of the advantages of being in multi base in his ability to learn in lots of places then applied across.

Doug Suttles: Yeah. Arun, thank you for the question. I mean, first of all, I'd highlight that, you know, there's only one company in the world who's drilled and completed more horizontal wells with a multi-stage frack than us, so we have incredible experience. We think one of the advantages of being in multi-basin is the ability to learn in lots of places then apply it across the portfolio. Tied to that which I think Brendan highlighted as our culture, this is all about innovation and constantly challenging what we do and how we do it. I think if you look at our track record, we're always changing, we're always driving it forward, we're always looking for the next improvement, some of that's with technology, some of it's with the supply chain.

Portfolio.

In in tied to that it which I think Brendan highlighted is our culture. This is all about innovation in constantly challenging what we do and how we do it.

Doug Suttles: I think if you look at our track record, we're always changing, we're always driving it forward, we're always looking for the next improvement, some of that's with technology, some of it's with the supply chain. You might remember while others were thinking they should own sand mines, we were working on local sand. While others were spending large amounts of money on water infrastructure, we came up with a very creative solution to that problem. It just doesn't stop. I remember in 15 and 16, many people were saying the cost reductions we delivered then would reverse out in 17 and 18.

I think if you look at our track record, we're always changing we're always driving it forward. We're always looking for the next improvement in some of that is with technology. Some of it's with the supply chain you you might remember while others were thinking they should own sand minds, we were working on local and then while others were spending large amounts of money on.

Doug Suttles: You might remember while others were thinking they should own sand mines, we were working on local sand. While others were spending large amounts of money on water infrastructure, we came up with a very creative solution to that problem. It just doesn't stop. I remember in 15 and 16, many people were saying the cost reductions we delivered then would reverse out in 17 and 18. Well, if you look at our costs, they went down year-over-year, we firmly believe they're gonna go down in 2021. I think Mike highlighted in his comments that the numbers we're using in the forward-look scenario are actually higher than cost we've actually delivered today. Our pacesetter well, which is our well with the lowest cost, is actually less expensive than what we've used in that planning scenario.

Water infrastructure, we came up with a very creative solution.

To that problem and it just doesn't stop I I remember in 15 and 16. Many people were saying the cost reductions. We delivered then would reverse out in 17 and 18, well if you look at our costs. They went down a year over year and we firmly believe they're going to go down in in 21, and I think Mike highlighted.

Doug Suttles: Well, if you look at our costs, they went down year-over-year, we firmly believe they're gonna go down in 2021. I think Mike highlighted in his comments that the numbers we're using in the forward-look scenario are actually higher than cost we've actually delivered today. Our pacesetter well, which is our well with the lowest cost, is actually less expensive than what we've used in that planning scenario.

In his comments.

But the numbers were using in forward looks scenario are actually higher than cost. We've actually delivered today are pacesetter, well, which is our our well with the lowest cost is actually less expensive than what we've used in that planning scenario and if you look at our tracker is that's information we usually publish on a red.

Doug Suttles: If you look at our track record, because that's information we usually publish on a regular basis. You'll find that quickly our pacesetters become our average, and we establish a new pacesetter and continue to drive it down. A lot of it's technology driven. It's not based on massive assumptions about lower service pricing. It's really driven by the innovation we're gonna do in our operations.

Either basis, you'll find that quickly our pacesetters become our average and we establish a new pacesetter and continue to drive down so a lot of its technology driven it's not based on massive assumptions about lower service pricing.

It's really driven by the innovation, we're going to do in our operations.

Yeah, that's a question.

Operator: Your next question comes from Bob Brackett from Citigroup. Your line is open.

Operator: Your next question comes from Brian Downey from Citigroup. Your line is open.

Townie sneakers.

Morning, everyone. Thanks for taking the questions I wanted to ask one on the 2021 commentary. So you know to a potential scenario in which are free cash flow positive next year.

Bob Brackett: Good morning, everyone. Thanks for taking the questions. I wanted to ask one on the 2021 commentary. You note a potential scenario in which you're free cash flow positive next year, post dividend at a commodity price not too dissimilar from the current 2021 forward curve for both oil and natural gas. I'm curious your hedging thoughts or hedging strategy given that backdrop. At what point would you look to layer in hedge protection on that 2021 plan versus targeting further free cash flow upside and net debt reduction potential if commodity prices were to continue to improve?

Brian Downey: Good morning, everyone. Thanks for taking the questions. I wanted to ask one on the 2021 commentary. You note a potential scenario in which you're free cash flow positive next year, post dividend at a commodity price not too dissimilar from the current 2021 forward curve for both oil and natural gas. I'm curious your hedging thoughts or hedging strategy given that backdrop. At what point would you look to layer in hedge protection on that 2021 plan versus targeting further free cash flow upside and net debt reduction potential if commodity prices were to continue to improve?

Give it ended a commodity price not too dissimilar from the the current 2021 forward curve for both oil and natural gas I'm curious your hedging thoughts or hedging strategy given that backdrop at what point, which you look to layer in hedge projection on that 2021 plan versus targeting further free cash flow upside in a net debt reduction potential if.

Commodity prices were to continue doing proof.

Yeah, Brian <unk>, good question and and you know if you look at our history, we always in or the current year with a strong hedge book.

Doug Suttles: Yeah, Brian, good question. You know, if you look at our history, we always enter the current year with a strong hedge book. Remember, we do this to protect our balance sheet, which you're seeing the effect of that this year. We also use a variety of products based on our views in the market and the risks that's out there, so everything from fixed-price swaps to three-way collar. I know there was some commentary not very long ago that our three-way collar weren't providing protection, which actually wasn't true, because I think people failed to understand that you can convert those and the spread value in there does have value.

Remember, we we do this to protect our balance sheet, what you're seeing the effective that this year. We also use a variety of products based on our our views in the market in the in the risk what's out there so everything firm fixed price swaps to three ways.

And I know there was some commentary or not very long ago that are three ways for providing protection, which which actually wasn't true because I think people fail to understand that you can convert those and the spread value in their does have value. So we'll build the book as we go through the year and as we from up our plans for 2021, it will be under P.

Doug Suttles: I know there was some commentary not very long ago that our three-way collar weren't providing protection, which actually wasn't true, because I think people failed to understand that you can convert those and the spread value in there does have value. We'll build the book as we go through the year, and as we firm up our plans for 2021, it will be underpinned. The balance sheet will be underpinned by a hedge book. At this point, I wouldn't want to indicate what the price is. I think it's too early to do that.

Doug Suttles: We'll build the book as we go through the year, and as we firm up our plans for 2021, it will be underpinned. The balance sheet will be underpinned by a hedge book. At this point, I wouldn't want to indicate what the price is. I think it's too early to do that. At the moment, we're not out in the market hedging oil at the current strip. As we get closer to the end of the year and begin to firm up our plans and also see how 20 finishes, we'll end up with a strong hedge book for next year, which is consistent with our plans.

And the balance you to be underpinned by hedge book, but at this point I wouldn't want to indicate what the prices I think it's too early to do that and at the moment, we're we're not out in the market.

Doug Suttles: At the moment, we're not out in the market hedging oil at the current strip. As we get closer to the end of the year and begin to firm up our plans and also see how 20 finishes, we'll end up with a strong hedge book for next year, which is consistent with our plans.

Hedging all at a at the current strip, but as we are closer to the end of the year and began to form up our plans and also see how 20 finishes we'll end up with a strong hedge book for next year, which is consistent with our plans.

I appreciate and then as a follow up a you disclose purchasing roughly 100 million of 2021 22 senior notes in the open market I'm curious how much additional runway you may have their in the open market seems as if you are prioritizing the 20 twos based on the combination of interest rate say, a interest savings and and percent discount.

Bob Brackett: Great, appreciate it. As a follow-up, you disclosed purchasing roughly $100 million of 2021 and 2022 senior notes in the open market. I'm curious how much additional runway you may have there, in the open market. Seems as if you are prioritizing the 2022s based on the combination of interest rates, interest savings, and % discount to face value. Any thoughts on strategy and whether there's a limit to how much you'd do in the open market?

Brian Downey: Great, appreciate it. As a follow-up, you disclosed purchasing roughly $100 million of 2021 and 2022 senior notes in the open market. I'm curious how much additional runway you may have there, in the open market. Seems as if you are prioritizing the 2022s based on the combination of interest rates, interest savings, and % discount to face value. Any thoughts on strategy and whether there's a limit to how much you'd do in the open market?

The face value, but any thoughts on on strategy and whether there's a a limit to how much you doing the open market.

Yeah, maybe I'll, let corey pick that up.

Doug Suttles: Yeah, maybe I'll let Corey pick that up.

Hey, Brian Yeah. Thanks for noticing the repurchase obviously, when we were targeting the 20 ones and 20 twos. It was really just an ability to extend maturity as well as capture some of the discount I think but we saw initially anyway and the trading was that the 20 twos traded a bit wider.

Corey: Hey, Brian. Yeah, thanks for noticing the repurchase. Obviously, when we were targeting the 21s and 22s, it was really just an ability to extend maturity as well as capture some of the discount. I think what we saw initially anyway on the trading was that the 22s traded a bit wider than the 21s. We just preferentially went for those based on price.

Corey Code: Hey, Brian. Yeah, thanks for noticing the repurchase. Obviously, when we were targeting the 21s and 22s, it was really just an ability to extend maturity as well as capture some of the discount. I think what we saw initially anyway on the trading was that the 22s traded a bit wider than the 21s. We just preferentially went for those based on price.

Than the 21, so we just preferentially went for those based on price.

That's your next question.

Operator: Your next question will come from Jeanine Wai from Barclays. Your line is open.

Wow I'm Barclays here.

Hi, good morning, everyone.

Jeanine Wai: Hi, good morning, everyone. This is Jeanine Wai. My first question is on debt, and I guess just following up on Brian's question. We recognize that you have revolver capacity for sure. In terms of maturities that are coming due over the next two years, is the plan to pay these strictly out of free cash flow? If that is the plan, is the stay-flat scenario something that's likely to get pushed forward? What WTI price do you think is required to cover those maturities out of the free cash flow? I think, you know, we saw the unhedged price sensitivities that you provided, which are really helpful.

<unk> My first question on that and and I guess piling up on buying question. We recognize that you have of our capacity for sure.

Maturity that are coming you over the next year is the plan to Haiti strictly out of free cash flow and if that is the plan is to stay flat yeah, something that's likely to get that's Ford and what W.T. I pay you think it's required to cover that maturity added the free cash and I think.

Hi.

You provide it what you're really helpful and.

Jeanine Wai: We think that the sensitivities imply that WTI needs to probably average something closer to $45 over the next couple of years to cover those maturities if you go ex growth. We're just wondering if we're thinking about that right, and if you have any further color. Thank you.

You need to apply at Debbie.

Probably average something closer to 45 over the next couple of years. He laughed covered that maturity. If you go x. crowd. So we're just wondering if we're thinking about that right.

Further color yeah.

Janine, maybe I'll make a couple of comments and S.S. Cory to to add some more detail.

Doug Suttles: Jeanine, maybe I'll make a couple of comments and ask Corey to add some more detail. You know what we've outlined, and when we've looked at various scenarios, we've taken a very conservative view on our projections on liquidity. As Corey indicated, we can clearly repay those maturities with our credit facility if we need to. You also are probably aware that the credit markets are slowly opening up, and that provides another option. Clearly, as prices improve, we'll be generating more free cash flow, which can also contribute to that. I think we have a number of options here as we look forward. Corey, is there anything else you'd like to add?

What what we've outlined in when we've looked at various scenarios, we've taken a very conservative view.

On on our projections on liquidity. So is Corey indicated we can clearly repaid those maturities with our with our credit facility. If we need to but you. You also are probably aware that the credit markets are slowly opening up in that provides another option.

Doug Suttles: You also are probably aware that the credit markets are slowly opening up, and that provides another option. Clearly, as prices improve, we'll be generating more free cash flow, which can also contribute to that. I think we have a number of options here as we look forward. Corey, is there anything else you'd like to add?

And then clearly as prices improve will be generating more free cash flow, which can also contribute to that so I think we have a number of options here as we look forward, but koreas or anything else you'd like Dan.

Yeah, I think <unk> clarification I make is you know the comments, we also highlighted as Doug alluded to the the option to refinance is one that in a more normalized open market for our investment grade credit, we would entertain that as well. So you know to the extent we want to reduce overall debt. We also have some short term.

Corey: Yeah, I think, Jeanine, the only other clarification I'd make is, you know, in the comments we also highlighted, as Doug alluded to, the option to refinance is one that, in a more normalized open market for our investment-grade credit, we would entertain that as well. You know, to the extent we wanna reduce overall debt, we also have some short-term borrowings on our credit facility that can be repaid easily as well. We've got lots of flexibility on that, on the capital structure front as well.

Corey Code: Yeah, I think, Jeanine, the only other clarification I'd make is, you know, in the comments we also highlighted, as Doug alluded to, the option to refinance is one that, in a more normalized open market for our investment-grade credit, we would entertain that as well. You know, to the extent we wanna reduce overall debt, we also have some short-term borrowings on our credit facility that can be repaid easily as well. We've got lots of flexibility on that, on the capital structure front as well.

From borrowings on our credit facility that can be repaid easily as well. So we've got lots of flexibility on that on the capital structure front as well.

Okay. Thank you I appreciate all that probably I guess the second question is moving on yeah.

Jeanine Wai: Okay. Thank you. Appreciate all that color. I guess the second question is moving on to operations and the assets. In the past, you've mentioned that your core three plays all have very similar returns. In today's oil price environment with the differentials and your cost improvements, is this still the case? I just wanted to check in on that. If it's not still the case, at what natural gas and NGL prices does the stack start to exceed the Permian on returns? Thank you.

That's in the past you mentioned that your course replaced Uh Huh.

Returns and today's oil price environment with the differential you're caught improvement.

Okay I just wanted that second on that and if it's not sounds like he's at what natural gas prices either that does attack sorry can't like he'd department and I can thank you.

Yeah. It you know, it's it's interesting insight and I think what we have to be a very cautious about right. Now is that you know this has been an unprecedented set of conditions, where you had massive demand destruction that happened very very quickly.

Doug Suttles: Yeah, you know, it's interesting insight. I think what we have to be very cautious about right now is that, you know, this has been an unprecedented set of conditions where you had massive demand destruction that happened very, very quickly, the supply response has taken some time, now you're seeing it's also quite strong. In fact, there's even some indications that the two points may cross at some point in the not too distant future. That varies a lot by regions. We've seen differentials in areas move radically to the tune of $15 or more per barrel over the course of days or a week. I don't think when we look at making capital investments, we would use that sort of volatility in today's market to influence us.

The supply response is taking some time, but now you're seeing it's also quite strong in fact, there's even some indications that the two points may cross at some point and they're not too distant future, but that varies a lot by regions. We've seen differentials in areas move radically or to the tune of $15.

More per barrel over the course of days or a week.

And I don't think when we look at making capital investments, we would use that sort of volatility in today's market to influence us we're going to take it would be taking a longer term look so in longer term. We're we're not we're not that concern that the big historic Diffs or a lot different in the future in fact, if any.

Doug Suttles: I don't think when we look at making capital investments, we would use that sort of volatility in today's market to influence us. We'd be taking a longer term look. In longer term, we're not that concerned that the big historic diffs are a lot different in the future. In fact, if anything, because of lower production levels and lower growth levels, it's gonna tighten those in. I don't think that will drive it. Your comment about natural gas mix and even NGL mix, because there is some encouraging signs on the NGL side and out there as well, that at the margin, it could shift some capital around.

Doug Suttles: We'd be taking a longer term look. In longer term, we're not that concerned that the big historic diffs are a lot different in the future. In fact, if anything, because of lower production levels and lower growth levels, it's gonna tighten those in. I don't think that will drive it. Your comment about natural gas mix and even NGL mix, because there is some encouraging signs on the NGL side and out there as well, that at the margin, it could shift some capital around. Once again, I just highlight this is the advantage of our portfolio and why we've never wanted to be or intended to be a single basin player. This allows us to adjust and to re-react to that.

Thing because of Ah lower production levels and lower growth levels, it's going to tighten those in so I don't think that will drive it but your comment about.

About natural gas mix and even N.G.L. mix because there is some there there is some encouraging signs on the N.G.L. side and out there as well that at at at the margin it could shift some capital around but once again I. Just highlight this is the advantage of our portfolio and why we've never.

Doug Suttles: Once again, I just highlight this is the advantage of our portfolio and why we've never wanted to be or intended to be a single basin player. This allows us to adjust and to re-react to that. I would tell you, though, that when we think about investments, it's not just on the current or the short-term commodity price. We'd be looking for at what level we think it would be sustained at or what the forward look is. I think there is some optimism on gas on the next 12 to 24 months. The question would be is how sustained that will be over time.

Wanted to be or intended to be a single based employer. This allows us to adjust underrate react to that I would tell you, though that when we think about investments is not just on the current or the short term commodity price we'd be looking for what at what level. We think it would be sustained DAT or what the forward look is.

Doug Suttles: I would tell you, though, that when we think about investments, it's not just on the current or the short-term commodity price. We'd be looking for at what level we think it would be sustained at or what the forward look is. I think there is some optimism on gas on the next 12 to 24 months. The question would be is how sustained that will be over time.

I think there is some optimism on gas on the next 12 to 24 months. The question would be his house sustain that will be over time.

Mm.

Mmm question I mean 10 minutes on the same cast your line is open.

Operator: The next question will come from Neal Dingman from SunTrust. Your line is open.

Operator: The next question will come from Neal Dingmann from SunTrust. Your line is open.

No my first questions on the younger operational efficiency you have just one are very briefly can you continue to achieve these with you know that kind of the minimal D.N.C. that you all are planning for the remainder of this year and then what you're thinking about into 2021.

Neal Dingmann: Well, no, my first question is on your operational efficiency. I'm just wondering very briefly, can you continue to achieve these with, you know, the kind of the minimal D&C that you all are planning for the remainder of this year and then what you're thinking about into 2021?

Yeah, Neil it's a it's a great question and.

Doug Suttles: Yeah, Neal, it's a great question. And scale does help here, but the environment's quite a bit different right now than obviously it was just a few months ago. I think we're firmly convinced we can. But it is clearly when you're doing more, it's easier to do a bit more experimentation and test new things. But many of, many of the things we've been implementing over the last 6 to 9 months, we're continuing to scale up. And once again, I'd reference simul-fracs, which is something we started in the Permian and are now beginning to spread across our portfolio. So I believe we will get there, even at a lower activity level.

Scale does help here, but the environment is quite a bit different right now that obviously it was just a few months ago.

And I think we're firmly convinced we can.

But it is clearly when you're doing more it's easier to do a bit more experimentation and test new things, but many of many of the things we've been implementing over the last six to nine months, we're continuing to scale up it wants skin I'd reference Simon Fracs, which is something we started in the permission enter now beginning to spread across our.

Are port Fellas, I believe we will get their even at a lower activity level and clearly our teams are thinking about while we're <unk>. While we're in this pause phase right now about how they can take further costs out of the business and dry further efficiency savings. So I believe we can do that but you're you're right. It.

Doug Suttles: So I believe we will get there, even at a lower activity level.Clearly, our teams are thinking about while we're in this pause phase right now, about how they can take further costs out of the business and drive further efficiency savings. I believe we can do that. You're right. It is a little more challenging at a lower activity level.

Doug Suttles: Clearly, our teams are thinking about while we're in this pause phase right now, about how they can take further costs out of the business and drive further efficiency savings. I believe we can do that. You're right. It is a little more challenging at a lower activity level.

Is a it is a little more challenging at a lower activity level.

And <unk> great detail and then my my sort of pop was in that same vein I was just looking at that presentation that that that just to really detail.

Neal Dingmann: Great detail. Then my sort of follow-up was in that same vein. I was just looking at that presentation that just the really detailed Anadarko Basin presentation you all put out early this year, and you talked about, I know in one of the mid slides there about being primed for the full field development. You know, again, in that same vein, just running two rigs there, I mean, is that, you know, I'm just kinda wondering what sort of plan to tackle that versus, you know, talking about early this year, maybe more of a full field development? I'm just wondering how you're thinking about that in the play now.

The base and presentation yellow put down early this year and you talked about I know and one of the.

Bid slides there about being prime for the fulfilled development. So you know again in that same vein just running two rigs. There is that you know I'm just kind of wondering what what sort of plan to tackle that versus you know talking about early this year, but more of a fulfilled developments I'm just wonder how you're thinking about that in the play now.

Yeah, and I think if you look at the spread of the seven rigs the three two and two what it's still allows us to do is efficiently do these larger pads that we do today, which we typically use.

Doug Suttles: Yeah, I think if you look at the spread of the 7 rigs, the 3, 2, and 2, what it still allows us to do is efficiently do these larger pads that we do today, which we typically use multiple rigs on a single location. That's partly what drove that decision. I think we will still be able to deliver those efficiencies there. In the Anadarko, one of the things we talked about coming into the year was how we would be doing a bit more activity in the SCOOP, which we have been doing and 'cause we do have quality acreage down there with the stack. You've seen us mixing those two pieces in this year, and we continue to do that.

Multiple rigs on a on a single location and that's partly what drove that decision. So I think we will still be able to deliver those efficiencies there in in the Anadarko one of things we talked about coming into the year was how we would be doing a bit more activity in the scoop.

Which we have been doing in that because we do have quality acreage down there with the stack and and you've seen us mixing those two pieces in this year and we continue to do that and it's an area. We've also seen radical cost savings improvements in particularly in drilling time I think that the team I mean these numbers are incredible we're we've now.

Doug Suttles: It's an area we've also seen radical cost savings improvements and particularly in drilling time. I think that the team. I mean, these numbers are incredible. We've now got wells at less than $5 million, where just slightly over a year ago, these cost almost $8 million. I don't believe the team's gonna stop where they are today.

Wells that less than $5 million were.

Slightly over a year ago. These cost almost eight and I don't believe the team's gonna stop where they are today.

Thank you next question Jeffrey.

Operator: Your next question will come from Jeoffrey Lambujon from Tudor, Pickering Holt. Your line is open.

Hmm [laughter] Pickering line is okay.

And more intense you're taking my questions minus two parter on the on the money first and just comment on the capital outlook, you're envisioning there when it comes to meeting planned expansion is coming out and then bigger picture when the medium medium term outlook is for that region overall point in time.

Jeoffrey Lambujon: Good morning. Thanks for taking my questions. Mine is just a two-parter on the Montney. First, can you just comment on the capital outlook you're envisioning there when it comes to meeting plant expansions coming up? Then bigger picture, what the medium-term outlook is for the region overall at this point in time?

Yeah. Good good question I mean, we do working with care, we are building a new gas plant in the Pipestone area, which we've been consistently talking about coming on line. Early next year that that plan is you notice is a similar arrangement to what we did in cutbank, where we're actually.

Doug Suttles: Good question. I mean, we do, working with Keyera, we are building a new gas plant in the Pipestone area, which we've been consistently talking about coming online early next year. That plan, as you know, this is a similar arrangement to what we did in Cut Bank, where we're actually building the facility and we'll operate it, but it's owned by Keyera, so we're working quite closely with them. That's going incredibly well. I think we have some really good practices and a great team. They're delivering results. The most interesting thing about that, though, is when we start that up, we haven't been drilling wells to pre-drill wells for that facility 'cause we can divert existing production into that plant when it becomes available.

Building the facility and we'll operate it but it's owned by care. So we're going quite quite cool closer with them that schooling incredibly well. We I think we have some really good practices and a great team, they're delivering results. The the most interesting thing about that though is when we start that up we haven't been drilling wells.

Doug Suttles: The most interesting thing about that, though, is when we start that up, we haven't been drilling wells to pre-drill wells for that facility 'cause we can divert existing production into that plant when it becomes available. We don't have take or pay commitments there, so it isn't gonna create a drag on cash flow, depending on how we allocate capital across the business. It doesn't create any additional capital strain on the business, and it has a little bit of incremental upside because it will reduce the gathering pressures in that area, which will enhance our base performance.

To pre pre drill wells for that facility, because we can divert existing production into that plant. When it becomes available we don't have to take her pay commitments. There. So it isn't going to create a drag on cash flow depending on on how we allocate capital across a business. So it doesn't create any additional capital strain.

Doug Suttles: We don't have take or pay commitments there, so it isn't gonna create a drag on cash flow, depending on how we allocate capital across the business. It doesn't create any additional capital strain on the business, and it has a little bit of incremental upside because it will reduce the gathering pressures in that area, which will enhance our base performance. You know, on the allocation of capital, kinda tried to cover that earlier. It's a bit early to tell. I mean, clearly, the improvement in gas prices, and you've probably seen the differentials in Canada have tightened in considerably. As I mentioned, we're looking at that to see how it might shift some capital allocation in the company.

On the business and it has a little bit of a incremental upside because it will reduce the gathering pressures in that area, which <unk>, which will enhance our our base performance.

You know on the allocation of capital kind of <unk> tried to cover that earlier, it's a bit early to tell I mean clearly.

Doug Suttles: You know, on the allocation of capital, kinda tried to cover that earlier. It's a bit early to tell. I mean, clearly, the improvement in gas prices, and you've probably seen the differentials in Canada have tightened in considerably. As I mentioned, we're looking at that to see how it might shift some capital allocation in the company. Once again, I just highlight this is the advantage of our portfolio. We have that ability to do that and respond to both fundamental prices as well as regional differentials. You shouldn't be concerned about the new gas plant creating any capital drag or cost drag on the business.

The improvement in in gas prices and you've probably seen the differentials in Canada have tightened in considerably and as I mentioned, we're looking at that to see how it might shift some capital allocation in the company and once again I. Just highlight this is the advantage of our portfolio, we have that ability to do that.

Doug Suttles: Once again, I just highlight this is the advantage of our portfolio. We have that ability to do that and respond to both fundamental prices as well as regional differentials. You shouldn't be concerned about the new gas plant creating any capital drag or cost drag on the business.

Respond to both both fundamental prices as well as regional differentials, but you shouldn't be concerned about the new gas plant, creating any capital drag or costs drag on the business.

Alright, thank you.

Steve Campbell: All right. Thank you.

Jeoffrey Lambujon: All right. Thank you.

And our final question for Tonight will come kind of <unk>.

Operator: Our final question for today will come from Jeffrey Campbell from Tudor, Pickering, Holt & Co. Your line is open.

Operator: Our final question for today will come from Jeffrey Campbell from Tuohy Brothers. Your line is open.

<unk>.

Good morning.

[Analyst] (Tudor, Pickering, Holt & Co.): Good morning. Doug, I was wondering in the 2020 stay flat, can you disclose, however you want to, the relative capital allocation between the core 3 plays based on the benchmarks that you supplied on slide 10? I was also wondering if there would be any significant differences in allocation in stay flat versus the pre-COVID plans.

Jeffrey Campbell: Good morning. Doug, I was wondering in the 2020 stay flat, can you disclose, however you want to, the relative capital allocation between the core 3 plays based on the benchmarks that you supplied on slide 10? I was also wondering if there would be any significant differences in allocation in stay flat versus the pre-COVID plans.

I was wondering on the 2020 stay flat and you disclose.

However, you want to relative capital allocation between the court replace based on the benchmark supplied on slide down and I'm also wondering if there would be any significant differences and allocation staying flab versus the <unk>.

Plans.

[noise], Yeah, Jeff I think at this point.

Doug Suttles: Yeah, Jeff, I think at this point, it's hard. I wouldn't wanna get very precise. I think all three will attract capital. Exactly what the proportion is will be dependent on the various products and what the fundamental prices are doing. All three will attract it. We also do have about half of our current DUCs are in our base assets today. We have DUCs in the Eagle Ford, the Bakken, and in the Uinta to complete, which we'll look at how we do that. It's a bit early to tell. As I mentioned earlier, when we've modeled this, we can look at various distributions of capital across the portfolio and get to that outcome. It's just a little too early.

It it's it's hard I wouldn't want to get very precise I think all three will attract capital exactly what the proportion is will be dependent on to the various products and the in what the fundamental prices are doing but all three will attract it. We also do have about.

Half of our current ducks are in or base assets today. So the we have ducks in the Eagleford dubach and and in the you went to to complete which will will look at how we do that so it's a bit early to tell and as I mentioned earlier when we modeled this we can we can look at various distributions of capital across a portfolio.

Doug Suttles: As I mentioned earlier, when we've modeled this, we can look at various distributions of capital across the portfolio and get to that outcome. It's just a little too early. The good news is, as we've shown once again, we can move capital around very rapidly in the company. We can both stop it and start it and shift it. We've done that through a combination of how we're organized and how our supply chain team works.

And get to that outcomes. So it's just it's just a little too early and the good news is as we've shown once again.

Doug Suttles: The good news is, as we've shown once again, we can move capital around very rapidly in the company. We can both stop it and start it and shift it. We've done that through a combination of how we're organized and how our supply chain team works. I mean, I just highlight while others have talked about penalties and termination fees they've incurred with ramping down activity, I'd highlight we didn't incur any of those. This is some fantastic work by our supply chain team.

We can move capital around very rapidly and the company. We can we can both stop it and started and shift it and we've done that through a combination of how we are organized and how're supply chain team works I mean, I just highlight while others have talked about penalties and termination fees. They encourage.

Doug Suttles: I mean, I just highlight while others have talked about penalties and termination fees they've incurred with ramping down activity, I'd highlight we didn't incur any of those. This is some fantastic work by our supply chain team.

With ramping down activity at highlight we didn't incur any of those and this is some fantastic work by our supply chain team.

That that's helpful.

[Analyst] (Tudor, Pickering, Holt & Co.): Okay. That, no, that's helpful. The other question I wanted to ask is referring to slide 7, the $400,000 per well D&C costs in the Permian, that's really low. I was wondering, first of all, do we have an average length for these laterals, and is it a fully loaded cost? If it's not, what do you think that would add to it?

Jeffrey Campbell: Okay. That, no, that's helpful. The other question I wanted to ask is referring to slide 7, the $400,000 per well D&C costs in the Permian, that's really low. I was wondering, first of all, do we have an average length for these laterals, and is it a fully loaded cost? If it's not, what do you think that would add to it?

I want to ask.

Pardon Slideseven 400000 for a while dancing costs and upon them.

Really low.

First of all.

We have an average length of these laterals and isn't fully loaded costs and if it's not what do you think that would add to it.

Yeah, I think that when we when we talk about this this is against our our standard well and and it's a number of things which have gone into that we continue to reduce drilling time, I mean rotary steerable tools now I've gotten into pricing zone, where they make sense and reduce drilling time in cost the completion.

Doug Suttles: Yeah, I think that when we talk about this is against our standard well, and it's a number of things which have gone into that. We continue to reduce drilling time. I mean, rotary steerable tools now have gotten into a pricing zone where they make sense and reduce drilling time and cost. The completion concepts that Greg mentioned and our average lateral length, average well's lateral length is getting longer as our land team continues to work to consolidate our acreage. When you look at those savings, of $400,000 per well versus 19, a number of things go into that, but it feels very repeatable, and we think they're gonna go down further.

Doug Suttles: The completion concepts that Greg mentioned and our average lateral length, average well's lateral length is getting longer as our land team continues to work to consolidate our acreage. When you look at those savings, of $400,000 per well versus 19, a number of things go into that, but it feels very repeatable, and we think they're gonna go down further.

Concepts that Greg mentioned in our average lateral linked average wells lateral linked is getting a longer as our land team continues to work to consolidate our acreage. So when you look at those savings a $400000 per well versus 19, a number of things go into that but it feels.

<unk> repeatable.

And we think they're they're going to go down further.

You're trying to call back over the presenters now for closing remark.

Operator: I turn the call back over to the presenters now for closing remarks.

[noise], Thanks, operator, and thank you everyone for joining us today.

Steve Campbell: Thanks, operator, and thank you everyone for joining us today. Please stay healthy, and we look forward to seeing you on the road in person very soon. Good day.

Please stay healthy and we look forward to seeing on the road in person very soon good day.

Thank you have if I Miss today's conference call you may have just kidding.

Operator: Thank you, everyone. This will conclude today's conference call. You may now disconnect.

[music].

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Oh.

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