Q4 2023 Marathon Oil Corp Earnings Call

Lee M. Tillman: I especially want to thank our employees and contractors for their enduring commitment to our core values. On that front, we have a few notable accomplishments to highlight today. First, we delivered a record safety year in 2023 as measured by total recordable incident rate for both our employees and our contractors.

We are discussing today.

And I, especially want to thank our employees and contractors for their enduring commitment to our core values.

On that front.

A few notable accomplishments to highlight today.

First we delivered a record safety year in 2023 as measured by total recordable incident rate for both our employees and our contractors. This builds on a multiyear track record of top quartile TR IRR in our industry.

Lee M. Tillman: This builds on a multi-year track record of top quartile TRIR in our industry. Providing a safe, healthy, and secure workplace remains a top priority for us, with our safety performance a key element of our executive and employee compensation score. Second, we continue to make progress in reducing our natural gas flaring, improving our total company gas capture to 99.5% in 2023, a new high for our company. We'll continue to work hard on our journey of continuous improvement, moving toward our ultimate objective of zero routine wear.

Biding, a safe healthy and secure workplace remains a top priority for us with our safety performance a key element of our executive and employee compensations for clients.

Second we continue to make progress in reducing our natural gas flaring, improving our total company gas capture to 99, 5% in 2023, a new high for our company.

We will continue to work hard on our journey of continuous improvement moving toward our ultimate objective of zero routine flaring.

Lee M. Tillman: And third, we achieved our 2025 GHG intensity reduction goal of 50% relative to 2019 levels, a full two years ahead of schedule, consistent with our objective to help meet the world's growing demand for oil and natural gas while achieving the highest standards of environmental excellence. We are a results-driven company, but how we deliver those results matters, and I couldn't be more proud of our people and what they've accomplished.

And third we achieved our 2025 GHT intensity reduction goal of 50% relative to 2019 levels a full two years ahead of schedule.

Consistent with our objective to help meet the world's growing demand for oil and natural gas, while achieving the highest standards of environmental excellence.

We are a results driven company, but how we deliver those results matters and I couldnt be more proud of our people and what they've accomplished.

Lee M. Tillman: Yet this type of delivery isn't new for us; it's the continuation of a well-established tradition. And before I get into our 2023 results and 2024 outlook, I'd like to reflect on what I believe is our unmatched track record of delivery on our framework for success. We're now more than three years into our more S&P 500, less E&T journey. My challenge for our company was to raise our game and compete head-to-head with not just the best companies in our sector but with the best companies in the S&P 500.

Speaker Change: Yeah at this type of delivery isn't new for us, it's the continuation of a well established trend.

Speaker Change: Before I get into our 2023 results in 2024 outlook I'd like to reflect on what I believe is our unmatched track record of delivering on our framework for success.

Speaker Change: We're now more than three years into our more S&P less E&P journey My challenge to our company was to raise our game and compete heads up with not just the best companies in our sector, but with the best companies in the S&P 500.

Lee M. Tillman: And to do so, year in, year out, through the commodity cycle, on the metrics that matter most: sustainable free cash flow generation, return of capital to shareholders, and capital and operating efficiency. For the last three years, we've consistently held true to our framework for success.

Speaker Change: And to do so year in year out through the commodity cycle on the metrics that matter most sustainable free cash flow generation.

Speaker Change: Arnaud capital to shareholders and capital and operating efficiency.

Speaker Change: For the last three years, we've consistently held true to our framework for success, we prioritize corporate returns sustainable free cash flow meaningful return of capital and we deliver differentiated execution quarter in quarter out.

Lee M. Tillman: We've prioritized corporate returns, sustainable free cash flow, meaningful return on capital, and we've delivered differentiated execution, quarter in, quarter out. We've continued to enhance our multibasin portfolio, which has produced the best capital efficiency in the sector. And we protected our investment grade balance sheet while prioritizing all elements of our ESG performance. I believe our commitment to our strategy and the consistency of our execution over the last three years have successfully differentiated Marathon Oil in the marketplace. The proof points are summarized on slide six of our deck.

Speaker Change: We continue to enhance our multi basin portfolio, which has produced the best capital efficiency in the sector.

Speaker Change: And we protected our investment grade balance sheet, while prioritizing all elements of our ESG performance.

Speaker Change: I believe our commitment to our strategy and the consistency of our execution over the last three years has successfully differentiated marathon oil in the marketplace.

Speaker Change: <unk> points are summarized on slide six of our deck.

Lee M. Tillman: First, sustainable free cash flow generation. Through disciplined, corporate returns-focused capital allocation, we've generated $8.4 billion of free cash flow over the past three years. That equates to over 60% of our current market cap, almost double that of our EMP peers and six times that of the S&P 500. Next, a meaningful return of capital to shareholders. Over the last three years, we've consistently held true to our transparent cash flow driven return of capital framework that prioritizes our investors as the first call on cash flow, not the drill bit, and not inflation. In total, we've returned $5.6 billion to our shareholders, equivalent to over 40% of our current market cap. Again, that's double that of our E&P peers and well in excess of the S&P 500.

Speaker Change: First sustainable free cash flow generation through disciplined corporate returns focused capital allocation, we've generated eight $4 billion of free cash flow over the trailing three years.

Speaker Change: That equates to over 60% of our current market cap almost double that of our E&P peers and six times that of the S&P 500.

Speaker Change: Next to meaningful return of capital to shareholders over the last three years, we have consistently held true to our transparent cash flow driven return of capital framework that prioritizes, our investors as the first call on cash flow not the drill bit and non inflation.

Speaker Change: In total we've returned $5 6 billion to our shareholders equivalent to over 40% of our current market cap again, that's double that of our E&P peers and well in excess of the S&P 500.

Lee M. Tillman: Third, capital and operating efficiency, a testament to the quality of our multibasin portfolio and the extreme discipline inherent in both our capital allocation and cost structure. Over the trailing three years, we've delivered the lowest reinvestment rate in the E&P sector, below the S&P average, and our well-leveled capital efficiency. According to independent third-party data, EMP has been the best in its peer space, 35% superior to the peer average, and 2023 was emblematic of these three proof points. Last year, we delivered $2.2 billion of adjusted free cash.

Speaker Change: Capital and operating efficiency, a testament to the quality of our multi basin portfolio and the extreme discipline inherent in both our capital allocation and cost structure.

Speaker Change: For the trailing three years, we've delivered the lowest reinvestment rate in the E&P sector below the S&P average and our well level capital efficiency. According to independent third party data has been the best in the E&P peer space, 35% superior to the peer average.

Speaker Change: And 2023 was emblematic of these three proof points last year, we delivered $2 2 billion of adjusted free cash flow, one $7 billion of shareholder distributions equivalent to <unk>, 41% of our CFO, providing a shareholder distribution yield of more than 12.

Lee M. Tillman: $1.7 billion of shareholder distribution, equivalent to 41% of our CFO, providing a shareholder distribution yield of more than 12%. $1.5 billion of share repurchases that drove a 9% reduction in our outstanding share count, a 22% increase to our base dividend while maintaining our pure low pre-cash flow breakeven. $500 million of gross debt reduction and 28% growth in our production per share, driven by our share repurchase program and the seamless integration of the InsignEagle production. That's what comprehensive delivery on our team. And if you like 2023, then you will not be disappointed in our 2024 business plan, which offers more of the same as we continue to build on our multi-year track record. We have confidence in our strategy and in our capital allocation and return of capital frameworks, and our focus will be on consistently executing our plan amidst all the volatility inherent in our sector.

Speaker Change: Percent.

Speaker Change: $1 5 billion of share repurchases that drove a 9% reduction to our outstanding share count.

Speaker Change: 22% increase to our base dividend, while maintaining our peer low free cash flow breakeven.

Speaker Change: $500 million of gross debt reduction and 28% growth in our production per share driven by our share repurchase program and the seamless integration of the Ensign Eagle Ford acquisition.

Speaker Change: That's what comprehensive deliberate on our key broker looks like.

Speaker Change: And if you like 2023, then you will not be disappointed in our 2024 business plan, which offers more of the same as we continue to build on our multiyear track records.

Speaker Change: We have confidence in our strategy and in our capital allocation and return of capital frameworks and our focus will be on consistently executing our plan.

Speaker Change: All of the volatility inherent in our sector.

Lee M. Tillman: And at the end of the day, I expect our plan to again benchmark with the very best companies in our sector outperforming the S&P 500. More specifically, this year, we expect our $2 billion capital program to deliver approximately $1.9 billion of free cash flow, assuming $75 WTI, $250 Henry Hub, and $10 TTF. We fully recognize that we are a price taker, not a price predictor, and commodity price volatility impacts our financial outcomes. As such, we've provided cash flow sensitivities for each of the key commodities within our slide deck to help you model expectations based on your own commodity forecast.

Speaker Change: And at the end of the day I expect our plan to again benchmark with the very best companies in our sector outperforming the S&P 500.

Speaker Change: More specifically this year, we expect our $2 billion capital program to deliver approximately $1 9 billion.

Speaker Change: Our free cash flow, assuming $75 <unk> $2 50, Henry hub and $10 TTS.

Speaker Change: We fully recognize that we are a price taker not a price predictor and commodity price volatility impacts our financial outcomes.

Speaker Change: As such we've provided cash flow sensitivities for each of the key commodities within our slide deck healthy model expectations based on your own commodity forecast.

Lee M. Tillman: We'll stay true to our CFO return of capital framework, expecting to return at least 40% of our CFO to shareholders, again providing visibility to a double-digit shareholder distribution. We expect the underlying capital efficiency of our 2024 capital program to improve as we maintain our well productivity leadership and work all avenues to improve capital efficiency, including further extending lateral length. And, perhaps most importantly, we believe our results are sustainable. That's true for our U.S. multi-basin portfolio, and that's true for our integrated gas business and EG. As you all know, our EG business now has no Henry Hub exposure with the expiration of our legacy contract at the end of 2023.

Speaker Change: We will stay true to our CFO return of capital framework expecting to return at least 40% of our CFO to shareholders again, providing visibility to a double digit shareholder distribution deal.

Speaker Change: We expect the underlying capital efficiency of our 2024 capital program to improve as we maintain our well productivity leadership and work all avenues to improve capital efficiency, including further extending lateral lengths.

Speaker Change: Perhaps most importantly, we believe our results are sustainable that is.

Speaker Change: True for our U S multi basin portfolio and that's true for our integrated gas business in EG.

Speaker Change: As you all know our AG business now has no Henry hub exposure with the exploration of our legacy contract at the end of 2023.

Dane E. Whitehead: That business is now fully realizing global L&G pricing, which will drive improved financial performance this year. We believe this improvement is sustainable due to all the great work our team has done to advance the EG Gas Mega Hub concept. For example, over the next five years, we're expecting our EG business to generate cumulative EBITDAX of approximately $2.5 billion, assuming flat $10 TTF commodity prices. With that, I'll turn it over to Dane, who will walk through our commitment to the return of capital, while also fortifying our investment trade balance. Thank you. Good morning, everybody.

Speaker Change: That business is now fully realizing global LNG pricing, which will drive improved financial performance this year.

Speaker Change: We believe this improvement is sustainable due to all the great work our team has done to advance the EG gas Mega hub concept for example over the next five years, we're expecting our EG business to generate cumulative EBITDAX of approximately $2 5 billion assumed.

Speaker Change: Assuming flat $10 TTS commodity pricing.

Speaker Change: With that I'll turn it over to Dan who will walk through our commitment to return of capital while also fortifying our investment grade balance sheet.

Dan: Thank you Ian good morning, everybody.

Dane E. Whitehead: As we mentioned, in 2023, we continued building on a peer-leading track record of returning capital to shareholders, consistent with our differentiated cash flow driven framework that prioritizes our shareholders as the first call on capital. Importantly, we did this while continuing to make progress on our analysis objectives through $500 million of gross debt retirement. We've built a track record of providing a truly compelling shareholder return proposition while at the same time continuing to enhance our investment grade balance sheet. We did both in 2023, and that's my expectation again for 2020.

Dan: As we mentioned in 2023, we continued building on our pure leading track record.

Dan: Joining capital to shareholders consistent with our differentiated cash flow driven framework prioritizes our shareholder as the <unk>.

Dan: First call on capital.

Dan: Currently we did this while continuing to make progress on our balance sheet objectives through $500 million of gross debt reduction.

Dan: We've built a track record of providing a truly compelling shareholder return proposition, but at the same time continuing to enhance our investment grade balance sheet. We had both in 2023 and that's my expectation again for 2024.

Dane E. Whitehead: More specifically, on our 2023 return of capital delivery, total shareholder returns amounted to $1.7 billion, including more than $400 million during the fourth quarter. That translates to 41% of our CFO, consistent with our framework, and an annual distribution yield of over 12% on our current market cap, compelling relative to any investment opportunity in the market. The majority of shareholder returns came in the form of share repurchases, which reduced our share count by 9% last year. That's about double the share count reduction of our next closest competitor.

Dan: More specifically on our 2023 return of capital delivery total shareholder returns amounted to $1 $7 billion, including more than 400 million during the fourth quarter.

Dan: That translates to 41% of our CFO consistent with our framework and an annual distribution yield of over 12% on a current market cap.

Dan: <unk> relative to any investment opportunity in the market.

Dan: The majority of shareholder returns came in the form of share repurchases, which reduced our share count by 9% last year, that's about double the share count reduction of our next closest competitor.

Dane E. Whitehead: For full year 2023, we grew our oil production per share by a peer-leading 28% due to our share of purchase program and the integration of the accretive enzyme acquisition in the. Looking to 2024, we expect to prioritize free cash flow via our disciplined capital allocation framework by holding our top line oil production flat. We also remain focused on driving significant per share growth and fully expect to maintain our long-held leadership position during this period. While the majority of our capital returns in 2023 came in the form of share repurchases, our base dividend remains foundational, and we remain committed to paying a competitive and sustainable base dividend to our shareholders. During 2023, we raised our base dividend by 22%, one of the strongest growth rates in our sector. Importantly, we did so with a laser focus on sustainability, maintaining one of the lowest post-dividend free cash flow break-evens in the period.

Dan: For full year 2023, we grew our oil production per share by a peer leading 28% due to our share repurchase program and the integration could be accretive <unk> acquisition unique.

Dan: Looking into 2024, we expect to prioritize free cash flow via our disciplined capital allocation framework, I'm, holding our topline and oil production flat.

Dan: Also remain focused on driving significant per share growth.

Dan: Fully expect to maintain our long held leadership position in the peer group.

Dan: The majority of our capital returns 2023 came in the form of share repurchases our base dividend remains foundational and we remain committed to paying a competitive and sustainable base given to our shareholders.

Dan: During 2023, we raised our base dividend by 22% one of the strongest growth rates in our sector. Importantly, we did so with laser focus on sustainability, maintaining one of the lowest post dividend free cash flow break evens in the peer group.

Dane E. Whitehead: Our consistent and committed approach to shareholder returns in the last three years has positively differentiated our company, and our approach in 2024 will remain the same. Priority number one remains consistently delivering returns of at least 40% of our CFO in the form of shareholder purchases and base dividends. That minimum 40% level translates to about $1.6 billion of expected shareholder distributions at a reference price tag, again, providing visibility to a compelling double-digit shareholder distribution need.

Dan: Our consistent and committed approach to shareholder returns over the last three years is positively differentiated our company and our approach in 2024 will remain the same.

Dan: Priority number one remains consistently delivering returns of at least 40% of our CFO in the form of share repurchases and base dividends minimum 40% level translates to about $1 $6 billion.

Dan: I've expected shareholder distributions at a reference price deck again, providing visibility to a compelling double digit shareholder distribution deal.

Dane E. Whitehead: With our stock trading in the low $20 per share range and at a free cash flow yield in the mid-teens at strip pricing, repurchases remain highly value accretive. They're also a very efficient means to continue driving our per share growth and are highly synergistic with continuing to grow our per share-based dividend without negatively impacting our peer-leading free cash flow break. To summarize our 2024 return of capital plans, at least 40% of our CFO will be returned to shareholders, which will be near the top of our sector, driving year-leading per share growth and competitive sustainable growth in our base dividend. We're also committed to further improving our investment grade balance sheet, and we plan to direct excess cash flow to continue reducing gross debt. We have tremendous financial strength and flexibility in our capital structure, with net debt to even up approximately one times at strip pricing. We have $400 million of tax-contempt bonds that mature this year.

Dan: With our stock trading in the low $20 per share range and our free cash flow yield in the mid teens at strip pricing.

Dan: Purchases remain highly value accretive you also very efficient means to continue driving our per share growth and are highly synergistic with continuing to grow our per share base dividend without negatively impacting our peer leading free cash flow breakeven.

Dan: To summarize our 2020 for return of capital plans at least 40% of our CFO to shareholders.

Dan: <unk> will be near the top of our sector.

Dan: Driving deere, leading per share growth and competitive sustainable growth in our base dividend.

Dan: Also committed to further improving our investment grade balance sheet, and we plan to direct excess cash flow to continue reducing gross debt.

Dan: We have tremendous financial strength and flexibility in our capital structure with net debt to EBITDA of approximately one times at strip pricing.

Dan: We have $400 million of tax exempt bonds mature. This year. This is a really unique vehicle in our capital structure and will likely remarket, those aetna advantaged interest rate relative to taxable debt as we've done previously.

Dane E. Whitehead: This is a really unique vehicle in our capital structure, and we'll likely remarket those at an advantaged interest rate relative to taxable debt, as we've done previously. We also have plenty of flexibility to manage the $1.2 remaining outstanding on our ensign term loan due at the end of this year. The markets are wide open for us to potentially refinance a portion of that debt. And as a reminder, we have $2.1 billion of available capacity on our credit facility that matures in 2027. And even if we opt to refinance in total, the maturing tax-exempt bonds and the term loan, we will retain capacity to pay off, at par, almost $1.5 billion of commercial paper and bonds, which would get us to our medium-term gross debt goal of $4 billion.

Dan: We also have plenty of flexibility to manage the one remaining outstanding on our insight and term loan due at the end of this year. The markets are wide open for us to potentially refinance the portion of that debt and as a reminder, we have $2 1 billion of available capacity on our credit facility that matures in 2027.

Dan: And even if we opt to refinance in total the maturing tax exempt bonds and the term loan.

Dan: We will retain capacity to pay off at par almost $1 5 billion of <unk>.

Dan: Commercial paper and bonds, which would get us to our medium term.

Dan: Gross debt goal of $4 billion.

Dane E. Whitehead: One final comment from me on our 24-hour outlook before I turn it over to Mike to walk through some of the details of our capital program. Consistent with our prior messaging, our 2024 financial guidance assumes we'll transition to becoming an alternative minimum tax, or AMT, cash taxpayer this year. The AMT tax rate is 15% on our pre-tax U.S. income.

Speaker Change: One final comment on our 24 outlook before I turn it over to Mike to walk through some of the details of our capital program.

Mike: Consistent with our prior messaging, our 2024 financial guidance assumes we will transition to becoming an alternative minimum tax or A&P cash taxpayer this year.

Mike: Tax rate is 15% on a pretax U S income our primary exposure here is domestic is our EG income will largely be offset by current year foreign tax credits.

Mike: Our primary exposure here is domestic, as our EG income will largely be offset by current year foreign tax credit. The new information we're providing today involves research and development or R&D tax credit. We recently completed a study of capital spent in past years on organic enhancement activities that qualified for R&D tax credits. As a result, we expect to apply approximately $150 million of these R&D tax credits this year as a direct offset to a significant portion of our 2024 AMT cash payments, a direct benefit to our free cash flow that's most likely not included in any sell-side models at this point. With that, I'll hand over to Mike. He'll walk us through the finer points of our 20 war catalog. Thank you.

Mike: The new information, we're providing today involves research and development or R&D tax credits. We recently completed a study of capital spent in past years on organic organic enhancement activities that qualify for R&D tax credits as a result, we expect to apply approximately 150.

Mike: Yeah.

Mike: Of these R&D tax credits. This year is a direct offset to a significant portion of our 2020 for E&P cash payments.

Mike: <unk> benefits, where free cash flow is most like we are not included in any sell side models at this point.

Mike: With that I'll hand over to Mike, who will walk us through the final points of our 2004 capital program.

Mike: Thanks, Steve.

Mike: As we highlighted earlier, we're a results-driven company. So I'll start with the expected bottom-line results of our 2024 capital. We expect our $2 billion capital program to deliver $1.9 billion of free cash, with one of the lowest reinvestment rates and free cash flow breakevens in the sector.

Mike: Highlighted earlier, where results driven company. So I'll start with the expanded expected bottom line results, our 2024 capital program.

Mike: We expect our $2 billion capital program to deliver $1 $9 billion of free cash flow.

Mike: With one of the lowest reinvestment rates and free cash flow breakeven in the same.

Mike: This will enable us to deliver our investors a truly compelling shareholder return. We fully anticipate these bottom-line financial outcomes and the underlying capital efficiency of our 2024 program to again benchmark at the very top of our high-quality E&P. To deliver these outcomes, we'll operate approximately nine regs and four frack crews on average. We expect our capital program to again be first half weighted, with about 60% of our capex concentrated in the first half of the year, largely a function of the timing of our wells to sail. This should drive stronger production and underlying free cash flow over the second half of the year. At the midpoint of our full year guidance, we expect to deliver flat total company oil production of approximately 190,000 barrels of oil, consistent with open previews last quarter.

Mike: This will enable us to deliver our investors a truly compelling shareholder return profile.

Mike: We fully anticipate these bottom line financial outcomes.

Mike: The underlying capital efficiency of our 2024 program.

Mike: Again benchmark at the very top of our high quality E&P peer group.

Mike: To deliver these outcomes will operate approximately nine rigs and four frac crews on average this year.

Mike: We expect our council program again be first half weighted with about 60% core capex concentrated in the first half of the year.

Mike: Largely a function of timing of our wells to sales.

Mike: This should drive stronger production and underlying free cash flow over the second half of the year.

Mike: At the midpoint of our full year guidance, we expect to deliver flat total company oil production approximately 190000 barrels of oil per day.

Mike: Assistant with what we previewed last quarter.

Mike: Yet importantly, as Dane highlighted, we fully expect to continue driving significant growth in oil production on a per share basis. We're guiding to a modest year-on-year decline in our oil equivalent production this year. The COE decline is largely a function of well mix and our focus on value over volume. Given the extreme weakness in natural gas prices relative to oil, we're allocating capital to the oiliest and thus highest-value areas in each of our plays, consistent with our prioritization of corporate returns and free cash flow generation. We're also expecting some modest ongoing base decline and equatorial gain. As is typical for our business and consistent with last year, there will be some quarter-to-quarter variability in our production. The first quarter should mark a low point for the year, impacted by about 4,000 barrels of oil per day of winter weather-related outages, largely concentrated in the box.

Mike: Importantly, as Dave highlighted we fully expect to continue driving significant growth in oil production on a per share basis.

Mike: We're guiding to a modest year on year decline in our oil equivalent production this year.

Mike: This decline.

Mike: Decline is largely a function of well mix.

Mike: Our focus on value over volume.

Mike: Given the extreme weakness in natural gas prices relative to oil or allocating capital to the oil and.

Mike: And thus highest volume areas and each of our police consistent with our prioritization corporate returns and free cash flow generation.

Mike: We're also expecting some modest ongoing base decline in Equatorial Guinea.

Mike: As is typical for our business and consistent with last year, there will be some quarter to quarter variability in our production.

Mike: First quarter should mark the low point for the year impacted by about 4000 barrels of oil from the winter weather related outage.

Mike: It's really concentrated in the Bakken.

Mike: We'll then grow from first quarter levels as we bring more wealth to sales as the year progresses. Now to the more important details of our 2024 program. We expect to deliver our flat oil production guidance with 5-10% fewer net wells to sales than last year.

Mike: We will then grow from first quarter levels as we bring more wells to sales as the year progresses.

Mike: Note to the more important details of our 2024 program.

Mike: We expect to deliver a flat oil production guidance with 5% to 10% fewer net wells to sales than last year.

Mike: This is a function of improving underlying capital, driven by durable well productivity at peer-leading levels, an additional 5% increase to our average lateral lengths, and modest deflationary capture that is built on conservative underlying assumptions. Approximately 70% of our total capital will be allocated to our high-confidence Eagleford & Bakken program, where we have a demonstrated track record of execution accidents. For 2023, external state data indicates we delivered six months of oil productivity per foot. 60% better than the basin average in the Eagleford and 40% better than the basin average in the Bath.

Mike: This is a function of improving underlying capital efficiency.

Mike: Driven by <unk>, well productivity at peer leading levels.

Mike: Additional 5% increased our average lateral lengths and modest deflation recapture that is built on conservative underlying assumptions.

Mike: Approximately 70% of our total capital will be allocated to our high confidence Eagle Ford and Bakken programs.

Mike: Then before we have a demonstrated track record execution excellence.

Mike: Our 2023.

Mike: Eternal state data indicates we delivered six months per foot oil productivity.

Mike: 60% better than the base on average and the Eagle Ford and 40% better than the basin average in the Bakken.

Mike: With our cost structure, we believe we're leading each basin in capital efficiency. We expect another year of outstanding performance in 2024 as we maintain our productivity advantage and find ways to continue enhancing our capital. The bulk of our remaining resource expenditure will be dedicated to the Permian, where we're increasing our activity and capital investment in a disciplined manner. Since getting back to work with a consistent DNC program in the Permian a couple of years ago, we've delivered among the best well productivity in the basin with competitive drilling completion performance. We're transitioning to an almost exclusive two mile plus lateral. This year, over 20% of our permit wells will be female.

Mike: With our cost structure.

Mike: We believe we're leading each basin and capital efficiency, we expect another year of leading performance in 2024, as we maintain our productivity advantage.

Mike: Wait to continue enhancing our capital efficiency.

Mike: The bulk of our remaining resource plate spend will be dedicated to the Permian.

Mike: We're increasing our activity and capital investments in a disciplined manner.

Mike: Since getting back to work with a consistent D&C program in the Permian a couple of years ago.

Mike: We've delivered among the best well productivity in the basin with competitive drilling completion performance.

Mike: <unk>, so an almost exclusive two mile plus lateral program.

Mike: This year over 20% of our Permian wells will be three mile laterals.

Mike: We'll get into more details and EG in a minute, but our EG CapEx will be up modestly this year, with spend limited to long-lead items in preparation for the potential ALBA Infiltration Program in 2020. Our non-development capital is higher this year, due largely to more environmental, regulatory, and emissions-related spending, as well as some non-recurring projects such as water infrastructure and pipeline additions.

Mike: We'll get into more details and easy in a minute.

Mike: But our <unk> capex will be up modestly this year with spend limited long lead items in preparation for potential Alba and health of our program in 2020.

Mike: Our non development capital is higher this year due largely to more environmental regulatory on emissions related spending as well as some.

Mike: <unk> nonrecurring projects, such as water infrastructure and pipeline additions for <unk>.

Mike: For context, a couple of years ago, this bucket represented about 5% of our total capital. It's about 10% now. Importantly, however, we expect our non-DNC capital to peak this year and to trend lower in 2025. I would also add that many of those projects designated as emissions-related have the added economic benefit of enhancing our reliability and uptime performance. Noteworthy for EG and The Rock.

Mike: <unk> a couple of years ago. This bucket represented about 5% of our total capital it's.

Mike: It's about 10% this year.

Mike: Importantly, however, we expect our non D&C capital to peak this year and to train more than 2025.

Mike: I would also add that many of those projects designated as emissions related of the added economic benefit of enhancing our reliability and uptime performance.

Speaker Change: Notably for EG under wrap up thank.

Mark: Thank you, Mark. Focusing on slide 15 in our deck, with the expiration of our legacy Henry Hub Link LNG contract at the end of last year, our EG integrated gas business is now fully realizing global LNG pricing. And in January, we lifted our first cargo under these new contractual terms. Consistent with our prior disclosure, the majority of our ALBA LNG sales are covered by the five-year sales contract we announced last year. That contract is TTF-linked.

Speaker Change: Thank you Mike.

Speaker Change: Focusing on slide 15 in our deck with the exploration of our legacy Henry hub linked LNG contract at the end of last year, our EG integrated gas business is now fully realizing global LNG pricing.

Speaker Change: And in January we lifted our first cargo under these new contractual terms.

Speaker Change: Consistent with our prior disclosure of the majority of our Alba LNG sales are covered by the five year sales contract, we announced last year.

Speaker Change: That contract is TGF link the.

Mark: The balance of our 2024 LNG cargoes have now all been contracted, but at a JKM price. This will afford us a nice combination of both TTF and JKM price exposure this year. Although global LNG pricing has weakened somewhat on warmer winter weather, the arbitrage between global LNG and Henry Hub pricing is still significant, and therefore should still drive improved financial performance for our international operations. We're guiding to $550 to $600 million of EG EBITDAX this year, assuming $10 TTF.

Speaker Change: The balance of our 2024 LNG cargos have now all been contracted at a J K M price linkage. This will afford us a nice combination of both Tcf and <unk> price exposure this year.

Speaker Change: Although global LNG pricing has weakened somewhat on warmer winter weather the arbitrage between global LNG in Henry hub pricing is still significant and therefore should still drive improved financial performance for our international operations.

Speaker Change: We're guiding to $550 to $600 million of EG EBITDAX this year, assuming $10 TTS.

Lee M. Tillman: That's a significant increase from the actual 2023 EBITDAX generation of $390 million. Importantly, we don't expect this to be a one-year financial upturn. For some time, we've been focused on sustaining this improved financial performance by progressing all elements of the EG Gas Megahub concept, supported by the HOA signed with the EG government and our partner last year. The five-year EG EBITDAX outlook we're providing today is intended to demonstrate the sustainability of our EG cash flow generation. Over the next five years, we expect to deliver cumulative EG EBITDAX of approximately $2.5 billion, assuming $10 TTF and $80 Brent are flat. Beyond realizing global LNG pricing, there are a few drivers of the strong performance over the duration of the five-year period. They include ongoing methanol volume optimization to maximize higher margin, higher working interest LNG throughput, an ALBA infill well program, which will help mitigate ALBA decline and maximize the amount of ALBA equity gas through the LNG plant in coming years, and further monetization of third-party gas through the Essane gas cap as we continue to take full advantage of our unique and highly valuable gas monetization infrastructure in one of the most gas-prone areas in the world

Speaker Change: It's a significant increase from actual 2023, EBITDAX generation of $390 million.

Speaker Change: Importantly, we don't expect this to be a one year financial uplift.

Speaker Change: Some time, we've been focused on sustaining this improved financial performance by progressing all elements of the EG gas Mega hub concept supported by the HOA signed with the EG government and our partner last year.

Speaker Change: The five year EG EBIT ex outlook, we're providing today is intended to demonstrate the sustainability of our cash flow generation.

Speaker Change: Over the next five years, we expect to deliver cumulative EG EBITDAX of approximately $2 5 billion.

Speaker Change: Assuming $10 TTS and $80 Brent flat.

Speaker Change: Beyond realizing global LNG pricing there are a few drivers of the strong performance over the duration of the five year period. They.

Speaker Change: They include.

Speaker Change: Ongoing methanol volume optimization to maximize higher margin higher working interest LNG throughput.

Speaker Change: And al the infill well program, which will help mitigate alpha decline and maximize the amount of alpha equity gas through the LNG plant in coming years.

Speaker Change: And further monetization of third party gas through the same gas cap as we continue to take full advantage of our unique and highly valuable gas monetization infrastructure and one of the most gas prone areas of the world.

Lee M. Tillman: And while this five-year EBITDAX scenario reflects the life of our recent global LNG sales agreement, we fully expect to extend the life of EGLNG beyond the next five years, well into the next decade, as we continue to advance the longer-term gas mega-hub concept. In summary, consistent with our MORE S&P mandate, for the last three years, we've been delivering financial performance highly competitive with the most attractive investment alternatives in the market, as measured by corporate returns, free cash flow generation, and return of capital. I fully expect 2024 to build on this track.

Speaker Change: And while this five year EBITDAX scenario reflects the life of our recent global LNG sales agreement, we fully expect to extend the life of EG LNG beyond the next five years well into the next decade as we continue to advance our longer term gas Mega hub concept.

Speaker Change: In summary, consistent with our more S&P mandate for the last three years, we've been delivering financial performance highly competitive with the most attractive investment alternatives in the market as measured by corporate returns free cash flow generation and return of capital.

Speaker Change: I fully expect 2024 to build on this track record.

Lee M. Tillman: Our compelling investment case is simple: a high-quality, multi-basin U.S. portfolio and integrated global gas business that delivers peer-leading free cash flow. A unique and differentiated return-of-capital framework that provides our shareholders with the first call on cash flow, the output of which is clear visibility to compelling shareholder distributions across a broad range of commodities, sector-leading growth, and Perth ShareBank, and a multi-year track record of consistent execution and proven discipline. And, perhaps most importantly, everything we're doing is sustainable through the commodity cycle.

Speaker Change: Our compelling investment case is simple.

Speaker Change: Our high quality multi basin U S portfolio and integrated global gas business that delivers peer leading free cash flow.

Speaker Change: Unique and differentiated return of capital framework that provides our shareholders with the first call on cash flow the output of which has clear visibility to compelling shareholder distributions across a broad range of commodity prices.

Speaker Change: Sector, leading growth in per share metrics, and a multiyear track record of consistent execution and proven disciplined.

Speaker Change: And perhaps most importantly, everything we're doing is sustainable through the commodity cycle.

Operator: This is due to the quality and depth of our U.S. multibasin portfolio, where we have over a decade of high-return inventory and a disciplined and multifaceted approach to portfolio renewal. It's also due to our differentiated integrated gas business that's now fully realizing global LNG pricing as we continue progressing all elements of the regional gas mega-hub concept. Rest assured, our commitment to our strategy is unwavering and is built upon our core values, resilience across the commodity cycle, and our long-term track record of success. With that, we can open the line for Q&A. www.larryweaver.com. Thank you. We will now begin the question and answer session. If you have a question, please press star 1.

Speaker Change: This is due to the quality and depth of our U S. Multi basin portfolio, where we have over a decade of high return inventory in a disciplined and multifaceted approach to portfolio renewal.

Speaker Change: It's also due to our differentiated integrated gas business. That's now fully realizing global LNG pricing as we continue progressing all elements of the regional gas Mega hub console.

Speaker Change: Rest assured our commitment to our strategy is unwavering and is built upon our core values resilience across the commodity cycle and our long term track record of success.

Speaker Change: With that he can open the line for Q&A.

Speaker Change: Thank you we will now.

Speaker Change: Ill begin the question and answer session. If you have a question. Please press star one.

Arun Jayaram: Our next question comes from Arun Jayaram with JP Morgan Chase. Please proceed. Good morning, Lee.

Jpmorgan Chase: Our next question comes from a room, they ran with Jpmorgan Chase. Please.

Jpmorgan Chase: Please proceed.

Jpmorgan Chase: Good morning Lee.

Lee M. Tillman: Lee, I wanted to start off on M&A. Obviously, there is a significant level of industry M&A activity, including a large transaction announced in your Bakken backyard last night. You know, I was wondering if you could provide some perspective on how we should think about M&A for MRO post the Ensign transaction. And I did wanna cite a recent example of a low-cost Permian producer as a low-cost structure such as yourself that announced a deal to get more scale in the Permian, adding more sticks on the map, and the multiple appears to have re-rated on that deal. So again, just some thoughts on the M&A landscape and what this means for MRO. Yeah, thank you. First of all, you know, size and scale are important, but it's not obviously just about getting bigger. It's about how do we get better.

Jpmorgan Chase: Lee I wanted to start off with on M&A, obviously, a significant level of industry M&A activity.

Jpmorgan Chase: Including a large transaction announced in your Bakken backyard last night.

Lee: I was wondering if you could provide some perspective on how should we think about M&A for MRO posts, the ensign transaction and I did want to site.

Lee: Recent example of a low cost Permian producer as a low cost structure such as yourself.

Speaker Change: It's a deal.

Lee: To get more scale in the Permian and adding more sticks on the map in the multiple appears to re rated on that deal. So again, just some thoughts on.

Lee: The M&A landscape and what this means for MRO.

Speaker Change: Yes, yes, thank you Eric.

Speaker Change: First of all size and scale are important but it's not obviously just about getting bigger it's about how do we get better.

Lee M. Tillman: So any consolidation opportunity fundamentally needs to enhance our ability to execute on the path that we've been on for the last three years, which I just described in my opening remarks. We have a very clear, very transparent framework for assessing M&A. That framework is unchanged, and if anything, the bar is even higher now with the successful addition of the Ensign asset that you mentioned. And just as a reminder, Arun, there are really five elements in that criteria. First and foremost, of course, is accretion to financial metrics. Secondly, accretion to our cash flow driven return of capital framework. Third, accretion to our resource or inventory life, with inventory that competes for capital from day one. Clear industrial logic, which to us means going into basins where we have a well-established level of execution, excellence, and credibility.

Speaker Change: Any consolidation opportunity.

Speaker Change: Fundamentally needs to enhance our ability to execute on the path that we've been on really for the last three years that I just described in my opening remarks.

Speaker Change: We have a very clear very transparent framework for assessing M&A.

Speaker Change: That framework is unchanged and if anything the bar is even higher now with the successful addition of the Ensign asset as you mentioned and just as a reminder, around there are really five elements of that.

Speaker Change: Criteria.

Speaker Change: First and foremost of course is accretion to financial metrics.

Lee: <unk> accretion to our cash flow driven return of capital framework.

Lee: Third accretion to our resource our inventory life with inventory that competes for capital from day, one clear industrial logic, which to us means going into basins, where we have a well established level of execution excellence and credibility and then finally of course doing all of this without.

Lee M. Tillman: And then finally, of course, doing all this without any harm to our investment grade balance. We know that's a challenging criteria, but we can be discerning and patient. As I mentioned, with over a decade of high-quality inventory, we can wait for those opportunities like InSign that tick all the boxes. And that's what made InSign so compelling.

Lee: Any harm to our investment grade balance sheet.

Lee: We know that the challenging criteria.

Lee: But we can be discerning and we can be patient as I mentioned with over a decade plus of high quality inventory.

Lee: We can wait for those opportunities like ensign that ticks all the boxes.

Lee: And Thats, what maintenance signed so compelling I mean, we integrated that asset into our operations and.

Lee M. Tillman: I mean, we integrated that asset into our operations in essentially a couple of months. Mike and his team did a fantastic job doing that. We never missed a step, and we've seen others stumble in that very critical integration step. So can we be a quire?

Lee: Essentially a couple of months, Mike and his team did a fantastic job doing that we never missed a step in leasing other stumble.

Lee: And that very critical integration step. So can we be acquire absolutely should you expect us to still apply our criteria in the discerning and be as disciplined as we R&R organic business absolutely.

Lee M. Tillman: Absolutely. Should you expect us to still apply our criteria and be discerning and be as disciplined as we are in our organic business? Absolutely. Great. My follow-up is on E.G. Lee.

Speaker Change: Great. My follow up is on EEG Lee you provided a five year outlook.

Lee M. Tillman: You provided a five-year outlook, which suggests a relatively stable earnings profile or EBITDAX relative to your 2024 guide. I was wondering if you could talk about opportunities to extend. These financial outcomes in EEG beyond the five-year threshold, as well as I was wondering if you could address the recent decision by a supermajor to exit EG, and does that open up any opportunities for you given that country's exit? Well, first of all, I want to be very clear. The five-year view we provided was really just a scenario that matched up with the LNG sales agreement that we just inked last year. And so you should not interpret that as a life of LNG kind of model.

Lee M. Tillman: Which suggests relatively stable.

Speaker Change: Earnings.

Speaker Change: Profile our EBITDAX.

Speaker Change: Relative to 2024 guide I was wondering if you could talk about opportunities to extend these financial outcomes in EG beyond the five year threshold.

Lee: As well as I was wondering if you could address the recent.

Lee: <unk>.

A decision by a supermajor to exit EG and does that open up any opportunities for you given that.

The country exit.

Lee M. Tillman: Absolutely.

Lee M. Tillman: First of all I want to be very clear the five year view. We provided was really just a scenario that matched up with the LNG sales agreement that we just inked last year and so you should not interpret that as a life of LNG kind of model. This was just to match.

Lee M. Tillman: This was just to match up with the certainty that we now have around that five-year TTF-linked LNG sales agreement. The reality is that when we look at all of the things that we have active now, NEG, whether that's methanol volume optimization, the future potential for alpha-enthyl drilling, and even more third-party molecules like Asang, we already see the path to extend well past 2030. So don't view that five-year view as anything other than just matching up with, in fact, that five-year sales agreement that we inked on TTF. In terms of exits out of EG by super majors, clearly, that's a very unique set of circumstances where you have a concession that's kind of at the end of its PSC term.

Lee: With that certainty that we now have around that five year Tcf linked LNG sales agreement. The reality is that when we look at all of the things that we have active now.

Lee: Whether thats methanol volume optimization, the future potential for al the infill drilling and even more third party molecules like our saying we.

Lee: We already see the path to extend well past 2030. So so don't view that five year view as anything other than just matching up with in fact at five year sales agreement that we inked on TTS.

Lee M. Tillman: In terms of exits out of EG by Supermajors clearly that's a very.

Lee M. Tillman: Unique set of circumstances, where you have a.

Lee M. Tillman: Our concession that's kind of at the end of its PSC term, it's a very mature oil play there.

Lee M. Tillman: It's a very mature oil play there, and again, pretty much an end of field life that is likely going to be taken over by the government and run by the government. So, a very different set of opportunities than we would look like. And again, I would just take you back to the criteria that we just talked about and make sure that we look at any opportunity through that same lens when we're talking about doing something inorganically. But we do believe there's a lot of opportunity outside of that within EG, both from an equity molecule standpoint, as well as from a third-party molecule standpoint. And the good news for us is that when we were able to bring the LN molecules to EGLNG, that was our first kind of third-party framework; we can now replicate that framework going forward. And that project constructed a very significant piece of infrastructure that we can now use for the future. Great, thanks a lot.

Lee M. Tillman: And again pretty much on the end of field life that likely is going to be taken over by the government and run by the government. So very different set of opportunities and then we would look like and again I would just take you back.

Lee M. Tillman: So the criteria that we just talked about and making sure that we look at any opportunity through that same lens. When we're talking about doing something inorganically, but we do believe there is a lot of opportunity outside of that within EG, but from an equity molecule standpoint, as well as a third party molecules stands.

Lee M. Tillman: And the good news for us is when when.

Lee M. Tillman: When we're able to bring the <unk> molecules to.

Lee M. Tillman: <unk> LNG that was our first kind of third party.

Lee M. Tillman: Framework, we can now replicate that framework going forward and that project constructed a very significant piece of infrastructure that we can now ease for the future.

Speaker Change: Great. Thanks, a lot.

Speaker Change: Thank you.

Neal Dingmann: Thank you. Our next question comes from Neal Dingmann with Crest Security. Please proceed.

Lee M. Tillman: Okay.

Lee M. Tillman: Our next question comes from Neal Dingmann with Grit Securities. Please proceed.

Mike: Morning, the first question is likely for Mike. You mentioned, Mike, you referenced the leading operational efficiencies which are noted. I'm just wondering, could you maybe give a little more detail?

Neal Dingmann: Good morning.

Neal Dingmann: First question is likely for Mike on your you mentioned, Mike you referenced the leading operational efficiencies, which are noted I'm. Just wondering could you maybe give a little more detail is it largely the longer laterals or maybe what other key drivers would you point us to that that's really driving this remarkable upside.

Mike: Is it largely the longer laterals, or maybe what other key drivers would you point us to that's really driving this remarkable upside? Yeah, Neal, I can certainly answer that. Yeah, underlying resource play capital efficiency, as we noted, is improving in 2024. And I highlighted a few things there in my prepared remarks. But I think, you know, it probably starts with that consistently strong, peer-leading well productivity. You know, when I look at our 2024 productivity by base and compare it to 2023, Eagleford, I would say 2024 is looking very comparable to what we delivered in 2023. When I look at the back end, I would actually say our productivity is up marginally in 2024, really on the back of, we are going to go back into Marathon and complete a few wells there. And then the Permian, it looks pretty flat from 2023 to 2024.

Mike: Yes.

Speaker Change: Neil I can certainly answer that so.

Mike: Underlying underlying resource play capital efficiency as we noted is improving in 'twenty four and highlighted a few things there in my prepared remarks, but.

Speaker Change: I think.

Speaker Change: It probably starts with a consistently strong peer leading well productivity.

Speaker Change: When I look at our 24 productivity by basin compared to 23.

Mike: Eagle Ford I would say 24 is looking very comparable to what we delivered in 2003, when I look at the Bakken.

Mike: Would actually see our productivity is up marginally in 'twenty four really on the back of we are going to go backend murnaghan on complete a few wells there and then the Permian It looks pretty flat from from 23 to 24. So I think that's the first thing I would point to.

Mike: So I think that's the first thing I would point to. The second thing, as you noted, was the longer laterals. We mentioned in the prepared remarks that they were up 5% at a company level. Eagleford, they're up about 10% year on year.

Mike: The second thing as you noted was longer laterals, we mentioned in the prepared remarks, there were up 5% at a company level and Eagle Ford, they're up about 10% year on year, even Bakken is up just notionally a couple of percentage points and then you look at the Permian, they're up by 10% as well.

Mike: Even Bakken is up just notionally a couple of percentage points. And then you look at the Pernian, they're up 10% as well. And that is a big part of that capital efficiency, a driver. And then the third part is that we are forecasting a little bit of deflation, albeit a very modest kind of low single-digit numbers there. Makes a lot of sense.

Mike: That is a big part of that capital efficiency a driver and then the third part is we are we are forecasting a little bit of deflation, albeit very modest kind of low single digit.

Mike: Numbers there.

Mike: It makes it makes a lot of sense and then.

Lee M. Tillman: And then my second question, Lee, maybe for you or Dane, just on capital allocation, I'm just wondering, is there anything that would cause you to move more towards the variable dividends? Or do you believe your active buyback program continues to be the most strategic? And, you know, maybe around that, I mean, how should we continue to think about per share growth? Obviously, as you keep buying the shares back, it really continues to ramp that up nicely. So I just love to hear your comments there. Yeah, hey Neal, this is... Good morning, this is Dane. I'll take a first cut.

Speaker Change: My second question, maybe for you or Dave just on capital allocation I'm just wondering.

Dane: There anything that would cause you to move towards more towards the variable dividends or do you believe youre active buyback program continues to be most strategic and maybe around that I mean, how should we continue to think about per share growth. Obviously as you keep buying the shares back it really continues to ramp that nicely. So I'd just love to hear your comments there.

Lee M. Tillman: Yes.

Dane: Good morning. This is Dan I'll take a first cut at it.

Dane E. Whitehead: So... The bottom line is we expect our framework and sort of the mix of return vehicles to remain unchanged in 2024. We've set a long sort of variable dividend. It's a third mechanism that it's on the table, but it's not front and center for us.

Lee M. Tillman: So.

Dane: The bottom line is expect our framework and sort of the mix of return vehicles to remain unchanged in 2024, we've said all along sort of variable dividend.

Dane: A third.

Dane: Mechanism that it's on the table, but it's not front and center for us at this point.

Dane E. Whitehead: You know, a 40% return to shareholders is a very firm commitment. That's our primary commitment for the use of capital, the base dividend. I talked about the sustainability of that base dividend being critically important to us. So dividend increases will probably be driven by the pace of share purchases as much as anything, because that kind of keeps the post-dividend breakeven flat, and it's right now that we're pure leading in the low to mid 40s.

Dane: It's a 40% return to shareholders is a very firm commitment that's our primary commitment for use of capital.

Dane E. Whitehead:

Dane E. Whitehead: Base dividend I talked about the sustainability of that base dividend is critically important to us so dividend increases will probably be driven by the pace of share repurchases as much as anything is that kind of keeps the most.

Dane E. Whitehead: Post dividend breakeven flat.

Dane E. Whitehead: Right now were purely being in that low to mid forties.

Dane E. Whitehead: Chaired by Vax again at, a mid-teens free cash flow yield super efficient vehicle, and as you noted, they drive that per share growth on a pretty significant basis. The second use of CAPEX or available cash for us, and you saw us do some of it this year, is to pay down debt. We paid down $500 million worth of debt last year. Are leverage levels we're comfortable with? They're like one-time.

Dane E. Whitehead: <unk>.

Dane E. Whitehead: Share buybacks again at.

Dane E. Whitehead: Mid teens free cash flow yield super efficient vehicle and as you know the big drive per share growth on a pretty significant basis. The second use of capex.

Dane E. Whitehead: Available cash for us.

Dane E. Whitehead: And you saw US do some of this year's pay down debt.

Dane E. Whitehead: We paid down $500 million worth of debt last year.

Dane E. Whitehead: Our leverage levels are.

Dane E. Whitehead: <unk> like one time.

Dane E. Whitehead: Net debt to EBITDA at strip pricing, but I'd like to get them down. And we've stated, you know, we've got $5.4 million of gross debt today. We'd like to drive that down to four, which was the pre-ensign debt level. And so we'll continue to allocate some excess free cash flow in excess of a 40 percent return to further improving the balance. Great details. Thank you both.

Dane E. Whitehead: Yes, the EBITDA at strip pricing, but I'd like to get them down that we've stated.

Dane E. Whitehead: Got $5 $4 million of gross debt today, we'd like to drive that down or gross debt, which was the three enzyme that level.

So we will continue to allocate some excess free cash flow in excess of a 40% return to further improving our balance sheet.

Great details. Thank you Oh go ahead, maybe I'll just add one thing to that too I think.

Lee M. Tillman: Maybe I'll just add one thing to that, too. I think, you know, the power of a consistent and meaningful share repurchase program really shows up in the growth and the per share metrics that really matter. If you just look at 2023, we took out 9% of our outstanding shares. That was roughly double the next best in our peer group.

The power of a consistent and meaningful share repurchase program, you really see that showing up in the and the growth in the per share metrics that really matter. If you just look at 2023.

Lee M. Tillman: We took out 9% of our outstanding shares that was roughly double the next best in our peer group.

Lee M. Tillman: And, of course, that translated into tremendous value growth on a per share basis for our shareholders. So we still believe in that. I mean, again, we kind of look through the cycle. It's a program that we set in place and let it run.

Lee M. Tillman: And of course that translated into tremendous.

Value growth on a per share basis for our shareholders. So we still believe in that I mean again, we we.

We kind of look through the cycle.

The program that we set in place and let it run we dollar average.

Lee M. Tillman: We dollar average, and we think it's very powerful. And if you rewind all the way back to October 21, that 9% becomes 27% of our shares outstanding that we've retired. So it's been a very powerful program for us, and we remain extremely committed. We still have $2.3 billion of outstanding authorization against the repurchase program with our board of directors.

And we think it is very powerful and <unk> all the way back.

To October 'twenty, one that 9% comes 27% of our shares outstanding that we've retired so it's a it's been a very powerful program for us and we remain extremely committed and we still have $2 3 billion of outstanding authorization against the repurchase program with our board of directors.

Lee M. Tillman: Great point, Lee. Thank you all. Our next question comes from Matt Portillo on GPA. Good morning, all.

Speaker Change: Great point Lee Thank you all.

Our next question comes from Matt Sparacino with GPA.

Good morning, all.

Matthew Merrel Portillo: Two asset level questions that I wanted to run by you. I guess first, in the Bakken, looking at the early results on Ajax are quite encouraging from a production and productivity perspective. I'm curious if you could talk about your learnings on the spacing design here, and then also, as you kind of look across your acreage position, how much of your BOC and acreage might be set up for three-mile development moving forward. Yeah, I'll answer that one, Matt. In terms of the spacing pattern there, it was a kind of 5x0 spacing.

Asset level questions that I wanted to run by you I guess first in the Bakken looking at the early time results on Ajax looks quite encouraging from a production and productivity perspective.

I'm just curious if you could talk about potentially your learnings on the spacing design here and then also as you kind of look across your acreage position how much of your Bakken acreage might be set up for a three mile development moving forward.

Yeah, I'll answer that one.

In terms of the spacing pattern there it was in a kind of five by all spacing. So five wells in the middle Bakken Theres no three forks opportunity down there and as you probably know what I was kind of down to the southwest.

Mike: So five wells in the middle back, and there's no three forks opportunity down there. And as you probably know, that's kind of down to the southwest of the Hector area where we've been pretty active the last couple of years. You know, what I'd say in terms of maybe a read through, it probably feels a little bit early.

Of the Hector area, where we've been pretty active.

Last couple of years.

What I'd say in terms of maybe a read through it probably feels a little bit early don't have a lot of data to share. Obviously, we've just brought three of the wells online. We've got some early production there.

Mike: I don't have a lot of data to share. Obviously, we've just brought three of the wells online. We've got some early production there. You know, what I'd probably tell you, this quarter may well change next quarter. So rest assured, we'll continue to work hard to improve our land position there. And if there are any opportunities to get more extended landfills, you can expect us to be talking about those in the future. I think one of the things I would add too, Mike, though, is that certainly, even though we're still waiting for a little bit more longitudinal production data to declare victory, when you look at the total well cost per foot and the savings that we've already captured there, it's very significant. So, from an execution standpoint, we feel very good about the D&C performance. So, as you said, early returns on the production side, very strong, but absolutely encouraging on the cost side, on the D&C side. Matt, I'll maybe provide a little bit more color there.

What I would probably tell you this quarter may well change next quarter. So.

Rest assured, though it will continue to work at our land position there hard on if there are any opportunities to get more extended lateral you could you can expect us to be talking about those in the future.

I think one of the things I would add to Mike, though is certainly even though we're still waiting for a little bit more longitudinal production data to declare victory.

When you look at the total well cost per foot and the savings that we've already.

Captured there is very significant so from an execution standpoint, we feel very good about the D&C performance. So as you said early returns on the production side very strong, but absolutely encouraging on the cost side on the D&C side.

Not only have to trade a little bit a little bit more color there.

Lee M. Tillman: You know, the first of the wells that we did execute on a TWC per foot basis, we're looking at those be 25%, sorry, below comparable to milers. And I think you couple that with the early production, a couple of thousand barrels of oil equivalent a day, 80% oil, the IPs will probably not be as stout as you might expect up in the hectare, but I think you'll get those volumes back over the long term. So, as we pointed out, you take the well productivity with the well cost. I would like to thank you for presenting a pretty compelling case for AJAX, www.globalonenessproject.org. Great, and then just as a follow-up, it looks like Texas-Delaware is going to be about a third of your program, give or take, in 2024. Curious, one, on the development plan here, are you moving towards development, or are you still working on delineating the resource? I know that 2023 was still kind of a learning year for you.

The first of the wells that we did execute a TWC for foot basis, we're looking at those would be 2025% sorry, it will comparable two milers in thank.

Thank you couple that with the early production a couple of thousand barrels of oil equivalent per day, 80% oil.

It will probably be noticed stope as you might expect open Hector, but I think you'll get the volumes back over the long term. So as we pointed out you take the well productivity with the well costs.

I would like to think that that is going to present, a pretty compelling case for a jackson future.

Okay.

Great and then just as a follow up it looks like the Texas, Delaware is going to be about a third of your program give or take in 2024 Q.

Curious one on the development plan here.

Moving towards development or are you still working on delineating the resource I know that 2023 was still kind of a learning year for you and then two just curious how you how well cost of progress in this area and I think that was also kind of initiatives last year is to get more reps on wells and get the costs down in the Texas, Delaware play given that there is high productivity trends.

Matthew Merrel Portillo: And then two, just curious how well costs have progressed in this area. I think that was also kind of an initiative last year, to get more reps on wells and get the cost down in that Texas-Delaware play, given that there are high productivity trends, but the cost out of the ledger still needed some work. Pat, this is Pat.

But the cost side of the ledger still needed some work.

Matt This is Pat I'll take the development piece and maybe I'll, let Mike take the cost piece.

Pat: I'll take the development piece, and maybe I'll let Mike... We moved this project into our development team last year, so it's no longer an exploration project; it is in our development program. As I think you probably know, we have 13 wells that have been online for some time, 9 in the world. Manor Act.

Yes, as you said, we move this project into our development team last year. So.

So longer at exploration project. It is in our development program.

As I think you've probably though we have 13 wells that have been online for some time not in the Woodford and Meramec and they continue to perform just as we had expected.

Jeanine: Thank you, Jeanine. Excellent productivity, high oil cut, shallow decline. We will be bringing on nine wells this year. Two of those are leasehold wells, and then there are two multi-well pads that we'll be bringing on. We've gone to longer laterals. We have this 57,000 acre blocky position, so that gives us. The wells we're bringing on this year will average around two miles.

Excellent productivity high oil cut shallow declines low water oil ratios, we will be bringing on nine wells. This year two of those or leasehold wells and then theres two multi well pads that we'll be bringing on.

Gone to longer laterals, we have 57000 acre blocky position, so that gives us the ability to drill really long laterals.

Wells, we're bringing on this year will average around two miles next year.

Pat: Next year, the wells we'll be drilling in the future will be up to 13,000 feet deep. From a development standpoint, we're still looking at 4x4 spacing in the window...

We'll be drilling in the future will be up to 13000 feet.

From a development standpoint, we're still look at it floor by floor spacing in the Woodford and the Meramec.

Mike: Yeah, Matt, from a cost perspective, what I'd say is we're kind of still mid-program, so to speak. We've just completed drilling the wells, not completed them yet, so don't have all of the data to share. What I would say, from a drilling perspective, costs are in line with kind of pre-drill expectations. What I would say, maybe the encouraging thing is, as we progressed through the drilling, it seemed that the efficiencies were getting better, and therefore, when we do get all of the costs in, I would expect that you would see that natural improvement in the costs. As we get, quite frankly, you get more revenue. One other thing I'll just mention too, this is a little bit of a subtlety, the fact that we brought the two asset teams, Permian and Oklahoma, together. Now that it is under a single leadership structure.

Okay.

The big deal.

Jim upfront from a cost perspective, what I'd say is we're kind of still met program. So to speak with just completed drilling the wells.

<unk> not completed them yet so don't have all of the data to share what I would say from a drilling perspective costs are in line with kind of pre drill.

Expectations, what I would say maybe the encouraging thing is as we progressed through the drilling it seem that the efficiencies, we're getting better and therefore, when we do get all of the costs that I would expect.

You can see that Nacho box that improvement in the cost as we get quite frankly to get more ramps. Yeah. One other thing I'll just mention too. This is a little bit of a subtlety to that the fact that.

We brought the two asset teams Permian and Oklahoma together now Thats under a single leadership structure and this is one of the areas, where we can benefit from learnings because of course.

Lee M. Tillman: And this is one of the areas where we can benefit from learning. So the course on Woodford-Veramac drilling and completing in Oklahoma, that's something that we've already kind of cut our teeth on. So we're bringing a lot of those learnings and expertise now into this, if you will, joint asset team now that we have this Texas-Delaware play with Woodford-Veramac. Because it is challenging drilling.

Woodford Meramec drilling and completing in Oklahoma, that's something that we've already kind of cut our teeth and so we're bringing a lot of those learnings and expertise now into this if he will join asset team now that we have this Texas, Delaware play with the Woodford Americas. It is it is challenging drilling.

Neo Meta: I mean, let's be honest, it's deeper, it's higher pressure, it's more challenging hard rock drilling. But bringing that expertise in from Oklahoma is certainly allowing us to advance up the learning curve a bit more efficiently. Thank you. Our next question comes from Neo Meta with Goldman Sachs. Yeah, good morning, Lee and team.

Let's be honest is deeper higher pressure, it's more challenging hard rock drilling, but bringing that expertise from from Oklahoma, certainly, allowing us to advance up the learning curve a bit more efficiently.

Thank you.

Our next question comes from Neil Mehta with Goldman Sachs.

Yeah, Good morning, Lee and team.

Lee M. Tillman: The first question I had was just post 2024 capital efficiency this year, another very strong year. But as you think about SETM, 2025 and ensuring that you're able to sort of continue at this capital. Some thoughts, post-2024. 190 barrels of oil.

Question I had was just.

Post 2024 capital efficiency. This year, another very strong year, but as you think about certain.

Fixed for 2025, and ensuring that you're able to sort of continue at this capital efficiency pace just some thoughts.

Post 2024.

Can you hold 190 of oil at $2 billion in Kansas.

Lee M. Tillman: Yeah, well, it feels like we're just now releasing 2024, so Jeff and I guess 2025 is a bit of a leap. But first of all, you know, let me just say we feel very good about our, I'll say, underlying well productivity. I think it's actually pretty remarkable when you think about the fact that we operate in two of the most mature basins in the market, and we're still very much holding the line on productivity that is already at the top of the peer space. So I think you have to keep all of this in the proper context.

Yeah, well it feels like we're just out releasing 2024, so Jeff in a hedged 2025 is the.

A bit of a lag, but but first of all let me just take Neal.

We feel very good about our I'll say underlying well productivity.

I think it's actually pretty remarkable when you think about the fact that we operated two of what the market uses very mature basins and we're still very much holding line on productivity that is already at the top of the peer space. So I think you have to keep all of this in the in the proper context.

Lee M. Tillman: And certainly as we do our longer-term modeling, clearly Permian will start competing for a bit more capital, but we believe that from a productivity as well as a capital efficiency standpoint, certainly as we look out over the horizon, we see ways to continue to hold the line and, certainly, hold the line if not improve on some metrics. And again, we have a lot of tools available to us, right? I mean, there are some of the things that Mike talked about.

And certainly as we do our longer term modeling clearly Permian will start competing for a bit more capital, but we believe that from a productivity as well as the capital efficiency standpoint, certainly as we look out over the horizon, we see ways to continue.

To hold the line.

And certainly hold the line if not improve on some metrics and again, we can have a lot of tools available to US right. I mean, there is for some of the things that Mike talked about theres, the fundamental well design longer laterals better completions, there's execution efficiency stages per day, our rate of penetration on the drilling side.

Lee M. Tillman: There's the fundamental well design, longer laterals, better completions. There's execution efficiency, you know, stages per day, our rate of penetration on the drilling side. We were just talking about Woodford hard rock drilling.

We're just talking about the Woodford hard rock drilling.

Lee M. Tillman: There's supply chain optimization. We continue to work on how best to integrate and manage our supply chain. And then, finally, there's just the sheer commercial leverage.

Our supply chain optimization, we continue to work on how best to integrate and manage our supply chain and then finally, there's just the sheer commercial leverage you can kind of put that in the deflation inflation bucket, but all of those things give us an opportunity to continue to work on overarching capital.

Lee M. Tillman: You know, you can kind of put that in the deflation inflation bucket, but all of those things give us an opportunity to continue to work on overarching capital efficiency as we move forward in time. Even though we may be moving to different parts, different geology, we certainly see a path to continue to protect our peer-leading capital efficiency that we've worked very hard to achieve. Thank you, and it definitely is notable.

Additionally, as we move forward in time, even though we may be moving to different parts different geology.

We certainly see a path to continue to protect our peer leading capital efficiency that we've worked very hard.

Thank you Ian and then definitely is notable.

Lee M. Tillman: The follow-up question is just on the natural gas outlook in the U.S. It's obviously a tough environment, as you referenced in your comment. So how are you designing your plan for 2024? Are you thinking about which areas? Are you trying to maximize the value of your net back?

The question. The follow up question is just on the natural gas outlook in the U S.

Obviously, a tough environment as you referenced in your comments.

You're designing your plan for 2024, and you're thinking about which areas you want to prosecute are you trying to maximize the value.

<unk>.

Of your net backs. Thank you.

Lee M. Tillman: Yeah, I think Mike was pretty clear in describing the capital program that our program for 24 already reflects the reality of where natural gas pricing fits today. So, not surprisingly, you know, we're driving capital allocation to our three types of black oil basins, Eagleford, Bakken, and the Permian. Thus, you know, a combination play essentially like Oklahoma is struggling, obviously, to compete for capital because of where we are on the commodity cycle. It doesn't mean that it won't compete in the future, but today, because of the multi-basin model, we're able to take a hard look. I mean, I think Mike said, you know, it's value over volume, and even though we're taking a little bit of a downtick on OEBs, that's by design. We're driven by returns and value optimization, which is making our oil program very efficient in 2024 and very much our focus given where gas pricing fits today in North Carolina. Thanks, team.

Yes, I think Mike was pretty clear in describing the capital program.

That's our program for 'twenty four already reflects the reality of where natural gas pricing sits today. So not surprisingly, we're driving capital allocation, two or three kind of black oil basins Eagle Ford Bakken and the Permian.

Thus a combination play essentially like Oklahoma is struggling obviously to compete for capital because of where we are on the commodity cycle that doesn't mean that it won't compete in the future, but today because of the multi basin model, we're able to take a hard look you may I think Mike said, it's value over volume and even.

Though we are taking a little bit of a downtick on OLED. That's by design, we are driven by returns and value optimization, which is making our oil program very efficient in 2024 and very much our focus given where gas pricing sits today in North America.

Thanks, Tim.

Doug Leggate: Yeah. Our next question comes from Doug Leggate with Bank of America. Hey, good morning, guys. This is actually Kalei from Bank of America.

Yes.

Our next question comes from Doug Leggate with Bank of America.

Hey, Good morning, guys. This is actually <unk> for Doug. So I appreciate you taking the question.

Kalei Akamine: So I appreciate you taking the question. My first question goes to inventory depth. You guys obviously continue to show a very consistent capital program with the emphasis on harvesting those mature assets. I'm hoping that you can provide a view on how you see the resource depth evolving on each one of your four US plays. And when you think about that program, as you work into the future, do you ever see the Anadarko Permian carrying the load of that program? And if so, when do you see it?

My first question goes to inventory depth, you guys, obviously against it.

Continue to show a very consistent capital program with the emphasis on harvesting those mature assets.

Hoping that you can provide a view on how you see the resource depth evolving on each one of your four U S plays and when you think about that program as you work into the future do you ever see the Anadarko Permian carrying the load of that program and if so when do you see it.

Lee M. Tillman: Okay, you know, there's a lot in there. So maybe try to unpack a little bit of that. First of all, maybe just let me deal with the inventory question. You know, our team has been very successful at replacing inventory over the last five years. And there are several ways that we're able to do that. One is organic enhancement.

Okay, Yes.

A lot in their site, maybe trying to unpack a little bit of that first of all maybe just let me deal with the inventory question.

Our team has been very successful at replacing inventory over the last five years and there are several ways that we're able to do that one is organic enhancement and that can include everything from cost reductions and places where we operate.

Lee M. Tillman: And that can include everything from cost reductions in places where we operate, extending laterals, refract and redevelopment work like we have ongoing in places like Eagleford. So that's helpful. We do small bolt-ons and even trades. One of the reasons that we're now having a primarily, you know, two mile plus program in Delaware is because of all the good work around small acquisitions and small trades there to allow us to get a more continuous kind of position there. And then we just talked about the migration of the Delaware, I'm sorry, the Texas-Delaware play from a kind of exploration into the development program.

Extending lateral.

Re frac and redevelopment work like we have ongoing in places like the Eagle Ford. So that's helpful.

We do small bolt ons and even trains one of the reasons that we're now having a primarily two mile plus program in Delaware is because of all the good work around small acquisitions small train there to allow us to get a more.

Contiguous kind of position there and then we just talked about the migration of the Delaware.

Sorry.

Texas, Delaware play from kind of exploration into the development program.

Lee M. Tillman: And then finally, there is, you know, large-scale, larger-scale M&A, like we do with Insight. We've got these four avenues to continue to replenish, and in some cycles, you lean on one more than another, but typically, you need to see all four of those to have a sustainable replenishment model. And that's really what we've been able to do over the last five years and hold that ten-plus, decade-plus of inventory relatively constant over that period of time. So you should expect us to use that same playbook going forward.

And then finally, there is large scale larger scale M&A likely deal with insight you've got these four avenues to continue to replenish and in some cycles you lean on one more than another but but typically you need to see all four of those to have a sustainable replenishment model and that's really what we've been able to to profit.

Over the last five years and hold that Ken plus decade, plus of inventory relatively constant over that period of time. So you should expect us to use that same playbook going forward. I mean every year is not going to have large scale M&A.

Lee M. Tillman: I mean, every year is not going to have large-scale M&A, but certainly every year, we're investing in things like organic enhancement. We're investing in and still trying to progress some of our exploration plays. So those things are just part and parcel of how we approach.

But certainly every year, we're investing in things like organic enhancement, we're investing and still trying to progress some of our our exploration play. So those things are just part and parcel of how we address.

Lee M. Tillman: Inventory replenishment. You know, at a basin level, we allocate capital at an enterprise level, so when we look at our inventory, we're looking at it from a holistic standpoint, and that's why, for instance, today, you see Permian starting to compete for more capital allocation. And so when we think through that 10-plus-year inventory, we think through it with the mindset of managing it at an enterprise level with basins coming in and out and receiving capital allocation based on the highest return and the best fit for us to continue to generate sustainable free cash flow. Thanks, Lee. I appreciate those comments. My quick follow up just goes to EG. I'm just trying to get a sense of the rateability of bonds from the perspective of commodity sensitivity.

Inventory replenishment.

At a basin level.

We allocate capital at an enterprise level. So when we look at our inventory we're looking at it from a holistic standpoint and Thats why for instance, today you see Permian starting to compete for more capital allocations and so when we think through that 10 plus year inventory.

We think through it with a mindset of managing it at an enterprise level with basins coming in and out and receiving capital allocation based on the highest return and the best fit for us to continue to generate sustainable free cash flow generation.

Thanks, Lee I appreciate those comments Mike.

My quick follow up just goes to EG.

Trying to get a sense of the great ability for the perspective, the commodity sensitivity.

Lee M. Tillman: Not to be stupid about it, but let's say prices blew out to $30 per MMBTU in a very extreme scenario. I'm wondering if the earnings that you've shown here would exhibit the same linearity compared to the $10 to $15 scenarios that you laid out. Well, first of all, if it goes to 30 yards, we're going to be very happy, but, you know, there is a bit of linearity there, though, and, you know, one of the reasons that, and I think I mentioned this in my opening comments, you know, we've provided some sensitivities at an enterprise level, you know, for all of the key products, so you can see how EG factors into the overall enterprise delivery, but certainly the data that we've included, you know, in the deck, you should be able to test those sensitivities, because it is a commercial framework.

To be stupid about it, but let's say prices blew out to $30 per and then btu and a very extreme scenario, but wondering if the earnings that you've shown here would exhibit the same linearity compared to the 10 to $15 scenario that you've laid out.

Well first of all it goes to $30 that we're going to be very happy.

Yes.

There is there is a bit of linearity, there, though and one of the reasons that and I think I mentioned this my opening comments, we've provided some sensitivities at an enterprise level.

For all of the key products. So you can see how <unk> factors into the overall enterprise delivery, but certainly the data that we've included.

The day, you should be able to test those sensitivities because it is a it is a commercial framework, it's linked to global LNG pricing. So to the extent that we're delivering the same level of volumes under the same cost structure and that should be a pretty linear relationship with commodity pricing.

Lee M. Tillman: It's linked to global LNG pricing, so the extent that we're delivering the same level of volumes under the same cost structure, then that should be a pretty linear relationship with commodity pricing. I appreciate that. Thank you. I'm going to take that $30 as a prediction, too, by the way. Our next question comes from Paul Cheng with Scotiabank. Thank you. Good morning, guys. Maybe this is for both me and Dane.

I appreciate that thank you.

Take that $30 is a prediction to bottleneck.

Yes.

<unk>.

Our next question comes from Paul Cheng with discussion.

Thank you good morning, guys.

Im wondering if maybe this is for both Nee and Dave you guys are changing our people on the accounting.

Paul Cheng: You guys are changing a bit on the accounting in EG, shifting the transfer price. Just curious about that, other than say the shift on earnings between the equity affinity and the fully owned operation. Does it in any way that change the way you make your decision for that operation at all? That's the first question. The second question that I want to maybe go back to consolidation. In your operating region, because of that, we are going to see some bigger pay.

D G shifting.

Transfer points, just curious that with debt.

Other than say the the ship owner, earning between the equity <unk>.

The fully owned operation.

And any way that changed the way how your decision making.

That operation that will.

That's the first question.

The second question that one too.

Maybe go back to the consolidation.

In your operating region.

Because of that we are going to see some pay it.

Lee M. Tillman: Do you foresee that it is going to change the landscape in terms of service supply? In terms of all that, because of consolidation, people have become more rational. So you actually think that the pricing on the service will become better for the rest of the payer. So just curious, then, what is your view on the competitive landscape that may have changed, if any, due to that consolidation in the operating regions that you are in? Great

Do you foresee that going to change the landscape.

In terms of the surface apply in terms of all of that because of the consolidation and people become more rational. So you actually think that the.

Pricing on the surface it will become better for the rest of the.

So just to expand on what your view on the competitive landscape.

That may have changed any.

Due to that consolidation in the operating regions that you again.

Lee M. Tillman: Well, again, lots of impact there, Paul, but let me maybe start off on the EG question. I'll get Dane to jump in there and help me out, but you're spot on in that, under the new contractual structure, we will be shifting some element of profitability from the equity companies over to the consolidated reporting. And in fact, we provided a very kind of detailed breakdown of that in our guidance in the deck just to hopefully eliminate any confusion or lack of clarity around this. I mean, we know EG is still complex, but in some ways, this will bring more transparency by migrating more of that profitability into the consolidated entity. But it will also limit the kind of this timing dislocation that we also have between when we generate income or earnings and when we receive, say, the dividend from an equity company because, in the consolidated entities, obviously, that step does not occur.

Okay, great well again less of an impact here, Paul well, let me let me maybe start off on the EG question I'll get David to jump in here and help me out here youre spot on in that under the new contractual structure and we will be shifting.

Element of profitability from the equity companies over to the consolidated reporting and in fact, we provided.

Very kind of detailed breakdown of that in our guidance in the deck just to hopefully eliminate.

Any confusion or lack of clarity around this point I mean, we know <unk> still is complex, but in some ways. This will bring more transparency by migrating more of that profitability into the consolidated entity and will also.

<unk> kind of this timing dislocation that we also have between when we generate the income or to earnings and when we receive say the dividend from an equity company because in the consolidated entities, obviously that step does not occur.

Lee M. Tillman: The only other thing you said, well, would this change anything around our decision-making because of this new structure? And what I would tell you is, you know, the beauty we have in EG is that we are aligned from an equity percentage standpoint across the value chain. So there's really no impact on our decision-making or how we think about investments across that value chain because we have alignment in every aspect of it, from the upstream all the way through the LNG plan. I don't know, Dane, if I missed anything there. No, I agree completely, Lee.

The only other thing he said with this change anything around our decision, making the cause of this new structure, but I would tell you is the beauty. We have in EG is that we are aligned from an equity percentage standpoint across the value chain. So theres really no impact to our decision.

Making or how we think about investments across that value chain, because we have alignment and every aspect of it from the upstream all the way through the LNG plan.

If I missed anything there I agree completely I would just add.

The guidance that we provided on page 15 of the slide deck.

Dane E. Whitehead: I would just add... The guidance that we provided on page 15 of the slide deck is really sort of at a holistic EG business unit level of 550 to 600 million dollars in 2024 assuming a $10 TTF, and we gave price sensitivity, so you can dial that how you want, but I will say that the best way to look at the business is through aggregate EBITDA generation. That's how we think about it. So to echo Lee's point, I don't think it drives our decision making about which entity, whether it's consolidated or an equity affiliate, where that earnings is coming from. We like them all.

It's really sort of added.

Holistic EG business unit level of $550 million to $600 million to EBITDA in 2024, assuming $10 TTS and we gave the price sensitivity achieving dial that how you want but I will say.

That's the best way to look at the business as the aggregate EBITDA generation, that's how we think about it so it doesn't really.

Both of these points.

It drives our decision, making which entity, whether it's consolidated or an equity affiliate.

Where that earning is coming from we like at all.

Dane E. Whitehead: The other thing is that guidance is quite a bit stronger than what we previously provided for 24, and now we've actually gone out five years and given you a five-year average. So this business is very strong, and it's improving with the infill opportunities and bringing the same gas into the system. I mean, there's a lot of running room here, a lot that's not fully baked into the future model yet.

The other thing is that guidance is.

Quite a bit stronger than what we previous provided for 24 and now we've actually gone out five years of giving you a five year average. So this business is very strong and is improving with b.

The infill opportunities in bringing the same gas into the system, maybe theres a lot of running room here a lot that's not fully baked into the future model yet so we're pretty we're pretty bullish on EG.

Lee M. Tillman: So we're pretty bullish on it. I think the last question here was just around kind of the, I'll call it, the competitive landscape, certainly in some of the basins where we operate today. You know, consolidation is absolutely a factor in all basins.

I think the last question was just around kind of the I'll call. It the competitive landscape.

Certainly in some of the basins, where we operate today consol.

Consolidation is absolutely.

Factor in all basins.

Lee M. Tillman: It's probably, in some ways, it becomes a bit more challenging in mature basins; the best operators tend to be aggregating the best assets, and many of them have already done so and have a material position. The other challenge I think you have with those assets is it's the balancing act between PDP production versus forward inventory. And I would use the example, for instance, of Ensign, where we really struck that balance. It brought cash flow and EBITDA with it, but it also brought 600 plus locations that were not only inventory life accretive to the Eagle firm but also inventory life accretive to the overall company. And those opportunities came in and competed immediately and continue to compete within our capital allocation today. And so there are some unique challenges as you look at the more mature basins.

Probably in some ways it becomes a bit more challenging in mature basins as the.

The best operators tend to be aggregating the best assets and many of them have already done so and have a material position. The other challenge I think you have in those assets. It is it's the it's the balancing act between PDP production versus forward inventory and I would use. The example for instance of Ensign.

Where we really struck that balance and brought cash flow and EBITDA with it but it also brought 600 plus locations that was not only inventory life accretive to the Eagle Ford, but with inventory life accretive to the overall company in those and those opportunities came in and competed immediate.

And we continue to compete within our capital allocation today and so there are some unique challenges as you look at the more mature basins, but ultimately the high quality assets will be run by the highest quality operators and we certainly put ourselves in that category.

Lee M. Tillman: But ultimately, high-quality assets will be run by the highest quality operators, and we certainly put ourselves in that category. Thank you. Our next question comes from Scott Gruber with Citigroup. Yeah, thanks for squeezing me in. I just have one question here.

Thank you.

Our next question comes from Scott Gruber with Citigroup.

Yes, Thanks for squeezing me in just one question here.

Scott Gruber: Lee, I think your M&A framework is certainly a very prudent approach, but obviously there does seem to be an industry rush here to secure good rock and scale up. So the question we get from investors is, you know, do you worry about the opportunity set for acquisitions shrinking and the quality of the opportunity set fading? And does that, you know, warrant a tweak to your M&A strategy? I guess ultimately the question is, are you comfortable with the longer-term outlook for adding quality resources, whether that's organic or inorganic, within the construct of your M&A approach or in the context of this, you know, hyper-consolidation phase? Yeah, well, definitely there. We're in that phase, you know, today, but we see no upside to our shareholders to compromise our criteria today. Again, you know, all of these transactions are very bespoke; they reflect the attributes of the counterpart.

Lee I think your your M&A framework is certainly a very prudent approach.

But obviously there does seem to be in an industry rush here to secure good luck and can scale up for the.

Question, we get from investors.

Is do you worry about the opportunity set.

Four acquisitions stroking qual.

Quality of the opportunities that savings and does that warranted a tweak to your M&A strategy I guess ultimately the question is are you comfortable with the longer term outlook for adding quality resource, whether that's organic or inorganic within the construct of your M&A approach or.

In the context of this hyper consolidation phase.

Yes.

Definitely there that we're in that phase today, but we see no upside to our shareholders to compromise our criteria today again all of these transactions are very bespoke they reflect the attribute of the counterparty.

Lee M. Tillman: Most of those counterparties are searching for something. They're searching for scale. They're searching for resilience. They're searching for balance sheet health. I mean, they're searching for sustainability in inventory. So they're trying to fill a void. And what that drives is this, I won't necessarily refer to it as desperation, but it drives a different kind of behavior.

Most of those Counterparties are searching for something we're searching for scale theyre searching for resilience theyre searching our balance sheet health I mean, they're searching for sustainability and inventory.

So they are trying to fill a void and what that drives is is this all.

Not necessarily refer to it as desperation, but it drives a different kind of behavior for us we're sitting with 10 plus years of inventory. So we can be patient we can be thoughtful we can exercise the same level of discipline that we do in our organic business and be very successful and we've and we've demonstrated.

Lee M. Tillman: For us, we're sitting with 10 plus years of inventory, so we can be patient. We can be thoughtful. We can exercise the same level of discipline that we do in our organic business and be very successful. And we've demonstrated that. We've got a track record. I talked about the four levers we have available for inventory replenishment. Large-scale M&A is just one of those levers that we can apply. And also keep in mind that even when transactions occur, the assets are still there, and so they're not going anywhere. And so there is still that aspect of, ultimately, the best assets will find their hands into being operated by the best.

Great that we've got a track record I talked about those four levers we have available for inventory replenishment large scale M&A is just one of those levers that we can apply and also keep in mind that even when transactions occur the assets are still there and so they're not going and so there is still that <unk>.

Aspect of ultimately the best assets will find their hands into <unk>.

Into being operated by the best operators.

Lee M. Tillman: I appreciate the call. Thanks, Lee. Thank you, Scott. Thank you. This concludes our question and answer session. I would like to turn the conference back over to Lee Tillman for any closing remarks. Thank you for your interest in Marathon Oil, and I'd like to close by again thanking all of our dedicated employees and contractors for their commitment. Thank you, and that concludes our conference. The conference has now concluded. Thank you for attending today's presentation.

So I appreciate the color thanks Luke.

Thank you Scott.

Thank you Lisa.

Our question and answer session I would like to turn the conference back over to Lee Tillman for any closing remarks.

Thank you for your interest in marathon oil and I'd like to close by again thanking all of our dedicated employees and contractors for their commitment to safely and responsibly delivering the energy the world needs now more than ever.

Not be proud of what they achieve each and every day. Thank you and that concludes our call.

The conference has now concluded.

You for attending today's presentation.