Q2 2022 PDC Energy Inc Earnings Call
The conference will begin shortly to raise your hand during Q&A you can dial star one one.
[music].
Good day and thank you for standing by welcome to the PDC Energy second quarter 2022 conference call. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During the session you will need to press star one one on your telephone.
Please be advised that today's conference is being recorded I would now like to hand, the conference over to the speaker today, Aaron Bandit Board.
Please go ahead.
Thank you and good morning, everyone on today's call, we'll have president and CEO , Bart Brookman Executive Vice President Lance Lauck, Chief Financial Officer.
Myers and senior Vice President of operations, Dave Willow.
Yesterday afternoon, we issued our press release, a poster presentation that accompanies our remarks today.
As we filed our Form 10-Q also last night.
The press release and presentation are available on the Investor Relations page of the website at Www Dot PVC Dot com.
On today's call, we will reference about forward looking statements and non U S. GAAP financial measures actual results may differ materially than those projected in the forward looking statements the appropriate disclosures and reconciliations may be found on slide two and the appendix of that presentation.
I'll turn the call over now to our CEO Bart Brookman.
Thank you Aaron and good morning, everyone.
Let me start with some second quarter highlights.
Notably closing the great Western transaction in early May.
Let me extend a sincere thank you to all of the PDC and great Western employees, who were able to successfully complete and integrate the scale building highly accretive transactions.
For the quarter PTC generated $405 million of free cash flow.
26% annualized free cash flow yield.
Shareholder returns for the quarter were $250 million $215 million in share buybacks four 3 million shares.
And $35 million in fixed dividends.
Second quarter shareholder returns calculate to a 16% annualized return.
The company has made tremendous progress obtaining permits in Colorado I believe our regulatory team has actually cracked. The code is 99, new permits were approved in June alone.
And I am happy to announce just two days ago PTC received completeness determination from the Seo GCC.
Okay.
Today with approximately 650 ducks and permits in hand, the Wattenberg team now has a turn in line schedule map for the next four years and with arc Vanilla cap. Another 450 wells are on target for approval later this year.
Once the cap is approved our turn in line schedule will be mapped into 'twenty 'twenty eight.
I want to thank the land and regulatory teams for the tremendous momentum we have gained in the permit process.
A quick update on ESG for the company emission reduction project projects are on track to support our year over year goal to reduce methane emissions by 30% and greenhouse gas emissions by 15%.
We also have direct line of sight towards achieving our 2025 emission reduction goals.
From a safety standpoint, I'm very proud of both districts for years with no lost time injuries in Texas, and Colorado and exceptional record I want to thank.
The operating teams for continued focus on safety and.
And on the community side PDC has already contributed contributed nearly $2 million to charities across Texas and Colorado with.
With plans to give another one 5 million by year end.
And it doesn't stop at the Walmart employee volunteer time at over 100 organizations should total over 4000 hours hours for 2022.
As I close out my comments today, let me address the second quarter production shortfall as we've navigated the second quarter a few.
Anticipated challenges emerged these are impacting both second and third quarter production and I'll, let Dave will give a lot more detail on this in a moment.
But let me assure you. These are short term correctable and they are getting the full attention of our engineering and production teams.
The outlook for PDC remains incredibly strong.
Capital programs are on track our drilling projects are well map for the next several years delivering substantial returns for our investors.
Western should be fully integrated by mid third quarter, and we anticipate operating cost for the company will begin to fully reflect the strong benefits of the scale building transaction by year end as.
As we wrap up 2022, we anticipate having repurchased approximately 10% of our outstanding shares delivering mid teens total shareholder return yield.
Paid a substantial special dividend near year end.
Fulfilling our commitment to return, 60% plus annual post dividend free cash flow to our shareholders achieve our ESG and emission reduction goals and mapped our turn in line schedule with permits in hand through 2028 what.
What I consider an incredibly strong story, so with that I'm going to turn the call over to Dave Little hope for more operational comments.
Thanks, Bart before moving to the operational highlights I want to thank our team for their efforts and hard work on their continued successful integration of the great Western asset.
And with that jumping to slide six.
During the second quarter, we invested $290 million, which was at the high end of our guidance range.
This was the result of continued pressure on service costs and pass through items, such as labor diesel steel and chemicals.
Overall across our operations, we are seeing approximately a 5% increase in the cost of services since the last time, we provided you an update in may.
Total production for the quarter came in at 21 4 million Boe.
Or approximately 235000 Boe per day.
The oil production was $6 8 million barrels or approximately 75000 barrels per day.
Our production came in lower than guidance as a result of a number of compounding short term operational constraints.
Including timing of moving a 35, well great Western rain dance pad to gas lift.
And the timing of temporary planned and unplanned maintenance on third party midstream systems in the Wattenberg field.
We also had delays in securing work over rigs in the Delaware Basin.
To provide more context around the great Western rain dance pad.
First like to note that this is our largest pad on production for PDC.
And as our operations continue to scale and we move to larger pad sites, there will be more variability in our quarterly production due to timing of when wells are brought online and associated shut ins of nearby completion work and maintenance activities.
As part of the normal operation and lower GR sections of the core Wattenberg the team appropriately accelerated the gas lift the move to gas lift on the rain dance pad to optimize fluid lift and production.
In June and July these wells were worked over to install gas lift equipment downhaul, requiring an increased number of adjacent wells to be temporarily shut in due to the tighter design of surface spacing of the great Western Wellheads.
Initial production response from these wells, where gas lift has been installed and brought back online are meeting expectation and currently support longer term production forecasts.
We expect to move the remaining wells to gas lift in October the.
The efforts of this work have been considered for our second half 2022 production guidance that Scott will address in his remarks shortly.
During the quarter, we experienced delays in securing a second workover rig in the Delaware basin due.
We were able to ultimately secure another rig at the end of the quarter and recently the team has been able to secure an additional third workover rig to dedicate to our inventory of projects.
LOE for the third quarter was $3 30 per Boe.
And all in G&A expense exclusive of <unk> 61 per Boe costs associated with great Western acquisition was one <unk>.
Two five.
Dollars per Boe.
Now moving to slide seven.
We are encouraged by the process of securing additional permits in Colorado and June PDC was granted unanimous approval for the Kenosha and the Bro oil and gas development plans are second and third approval under the new permitting process combine these two approvals.
Provided the company approximately 100 additional permits.
You can see.
From a representative turned in line inventory shown on this slide.
That with the Ducks and permits we have already in hand, there is good visibility into our next four years of activity at our current pace in development.
And the expected approval of the Granola cap later this year.
Our inventory.
Our turn in line inventory extends well beyond 2028.
And over the coming months. The company also expects to submit several additional Oh GDP is expanding its inventory of permit locations to support the most efficient development of the core Wattenberg field.
Finally, slide eight I want to give an.
An update on our <unk> comprehensive area plan, and where we sit in the approval process.
On August 2nd the company passed they mail.
Major milestone and permitting and the permitting process by receiving the completeness determination on the Gwen Nellix cap from the GCC.
The granola cap covers approximately 35000 consolidated net acres in rural Weld County, and approximately 450 locations and 22 surface locations.
With the completeness determination past PDC now enters the technical review phase and a 60 day public comment period.
It is important to note.
But that not only does the <unk> cap materially extend our runway for our operations, but it also provides an alliance with continuous progress on the ESG efforts that Bart highlighted earlier in the call.
We plan to PMA 300 existing vertical wells within the cap boundary.
There was a 100% of our oil gas and produced water on pipe and further reduce noise and emissions by having 100% electricity power on every location.
And in the last 24 hours I am pleased to announce the tentative hearing date has been scheduled for December 7th 2022 in front of the commission.
With that I will turn it over to Scott Meyers.
Thanks, Dave.
Martin Dave highlighted the first half of the year Hasnt been operationally solid despite some short term issues relating to the timing of maintenance events and service crew availability.
Before discussing the financial highlights of the quarter I want to start on slide 10 by providing a brief update on guidance as it will provide context to some of the data will show later in the slide deck.
For the second half of the year, we expect total production to be in the range of 245000 to 255000 Boe per day.
And 80000 to 84000 barrels per day of oil production.
Capital investments in crude oil and natural gas properties are expected to be between 515, and 600 and $565 million. This represents an approximate 5% of additional expenses.
We are seeing related to inflationary pressures that Dave detailed earlier on the call and some small changes as the second crew completion crew is now expected to start mid.
Mid <unk>.
September instead of early October .
Based on our current operating results in the first half of the year. We now expect full year 'twenty two production to be in the range of 230.
240000 Vod.
<unk> per day of which 73 to 77000 barrels are expected to be crude oil.
As our planned 22 capital investment in crude oil and natural gas properties are expected to be between $1 <unk>, five and $1 75 billion.
What I want our investors and investment community to take away from this guidance is that our robust free cash flow and shareholder return programs are strong and intact.
Spend the next few slides highlighting some of these points in context of our quarterly results.
Moving to slide 11, Youll see operations again result in significant cash flow generation.
We enjoyed a pre hedge realized price of approximately $58 per Boe, while operating expenses came in under $9 per Boe.
Our G&A as expected was approximately $1 50 per BOE net of the 61 per Boe costs associated with great Western acquisition.
This allowed us to generate $695 million of adjusted cash flow from operations and after taking into account $290 million of Capex, we generated more than $400 million of free cash flow during the quarter.
This equates to an annualized free cash flow yield of 26%.
Higher than most if not all of our E&P peers.
We remain committed to returning 60 plus percent of our post dividend free cash flow to shareholders via systematic share repurchases and a special dividend.
For the first half of the year, we have generated nearly $725 million of free cash flow.
Of that we paid out $60 million in the form of regular dividends bought back $300 million of our shares and committed nearly another $100 million towards additional shareholder returns.
For the full year, we are on track to generate $1 6 billion in free cash flow.
After paying $125 million for the base dividend and accounting for 60% shareholder return targets, we anticipate approximately $885 million to be available for share repurchase program and special dividend.
Finally, as you can see on the slide we are now looking at potentially repurchasing more shares this year as our stock price is trading at a lower than expected multiples as we spend more on share repurchases are anticipated year end special dividend May decrease however, the total shareholder returns are still hold.
Moving to slide 12, I'd like to highlight a few additional details on our shareholder return program first our estimate at 22 annualized shareholder return yield is approximately 16%.
As planned we raised the quarterly dividend to <unk> 35 per share after closing the great Western acquisition as part of our systematic and opportunistic plans, we repurchased approximately 3 million shares or 250 or $215 million through the share buyback program in the second quarter alone.
Again look for the third quarter to be another strong share buyback quarter for PDC at these prices.
As you can see in the chart in the lower right hand side of the slide we have returned nearly $360 million through the first half of the year and are on track to accelerate that activity to approximately $1 billion inclusive inclusive of a potential special dividend by year end.
Depending on market conditions, and the number of shares repurchased in a total repurchase dollars spent this year.
Special dividend between two to $3 per share to meet our 60% post dividend shareholder return goal is projected.
Finally on slide 13, I want to draw your attention to the quality of our balance sheet today, and Directionally, where we intend to end the year.
At the end of the corner with approximately $1 7 billion in long term debt.
On a net leverage ratio of one seven times. In addition to our shareholder return profile, we anticipate having the opportunity to allocate free cash flow towards further reducing our borrowings under the credit facility and exited the year with approximately $1 3 billion of long term debt and a leverage ratio of five times.
Before we move to Q&A I want to summarize our call by highlighting that PDC is poised to have its most successful financial year and 15 year history.
We remain disciplined in our approach of developing our top tier asset base, while continuing to build a company of scale that is capable of delivering sustainable free cash flow and material shareholder returns for the years to come.
With that I'll turn the call over to the operator.
As a reminder to ask a question. Please press star one on your telephone please standby, while we compile the Q&A roster.
And our first question will come from Neal Dingmann of curious your line is open.
Good morning, all.
Scott maybe first question is for you specifically you talked about lean at the third quarter to be heavy in buybacks and I'm just wondering given the authorization.
How heavily could you read could you lead into this I mean are there I know besides blackout periods. Other restrictions and then I'm just wondering on a go forward.
How you will continue to balance that versus potential higher bids.
Yeah, No that's a great question.
We are authorized by the board to buy back $1 5 billion.
In February of this year. So we've just barely started scratching that surface. So far this year I would look for the third quarter to be pretty similar to what we did in the second quarter.
With our systematic share buyback that buys it every day, we're just kind of messaging, we're going to be a little bit more opportunistic and we were previously guiding more to somewhere around that 6% to $6 25 per share buyback and we now are kind of leaning in a little bit and look for us to probably do more than half of that board approved program. This year.
So again I think we're through the range $6 $25 to 675, it's not a major step forward, but it is leaning in a little bit more.
On the repurchase program and as we go out throughout the year, if we still see the prices with us multiple discount we will consider continuing to increase that.
Great and then just lastly, Bart Bart on the prepared remarks, you mentioned that some of the gas with those issues.
Bit more just timing issues. There just wanted you all anticipate when you look at the portfolio down examine are there other.
The other sort of at a lower DLR pads it might be need to be brought also on the list.
And while you're talking kind of talking about pad could you. You also mentioned this can you just talk about sort of typical pad size going forward, how much that's going to increase.
David you want to jump on this yes, I think I think going forward.
Typically on that rain dance pad.
We had 22 wells.
Okay, great Western Frac last year and turned them online.
In April the team watched that very very close when we took over may six.
We instantaneously.
Moved a rig out there started installing gas lift.
We were able to complete 12 of those jobs we had.
Some SUA.
That implied that we couldnt do do a lot of the work between.
July and September so we'll have to move back in October and finish up we have 10 more wells too to install gas lift on that well.
That will be in effect for the third quarter, and we've implemented that into our forecast as well.
At this point besides that I think we're the team is learning from our lower GOR areas.
We've just recently taken over and have built plans around that.
Alright, good thanks for that.
Hey, Neal.
As far as other great great Western pads right now no.
This pad was being.
Literally GW.
<unk> is just wrapping up their completions when we close the deal and took over operations. So our operating teams.
Obviously took over the production operations.
Valuate it to production.
Quickly realize a gas lift manuals needed to be installed on the wells and like Dave said, they had a tight window with the landowner to get in and we got as many done as we could.
And then there was complications with how many wells, we had shut in but as far as other big pads.
No I don't think we have other than the low <unk>. This is again. This is 35 wells. This is one of the biggest pads.
And the team made the right decision at the right time.
In mid to late May to take proactive action on optimizing long term production on this pad I just want to stress that.
Yes, thanks for additional details.
Yes.
And our next question will come from you May Chowdhry.
I'm Goldman Sachs.
Hi, good morning, and thank you for taking my questions.
My first question is just on the production impact just to be sure.
Is all the production impact just a near term.
Near term impact and can you queue and it'd be great. If you can give us.
A quick color in terms of how we should think about the cadence of production.
Heading exiting the euro and also probably in 'twenty three.
Yes, I would say when we look at our production, we're going to be fairly level for the next two quarters, maybe third quarter slightly higher we have Delaware production that is still going to be stronger in the third and then it tails off in the fourth but our wattenberg production will kind of be doing the opposite as we get.
The rain dance fully operational up to its operational capabilities and the end of October plus the fact that we have our second <unk>.
Completion crew coming in mid September you should start seeing some of those extra wells coming online in the November timeframe. So overall pretty level between the two quarters, but yet the two basins going out a little bit different trajectory. When you look at 'twenty three yes, we still have a strong outlook on the prior outlook, we said more like zero.
5%, we're probably in the 5% ish kind of line because when we get these wells engineered and back on the line I think you are going to really see a pretty good pick up in the first two quarters next year as we start going through in the Delaware activity really starts kicking in again as it did in the second quarter of this year, but.
Overall look for a 23% growth rate probably in that 5% range not very much different than we had before.
Awesome. Thank you.
And my next question is on capital Johnson I. Appreciate all the details that you provided before it sounds like it might lean in a little bit more on shred, it but just given the share price and the near term, but I was thinking about next year with a leverage falling to one.
$1.3 billion at the end of the yard.
What are you thinking about how.
How much percentage of free cash flow post dividend would you allocate towards our capital return program.
That's another great question and when we designed this program, we really wanted to emphasize the plus so the 60% plus and what happens that we wanted to develop a program that's going to work through all the different cycles that PVC goes through and it's in it's in its history. So I would just say when leverage gets lower.
We could obviously lean in more on that shareholder return and we don't want to be a debt free company that doesn't make a lot of sense as an effective way to use capital. So at the size. We are today youre not going to take youre going to get our debt levels down to 700 $850 million million in total so there's not that much more debt to pay.
Down in 'twenty three 'twenty four so again that 60% plus I am not ready to comment on an exact number right now, but look for us to be as leverage gets lower we can return more capital to shareholders for sure and Thats. The way we designed the plan. So for a particular number what we're going to do for 'twenty three you'll have to wait to have finished the <unk>.
Three rollout of the budget in February next year.
Great I appreciate it guys. Thank you.
And our next question will come from Michael <unk> of Stifel. Your line is open.
Okay.
Hey, good morning, everybody.
I wanted to see if the inflation reduction at.
It's approved here it becomes law, what kind of impact that might have on.
PDC in particular with methane emissions, if theres, a methane emission fee attached to the bill.
And any other aspects that could be positive or negative for the company or the industry for that matter.
Yes, Mike.
My.
Let me give a soft answer on this one it's early in the game.
Nicky.
Our trade associations are keeping a close eye on this but I think it'd be premature for me to even try to speculate the impacts.
Literally just still trying to understand what's in the bill so.
We're keeping our eye on this.
We've got NXP sequel, full court press over over to Congress trying to understand the pieces and parts have influence on this would give us a little more time before I can comment.
Okay understood.
And then Scott you talked about next year.
The plans you have for free cash flow.
Over the next 612 months, there's not going to be much to do.
With that.
Just wondering with the.
Market kind of looking like it's pricing in some.
Fairly high degree that there could be a recession is there any thought on.
Maybe building a cash balance or I guess, what level of cash balance are you comfortable with.
Going forward.
Yes, I mean, if we had a couple of hundred million dollars in cash on the balance sheet.
Not bother me at all I think the first thing is to pay off our credit facility no sense of paying interest when you don't have to do that so we're going to get the credit to fulfill facility paid off by the summer of next year based on our forecast.
And then we'll go from there from that standpoint, we do have the 24 bonds that will probably have to look to address to take care of those in the latter half of 'twenty three are early 'twenty four.
So yes, we could have a little bit of cash on the balance sheet I'm not worried about stacking 100 or $200 million, but I think that would probably be more towards the end of 'twenty three 'twenty early 'twenty four before you'd see that materially happen as we have.
The ability to pay off all of the stuff on the credit facility <unk>.
Got it thank you.
And our next question will come from Iran. DRAM of JP Morgan Your line is open.
We wanted to get some just some general thoughts on.
Of the six mbo.
They like declining your oil outlook, how much of that was driven by a rain dance.
Versus that.
The other two items in the Delaware.
As well as the midstream issue just maybe help us think about that I'm, just trying to think about implications for 2023.
Because I think your previous outlook was low single digits growth and I'm just wondering if we base that on.
The updated guidance.
Yes, that's a fair question I mean, the rain dance pad is one of our most oily pad I want to say it was around 70, maybe a little bit more 70% oil. So it's true real strong economic pad. That's why we want to get it to its optimal production as quick as possible also.
When you look at some of the Workover opportunities that really affected some of our our new wells as we're having this massive production you have to clean those wells out in all of those new wells in Delaware are 50, plus percent oil. So unfortunately, where the where those two hits, which were the two two are two largest reductions in the second quarter.
<unk> it tends to lead to a more oily.
Percent of your production and Thats, what Youre seeing here as far as when you go to <unk>.
23, again and again I think.
5% growth kind of rate is what we're looking at for all the commodities I mean, when we look at Delaware, it's consistently in that low 40% kind of look at it the great Western that we're adding as a little bit more oil to what than what we traditionally had but we are starting to throw on which are fantastic wells, we have a couple.
Planes wells coming on in about four months and those wells are massive producers, but theyre just theyre just a.
More of a higher.
Gas portion and so that kind of has to all balance out. So I would still long term look for PDC in total to be that low 30% oil mix I don't think I don't see anything changing that materially over the next three to five years with our production I don't know David any other thing to add or BARDA.
Arun it's.
A fair question and I think you should look at it as kind of equal equal blend.
The three things that Dave.
Outline been the rain dance more than anticipated midstream downtime.
And the procurement.
Particularly on the labor side on Workover rigs in Delaware Midstream has rebounded as running.
The last couple of weeks exceptionally well working close with all our midstream partners.
Once a year the rain dance I think David gave a full explanation on where we're at and then in Delaware. We've got we've got we procured the workover rigs and we've got a good project lists and our team's full steam ahead on correcting that so I think as we go through the balance of the year in the fourth quarter Youre going to see those three levels come back.
And then we'll exit the year, probably somewhere around that 250 level for our company and then we'll have our growth on top of that next year. So.
That's kind of a high level.
We don't have the exact numbers right here in front of us of each of these projects, but it was a blend of the three.
That's fair and then just Scott maybe just a clarification.
Are you thinking about 5% growth off of the second half 2022.
Cadence that obviously that would include great western or is that just off of the full year numbers.
Oh, no I am sorry.
Really second half guidance or fourth quarter run rate I think is the 5% yes.
It will be larger because of the on a total annual yield because we don't have the first four months of great Western and our and our annual guide right now does that help that's super helpful and then.
You guys mentioned that you plan, perhaps to lean on the buyback a bit more.
So I think you've you are targeting $625 million.
Buybacks any order mad at magnitude here leaning.
Leaning on this versus the special just trying to get some thoughts around that.
Yes, we did.
Our previous number was $625 million for the year were kind of thinking is our upper limit before we did 300 in the.
First half of the year, which means the second half of the year has to be about $3 25, where we're sitting at today.
It's why we're kind of saying that 625, we would hope would be more of a lower end of the limit right now and so when you look at it I think third quarter can be pretty similar to the second quarter with this valuation where they are and we think it's a great time to be buying shares and hopefully we continue to go and get this capital.
And that will help with the.
With the multiple issues so the remainder of this year.
For us to be strong buying shares every day and just leaning in when we have the open windows.
Great. Thanks, a lot.
Yeah.
Hello, Matt.
And our next question will come from Austin Alcorn Ocwen.
Johnson Rice <unk> company your line is open.
Good morning Barton team. Thank you for taking my questions and congrats on the next step in the Granola cat.
Thank you. Thank you.
I just have one question.
Related to the canola cap.
In the opening remarks, you said that the tentative hearing data scheduled for December 7th.
Do you see any potential roadblocks that could push that date back or is that pretty pretty set.
So we've worked very hard to say oil and gas Commission all along this whole process.
We have.
We've given them everything that they wanted.
We've.
We've submitted over a 2000 page report to them on the application. So we went through all the alternative location analysis.
Environmental impact analysis, working with wildlife working with all different communities. I think this is going to be a very successful hearing.
In December and we have all the confidence in the world on it.
I appreciate the color and I guess as a follow up.
To everyones question.
He was asking about.
However, delays in the Delaware.
I believe you said that you all had secured the work over rigs in the Delaware.
Albert checking to make sure I heard that properly, yes, we started out the quarter and we had one full time rig we we were able to secure a second rig, but it was a daylight only due to labor constraints.
And we we got onto some.
One complicated project, which devoted talked we added about time too. So we have a backlog of about 15 to 20 projects right. Now we have secured a third workover rig and the team has went ahead and.
As highlighted the top priority projects and we're going full steam ahead of of catching up on some of those they're mostly clean outs gas.
Gas lift installations those type of projects that they are very valuable to us.
I appreciate it that's all from me.
Thank you.
Yeah.
And our next question will come from Oliver Huang Your line is open.
Good morning, and thanks for taking my questions.
Just given the.
Hello.
Good morning.
Just given the revision back half of the year outlook and that looks fairly one off in nature, but also the inflationary pressure, we're seeing across the industry. Today, just wanted to get a sense for the confidence around being able to achieve the prior 2023 outlook for me on a free cash flow and if it's Stu.
Still a reasonable expectation.
Yes, I mean, absolutely we think we have a very robust free cash flow outlook for the next several years from a production standpoint, we've already talked about that a couple of times, we see that 5% growth next year. The inflation is a tough one clearly you've seen through this earnings seasons, where these inflationary numbers of <unk>.
So if you kept the prices steady.
And our production next year is rather steady from what we were thinking before but capital is a little higher obviously it might put a little bit of a damper on some of your free cash flow, but it's still going to be a super robust program. So for the next several years look for us to be able to continue our shareholder returns and have a very very payroll out.
<unk>.
When compared to the peers with our production.
Okay. That's helpful color and for my second question was wondering if you could remind us how many wells you were able to complete in the Wattenberg per crude just given the continued improvements there. The updated 2022 budget seems to indicate in the 100 115 ballpark, but I just want to make sure that sounds reasonable just kind of get into some of the work in <unk>.
<unk> wells that are flowing into the mix mix from great Western.
Yes.
I'll just jump out sometimes it depends on the length of the wells too and how many are there.
I'd say one completion crew 125 ish seems to be good. That's why we have to have a second crew for half of the year gives you. Another 50 to 75, it really depends on.
On the number and the length of the wells and when we tend to have longer wells, which is a lot more of our future those numbers might come down a bit but I hopefully that helps David anything else. She is that fair, yes, roughly we're going to turn in line. This year, probably 150 to 160 wells answer your question.
With the cadence that we're at right now.
Awesome well, thanks for the time guys.
Thanks.
Thank you.
And our next question will come from Kevin Mccarty.
Pickering Energy partners, Hey, guys.
Hey, guys I appreciate the commentary today, so far on the buybacks.
Sorry to press the point, a little bit, but given that your free cash flow yield is around 30%.
And the stock is down today, why not commit all of your free cash flow for the three <unk> buybacks and forego the special dividend.
Somehow limited from doing this.
Yes.
There are some regulations and when Youre doing a buyback program you can only buy a certain amount of your flow today. So.
We want to make a short systematic program and and again, we're really happy that I think we're going to have the opportunity to lean in here a little bit in the third quarter, we do favor the share buybacks, but given the public float we have not wanting to move the market ourselves I don't think it's realistic for us to use all of the all of the <unk>.
Cash flow or the return of shareholder dollars to go to share repurchases, but look for that as we've shown on the slides so that special shrinking a little bit. So we can do even more share repurchases and we will continue to monitor it but I would say here by the end of the year I don't think we're going to be able to meet our commitment through share buybacks alone. So I still think we will.
Most likely have a special towards the end of the year.
Great. Thank you for taking my question.
Rob.
I would now like to turn the conference to Bart Brookman for closing remark.
Yes, Thank you latanya.
Thank you everyone for joining us today, just in closing I can assure you Dave in our operating terms of full court press right now.
On.
Production.
We've got a lot of good things going on in that arena. So more to come there we have all the confidence in the team of getting us back.
This concludes today's conference call. Thank you for participating you may now disconnect.
Yeah.
The conference will begin shortly to raise your hand during Q&A you can dial one one.
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Okay.
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