Q3 2023 Chesapeake Energy Corp Earnings Call

Good morning, and welcome to the Chesapeake Energy Corporation Thirdquarter Twenty-twenty three earnings conference call, all participants will be and listen only mode.

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Oh, and I liked <unk> turn the cough started Christian ears, Vice President of Investor Relations and treasure. Please go ahead.

Thank you Anthony good morning, everyone and thank you for joining our call today to discuss Chesapeake third quarter 2023 financial and operating results.

Hopefully you've had a chance to review our press release and the updated investor presentations that we posted to our website yesterday.

This morning's call, we will be making forward looking statements, which consists of statements that cannot be confirmed by reference to existing information, including statements regarding beliefs skulls expectations forecast projections future performance and the assumptions underlying such statements. Please note. There are a number of factors that will cause a.

Actual results to differ materially from our forward looking statements and.

Including the factors identified in disgust in our press release yesterday and another F. C. C filings. Please recognize that is except are required by applicable law. We undertake no duty to update any forward looking statements and you should not place undue reliance on such statements. We may also refer.

To some non-GAAP measures, which help facilitate comparisons across periods and peers for any non-GAAP measure we use of reconciliation to the nearest corresponding gap measure, which can be found on our website with me on the call. Today are nicked I'll also mowat sing and Joshua beats, Nick will give a brief overview of our results and then we will open up.

Teleconference to Q&A, so with that thank you again now will turn it over to Nick.

Good morning, Thank you for joining the call I'll.

Start off by discussing a few of our third quarter highlights and then I'll get right to your questions.

We delivered another strong quarter advancing our strategy to deliver sustainable value to shareholders through cycles.

As you've seen for my third quarter results. We came in on the low end of capital in the high end of production. Despite the 60% deferral of plan the third quarter turn in lines and the extinction of elective curtailments in the Marcellus.

And the Marcellus this quarter, a rig fleets at a new company record, averaging 1367 feet per day, marking a 16% improvement over the prior quarter.

Overall, we drilled four of the top 10 fastest Marcellus wells in our company's history.

Pretty significant accomplishment given our long unsuccessful history in the basement.

Importantly, or decreased cycled times I've also been accompanied by achieving a lower cost per foot.

Which means we will now be able to drill another well per rig year at a lower cost compared to what we projected at the beginning of the year cause. This is a great example of efficiency offsetting inflation.

And the Haynesville, we'd delivered another robot quarter of based production withdrawn wedge volumes.

Additionally are sustained efforts to Debottleneck are midstream has resulted in lower line pressures and higher production.

We realized say, 15% quarter over quarter reduction in interrupted volumes attributable to midstream disruptions.

The combination of our improved based production and effort to optimize gas low assurance has led us to increasing our queue for production guidance by 35 million cubic feet, a day or approximately 2.5%.

Are strong operational performance serves as the backbone to our commitment to deliver superior capital returns for shareholders.

We continued to execute are pure leading returned program in the quarter repurchasing $130 million in shares and delivering our base dividend.

Through the third quarter, we have returned approximately 725 million shareholders through our buyback and dividend programs.

We also announced another important step on our path to be LNG ready with today's LNG supply announcement would be tall.

Similar to our past agreement with gun bore under today's heads of agreement would be tall, Chesapeake will supply up to 1 million tons per annum of LNG to be tall with the purchase price index to J K M.

As we continue exploring these types of agreements, we see an appreciation of the premium rock returns and runway of our advantage portfolio and the strength of our financial position.

Our approach to executing our LNG strategy has been consistent and benefits from production that is physically linked to LNG markets.

Access to international prices.

Downside protection through cancellation Optionality.

Our portfolio balance sheet and approach represents a clear competitive advantage among our gas peers and we continued to complete LNG agreements as we see export capacity come on line over the next few years.

Before opening the call for questions I'd like to touch on a trajectory headed into 2024.

We expect to maintain our current rig count of five rigs in the Haynesville and for rigs in the Marcellus for the first part of the year.

Sure gas prices farm up in line with the current 2025 strip. We believe there may be an opportunity to add an additional reagan the haynesville during the second half of the year, which would positively impact volumes in 2025.

She looked a model our business in 2024, a fair starting point is to assume our annual production should be in line with our fourth quarter run rate of 3.2, B C. F. A day in the Marcellus and Haynesville.

Ah Capex for the full year should approximate $1.6 billion, assuming an additional haynesville rig in the second half of the year.

We're now please stay a dresser questions operator, if you wanted to assemble the cube.

We will now begin the question and answer session to ask a question I started them on your telephone keypad.

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Our first question will come from Doug luggage with bank of.

Erica you.

You may not go ahead.

Hey, good morning, everyone's thanks for taking my questions.

I wonder if I could pick up on the 2024 outlook here because for quite some time that you've talked about managing your production to maintain production capacity. Although I don't know if you know messing up the description of that but as you think about the capital required in 2024 to maintain.

See you would exit right and then set yourself up into 2025, what do you think that cadence on production than not associated capital looks like.

X X eagle for it obviously.

Well I'll start hearing Josh might have some more color to add but essentially dog, we're starting a year.

With maintaining the production where it is today five breaks in the Haynesville four rigs in the Marcellus that's going to keep us where we are today at about 3.2 B C. F a day.

We.

Are paying attention to the fact that the export capacity for LNG should come online.

By the end of the year setting up for.

Unmet demand in 2025, if that looks like it's gonna play out in the strip looks like it's going to hold up then we would add a rig in the second half of the year and so the $1.6 billion of Capex that I gave you a minute ago does assume that we add a rig in the second half of the year and the Haynesville. If we didn't have that Reg we would just stay at that level of production, so it'd be a little bit less.

Okay that makes that makes a ton of sense. Thanks, Nick I I I don't I don't expect you to answer this question directly but I wonder if I could ask you to frame your views on.

Broader industry consolidation for Chesapeake you've talked.

We were in the Haynesville with you in July you said there was no there were no conversations happening <unk>.

<unk> countered that little bit in our bus tour, basically, saying well actually there's a lot of conversations happening and I was just two months later, so how how do you see the landscape on Chesapeake rule within not whether it be private Republic.

Well I I think you've touch on you know some themes. There that are that are pretty interesting and we've been very consistent in saying that we believe in consolidation in the industry. So we've been pleased to see you know Exxon and Chevron do the deals that they've done we think those are constructive for the industry and the dialogue for M&A does come in ebbs and flows.

And there are times in the market, where it seems like more people are are having conversations than others Ah.

Overall, yeah, we've continued to say that we're very happy with the portfolio that we own.

So we don't feel compelled to do anything and we certainly don't feel compelled to do anything on a.

Near term timetable, but at the same time, we believe in consolidation we believe in the merits of attempting to have consolidation make the industry a more profitable more productive place and we've been also very consistent and talking about how we would define that for ourselves.

And so for US we go back to our non negotiable and just to remind everybody that means that we in the context of consolidation, we don't want to overpay.

We will look for accretion in a transaction, we will protect our balance sheet. We will look for a good emissions profile or one we can quickly make better.

And what that really means at the end of the day.

Is that you have to make your company better through consolidation not just bigger.

And that's not an easy thing to do that's a pretty high bar so.

No.

We believe in consolidation and will continue to pay attention.

Cause he's just a quick add on to that very quickly make us.

Any interest in been outside of the two basins that urine or when you say you're happy with your portfolio without imply therefore, the any consolidation you would pursue would be focused on those two business.

Well you got a couple of questions embedded in there and I think the answer is won't be surprising to anyone we liked the basins were and we liked the assets that were in because we know that they are at the top of the heap for natural gas.

Supply and demand fundamentals and delivering against that supply and demand and supply and demand fundamentals for many years.

So we're happy being in the Marcellus and the Haynesville. We've been asked over time would we look outside of those basins and.

Might answer there is are non negotiable or a high bar. If you wanted to apply those non negotiable as to a place we don't operate today AD bars, even higher so we continued to say that is unlikely answer for us.

But you know, we we do like where we operate today, we think that we have a competitive advantage to be in both of those basins.

Oh bless you in a couple of weeks.

Our next question will come from Zack <unk> with J P. Morgan you.

You may not go ahead.

Thanks for taking my question just wanted to ask on the the outperformance in the Haynesville <unk> outperformed your guidance each quarter of this year increased to 444 Q God looking.

Looking at state data, well productivity seems to be trending positively.

Can you just give us a bit more color on on what's driving that outperformance in the Haynesville withheld sustainable you think that is going forward.

Yeah. Good morning. This is Josh you know we've been really happy with the way. The performance has showed up in in the Haynesville. This year and of course going back to last year. We knew we had some bottlenecks within the midstream and so we've we've we've done a ton of work over the last year to really sure that up and largely what that's been attributed to.

That is simply working with her midstream providers to introduce.

Additional interconnects between gathering systems, helping support trading capacity expansion and so those are things that are just simply you know will be sustainable through the years, and it's allowing us to continue to mitigate midstream induced downtime. So we will continue to work with her midstream provide.

<unk> to allow that to to improve over time.

Well productivity has been strong through the course of the year.

You know, we we've seen some modest increases in and well performance one of the things that's actually allowed us to do is to delay the the the second frat crew that we're bringing in we've allowed ourselves to push that back by a couple of months will bring that second frat crew back now in the middle to late November.

Which allows us to preserve some productive capacity as we head into early 2024.

Thanks for that color and then just one clarification on 2024, you talked about 1.6 billion Capex, assuming that additional haynesville right comes back in the second half next year does that include the spend on the momentum pipe, which I think it's around 100 billion next year.

A good questions Act no that does not include momentum we're trying to just give you a number to think about our regular way ANP business.

Okay.

Thank you.

Our next question will come from among Chowdhry with Goldman Sachs you.

Hi, good <unk>.

Hi, Good morning, Thank you for taking my questions.

I would love to have.

Hudson under 2024 macro outlook for natural gas and to follow up on Ducks question around your Ah. Your your activity level from the Haynesville you plan to add a rig in the back half of the yard any talks.

Or any color you can give in terms of where you'd think the spending level would be production outlook would be for the.

Sure among yeah. So macro start with that you know we've got a lot of uncertainty in front of us here with winter, just starting and storage levels have been high relatively high throughout 2023, they look a little bit better today than they did a couple of months ago, but you know the <unk>.

Variable in front of US now is the winter.

But we're all excited about in the industry is the step change that will come to the fundamentals when we.

Have the incremental export capacity come online, we still think that happens around the end of 24, we will watch that very very closely that's the signal. We're really focused on from a macro perspective is will we have that connectivity to markets that are underserved such that there is a call on U S gas if that happens we believe.

Unknown Attendee: Good morning and welcome to the Chesapeake Energy Corporation, third quarter 2023 earnings conference call. All participants will be in listen only mode. Did you need assistance? Please signal conference specialists by pressing the start key, followed by zero. After the day's presentation, there will be an opportunity to ask questions. If you ask a question, may press star than one your telephone keypad to withdraw from the question queue, please press star than two. Please note this event is being recorded.

Chris Ayres: I would not like to turn the conference over to Chris Ayres, vice president of investor relations and treasure. Please go ahead. Thank you, Anthony.

We have an important asset to meet that call in the Haynesville and we would expect to add a rag if that looks like it's it's coming in line with that projection.

But to be clear or 1.6 number that we gave you as an approximation for our 2024, capex, which, albeit it's very early to be giving you that number that is Ah. That's an early estimate and we'll set a budget still as we go through the end of the year here and get <unk>.

Chris Ayres: Good morning, everyone, and thank you for joining our call today to discuss Chesapeake's third quarter 2023 financial and operating results. Hopefully you've had a chance to review our press release and the updated investor presentations that we posted to our website yesterday. During this morning's call, we will be making forward looking statements, which consist of statements that cannot be confirmed by reference to existing information, including statements regarding beliefs, goals, expectations, forecast projections, future performance, and the assumptions underlying such statements.

Eddie to start next year, as we really see where winter plays out.

That that would assume that we bring a rig on in the second half of the year and the haynesville. So if that macro view changes and we don't believe that LNG is gonna come online timely or the storage environment changes, because we have either or really cold or really warm winter, we could certainly change that answer.

Sure, but as of now we're thinking about a business that.

Would start off the year exactly where it is today and that has the flexibility to add a rig in the second half of the year and so the starting point number we've given you for capital would assume we do just that but you know just to reiterate we have all the flexibility in the world to change our answer around whether or not that rig comes on in the second half of the year or any other changes to our captain.

Chris Ayres: Please note there are a number of factors that will cause actual results to differ materially from our forward looking statements, including the factors identified and discussed in our press release yesterday and in other SEC filings. Please recognize that as except required by applicable law, we undertake no duty to update any forward looking statements and you should not place undue reliance on such statements. We may also refer to some non-GAP measures, which help facilitate comparisons across periods and peers.

[noise] program with plenty of flexibility and we can be very responsive to what we believe the fundamentals are asking our industry to deliver in the way of supply.

That's very helpful. Thank you and May I say a fall.

Question, I wonder glare understand a little bit, but the midstream set up and the haynesville the production and the Haynesville has been declining and you'll also have made progress in terms of adding more capacity and the haynesville.

Chris Ayres: For any non-GAP measure, we use a reconciliation to the nearest corresponding GAP measure, which can be found on our website. With me on the call today are Nick Delosso, Mohit Singh, and Josh Veets. Nick will give a brief overview of our results and then we will open up the teleconference to Q&A. So with that, thank you again.

So do you feel like you have sufficient capacity is who looked acquaint twenty-five two grilled molecules in the Haynes Smith. That's a question of of one and can you remind us on the progress and the momentum biplane is it on track to come on line in the fourth quarter of next year.

Nick Delosso: Now we'll turn over to Nick.

Nick Delosso: Good morning. Thank you for joining the call. I'll start off by discussing a few of our third quarter highlights and then I'll get right to your questions.

Yeah, Let me answer the first part of that and then I'll I'll have more to talk about momentum asked for capacity.

Nick Delosso: We delivered another strong quarter, advancing our strategy to deliver sustainable value to shareholders through cycles. As you've seen from our third quarter results, we came in on the low end of capital and high end of production despite the 60% deferral of planned third quarter turn in lines and the extension of elective curtailments in the Marcellus. In the Marcellus this quarter, our rig fleet set a new company record averaging 1,367 feet per day, marking a 16% improvement over the prior quarter.

Capacity, we feel very comfortable we can deliver what we're planning for here.

Remember the 2024 volumes in the Haynesville will be lower than we were in 2022 in 2023, where at the B. During 22 in the beginning of twenty-three we experienced some of those bottlenecks we've removed those bottleneck. So we can restore production back to those previous levels, what's that incremental rig we feel very good about that and feel very good that if we ever chose to <unk>.

Grow beyond that in the future, we have the relationships and the infrastructure in place to be able to do it.

Nick Delosso: Overall, we drilled four of the top 10 fastest Marcellus wells in our company's history. That's a pretty significant accomplishment given our long and successful history in the basin. Importantly, our decreased cycle times have also been accompanied by achieving a lower cost per foot, which means we will now be able to drill another well per rig year at a lower cost compared to what we projected at the beginning of the year. This is a great example of efficiency offsetting inflation.

Among this was on the second part of your question about momentum as we've said previously we are really excited about the project and what it means for our flow assurance. We look at the volumes that we are producing and haynesville and are trying to build a and transport portfolio, which allows us to take it to bury will or down south too.

To get us and the intent.

Nick Delosso: In the Hainesville, we delivered another robust quarter of base production with strong wedge volumes. Additionally, our sustained efforts to debottle neck our midstream has resulted in lower line pressures and higher production. We've realized that 15% quarter over quarter reduction in interrupted volumes attributable to midstream disruptions. Operations. The combination of our improved base production and effort to optimize gas low assurance has led us to increasing our Q4 production guidance by 35 million cubic feet a day or approximately 2.5%.

Part of our be LNG ready strategy, where we get production to get loose and that's where we can have connected with you two different liquefaction facilities.

Some momentum has it's it's it's.

Remains the critical part of our strategy and we it's on track we expect it to go into service probably late next year or.

2025, which is all still on track, we'd still like the project and.

It remains a key part of our energy strategy.

Nick Delosso: Our strong operational performance serves as the backbone to our commitment to deliver superior capital returns for shareholders. We continue to execute our peer leading return program in the quarter, repurchasing $130 million in shares and delivering our base dividend.

That's what he has so thank you guys.

Our next question will come from Burton Dawn's was truest.

I'll go ahead.

Nick Delosso: Through the third quarter, we have returned approximately $725 million to shareholders through our buyback and dividend programs. We also announced another important step on our path to BLNG ready with today's LNG supply announcement with VTOL. Similar to our past agreement with Gunvor, under today's heads of agreement with VTOL, Chesapeake will supply up to 1 million tons per annum of LNG to VTOL with the purchase price indexed to JKM. As we continue exploring these types of agreements, we see an appreciation of the premium rock returns and runway of our advantage portfolio and the strength of our financial position.

Pardon me burn your line is open for questions.

Your total company LNG pricing exposure predominantly to an international index instead of a domestic one is is that an intentional shift or was this just kind of timing and maybe you have some you know Henry held linked agreements down the line you know.

Even though the score and maybe the second part of that is is there any reason you haven't signed up and opened into an agreement where you kind of retain control and you know sell the gossip final destination.

Nick Delosso: Our approach to executing our LNG strategy has been consistent and benefits from production that is physically linked to LNG markets, access to international prices, and downside protection through cancellation optionality. Our portfolio, balance sheet, and approach represent a clear competitive advantage among our gas peers and we continue to complete LNG agreements as we see export capacity come online over the next few years.

Sure Burt you're the first part of your question didn't come through I think maybe you were coming off a mute or something but.

But I'll.

I'll start to talk about LNG and modal out in and then you'll have to just redirect disappointment as part of your question.

But you were asking about percentage of international price exposure, we've been pretty consistent there to talk about 15% to 20% I guess to clarify based on a question. We got last night, when we talk about 15% to 20% of our production that we target for international pricing. That's our net production generally when companies announced these deals they are and.

Nick Delosso: Before opening the call for questions, I'd like to touch on our trajectory headed into 2024. We expect to maintain our current rig count of five rigs in the Haynesville and four rigs in the Marcellus for the first part of the year. Should gas prices firm up in line with the current 2025 strip, we believe there may be an opportunity to add an additional rig in the Haynesville during the second half of the year, which would positively impact volumes in 2025.

Nounced under gross marketed production, which is obviously more so.

So just to think about that you need to consider what are average net revenue interest is across our production.

It was a pretty good approximation for for how to note that down so we've got a little bit of ways to go to get there we're not done yet and we liked that we're not done yet we think there's plenty more interesting deals to be had in the LNG space and as to why we've done what we've done with a trade or rather than try to marketed ourselves.

Nick Delosso: As you look to model our business in 2024, a fair starting point is to assume our annual production should be in line with our fourth quarter run rate, the 3.2 BCF a day in the Marcellus and Haynesville. Our cat-backs for the full year should approximate $1.6 billion, assuming an additional Haynesville rig in the second half of the year. Would now please say a dresser questions operator if you want to assemble the queue.

It's gonna take a pretty significant presence in LNG marketing to be really successful at marketing volumes. This is Ah Ah.

Unknown Attendee: We will now begin the question and answer session. To ask a question, press star then one your telephone keypad. If you're using a speaker phone, please pick up your hands up before pressing the keys. To withdraw from the question queue, please press star then two. At this time, we'll pause momentarily to assemble our roster.

A market that is.

The participants in this market are very very large the majors participate in this market and the big commodities traders participate in this market on a daily basis, and I think in order to be competitive there you need to be part of a pool of volumes that can be traded around in a in a very.

Douglas Leggate: Our first question will come from Doug Leggett with Bank of America. You may now go ahead. Hey, good morning everyone. Thanks for taking my questions. Nick, I wonder if I could pick up on the 2024 outlook here, because for quite some time now you've talked about managing your production to maintain production capacity. I don't know if I'm messing up the description of that. But as you think about the capital required in 2024 to maintain, let's say your exit rate and then set yourself up into 2025, what do you think that cadence on production and that associated capital looks like?

Fluid way.

And to be a producer that may ultimately have three or four or 5 million tonnes per annum on the water.

We think is relatively small.

And would it be a challenge to be competitive in that marketplace that said, we're always <unk>.

<unk> to be creative in how we think about the best ways for us to <unk>.

Access to international markets and achieve international pricing, we like what we've done so far this market is evolving and evolving rapidly and will continue to think about the best the best ways for us to participate.

Douglas Leggate: X, X, X Eagle Ford, obviously. Well, I'll start here and Josh may have some more color to add, but essentially, Doug, we're starting a year with maintaining the production where it is today, right, five rigs in the handsville, four rigs in the Marcellus. That's going to keep us where we are today at about 3.2 BCF a day. We are paying attention to the fact that the export capacity for Ellen G should come online, you know, by the end of the year, setting up for unmet that demand in 2025.

I I appreciate that and then just a small.

Small detail in the presentation, you kinda shifted your deflation expectations I think prior you were using one Q over once you and you've shifted to first half of the first half. So I guess the the first part is you know what what was the shift there and then the second part is of the the 50 per cent that you have locked in are those locked in it at.

Fixed prices or those you know maybe you have some sort of escalator deal or something linked to commodity prices. Thanks.

Douglas Leggate: If that looks like it's going to play out, and this trip looks like it's going to hold up, then we would add a rig in the second half of the year. And so the $1.6 billion of CapEx that I gave you a minute ago does assume that we add a rig in the second half of the year in the handsville. If we didn't have that rig, we would just stay at that level of production to be a little bit less.

Yeah burdens, Josh Yeah, we did extend the expectation for inflation.

Nick Delosso: Okay, that makes a ton of sense. Thanks.

For the first half of 2024.

You know we've we've just continued to increase our confidence in that expectation as we've been able to sure up contracts and so when we do reference that 50% of contracts.

Nick Delosso: Nick, I don't expect you to answer this question directly, but I wonder if I could ask you to frame your views on this broader industry consolidation. For Chesapeake, you've talked, we were in a handsville with you in July. You said there were no conversations happening. Mohit countered that a little bit in our bus tour, basically saying, well, actually, there's a lot of conversations happening. That was just two months later. So how do you see the landscape on Chesapeake rule within that, whether it be private or public?

By and large those are all fixed pricing, we do have some contracts that will start to show up in the second half of the year that have some [noise] Delta next.

Escalators, but you know that represents a relatively small amount of our our total spend and and that's why I think we feel pretty good about actually seeing and preventing any additional inflation in the second half of the year because the majority of this band is locked in at this fixed pricing for the large part of 2024.

Nick Delosso: Well, I think you touched on some themes there that are pretty interesting. And we've been very consistent in saying that we believe in consolidation in the industry. So we've been pleased to see Exxon and Chevron do the deals that they've done. We think those are constructive for the industry. And the dialogue for M&A does come in ebbs and flows. And there are times in the market where it seems like more people are having conversations than others.

I appreciate it thanks guys.

Our next question will come from Scott handled with RBC capital markets.

You may not go ahead.

Yeah, I think so if I could ask a question I'm torn to twenty-four you know Nick I think the prior commentary around it talked about optionality, bringing the Haynesville Reagan.

Nick Delosso: Overall, we've continued to say that we're very happy with the portfolio that we own. So we don't feel compelled to do anything. And we certainly don't feel compelled to do anything on a near term timetable. But at the same time, we believe in consolidation. We believe in the merits of attempting to have consolidation, make the industry a more profitable, more productive place. And we've been also very consistent in talking about how we would define that for ourselves.

The first part of the year and then maybe a haynesville on them ourselves in mid year and it it sounds like you're you're you know I guess your your view on the market the gas market for 24 hours and change too much. In fact, you said that you know the the inventory overhang went down a little bit. So I'm just kind of curious on you know why sort of pushing back some of that production Ah you know.

Coverage in the next year.

ER, sorry, yeah, I wouldn't really view it as pushing it back Scott we.

We've said you know during the year and you know we could change the timing of that still a little bit I mean, if we come out of this winter in a really strong market, we could bring a haynesville regwan sooner.

Nick Delosso: And so for us, we go back to our non-negotiables. And just to remind everybody, that means that we in the context of consolidation, we don't want to overpay. We will look for accretion in a transaction. We will protect our balance sheet. We will look for a good emissions profile or one we can quickly make better. And what that really means at the end of the day is that you have to make your company better through consolidation not just bigger.

So you know that we're we're trying to be pretty flexible in how we communicate this.

As of right now, we think we're pretty happy with where are Marcellus position sits relative to the production, we can generate and the capacity of the market to take that production in the northeast.

If that changes we could easily out a rig there too. So we're you know we're pretty flexible around all of that and in order to give you a capex number. We gave you a scenario which is to bring a haynesville rig on at mid year.

Nick Delosso: And that's not an easy thing to do. That's a pretty high bar. So we believe in consolidation and we'll continue to pay attention. Just a quick add on to that very quickly. Like is there any interest in been outside of the two basins that you're in or when you say you're happy with your portfolio without imply there for the any consolidation you would pursue would be focused on those two basins? Well, you got a couple of questions embedded in there.

And that easily could change and it frankly, probably will change there's a lot we need to understand about where this market is headed.

Okay. So so fundamentally no major changes to your view on 20th 24 at this point versus say, where you were two months ago.

Nick Delosso: And I think the answer won't be surprising to anyone. We like the basins. We're in. We like the assets that we're in because we know that they are at the top of the heat for natural gas. Service, Supply and Demand Fundamentals and Delivering Against That Supply and Demand Fundamentals for many years. So we're happy being in the Marcellus in the Hainesville. We've been asked over time, would we look outside of those basins?

That's correct.

Okay and is my follow up question can you talk about the the differentials in the Marcellus strategies you guys are using to help mitigate some of the blow outs and and you talked about.

Extending your elective deferrals, just when you think that you know might might end.

Yeah. So Scott. This is all that we remain Ah active active in our hedging program. So the guidance that would give you is we are about 675% to 80% basis hedged.

Nick Delosso: And you know, my answer there is, our non-negotiables are a high bar. If you wanted to apply those non-negotiables to a place we don't operate today, that bar is even higher. So we continue to say that is an unlikely answer for us. Makes sense. But, you know, we do like where we operate today and we think that we have a competitive advantage to be in both of those basins.

And both of our businesses for the winter and then when you start coming into next year explore around 60 per cent. So again, that's trying to take that uncertainty out from the.

The future outcomes, and that's a combination of financial and physical hedges that we put into place.

Nick Delosso: Thanks, Nick. We'll see you in a couple of weeks. Great.

I used to build onto that as well as far as kind of current outlook. You know we are starting to see some improvements and.

Zach Parham: Our next question will come from Zach Parham with JP Morgan. You may now go ahead. Thanks for taking my question.

In pricing up in the northeast right now that's allowed us to start bringing on wells, who brought on about 12 wells to the first month of the quarter.

Josh Viets: Just wanted to ask on the health performance in the Hainesville. So, you've performed your guidance each quarter this year. You increased the 4Q guide. You know, looking at state data, well productivity seems to be trending positively. You know, can you just give us a bit more color on what's driving that health performance in the Hainesville and how sustainable you think that is going forward?

We're looking at opportunities right now it's historic.

<unk> some of the base that we've had curtailed for the last couple of months and bring that back in.

To the markets here over the next couple of weeks. So we are definitely starting to see some improvements there and I think that just further supports you know the the outlook that we provided for our queue for production and the asset yeah, and I'll just add a little bit further specifics their first month pricing.

Josh Viets: Yeah, good morning, Zach. This is Josh. You know, we've been really happy with the way the performance has showed up in the Hainesville this year. And of course, going back to last year, we knew we had some bottlenecks within the midstream and so we've done a ton of work over the last year to really sure that up. And largely what that's been attributed to is simply working with our midstream providers to introduce additional interconnects between gathering systems, helping support, you know, treating capacity expansion.

For November was materially improved.

And is encouraging around the pick up in demand that you generally see at this time of year. So.

You know the the elective curtailments usually end around now sometime in early to mid November that's a cash market decisions super hard to predict on a daily basis. So they generally will fall away as you go through November as to whether it's the beginning of November at the end of November.

Josh Viets: And so, those are things that are just simply, you know, will be sustainable through the years and it's allowing us to continue to mitigate midstream induced downtime. So, we'll continue to, you know, work with our midstream providers to allow that to improve over time. Well productivity has been strong through the course of the year. You know, we've seen some modest increases in well performance. One of the things that's actually allowed us to do is to delay the second frat crew that we're bringing in.

That's a function of weather.

Got it thank you.

Our next question will come from Charles meet with Johnson Rice you.

You may not go ahead.

Good morning, Nick and Josh and and the rest of the the Chesapeake team there.

Nick I wanted to.

Josh Viets: We've allowed ourselves to push that back by a couple months. We'll bring that second frat crew back now in the middle to late November, which allows us to, you know, preserve some productive capacity as we head into early 2024.

Thank you for your released the sinking explicit comments about 24 I. That's that's great I think it probably took a lot with us sales.

People questions, but I Wanna ask you a question about your your LNG strategy. So.

I've noticed that this this vital deal just like the governor ordeal Jessop have the.

Zach Parham: Thanks for that color. And then just one clarification on 2024, you talked about 1.6 billion and in Capac, assuming that additional Haynesville rig comes back in the second half next year. Does that include the spanned on the momentum pipe, which I think is around 100 billion next year? Good question, Zach. No, that does not include momentum. We're trying to just give you a number to think about our regular way in P business. Okay.

Zach Parham: Thank you.

There's a block missing a piece missing, but the liquefaction. So I'm curious if you could elaborate a bit on your thinking is this is this kind of a an intentional bet that that you guys at the board is making that Ah liquefaction facilities will eventually be overbuilt in the next five years or is or is it more.

Is it more along the lines of you know you wanted to do what you can now and figure out the rest later.

Hey, Charles this is mow it thanks for the question.

Umang Choudhary: Our next question will come from among children with Goldman Sachs. Hi, good. Thank you. Hi, good morning. Thank you for taking my questions. Sure, Umang, yeah. So macro, start with that. You know, we've got a lot of uncertainty in front of us here with winter just starting and storage levels have been relatively high throughout 2023. They look a little bit better today than they did a couple of months ago, but the big variable in front of us now is the winter.

The way I would like you to think about this is.

Clearly, there's a willing seller in Chesapeake, there's a willing buyer and be tall and what we are taking to these liquefaction facilities. Then is a pretty wide deal, where we have a buyer and a seller already.

Agreeing upon the terms. So there is option value that's embedded in such an arrangement. When you go doctor different LNG facilities, they might need one or two M. P. P. A to get two F I D.

So it creates a.

Little bit of an competitive tension with different facilities as we go talk to them and figure out, which one meets our requirements and we dogs requirements and the ones that we think about primarily are.

What what's the pricing what all are you having to pay is number one.

Do is is it accessible to our production. So it can be even get our equity volumes to those facilities through through transport solutions number.

Number three would be what kind of accounting treatment are you are you getting whether it's debit versus non derivative.

Umang Choudhary: But we're all excited about in the industry is the step change that will come to the fundamentals when we have the incremental export capacity come online. We still think that happens around the end of 24. We will watch that very, very closely. That's the signal we're really focused on from a macro perspective is will we have that connectivity to markets that are underserved such that there is a call on US gas.

And credit requirements is another one and then last but not least is about the F. I D timing and probability of getting to fighting so when you put all that together.

It works for us in this situation, but that's not to say that this is how we will do the remaining ones too I mean, we are clearly looking at a lot of LNG transactions and we might do it differently in the next one that'd be announced.

Umang Choudhary: If that happens, we believe we have an important asset to meet that call in the Hainesville and we would expect to add a rig if that looks like it's it's coming in line with that projection. But to be clear, our 1.6 number that we gave you as an approximation for our 2024 capex, which, you know, albeit it's very early to be giving you that number that is a that's an early estimate and we'll set a budget still as we go through the end of the year here and get ready to start next year as we really see where winter plays out.

Mo hit that's helpful. Thank you for that and then Ah Ah Ah second follow up on.

A N D opportunities I know this is.

This will be an ongoing discussion for you guys, but.

There was a a.

A major player in the Haynesville Ah B P. A.

There's been a lot of turmoil there lately and I think just yesterday there was a there was an article saying that you know maybe they were going to be looking for.

Partners and some of the U S. A bunch of assets and in my opinion, if someone says they are looking for partners. They they might be open.

Umang Choudhary: That would assume that we bring a rig on in the second half of the year in the Hainesville. So if that macro view changes and we don't believe that LNG is going to come online timely or the storage environment changes because we have either a really cold or a really warm winter, we could certainly change that answer. But as of now, we're thinking about a business that would start off the year exactly where it is today and that has the flexibility to add a rig in the second half of the year.

Open to offers as well, but I recognize it you guys can't talk a lot it's relatively new and you can't talk about anything cause I'm going, but but ah, but perhaps joshua and they could be you could you could tell me my impression is that does P. P. S. That's a really high quality assets.

They are the old H K, a petrol gas that's in that <unk>.

Those locations would be able to compete favorably in Europe portfolio is that Ah Ah Ah.

Umang Choudhary: And so the starting point number we've given you for capital would assume we do just that. But, you know, just to reiterate, we have all the flexibility in the world to change our answer around whether or not that rig comes on in the second half of the year or any other changes to our capital program. We have plenty flexibility and we can be very responsive to what we believe the fundamentals are asking our industry to deliver in the way of supply. That's very helpful. Thank you.

Is that the way you guys see it.

[noise] Hey, Charles This is my life again again, if you don't want to speculate on rumours Ah what one thing I'm sensitive do I do have a BB legacy since I came to Chesapeake from B P. So I know the team and those athletes really really well I think your general comment around the quality of the athletes is very competitive I would agree with.

That.

But maybe we leave it there and just if if something were to happen there again.

Umang Choudhary: And as a follow-up question, I wanted to understand a little bit about the mid-stream setup in the Hainesville. The production in the Hainesville has been declining. But you also have made progress in terms of adding more capacity in the Hainesville. So do you feel like you have sufficient capacity as we look to 2025 to grow molecules in the Hainesville? That's a question of a one.

Again as as we do we we always take a look across the least line to see what else might be available.

That's what I was looking forward thinking about it.

Our final question will come from Noel Parks with Toohey part brothers you.

You May now go ahead.

Nick Delosso: And can you also remind us on the progress on the momentum pipeline? Is it on track to come online in the fourth quarter of next year? Yeah, let me answer the first part of that and then I'll have Molly talk about momentum. As for capacity, we feel very comfortable. We can deliver what we're planning for here. Remember that 2024 volumes in the Hainesville will be lower than we were in 2022 and 2023, where during 2022, in the beginning of 23, we experienced some of those bottlenecks.

Hi, good morning.

Well you know.

So.

Wanted to ask you about infrastructure and future investment there with allergy coming into the picture.

It seems like a lot of producers are looking at.

Nick Delosso: We've removed those bottlenecks so we can restore production back to those previous levels with that incremental rig. We feel very good about that and feel very good that if we ever chose to grow beyond that in the future, we have the relationships and the infrastructure in place to be able to do it.

You know at what level, they they might consider a maintenance or expansion infrastructure investment and I'm. Just wondering is there anything.

[noise] directly spurred by LNG or are otherwise are there any non obvious factors that would affect your decisions going forward about on balance sheet versus J b structures with infrastructure investments.

Mohit Singh: Among this is Mohit, on the second part of a question about momentum. As we've said previously, we are very excited about the project and what it means for our flow assurance. We look at the volumes that we are producing in Haynesville and are trying to build a transport portfolio which allows us to take it to Perryville or down south to Gillis. And the intent, this is part of our BLNG-ready strategy where we get production to Gillis and that's where we can have connectivity to different liquefaction facilities.

Thinking about you know cats considerations or et cetera considerations.

Or or things like that pretty much back burner, when you're you're looking at your <unk>.

The real planning.

Well I'll I'll take a shot at answering that no you know I think the way we think about infrastructure.

When you're.

Looking to create access to new markets and premium markets.

You often are going to need either expansions or new construction of infrastructure.

Mohit Singh: So momentum has, it remains a critical part of our strategy and we, it's on track. We expect it to go into service probably late next year or early 2025, which is all still on track. We still like the project and it remains a key part of our N&G strategy. That's what he has.

When I think about what we've done with the N G. Three pipeline with momentum that was an opportunity to support a project that we thought was a competitive project that would improve the marketability of our production Ah. We also thought that the economics of that development, we're very attractive to us because you could.

Umang Choudhary: So thank you guys.

Invest at the Preconstruction stage and have great line of sight into the fact that that project would be successful since our equity production would be a big driver of causing it to be successful so.

Bert Donnes: Our next question will come from Bert Donnes with Trist. You may now go ahead. Part of me, Bert, your line is open for questions?

That kind of return opportunity, it's a very compelling to us and it helps to underwrite a project that's.

Accretive to our entire portfolio of Haynesville production.

So that that's a great project for us when we think about.

Nick Delosso: Your total company, LNG pricing exposure, predominantly to an international index instead of a domestic one, is that an intentional shift or was this just kind of timing and maybe you have some Henry Hublink agreements down the line, even up the score and maybe the second part of that is, is there any reason you haven't signed an open-ended agreement where you kind of retain control and sell the gas at the final destination? Sure.

How or where or why we might participate in infrastructure. It's when you have that kind of differential opportunity to earn return for your shareholders.

If you can participate in infrastructure that without participating in it you don't have access to a premium market sure. You can consider that if you can participated in a place where there's an outsized return that you're uniquely capable of earning that's great too.

If it's otherwise just to own infrastructure style producing returns of.

Nick Delosso: Bert, the first part of your question didn't come through. I think maybe you were coming off of mute or something, but I'll start to talk about LNG and Molyt will add in and then you'll have to just redirect us if we missed part of your question. But you were asking about percentage of international price exposure. We were pretty consistent there to talk about 15 to 20 percent. I guess to clarify based on a question we got last night, when we talk about 15 to 20 percent of our production that we target for international pricing, that's our net production generally when companies announce these deals, they are announced under gross marketed production, which is obviously more.

Call It high single low double digits for fully developed assets, probably less interested in that.

I hope I've answered your question there, but strategically we think about if we're willing to make an investment in infrastructure it should be for a differential return.

Okay.

Great. Thanks.

I totally get that what it was wondering and.

I was wondering with the either the the the call or the Andrew.

Andrew transfer Gunvor.

Deal.

Nick Delosso: So just to think about that, you need to consider what our average net revenue interest is across our production is a pretty good approximation for how to net that down. So we've got a little bit of ways to go to get there. We're not done yet. And we like that we're not done yet. We think there's plenty more interesting deals to be had in the LNG space. And as to why we've done what we've done with a trader rather than try to market it ourselves, I think it's going to take a pretty significant presence in LNG marketing to be really successful at marketing volumes.

Are there any right of first refusal or or similar conditions when it comes to the potential tan.

Add more volumes down the road or or both both parties essentially just free agents to <unk>.

[noise] contract with whomever they they want going forward.

Yeah. So the terms of the arrangements with both feet. All Gung War entered your transfer confidential knows who can't get into all the specifics, but what I will tell you is.

We are delivering.

Nick Delosso: This is a market that is the participants in this market are very, very large. The majors participate in this market and the big commodities traders participate in this market on a daily basis. And I think in order to be competitive there, you need to be part of a pool of volumes that can be traded around in a very fluid way. And to be a producer that may ultimately have three or four or five million tons per annum on the water, we think is relatively small, and would be a challenge to be competitive in that marketplace.

The LNG F O B and then it's that's where the custody transfer is happening and then bye.

The buyer to take it to whichever end user it makes sense for them.

Great, but just to be clear those agreements that we have are limited to the volumes. We've announced we don't have a broader partnership with any of those counterparties at this point, it's one to 2 million tonnes per annum with gun bore.

And 1 million tons per annum would be tall. So beyond that we are free to contract with anybody should we choose to do additional contracts.

Great and just one sort of clean up item.

Wanda in retrospect looking back.

Nick Delosso: That said, we're always eager to be creative and how we think about the best ways for us to access international markets and achieve international pricing. We like what we've done so far. This market is evolving and evolving rapidly and we'll continue to think about the best ways for us to participate. I appreciate that.

Do you have a sense that what happened with Freeport and the volumes that did not go out on that because of that outage do you.

Do you think that that impact has fully worked its way through either storage or through the market's perception of where supply demand fundamentals really are right now or do you think is somebody that's still an overhang are still sorta flying under the radar if we hadn't do another you know.

Josh Viets: And then just a small detail on the presentation, you kind of shifted your deflation expectations. I think prior you were using 1Q over 1Q and you've shifted to first half over first half. So I guess the first part is, you know, what was the shift there? And then the second part is of the 50% that you have locked in. Are those locked in at 6th prices or those, you know, maybe have some sort of escalator deal or something linked to commodity prices? Thanks.

For all season.

That's a good question I think it's probably pretty well worked through I think the fundamentals at this point are all about what the draw will be weather related this winter what the trajectory of production is from the capital reductions you've seen U S onshore through 2023.

Josh Viets: Yeah, Bert, this is Josh. Yeah, we did extend the expectation for inflation for the full first half of 2024. You know, we've just continued to increase our confidence in that expectation as we've been able to shore up contracts. And so when we do reference that to 50% of contracts, by and large, those are all fixed pricing. We do have some contracts that will start to show up in the second half of the year that have some built in ex escalators.

And then the timing of new export capacity coming online sometime around the end of 24 beginning of 25 those are three big variables.

And those are gonna be your biggest drivers.

Great. Thanks, a lot.

This concludes our question and answer session I would like to turn the conference back over Nick Donoso for any closing remarks.

[noise] well thanks, everyone. We really appreciate everybody's time and questions. This morning, I was always our team is available today and any other day to answer any further follow up questions will be at a few conferences between now and the end of the year and look forward to seeing everybody out on the road have good day.

Josh Viets: But, you know, that represents a relatively small amount of our total spend. And that's why I think we feel pretty good about actually seeing and preventing any additional inflation in the second half of the year because the majority of the spend is locked in at fixed pricing for the large part of 2024.

The conference is not included thank you for attending today's presentation you may now disconnect.

Bert Donnes: I appreciate it. Thanks, guys.

Scott Hanold: Our next question will come from Scott handled with RBC capital markets. You may now go ahead. Yeah, thanks.

Nick Delosso: If I can ask a question on 2024, Nick, I think the prior commentary I'm going to talk about optionally of bringing the Haynesville rig in the first part of the year. And then maybe a Haynesville on a Marcel's in mid-year. And it sounds like your view on the market, the gas market for 24 hasn't changed too much. In fact, you said that the inventory overhang went down a little bit. So I'm just curious on why sort of pushing back some of that production recovery in the next year.

Nick Delosso: Sorry, yeah, I wouldn't really view it as pushing it back, Scott. We've said, you know, during the year, and we could change the timing of that still a little bit. I mean, if we come out of the winter in a really strong market, we could bring a Haynesville rig on sooner. So, you know, we're trying to be pretty flexible in how we communicate this. As of right now, we think we're pretty happy with where our Marcel's position fits relative to the production we can generate and the capacity of the market to take that production in the Northeast.

Nick Delosso: If that changes, we could easily add a rig there too. So we're, you know, we're pretty flexible around all of that. And in order to give you a CapEx number, we gave you a scenario, which is to bring a Haynesville rig on it mid-year. And that easily could change. And it frankly probably will change. There's a lot we need to understand about where this market has Okay, so fundamentally no major changes to your view on 2024 at this point versus say where you were two months ago. That's correct. Got it. Okay.

Scott Hanold: It is my follow-up question. Can you talk about the differentials in the Mars Fellows strategies you guys are using to help mitigate some of the blowouts and you talk about extending your elective deferrals just when you think that might end. Yeah.

Mohit Singh: So Scott, this is my we remain active active in our hedging program. So the guidance I would give you is we're about 675 to 80% basis hedged in both our businesses for the winter. And then when you start coming into next year, it's more on 60%. So again, that's trying to take that uncertainty out from the future outcomes. And that's a combination of financial and physical hedges. That's a combination that we put into place.

Mohit Singh: Build on to that as well as far as kind of current outlook. You know, we are starting to see some improvements in pricing up in the Northeast right now. That's allowed us to start, you know, bringing on wells. We brought on about 12 wells through the first month of the quarter. You were looking at opportunities right now to start taking some of the base that we've had curtailed for the last couple months and bring that back in to the markets here over the next couple weeks. So we are definitely starting to see some improvements there. And I think that just further supports. You know, the outlook that we provided for a Q4 production in the asset.

Nick Delosso: Yeah, and I'll just add a little bit further specifics there. First of month pricing for November was materially improved and is encouraging around the pickup and demand that you generally see at this time of year. So, you know, the elective curtailments usually end around now. Some time in early to mid-November. That's a cash market decision. Super hard to predict on a daily basis. So they generally will fall away as you go through November as to whether it's the beginning of November, the end of November. That's a functional weather.

Charles Mead: Thank you.

Charles Mead: Our next question will come from Charles Mead with Johnson Rice. You may now go ahead. Good morning, Nick Mohit and Josh and the rest of the Chesspeak team there.

Charles Mead: Nick, I want to thank you for your really succinct and explicit comments about 24. That's great. I think it probably took a lot without the sales for people questions.

Charles Mead: But I want to ask a question about your LNG strategy. So I noticed that this vital deal, just like the governor deal, doesn't have the, you know, there's a block missing and piece missing with the liquefaction.

Mohit Singh: And so I'm curious if you can elaborate a bit on your thinking, is this kind of an intentional bet that you guys and the board is making that liquefaction facilities will eventually be overbuilt in the next call five years or is it more, is it more long lines of, you know, you want to do what you can now and figure out the rest later. Okay, Charles, this is Mohit. Thanks for the question.

Mohit Singh: The way I would like you to think about this is. News. Clearly, there's a willing seller in Chesapeake, there's a willing buyer in VTOL, and what we are taking to these liquefaction facilities then is a pre-wire deal where we have a buyer in a seller already agreeing upon the terms. So there is option value that's embedded in such an arrangement when you go talk to different LNG facilities, they might need one or two MTP-A to get to FID.

Mohit Singh: So it creates a little bit of a competitive tension with different facilities as we go talk to them and figure out which one meets our requirements and VTOLs requirements, and the ones that we think about primarily are, what's the pricing? What toll are you having to pay is number one. Number two is, is it accessible to our productions? So can we even get our equity volumes to those facilities through transport solutions?

Mohit Singh: Number three would be what kind of accounting treatment are you getting, whether it's derivative versus non-derivative and credit requirements is another one, and then last but not the least is about the FID timing and probability of getting to FID. So when you put all that together, it works for us in this situation, but that's not to say that this is how we will do the remaining ones too. I mean, we are clearly looking at a lot of LNG transactions, and we might do it differently in the next one that we announce. Mohit, that's helpful. Thank you for that.

Charles Mead: And then a second follow-up on, I guess, A and D opportunities. I know this is, you know, this will be an ongoing discussion for you guys, but there was a major player in the Haynesville BP. There's been a lot of turmoil there lately, and I think just yesterday there was an article saying that, you know, maybe they were going to be looking for partners in some of the other social assets, and I think someone says they're looking for partners.

Charles Mead: They might be open to offers as well. But I recognize that you guys can't talk a lot. It's relatively new, and you can't talk about anything that's ongoing, but perhaps Josh or Nick, you could tell me my impression is that those BP assets are a really high quality assets. They're they're the old HK petrol gas. And those locations would be able to compete favorably in your portfolio.

Mohit Singh: Is that the way you guys see it? Hey Charles, this is Mohit again. Again, we don't want to speculate on rumors, but one thing I'm sensitive to, I do have a BP legacy since I came to us speak from BP. So I know the team and those assets really, really well. I think your general comment around the quality of the assets is very competitive.

Mohit Singh: I would agree with that, but maybe we leave it there. And just if if something were to happen there, then again, as we do, we we always take a look across the lease line to see what else might be available. That's what I was looking for. Thank you, Mohit.

Noel Parks: Our final question will go from Noel Parks with two wee part brothers. You may now go ahead. Hi, good morning. Morning, no. So I wanted to ask you about infrastructure and future investment there. With ONG coming to the picture, things like a lot of producers are looking at, you know, at what level they might consider maintenance or expansion infrastructure investment. And I'm just wondering, is there anything either directly spurred by ONG or otherwise?

Noel Parks: Are there any non-obvious factors that would affect your decisions going forward about on balance sheet versus GAD structures with infrastructure investments? I'm thinking about, you know, tax considerations or incentive considerations, or things like that pretty much backburner when you're looking at your down the road planning.

Nick Delosso: Well, I'll take a shot at answering that, Noel. I think the way we think about infrastructure, when you're looking to create access to new markets and premium markets, you often are going to need either expansions or new construction of infrastructure. When I think about what we've done with the NG-3 pipeline with momentum, that was an opportunity to support a project that we thought was a competitive project that would improve the marketability of our production.

Nick Delosso: We also thought that the economics of that development were very attractive to us because you could invest at the pre-construction stage and have great line of sight into the fact that that project would be successful since our equity production would be a big driver of causing it to be successful. So, that kind of return opportunity is very compelling to us and it helps to underwrite a project that's, you know, accretive to our entire portfolio of Hainesville production.

Nick Delosso: So, that's a great project for us. When we think about, you know, how or where, why we might participate in infrastructure, it's when you have that kind of differential opportunity to earn return for your shareholders. If you can participate in infrastructure that without participating in it, you don't have access to a premium market. Sure, you can consider that. If you can participate in a place where there's an outsized return that you're uniquely capable of earning, that's great too. If it's otherwise just own infrastructure style producing returns of, call it, high single, low double digits for fully developed assets, probably less interested in that.

Mohit Singh: I hope I've answered your question there, but strategically, we think about, you know, we're willing to make an investment in infrastructure, it should be for a differential return. Great, thanks. I totally get to what it was wondering. And I was wondering with either the, the, the tall or the Andrew Transfer Gunver deal, are there any right of first refusal or similar conditions when it comes to the potential to add more volumes down the road or are both parties essentially just reagents to contract, you know, with home everyday, they want going forward.

Mohit Singh: Yes, so the terms of the arrangements with both the toll gun war, energy transfer, our confidential knows can't get into all the specifics, but what I will tell you is we are delivering the LNG FOB and then it's, that's where the custody transfer is happening and then buyer to take it to whichever end user it makes sense for them. Great. But it needs to be clear, those agreements that we have are limited to the volumes we've announced, we don't have a broader partnership with any of those counter parties at this point. It's one to two million tons per annum with gun war and one million tons per annum with B-tall. So beyond that, we are free to contract with anybody. Should we choose to do additional contracts? Great.

Noel Parks: And just one sort of cleanup item. I just wonder, in retrospect, looking back, do you have a sense that what happened with free port and the volumes that did not go out on that because of that outage? Do you think that that impact has fully worked its way through either storage or through the market's perception of, you know, where supply demand fundamentals really are right now? Or do you think that something to do that still in overhang or still sort of flying under the radar as we head into another, you know, for all season?

Noel Parks: That's a good question. I think it's probably pretty well worked through. I think the fundamentals at this point are all about what the draw will be whether related this winter, what the trajectory of production is from the capital reductions you've seen US onshore through 2023, and then the timing of new export capacity coming online sometime around the end of 24, beginning of 25. Those are your three big variables, and those are going to be your biggest drivers. Great. Thanks a lot.

Nick Delosso: This concludes our question and answer session.

Nick Delosso: I would like to turn the conference back over and Nick Deloso for any closing remarks. Well, thanks, everyone. We really appreciate everybody's time, and questions this morning, as always, our team is available today, and any other day to answer any further follow-up questions, we'll be at a few conferences between now and the end of the year, and look forward to seeing everybody out on the road.

Unknown Attendee: Have a good day.

Unknown Attendee: The conference is now concluded.

Unknown Attendee: I think for today's presentation, you may not...