Q2 2024 EOG Resources Inc Earnings Call

Operator: Good day, everyone, and welcome to the EOG Resources second quarter 2024 earnings results conference call. As a reminder, this call is being recorded. At this time, for opening remarks and introductions, I would like to turn the call over to the Investor Relations Vice President of EOG Resources, Mr. Pearce Hammond. Please go ahead, sir. Thank you, Daniel.

Unknown Executive: Good day, everyone, and welcome to the EOG Resources 2nd quarter 2024 earnings results conference call. As a reminder, this call is being recorded.

Good day, everyone and welcome to the EOG resources second quarter 2024 earnings results Conference call. As a reminder, this call is being recorded.

Pearce Hammond: At this time, for opening remarks and introductions, I would like to turn the call over to the Investor Relations Vice President of EOG Resources, Mr. Pearce Hammond. Please go ahead, sir.

Speaker Change: At this time for opening remarks.

Speaker Change: And introductions I would like to turn the call over to the Investor Relations Vice President of EOG resources. Mr. Pearce Hammond. Please go ahead, sir thank.

Pearce Hammond: Thank you, Danielle, and good morning, and thank you for joining us for the EOG Resources second quarter 2024 earnings conference call. An updated investor presentation has been posted to the investor relations section of our website, and we will reference certain slides during today's discussion. A replay of this call will be available on our website beginning later today.

Pearce Hammond: Thank you, Danielle, and good morning, and thank you for joining us for the EOG Resources 2nd quarter 2024 Earnings Conference Call. An updated investor presentation has been posted to the investor relations section of our website, and we will reference certain slides during today's discussion. A replay of this call will be available on our website beginning later today.

Pearce Hammond: Thank you Danielle and good morning, and thank you for joining us for the EOG resources second quarter 2024 earnings conference call and.

Speaker Change: An updated investor presentation has been posted to the Investor Investor Relations section of our website and we will reference certain slides during today's discussion.

Speaker Change: A replay of this call will be available on our website beginning later today.

Pearce Hammond: As a reminder, this conference call includes forward-looking statements. Factors that could cause our actual results to differ materially from those in our forward-looking statements have been outlined in the earnings release and EOG's SEC filings. This conference call may also contain certain historical and forward-looking non-GAAP financial measures. Definitions and reconciliation schedules for these non-GAAP measures and related discussion can be found on the Investor Relations section of EOG's website.

Pearce Hammond: As a reminder, this conference call includes forward-looking statements. Factors that could cause our actual results to differ materially from those in our forward-looking statements have been outlined in the earnings release and EOG's SEC filings. This conference call may also contain certain historical and forward-looking non-GAAP financial measures. Definitions and reconciliation schedules for these non-GAAP measures and related discussion can be found in the Investor Relations section of EOG's website. In addition, some of the reserve estimates discussed on this conference call may include estimated potential reserves, as well as estimated resource potential not necessarily calculated in accordance with the SEC's Reserve Reporting Guidelines.

Speaker Change: As a reminder, this conference call includes forward looking statements factors that could cause our actual results to differ materially from those in our forward looking statements have been outlined in the earnings release and Eog's SEC filings. This conference call May also contain certain historical and forward looking non-GAAP financial measure.

Speaker Change: Definitions and reconciliations schedules for these non-GAAP measures and related discussion can be found on the Investor Relations section of Eog's website and.

Pearce Hammond: In addition, some of the reserve estimates on this conference call may include estimated potential reserves, as well as estimated resource potential, not necessarily calculated in a cordon reference with the SEC's reserve reporting guidelines.

Speaker Change: In addition, some of the reserve estimates on this conference call May include estimated potential reserves as well as estimated resource potential not necessarily calculated in accordance with the Sec's reserve reporting guidelines.

Pearce Hammond: Participating on the call this morning are Ezra Yacob, Chairman and CEO; Jeff Leitzell, Chief Operating Officer; Ann Janssen, Chief Financial Officer; Keith Trasko, Senior Vice President, Exploration and Production; and Lance Terveen, Senior Vice President, Marketing. Here's Ezra.

Pearce Hammond: Participating on the call this morning are Ezra Yekup, Chairman and CEO; Jeff Litzel, Chief Operating Officer; Ann Jansen, Chief Financial Officer; Keith Trasco, Senior Vice President, Exploration and Production; and Lance Traveen, Senior Vice President, Marketing.

Speaker Change: Participating on the call. This morning are <unk>, chairman and CEO, Jeff Leitzel, Chief operating officer.

Speaker Change: And Janssen, Chief Financial Officer, Keith Transco, Senior Vice President exploration and production and Lance Devine Senior Vice President marketing Here's Ezra.

Ezra Yacob: Here's Ezra. Thanks, Pearce.

Ezra: Thanks, Paris.

Ezra Yacob: Good morning, everyone, and thank you for joining us. We delivered exceptional second-quarter results, reflecting outstanding execution by our employees throughout our multi-basin portfolio. We earned $1.8 billion of adjusted net income, and generated $1.4 billion of free cash flow. Every metric, production volumes, capex, and per unit operating costs beat targets, driving another quarter of excellent financial performance. Our outstanding results year-to-date allow EOG to update our full-year forecast for liquids production, cash operating costs, and free cash flow. As seen on slide 5 of our investor presentation, we increased our target for full-year 2024 total liquids production by 11,800 barrels per day.

Ezra Yacob: Good morning, everyone, and thank you for joining us. We delivered exceptional second-quarter results, reflecting outstanding execution by our employees throughout our multi-basin portfolio. We earned $1.8 billion of adjusted net income and generated $1.4 billion of free cash flow. Furthermore, every metric, production volumes, capex, and per unit operating costs beat targets, driving another quarter of excellent financial performance. Our outstanding results year-to-date allow EOG to update our full-year forecast for liquids production, cash operating costs, and free cash flow.

Ezra: Good morning, everyone and thank you for joining us.

Ezra Yacob: As seen on slide 5 of our investor presentation, we increased our target for full year 2024 total liquids production by 11,800 barrels per day. Increased production, coupled with a modest increase to forecasted operational efficiency, reduces per unit cash operating costs by 15 cents, driving a $100 million increase to our forecasted free cash flow to $5.7 billion for the full year at the same strip prices of $80 oil and $2.50 natural gas. Illustrating the benefits of EOG's unique culture and decentralized structure, there wasn't one single operation or play that drove our second quarter performance.

Speaker Change: We delivered exceptional second quarter results, reflecting outstanding execution by our employees throughout our multi basin portfolio.

Speaker Change: We're in $1.8 billion of adjusted net income and generated $1.4 billion of free cash flow.

Speaker Change: Every metric production volumes Capex in per unit operating cost beat targets driving another quarter of excellent financial performance.

Speaker Change: Our outstanding results year to date allow EOG to update our full year forecast for liquids production cash operating costs and free cash flow.

Speaker Change: As seen on slide five of our Investor presentation, we increased our target for full year 'twenty 'twenty four total liquids production by 11800 barrels per day.

Ezra Yacob: Increased production, coupled with a modest increase to forecasted operational efficiencies, reduces per unit cash operating costs by 15 cents, driving a $100 million increase to our forecasted free cash flow to $5.7 billion for the full year at the same strip prices of $80 oil and $2.50 natural gas. Illustrating the benefits of EOG's unique culture and decentralized structure, there wasn't one single operation or play that drove our second quarter outperformance. Our decentralized operating teams utilize technology and apply innovation across our portfolio of assets to improve unit costs, well costs, and well productivity.

Speaker Change: Increased production, coupled with a modest increase to forecasted operational efficiencies reduces per unit cash operating costs by 15 cents driving a $100 million increase to our forecasted free cash flow to $5 $7 billion for the full year at the same strip prices of $80.

Speaker Change: Oil and $2 50 natural gas.

Speaker Change: Illustrating the benefits of Eog's unique culture, and decentralized structure. There wasn't one single operation or play that drove our second quarter outperformance, our decentralized operating teams utilized technology and apply innovation across our portfolio of assets to improve unit costs, well costs and well.

Ezra Yacob: Our decentralized operating teams utilize technology and apply innovation across our portfolio of assets to improve unit costs, well costs, and well productivity. We made gains in both drilling and completions, and every asset contributed. Our foundational Delaware Basin and Eagleford Place, as well as our emerging Wyoming Powder River Basin, South Texas Dorado, and Ohio Utica Shale Place.

Ezra Yacob: University. We make gains in both drilling and completions, and every asset contributed. Our foundational Delaware Basin and Eagle Ford Place, as well as our emerging Wyoming Powder River Basin, South Texas Dorado, and Ohio Utica Shale Place. The strength and depth of our multi-basin portfolio of premium assets is a tremendous advantage. And our focus on premium drilling means each of these assets competes against our premium price deck, measuring direct well investments against a $40 oil and $2.50 natural gas price for the life of the assets. That capital discipline provides EOG the flexibility to invest thoughtfully across all of our assets to support the pace of operations that is optimal for each individual asset to continue to improve.

Speaker Change: Productivity.

Speaker Change: We made gains in both drilling and completions and every asset contributed our foundational Delaware Basin and Eagle Ford plays as well as our emerging Wyoming Powder River Basin, South, Texas, Toronto, and Ohio, Utica shale plays.

Ezra Yacob: The strength and depth of our multi-basin portfolio of premium assets is a tremendous advantage, and our focus on premium drilling means each of these assets competes against our premium price deck, measuring direct well investments against a $40 oil and $2.50 natural gas price for the life of the asset. That capital discipline provides EOG the flexibility to invest thoughtfully across all of our assets to support the pace of operations that is optimal for each individual asset to continue to improve.

Speaker Change: The strength and depth of our multi basin portfolio of premium assets is a tremendous advantage and our focus on premium drilling means each of these assets competes against our premium price deck measuring direct well investments against a $40 oil and $2 50 natural gas price for the life of the assets.

Speaker Change: That capital discipline provides EOG the flexibility to invest thoughtfully across all of our assets to support the pace of operations that is optimal for each individual asset to continue to improve we.

Ezra Yacob: We can adjust to dynamic market conditions such as the broader macro environment and basin-specific economic factors. As a result, we don't rely on any one basin, any one product, or any one marketing outlet to drive our company's success. Capital discipline is core to EOG's value proposition, evidenced by our ability to generate free cash flow for eight years in a row, and is what drives our ability to deliver the consistent performance that our shareholders have come to expect, and to create long-term shareholder value through the cycle.

Ezra Yacob: We can adjust to dynamic market conditions such as the broader macro environment and basin-specific economic factors. As a result, we don't rely on any one basin, any one product, or any one marketing outlet to drive our company's success.

Speaker Change: We can adjust to dynamic market conditions, such as the broader macro environment and basin specific economic factors.

Speaker Change: As a result, we don't rely on any one basin any one product or any one marketing outlet to drive our company's success.

Ezra Yacob: Capital discipline is core to EOG's value proposition, evidenced by our ability to generate free cash flow for eight years in a row, and is what drives our ability to deliver the consistent performance that our shareholders have come to expect and to create long-term shareholder value through the cycle. EOG's outstanding and consistent operational and financial performance positions us to deliver on our cash return commitments in 2024. Our cash return strategy continues to be grounded in our regular dividend, which has never been suspended or reduced in 26 years, and supplemented with special dividends and opportunistic share repurchases.

Speaker Change: Capital discipline is core to eog's value proposition evidenced by our ability to generate free cash flow for eight years in a row and is what drives our ability to deliver the consistent performance that our shareholders have come to expect and to create long term shareholder value through the cycle.

Ezra Yacob: EOG's outstanding and consistent operational and financial performance positions us to deliver on our cash return commitments in 2024. Our cash return strategy continues to be grounded in our regular dividend, which has never been suspended or reduced in 26 years and supplemented with special dividends and opportunistic share repurchases. Our discipline and balanced investment in foundational plays, emerging assets, and strategic infrastructure, all supported with a pristine balance sheet, is laying the path to increase near- and long-term free cash flow.

Speaker Change: EOG is outstanding and consistent operational and financial performance positions us to deliver on our cash return commitments in 2024 our.

Speaker Change: Our cash return strategy continues to be grounded in our regular dividend, which has never been suspended or reduced in 26 years and supplemented with special dividends and opportunistic share repurchases.

Ezra Yacob: Our disciplined and balanced investment in foundational plays, emerging assets, and strategic infrastructure, all supported by a pristine balance sheet, is laying the path to increased near and long-term free cash flow. The overall macro environment remains constructive.

Speaker Change: Our disciplined and balanced investment and foundational plays emerging assets and strategic infrastructure, all supported with a pristine balance sheet is laying the path to increase near and long term free cash flow.

Ezra Yacob: The overall macro environment remains constructive. Global oil demand continues to increase after a seasonally soft first quarter and is in line with our forecasts. As anticipated, domestic oil supply growth has moderated since last year as a result of consolidation in the industry and reduced drilling and completions activity stemming from industry capital discipline. Activity levels, as reflected in rig count, indicate continued lower oil production growth through at least mid 2025. We expect lower 48 U.S. supply to exit 2024 roughly the same level as year end 2023, with only modest gains to total U.S. oil supply from offshore as offshore production increases.

Speaker Change: The overall macro environment remains constructive global oil demand continues to increase after a seasonally soft first quarter and is in line with our forecasts.

Ezra Yacob: Global oil demand continues to increase after a seasonally soft first quarter and is in line with our forecast. As anticipated, domestic oil supply growth has moderated since last year as a result of consolidation in the industry and reduced drilling and completions activity stemming from industry capital disarray. Activity levels, as reflected in the rig count, indicate continued lower oil production growth through at least mid-2025. We expect lower 48 U.S. supply to exit 2024 at roughly the same level as year-end 2023, with only modest gains to total U.S. oil supply as offshore production increases.

Speaker Change: As anticipated domestic oil supply growth has moderated since last year as a result of consolidation in the industry and reduced drilling and completions activity stemming from industry capital discipline.

Speaker Change: Activity levels as reflected in rig count indicate continued lower oil production growth through at least mid 2025.

Speaker Change: We expect lower 48 U S supply to exit 'twenty 'twenty four at roughly the same level as year end 2023, with only modest gains to total U S oil supply from offshore as offshore production increases.

Ezra Yacob: Regarding North American natural gas, during the second quarter, inventory levels move closer to the five-year average, and we expect this trend to continue due in part to supply curtailments and increasing year-over-year demand. We remain optimistic on the long-term outlook for gas demand beginning in 2025 as a result of additional LNG capacity coming online and continuing increases in demand from electricity generation. We will continue to prudently manage our auto-activity as the current environment continues to highlight the importance of being a low-cost supplier of natural gas with access to multiple diverse markets.

Ezra Yacob: Regarding North American natural gas, during the second quarter, inventory levels moved closer to the five-year average, and we expect this trend to continue, due in part to supply curtailments and increasing year-over-year demand. However, we remain optimistic on the long-term outlook for gas demand beginning in 2025 as a result of additional LNG capacity coming online and continuing increases in demand from electricity generation. We will continue to prudently manage our Dorado activities as the current environment continues to highlight the importance of being a low-cost supplier of natural gas with access to multiple diverse markets.

Speaker Change: Regarding north American natural gas during the second quarter inventory levels move closer to the five year average and we expect this trend to continue due in part to supply curtailments and increasing year over year demand.

Speaker Change: We remain optimistic on the long term outlook for gas demand beginning in 2020 five as a result of additional LNG capacity coming online and continuing increases in demand from electricity generation.

Speaker Change: We will continue to prudently manage our dorado activity as the current environment continues to highlight the importance of being a low cost supplier of natural gas with access to multiple diverse markets.

Jeffrey Leitzell: Leitzell. This quarter, we have further expanded our marketing outlets, capturing additional interstate pipeline capacity to deliver natural gas to demand centers in the Southeastern U.S. In a moment, Lance will provide details on this exciting opportunity as well as updates on our ongoing infrastructure project.

Ezra Yacob: This quarter, we have further expanded our marketing outlets, capturing additional interstate pipeline capacity to deliver natural gas to demand centers in the southeastern U.S. In a moment, Lance will provide details on this exciting opportunity, as well as updates on our ongoing infrastructure projects. EOG's performance this quarter can be summed up as exceptional operational execution drives exceptional financial performance, resulting in more volumes and lower per unit operating costs. The same CapEx, yielding higher free cash flow. Ann is up next to provide an update on the financials and cash return to shareholders. Here's Anne.

Speaker Change: This quarter, we have further expanded our marketing outlets, capturing additional interstate pipeline capacity to deliver natural gas to demand centers in the south Eastern U S.

Speaker Change: In a moment Lance will provide details on this exciting opportunity as well as updates on our ongoing infrastructure projects.

Ezra Yacob: EOG's performance this quarter can be summed up as exceptional operational execution drives exceptional financial performance, resulting in more volumes and lower per unit operating costs for the same CapEx, yielding higher free cash flow for the year.

Lance: <unk> performance this quarter can be summed up as exceptional operational execution drives exceptional financial performance.

Lance: <unk> and more volumes and lower per unit operating costs for the same capex, yielding higher free cash flow for the year.

Ann Janssen: Ann is up next to provide an update on financials and cash return to shareholders.

Speaker Change: And is up next to provide an update on financials and cash returned to shareholders Here's Ann.

Ann Janssen: Here's Ann. Thanks, Ezra. EOG continues to create long-term shareholder value. During the second quarter, we earned 1.8 billion of adjusted net income and generated 1.4 billion of free cash flow. On 1.7 billion of capital expenditures. Second quarter capital expenditures finished lower than expected due to the timing of certain indirects and international projects, along with contributions from efficiency gains above what we forecasted at the start of the year.

Ann Janssen: EOG continues to create long-term shareholder value. During the second quarter, we earned $1.8 billion of adjusted net income and generated $1.4 billion of free cash flow on $1.7 billion of capital expenditures. Second quarter capital expenditures finished lower than expected due to the timing of certain indirect and international projects, along with contributions from efficiency gains above what we forecasted at the start of the year.

Ann: Thanks Sandra.

Ann: He continues to create long term shareholder value.

Ann: During the second quarter, we earned $1 8 billion of adjusted net income and generated $1 4 billion of free cash flow on one 7 billion of capital expenditures.

Ann: Second quarter capital expenditures finished lower than expected due.

Ann: Due to the timing of certain indirect and international projects, along with contributions from efficiency gains above what we forecasted at the start of the year, Jeff will discuss these operating efficiencies in a moment.

Ann Janssen: Jeff will discuss these operating efficiencies in a moment. We also paid a $0.91 per share dividend and repurchased 690 million shares during the quarter. In the first half of 2024, we generated $2.6 billion of free cash flow, helping fund a cash return to shareholders of $2.5 billion. We have paid over $1 billion in regular dividends and repurchased more than $1.4 billion in stock through the second quarter while maintaining a pristine balance sheet.

Ann Janssen: Jeff will discuss these operating efficiencies in a moment. We also paid a 91 cent per shared dividend and repurchased 690 million of shares during the quarter. In the first half of 2024, we generated 2.6 billion of free cash flow, helping fund cash return to shareholders of 2.5 billion. We have paid over 1 billion in regular dividends and repurchased more than 1.4 billion in stock through the second quarter while maintaining a pristine balance sheet. Taking into account our top tier full year regular dividend, we have already committed to return 3.5 billion to shareholders in 2024. We are on track to exceed not only our minimum cash return commitment of 70 percent of annual free cash flow, but also last year's cash return of 85 percent.

Jeff Leitzel: We also paid our 91 cent per share dividend and repurchased 690 million of shares during the quarter.

Jeff Leitzel: In the first half of 'twenty 'twenty four we generated 2.6 billion of free cash flow, helping fund cash return to shareholders of 2.5 billion we.

Speaker Change: We have paid over 1 billion in regular dividends and repurchased more than 1.4 billion in stock during the second quarter, while maintaining a pristine balance sheet.

Ann Janssen: Taking into account our top-tier full-year regular dividend, we have already committed to return $3.5 billion to shareholders in 2024. We are on track to exceed not only our minimum cash return commitment of 70% of annual free cash flow but also last year's cash return of 85%. EOG's commitment to high-return investments is delivering high returns to our shareholders. A growing, sustainable, regular dividend remains the foundation of our cash return commitment and is the best indicator of a company's confidence in its future performance.

Ann: Taking into account our top tier full year regular dividend, we have already committed to return $3 5 billion to shareholders in 2024.

Jeff Leitzel: We are on track to exceed not only our minimum cash return commitment of 70% of annual free cash flow, but also last year's cash return of 85%.

Ann Janssen: EOG's commitment to high return investments is delivering high return to our shareholders. A growing sustainable regular dividend remains the foundation of our cash return commitment and is the best indicator of a company's confidence in its future performance. Special dividends and share repurchases are employed opportunistically to supplement our top tier regular dividend. Since putting the 5 billion share repurchased authorization in place over two years ago, the fundamental strength of our business has improved, as demonstrated most recently by our exceptional second quarter and year-to-date performance. We continue to get better through consistent execution of EOG's value proposition.

Jeff Leitzel: <unk> commitment to high return investments is delivering high return to our shareholders.

Ann: A growing sustainable regular dividend remains the foundation of our cash return commitment and is the best indicator of the company's confidence confidence in its future performance.

Ann Janssen: Special dividends and share repurchases are employed opportunistically to supplement our top-tier regular dividends. Since putting the $5 billion share repurchase authorization in place over two years ago, the fundamental strength of our business has improved, as demonstrated most recently by our exceptional second quarter and year-to-date performance. We continue to get better through consistent execution of EOG's value propositions. As a result, over the last several quarters, we have favored buybacks, and we will continue to monitor the market for opportunities to step in and repurchase shares throughout the year.

Ann: Dividends and share repurchases are employed opportunistically to supplement our top tier regular dividend.

Speaker Change: Since putting the 5 billion share repurchase authorization in place over two years ago. The fundamental strength of our business has improved as demonstrated most recently by our exceptional second quarter and year to date performance.

Speaker Change: We continue to get better through consistent execution of Eog's value proposition.

Ann Janssen: As a result, over the last several quarters, we have favored buybacks, and we will continue to monitor the market for opportunities to step in and repurchase shares throughout the year. Since the authorization has been put in place, we have repurchased nearly 21 million shares, which is more than 3 percent of shares outstanding. At an average price of about $118 per share, totaling about 2.4 billion worth of shares repurchased.

Ann: As a result over the last several quarters, we have favorite buybacks and we will continue to monitor the market for opportunities to step in and repurchase shares throughout the year.

Ann Janssen: Since the authorization has been put in place, we have repurchased nearly 21 million shares, which is more than 3% of the shares outstanding, at an average price of about $118 per share, totaling about $2.4 billion worth of shares repurchased. Now, Jeff will review our operating results.

Ann: Since the authorization has been put in place we have repurchased nearly 21 million shares which is more than 3% of shares outstanding.

Speaker Change: At an average price of about $118 per share totaling about 2.4 billion worth of shares repurchase.

Jeffrey Leitzell: Now, here's Death to review our operating results. Thanks, Ann. I'd like to first thank our employees for their outstanding execution this quarter. Your dedication to and focus on operational excellence extends our momentum from the first quarter and puts EOG in great position to finish the year strong and deliver exceptional value to our shareholders. In the second quarter, we beat targets across the board, including production volumes, per unit operating costs, and catbacks. Oil volumes came in above target due to a couple of drivers. Production in our foundational Delaware Basin and Eagleford plays is outpacing our forecast due to better well performance on a collection of packages.

Speaker Change: Now here's staff to review our operating results.

Jeffrey Leitzell: Thanks, Ann. I'd first like to thank our employees for their outstanding performance this quarter. Your dedication to and focus on operational excellence extends our momentum from the first quarter and puts EOG in a great position to finish the year strong and deliver exceptional value to our shareholders. In the second quarter, we beat targets across the board, including production volumes, per-unit operating costs, and CAVPAC. Oil volumes came in above target due to a couple of drivers.

Staff: Thanks, Ann I'd like to first thank our employees for their outstanding execution. This quarter your dedication to and focus on operational excellence extends our momentum from the first quarter and puts EOG in great position to finish the year strong and deliver exceptional value to our shareholders in the second quarter, we'd be targets across the board.

Jeff Leitzel: Including production volumes per unit operating costs and Capex.

Jeff Leitzel: Volumes came in above target due to a couple of drivers production in our foundational Delaware Basin and Eagle Ford plays is outpacing our forecast due to better well performance on a collection of packages.

Jeffrey Leitzell: Production in our foundational Delaware Basin in Eagleford Place is outpacing our forecast due to better well performance on a collection of packages. Also, our base production performance continues to improve due to the application of proprietary EOG technology. Over the last several years, we have developed in-house artificial lift optimizers for several functions, including gas lift, plunger lift, and rod pump operations. These state-of-the-art optimizers use algorithms to automate the set points of artificial lift and cost factors that allow for real-time adjustments to maximize production and reduce interruptions of third-party downtime. These cross-functional efforts by our production, marketing, and information systems teams continue to improve and pay dividends. The final driver of our second quarter, Volume B, was timing.

Jeffrey Leitzell: Also, our base production performance continues to improve due to the application of proprietary EOG technology. Over the last several years, we have developed in-house artificial lift optimizers for several functions, including gas lift, plunger lift, and rod pump operations. These state-of-the-art optimizers use algorithms to automate the set points of artificial lift and cost factors that allow for real-time adjustments to maximize production and reduce interruptions of third-party downtime. These cross-functional efforts by our production, marketing, and information systems teams continue to improve and pay dividends. The final driver of our second quarter volume beat was timing. We were able to bring up an online package of wells a full month earlier than anticipated.

Jeff Leitzel: Also our base production performance continues to improve due to the application of proprietary EOG technology over.

Jeff Leitzel: Over the last several years, we have developed in house artificial lift optimizes for several functions, including gas lift plunger lift and rod pump operations.

Jeff Leitzel: These state of the our optimizer is use algorithms to automate this at points of artificial lift in cost factors that allow for real time adjustments to maximize production and reduce interruptions of third party downtime.

Jeff Leitzel: These cross functional efforts by our production marketing and information systems teams continue to improve and pay dividends.

Jeff Leitzel: Final driver of our second quarter volume beat was timing.

Jeffrey Leitzell: We were able to bring online a package of wells a full month earlier than anticipated. As a result of volume performance beats to date and updates to our full-year forecast for Delaware Basin and Eagleford production, we are increasing our annual volume guidance by 1,800 barrels of oil per day and 10,000 barrels per day of natural gas liquids. The volume uplift helps lower per-unit cash operating cost guidance for the full year, as well as generates additional free cash.

Jeff Leitzel: We were able to bring online a package of wells a full month earlier than anticipated.

Jeffrey Leitzell: As a result of volume performance beats to date and updates to our full-year forecast for Delaware Basin and Eagleford production, we are increasing our annual volume guidance by 1,800 barrels of oil per day and 10,000 barrels per day of natural gas liquids. The volume uplift helps lower our per-unit cash operating costs guidance for the full year, as well as generates additional free cash flow. Total well costs are trending in line with our expectations and resulting in a low single-digit year-over-year decrease. Driven by both moderate market deflation and drilling efficiency gains, we are seeing these cost improvements across our entire multi-base and portfolio.

Jeff Leitzel: As a result of volume performance beats to date and updates to our full year forecast for Delaware Basin and Eagle Ford production, we are increasing our annual volume guidance by 1800 barrels of oil per day, and 10000 barrels per day of natural gas liquids.

Jeff Leitzel: Volume uplift helps lower our per unit cash operating cost guidance for the full year as well as generates additional free cash flow.

Jeffrey Leitzell: Total well costs are trending in line with our expectations and resulting in a low single-digit year-over-year decrease. Driven by both moderate market deflation and drilling efficiency gains, we are seeing these cost improvements across our entire multi-basin portfolio. Regarding service costs, depletion is playing out as we had forecasted at the start of the year.

Jeff Leitzel: Total well costs are trending in line with our expectations and resulting in a low single digit year over year decrease.

Jeff Leitzel: Driven by both moderate market deflation and drilling efficiency gains we are seeing these cost improvements across our entire multi basin portfolio.

Jeffrey Leitzell: Regarding service costs, depletion is playing out as we had forecasted at the start of the year. Spot prices for certain services have trended lower, while high-spec rigs and practical equipment remain relatively stable. We have secured 50-60% of our service costs with contracts in 2024, primarily for high-spec, high-demand services to ensure consistent performance throughout our program. By securing these resources, we are able to focus on sustainable efficiency improvements to progress each one of our plays at a measured pace. In our foundational Delaware Basin and Eagleford plays, operational efficiencies are driven primarily by longer laterals improving drill feet per day. Longer laterals allow for more time being spent drilling down hole and less time moving equipment on the surface.

Jeff Leitzel: Regarding service costs depletion is playing out as we had forecasted at the start of the year spot prices for certain services have trended lower while high spec rigs and Frac equipment remained relatively stable.

Jeffrey Leitzell: Spot prices for certain services have trended lower while high-spec rigs and prac equipment remain relatively stable. We have secured 50-60% of our service costs with contracts through 2024, primarily for high-spec, high-demand services to ensure consistent performance throughout our program. By securing these resources, we're able to focus on sustainable efficiency improvements to progress each one of our plays at a measured pace. In our foundational Delaware Basin and Eagleford plays, operational efficiencies are driven primarily by longer laterals improving drilled feet per day.

Jeff Leitzel: We have secured 50% to 60% of our service costs with contracts in 2024, primarily for high spec high demand services to ensure consistent performance throughout our program.

Jeff Leitzel: By securing these resources, we're able to focus on sustainable efficiency improvements to progress each one of our plays at a measured pace.

Jeff Leitzel: And our foundational Delaware Basin and Eagle Ford plays operational efficiencies are driven primarily by longer laterals improving drilled feet per day.

Jeffrey Leitzell: Longer laterals allow for more time being spent drilling downhole and less time moving equipment on the surface. In addition, the more we extend laterals, the more benefit we derive from our in-house drilling motor program. EOG motors drill faster and are more reliable, which becomes more impactful on our drilling performance as lateral length increases.

Jeff Leitzel: Longer laterals allow for more time being spent drilling downhole and less time moving equipment on the surface.

Jeffrey Leitzell: In addition, the more we extend laterals, the more benefit we derive from our in-house drilling motor program. UG motors drill faster and are more reliable, which becomes more impactful on our drilling performance's lateral length increase. In the Eagle Ferd, we are on target to extend laterals by 20% on average, and the year-to-date results has been a 7% increase in drill fee per day. In the Delaware Basin, more than 50 wells are nearly 15% of our 2024 drilling program will use three-mile laterals compared to four three-mile laterals last year. In the Utica Shell, we continue to collect data from our new packages and evaluate production history from existing wells as we test spacing patterns and completion designs across our 140-mile acreage position.

Jeff Leitzel: In addition, the more we extend laterals the more benefit we derive from our in house drilling Motor program EOG.

Jeff Leitzel: EOG motors drill faster and are more reliable, which becomes more impactful on our drilling performance is lateral length increases and.

Jeffrey Leitzell: In Eagleford, we are on target to extend laterals by 20% on average, and the year-to-date results have been a 7% increase in drilled feet per day. In the Delaware Basin, more than 50 wells, or nearly 15 percent of our 2024 drilling program, will use three-mile laterals compared to four three-mile laterals last year. Year-to-date, the efficiency impact from our three-mile program in the Delaware Basin has been a 10% increase in drilled feet per day.

Jeff Leitzel: In the Eagle Ford, we are on target to extend laterals by 20% on average in the year to date results has been a 7% increase in drilled feet per day.

Jeff Leitzel: In the Delaware basin more than 50 wells or nearly 15% of our 2024 drilling program will use three mile laterals compared to four three mile laterals last year.

Jeff Leitzel: Year to date, the efficiency impact from our three mile program in the Delaware Basin is a 10% increase in drilled feet per day.

Jeffrey Leitzell: In the Utica shale, we continue to collect data from our new packages and evaluate production history from existing wells as we test spacing patterns and completion designs across our 140-mile acreage position. Two new well packages, the Northern Shadow Wells and the Southern White Wino Wells, as seen on slide 12 of our investor presentation, have delivered strong initial results and continue to demonstrate the premium quality of this play. In addition to strong well results, since last quarter, we have added another 10,000 net acres to our Utica Shale position, bringing our total to 445,000.

Jeff Leitzel: In the Utica shale, we continue to collect data from our new packages and evaluate production history from existing wells as we test spacing patterns and completion designs across our 140 mile acreage position.

Jeffrey Leitzell: Two new well packages, the Northern Shadow wells and the Southern White Wine wells, as seen on slide 12 of our investor presentation, have delivered strong initial results and continue to demonstrate the premium quality of this play. In addition to strong well results, since last quarter, we have added another 10,000 net acres to our Utica Shale position, bringing our total to 445,000. While we continue to make delineation progress, our focus in the near future for Utica development will be on the 225,000 net acres in the volatile oil window where we have a more comprehensive geologic data set.

Jeff Leitzel: Two new well packages the northern Shadow wells in the southern White wine OLS as seen on slide 12 of our Investor presentation have delivered strong initial results and continued to demonstrate the premium quality of this play.

Jeff Leitzel: In addition to strong well results since last quarter. We have added another 10000 net acres to our Utica shale position, bringing our total to 445000.

Jeffrey Leitzell: While we continue to make delineation progress, our focus in the near future for Utica development will be on the 225,000 net acres in the volatile oil window where we have a more comprehensive geologic data set. Our large, contiguous acreage position in the Utica lends itself to developing a long-life, repeatable, low-cost play competitive with the premier unconventional plays across North America. For 2024, we are on target to complete 20 net wells in Utica across our northern, central, and southern acreage, which supports a full-rig program and enables significant well cost reduction.

Jeff Leitzel: While we continue to make delineation progress our focus in the near future for Utica development will be on the 225000 net acres in the volatile oil window, where we have a more comprehensive geologic dataset.

Jeffrey Leitzell: Our large, continuous acreage position in the Utica lends itself to developing a long-life, repeatable, low-cost play competitive with the premier unconventional plays across North America. For 2024, we are on target to complete 20 net wells in the Utica across our northern, central, and southern acreage, which supports a full rig program and enables significant well cost reductions. In Durado, we continue to leverage the operational flexibility provided by our multivacent portfolio to moderate and manage activity through the summer. Earlier this year, we decided to defer completions while retaining a full rig program to maintain operational momentum. As a result, the drilling team has achieved a 13% increase in drilled feet per day year to date.

Jeff Leitzel: Our large contiguous acreage position in the Utica lends itself to developing a long life repeatable low cost play competitive with the Premier unconventional plays across North America for 2024, we are on target to complete 20 net wells in the Utica across our northern central and southern acreage, which.

Jeff Leitzel: Ports, a full rig program and enables significant well cost reductions.

Jeffrey Leitzell: In Dorado, we continue to leverage the operational flexibility provided by our multi-basin portfolio to moderate and manage activity through the summer. Earlier this year, we decided to defer completions while retaining a full-rig program to maintain operational momentum. As a result, the drilling team has achieved a 13% increase in drilled feet per day year-to-date. Maintaining a steady drilling program allows us to capture corresponding efficiencies in advance and improve the play while we continue to monitor the natural gas market.

Jeff Leitzel: In Dorado, we continue to leverage the operational flexibility provided by our multi basin portfolio to moderate and manage activity through the summer.

Jeff Leitzel: Earlier this year, we decided to defer completions, while retaining a full rig program to maintain operational momentum.

Jeff Leitzel: As a result, the drilling team has achieved a 13% increase in drilled feet per day year to date.

Jeffrey Leitzell: Maintaining a steady drilling program allows us to capture corresponding efficiencies in advance and improve the play while we continue to monitor the natural gas market. Gas parts are improving into the second half of the year, and we remain flexible to respond to the market. As the year unfolds, we will continue to maintain capital discipline and leverage the flexibility of our multivacent portfolio to ensure consistent execution across all operating areas. We also remain highly focused on sustainable cost reduction through innovation, operational performance, and efficiency improvement to further drive down our cost structure and expand EOG's capacity to generate free cash flow.

Jeff Leitzel: Maintaining a steady drilling program allows us to capture corresponding efficiencies and advance and improve to play while we continue to monitor the natural gas market.

Jeffrey Leitzell: Gas prices are improving into the second half of the year, and we remain flexible to respond to the market. As the year unfolds, we will continue to maintain capital discipline and leverage the flexibility of our multi-basin portfolio to ensure consistent execution across all operating areas. We also remain highly focused on sustainable cost reduction through innovation, operational performance, and efficiency improvement to further drive down our cost structure and expand EOG's capacity to generate free cash flow. Here's Lance for a marketing update. Thanks, Jeff.

Jeff Leitzel: Gas prices are improving into the second half of the year and we remain flexible to respond to the market.

Jeff Leitzel: As the year unfolds, we will continue to maintain capital discipline and leverage the flexibility of our multi basin portfolio to ensure consistent execution across all operating areas. We also remain highly focused on sustainable cost reductions through innovation operational performance and efficiency improvements to further drive down our cost.

Jeff Leitzel: Structure and expand eog's capacity to generate free cash flow, here's Lance for a marketing update.

Lance Terveen: Here's Lance for a marketing update. Thanks, Jeff. I'll be updating on our strategic infrastructure investments in the Delaware Basin and Durado, as well as exciting progress we have made expanding access to premium natural gas markets. First, in the Delaware Basin, our Janus Gas Processing Plant is on schedule to start up in the first half of 2020. 55. This 300 million cubic feet per day plan will be instrumental in lowering our cash operating costs and improving netbacks. The Janus plant will have connectivity to the new Matterhorn Express pipeline, estimated to be in service in the fourth quarter of this year.

Lance Terveen: Thanks, Jeff. I'll be updating you on our strategic infrastructure investments in the Delaware Basin and Dorado, as well as the exciting progress we have made expanding access to premium natural gas First, in the Delaware Basin, our Janus gas processing plant is on schedule to start up in the first half of 2025. This 300 million cubic feet per day plant will be instrumental in lowering our cash operating costs and improving netback. The Janus plant will have connectivity to the new Matterhorn Express pipeline, estimated to be in service in the fourth quarter of this year.

Lance: Thanks, Jeff I'll be updating them on our strategic infrastructure investments in the Delaware Basin, and Dorado as well as the exciting progress we've made expanding access to premium natural gas markets first in the Delaware Basin, our Genesis gas processing plant is on schedule to start up in the first half of 2025.

Jeff Leitzel: This 300 million cubic feet per day plant will be instrumental in lowering our cash operating costs and improving net backs. The Janus plant will have connectivity to the new Matterhorn Express pipeline estimated to be in service in the fourth quarter of this year.

Lance Terveen: EOG has firm capacity on Matterhorn, which will allow us to move additional residue gas out of Oahu to the Katy Houston Market Center. Most importantly, we expect our Waha gas exposure on a total company gas production basis to be only 5% in 2025.

Lance Terveen: UG has firm capacity on Matterhorn, which will allow us to move additional residue gas out of Waha to the Katie Houston Market Center. Most importantly, we expect our Waha gas exposure on a total company gas production basis to be only 5% in 2025. Furthermore, our new Matterhorn capacity already has in place term sales, along with additional downstream connectivity.

Speaker Change: EOG has firm capacity on Matterhorn, which will allow us to move additional residue gas out of Wahaha to the Katy Houston market Center.

Jeff Leitzel: Most importantly, we expect our Oaxaca exposure on a total company gas production basis to be only 5% in 2025. Furthermore, our new Matterhorn capacity already has in place term cells, along with additional downstream connectivity neck.

Lance Terveen: Furthermore, our new Matterhorn capacity already has term sales in place along with additional downstream connectivity. Next, in our emerging South Texas Dorado natural gas play, phase one of our 36-inch Verde pipeline is in service with safe, consistent operations, and we are on schedule to bring phase two online in the second half of 2024. We're excited that phase two of the Verde Pipelines Terminus is the Agua Dulce market hub. While our current cash costs in Dorado are approximately $1 per MCF, we expect the combination of Verde Phase II and the premium markets accessed at Agua Dulce will further expand our margins, positioning Dorado as one of the most competitive, lowest cost, and highest return natural gas fields in North America.

Lance Terveen: Next, and our emerging South Texas Dorado natural gas play, phase one of our 36-inch Verity pipeline is in service with safe, consistent operations. And we are on schedule to bring online phase two and a second half of 2024. We are excited that phase two of the Verity Pipelines Terminus is the Aguadolse Market Hub. While our current cash costs in Dorado are approximately $1 per MCF, we expect the combination of Verity phase two and the premium markets accessed at Aguadolse will further expand our margins, positioning Dorado as one of the most competitive, lowest cost, and highest return natural gas plays in North America.

Jeff Leitzel: Next in our emerging South, Texas Dorado natural gas play phase one of our 36 inch severity pipeline is in service with safe consistent operations and we are on schedule to bring online phase two in the second half of 2024, we're excited that phase two.

Jeff Leitzel: Oh, the verity of pipelines terminals at the Agua Dulce, a market hub, while our current cash cost and Dorado are approximately a dollar per Mcf, we expect the combination of their day phase two and the premium markets accessed at Agua Dulce, saying, well further expand our margins positioning Dorado as one of the most competitive lowest cost.

Jeff Leitzel: And highest return natural gas plays in North America.

Lance Terveen: At Aguadolse, we have executed agreements for three interconnects directly from our Verity pipeline, including Whitewater's new ADCC pipeline, Supply and Sinear's Corpus Christi LNG terminal, Inbridge's Valley Crossing pipeline with access to industrial LNG and Mexico markets, and Williams Transco Pipeline expansion, the Texas to Louisiana Energy Pathway Project, or TLIP, reaching the entire Gulf Coast corridor, which is illustrated on slide 10 and our investor presentation. TLIP received FERC approval at the end of June and is currently under construction and expected to be in service in the first quarter of 2025. EOG is contracted for the entire 364,400 MMBTU per day of firm capacity.

Lance Terveen: At Agua Dulce, we have executed agreements for three interconnects directly from our Verde pipeline, including Whitewater's new ADCC pipeline supplying Chenier's Corpus Christi LNG terminal, Enbridge's Valley Crossing pipeline with access to industrial LNG and Mexican markets, and Williams Transco Pipeline Expansion, the Texas to Louisiana Energy Pathway Project, or TLIP, reaching the entire Gulf Coast corridor, which is illustrated on slide 10 TLIP received FERC approval at the end of June and is currently under construction and expected to be in service in the first quarter of 2025.

Jeff Leitzel: At Agua Dulce say, we've executed agreements for three interconnects directly from our Verity pipeline, including.

Jeff Leitzel: Whitewater's, New ADC Sea pipeline supply engineers Corpus Christi LNG terminal Enbridge.

Jeff Leitzel: Enbridge is valley crossing pipeline with access to industrial LNG, and Mexico markets and Williams Transco pipeline expansion, the Texas to Louisiana Energy pathway project or T lab, reaching the entire Gulf Coast Corridor, which is illustrated on slide 10 in our investor presentation.

Speaker Change: <unk> received FERC approval at the end of June and is currently under construction and expected to be in service in the first quarter of 2025 EOG is contracted for the entire 364400 M. Btu per day of firm capacity through T that we expand our access to a valuable liquid market center that serves.

Lance Terveen: EOG is contracted for the entire 364,400 MMBTU per day of firm capacity. Through TLIP, we expand our access to a valuable liquid market center that serves robust southeastern power generation and additional future demand. Our capacity on TLIP is in the path for supply from multiple EOG assets, including Dorado from our Verity pipeline and the Permian Basin from our capacity on the Matterhorn. Securing capacity on T-Lib is consistent with our broader marketing strategy to diversify our in-market options. We continue to expand our access to multiple premium markets, serving customers from LNG to industrials to utilities and more, while optimizing our valuable transportation. Now, let's wrap up with Ezra.

Lance Terveen: Through TLIP, we expand our access to a valuable liquid market center that serves robust southeastern power generation and additional future demand. Our capacity on TLIP is in path for supply from multiple EOG assets, including Dorado from our Verity pipeline and the Permian Basin from our capacity on the Matterhorn pipeline. Securing capacity on TLIP is consistent with our broader marketing strategy to diversify our end market options. We continue to expand our access to multiple premium markets, serving customers from LNG to industrials to utilities and more, while optimizing our valuable transportation position.

Jeff Leitzel: Robust south eastern power generation and additional future demand our capacity anttila is in path for supply from multiple EOG assets, including Dorado from our Verdes pipeline and the Permian basin from our capacity on the matter of Horn pipeline.

Jeff Leitzel: Securing capacity on Taylor.

Ezra: [noise] is consistent with our broader marketing strategy to diversify our end market options. We continue to expand our access to multiple premium markets, serving customers from LNG to industrials to utilities and more while optimizing our valuable transportation position now here's Ezra to wrap up.

Ezra Yacob: Now here's Ezra to wrap up. Thanks, Lance. I'd like to note the following important takeaways. EOG has delivered another outstanding quarter. Strong employee-driven operational performance produced strong financial performance. Our multi-base and asset teams continue to drive innovation and increase capital efficiency, not only on new wills, but by applying technology to our base production. We are delivering more volumes and lower per unit cost for the same CapEx, resulting in higher free cash flow for the New Year. Capital allocation across our foundational plays, emerging assets, and strategic infrastructure is delivering strong near-term free cash flow, while also laying a path to future free cash flow generation.

Ezra Yacob: Thanks, Lance. I'd like to note the following important takeaways. EOG has delivered another outstanding quarter. Strong employee-driven operational performance has produced strong financial performance. Our multibase and asset teams continue to drive innovation and increase capital efficiency, not only on new wells but by applying technology to our base production. As a result, we are delivering more volumes and lower per-unit costs for the same CapEx, resulting in higher free cash flow for the year. Capital allocation across our foundational plays, emerging assets, and strategic infrastructures delivers strong near-term free cash flow while also laying a path to future free cash flow generation.

Ezra: Thanks Lance.

Ezra: Like to note the following important takeaways.

Ezra: EOG has delivered another outstanding quarter strong employee driven operational performance produced strong financial performance, our multi basin asset teams continue to drive innovation and increased capital efficiency not only on new wells by applying technology to our base production, we are delivering more volumes and lower per unit costs for the <unk>.

Speaker Change: Capex, resulting in higher free cash flow for the year.

Speaker Change: Capital allocation across our foundational plays emerging assets in strategic infrastructure is delivering strong near term free cash flow, while also laying a path to future free cash flow generation.

Ezra Yacob: EOG continues to expand and already diverse marketing strategy, following our announcement of a new Brent-linked gas sales agreement earlier this year. This quarter we have announced additional natural gas pipeline connections, further reducing our exposure to in base and differentials and exposing us to multiple demand centers. And lastly, EOG continues to deliver on its cash return commitment.

Ezra Yacob: EOG continues to expand an already diverse marketing strategy. Following our announcement of a new Brent Link Gas Sales Agreement earlier this year, this quarter, we have announced additional natural gas pipeline connections, further reducing our exposure to in-basin differentials and exposing us to multiple demand centers.

Speaker Change: EOG continues to expand an already diverse marketing strategy.

Speaker Change: Following our announcement of a new Brent linked gas.

Speaker Change: Gas sales agreement earlier this year this quarter, we have announced additional natural gas pipeline connections further reducing our exposure to in basin differentials and exposing us to multiple demand centers.

Ezra Yacob: And lastly, EOG continues to deliver on its cash return commitment. While our regular dividend is the foundation of our cash return strategy, we are well positioned to continue delivering additional cash returns through share repurchases and special dividends. Supported by the strength of our balance sheet and low-cost operations. Including our annual regular dividend and share repurchases in the first half of the year, we have already committed to $3.5 billion in cash return and are well positioned to exceed our minimum cash return. Thanks for listening. We'll now go to Q&A.

Speaker Change: And lastly, EOG continues to deliver on its cash return commitment while our regular dividend is the foundation of our cash return strategy. We are well positioned to continue delivering additional cash returned through share repurchases and special dividends.

Ezra Yacob: While our regular dividend is the foundation of our cash return strategy, we are well positioned to continue delivering additional cash return through share repurchases and special dividends, supported with the strength of our balance sheet and low cost operations. Including our annual regular dividend and share repurchases in the first half of the year, we have already committed to $3.5 billion in cash flow. We are now in cash return and are well positioned to exceed our minimum cash return commitment.

Speaker Change: Supported with the strength of our balance sheet and low cost operations.

Speaker Change: Including our annual regular dividend and share repurchases in the first half of the year, we have already committed to $3 $5 billion in cash return and are well positioned to exceed our minimum cash return commitment. Thanks.

Unknown Executive: Thanks for listening.

Speaker Change: Thanks for listening, we will now go to Q&A.

Unknown Executive: We will now go to Q&A. Thank you. The question and answer session will be conducted electronically. If you would like to ask a question, please do so by pressing the star key followed by the digit one on your touch-tone phone. If you are using a speaker phone, please make sure your mute function is turned off to allow your signal to reach our equipment. Questions are limited to one question and one follow-up question. We will take as many questions as time permits. Once again, please press star one on your touch tone phone to ask a question.

Operator: Thank you. The question and answer session will be conducted electronically. If you would like to ask a question, please do so by pressing the star key followed by the digit 1 on your touch-tone phone. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment.

Speaker Change: Thank you the question and answer session will be conducted electronically.

Speaker Change: I'd like to ask a question. Please do so by pressing the Starkey followed by the digit one on your Touchtone phone.

Speaker Change: If youre using a speaker phone. Please make sure your mute function is turned off allowing the signal to reach our equipment.

Operator: Questions are limited to one question and one follow-up question. We will take as many questions as time permits. Once again, please press star 1 on your touchtone phone to ask a question. If you find that your question has been answered, you may remove yourself by pressing star 2. We'll pause for just a moment to give everyone an opportunity to signal for questions. The first question comes from Arun Jayaram from J.P. Morgan. Please go ahead.

Speaker Change: Questions are limited to one question and one follow up question, we will take as many questions as time permits once again. Please press star one on your Touchtone phone to ask a question.

Unknown Executive: If you find that your question has been answered, you may remove yourself by pressing Star Two.

Speaker Change: If you find that your question has been answered you may remove yourself by pressing star two well pause for just a moment to give everyone an opportunity to signal for questions.

Unknown Executive: We will pause for just a moment to give everyone an opportunity to signal for questions.

Haroon Jairam: The first question comes from Haroon, Jairam from JP Morgan. Please go ahead. Good morning.

Speaker Change: The first question comes from Arun Jairam from J P. Morgan. Please go ahead.

Arun Jayaram: Yeah, good morning. Ezra, I wanted to start with the Utica Shale. I was wondering if you could give us a sense of some of the key learnings thus far, including your initial test in the south, and perhaps discuss maybe the glide path towards shifting into development mode. You know, what are some of the key risks, you know, from here that you need to get comfortable with before shifting into development?

Arun Jairam: Yeah. Good morning, I wanted to start in the Utica shale I was wondering if you could give us a sense of some of the key learnings thus far including your initial test in the south.

Ezra Yacob: Ezra, I wanted to start in the Utica Shale. I was wondering if you could give us a sense of some of the key learnings thus far, including your initial test in the south, and perhaps discuss maybe the glide path towards shifting into development mode. Where are some of the key risks from here that you need to get comfortable with before shifting into development?

Speaker Change: And perhaps discuss maybe the glide path towards shifting into development mode. What are the some of the key risks from here that you need to to get comfortable with before shifting into development.

Ezra Yacob: Yes, we're reading Good morning. This is Ezra.

Ezra Yacob: Yes, Arun, good morning. This is Ezra.

Ezra: Yes, Arun good morning. This is Ezra let me start with the last part of your question there and then I'll hand, it off to Keith Transco for a few more of the details on the Utica play.

Keith Trasko: Let me start with the last part of your question there, and then I'll hand it off to Keith Krasko for a few more of the details on the Utica play. You know what I'd say in the Utica overall is that we're very happy with the results that we've seen today. The southern wells, the white rhinos that we've talked about, are right in line with the expectations, and northern wells are consistently strong results and very repeatable. So ramping up the Utica, I mean it's going to be like any other play that we have in our portfolio.

Ezra Yacob: Let me start with the last part of your question there, and then I'll hand it off to Keith Trasko for a few more details on the Utica play. You know, what I'd say about Utica overall is that we're very happy with the results that we've seen to date. You know, the Southern Whales, and the White Rhinos that we've talked about, are right in line with the expectations, and the Northern Whales are consistently strong results and very repeatable.

Keith Transco: What I'd say in the Utica over all of US are we're very happy with with what with the results that we've seen to date.

Keith Transco: The southern wells, the White Rhinos, and we've talked about are right in line with the expectations of the northern wells are consistently strong results and very repeatable.

Keith Trasko: So ramping up Utica, I mean, it's going to be like any other play that we have in our portfolio. We want to invest in it at the right pace so that we can continue to learn and embed those learnings into the next well. And Keith will mention some of those learnings here in a minute. Ultimately, as we do continue to define and invest more capital out there, it's going to be at a level of reinvestment that really reflects the maturity of that asset. And when we do that across our multi-basin portfolio, that's when we really start to drive down the cost of all the plays and expand the margins at the corporate level.

Speaker Change: So ramping up the Utica I mean, it's gonna be like any other play that we have in our portfolio, we want to invest in it at the right pace. So that we can continue to learn and embed those learnings into the next well and Keith mentioned some of those learnings here in a minute ultimately as we do continue to delineate and invest more capital out there.

Keith Trasko: We want to invest in it at the right pace so that we can continue to learn and embed those learnings into the next well.

Ezra Yacob: Keith will mention some of those learnings here in a minute. Ultimately, as we do continue to delineate and invest more capital out there, it's going to be at a level of reinvestment that really reflects the maturity of that asset. And when we do that across our multi-basin portfolio, that's when we really start to drive down the costs of all the plays and expand the margins at the corporate level.

Keith Transco: It's going to be at a level of reinvestment that are really reflects the maturity of that asset and when we do that across our multi basin portfolio. That's when we really start to drive down the cost of all the players and expand the margins at the corporate level.

Keith Trasko: Yeah, this is Keith. On the well results so far, the recent ones, you know, we're very pleased overall. Feel like we're making great delineation progress. Some of the key learning so far, you know, the white rhino that is our first package down the south, the performance we're seeing, the dates, meeting expectations, you know, it has a little bit lower B.O.E., IP 30. That was something we were expecting because of a little bit thinner reservoir down there, but it really benefits from the strategic mineral ownership, which really enhances the returns by voting the royalties down there.

Keith Trasko: Yeah, this is Keith on the on the well results so far, the recent ones, you know, we're very pleased overall feel like we're making great delineation progress. Some of the key learnings so far, you know, the White Rhino, that is our first package down the south. The performance we're seeing today, it's meeting expectations. You know, it has a little bit lower BOE IT30.

Speaker Change: Yeah. This is Keith on the AR on the well results. So far the recent ones. You know, we're very pleased overall I feel like we're making a great delineation progress.

Keith Transco: Some of the key learnings so far you know white Rhino that as our first package down the south and the performance. We're seeing the dates are meeting expectations. You know it has a little bit lower at Bowie IP 30 that was something we were expecting because of a little bit thinner reservoir down there, but it really benefits from the strategic mineral ownership.

Keith Trasko: That was something we were expecting because of a little bit thinner reservoir down there, but it really benefits from the strategic mineral ownership, which really enhances the returns by avoiding royalties down there. That has a really big financial impact. The Shadow package that we just recently brought in, you know, that's an offset to the Timberwolves. We're seeing consistently strong results at tighter spacing there. We did a 700-foot spacing test there versus 1,000.

Speaker Change: Which really enhances the returns by avoiding the royalties down there that is a really big financial impact the shadow package that we just recently brought on you know that's an offset to the timber wolves, we're seeing consistently strong results at tighter spacing. There we did a 700 foot spacing tests there versus a thousand.

Keith Trasko: That does a really big financial impact.

Keith Trasko: The shadow package that we just recently brought on, you know, that's an offset to the Timberwolves. We're seeing consistently strong results at tighter spacing there. We did a 700 foot spacing test there versus a thousand. Spacing overall, I'd say, you know, so far so good. We're excited about the consistency so far there. We're going to keep incorporating data as far as future development decisions go there, but we're still early in the play. We need a little bit longer production history. We look at a lot of different things as far as the two and three stream production, the pressure.

Keith Trasko: Spacing overall, I'd say, you know, so far so good. We're excited about the consistency so far there. We're going to keep incorporating data as far as future development decisions go there, but we're still early in the process. We need a little bit longer production history. We look at a lot of different things as far as two- and three-stream production, the pressure. We're taking a lot of real-time measurements, choke schedules, those sorts of things.

Speaker Change: Spacing overall, let's say you know so far so good we're excited about the consistency so far there we're gonna keep incorporating data as far as future development decisions go there, but we're still early in the play we need a little bit longer production history, we look at a lot of different things as far as the two and three stream production the <unk>.

Keith Trasko: We're taking a lot of real-time measurements, choke schedules, those sorts of things. We expect this spacing will probably change across the play based on geology; it's just a really large acreage position. But let's say, with our learnings, we're constantly bringing those into our decisions. We really pride ourselves on not getting into manufacturing mode; instead, kind of developing the acreage package by package, integrating the latest data and learnings, trying to maximize their returns. And the value capture.

Speaker Change: Pressure and we're taking a lot of real time measurements a choke schedules. This those sorts of things.

Keith Trasko: And we expect the spacing will probably change across the play based on geology. It's just a really large acreage position. I'd say with our learnings, we're constantly bringing those into our decisions. We really pride ourselves on not getting into a manufacturing mode and instead kind of developing the acreage package by package, integrating the latest data and learnings, trying to maximize the returns and the value capture.

Speaker Change: We expect this spacing will probably change across the play based on geology is just a really.

Speaker Change: Large acreage position, but let's.

Speaker Change: Let's say, even with our learnings were constantly bringing those into our decisions, we really pride ourselves on not getting into manufacturing mode, and instead kind of developing the acreage package by package integrating the latest data and learnings trying to maximize the returns and the value capture.

Unknown Executive: Okay.

Arun Jayaram: Okay. My follow-up question is, Jeff, if you could elaborate on some of the technology on the artificial lift side that you've been incorporating. What are some of the potential financial implications? Does this have a positive impact on your decline rate, or sustaining capital requirements? But give us a sense of the big picture in terms of the artificial lift technology.

Speaker Change: Okay.

Leo Mariani: My follow-up is maybe, Jeff, if you could elaborate on some of the technology on the artificial lift side that you've been incorporating. What are some of the potential financial implications? Does this have a positive impact on your decline rate, sustaining capital requirements, but give us a sense of the big picture in terms of the artificial lift technology. Yeah, thanks, Arun.

Speaker Change: My follow up is older and maybe Jeff if you could elaborate on some of the technology on the artificial lift side that you've been incorporating.

Speaker Change: What are some of the potential financial implications does this have a positive impact on your decline rate sustaining capital requirements, but give us a sense of the big picture.

Jeff Leitzel: In terms of the artificial lift technology.

Jeffrey Leitzell: Yeah, thanks, Arun. Well, as we talked about, you know, we've been developing this technology over the last few years. And it's one of the big reasons, you know, obviously, we had the increase in guidance this quarter, and it really had to do with better base production kind of across the full portfolio. And it has to do with these artificial lift technologies that we're implementing. So, for instance, and we've talked about it a little bit, we have a program that optimizes our gas lift.

Jeff Leitzel: Yeah. Thanks, Arun are well as we talked about you know we've been developing this technology over the last few years and it's one of the Big reasons. You know obviously, we had the increase to guidance. This this quarter and it really had to do with better base production kind of across the full portfolio and it has to do with these artificial lift.

Jeffrey Leitzell: Well, as we talked about, you know, we've been developing this technology over the last few years, and it's one of the big reasons. You know, obviously we had the increase to guidance this quarter, and it really had to do with better base production, kind of across the full portfolio. And it has to do with these artificial lift technologies that we're implementing. So, for instance, and we've talked about it a little bit, we have a program that optimizes our gas lift. So it'll basically monitor, and through algorithms, it'll rate how much gas we are injecting down hold, and maximize production on the full bank of wells that it's supplying gas to.

Speaker Change: Allergies that we're implementing so for instance, and we've talked about it a little bit we have a program that optimizes our gas lift so it'll basically monitor and through algorithms iterate how much gas we are injecting downhole to maximize production on the full bank of wells that are supplying gas to and then if we ever have any kind of downstream.

Jeffrey Leitzell: So it'll basically monitor and, through algorithms, iterate how much gas we are injecting downhole to maximize production on the full bank of wells that it's supplying gas to. And then if we ever have any kind of downstream interruptions, it can divert gas, and it can move it to higher-producing wells to make sure we're maximizing the production potential, you know, through that downtime event, and then it can switch back to optimal normal operations.

Jeffrey Leitzell: And then, if we ever have any kind of downstream interruptions, it can divert gas, and it can move it to the higher producing wells to make sure we're maximizing the production potential. You know, through that downtime event, and then it can switch back to optimal normal operations. So we've done that exact same thing with a plunger lift optimization, and then also on rod pump to run exactly how fast the rod pump is working, and to optimize the lift of the oil on all of our wells out there. So, yeah, it's been absolutely a big mover, and we've implemented it pretty much around our multi-base portfolio.

Speaker Change: Interruptions, it can divert gas and it can move it to the higher producing wells to make sure. We're maximizing the production potential you know through that downtime event and then they can switch back to optimal normal operation. So we've done that exact same thing with a plunger lift optimization and then also on rod pump to run.

Jeffrey Leitzell: So we've done that exact same thing with plunger lift optimization and then also with rod pump to run exactly how fast the rod pump is working and to optimize the lift of the oil on all of our wells out there. So, yeah, it's been absolutely a big mover. And we've implemented it pretty much across our multi-basin portfolio, and I think you're seeing the benefits of it right now in base production. And we expect to obviously be moving forward to have less downtime and be able to maintain a better base production as we move into the future.

Speaker Change: Exactly how fast the the rod pump is working and to optimize the lift of the oil on all of our wells out there. So yeah, it's been absolutely a big mover and we've implemented it pretty much around our multi basin portfolio and I think youre seeing the benefits of it right now in the base production and we expect to.

Jeffrey Leitzell: And I think you're seeing the benefits of it right now in the base production, and we expect to obviously be moving forward to have less downtime and be able to maintain a better base production as we move into the future.

Speaker Change: To to obviously be moving forward to to have less downtime and be able to maintain a better base production as we move into the future.

Neil Mehta: The next question comes from Neil Mehta from Goldman Sachs. Please go ahead. Yeah, thank you. Ezra and team. I am, Ezra. I always value your perspective on the oil macro, particularly around the lower 48. You know, what's your view of how exit to exit is tracked? It does seem from this earning season, whether it's you or the super majors, the execution and from a production standpoint has been very good. And how do you think this plays out in 25, especially given the fact that OPEC has that spare capacity and indicating the return of supply into the market.

Neal Mehta: The next question comes from Neal Mehta from Goldman Sachs. Please go ahead.

Speaker Change: The next question comes from Neil Mehta from Goldman Sachs. Please go ahead.

Neal Mehta: Yeah, thank you, Ezra and team. Ezra, I always value your perspective on the oil macro, particularly around the lower 48. You know, what's your view of how exit-to-exit is tracking?

Speaker Change: Yeah. Thank you yeah, as a team and I am sorry.

Speaker Change: I always value your perspective on on the oil macro, particularly around the lower 48.

Neil Mehta: What's your view of how exit to exit is tracked it does seem from this earnings season, whether it's you or the super majors to the edge.

Ezra Yacob: It does seem from this earnings season, whether it's you or the supermajors, the execution from a production standpoint has been very good. And how do you think this plays out in 25, especially given the fact that OPEC has that spare capacity as indicating the return of supply into the market? So macro thoughts on the shale trajectory would be

Speaker Change: Execution in it.

Speaker Change: From a production standpoint has been very good and how do you think this plays out in 'twenty, five, especially given the fact that OPEC.

Speaker Change: Has that spare capacity is it indicating the return of supply into the market. So macro thoughts on on the shale trajectory would be terrific.

Neil Mehta: So macro thoughts on the shell trajectory would be terrific.

Ezra Yacob: Yeah, thanks, Neil.

Ezra Yacob: Yeah, thanks, Neal. I appreciate the question and the opportunity to talk a little bit about the macro.

Speaker Change: Yeah. Thanks, Neal I appreciate the question the opportunity to talk a little bit of about the macro you know if we started a little bit more of a broad level. I think you know what we're seeing is global demand is increasing our year over year essentially in line with our expectations, which is quite a bit less.

Ezra Yacob: Appreciate the question, the opportunity to talk a little bit about the macro. You know, if we started a little bit more of the broad level, I think, you know, what we're seeing is global demands increasing year of year, essentially in line with our expectations, which is quite a bit less than 23 over 22. Even China, I'd say that that has a lot of questions. China demands even, you know, kind of in line; demand is in line with with our expectations of the year. For us on US supply, I think we've talked about on previous earnings calls for crude.

Speaker Change: Then twenty-three over over 22.

Speaker Change: Even China I'd say that that has a lot of questions China demands. Even you know kind of in line demand is in line with our expectations of the year for us on U S supply I think we've talked about on previous earnings calls for crude you know, we're looking we feel somewhere between 300 and 400000 barrels a day annually would be the increase in total liquids.

Ezra Yacob: You know, we're looking; we feel somewhere between 304,000 barrels a day annually would be the increase in total liquids, maybe closer to 500,000 barrels a day. When you look at what's happening in the lower 48 specifically, as I said in the opening remarks, we think, you know, from December to December, it'll be relatively flat. We've had relatively flat duck counts for the past months. And even though, as you're highlighting, everybody seems to be reporting on the margins and increased operational efficiency, it's really rigged count that's remained flat and then completion spreads that have remained flat as well.

Speaker Change: Maybe closer to a 500000 barrels a day when you look at what's happening in the lower 48, specifically.

Ezra Yacob: You know, if we started a little bit more at the broad level, I think, you know, what we're seeing is global demands increasing year over year, essentially in line with our expectations, which is quite a bit less than 23 over over 22. Even China, I'd say that that has a lot of questions. Chinese demands even, you know, kind of in line with our expectations for the year.

Speaker Change: As I've said in the opening remarks, we think you know from December to December it'll be relatively flat, we've had relatively flat DUC counts for the past months and even even though as you're highlighting there's everybody seems to be reporting on the margins from increased operational efficiency. It's really rig count that's remained flat and then complete.

Ezra Yacob: For us on US supply, I think we've talked about on previous earnings calls for crude, you know, we're looking, we feel somewhere between 300 and 400,000 barrels a day, annually would be the increase in total liquids, maybe closer to 500,000 barrels a day. When you look at what's happening in the lower 48, specifically, As I said in the opening remarks, we think, you know, from December to December, it'll We've had relatively flat duck counts for the past month.

Ezra Yacob: And even though, as you're highlighting, everybody seems to be reporting on the margin some increased operational efficiency, it's really rig count that's remained flat, and then completion spreads that have remained flat as well. And so when we roll all that up, we continue to see not only the effects of consolidation in the industry, but just overall industry discipline, really being the drivers of that more moderate U.S. growth. And we think that will continue, not only into 2025 but for the next few years as well.

Speaker Change: <unk> spreads that have remained flat as well and so when we roll all that up we continue to see not only the effects of consolidation in the industry, but just overall industry discipline.

Ezra Yacob: And so when we roll that up, we continue to see not only the effects of consolidation in the industry, but just overall industry discipline really being the drivers of that more moderate US growth. And we think that will continue not only into 2025, but really for the next few years moving forward. Immediately as I discussed with the current rig counts, where they have been for the last eight, nine months, and where they look to be finishing the rest of this year at, that should drive moderate, potentially even less growth year over year than what we're seeing this year.

Speaker Change: Really being the drivers of that more moderate U S growth and we think that will continue not only into 2025, but really for.

Speaker Change: The next few years moving forward.

Ezra Yacob: Immediately, as I discussed, with the current rig counts, where they have been for the last eight, nine months, and where they look to be finishing the rest of this year at, that should drive moderate, potentially even less growth year-over-year than what we're seeing this year. And the last thing I think I'd point out is just the amount of decline. You know, the U.S. has grown so much in the last decade on the oil side, and many of those barrels have been switched out from conventional resources into obviously more unconventional resources that come with a bit of a steeper decline.

Speaker Change: Immediately as I as I discussed with the current rig counts, where they have been for the last.

Speaker Change: Eight nine months and where they they look to be finishing the rest of this year at that should drive a moderate potentially even you know less growth year over year than what we're seeing this year and the last thing I think I'd point out is just the amount of decline you know the U S has grown so much in the last decade on the oil side and <unk>.

Ezra Yacob: And the last thing I think I'd point out is just the amount of decline. You know, the US has grown so much in the last decade on the oil side, and many of those barrels have been switched out from conventional resources into obviously more unconventional resources that come with a bit of a steeper decline. And so after years and years of growing, the US is finally looking at a spot where we have a very steep decline year over year as a country that needs to be filled in before new barrels can actually add to the growth.

Speaker Change: Many of those are barrels.

Speaker Change: Barrels have been have been switched out from conventional resources into obviously more unconventional resources that come with a bit of a steeper decline and so after years and years of growing the U S. Is finally looking at a spot where we have a very steep decline year over year as a country that needs to be filled in before new barrels can actually add to the growth.

Ezra Yacob: And so after years and years of growing, the U.S. is finally looking at a spot where we have a very steep decline year-over-year as a country that needs to be filled in before new barrels can actually add to the growth. Those are the kind of key metrics that we continue to look at. But ultimately, it starts in the field at the asset level, looking at the activity and the capital efficiency of the place.

Ezra Yacob: And those are the kind of key metrics that we continue to look at, but ultimately it starts in the field at the asset level looking at the activity and the capital efficiency of the place.

Speaker Change: Those are the kind of key metrics. So we continue to look at but ultimately it starts in the field at the asset level looking at the activity and the capital efficiency of the plays.

Neal Mehta: Thank you, Ezra. That's a really helpful perspective and staying on a macro and then tying into your business. On natural gas, we've seen a lot of volatility, a good price to start the year, obviously very weak prices. Now, this morning, we had the six month push out of Golden Pass.

Neil Mehta: Thank you, Ezra. That's really helpful perspective.

Speaker Change: Okay. Thank you that's that's very helpful perspective, and staying on the macro and then time into your business on natural gas, we've seen a lot of volatility good price to start the year, obviously very weak prices now. This morning, we had a six month push out of Golden pass. So just as you think about the 25 Grand.

Neil Mehta: And stay on a macro and then time into your business. On natural gas, we've seen a lot of volatility. Good prices start the year; obviously, very weak prices now. This morning, we had the six-month push out of golden past. So just as you think about the 25th grand, is it fair to say you're going to try to keep it a little bit more oil weighted versus gas, and how does that affect how you want to deploy capital. Thank you very much. and Daffier Areas. Neil, that's another good question. You know, you know, at this point, you know, inventory levels are clearly above the five-year average and commissarily, you know, commissary with that, the natural gas price is below the five-year average.

Neal Mehta: So just as you think about the 25 grand, is it fair to say you're going to try to keep it a little bit more oil weighted versus gas? And how does that affect how you want to deploy capital? Transcribed by https://otter.ai and Gafier areas.

Speaker Change: Is it fair to say youre going to try to keep it a little bit more oil weighted versus gas and how does that affect.

Speaker Change: How does it affect how you want to deploy capital.

Speaker Change: And gas here areas.

Ezra Yacob: Neal, that's another good question. You know, we, you know, at this point, inventory levels are clearly above the five-year average, and commensurately, you know, commensurate with that, the natural gas price is below the five-year average. I will point out, you know, as we saw at the beginning of 2024, inventory levels can react very quickly to weather, specifically winter weather. But at this point, we do foresee that the inventory overhang will continue into 2025. I don't think we're alone with that idea.

Speaker Change: Neil It's another good question you know we you know at this point.

Speaker Change: You know inventory levels are clearly above the five year average and commensurately commenced.

Neil Mehta: Commensurate with that the natural gas prices below the five year average I will point out.

Ezra Yacob: I will point out, you know, as we saw at the beginning of 2024, inventory levels can react very quickly on weather, specifically winter weather. But at this point, we do foresee that the inventory overhang will continue into 2025. I don't think we're alone with that idea. But we do forecast that we should bring down inventory levels to the five-year average throughout 2025, you know, assuming count of a normal winter. And that's not only due to the increase in demand throughout the year from LNG and increased electricity demand. You know, recently, it certainly didn't help, but this summer, we did experience some offline demand in LNG.

Speaker Change: You know as we saw at the beginning of 'twenty 'twenty four inventory levels can react very quickly on whether specifically winter weather, but at this point, we do foresee that the inventory overhang will continue into 2025 I don't think we're alone with that with that idea, but we do forecast that we should be.

Ezra Yacob: But we do forecast that we should bring down inventory levels to the five-year average throughout 2025, you know, assuming kind of a normal winter. And that's not only due to the increase in demand throughout the year from LNG and increased electricity demand. You know, recently it certainly didn't help, but this summer we did experience some offline demand for LNG. But even with that, overall, we're still seeing an increase in year-over-year domestic demand.

Speaker Change: Down inventory levels to the five year average throughout 2025.

Speaker Change: Assuming kind of a normal winter and that's dominantly due to the increase in demand throughout the year from LNG and increased electricity demand.

Speaker Change: You know recently.

Speaker Change: Certainly didn't help but this summer we did experience some offline demand in LNG.

Ezra Yacob: But even with that overall, we're still seeing an increase in year-to-year, year-to-year domestic demand. I think electricity is trending on about a 4.5% increase year-to-year. And so all those things continue to be positive in the longer term. So specific to what we're talking about in 2025, you know, we haven't. We're not prepared today to talk about 2025. I'm sure I'm heading off a question that probably comes up later on the call with that. But what I'd say is we are actively managing our Dorado program. We've done that last year, and we did that this year.

Speaker Change: But even with that overall, we're still seeing an increase in your year over year domestic demand.

Ezra Yacob: I think electricity is trending on about a 4.5% increase year-over-year, and so all those things will continue to be positive in the longer term. So, specific to what we're talking about in 2025, you know, we haven't, we're not prepared today to talk about 2025. I'm sure I'm heading off a question that probably comes up later on in the call with that. But what I'd say is we are actively managing our Dorado program. We did that last year, and we will do that this year.

Speaker Change: I think electricity.

Speaker Change: Is trending on about a four 5% increase year over year.

Speaker Change: And so all those things continue to be positive in the longer term.

Speaker Change: So specific to what we're talking about in 2025, you know we haven't we're not prepared today to talk about 2020 five.

Speaker Change: I'm sure I'm heading off a question that probably comes up later on the call with that but what I'd say is we are actively managing our Dorado program. We've done that last year and we did that this year.

Ezra Yacob: Longer term, as I said, we do expect we're very bullish on pricing through there. And so we are managing the Dorado program to align with demand. We prefer to manage Dorado on the upfront kind of investment side. I think Jeff mentioned in the opening remarks the benefits we've seen of running a consistent rig program there. Increased, drilled, feet per day by 13% year-over-year. I think if you look at the past two years, it's closer to 30% over the past two years. But then, once we get the gas molecules online, as Lance mentioned, we do have a low cash operating cost of a dollar per MCF.

Speaker Change: Longer term as I said, we do expect we're very bullish on pricing through there and so we are managing the draw to a program to align with demand we prefer to manage dorado on the upfront kind of investment side I think Jeff mentioned in the opening remarks, the benefits we've seen of running a consistent rig program there are increased drill.

Ezra Yacob: Longer term, as I said, we do expect we're very bullish on pricing through there, and so we are managing the Dorado program to align with demand. We prefer to manage Dorado on the upfront kind of investment side. I think Jeff mentioned in his opening remarks the benefits we've seen of running a consistent rig program there, increasing drilled feet per day by 13% year over year. But I think if you look at the past two years, it's closer to 30% over the past two years.

Speaker Change: <unk> feet per day by 13% year over year I think if you look at the past two years, it's closer to 30% over the past two years, but then once we get the gas molecules online as Lance mentioned, we do have a low cash operating cost of one dollar per Mcf. That's a that's a dynamic number as we sit here today.

Ezra Yacob: But then once we get the gas molecules online, as Lance mentioned, we do have a low cash operating cost of $1 per MCF. That's a dynamic number as we sit here today, and so that gives us a lot of confidence and flexibility on how to invest and how to think about Dorado going forward.

Steve Richardson: That's a dynamic number as we sit here today. And so that gives us a lot of confidence and flexibility on how to invest and how to think about Dorado going forward.

Lance: And so that gives us a lot of confidence and flexibility on how to invest and how to think about dorado going forward.

Steve Richardson: The next question comes from Steve Richardson from Evercore ISI.

Steve Richardson: The next question comes from Steve Richardson from Evercore ISI. Please go ahead.

Speaker Change: The next question comes from Steve Richardson from Evercore ISI. Please go ahead.

Steve Richardson: Please go ahead. Thank you. Good morning. Really impressive realizations in the quarter, particularly relative to what we're seeing from the broader industry, and can't help but think it's largely to do with how unique your marketing organization is. Ezra, I guess the would wonder if you could expound a little bit on the nature of the organization. You don't seem shy about deploying capital either in field or, as we just heard, with longer haul pipes and everything else. But if you just take from the basis that you're trying to get the highest realization for your products and getting to the best sales point, how do you incentivize that organization on returns?

Steve Richardson: Thank you. Good morning.

Steve Richardson: Thank you good morning.

Ezra Yacob: Really impressive realizations in the quarter, particularly relative to what we're seeing from the broader industry, and I can't help but think it's largely to do with how unique your marketing organization is. You know, Ezra, I guess the, you know, I would wonder if you could expound a little bit on the nature of the organization, right? You don't seem shy about deploying capital either infield or, you know, as we just heard with, you know, longer haul pipes and everything else.

Steve Richardson: Really impressive realizations in the quarter, particularly relative to what we're seeing from you know from the broader industry and you can't help but think it's largely to do with how unique your marketing organization is as road I guess, the you know what.

Speaker Change: Would wonder if you could expand a little bit on the nature of the organization you don't seem shy about deploying capital either in field or you know as we just heard with you know longer haul pipes and everything else but.

Ezra Yacob: If you just take from the basis that you're trying to get the highest realization for your products and getting to the best sales point, how do you incentivize that organization on returns, and how do you think about capital deployed in that business and the performance of that business and how it adds value to you?

Speaker Change: If you just take from the from the basis that you're trying to get the highest realization for your products and getting to the best sales point, how do you. How do you organize how do you how do you incentivize that organization on returns and how do you think about capital deployed in that business.

Steve Richardson: And how do you think about capital deployed in that business and performance of that business and how that's valued to you?

Speaker Change: And how to you know and in performance of that business and how it adds value to EOG.

Ezra Yacob: Steve, this is Ezra. I appreciate the remarks there, and the question our marketing team is something we're extremely proud of, and we think is a real competitive advantage, especially in a multi-basin portfolio of companies such as ours.

Ezra Yacob: Steve, this is Ezra. I appreciate the, uh... The remarks there and the question: our marketing team is something we're extremely proud of and what we think is a real competitive advantage, especially in a multi-basin portfolio of companies such as ours. So just maybe a few remarks by me and then I'll hand it off to Lance to give some more details on that. You know, our overall marketing strategy; the first thing we always think about is really net back pricing.

Speaker Change: Steve This is Ezra I appreciate the.

Steve Richardson: The remarks, there and the question our marketing team is something we're extremely proud of and what we think is a real competitive advantage.

Steve Richardson: Especially in our multi basin portfolio of companies such as ours. So just maybe a few remarks by me and then I'll hand, it off to Lance to give some more details on a you know our overall marketing strategy. The first thing. We always think about is really the netback pricing and so taking on additional transportation not a negative thing if it's getting you into premium market.

Lance Terveen: So just maybe a few remarks by me, and then I'll hand it off to Lance to give some more details on it, you know, our overall marketing strategy. The first thing we always think about is really the net back pricing. And so taking on additional transportation is not a negative thing if it's getting you into premium markets either for oil or gas. We like to have flexibility, as we've talked about diversification with access to multiple markets. We love to have control where we get firm capacity from the well head to sales points. And then the duration, you know, we've had times, you know, in the past where we've committed to long-term commitments, and we realize that's not what we want to do.

Ezra Yacob: And so, taking on additional transportation is not a negative thing if it's getting you into premium markets, either for oil or gas. We like to have flexibility, as we've talked about, diversification with access to multiple markets. We love to have control, where we get firm capacity from the wellhead to sales points. And then the duration, you know. We've had times in the past where we've committed to long-term commitments, and we realize that's not what we want to do.

Lance: It's either for oil or gas, we like to have flexibility as we've talked about diversification with access to multiple markets. We love to have control, where we get firm capacity from the wellhead to sales points are.

Speaker Change: And then the duration you know we've had.

Lance: At times, you know in the past, where we've committed to long term commitments and we realize that's not what we wanted to do we want to minimize those long term kind of high cost commitments and really invest in.

Ezra Yacob: We want to minimize those long-term kind of high cost commitments and really invest in with good partners that understand that we're trying to align our commitments with how we think about our growth of the individual assets. And we're consistently challenging the marketing team to think about being a low-cost operator. And that's also how we invest in some of the strategic infrastructure projects: is what will they do for us over the long term with margin expansion. Yeah, all right.

Lance Terveen: We want to minimize those long-term, kind of high-cost commitments and really invest in good partners that understand that we're trying to align our commitments with how we think about our growth of the individual assets. And we're consistently challenging the marketing team to think about being a low-cost operator. And that's also why we invest in some of these strategic infrastructure projects, because what will they do for us over the long term with margin expansion? Yeah. No, right, Ezra. And Steve, this is Lance.

Lance: With good partners that understand that we're trying to align our commitments with how we think about our growth of the individual assets.

Lance: And we're consistently challenging the marketing team to think about being a low cost operator, and that's also how we invest in some of these strategic infrastructure projects is what will they do for us over the long term with margin expansion. Yeah. No right is rather than Steve. This is lance I think where I might add a little bit additional color too.

Lance Terveen: And Steve, this is Lance.

Lance Terveen: I think where I might add a little bit additional color to when you think about how we're differentiated, I just, it goes back to the culture too. I think like our marketing teams, like we're integrated in with our division operations. I mean, our division operations, our marketing team, that's all integrated with our fundamentals. So when we look at, you know, we can look at the global markets as we think about LNG or exporting of our products. But then also when you get to like in-base in fundamentals, we have a strong grasp of that and what we see.

Lance Terveen: I think where I might add a little bit of additional color, too, when you think about how we're differentiated, I just – it goes back to the culture, too. I think, like, our marketing teams, like, we're integrated with our division operations. I mean, our division operations, our marketing team, that's all integrated with our fundamentals. So when we look at – you know, we can look at the global markets as we think about L&G or exporting our products, but then also when you get to, like, in-basin fundamentals, we have a strong grasp of that and what we see.

Speaker Change: When you think about how we're differentiated I just it goes back to the culture to I think like our marketing teams like we're integrated in with our our division operations I mean, our division operations, our marketing team that's all integrated with our fundamentals. So when we look at you know we we can look at the global markets as we think about LNG or exporting of our products, but then.

Speaker Change: So when you get to like in basin fundamentals, we have a strong grasp of that and what we see and so then that way we can set up and have multiple markets and we can get to new markets like we announced with T lab and it gets to a new premium market for the company to further strengthen our net backs are long term. So I'll say I'll, let Ezra you know put together with them.

Lance Terveen: And so then that way, we can set up and have multiple markets, and we can get to new markets, like we announced with TLIP, which gets to a new premium market, you know, for the company to just further strengthen our netbacks long term. So I'll say all what Ezra, you know, put together with his comments, and then just the integration that we have internally, too, I think is a real differentiator.

Lance Terveen: And so then that way we can set up and have multiple markets, and we can get to new markets like we announced with TLP. You know, they get to a new premium market, you know, for the company to just further strengthen our netbacks long-term.

Lance Terveen: So I say all what Ezra, you know, put together with his comments. And then just the integration that we have internally too, I think is a real differentiator.

Ezra: Comments and then just the integration that we have internally to Ah I think is a real differentiator.

Steve Richardson: Appreciate all that additional info.

Steve Richardson: Appreciate all that additional info. So, what if I could just follow up really quickly on service costs, you know, appreciate the comments that you're 50 to 60% contracted for 24. Would be curious to hear what you're seeing on the leading edge across the supply chain and thoughts on, you know, what the back half of the year could look like, at least on parts of the bill materials that aren't contracted.

Speaker Change: I appreciate all that additional info I'm, sorry, if I could just follow up really quickly on service costs I. Appreciate the comments that your 50 to 60 per cent contracted for 24 would.

Steve Richardson: So what if I could just follow up really quickly on service costs, you know, appreciate the comments that you're 50 to 60% contracted for 24.

Steve Richardson: Would be curious to hear what you're seeing on the leading edge across the supply chain and thoughts on, you know, what the back half of the year could look like at least on parts of the bill of materials that isn't contracted at this point.

Speaker Change: Would be curious to hear what your what youre seeing on the leading edge across the supply chain and thoughts on you know what the back half of the year could look like at least on parts of the of the of the bill of materials that isn't contracted at this point.

Jeffrey Leitzell: Yes, Steve.

Jeffrey Leitzell: Yes, Steve, this is Jeff. Thanks for the question. You know, when we look at service costs, what we do is we really break them down into a couple categories. So we have our standard services, and then we have what we refer to as our high-spec services, which is the majority of what we utilize as a company. On the standard kind of rig and frack pricing out there, what we saw is that it started to weaken in the second half of last year.

Jeffrey Leitzell: This is Jeff. Thanks for the question. You know, when we look at service costs, what we do is we really break them down into a couple categories. So we have like our standard services. And then we have what we refer to as like our high spec services, which is the majority of what we utilize as a company on the standard kind of rig and frack pricing out there. What we saw is it started a weekend of the second half of last year, and it really varied kind of base and the base and based on activity levels. And the Permian, I would say, definitely had the most resilient pricing for service costs since it had like over half of the rig activity.

Speaker Change: Yes, Steve This is Jeff. Thanks for the question you know when we look at service costs. What we do is we really break them down into a couple of categories. So we have like our standard services and then we have what we referred to as like our high spec services, which is the majority of what we utilize as a company I'm on the standard kind of rig and Frac pricing out there. What we saw is it started a week.

Speaker Change: In the second half of last year, and it really varied kind of basin to basin based on activity levels in the Permian I would say definitely had the most resilient pricing for service cost since it had like over half of the rig activity. So in general I would say since the middle of last year standard rig and Frac, our prices are down probably 15% to.

Jeffrey Leitzell: And it really varied kind of basin to basin based on activity levels. And the Permian, I would say definitely had the most resilient pricing for service costs since it had like over half of the rig activity. So in general, I would say since the middle of last year, standard rig and frack prices are down probably 15 to 20%. When you look at some of the support services over that same period, I'd say coil tubing and wireline costs are probably down 15%.

Jeffrey Leitzell: So, in general, I would say since the middle of last year, standard rig and frack prices are down probably 15 to 20% when you look at some of the support services over that same period. It's a cool tube in a wire line; costs are probably down 15%, and then work over rigs have reduced about 10%. And then just an additional thing that I'd point out is that through the first half of the year, you know, we've really seen those reductions have kind of slowed, as Ezra talked about, with the rig count and the frack fleet count kind of stabilizing.

Speaker Change: 20%.

Ezra: When you look at some of the support services over that same period, I'd say coiled tubing and wireline costs are probably down 15% and then workover rigs have reduced about 10% and then just an additional thing that I'd point out is it through the first half of the year. You know, we've really seen those reductions have kind of slowed as Ezra talked about with the <unk>.

Jeffrey Leitzell: And then just an additional thing that I'd point out is that through the first half of the year, we've really seen those reductions kind of slowed, as Ezra talked about with the rig count and the frack fleet count kind of stabilizing. So the big point out there I'd say is with the high-spec services that we utilize, we currently see relatively stable pricing, and we probably will mostly through the rest of the year.

Ezra: Counting the Frac fleet count kind of stabilizing so.

Jeffrey Leitzell: So the big point out there, I'd say, is with the high spec services that we utilize. You know, we currently see relatively stable pricing. You know, we probably will mostly through the rest of the year, but we have started to see a few areas of moderation and a little bit of spot availability, and it's primarily around the gas plays and outside the Permian. And then, as you talked about, we're just locking up the 50 to 60% of our services. You know, the way we do that, our contracting strategies are very strategic to where we stagger out our contracts.

Speaker Change: The Big point out there I'd say is with the high spec services that we utilize we currently see relatively stable pricing and you know, we probably will mostly through the rest of the year, but we have started to see a few areas of moderation and a little bit of spot availability and it's primarily around the gas plays in and outside the Permian.

Jeffrey Leitzell: But we have started to see a few areas of moderation and a little bit of spot availability, and it's primarily around the gas plays and outside the Permian. And then, as you talked about, we're just locking up 50 to 60% of our services. You know, the way we do that; our contracting strategy is very strategic to where we stagger out our contracts so we aren't rolling contracts off all at once. So we're constantly renegotiating new contracts and also renegotiating the spot market to make sure we're taking the best advantage we can of the pricing that's out there.

Ezra: And then as you talked about we're just locking up to 50% to 60% of our services you know the way we do that our contracting strategy is very strategic to where we stagger out our contracts. So we aren't rolling contracts off all at once so we're constantly renegotiating new contracts and also renegotiated the spot market to make sure. We're taking the best advantage. We can know the pricing that's out there.

Jeffrey Leitzell: So we aren't rolling contracts off all at once. So we're constantly renegotiating new contracts and also renegotiating the spot market to make sure we're taking the best advantage we can of the pricing that's out there.

Ezra: <unk>.

Leo Mariani: The next question comes from Leo Mariani from Roth Capital. Please go ahead. Hey, I just wanted to follow up a little bit on your comments around how you're going to be kind of prudently managing your Dorado activity. I just wanted to get a sense.

Leo Mariani: The next question comes from Leo Mariani from Roth Capital. Please go ahead.

Ezra: The next question comes from Leo Mariani from Roth Capital. Please go ahead.

Ezra: Okay.

Leo Mariani: Hey, I just wanted to follow up a little bit on your comments around how you're going to be kind of prudently managing your Dorado activity. I just wanted to get a sense, are you pretty much committed to one rig this year? It sounds like you want to get the wells drilled. But is there potential to, you know, maybe defer some of those turn-in lines or maybe choke back some of those volumes to later this year, just based on the weak current pricing?

Leo Mariani: Hey, I just wanted to follow up a little bit on your comments around how youre going to be kind of prudently managing your dorado activity.

Leo Mariani: I just wanted to get a sense are you pretty much committed to kind of the one rig this year it sounds like you.

Leo Mariani: Are you pretty much committed to kind of the one rig, you know, this year? It sounds like you want to get the well drilled, but is there potential to, you know, maybe defer. You know, some of those turning lines are maybe chokeback, some of those volumes to later this year, just based on the week, current pricing. Obviously, I know you got the second phase of your Verde pipeline coming on, which is going to improve netbacks. But I was just hoping to get a little more color on how you kind of prudently manage that activity and how you're thinking about it.

Speaker Change: We want to get the wells drilled but is there a potential to maybe defer some of those turn in lines that maybe choke back some of those volumes to later this year just based on.

Speaker Change: The weak current pricing, obviously I know you got the second phase of your Verdes pipeline coming on which is going to improve net backs, but I was just hoping to get a little more color on how you're kind of prudently manage that activity and how you're thinking about it.

Leo Mariani: Obviously, I know you got the second phase of your Verde pipeline coming on, which is going to improve netbacks. But I was just hoping to get a little more color on how you kind of prudently manage that activity and what you're thinking about it.

Jeffrey Leitzell: Yeah, Leo, this is Jeff. And as Ezra talked about earlier, you know, there's really no change moving forward from what we had talked about last quarter. You know, we're obviously managing the investment timing, and it's primarily on the completion side where we just pushed, you know, a handful of wells into the second half of the year because we had some flexibility there. And as he said, you know, we'll just be able to monitor those prices through kind of summer and fall and see what happens as we move into the back end of the year. With that, though, yeah, we're going to go ahead and maintain that one rig program really with no changes to the rest of the year.

Jeffrey Leitzell: Yeah, Leo, this is Jeff. And as Ezra talked about earlier, there's really no change moving forward from what we talked about last quarter. You know, we're obviously managing the investment timing, and it's primarily on the completion side where we just pushed, you know, a handful of wells into the second half of the year because we had some flexibility there. And as he said, you know, we'll just be able to monitor those prices through kind of summer and fall and see what happens as we move into the back end of the year.

Ezra: Yes, Leo this is Jeff and as I sort of talked about earlier, you know Theres really no change moving forward from what we had talked about last quarter. You know, we're obviously managing the investment timing and it's primarily on the completion side, where we we just pushed a you know a handful of wells into the second half of the year, because we had had some flexibility there and as he said you know, we'll just be able to monitor.

Ezra: Those prices through kind of summer and fall in and see what happens as we move into the back end of the year with that though yeah. We're going to go ahead and maintain that one rig program really with no changes through the rest of the year I mean, the team has just done an exceptional job on building on their existing existing operational efficiencies and as as restated I mean, they're already.

Jeffrey Leitzell: With that, though, yeah, we're going to go ahead and maintain that one rig program really with no changes through the rest of the year. I mean, the team has just done an exceptional job of building on their existing operational efficiencies. And as Ezra stated, I mean, they're already halfway through the year, and they've seen a 13% improvement in their overall footage per day. So the big thing is, if you look at the program, I mean, it's only a 20-25 well program right now. We really want to build on that and continue to push the great technical and operational progress that we've made so far. And so we'll continue to do that through the year and stay on course with our current plan and just continue to make the best economic decisions for the company as we move forward.

Jeffrey Leitzell: I mean, the team has just done an exceptional job on building on their existing operational efficiencies. And as Ezra stated, I mean, they're already halfway through the year. They've seen a 13% improvement in their overall footage per day. So the big thing is, if you look at the program, I mean, it's only a 20, 25 well program right now. We really want to build on that and continue to push, you know, the great technical and operational progress that we've made so far. And so we'll continue to do that through the year and stay on course with our current plan and just continue to make the best economic decision for the play as we move forward.

Ezra: Halfway through the year, they've seen a 13% improvement in their overall footage per day. So the big thing is if you look at the program I mean, it's only a 2025 well program right now we really want to build on that and continue to push the great technical and operational progress that we've made so far and so we'll continue to do that through the year and stay on course with our current.

Ezra: Plan and just continue to make the best economic decision for the play as we move forward.

Leo Mariani: Okay. Now I appreciate that. And then just for the respect to the Utica, you made some comments that, you know, wells are sort of performing in line with expectations, but we also mentioned the fact that you continued to kind of experiment with spacing and completion design.

Speaker Change: Okay I appreciate that.

Leo Mariani: Okay, I appreciate that. And then, just with respect to Utica, you made some comments that, you know, wells are sort of performing in line with expectations, but you also mentioned the fact that you've continued to kind of experiment with spacing and completion design. So I don't exactly know what the internal expectations are, but are you seeing the well performance trend better, you know, are the last two pads showing, you know, maybe just better EURs per foot versus where they were in 2023, just trying to get a sense of trends on these wells and whether or not they're getting better, and maybe that was what your internal expectation was.

Speaker Change: And then just with respect to the Utica you made some comments that wells are performing in line with expectations.

Speaker Change: He also mentioned the fact that you've continued to kind of experiment with spacing and completion designs. So don't exactly know what the internal expectations are but are you seeing the well performance trend better.

Keith Trasko: So don't exactly know the internal expectations are, but are you seeing the well performance trend better, you know, or the last two pads, you know, showing, you know, maybe just better you are as per foot versus where they were. You know, in 2023, just trying to get a sense of trends on these wells and whether or not they're getting better, or maybe that was what your internal expectation was.

Speaker Change: The last few pads, showing maybe just better EUR per foot versus where they were.

Speaker Change: And in 2023, just trying to get a sense.

Speaker Change: Trends on these wells and whether or not theyre getting better and maybe that was what your internal expectation of loss.

Keith Trasko: Yeah, this is Keith. I'd say they've met our internal expectations. We're expecting performance to vary over the 445,000-net-acre position with the 140-mile span of it. You know, we've been focusing our activity on the 225,000 net acres that we have in the volatile oil window, and we see changes in geology along there. We see, you know, we're going to have different spacing in different areas, different types of curves in different areas, but we're constructive on the play overall everywhere that we've tested, and we think the variation that we're seeing is within the norm.

Keith Trasko: Yeah, this is Keith.

Ezra: Yeah. This is Keith I'd say, they've they've met our internal expectation, we're expecting performance to vary over the 445000.

Keith Trasko: I'd say they made our internal expectation. We're expecting performance to vary over the 445,000 met acre position with 140 miles span of it. You know, we've been focusing our activity on the 225,000 net acres that we have in the volatile window, and we see changes in geology along there. We see, you know, we're going to have different spacing of different areas, different type curves in different areas, but we're constructive on the play overall everywhere that we've tested.

Ezra: Net acre position with a 140 mile span of it.

Speaker Change: You know we've been focusing our activity on the 225000 net acres that we have in the volatile oil window and we see changes in geology, along there. We see you know we're gonna have different spacing in different areas different type curves in different areas, but we are constructive on the play overall everywhere that we've tested in.

Keith Trasko: And we think the variation that we're seeing is within the norm.

Ezra: We think the variation that we're seeing is within the norm.

Scott Hanold: The next question comes from Scott, handled from RBC Capital Markets.

Scott Hanold: The next question comes from Scott Hanold from RBC Capital Markets. Please go ahead. Yeah, thanks.

Ezra: The next question comes from comes from Scott Hanold from RBC capital markets. Please go ahead.

Scott Hanold: Please go ahead. Yeah, thanks.

Scott Hanold: Yeah, thanks. Good morning.

Lance Terveen: Maybe sticking with Utica and you know, how do you think about marketing gas and some of your NGLs? Can you talk about the strategy as you look to eventually get to, you know, more scale development in Utica? How do you think about marketing those gas and NGLs?

Scott Hanold: Yeah. Thanks, good morning, maybe.

Lance Terveen: Good morning. Um, maybe stick with the Utica and, you know, how do you think about like marketing, you know, gas and some of your NGLs? Can you talk about the strategy as you look to eventually get to, you know, more scale development in the Utica? How do you think about marketing those gas and NGLs?

Scott Hanold: Maybe sticking with the Utica and how would you think about like marketing gas and some of your Ngls can you talk about the strategy as you look to eventually get to more scale development in the Utica, How you think about marketing those gas and Ngls.

Lance Terveen: Hey Scott, hey, good morning. This is Lance. Yeah, when we, when we look at the Utica, um, one of the things I like is um, I mean, it was, it's very consistent. You know, as we think about the early evaluation of the play, one of the things that's unique, again, I know we've comment on this in the past, but when you think about it, I mean, you don't really need a lot of major infrastructure build out. I mean, so what we've really been focused on from a marketing, midstream, and within our division up there is really just getting the local gathering systems in place.

Lance Terveen: Hey, Scott. Hey, good morning. This is Lance.

Lance: Hey, Scott Hey, Good morning. This is lance yeah, when we when we look at the Utica one of the things I like is and I mean, it was it's very consistent you know as we think about the early evaluation of the play one of the things. That's unique again I know we've commented on this in the past, but when you think about it I mean, you don't really know.

Lance Terveen: Yeah, when we look at Utica, one of the things I like is, I mean, it's very consistent, you know, as we think about the early evaluation of the play. One of the things that's unique, again, I know we've commented on this in the past, but when you think about it, you don't really need a lot of major infrastructure build-out. I mean, what we've really been focused on from a marketing, midstream, and within our division up there is really just getting the local gathering systems in place, and those are both commissioned and online, and we're getting to the markets. I know we've talked a lot about there being just a lot of ample, redundant processing capacity. Again, going back to my earlier comment about you don't need to make a lot of real long-term commitments.

Speaker Change: A lot of major infrastructure build out I mean, so what we've really been focused on from a marketing midstream and within our division up there is really just getting the local gathering systems in place and those are both commission and online and we're getting to the markets I know we've talked a lot about theres just a lot of ample redundant processing capacity again going back to my earlier comment about you.

Lance Terveen: And those are both commission and online, and we're getting to the markets. I know we've talked a lot about. There's just a lot of ample redundant processing capacity. Again, going back to my earlier comment about you don't need to make a lot of real long-term commitments. It's a place where we have measured pace, right? A lot of acreage is all HPP. We can have a measured, measured pace of production up there. But then from a commitment standpoint with being, you know, existing capacity and also very near to, you know, a pretty, a pretty sizable, you know, local demand market on the crude oil side too.

Ezra: Don't need to make a lot of real long term commitments, it's a place where we have measured pace right. A lot of the acreage is all H B P. We can have a magic measured pace of production up there, but then from a commitment standpoint was being you know existing capacity and also very near to you now.

Lance Terveen: It's a place where we have a measured pace, right? A lot of the acreage is HPP. We can have a measured pace of production up there, but then from a commitment standpoint with being, you know, existing capacity and also very near to, you know, Pretty, a pretty sizable local demand market on the crude oil side, too. So, I think as you think about our strategy from a marketing standpoint, it will be very consistent with our other plays that we've had that have been very early in their development.

Ezra: Pretty a pretty sizeable local demand market on the crude oil side too. So I think as you think about our strategy from a marketing standpoint, it will be very consistent with our other plays that we've had that have been very early in their development. So we will be very measured while the crude oil will probably start with lease sales and then we'll kind of litho will gathering we're sitting up in.

Lance Terveen: So I think as you think about our strategy from a marketing standpoint, it will be very consistent with our other place that we've had that have been very early in their development. So we'll be very measured. A lot of the crude oil will probably start with Lee sales. And then we'll kind of look to will gathering. We're setting up and selling a lot of our crude into the local refineries today. That's in that area. So I would say it aligns very much with what we've done and many of our other places. Scott.

Lance Terveen: So, we'll be very measured. A lot of the crude oil, we'll probably start with lease sales, and then we'll kind of look to oil gathering. We're setting up and selling a lot of our crude oil to local refineries today that are in that area. So, I would say it aligns very much with what we've done and many of our other plays.

Ezra: A lot of our crude into the local refineries today, that's in that in that area. So I would say it aligns very much with the with what we've done in many of our other place Scott.

Scott Hanold: Scott.

Scott Hanold: Yeah, yeah, and I guess, you know, delving a little bit more specifically on that, you know, do you expect to try to get the gas that you produce out of the base to get better pricing, and with the NGLs, you know, there, would you try to, you know, try to find a way to, you know, maybe get to the export market in that area, where you'll get much stronger pricing? Just more so on the NGLs and the gas, like, do you expect to get those out of the basin or, you know, what's sort of the short and longer term plan there?

Lance Terveen: Yes. And I guess, you know, delving into a little bit more specific on that, you know, do you expect to, you know, try to get the gas that you produce out of the base to get better pricing on with the NGLs? You know, there, you know, what would you try to, you know, try to find a way to, you know, maybe get to the export market in that, you know, in that area where you'll get much stronger pricing.

Speaker Change: And I guess delving into a little bit more specific on that.

Speaker Change: Do you expect to try to get the gas that you produce out of the base to get better pricing and with the Ngls.

Speaker Change: Would you try to try to find a way to maybe get to the export market.

Ezra: In.

Speaker Change: In that area, where you will get much stronger pricing. So just more so on the Ngls and the gas like do you expect to get those either basin or.

Lance Terveen: So just more so on the NGLs and the gas, like do you expect to get those out of base or, or, you know, what's with sort of the short in longer term plan there? No, that's a great question. I think again, I mean, not to kind of go back to my earlier comments, it's going to be a function of just the pace of the development there. And so commitments, we're going to be very disciplined there. But as you think about the gas markets there, especially at the tailgate from a residue standpoint going into the markets, there's a significant amount of just demand that's there.

Speaker Change: What's sort of the short and longer term plans there.

Lance Terveen: No, that's a great question. I think, again, to kind of go back to my earlier comments, it's going to be a function of just the pace of the development there. And so commitments, we're going to be very disciplined there. But as you think about the gas markets there, especially at the tailgate, from a residue standpoint, going into the markets, there's a significant amount of just demand that's there to kind of go through the Midwest. You have a lot of interstate connectivity, it's an extremely liquid market.

Speaker Change: That's a great question I think again, I mean, not to kind of go back to my earlier comments, it's gonna be a function of just the pace of the development there and so commitments, we're going to be very disciplined there, but as you think about the gas markets there, especially at the tailgate from a residue standpoint going into the markets. There's a significant amount of just demand that's there to kind of go.

Lance Terveen: To kind of go into the Midwest, you have a lot of interstate connectivity. It's an extremely liquid market. So I think we're going to be, you know, pretty disciplined there. And I've been using that word quite a bit, but it's just not a need to really reach to further downstream. You know, and then as you think about the NGL markets, there's a lot of, it's a little bit different than other plays in that you have a lot of the local fractionation is kind of there within the state, right? And so a lot of the purity is being exported.

Ezra: Through the Midwest do you have a lot of Interstate connectivity, it's an extremely liquid market. So I think we're gonna be you know pretty disciplined there and I've been using that word quite a bit but it's just not a need to really reach to further downstream you know and then as you think about the NGL markets and there's a lot of it's a little bit different than other plays in that you'd have a lot.

Lance Terveen: So I think we're going to be, you know, pretty disciplined there. And I've been using that word quite a bit, but there's just not a need to really reach too far downstream. You know, and then as you think about the NGO markets, there's a lot of it that's a little bit different than other plays in that you have a lot of local fractionation is kind of there within the state, right? And so a lot of the purity is being exported. So we're kind of already kind of participating in some of those aspects as well, just because that's some of the natural market avenues for the products there on NGLs, Scott.

Ezra: The local fractionation is kind of there within the state right and so a lot of the purity is being exported. So we're kind of already kind of participating in some of those aspects as well just because of some of the natural markets.

Lance Terveen: So we're kind of already kind of participating in some of those aspects as well, just because that's some of the natural markets avenues for the products there on NGLs. Scott.

Scott Hanold: Avenues for the products, they're on Ngls Scott.

Charles Meade: The next question comes from Charles Mead from Johnson Rice. Please go ahead.

Charles Meade: The next question comes from Charles Meade from Johnson Rice. Please go ahead.

Ezra: The next question comes from Charles Meade from Johnson Rice. Please go ahead.

Charles Meade: It's good morning Ezra to you and the whole EOG team there. I'd like to go back to Utica and the shadow pad, so it looks like a really attractive IP 30 you showed us there relative to the wider space wells, but I'm curious if you could maybe offer a little bit more detail or insight on how those spot rates are evolving from that pad and if you have any sense of how long it will be before you're able to say that Spacey, Spacing Power is a success.

Keith Trasko: It's good morning, Ezra, to you and the whole EOG team there. I'd like to go back to the Utica and the shadow pad. So it looks like a really attractive IP30 you showed us there relative to the wider space wells, but I'm curious if you could maybe offer a little bit more detail or insight on how those spot rates are evolving from that pad. And if you have any sense of how long it will be before you're able to say that that spacey, the spacey pile is the success.

Charles Meade: Good morning to you and the whole EOG team there.

Charles Meade: I'd like to go back to the to the Utica in in the Shadow pad. So it looks like a really attractive IP 30, you showed us there.

Speaker Change: Relative to the to the wider space wells, but I'm curious if you could.

Speaker Change: Maybe offered a little bit more detail or insight on how those the spa.

Speaker Change: Spot rates are evolving from that pad and if you have any sense of.

Speaker Change: How long it will be before you were able to say that that space even.

Ezra: The spacing probably as a success.

Keith Trasko: Yeah, boy, this is Keith. So, as far as how the, I'll take the as far as how the rates are evolving question and talk a little bit about like the product mix. So our IP30s, you know, are kind of heavily oil weighted, heavily liquids weighted. We do see that in a lot of combo plays. So expect that early on. And we've seen that across all the well packages we've have in the north end of South. So we still estimate like a 60 to 70% liquids mix for the EUR product. And so I'll tie back to it.

Keith Trasko: Good morning, this is Keith. So as far as how the I'll take the as far as how the rates are evolving question and talk a little bit about the product mix. So our IP 30s, you know, are kind of heavily oil weighted, heavily liquid weighted. We do see that in a lot of combo plays.

Ezra: Yeah. Good morning. This is a this is keith so as far as how the I'll take the as far as how the rates are evolving question and talk a little about like the product mix. So our IP Thirty's you now are kind of heavily oil weighted.

Ezra: Heavy liquids weighted but did you see that in a lot of combo plays. So do you expect that early on and we've seen that across all of the well packages you have in the north and the south.

Keith Trasko: So expect that early on. And we've seen that across all the well packages we have in the north and the south. So, we still estimate a 60-70% liquids mix for the EUR product. And so, I'll tie back to a law that has a little more production history, which is the Timber Wolf. So Timberwolf and also the Xavier package, that IP30 was around a 55% oil cut. Those have been on for about a little over six months now, and we see closer to a 50% oil cut right now.

Ezra: So we still estimate like 60% to 70% liquids mix for the U R a product.

Ezra: And so I'll tie back to a well that has a little more production history, which is the the timber wolf so.

Keith Trasko: Well, that has a little more production history, which is the Timberwolf. So Timberwolf and also the Xavier package that IP30 was around 55% oil cut. There's been on for about a little over six months now, and we see a closer to a 50% oil cut right now. So you see it moderate, but it's not a large drop overall.

Ezra: Timber Wolf and also the Xavier package that IP 30 was around 55% oil cut.

Ezra: Been on for about a little over six months now and we see a closer to a 50% oil cut right now so you see it moderate but it's not a large it's not a large drop.

Keith Trasko: So you see it moderate, but it's not a large, it's not a large drop overall. As far as how to, how long to determine if the spacing is a success, it's going to vary in different places, but we just want to see, you know, more production data on the, you know, I'd say at least six months, nine months or so, and compare that to the data set that we have on some of our older packages, Timberwolf, Xavier, et cetera, and just kind of see how, see how they hang in there, see how the pressures look, etc.

Keith Trasko: As far as how how long to determine if the spacing is success, it's going to vary in different places, but we just want to see, you know, more production data on the, you know, I'd say at least six months, nine months or so. And compare that to the data set that we have on some of our older packages, Timberwolf, Xavier, et cetera. And just kind of see how, see how they hang in there, see how the pressures look, etc. Got it.

Speaker Change: Overall as far as how to how long to determine if a spacing as a success.

Ezra: It's going to vary in different places, but but we just want to see them you know more production data on the.

Ezra: I'd say at least six months nine months or so and compare that to the dataset that we have on some of our older packages Timberwolves Savior etcetera, and just kind of see how see how to hang in there and see how the pressures look.

Ezra: Etc.

Keith Trasko: That's helpful. So maybe mid-year next year.

Ezra: Got it that's helpful. So maybe mid year next year.

Lance Terveen: And then to follow up on the tea that project, I wonder if you could, you know, stick it on the theme of the mid-chair, but what if you could give us a narrative on how that, you know, how that project came together for you guys, particularly that, you know, I know, I know a lot of people, a lot of marketers have been trying to get ease from the ship channel, you know, to markets east of there. And how this came together and how it came to be that you're the 100% of the capacity there. That's right.

Speaker Change: And then a follow up on the on the on the T that project I Wonder if you could.

Speaker Change: Sticking on the theme of the midstream, but wonder if you could give us a.

Speaker Change: Narrative on how that.

Speaker Change: How that project came together for a for you guys, particularly that are you know what.

Speaker Change: I know a lot of people a lot of marketers have been trying to get east from the ship channel.

Ezra: Markets East of there and.

Ezra: How this came together and how it came to be that you are the 100% of the capacity there.

Charles Meade: Got it. That's helpful.

Lance Terveen: Hey, good morning. Thanks for the question. This is Lance. We could probably spend 30 minutes on that question, but I think Ezra is going to kick me over here if I spend too much time. But I'd say, you know, I talked earlier; one of the questions kind of related to just, you know, the marketing strategy and kind of the integration that we have, and we think about like the markets. And that was something that we looked at as you asked, kind of the genesis of that. I mean, that started all the way back in kind of 2022, right?

Lance: Yeah, Charles Hey, good morning. Thanks for the question. This is lance so we could probably spend 30 minutes on that on that question, but I think that's where it's going to kick me over here, if I spend too much time, but I'd say you know I talked earlier, one of the questions kind of related to just the marketing strategy and kind of the integration that we have and we think about like the markets and that was something that we've looked at.

Charles Meade: So maybe mid-year next year. And then a follow-up on the TLAB project, I wonder if you could, you know, sticking with the theme of the midship, give us a narrative on how that, you know, how that project came together for you guys, particularly that, you know, I know a lot of people, a lot of marketers have been trying to get east from the ship channel, you know, to market east of there. How this came together and how it came to be that you're 100% of the capacity there.

Ezra: As you asked to kind of the Genesis of that I mean that started all the way back in 2022 right. So we saw kind of that station 65. When you look kind of into that market was likely going to be very much a premium market long term and so you know we worked alongside Williams there went out for their open season, and we were able to kind of capture all the.

Lance Terveen: Hey, Charles. Hey, good morning. Thanks for the question. This is Lance.

Lance Terveen: And so we saw kind of that station 65 when you look kind of into that market was likely going to be very much a premium market long term. And so, you know, we worked alongside Williams there, went out for their open season. And we were able to kind of capture all the capacity there through our precedent agreement. So, you know that took a lot of time, right? I mean, I think you really have to have that foresight and then looking forward, like into the markets. And then I think the other thing I really want to capture is just that, is all in path, right, Charles?

Ezra: All the capacity there through our precedent agreements. So you know that took a lot of time right. I mean, I think you really have to have that foresight and then looking for like into the markets and then I think the other thing I really want to capture as just that is all in path.

Lance Terveen: We could probably spend 30 minutes on that question, but I think Ezra's going to kick me over here if I spend too much time. But I'd say, you know, I talked earlier about one of the questions kind of related to just, you know, the marketing strategy and kind of the integration that we have and how we think about, like, the markets. And that was something that we looked at as you asked kind of the genesis of that. I mean, that started all the way back in 2022, right?

Lance Terveen: And so we saw kind of that Station 65, when you look kind of into that market, was likely going to be very much a premium market long term. And so, you know, we worked alongside Williams there, went out for their open season, and we were able to kind of capture all the capacity there through our precedent agreement. So, you know, that took a lot of time, right? I mean, I think you really have to have that foresight and then look forward, like, into the markets.

Lance Terveen: So I mean, when you think about like South Texas all the way through our Eagleford asset all the way up, you know, into the Gulf Coast market, I mean, we can kind of capture everything. The Delaware Basin with our existing transport, our new transport that we're going to have on Matterhorn, all that kind of gets in the path that can kind of get into that market. So that's a little bit of kind of that all came together because yes, you have a lot of these pipes that are coming in to the Gulf Coast. And so, as you've seen on some of our slides that we have there, especially related to our gas sales agreements, you have to have in markets on the other side.

Ezra: Charles So I mean, when you think about like South, Texas, all the way through our Eagle Ford asset all the way up you know into the Gulf Coast market. I mean, we can kind of capture everything the Delaware basin with our existing transport our new transport that we're gonna have on Matterhorn, all that kind of gets in the past that can kind of get into that market. So.

Ezra: That's a little bit of kind of that all came together because yes, you have a lot of these pipes that are coming in to the Gulf coast and so as you've seen on some of our slides that we have there is especially related to our gas sales agreements you have to have in markets on the other side. So we've been very forward thinking there you can kind of see the ramp up that we have in terms of other term sales that way.

Lance Terveen: And then I think the other thing I really want to capture is just that it's all in the path. Right, Charles. So I mean, when you think about South Texas, all the way through our Eagleford asset all the way up, you know, into the Gulf Coast market, I mean, we can kind of capture everything. The Delaware Basin with our existing transport, our new transport that we're going to have on Matterhorn, all that kind of gets in the path that can kind of get into that market. So that's a little bit of how all that kind of came together. Because, yes, you have a lot of these pipes that are coming in from the Gulf Coast.

Lance Terveen: And so, as you've seen on some of our slides that we have, there's a special related to our gas sales agreements. You have to have markets on the other side. So we've been very forward thinking there. You can kind of see the ramp up that we have in terms of other term sales that we have. So you need to have the transport position, Charles, but then you also need to be thinking about having strategic sales on the other side. And I think that's another thing that really differentiates us that we've got that in place now, and then also looking forward.

Lance Terveen: So we've been very forced thinking there. You can kind of see the ramp up that we have in terms of other term sales that we have. So you need to have the transport position, Charles, but then you also need to be thinking about having strategic sales on the other side. And I think that's another thing that really differentiates us, that we've got that in place now, and then also looking forward.

Ezra: So you need to have the transport position Charles but then you also need to be thinking about having strategic sales on the other side and I think that's another thing that really differentiates us that we've got that in place now and then also looking forward.

Paul Cheng: The next question comes from Paul Cheng from Scotia Blank. Please go ahead. Hi, thank you. Uh, good morning, team.

Paul Cheng: The next question comes from Paul Cheng from Scotiabank. Please go ahead.

Ezra: The next question comes from Paul Cheng from Scotiabank. Please go ahead.

Paul Cheng: Hi, thank you. Good morning, Kim. Maybe this is for Jeff or maybe Ursula.

Paul Cheng: Alright. Thank you good morning team.

Paul Cheng: Um, maybe this is for Jeff or maybe Ersa. I want to go back into artificial links. Um, want to see that. I mean, the technology you use and how that is different than what is commonly available in the market today by some of the oil services. So in other words, that do you think, uh, you're at adoption that, uh, what gives you the edge comparing to your competitor and whether that you can quantify you talk about the phase, uh, our patient become better. How does that improve your phase decline rate? Uh, that's the first question.

Speaker Change: Maybe this is for Jeff or maybe it was that I wanted to go back into artificial limits.

Paul Cheng: I want to go back to artificial lips. I want to see the technology you use and how it is different than what is commonly available in the market today by some of the oil services. So in other words, do you think your adoption is what gives you the edge compared to your competitor and whether that can be quantified, you talk about the base operation becoming better? How does that improve your base decline rate? That's the first question.

Paul Cheng: Wanted to see that I mean, the technology, you use and how is that different than what's.

Speaker Change: It's commonly available in the market today by some of their own synthesis. So in other words there.

Speaker Change: Do you think you're at bumps in that.

Speaker Change: <unk> edge comparing to your competitor and weapons that you can quantify your pulse on the pace all patients become better how's that been cool.

Speaker Change: <unk> base decline rate.

Speaker Change: That's the first question.

Jeffrey Leitzell: Thanks, Paul. This is Jeff.

Jeffrey Leitzell: Thanks, Paul.

Ezra Yacob: This is Jeff. Yeah. That's a great question. And, and with any of our technology, uh, you know, that we developed, the beautiful thing about it is it's integrated with an EOG, with all of our different systems. So it communicates with all the data. It's getting all of our production data, all the pressures, um, you know, all the flow rates, all the temperatures, everything real time. And, uh, so all that's flowing into the system, and it can see that, which with a lot of other third party systems, that's not possible. On top of that, it also ties directly into our centralized control rooms, which are in each one of our basins that watches.

Speaker Change: Thanks, Paul This is Jeff Yeah, that's a great question and with any of our technology Ah you know.

Jeff Leitzel: We developed the beautiful thing about it is it's integrated within EOG with all of our different systems. So it communicates with all the data it's getting all of our production data all the pressures you know all the flow rates all the temperatures everything real time, and so all of that's flowing into the system and it can see that which with a lot of other third party a assist.

Ezra: So that's not possible on top of that it also ties directly into our centralized control rooms, which is in each one of our basins that watches you know our production you know real time $24 seven and as these systems are optimizing at the control room can watch it and monitor and make sure that theater readied set points are correct and then notify any people in the.

Jeffrey Leitzell: You know, our production, uh, you know, real time 24/7. And as these systems are optimizing at the control room, can watch it monitor and make sure that the already set points are correct and then notify any people in the field real time, you know, to be able to go out and check on a well, uh, or make any additional changes that need to be done. So really it has to do with the integration within our systems. It really kind of sets us apart from that aspect. And then, you know, on the decline rate side or I should say, at least from a base production and what our forecast is, you always have a certain amount of downtime, you know, that goes along with normal operations as well.

Ezra: Field real time, you know to be able to go out and check on a well or make any additional changes that need to be done. So really it has to do with the integration within our systems that really kind of sets us apart from that aspect and then you know on the decline rate side or I should say at least from our base production and what our forecast is you always have a certain amount of downtime.

Jeffrey Leitzell: Yeah, that's a great question. And with any of our technology, you know, that we develop, the beautiful thing about it is it's integrated with an EOG, with all of our different systems. So it communicates with all the data. It's getting all of our production data, all the pressures, you know, all the flow rates, all the temperatures, everything in real time. And so all that's flowing into the system, and it can see that, which with a lot of other third-party systems is not possible. So really, it has to do with integration within our systems. It really kind of sets us apart from that aspect,

Jeffrey Leitzell: And then, you know, on the decline rate side, or I should say, at least from a base production and what our forecast is, you always have a certain amount of downtime that goes along with normal operations of wells. And what these optimizers really do is they help minimize that downtime. So instead of having, you know, a handful of percentages, you're able to actually knock off a percentage or two of downtime to be able to keep these wells flowing and maximize production across our multi-basin portfolio.

Ezra: That goes along with normal operations of wells and what these optimized theres really do is they help minimize that downtime. So instead of having you know a handful of percentage you're able to actually not knock off a percentage or two of downtime to be able to keep these wells flowing and maximize production across our multi basin portfolio.

Jeffrey Leitzell: And what these optimizers really do is they help minimize that downtime. So instead of having, you know, a handful of percentage, you're able to actually knock off a percentage of two of downtime to be able to keep these wells flowing and maximize the production across our multi base and portfolio.

Paul Cheng: That's great. The second question that I think, Ersa, that you talk about, you guys can do quickly is that with Dorado, if you want to increase the activity level, what will be the precondition? I mean, what do you look for in order for you to determine when is the right time for you to accelerate the rig activity or even how many wells you bring online?

Paul Cheng: That's great. Um, the second question that, um, I think earlier that we talked about, you guys can do quite quickly that we've traveled. You can want to increase the activity level. What will be the precondition? I mean, what you look for in order for you to determine when is the right time for you to salary the rig at difficulty or that even how many well that you bring on on the market. Yeah.

Speaker Change: That's great.

Ezra: The second question that.

Speaker Change: I think or something like that.

Ezra: Can you talk about you guys can do quick footed.

Ezra: Robin you want to increase that I think that what would be the peak condition I mean, what you want.

Speaker Change: Well you know that when you took the time and when he is the right time for you to a Saturday.

Speaker Change: Hey, Rick I think the key or that even on the web.

Speaker Change: I do think on the market.

Ezra Yacob: Yeah, Paul, this is Ezra. I think I think you broke up there just for a second. So I'm not sure if you're asking about the Bach Andrado or Utica. I'm talking about Dorado. Yeah, and Dorado will be the peak. What will be the precondition for you to decide, okay, this is the right time for us to increase the activities and bring more guests to the market? It's just simply the price, or that you're looking for anything else, and you need to simply lower the price. Is there a price level that will be the important trigger point? Yeah, thank you, Paul.

Ezra Yacob: Yeah, Paul, this is Ezra. I think I think you broke up there just for a second. So I'm not sure if you're asking about the Bach and Drauto or Utica. I'm talking about the Rado and Drauto. Will be the peak.

Ezra: Yeah. Paul This is Ezra <unk> I think I think you broke up there just for a second so I'm not sure if you're asking about the the Bakken draw or Utica.

Ezra: I.

Speaker Change: I'm talking about the Rocco.

Speaker Change: Draw it up will be the peak what would it be at that same condition all year to decide okay. This is the right time for up to include the I think the teams and bringing more guests to them. Okay. So it just simply.

Ezra Yacob: What will be the precondition for you to decide, okay, this is the right time for us to increase the activities. And bring more gas to the market. It's just simply the price or that you're looking for anything else, and you need to simply the price. If there are price and effort that will be by the impotent trick of porn.

Speaker Change: Or that you're looking for anything else and yet at the same place upon yes at price levels that with anybody.

Speaker Change: Uh huh.

Ezra: In fact upon.

Ezra Yacob: Yeah, thank you, Paul. So, yeah, with Drauto, you know, I think the biggest thing to continue to think about with any gas play, and for us, the dominant one is Drauto. And you can see right now in the current environment how volatile gas prices are; you've got to be committed to being the low cost supplier. You've got to be a low-cost operator on the gas side, because, as we all know, the margins are pretty skinny. You can make up with it with low operating costs. Gas is, you know, easier to operate. Then liquids, but then you need to make up for it with volumes.

Ezra Yacob: So yeah, with Dorado, you know, I think the biggest thing to continue to think about with any gas play, and for us, the dominant one is Dorado. And you can see right now in the current environment, how volatile gas prices are, that you've got to be committed to being the low cost supplier; you've got to be a low cost operator on the gas side. Because, as we all know, the margins are pretty skinny; you can make up for it with low operating costs gas, you know, easier to operate than liquids. But then, you need to make up for it with volumes.

Paul Cheng: Yeah. Thank you Paul.

Speaker Change: Yeah withdraw so you know I think the biggest thing to continue to think about it with any gas play and for US the dominant one is gerardo.

Speaker Change: And you can see right now in the current environment of volatile gas prices are is you've got to be committed to being the low cost supplier you've got to be a low cost operator on the gas side because as we all know that the margins are a pretty skinny you can make up with it with low operating cost gas as you know easier to operate than liquids.

Ezra: But then.

Ezra: You need to make up for it with volumes and then the second piece of it is you've got to be exposed.

Ezra Yacob: And then the second piece of it is you've got to be exposed to diverse markets because the volatility of gas means that you will have arbitrages come and go very quickly. And if you've got the gas there exposed to the market, you can capture those. If you try to chase those arbitrages, much like we saw in 2022 and 2023, by the time you can try to get your gas in position to capture an arbitrage, it might be gone.

Ezra Yacob: And then the second piece of it is you've got to be exposed to diverse markets, because the volatility of gas means that you will have arbitrages come and go very quickly. And if you've got the gas there exposed to the market, you can capture those if you try to chase those arbitrages, much like we saw, you know, in 2022 and 2023. By the time you can try to get your gas in position to capture an arbitrage, it might be gone. And so those are the two things that we really focus on. In general, when you start talking about capital allocation to it, those comments you should read into is why we've continued to stick with a rig activity down there, kind of a minimal level of activity.

Ezra: Exposed to diverse markets because the volatility of gas means that you'll have arbitrage has come and go very quickly and if you've got the gas they're exposed to the market you can capture those if you tried to chase those arbitrage as much like we saw you know Ah in 2022 and 2023 by the time you can try to get your gas and positioned to capture an arbitrage.

Ezra: It might be gone and so those are the two things that we really focus on in general when you start talking about capital allocation to it.

Ezra Yacob: And so those are the two things that we really focus on. In general, when you start talking about capital allocation to it. Those comments you should read into is why we've continued to stick with a rig activity down there, kind of a minimal level of activity, so that we can continue, as Jeff highlighted, to learn, embed those learnings in the very next well, and continue to be confident that when we see the emerging demand hit, which is coming in the next few years with a lot of the LNG coming online, we'll be in a position to be able to bring to market low-cost reserves, low-cost gas reserves.

Speaker Change: Those comments you should read into is why we've continued to stick with our rig activity down there kind of a minimal level of activity.

Ezra Yacob: So that we can continue, as Jeff highlighted, to learn, embed those learnings in the very next well, and continue to be confident that when we see the emerging demand hit, which is coming in the next few years with a lot of the LNG coming online, we'll be in a position to be able to bring to market low cost reserves, low cost gas reserves. Now, on the drilling side, on the completion side, we do have a lot of flexibility there. You know, a great way to kind of overspend is if you're bringing in a fractured and sending it out of the basin and bringing it back, picking up water lines, you know, laying them back down and things like that.

Ezra: So that we can continue as Jeff highlighted to learn embed those learnings in the very next well and continue to be confident that when we see the emerging demand hit which is coming in the next few years with a lot of the LNG coming online will be in a position to be able to bring to.

Ezra: It's a market low cost reserves low cost gas reserves now.

Ezra Yacob: Now, that's on the drilling side. On the completion side, we do have a lot of flexibility there. You know, a great way to kind of overspend is if you're bringing in a frac spread and sending it out of the basin and bringing it back, picking up the water lines, you know, laying them back down and things like that. So that's why we try to keep a drilling rig going. As I've talked about in the past, that's kind of the first hurdle to capturing economies of scale.

Speaker Change: Now on the that's on the drilling side on the completion side, we do have a lot of flexibility. There you know a great way to kind of overspend is if you're bringing in a frac spread and sending it out of the basin and bringing it back picking up water lines laying them back down and things like that so that's why we tried to keep a drilling rig.

Ezra Yacob: So that's why we try to keep a drilling rig going. As I've talked about in the past, that's kind of the first hurdle to capturing economies of scale. Then the second one is trying to get your packages lined up so when you bring a completion spread in, you can actually keep it for a significant number of wells and bring that on.

Ezra: Going as Ive talked about in the past that's kind of the first hurdle to capturing economies of scale and then the second one is trying to get your packages lined up so when you bring a completion spread in you can actually keep it for a significant number of wells and bring that on what we look for in general to when we could take that next step it's not only internal learnings it's not all.

Ezra Yacob: Then the second one is trying to get your packages lined up so when you bring a completion spread in, you can actually keep it for a significant number of wells and bring that on. What we look for in general when we can take that next step is not only internal learnings, it's not only the returns that we're generating, but it is also with respect to the macro market. Now, as I said in a previous question, you know, the price essentially follows inventory levels, or it's very closely aligned with that.

Ezra Yacob: What we look for in general to when we could take that next step, it's not only internal learnings, it's not only the returns that we're generating, but it is also with respect to the macro market. Now, as I said on a previous question, you know, the price essentially follows inventory levels, or it's very lined up with that. We're below the five-year average right now on pricing and above the five-year average on inventory levels. So inventory levels are a big driver of what we're looking for, but then we're also cognizant of the supply and demand fundamentals for really North America or really just the US.

Ezra: The returns that we're generating but it is also with respect to the macro market.

Ezra: As I've said on a previous question you know the the price essentially follows inventory levels or its very lined out with that were below the five year average right now and on pricing and above the five year average on inventory levels. So inventory levels are a big driver of what we're looking for but then we're also cognizant of the supply and demand fundamentals.

Ezra Yacob: We're below the five-year average right now on pricing and above the five-year average on inventory levels. So inventory levels are a big driver of what we're looking for, but then we're also cognizant of the supply and demand fundamentals for really North America or really just the U.S. And again, what we see is... a lot of increased demand coming in the next few years. You have 10 to 12 BCF a day arguably under construction right now that should be really beginning throughout 2025.

Ezra: Really North America are really just the U S and again, what we see is.

Ezra Yacob: And again, what we see is a lot of increased demand coming in the next few years. You have 10 to 12 BCF a day arguably under construction right now that should be on really beginning throughout 2025. And then in addition to that, as you look at the back half of the decade, I think on the last earnings call, we highlighted our forecast for potentially another 10 to 12 BCF a day of demand increasing from things like electricity generation, coal power plant retirements, just an increase in Mexico exports, and then finally just overall industrial demand growth.

Ezra: A lot of increased demand coming in in the next few years you have 10 to 12 Bcf a day arguably under construction right now that should be on a really beginning throughout 2025, and then addition in addition to that as you look at the back half of the decade I think on the last earnings call, we highlighted our forecast for potentially another tenant.

Ezra Yacob: And then in addition to that, as you look at the back half of the decade, I think on the last earnings call, we highlighted our forecast for potentially another 10 to 12 BCF a day of demand increasing from things like electricity generation, coal power plant retirements, just an increase in Mexico exports, and then finally just overall industrial demand growth. So we really look at it internally. Our ability to generate higher returns and embed our learning so that we're investing at the right pace, and externally, we look at supply, demand, and ultimately inventory levels, Paul.

Ezra: To 12 Bcf a day of demand increasing from things like electricity generation coal power plant retirements, just an increase in Mexico exports and then finally, just overall industrial demand growth. So we really look at our internally.

Ezra Yacob: So we really look at internally our ability to generate higher returns and embed our learning so that we're investing at the right pace. And externally, we look at supply demand and ultimately the inventory levels, Paul.

Speaker Change: Our ability to generate higher returns and embed our learnings so that we're investing at the right pace and externally, we look at supply demand and ultimately the inventory levels fall.

Doug Leggate: The next question comes from Doug Leggate from Wolf Research. Please go ahead. Ezra, how are you? Thanks for having me on. Um, can you hear me okay? Yes, sir, Doug, it's good to hear from you again. No good, I wasn't sure if I'd gone into the ether, but um, I wonder if I could pull you back to the eutica just for a second. I mean, delineation is kind of a glacial event for a lot of companies. You guys have moved very quickly, not only to walk down the acreage, but to demonstrably show that at least on our numbers that this is starting to look competitive relative to your Permian position.

Doug Legate: The next question comes from Doug Legate from Wolf Research. Please go ahead.

Ezra: The next question comes from Doug Leggate from Wolfe Research. Please go ahead.

Ezra: Yeah.

Doug Legate: Ezra, how are you? Thanks for having me on.

Doug Leggate: How are you thanks for having me on.

Doug Legate: Can you hear me okay? Yes, sir, Doug. It's good to hear from you again. Thank you.

Ezra: Can you hear me, Okay, yes, Sir Doug it's good to hear from you again.

Doug Legate: Now, good, I wasn't sure if I'd gone into the ether, but I wonder if I could pull you back into Utica just for a second. I mean... Delineation is kind of a glacial, um... event for a lot of companies. You guys have moved very quickly, not only to walk down the acreage but to demonstrably show that, at least on our numbers, this is starting to look competitive relative to your, uh... Permian position. I'm just wondering how you would do it, [inaudible]

Speaker Change: No I get up I wasn't sure if I had gone into the east but I.

Speaker Change: I Wonder if I could pull you back to the Utica just for a second I mean.

Speaker Change: Delineation as kind of a glacial.

Speaker Change: Event for a lot of companies you guys have moved very quickly not only to walk down the acreage but to.

Speaker Change: To demonstrably show that at least on our numbers. This is starting to lose competitive relative to your Permian position.

Ezra Yacob: I'm just wondering how you would frame the extent to which you've de-risked the play at this point. And when you would anticipate a more meaningful development plan as you move forward, is it infrastructure constraint? There is another reason that you're waiting because it looks like, geologically at least, you're figuring this thing out. Yes, Doug, I appreciate that. I think everything you're saying is correct. It's how we feel about it too. Geologically, we're doing a great job figuring out. I will point out the only caveat I'd maybe make is we have, uh, as Jeff pointed out, concentrated right now in the volatile oil window.

Speaker Change: Just wondering how you would frame the extent to which you derisk. The play at this point on when you would anticipate a more meaningful development plan as you move forward as the infrastructure constrained or is another another reason that.

Speaker Change: Youre waiting because it looks like geologically at least youre figuring this figuring this thing out.

Ezra Yacob: Yes, Doug, I appreciate that. I think everything you're saying is correct.

Speaker Change: Yes, Doug I appreciate that I think everything you're saying is correct. Its how we feel about it too geologically we're doing a great job figuring out I will point out the only caveat I'd maybe make is we have as Jeff pointed out concentrated right now in the volatile oil window. So roughly 225 out of the 445000 acres.

Ezra Yacob: It's how we feel about it, too. Geologically, we're doing a great job of figuring it out. I will point out the only caveat I'd maybe make is that we are, as Jeff pointed out, concentrated right now in the volatile oil window, so roughly 225 out of the 445,000 acres. But you can see our confidence in the fact that we continue to put together some leased acreage as we increase the footprint by about 10,000 acres. And it's not overly complicated, Doug.

Ezra Yacob: So roughly 225 out of the 445,000 acres. But you can see our confidence and the fact that we continue to put, we continue to put together some leaf acreage as we increase the footprint about 10,000 acres. And, you know, it's not overly complicated. Doug, you know, we've got multiple packages now in the north, and we're seeing consistently strong results. So I would say we're feeling very confident there in the north. Certainly, as Keith and Charles were speaking about, we're not 100 percent, you know, satisfied with a spacing number if you wanted to get down that path.

Speaker Change: But you can see our confidence in the fact that we continue to put.

Speaker Change: We continue to put together some leased acreage as we increase the footprint about 10000 acres.

Speaker Change: You know, it's not it's not overly complicated Doug you know we've got multiple packages now in the north and we're seeing consistently strong results. So I would say, we're feeling very confident there in the north certainly as Keith and Charles We're speaking about we're not 100% you know are satisfied with our spacing number if you wanted to get down that path.

Ezra Yacob: We've got multiple packages now in the north, and we're seeing consistently strong results. So I would say we're feeling very confident there in the north. Certainly, as Keith and Charles were speaking about, we're not 100% satisfied with a spacing number if you want to get down that path. But in any North American shale play, you know as well as I do, the spacing is going to be between 600 feet and 1,000 feet, probably on average, depending on the play.

Ezra Yacob: But in any North American show play, you know, as well as I do, the spacing's going to, you know, it's going to be between 600 foot and a thousand foot spacing probably on average, depending on the play. And then in the south, you know, we only have one package really with any amount of data on there. So we're a little bit further behind on delineation down there, even though that package did come online with our expectations.

Speaker Change: But in any North American shale play you know as well as I do the spacing is going to you know its going to be between 600 foot and 1000 foot spacing probably on average depending on the play and then in the South you know we only have one one package really with any any amount of data on there. So we're a little bit further behind on delineation down there, even though that <unk>.

Ezra Yacob: And then in the south, we only have one package, really, with any amount of data on it. So we're a little bit further behind on delineation down there, even though that package did come online with our expectations. So it's too early to talk about 2025, but just to call back, we have basically, we're planning on this year doubling the amount of wells to sales over what we did in 2023. And I think you're spot on, Doug, that what we are seeing to date with the early time wells that we have, we're seeing that it's competitive with parts of the Permian Basin.

Doug Leggate: <unk> did come on line with our expectations. So you know it's too early to talk about 2025, but you know just a call back we have basically where we're planning on this year doubling the amount of wells to sales over what we did in 'twenty three and I think you're spot on Doug that we are seen to date.

Ezra Yacob: So, you know, it's too early to talk about 2025. But, you know, just to call back, we have basically, we're planning on this year doubling the amount of wells to sales over what we did in 23. And I think you're spot on, Doug, that we are seeing, to date, with, you know, the early time wells that we have. We're seeing that it's competitive with parts of the Permian Basin. That's what we're seeing as well. And I, you know, I think, to be honest, I think some of us were a little skeptical to begin with and you're, you're proving as you're proving as wrong.

Doug Leggate: You know their their early time wells that we have we're seeing are that it's competitive with parts of the Permian basin.

Doug Legate: That's what we're seeing as well. And, to be honest, I think some of us were a little skeptical to begin with, and you're proving us wrong. So congratulations on that. My follow-up question, there were a lot of questions this morning on gas and the extraordinary realizations you guys have had, I think was pointed out earlier. But my question is about the proportion of gas that you're prepared to commit to international pricing.

Doug: Uh huh.

Doug Leggate: What we're seeing as well and then I you know I think to be honest I think someone who's got a little skeptical to begin with and you're you're proving as youre proving us wrong. So congratulations on that.

Doug Leggate: So congratulations on that.

Doug Leggate: My follow up, there's been a lot of questions this morning on gas and, you know, the extraordinary realizations you guys have had. I think it was pointed out earlier, but my question is on the proportion of gas that you're prepared to commit to international pricing. You're, I think right now, you're, I want to say if I look out to the back end of the decade that you're currently involved in, you're about halfway, you're about halfway locked in with a ventilated or the other things you point out. But in terms of your preparedness to step up your international exposure, what are you thinking as we see incremental LNG plans start to come out of the woodwork like the Woodside deal with, we're in, for example, where would you be comfortable in terms of international exposure.

Speaker Change: My follow up there's been a lot of questions. This morning on gas and the extraordinary realization that you guys have had I think it was pointed out earlier, but my question is on the proportion of gas that you're prepared to.

Speaker Change: Commit to international pricing I think right now I wanted to see if I look out to the back end of the decade that your current role.

Doug Legate: I think right now, I want to see if I can look out to the back end of the decade at your current volume. You're about halfway; you're about halfway locked in, whether it be brand-related or the other things you pointed out. But in terms of your preparedness to step up your international exposure, what are you thinking as we see incremental LNG plants start to come out of the woodwork, like the woodside deal with Tularean, for example? Where would you be comfortable in terms of international exposure? I'm losing my voice, but in terms of international exposure, Ezra, as it relates to your total proportion of your volume.

Speaker Change: Uh Huh, we halfway lumpkin, whether it's Brandon we've hit all the other things that you pointed out but in terms of your preparedness to step up your international exposure. What are you thinking as we see incremental LNG plants start to come out of the woodwork like the Woodside deal with Lilly for example, where would you be comfortable.

Ezra Yacob: I'm losing my voice, but in terms of international exposure, Ezra, I've released to you your total proportion of the boy. Doug, I appreciate that. We have, as you've seen, we've got to slide 11 in our deck that kind of highlights what we've done with our gas sales agreements to, you know, expose us to pricing diversification, including the international. You know, I'd point out, Doug, the biggest thing is when we entered into these agreements, as you'll recall, we started negotiations and really entered into most of these and kind of a counter-secret time period. And so the first thing to keep in mind is when we look at these opportunities, we want to make sure that we're being a low cost, we're entering into a lower cost contract or gas sales agreement that's going to provide us with upside exposure.

Doug: International exposure I'm, losing my voice, but in terms of.

Doug: International exposure as well.

Speaker Change: Thanks to your total proportion of your volumes.

Ezra Yacob: Yeah, Doug, I appreciate that. We have, as you've seen, we've got slide 11 in our deck that kind of highlights what we've done with our gas sales agreements to, you know, expose us to pricing diversification, including the international, you know, I'd point out, Doug, the biggest thing is when we entered into these agreements, as you'll recall, we entered, we started negotiations and really entered into most of these and kind of a counter cyclic The first thing to keep in mind is when we look at these opportunities, we want to make sure that we're being a low cost, we're entering into a lower cost contract or gas sales agreement that's going to provide us with upside exposure.

Speaker Change: Yeah, Doug I appreciate that we have.

Speaker Change: You're saying, we've got a slide 11 in our deck that kind of highlights.

Speaker Change: What we've done with our gas sales agreements to expose us to pricing diversification, including the international.

Doug: I would point out Doug the biggest thing is when we entered into these agreements as you'll recall, we entered when we started negotiations and really entered into most of these in kind of a counter cyclic.

Doug Leggate: Time period, and so the first thing to keep in mind is when we look at these opportunities we want to make sure that we're being a low cost we're entering into a lower cost a contract or a gas sales agreement, that's going to provide us with upside exposure.

Ezra Yacob: And then, in the sales agreements that we've done today, we feel like it limits our exposure to risk as well. You know, one reason that we're able to enter into some of these agreements is just because of, to be perfectly honest, the size and scale of what we've captured, mainly a drawdo, but also across other basins as Lance has talked about. So right now, as you pointed out, we're only really selling about 140 MMBTU per day. They get exposed to, you know, the uplift of JKM pricing. But from 2020 to 2023, as we highlighted on slide 11, you know, that's added about just over $1 billion worth of revenue uplift, which is outstanding.

Ezra Yacob: And then in the sales agreements that we've done to date, we feel like they limit our exposure to risk as well. You know, one reason that we're able to enter into some of these agreements is just because of, to be perfectly honest, the size and scale of what we've captured, mainly at Dorado, but also across other basins, as Lance has talked about. So right now, as you pointed out, we're only really selling about 140 MMBTU per day.

Doug: And then in the sales agreements that we've done to date, we feel like it limits our exposure to risk as well no. One reason that we're able to enter into some of these agreements is just because of to be perfectly honest the size and scale of what we've captured a mainly a draw but also across other.

Doug: Basins as Lance has talked about so right now as you pointed out we're only really selling about 140.

Speaker Change: M M Btu per day, they gets exposed to you know the uplink the uplift of JK on pricing, but from 'twenty to 'twenty to 'twenty to 'twenty three as we highlighted on slide 11, you know that's added about just over $1 billion worth of revenue uplift, which is outstanding so even on small volumes it can.

Ezra Yacob: They get exposed to, you know, the uplink, the uplift in JKM pricing. But from 2020 to 2023, as we highlighted on slide 11, that's added about just over $1 billion worth of revenue uplift, which is outstanding. So even on small volumes, it can have a major impact on the revenue side. We're happy that that's going to step up here on 25 and 26 as Corpus Christi brings in their stage three.

Ezra Yacob: So, even on small volumes, it can be a major impact on the revenue side. We're happy that that's going to step up here in 25 and 26, as Corpus Christi brings on. They're stage three, and that'll increase approximately to 720 MMBTU under a couple of different gas sales or agreements that are outlined on that slide. And then, as we've talked about last quarter, we made it yet another, and I would call this counter-cyclic agreement because an agreement like this hasn't been done in North America for quite some time, but we actually have a Brent link now gas sales agreement.

Doug: Can be a major impact on the revenue side, we're happy that that's going to step up here in 'twenty, five and 26 as Corpus Christi brings on their stage three and that will increase approximately to 720 M. M. B to you under a couple of different gas sales agreements that are outlined on that slide and then as we've talked about.

Ezra Yacob: And that'll increase approximately to 720 MMBTU under a couple of different gas sales agreements that are outlined on that slide. And then, as we've talked about, Last quarter, we made yet another, and I would call this a counter-cyclic agreement because an agreement like this hasn't been done in North America for quite some time, but we actually have a Brent-linked gas sales agreement now. When we think about a percentage of our portfolio that we would necessarily like to have exposed to international markets, I'm not sure if we have a set percentage that we'd publicize right now because it really is But ultimately, our strategy is to get more of our gas exposed to diverse markets and to get our gas kind of offshore and exposed to the international market.

Speaker Change: Last quarter, we made it yet another and I would call. This counter cyclic agreement because an agreement like this hasn't been done in North America for quite some time, but we actually have a Brent linked now gas sales agreement when we think about a percentage of our portfolio that we would necessarily like to have exposed to international I'm not sure. If we have a set percentage.

Ezra Yacob: When we think about a percentage of our portfolio that we would necessarily like to have exposed to international, I'm not sure if we have a set percentage that we'd, you know, publicize right now because it really is dependent on the types of agreements and the marketing structures that we see available at the time. But ultimately, our strategy is to get more of our gas exposed to diverse markets and to get our gas kind of offshore and exposed to the international markets.

Doug: We publicize right now because it really is dependent on the types of agreements and the marketing structures that we see available at the time, but ultimately our strategy is to get more of our gas exposed to.

Doug: Diverse markets and to get our gas kind of offshore and exposed to the international markets.

Unknown Executive: This concludes our question and answer session.

Ezra Yacob: This concludes our question and answer session. I would like to turn the conference back over to Mr. Yacob for closing remarks.

Doug: This concludes our question and answer session I would like to turn the conference back over to Mr. Jacobs for closing remarks.

Unknown Executive: I would like to turn the conference back over to Mr. Jacob for closing remarks. We appreciate everyone's time today. Thank you to our shareholders for your support, and especially thanks to our employees for delivering another exceptional quarter.

Ezra Yacob: We appreciate everyone's time today. Thank you to our shareholders for your support, and especially thanks to our employees for delivering another exceptional quarter.

Mr. Jacobs: We appreciate everyone's time today, thank you to our shareholders for your support and especially thanks to our employees for four.

Mr. Jacobs: For delivering another exceptional quarter.

Unknown Executive: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect. Thank you.

Operator: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.

Doug: Okay.