Q3 2024 Range Resources Corp Earnings Call

October 23, 2024

Statements made during this conference call that are not historical facts are forward looking statements.

Such statements are subject to risks and uncertainties, which could cause actual results to differ materially from those in the forward looking statements.

After the Speakers' remarks, there will be a question and answer period.

Vice President Investor Relations at range resources. Please go ahead Sir.

Speaker Change: Thank you operator.

Speaker Change: Good morning, everyone and thank you for joining ranges third quarter 2024 earnings call.

Speaker Change: Speakers on today's call are Dennis Degner, Chief Executive Officer, and Mark <unk>, Chief Financial Officer.

Speaker Change: Hopefully you've had a chance to review the press release and updated Investor presentation that we've posted on our website.

We may reference certain slides on the call. This morning.

Speaker Change: You will also find our 10-Q on ranges website under the investors tab.

Speaker Change: You can access it using the Sec's Edgar system.

Speaker Change: Please note, we'll be referencing certain non-GAAP measures on today's call. Our press release provides reconciliations of these to the most comparable GAAP figures.

Speaker Change: We've also posted supplemental tables on our website.

Speaker Change: That include realized pricing details by product.

Speaker Change: Long with calculations of EBITDAX cash margins and other non-GAAP measures.

Speaker Change: With that let me turn the call over to Dennis.

Thanks, Lee and thanks to all of you for joining the call today.

Dennis Degner: Consistent performance has been a key part of the range story this year.

Dennis Degner: And our third quarter results reflect our repeatable execution in areas such as operating safely.

Dennis Degner: Driving continued drilling completion and production improvements.

Dennis Degner: Generating free cash flow.

Dennis Degner: And the prudent allocation of that free cash flow balancing returns of capital to shareholders and the long term development of our world class asset base.

Dennis Degner: I believe our third quarter results reflect the ongoing advancement of these objectives and the resilience of ranges business through cycles like we're experiencing today.

Dennis Degner: Range has low capital intensity as a key component of our through cycle profitability and as a result of ranges class, leading drilling and completion costs.

Dennis Degner: Shallow base decline.

Dennis Degner: Large blocky core inventory.

Dennis Degner: And talented team.

Dennis Degner: Another key component of ranges resilience is the diversity of our production stream.

Dennis Degner: And the value of arrangements liquids business was on full display in the third quarter.

Dennis Degner: Our ability to market ethane propane and butane into the international market drove the highest NGL premium in company history at over $4 per barrel above the Mont Belvieu index.

Dennis Degner: Looking at the entire production makeup range saw an aggregate unhedged price realization of $2 61 per mcf for the quarter.

Dennis Degner: Which is a 45% premium over Henry hub natural gas and a clear differentiator versus purely dry gas producers.

Dennis Degner: When you combine our efficient operations low capital intensity and liquids revenue uplift along with a thoughtful right sized hedge program. The output is another quarter of positive free cash flow despite challenging natural gas prices.

Dennis Degner: During the third quarter range invested $156 million running two rigs and one completion crew and placing us on track with our full year capital guidance we've communicated.

Dennis Degner: <unk> third quarter production came in at two two Bcf equivalent per day, and we expect fourth quarter production will be near similar level, resulting in an annual 2020 for production of approximately $2 one seven Bcf per day.

Dennis Degner: This is roughly 30 million cubic feet per day above the previous midpoint of guidance and as the result of strong well performance and continued optimization of gathering and compression infrastructure that was mentioned during our last call.

Dennis Degner: Range can maintain this higher level of production with just one electric frac clue.

Dennis Degner: I think this is messages worth repeating.

Dennis Degner: The range can hold nearly two two bcf per day of net production flat with one completion crew.

Dennis Degner: This is a true testament to both the quality of our asset base and the quality of the team.

Dennis Degner: Afflicting, two decades of innovation and collaboration and the Marcellus between range ended service providers.

Dennis Degner: While we are still finalizing our capital and production plans for 2025, we expect that running one continuous completions crew is a reasonable baseline from which we will be fine tuning our plans over the next few months.

Dennis Degner: As has been the case for the last two years running at this one crew activity level is slightly more than required for maintaining production, which we would consider as maintenance plus.

Dennis Degner: This counter cyclical investment provides range and operational tailwind for future periods as takeaway capacity becomes available in Appalachia and in basin natural gas demand increases in the years ahead.

Dennis Degner: When there is a fundamental call for additional production in the future.

Dennis Degner: <unk> will be able to generate a very efficient wedge of modest growth.

If our asset base and the quality of the team, reflecting two decades of innovation and collaboration and the Marcellus between range and its service providers.

Dennis Degner: Turning to marketing and focusing on Ngls.

Dennis Degner: International demand and pricing for Ngls remained robust in the third quarter, leading to near maximum U S export capacity utilization.

While we are still finalizing our capital and production plans for 2025, we expect that running one continuous completions crew is a reasonable baseline from which we will be fine tuning our plans over the next few months.

Dennis Degner: Simultaneously, improving Panama canal throughput access and a growing global fleet of LPG ships improved waterborne freight rates.

As has been the case for the last two years running at this one crew activity level is slightly more than required for maintaining production, which we would consider.

Dennis Degner: These factors combined to drive export price premiums to new levels relative to the Mont Belvieu index.

Dennis Degner: As in prior quarters brings his portfolio of transportation and sales contracts provided reliable access to these premium markets.

<unk> is maintenance plus.

This counter cyclical investment provides range and operational tailwind for future periods as takeaway capacity becomes available in Appalachia and in basin natural gas demand increases in the years ahead.

Dennis Degner: Looking ahead to 2025 many of these dynamics are expected to remain in place as international demand for NGL products continues to grow.

When there is a fundamental call for additional production in the future range.

Dennis Degner: While U S Gulf Coast export capacity does not increase materially until the second half of 2025 and into 2026.

The range, we will be able to generate a very efficient wedge of modest growth.

Turning to marketing and focusing on Ngls.

Dennis Degner: This provides a constructive set up for ranges go forward price realizations and margins.

International demand and pricing for Ngls remained robust in the third quarter, leading to near maximum U S export capacity utilization.

Dennis Degner: I believe the last couple of years are positive proof that ranges does a business capable of generating free cash flow and returns through cycles.

Simultaneously, improving Panama canal throughput access and a growing global fleet of LPG ships improved waterborne freight rates.

Dennis Degner: Like many of the listeners today, we see the demand for natural gas and NGL is increasing substantially in the years ahead.

These factors combined to drive export price premiums to new levels relative to the Mont Belvieu index.

Dennis Degner: As one of the lowest cost producers in North America, We believe range is well positioned for thoughtful growth in the years ahead when called upon.

As in prior quarters, <unk> portfolio of transportation and sales contracts provided reliable access to these premium markets.

Dennis Degner: Whether thats in the year ahead or beyond in the long run we believe ranges competitive full cycle cost structure and through cycle profitability provide a unique investment opportunity for long term investors given our multi decade inventory runway.

Looking ahead to 2025 many of these dynamics are expected to remain in place as international demand for NGL products continues to grow.

While U S. Gulf Coast export capacity has not increased materially until the second half of 2025 and into 2026.

I'll now turn it over to Mark to discuss the financials.

Mark: Thanks Dennis.

With three quarters of 2024 behind us, it's a sensible time to take stock of the state of our business.

This provides a constructive setup for ranges go forward price realizations and margins.

Mark: To examine what we've accomplished in the absolute and on a relative basis.

I believe the last couple of years are positive proof that ranges does a business capable of generating free cash flow and returns through cycles.

Mark: And what this may imply for the future.

Mark: For the first three quarters of 2020 for Nymex natural gas averaged $2 nine.

Like many of the listeners today, we see the demand for natural gas and Ngls, increasing substantially in the years ahead.

Despite the low commodity price year to date ranges paid $58 million in dividends.

As one of the lowest cost producers in North America, We believe range is well positioned for thoughtful growth in the years ahead when called upon.

Mark: Invested $44 million in share repurchases.

Mark: This is well below our view of long term value.

Mark: <unk> reduced net debt by $136 million, while investing in operations.

Whether thats in the year ahead or beyond in the long run we believe ranges competitive full cycle cost structure and through cycle profitability provide a unique investment opportunity for long term investors given our multi decade inventory runway.

Mark: Range generated the free cash flow that made those capital allocation decisions possible, while executing an operational plan that stands in stark contrast to much of this industry.

Speaker Change: I'll now turn it over to Mark to discuss the financials.

Mark: <unk> program is slightly above maintenance capital in 2024 strategically.

Mark: Thanks Dennis.

Strategically investing in land and water infrastructure to enhance capital efficiency, while also building modest well inventory to provide options for future capital spending and resulting production profile.

Mark: With three quarters of 2024 behind us, it's a sensible time to take stock of the state of our business.

Mark: To examine what we've accomplished in the absolute and on a relative basis.

Mark: And what this may imply for the future.

Mark: Ranges, both proving the free cash flow resilience of the business and reinforcing that resilience through targeted capital investment.

Mark: Okay.

Mark: For the first three quarters of 2024.

Mark: Nymex natural gas averaged $2 nine.

Mark: Despite the low commodity price year to date ranges paid $58 million in dividends.

Mark: That free cash flow resilience allows us to be successful throughout commodity price cycles and to pursue a comprehensive capital allocation strategy that returns cash to shareholders reinforces our strong balance sheet.

Mark: Invested $44 million in share repurchases at prices well below our view of long term value.

Mark: And reduced net debt by $136 million, while investing in operations.

Mark: And invest in the business.

Mark: There are a number of unique aspects of the range story that allow us to achieve these results.

Mark: <unk> generated free cash flow that made those capital allocation decisions possible, while executing an operational plan that stands in stark contrast to much of this industry.

Mark: Including our peer leading reinvestment rate.

Mark: Our diversification across products.

Mark: Transport and end markets customers contract structures, and our solid financial position.

Mark: British program is slightly above maintenance capital in 2024.

Mark: <unk> investing in land and water infrastructure to enhance capital efficiency, while also building modest well inventory to provide options for future capital spending and resulting production profile.

Mark: Ranges reinvestment rate through the first three quarters of 2024 was 63%.

Mark: In other words, while investing at a maintenance plus level, we generated healthy free cash flow margin, even with low commodity prices.

Mark: Range is both proving the free cash flow resilience of the business and reinforcing that resilience through targeted capital investment.

Our low required reinvestment rate is driven by our peer leading base decline rate of production.

Mark: The benefits of our high quality contiguous acreage position.

And the efforts of an experienced and motivated team.

Mark: Ranges of resilient cash flow is supported by the diversification of revenue.

Mark: Roughly 30% of ranges production is liquids, which are accounted for more than 50% of pre hedge revenue in five of the last six quarters.

Mark: There are a number of unique aspects of the range story that allow us to achieve these results.

Mark: Including our peer leading reinvestment rate or.

Mark: Further we have achieved a strong premium to domestic NGL pricing, averaging $2 42 per barrel premium versus Mont belvieu year to date in 2024, driven.

Mark: Our diversification across products.

Mark: Transport and end markets customers contract structures, and our solid financial position.

Driven by our advantaged takeaway and Marcus Hook dock access.

Mark: Ranges reinvestment rate through the first three quarters of 2024 was 63%.

Mark: As well as our ability to market cargoes of propane and butane on a vessel by vessel basis.

Mark: In other words, while investing at a maintenance plus level, we generated healthy free cash flow margin, even with low commodity prices.

Mark: That has benefited realizations by allowing range to largely avoid domestic points of NGL product congestion and instead price at attractive international indices.

Our low required reinvestment rate is driven by our peer leading base decline rate of production.

Mark: Gas revenues are supported by a broad portfolio of transportation contracts and customers, reaching a diversified set of advantageous end markets.

Mark: The benefits of our high quality contiguous acreage position.

Mark: And the efforts of an experienced and motivated team.

Mark: Ranges resilient cash flow is supported by the diversification of revenue.

Mark: Markets have growing power industrial and LNG demand.

Mark: Roughly 30% of ranges production is liquids, which are accounted for more than 50% of pre hedge revenue in five of the last six quarters.

Mark: In addition range has employed a flexible and persistent goal oriented hedging framework, where we look to create a portfolio that cover fixed costs.

Mark: Further we have achieved a strong premium to domestic NGL pricing.

Mark: And as a byproduct enables us to capture market opportunities.

Mark: <unk> of $2 42 per barrel premium versus Mont Belvieu year to date in 2020 for drip.

Mark: Share buybacks debt reduction dividends.

Mark: <unk> cyclical capital investments and other alternatives.

Mark: Driven by our advantaged takeaway and Marcus Hook dock access.

Mark: That approach has helped to support attractive full cycle margins and markets as varied as seen in 2022 and 2024.

Mark: As well as our ability to market cargoes of propane and butane on a vessel by vessel basis.

Mark: That has benefited realizations by allowing range to largely avoid domestic points of NGL products congestion and instead price at attractive international indices.

Mark: Range ended the third quarter with net debt of $1 4 billion.

Mark: Within our target range of one to one 5 billion.

Mark: The nearly $2 7 billion of net debt reduction range has achieved over the last several years not only reduces interest expense.

Mark: Gas revenues are supported by a broad portfolio of transportation contracts and customers, reaching a diversified set of advantageous end markets.

Mark: It pairs a world class asset with a world class balance sheet supporting.

Mark: Markets have growing power industrial and LNG demand.

Supporting a global business.

Mark: This financial position an asset pairing allows an efficient longer term strategic approach to investments in the business alone.

Mark: In addition range has employed a flexible and persistent goal oriented hedging framework, where we look to create a portfolio that cover fixed costs.

Mark: Alongside durable returns to shareholders.

Mark: As a whole.

Mark: And as a byproduct enables us to capture market opportunities.

Mark: We view range is uniquely positioned to benefit from and take advantage of what we expect will be continued secular demand growth for both natural gas and Ngls.

Mark: Share buybacks debt reduction dividends.

Mark: Enter cyclical capital investments and other alternatives.

Our durable free cash flow story, along with the investments we have made in the business over the last two years.

That approach has helped to support attractive full cycle margins and markets as varied as seen in 2022 and 2024.

Mark: Position range to sustain and grow its presence as a reliable provider of energy to its customers, while consistently delivering value to its shareholders.

Mark: Range ended the third quarter with net debt of $1 4 billion.

Mark: Within our target range of one to one 5 billion.

Dennis back to you.

Dennis Degner: Thanks, Mark before moving to Q&A I'd like to acknowledge that today marks the anniversary of an important day.

Mark: The nearly $2 7 billion of net debt reduction range has achieved over the last several years not only reduces interest expense.

Dennis Degner: Not only for range resources, and our industry, but also for the energy independence of our country.

Mark: It pairs a world class asset with a world class balance sheet.

Supporting a global business.

Dennis Degner: 20 years ago on this day in 2000 and for range resources completed the Rins number one the first commercial Marcellus well.

Mark: This financial position an asset pairing allows an efficient longer term strategic approach to investments in the business alone.

Mark: Alongside durable returns to shareholders.

Dennis Degner: At that time in 2000 and for the United States was a net importer of natural gas with total imports exceeding $4. Three tcf are over 11 Bcf per day.

Mark: As a whole.

Mark: We view range is uniquely positioned to benefit from and take advantage of what we expect will be continued secular demand growth for both natural gas and Ngls.

Dennis Degner: Today, the Marcellus and Utica produce over 30 Bcf per day and accounted for approximately one third of gas production in the United States.

Mark: Our durable free cash flow story, along with the investments we have made in the business over the last two years.

Mark: Position range to sustain and grow its presence as a reliable provider of energy to its customers, while consistently delivering value to its shareholders.

Dennis Degner: The U S is not only a net exporter of natural gas, but is also surpassed Russia as the leading supplier of natural gas around the globe with total exports last year exceeding 20 Bcf per day, including exports to Mexico.

Speaker Change: Dennis back to you.

Dennis: Thanks, Mark before moving to Q&A I'd like to acknowledge that today marks the anniversary of an important day not.

Dennis Degner: During this same 20 year time period total U S energy emissions declined approximately 20% driven by a 40% decrease in emissions from power generation due to the increased utilization of natural gas.

Dennis: Not only for range resources, and our industry, but also for the energy independence of our country.

Dennis: 20 years ago on this day in 2000 and for range resources completed the range number one the first commercial Marcellus well.

This has been a tremendous achievement by our industry and we are proud of the role that range has played and continues to play in providing safe clean economic energy to the world.

Dennis: At that time in 2000 and for the United States was a net importer of natural gas with total imports exceeding $4. Three tcf are over 11 Bcf per day.

Dennis Degner: You have heard US state this before but we continue to believe the results communicated today showcase that ranges business is in the best place in company history, having derisked, our high quality inventory measured in decades, and translated that into a business capable of generating free cash flow through these types of cycles.

Dennis: Today, the Marcellus and Utica produced over 30 Bcf per day and accounted for approximately one third of gas production in the United States.

The U S is not only a net exporter of natural gas, but is also surpassed Russia as the leading supplier of natural gas around the globe with total exports last year exceeding 20 Bcf per day, including exports to Mexico.

Dennis Degner: And it all started with a successful well test 20 years ago.

Dennis Degner: We look forward to the next decades of developing ranges inventory and the milestones we'll achieve.

Dennis: During this same 20 year time period total U S energy emissions declined approximately 20% driven by a 40% decrease in emissions from power generation due to the increased utilization of natural gas.

Dennis Degner: With that let's open the line for questions.

Speaker Change: Thank you Mr <unk>.

Speaker Change: The question and answer session will now begin.

Speaker Change: We would like to ask a question. Please indicate by pressing the star key than one one.

Dennis: This has been a tremendous achievement by our industry and we are proud of the role that range has played and continues to play in providing safe clean economic energy to the world.

If you don't want a speakerphone please pick up your handset before asking your question.

Speaker Change: If you would like to withdraw your question you may do so by pressing star one again.

Speaker Change: Please standby, while we compile the Q&A roster.

Dennis: <unk> heard us state this before while we continue to believe the results communicated today showcase that ranges business is in the best place in company history, having derisked, our high quality inventory measured in decades, and translated that into a business capable of generating free cash flow through these types of cycles.

Speaker Change: Our first question comes from the line of Scott Hanold with RBC. Your line is open.

Speaker Change: Good morning.

Speaker Change: You all had.

Speaker Change: Some pretty strong production performance.

Dennis: And it all started with a successful well test 20 years ago.

Speaker Change: I know you did.

Speaker Change: The midstream optimization could you give us sense on what what.

Dennis: We look forward to the next decades of developing ranges inventory and the milestones we'll achieve.

Speaker Change: Does that really added do you have just sense of just in terms of like volumes that is added in what has it done to your base decline rate on your asset base going forward.

Dennis: With that let's open the line for questions.

Speaker Change: Thank you Mr <unk>.

Speaker Change: The question and answer session will now begin.

Yes, good morning, Scott I appreciate the question around the production is something we've been awfully pleased with on the performance this year and I think for US It really starts with some of the long lateral performance that we saw from the back half of last year, and then really through the front half of this year is that compression and gathering.

Speaker Change: If you would like to ask a question. Please indicate by pressing the star key than one one.

Speaker Change: If you don't want a speakerphone please pick up your handset before asking your question.

Speaker Change: I would like to withdraw your question you may do so by pressing star one again.

Speaker Change: Please standby, while we compile the Q&A roster.

Infrastructure expansion started to go into service one of the projects was.

Speaker Change: At the end of Q3, beginning of Q4 of last year and the other was in the early part of this year. Some some in across areas of the well mix both from dry to a wet and super rich impacts. So when we think about what we've seen so far it's still a little early on some of the trends and how it's benefiting <unk>.

Speaker Change: Our first question comes from the line of Scott Hanold with RBC. Your line is open.

Scott Hanold: Good morning.

Scott Hanold: Hey, you all had.

Scott Hanold: Some pretty strong production performance.

Scott Hanold: I know you did.

Scott Hanold: The midstream optimization could you give us sense on what.

Speaker Change: Some of the wells across the field, but we had been able to see is that in areas, where you might see let's just say.

Speaker Change: What does that really added you just sense of just in terms of like volumes that is added in what has it done to your base decline rate on your asset base going forward.

Speaker Change: Some constrained production on a smaller level, we've seen some small upticks, where we've got longer laterals that are producing at a high level, we've actually seen the ability to move more through that system and keep it at a higher level of utilization. So we will have more that we can probably share in.

Speaker Change: Yes, good morning, Scott <unk>.

Speaker Change: Appreciate the question around the production is something we've been awfully pleased with on the performance this year and I think for US It really starts with some of the long lateral performance that we saw from the back half of last year, and then really through the front half of this year is that compression and gathering infrastructure expansion started to go into service one of the.

Speaker Change: We think about setting up our plans for 2025, but I think if you look at how the business is performing this year as an example, it kind of shows what it's capable of when you look at we're on track to grow roughly 2% this year or maybe just right below that and that's that's the byproduct of what we're seeing from that compression to give those long laterals.

Speaker Change: Projects was.

Speaker Change: At the end of Q3, beginning of Q4 of last year and the other was in the early part of this year. Some some in across areas of the world mix, both from dry to a wet and super rich impacts.

Speaker Change: Our base decline being at 19%. It's something we're also proud of I think it reflects the quality of the asset and the team's hard work, but we expect that over the course of time, we could continue to see that decline shallow even further from where it is today.

Speaker Change: When we think about what we've seen so far it's still a little early on some of the trends and how it's benefiting some of the wells across the field, but we hadn't been able to see is that in areas, where you might see let's just say some constrained production on a smaller level. We've seen some small objects, where we've got longer laterals that are producing.

Speaker Change: Yes.

Speaker Change: Lot easier when you have the shallow decline my follow up question is on 2025.

Speaker Change: You talked about running one frac crew and that gets you.

Speaker Change: At a high level, we've actually seen the ability to move more through that system and keep it at a higher level of utilization. So we will have more that we can probably share and as we think about setting up our plans for 2025, but I think if you look at how the business is performing this year as an example, it kind of shows what it's capable of when you look at.

Speaker Change: To that I guess modest growth pace to continue.

Speaker Change: Can you talk.

Regarding the.

Duck Optionality to grow like would you right now need to see to kind of do that.

Speaker Change: And would that require getting a partial frac crew. If you were to decide that at some point and do you have the firm takeaway two.

Speaker Change: We're on track to grow roughly 2% this year or maybe just right below that and that's that's the byproduct of what we're seeing from that compression and again those long laterals our base decline being at 19% something we're also proud of I think it reflects the quality of the asset and the team's hard work but.

Speaker Change: Get your volumes to market.

Speaker Change: Yeah. Good question I think when we start to ask ourselves what signals that we need to see in order to think about utilizing that productive capacity.

Speaker Change: I think it's some of the basics what kind of winter weather, we going to see come together as we get from one one pattern of weather to the other from linear to to El Nino and back and forth.

Speaker Change: But we expect that over the course of time, we can continue to see that decline shallow even further from where it is today.

Speaker Change: Yes.

Speaker Change: A lot easier when you have the.

Scott Hanold: Shallow decline my follow up question is on 2025, then you talked about running one frac crew and that gets you.

Speaker Change: The other thing we need to see is further commissioning and utilization of the LNG infrastructure. There's a lot of reasons to be optimistic about plaquemines and.

Speaker Change: In reaching that one seven Bcf a day of capacity utilization early in 2025, you've got Corpus Christi train three we think thats going to all signs are it's ahead of schedule and it could see.

Speaker Change: To that I guess modest growth pace to continue.

Speaker Change: Can you talk regarding the Dr.

Speaker Change: The duck Optionality to grow like where do you rate now need to see the kind of do that.

Speaker Change: Cash start to roll through that infrastructure end of this year and then reach full utilization next year, that's another b and a half so youre talking about three Bcf a day of those two.

Speaker Change: And with that required getting a partial frac crew. If you were to decide that at some point and do you have the firm takeaway two.

Pieces of infrastructure alone before you even get to.

Speaker Change: Get your volumes to market.

Speaker Change: Yes, good question.

Speaker Change: <unk> Golden pass train one at the end of 'twenty five so I think we'd like to see what comes together with weather LNG infrastructure, and then what kind of price responses that we're going to see let's say more in the short term as a part of that the good news is is with the inventory that we generated between 2024 and 23, we have the ability.

Speaker Change: When we start to ask ourselves what signals that we need to see in order to think about utilizing that productive capacity.

Speaker Change: To pick up a spot crew and add that.

Speaker Change: I think the other thing we need to see is further commissioning and utilization of the LNG infrastructure. There is a lot of reasons to be optimistic about plaquemines and.

Speaker Change: <unk> when we think the fundamentals are pointing to it and they're calling for that additional incremental gas.

Speaker Change: When you look at how our transportation is set up we feel like we do have the right takeaway to handle that incremental production. If you think about our production profile under maintenance in the past, it's looks like more of a sine wave where we've had more of a decline in the early part as you come out at the end of the year heavy activity focus and then a ratable increase.

Speaker Change: <unk> in the back half of the year. This year, we've seen that shallow quite a bit with a flat two rig program. In this one frac crew approach. So next year, what we think we could see as good utilization of our transport when the right signs materialize, we could at a spot frac crew and utilize some of that inventory again, when the right science Gulfport, but if not.

Speaker Change: Pieces of infrastructure alone before you even get to.

<unk> Golden pass train one at the end of 'twenty five so I think we'd like to see what comes together with weather LNG infrastructure, and then what kind of price responses that we're going to see let's say more in the short term as a part of that the good news is is with the inventory that we generated between 2024 and 23, we have the ability.

Speaker Change: We feel like just like this year, we could add that incremental inventory, we could respond when the market calls for it whether it's back half of 'twenty five or thinking about being more efficient then into 2026, but all becomes the byproduct of a good lean based activity program.

Speaker Change: To pick up a spot crew and add that production. When we think the fundamentals are pointing to it and they're calling for that additional incremental gas.

Speaker Change: When you look at how our transportation is set up we feel like we do have the right takeaway to handle that incremental production. If you think about our production profile under maintenance in the past it's looked like more of a sine wave where we've had more of a decline in the early part as you come out at the end of the year heavy activity focused and then a ratable increase.

Speaker Change: Thanks.

Speaker Change: Thank you Scott.

Speaker Change: Please standby for our next question.

Speaker Change: Our next question comes from the line of Neil Mehta with Goldman Sachs and company. Your line is open.

Neil Mehta: Yes, good morning team really really strong results here and Thats why I kind of let's start off on 30 E. Slide 38, where the price realization for the NGL differential was super strong and I know you talked about your ability to get to that international market, but maybe you could break it down for us.

Neil Mehta: A little bit more and talk about what your marketing teams are doing in <unk>.

Speaker Change: You mentioned you think this is sustainable but it is a big big step up from historical levels of price.

Speaker Change: We feel like just like this year, we could add that incremental inventory, we could respond when the market calls for it whether it's back half of 'twenty, five or thinking about being more efficient and into 2026. It all becomes the byproduct of a good lean based activity program.

Speaker Change: Differential strength and so on.

Speaker Change: Help us understand how you keep that momentum up.

Dennis Degner: Yes, good morning, Neil.

Speaker Change: I think you've heard us probably say this in a lot of our prepared remarks and in other meetings that we've had together but.

Speaker Change: Thanks.

Speaker Change: Thank you Scott.

Speaker Change: Please standby for our next question.

Speaker Change: Our ability to we're celebrating the 20th anniversary of the written as well, but with that came our ability to start with a different <unk>.

Speaker Change: Okay.

Speaker Change: Our next question comes from the line of Neil Mehta with Goldman Sachs and company. Your line is open.

Neil Mehta: Yes, good morning team really really strong results here and Thats why I kind of let's start off on 30, <unk> Slide 38, where the price realization for the NGL differential was super strong and I know you talked about your ability to get to that international market, but maybe you could break it down for us.

Speaker Change: <unk> approach and that is sitting a purity product processing in Appalachia for our production and it allowed us to be able to market those products out of different outlets.

Speaker Change: Mainly to getting exposure to a waterborne export out of Marcus Hook, Philadelphia and as you start to look at this year, we point to the premium opportunity that exist out of out of the northeast for us and we think it all starts back to again 20 years ago and how this setup really began but when you think about what we're seeing today clearly.

Neil Mehta: A little bit more and talk about what your marketing teams are doing in <unk>.

Neil Mehta: You mentioned you think this is sustainable but it is a big big step up from historical levels of price.

Neil Mehta: <expletive>.

Neil Mehta: Mental strength and so.

Speaker Change: Sports have been at extremely high level out of the Gulf.

Neil Mehta: Help us understand how you keep that momentum up.

Speaker Change: We're running over 2 million barrels a day of export as an industry and dock utilization is running right around 90% and so the congestion that has occurred there has really presented an opportunity for us to capture a premium out of the northeast, where we were seeing a strong utilization rate, but were below those kind of congestion levels that could present an issue.

Speaker Change: Yes, good morning, Neal I think you've heard us probably say this in a lot of our prepared remarks and in other meetings that we've had together but.

Speaker Change: Our ability to we're celebrating the 20th anniversary of the written as well, but with that came our ability to start with a different.

Speaker Change: All at the same time, you are seeing demand continue to grow when you look at the PVH infrastructure that continues to be commissioned clearly a bulk of that is in the Asian market, but when you see what's been growing both in 'twenty three and commissioned in 2020 for utilization rates continue to go on the uptick and Theres more coming when you start to think about.

Speaker Change: Development approach and that is sitting a purity product processing in Appalachia for our production and it allowed us to be able to market those products out of different outlets.

Speaker Change: Mainly to getting exposure to a waterborne export out of Marcus Hook, Philadelphia and as you start to look at this year, we point to the premium opportunity.

Speaker Change: Again that additional infrastructure for 2025, so we remain really optimistic that if you think about the dock capacity congestion infrastructure expansion, there really doesn't take shape until the back half of 2025 and pretty deep into 25 with that and into 26. So we think there is a set of fundamentals that are.

Speaker Change: That exists out of out of the northeast for Us and we think it all starts back to again 20 years ago, and how they're set up really began but when you think about what we're seeing today clearly exports have been at extremely high level out of the Gulf.

Speaker Change: We're running over 2 million barrels a day of export as an industry and dock utilization is running right around 90% and so the congestion that has occurred there has really presented an opportunity for us to capture premium out of the northeast, where we were seeing a strong utilization rate, but were below those kind of congestion levels that could present an issue.

Speaker Change: In play here that could be very much structurally repetitive from 'twenty five for our NGL realization to what we've been able to harvest in 2024 and look at the other at the other end of that dock capacity expansion will that same premium level exists maybe not but as you start to see but we believe a premium still continues to be present for us in the northeast.

Speaker Change: All at the same time, you're seeing demand continue to grow when you look at the PTH infrastructure that continues to be commissioned clearly a bulk of that is in the Asian market, but when you see what's been growing both in 'twenty three and emissions in 2020 for utilization rates continue to go on the uptick and Theres more coming when you start to think about.

Speaker Change: And demand continues to grow and with that will come price improvements as well.

Speaker Change: Okay.

Speaker Change: Thanks for that and then just follow up is just on the 25.

Speaker Change: The plan as it relates to capital again, we're going to get more.

Speaker Change: Again that additional infrastructure for 2025, so we remain really optimistic that.

Speaker Change: Specter of on this I'm sure in the next couple of months, but given that you're running close to a maintenance level is it fair to use 24 is a good proxy for how youre thinking about 'twenty five as it relates to capital are there efficiencies that you can capture in the moving pieces that we need to take into account.

Speaker Change: You think about the dock capacity congestion infrastructure expansion, there really doesn't take shape until the back half of 2025 and pretty deep into 25 with that and into 26. So we think there's a set of fundamentals that are in play here that could be very much structurally repetitive from 'twenty five for our NGL.

Speaker Change: Yeah, I think Thats a good question Neal we're still refining was <unk> 25 is going to look like and clearly I'm sure a lot of other producers are doing the same at this time of year, but 24 is a good way of thinking about how our business could look in 2025 and I think it starts with our dedicated Frac crew and then the drilling.

Speaker Change: <unk> to what we've been able to harvest in 2024 and look at the other at the other end of that dock capacity expansion will that same premium level exists maybe not but as you start to see but we believe a premium still continues to be present for us in the northeast and demand continues to grow with that will come price improvements as well.

Speaker Change: <unk> that efficiently feeds that process. If you will if you will.

Speaker Change: Look at this year, we had that we have two horizontal rigs that are continuing to feed that frac crew. It does generate a little bit of that in process inventory next year again, if youre constructive on 25, and 26 clearly maintaining the operational efficiencies with the two rigs could make a lot of sense for us, but there is a point in time, we are <unk>.

Speaker Change: Okay.

Speaker Change: Thanks for that and then just follow up is just on the 25.

Speaker Change: The plan as it relates to capital again, we're going to get more.

Speaker Change: Perspective on this I'm sure in the next couple of months, but given that you're running close to a maintenance level is it fair to use 24 is a good proxy for how youre thinking about 'twenty five as it relates to capital are there efficiencies that you can capture in the moving pieces that we need to take into account.

Speaker Change: No doubt, we will have the operational and program flexibility to think about do you reduce rig activity in the future if the fundamentals call for it or do you maintain that same level of cadence and instead utilize that productive capacity with some kind of spot frac crews. So I think thinking about our capital program in 'twenty four and activity is a good way of <unk>.

Speaker Change: Yes, I think Thats a good question Neal we're still refining was <unk> 25 is going to look like and clearly I'm sure a lot of other producers are doing the same at this this time of year, but 24 is a good way of thinking about how our business could look in 2025 and I think it starts with our dedicated Frac crew and then the drilling.

Speaker Change: Say starting to think about how our 2025 could look.

Speaker Change: Okay, that's perfect. Thanks, Tim.

Speaker Change: Thank you thanks Neal.

Speaker Change: Please standby for our next question.

Speaker Change: Activity that efficiently feeds that process. If you will if you look at this year. We had that we have two horizontal rigs that are continuing to feed that frac crew. It does generate a little bit of that in process inventory next year again, if youre constructive on 25% and 26 clearly maintaining the operational.

Our next question comes from the line of Doug Leggate with Wolfe Research. Your line is open.

Speaker Change: Thank you and good morning, everyone. Thanks for having me on.

Speaker Change: Dennis you you kind of walked into the mills from a little bit by talking about.

Speaker Change: Takeaway capacity and basin demand.

Doug Leggate: Very topical on both both fronts, particularly the in basin demand. The guest data centers is topical but I was just wondering if I could ask you to elaborate a little bit as to what youre seeing.

Speaker Change: <unk> with the two rigs could make a lot of sense for us, but there is a point in time, we're no doubt, we'll have the operational and program flexibility to think about the reduced rig activity in the future. If the fundamentals call for it or do you maintain that same level of cadence and instead utilize that productive capacity with some kind of spot frac crews. So.

Doug Leggate: Fortunately.

Doug Leggate: For Orange and have a quick follow up.

Speaker Change: You bet good morning, Doug Thanks for joining us.

Speaker Change: When we start to think about demand regionally I'll just say more in the near term we added a new slide to the slide deck. This cycle to try and put some color around that is slide number 18, but really when you start to think about near term demand a couple of things that we see clearly is there is the industrialization.

Speaker Change: I think thinking about our capital program in 'twenty four and activity is a good way of I'll, just say starting to think about how our 2025.

Okay, that's perfect. Thanks team.

Speaker Change: Thank you thanks Neal.

Speaker Change: Please standby for our next question.

Speaker Change: Our next question comes from the line of Doug Leggate with Wolfe Research. Your line is open.

Speaker Change: Expansion process Thats, starting to take shape with some of the legislative acts that have been approved over the last few years and so when you think about the next few years clearly there is going to be the Intel semiconductor fab facility and also the micron facility as well.

Doug Leggate: Thank you and good morning, everyone. Thanks for having me on.

Dennis you.

Doug Leggate: You kind of walked into the maelstrom, a little bit by talking about.

Doug Leggate: Takeaway capacity and basin demand.

Speaker Change: We have the ability to I will just say through our transport have access to that kind of growing demand and others that that clearly that will continue to materialize.

Doug Leggate: Very topical on both those fronts, particularly the in basin demand. The guest data centers is topical but I was just wondering if I could ask you to elaborate a little bit as to what youre seeing.

Speaker Change: <unk> got clearly coal retirements that are going to take shape over the next 12 to 24 months approximately one Bcf a day in.

Doug Leggate: Fortunately.

Speaker Change: For Orange and I have a quick follow up.

You bet good morning, Doug Thanks for joining us.

Speaker Change: Displacement, there that could take shape and I think if you look over the last 24 months. We're now on back to back years of seeing incremental power burn on the Nat gas side of around one three to one four Bcf a day and that.

Speaker Change: You heard me say this before and one on one conversations but it feels like that's been underappreciated when we when we enter each year just because of the wildcard factor around that but now you've got net gas again playing.

Speaker Change: Expansion process.

Speaker Change: Starting to take shape with some of the legislative acts that have been approved over the last few years and so when you think about the next few years clearly there is going to be the Intel semiconductor fab facility and also the micron facility as well.

Speaker Change: Joel Thats really unique and we're 74% of the thermal share through the first half of 2024, that's all while wind is actually up year over year. So thats I think it shows again the durability of what best guess net gas will play a role there. So and then clearly from a takeaway standpoint MVP has been beneficial.

Speaker Change: We have the ability to I will just say through our transport have access to that kind of growing demand and others that that clearly that will continue to materialize.

Speaker Change: That <unk> been running sub a bcf a day at this point, but clearly there is the ability in the next few years as we see that Transco.

Speaker Change: <unk> got clearly coal retirements that are going to take shape over the next 12 to 24 months approximately a bcf a day in.

Speaker Change: Activity and expansion take place to reach its two to two to two two bcf capacity. So in the near term. We think those are the line of sight type projects, but we also know there are a lot of conversations that are starting to materialize around.

Speaker Change: Data centers future power demand and I think the PJM auction that was recently conducted probably shed some light on the critical movement that will need to take shape around power in the future. When you saw it go from somewhere in the mid $2020 range to $270 per megawatt day. So there is there are some early indications that movement has to take shape.

Speaker Change: You heard me say this before and one on one conversations but I feel like that's been underappreciated when we when we enter each year just because of the wildcard factor around that but now you've got net gas again plan.

Speaker Change: Roll, that's really unique and we're 74% of the thermal share through the first half of 2024, that's all while wind is actually up year over year. So thats I think shows again, the durability of what best guess net gas will play in the role there. So and then clearly from a takeaway standpoint MVP has been beneficial.

Speaker Change: So that's how we're seeing the future demand kind of take place regionally, but we also know that LNG is also going to be the the big pin in this as well.

Speaker Change: So very very helpful. Thank you for the color I guess my follow up and this might be for <unk>.

Speaker Change: That pipeline running sub a bcf a day at this point, but clearly there is the ability in the next few years as we see that Transco.

Speaker Change: Mark, but so you guys are best in class couple efficiencies no question that has been an extraordinary.

Speaker Change: Activity and expansion take place to reach $2 two two bcf capacity. So in the near term. We think those are the line of sight type projects, but we also know there are a lot of conversations that are starting to materialize around.

Speaker Change: Im just wondering restore and frankly in terms of the longevity you have in your business.

Speaker Change: <unk> spending level, but.

Speaker Change: I guess my question is you've benefited from returning to.

Speaker Change: When it comes to you walk through how you describe to us, but you benefited from some box plants that you'd previously drilled.

We utilized.

Speaker Change: Got it.

Speaker Change: I'm sorry on what the running room is for that that you can maintain this capital level.

Speaker Change: Given that that's been and then Onthe tailwind cannot continue.

Yeah.

Speaker Change: Sure I think as we tried to explain the longevity of ranges program and how consistent the performance can be from a capital productivity standpoint, I think it's important as you point out that roughly half of wells in a given year or put on existing pads I mean those are.

Speaker Change: So that's how we're seeing the future demand kind of take place regionally, but we also know that LNG is also going to be the the big pin in this as well.

Speaker Change: So very very helpful. Thank you for the color.

Speaker Change: I guess my follow up and this might be for <unk>.

But so you guys are best in class couple efficiencies no question, there's been an extraordinary.

Speaker Change: Still new locations and.

Speaker Change: If we rewind to all the way back to the beginning in terms of how range worked with this partner is to build up the gathering system. The gathering system is built across essentially the entire footprint. So while roughly half of our wells in a given year ago on existing pads.

I'm just wondering the story frankly in terms of the longevity you have in your business.

Speaker Change: Spending levels, but I guess my question is you've benefited from returning to.

Speaker Change: Good morning.

Speaker Change: <unk> walked through.

Speaker Change: And.

Speaker Change: Great.

Speaker Change: Use of existing infrastructure have renewals, so youre getting what is in essence, a slice a samples.

Speaker Change: You benefited from going back to the times that you'd previously drilled.

Speaker Change: We utilized Sutton.

And I'm sorry on what the running room is for that that you can maintain this capital level.

Speaker Change: Perhaps not a perfectly statistical sampling, but a sampling nonetheless across the entire acreage position, so an averaging effect.

Speaker Change: Given that that's been in the Sito wont cannot continue.

Speaker Change: And what that means is we're not focused on one specific area exhausting it moving down the road to another area.

Speaker Change: Yeah.

Speaker Change: Sure I think as we tried to explain the longevity of ranges program and how consistent the performance can be from a capital productivity standpoint.

Speaker Change: That is why you get a very consistent as one of the reasons why you get a very consistent result on a program level year end and year round. It's also why you see benefits of things like Dennis spoke about earlier optimization of the existing gathering system. It's because you didn't exhaust a particular area use.

Speaker Change: I think it's important as you point out that roughly half of wells in a given year.

Speaker Change: Put on existing pads.

Speaker Change: Those are still new locations.

Speaker Change: If we rewind to all the way back to the beginning in terms of how range worked with this partner to build at the gathering system. The gathering system is built across essentially the entire footprint.

Speaker Change: All the locations available in a particular area and then move down the road, meaning Youre 100, utilizing a portion of the gathering system, we use and reuse to continue to attempt to fully utilize the gathering system. The existing one so optimization like adding compression and return in the past for part of our locations in a given year.

Speaker Change: So while roughly half of our wells in a given year ago on existing pads.

Speaker Change: Use of existing infrastructure have renewals, so youre getting what is in essence, a slice a sample perhaps.

Speaker Change: It gives production uplift.

Speaker Change: Of the existing base.

Speaker Change: And at new production from existing wells so.

Speaker Change: <unk> is not a perfectly statistical sampling, but a sampling nonetheless across the entire acreage position, so an averaging effect.

Speaker Change: To pull back all the way to your question is how long can we keep that up what it looked like that pulls you back to one of the very first slides we have the inventories measured in decades before we would expect at a program level to see.

Speaker Change: What that means is we're not focused on one specific area exhausting it moving down the road to another area.

Speaker Change: Even if <unk> expect to see any material change in the productivity of the teams efficiencies that they learn.

Speaker Change: That is why you get a very consistent as one of the reasons why you get a very consistent results on a program level year end and year out.

Year ended year out whether its.

Speaker Change: It's also why you see benefits of things like Dennis spoke about earlier optimization of the existing gathering system is because you didn't exhaust a particular area use.

Speaker Change: Better targeting landing completion stages per day on the drilling side lateral footage per day getting more and more accurate, it's not just drilling and how fast they're drilling and how accurately they are drilling in placing that lateral and the targeted interval. So.

Speaker Change: All the locations available in a particular area and then move down the road, meaning youre under utilizing a portion of the gathering system, we use and reuse and continue to attempt to fully utilize the gathering system. The existing one so optimization like adding compression and turned into pads for part of our locations in a given year.

We think that range of story is truly unique in that perspective in terms of the efficiency combined with how long we can hold it.

Speaker Change: Thanks for that Mark just a quick clarification is it fair to say then that.

Speaker Change: Against production uplift.

Speaker Change: Of the existing base.

Speaker Change: Partially utilized parts if you like you cannot replenishing those as you go.

Speaker Change: And as new production from existing wells, so to pull back all the way to your question of how long can we keep that up what it looked like that pulls you back to one of the very first slides we have the inventory measured in decades before we would expect at a program level to see.

Speaker Change: Because half of your programs.

Speaker Change: Drilling new pods is up here, we think about it.

I think that's a fair way of thinking about it yes.

Speaker Change: Great stuff. Thanks, so much guys.

Doug Leggate: Thank you Doug.

Speaker Change: Even if <unk> expect to see any material change in the productivity of the teams efficiencies that they learn.

Speaker Change: Please standby for our next question.

Speaker Change: Our next question comes from the line of Jacob Roberts with <unk> capital. Your line is open.

Speaker Change: Year end and year out whether its <unk>.

Speaker Change: Better targeting landing completion stages per day on the drilling side level footage per day getting more and more accurate. It is not just drilling and how faster drilling and how accurately they are drilling in placing that lateral in the targeted interval. So.

Jacob Roberts: Good morning.

Speaker Change: We're doing great.

Jacob Roberts: Wanted to touch on the incremental land spend.

Jacob Roberts: The indication marriage, youre, effectively replacing 75% of the drilled lateral feet for a given year for 25 or $30 million I was hoping you could maybe elaborate on what what's being acquired there and how you see that is enhancing the near term opportunity set relative to perhaps just adding another year to as you've noted.

Speaker Change: We think that range of story is truly unique in that perspective in terms of the efficiency combined with how long we can hold it.

Speaker Change: Thanks for that Mark just a quick clarification is it fair to say then that.

Jacob Roberts: A decades long inventory.

Speaker Change: Partially utilized parts, if you like Youre kind of replenishing those as you go.

Jacob Roberts: Okay.

Speaker Change: Yes, good morning, Jake I think when you ask about the opportunity set if you look at among if you look across our acreage position. There is there are very <unk>.

Because half of your programs.

Speaker Change: Drilling new pods is outfitted with think about it.

I think that's a fair way of thinking about it yes.

Unique open space parcels that kandi exist, it's more the exception than the rule. It represents a really really small part of our acreage position, that's well blocked up and sometimes it can involve extending laterals at the perimeter of our acreage position as well and so when we think about the opportunity set this year it could represent as much.

Speaker Change: Great stuff. Thanks, so much guys.

Doug Leggate: Thank you Doug.

Speaker Change: Please standby for our next question.

Speaker Change: Our next question comes from the line of Jacob Roberts with <unk> capital. Your line is open.

Jacob Roberts: Good morning.

Speaker Change: We're doing Greg.

As essentially 500000 feet of lateral inventory that wasn't factored into our total numbers, but allows us to then.

Jacob Roberts: Wanted to touch on the incremental land spend.

Jacob Roberts: The indication there is that you are effectively replacing 75% of the drilled lateral feet for a given year for 25 or $30 million I was hoping you could maybe elaborate on what what's being acquired there and how you see that is enhancing the near term opportunity set relative to perhaps just adding another year to as you've noted.

The opportunity to capture those open parcels and extend laterals, which we know then will translate into our most capital efficient wells.

So our ability like if you look on 2023 as an example, we started off the program at the beginning of the year with an average of around 10000 foot laterals by the time, we got to the end of the year, we were almost at 13000 feet all predicated on the optimization of our development plan throughout the year and the ability to pick up some of those open parcels that you see.

Jacob Roberts: A decades long inventory.

Jacob Roberts: Okay.

Speaker Change: Yes, good morning, Jake I think when you ask about the opportunity set if you look at all among if you look across our acreage position. There is they are very <unk>.

Speaker Change: Unique open space parcels that can exist, it's more the exception than the rule. It represents a really really small part of our acreage position, that's well blocked up and sometimes it can involve extending laterals at the perimeter of our acreage position as well and so when we think about the opportunity set.

Speaker Change: So it does add that incremental inventory as our most capital efficient wells and ties to something that you've heard us talk about this morning efficient use of the gathering system as well and when you look at the drilling and completion efficiencies that we've touched on quarter over quarter.

Speaker Change: That also dovetails into it because that becomes we'll just say pennies on the dollars type investments when when you think about the grander scheme of the production add for the year.

Speaker Change: This year it could represent as much as essentially 500000 feet of lateral inventory that wasn't factored into our total numbers, but allows us to then.

Speaker Change: Great. Thank you and then maybe for Mark kind of a clean up question, how should we be thinking about your approach to the remainder of the 2025 notes just trying to get a sense of.

Speaker Change: The opportunity to capture those open parcels and extend laterals, which we know then will translate into our most capital efficient wells. So our ability like if you look on 2023 as an example, we started off the program at the beginning of the year with an average of around 10000 foot laterals by the time, we got to the end of the year, we were almost at 30000 feet all.

If we see interest come down throughout the year next year when those might ultimately exit.

Speaker Change: Yeah, we've worked hard to be in a position where we are today to have a good deal of options in front of US both the reality of the business and where we positioned it as well as just the <unk>.

Predicated on the optimization of our development plan throughout the year and the ability to pick up some of those open parcels that you see so it does add that incremental inventory. It adds our most capital efficient wells and ties to something that you've heard us talk about this morning efficient use of the gathering system as well and when you look at the drilling and completion efficiencies.

Speaker Change: Economic backdrop right now we're in a declining interest rate environment.

Speaker Change: Capital markets are open.

Speaker Change: That range is reduced and so the need to do a transaction is not there if the auction if thats. The most economically prudent way of managing them. So I would say as a baseline to start with the cash we have on hand today plus cash will generate before the maturity date early next year, we have a completely undrawn revolving credit facility for any tail amount of it.

Speaker Change: We've touched on quarter over quarter.

That also dovetails into it because that becomes we'll just say pennies on the dollars type investments when when you think about the grander scheme of the production add for the year.

Speaker Change: Maybe we don't have cash on hand for at that point.

Speaker Change: Great. Thank you and then maybe for Mark kind of a cleanup question, how should we be thinking about your approach to the remainder of the 2025 notes just trying to get a sense of if.

Speaker Change: That said.

Speaker Change: If rates continue to come down you could see optionality in range looking taking care of the 25, certainly but also at the eight quarter notes those presented some optionality in terms of how we want to approach those pull and part of those refinance at a better rate. So we're in a great spot of having <unk>.

Speaker Change: If we see interest come down throughout the year next year when those might ultimately exit.

Mark: Yeah, we've worked hard to be in a position where we are today to have a good deal of options in front of us.

Speaker Change: Net debt and are targeting Luca.

Mark: Both the reality of the business, where we positioned it as well as just the.

Speaker Change: Being able to optimize and drive down interest expense overtime.

Mark: Economic backdrop right now we're in a declining interest rate environment.

Speaker Change: Great I appreciate the time guys.

Speaker Change: Thank you.

Mark: Capital markets are open.

Speaker Change: Please standby for our next question.

Range has reduced at so the need to do a transaction is not there if the auction if thats. The most economically prudent way of managing them. So I would say as a baseline to start with the cash we have on hand today plus cash will generate before the maturity date early next year, we have a completely undrawn revolving credit facility for any tail amount that.

Speaker Change: Our next question comes from the line of Kevin Mccarthy with Pickering Energy Partners. Your line is open.

Speaker Change: Hey, good morning.

Kevin Mccarthy: I wanted to follow up on an earlier question about the wells in progress are you able to quantify how many ducks you do plan to have at year end.

Mark: And maybe we don't have cash on hand for at that point.

Mark: That said.

Speaker Change: Yes, good morning, Kevin at this point I don't think we've defined exactly what that number is and part of it is because the drilling efficiencies that we've captured throughout the year and sometimes we'll just say the dynamics of <unk>.

If rates continue to come down you could see optionality in range looking at taking care of the 25, certainly but also at the eight and a quarter notes those presented some optionality in terms of how we want to approach those pull and part of those refinance at a better rate. So we're in a great spot of having <unk>.

Speaker Change: Moving the activity around in our our development program as we get to the end of the year. When you think about though from a capital investment standpoint, it's really been around $60 to $75 million between last year and this year and so ultimately I would say, it's going to be an approximation number I'm going to give you, but it is going to be somewhere in the neighborhood of about <unk>.

Mark: Net debt in our targets.

Mark: Being able to optimize and drive down interest expense over time.

Speaker Change: Great I appreciate the time guys.

Speaker Change: Thank you.

Speaker Change: Please standby for our next question.

Speaker Change: Two pads worth of wells, So think kind of eight to 10.

Speaker Change: In number but again, we'll have a better refined number as we get closer to the end of the year and see what good work the team is harvested through their efficiencies.

Our next question comes from the line of Kevin Mccarthy with Pickering Energy Partners. Your line is open.

Hey, good morning.

Kevin Mccarthy: I wanted to follow up on an earlier question about the wells in progress are you able to quantify how many ducks you do plan to have at year end.

Speaker Change: Great. Thank you for that detail and just to clarify when you decided to utilize that productive capacity or you're kind of envisioning a permanent step up on your two two bcf a day of production level or would you consider completing those wells opportunistically to kind of take advantage of temporary price spikes.

Speaker Change: Yes, good morning, Kevin at this point I don't think we define exactly what that number is and part of it is because the drilling efficiencies that we've captured throughout the year and sometimes we'll just say the dynamics of <unk>.

I'll chime in here I think we could go either way that's going to be driven by the fundamentals when the in basin demand combined with our exposure to the LNG that's slated to come online next year.

Speaker Change: Moving the activity around in our our development program as we get to the end of the year. When you think about though from a capital investment standpoint, it's really been around $60 million to $75 million between last year and this year and so ultimately I would say, it's going to be an approximation number I'm going to give you, but it is going to be somewhere in the neighborhood of about two.

Speaker Change: That work in process can just represent.

Speaker Change: A steady state of what Youre turning in line on a given year. So what's your just in time inventory it could be one time opportunistic depending on how fundamental shape out the steadiness of the poll and call on range production.

Speaker Change: <unk> worth of wells, so think kind of 8% to 10.

Speaker Change: In number but again, we'll have a better refined number as we get closer to the end of the year and see what good work the team is harvested through their efficiencies.

Speaker Change: <unk>.

Speaker Change: It's an either or thats, the beauty of the Optionality in it but I think when you pulled back to what ranges story is what the capital efficiency means that full cycle cost and the dollar D&C capital per Mcf stays at the leading edge. This just represents further efficiencies in <unk>.

Speaker Change: Great. Thank you for that detail and just to clarify when you decide to utilize that productive capacity or you're kind of envisioning a permanent step up on your two two bcf a day production level or would you consider completing those wells opportunistically to kind of take advantage of temporary price spikes.

Speaker Change: And whether you're in a maintenance mode or whether you are stepping into some growth when fundamental is there.

Speaker Change: So even if there is a reset to some higher level.

Speaker Change: I'll chime in here I think we could go either way that's going to be driven by the fundamentals when the in basin demand combined with our exposure to the LNG that's slated to come online next year.

Speaker Change: Said differently when there is a reset to a higher level based on the fundamentals.

Speaker Change: The efficiency is going to drive still an extremely.

Speaker Change: Strong free cash flow generation level, thats sustainable with that low base decline rate and are really really strong comparative D&C per mcf.

Speaker Change: That work in process can just represent.

Speaker Change: Yes.

Speaker Change: I appreciate the details thank you.

Speaker Change: Thank you.

Speaker Change: Please standby for our next question.

Speaker Change: Our next question comes from the line of Roger read with Wells Fargo Securities. Your line is open.

Roger Read: Yes, thanks, good morning.

Roger Read: I guess, one question I'd like to come out given the <unk>.

Roger Read: <unk> to the Ngls, keeping production flat around the two and change production level.

Speaker Change: And whether you're in a maintenance mode or whether you are stepping into some growth fundamentals there.

Roger Read: As we think about adding new wells decline of existing wells.

Speaker Change: So even if there is a reset to some higher level.

Roger Read: Just one question with two parts base decline rates what are those have they been changing at all and then as we think about the mix of production with Ngls versus dry gas any changes there I'm just trying to think about if we remained stuck in a position here of flatness for a while what what does that look like in <unk>.

Speaker Change: Said differently when there is a reset to a higher level based on the fundamentals.

Speaker Change: The efficiency is going to drive still an extremely.

Speaker Change: Strong free cash flow generation level, that's sustainable with that low base decline rate and are really really strong comparative D&C per mcf.

Speaker Change: Yes.

Speaker Change: I appreciate the details thank you.

Roger Read: Terms of production and in terms of any.

Roger Read: Lets say potential changes in type of well or capex.

Speaker Change: Thank you.

Speaker Change: Please standby for our next question.

Speaker Change: Yes, good morning, Roger I'll tackle this one I think when you look at our base decline. It should look very consistent if not continuing to shallow over the course of time and I think today, you've heard us mention it.

Speaker Change: Our next question comes from the line of Roger read.

Speaker Change: Wells Fargo Securities. Your line is open.

Roger Read: Yes, thanks, good morning.

Roger Read: I guess, one question I'd like to come at the given the <unk>.

Speaker Change: And in prior calls, but typically our base decline is running around 19% two years ago was around 20%. So we would expect over the course of time is to continue to just slightly slightly shallow.

Roger Read: <unk> to the Ngls, keeping production flat around the two and change production level.

Roger Read: As we think about adding new wells decline of existing wells.

So ultimately still very resilient, we've got 500, producing wells. So it represents we will just say a strong data set that comprises that base number that we provide.

Speaker Change: When you think about the production mix changes I think this year versus last year is a good way to think about what the future could look like for us meaning just on a when you look back over a few quarters, just seeing a slow and steady incremental.

Roger Read: Terms of production and in terms of any.

Roger Read: Lets say potential changes in type of well or capex.

Speaker Change: <unk> of the production stream I think we were right at 30% you've seen us get a little bit above that level.

Speaker Change: But across the course of time, you would expect to see our production stream continue to have a little bit more of an NGL contribution and it's clearly a.

Speaker Change: A large portion of our inventory resides in where again, we have our some of our most capital efficient wells. When you look across the inventory, though they are all very economically competitive with each other but over the course of time, we'd expect the production mix to look pretty similar about two thirds of it in the wet side, one third on the dry side.

Speaker Change: So ultimately still very resilient, we've got 500, producing wells. So it represents we will just say a strong data set that comprises that base number that we provide.

Speaker Change: Okay. Thank you.

Speaker Change: Thanks Roger.

Speaker Change: Please standby for our next question.

Speaker Change: When you think about the production mix changes I think this year versus last year is a good way to think about what the future could look like for us.

Speaker Change: Our next question comes from the line of Bertrand Dennis with Troy. Your line is open.

Bertrand Dennis: Hey, Good morning, guys just wanted to follow up on the ability to add some modest growth I just want to clarify how you see it playing out logistically are you waiting for prices to move up then you hedge those prices then you begin to accelerate or is it maybe a supply demand forecast that you see and then you try to increase production.

Speaker Change: <unk> just on a when you look back over a few quarters, just seeing a slow and steady incremental.

Speaker Change: Lightning of the production stream I think we were right at 30% <unk> seen us get a little bit above that level.

Speaker Change: But across the course of time, you would expect to see our production stream continue to have a little bit more of an NGL contribution and it's clearly a.

Bertrand Dennis: In anticipation of that or do you kind of need to see the prices.

Speaker Change: A large portion of our inventory resides where again, we have our some of our most capital efficient wells when you look across the inventory, though theyre all very economically competitive with each other but over the course of time, we'd expect the production mix to look pretty similar about two thirds of it in the west side one third.

Bertrand Dennis: In the months and in the strip in the second part of that is just do you need to hedge into that or does your NGL pricing kind of create a natural hedge.

Speaker Change: Well good morning, Let me, let me start with this quarter EBIT prices, where we are today we're <unk>.

Speaker Change: Generating free cash flow today.

Speaker Change: On the dry side.

Speaker Change: So the pricing is certainly a factor clearly, but what we're looking at is the fundamentals the demand pull the in service of new demand whether its the power demand whether it's the LNG, whether it's industrial in the industrialization of all those things.

Speaker Change: Okay. Thank you.

Speaker Change: Thanks Roger.

Speaker Change: Please standby for our next question.

Speaker Change: Our next question comes from the line of Bertrand Dennis matures Youre line is open.

Hey, Good morning, guys just wanted to follow up on the ability to add some modest growth I just wanted to clarify how you see it playing out logistically are you waiting for prices to move up then you hedge those prices then you begin to accelerate or is it maybe a supply demand forecast that you see and then you try to increase production.

Speaker Change: I've mentioned and referred to in the slide deck as well.

Speaker Change: So as you think about the timing and how that manifests itself, we already have great exposure on existing transport to get into those markets with growing demand.

Speaker Change: Also some underutilized capacity on various pipelines that we can step into either in the form of selling to customers with a capacity picking it up short term picking up re marketed capacity by others, who do not use it don't have the inventory to fill it and maximizes utilization.

In anticipation of that or do you kind of need to see the prices in the in the months and in the strip.

Speaker Change: The second part of that is just do you need to hedge into that or does your NGL pricing kind of create a natural hedge.

Speaker Change: There's a host of ways for us to step into that over time as far as the hedging goes.

Speaker Change: Well good morning, Let me, let me start with this quarter EBIT prices, where we are today, we're generating free cash flow today.

Speaker Change: That's somewhat of a exercise done in parallel.

Speaker Change: So the pricing is certainly a factor clearly, but what we're looking at is the fundamentals the demand pull the in service of new demand whether its the power demand, whether it's the LNG, whether it's industrial or.

Speaker Change: To grow the company to make a capital investment decisions they are certainly related but.

Speaker Change: The hedging philosophy is to try to cover our fixed costs. So I guess by extension if youre stepping up your capital.

Speaker Change: It might be to think through what that implies for your hedge book, but I think next year's program is a really good example of a go forward type level, if you're in the mid 30% type range.

Speaker Change: Industrialization of all those things, we've mentioned and referred to in the slide deck as well.

Speaker Change: So as you think about the timing and how that manifests itself, we already have great exposure on existing transport to get into those markets with growing demand there is.

Speaker Change: Range with four handle in front of it that cover your fixed costs and generates free cash flow covers our dividend and <unk>.

Speaker Change: So some underutilized capacity on various pipelines that we can step into either in the form of selling to customers with a capacity picking it up short term picking up re marketed capacity by others, who do not use it don't have the inventory to fill it and maximize its utilization.

Speaker Change: Good exposure to a positive setup on the commodity front. So I wouldn't say the two are hard linked necessarily they certainly influence and shape each other but.

Speaker Change: Really the first decision as far as capital goes it's just a fundamental call on supply.

Speaker Change: There's a host of ways for us to step into that overtime as far as the hedging goes.

Speaker Change: From range and how we deliver it to those growing markets.

Speaker Change: That's somewhat of exercise done in parallel.

Speaker Change: That makes sense I appreciate it and then maybe just want to hit on the data Center demand question again real quick obviously nuclear is getting most of the headlines and obviously gas is a large part kind of playing to generation.

Speaker Change: To grow the company to make a capital investment decisions they are certainly related but.

The hedging philosophy is to try to cover our fixed costs. So I guess by extension if youre stepping up your capital you might need to think through what that implies for your hedge book, but I think next year's program is a really good example of a go forward type level, it's given the mid 30% type range with four handle in front of it that covered your fixed costs and.

Speaker Change: The players in the state gearing up to sign fixed agreements in 2025, obviously not for 2025 gas, but just finding agreements or or is your sense. That's way too early for any kind of data center related.

Speaker Change: Agreements or are the counterparties. They are asking or are we still kind of in the just a conversation space. Thanks.

Speaker Change: <unk> free cash flow covers our dividend and.

Speaker Change: I think the.

Speaker Change: Keeps good exposure to a positive setup on the commodity front. So I wouldn't say the two are hard linked necessarily they certainly influence and shape each other but.

Speaker Change: The conversations are.

Speaker Change: Being had rapidly a lot of conversations a lot of different counterparties and different ways of servicing that need whether it's directly with the utilities, whether it's with independent power producers, whether it's behind the meter and directly with data centers or other industrial type type demand. So all those conversations are being at keep in mind that these investments by by those come.

Speaker Change: Really the first decision as far as capital goes it's just a fundamental call on supply.

Speaker Change: From range and how we deliver it to those growing markets.

Speaker Change: <unk> are a multi decade decade type investments for themselves. So these are not discussions that are going to be had and arrived at in a series of months.

Speaker Change: This is.

Speaker Change: Probably.

Speaker Change: <unk>.

Speaker Change: <unk> 25 over the course of 'twenty five that market the nature of those conversations will develop.

Speaker Change: The players in the state gearing up to sign fixed agreements in 2025, obviously not for 25 gas, but just finding agreements or or is your sense. That's way too early for any kind of data center related.

Speaker Change: The tenor and pricing structures of those types of agreements and how they manifest itself now it's going to be a mix of.

Speaker Change: Agreements or are the counterparties. They are asking or are we still kind of in the just a conversation space. Thanks.

Speaker Change: Traditional just directly into the utilities to independent power producers, probably some behind the meter.

Speaker Change: Less conventional what youre seeing in the nuclear but if you pull back and look at what the.

Speaker Change: I think the.

Speaker Change: The conversations are.

Speaker Change: Potential displacement of incremental demand for natural gases for the nuclear deals. So far it's something on the order of one Bcf a day potential that's assuming it gets regulatory approval.

Speaker Change: Being had rapidly a lot of conversations a lot of different counterparties and different ways of servicing that need whether it's directly with the utilities, whether it's with independent power producers, whether it's behind the meter and directly with data centers. Our other industrial type type demand. So all those conversations are being at keep in mind that these investments by by those <unk>.

Speaker Change: Meets all of the required.

Clearances to re commission the nuclear power plant. So those are certainly encouraging in terms of the creativity and the recognition by data centers and industrial demand that they need reliable $24 seven clean power and Thats something that we the natural gas industry can do reliably 24.

Speaker Change: Companies are multi decade decade type investments for themselves. So these are not discussions that are going to be had and arrived at in a series of months.

Speaker Change: This is <unk>.

Speaker Change: <unk> 'twenty.

Speaker Change: 25 over the course of 'twenty five that market the nature of those conversations will develop.

Speaker Change: Got it.

Speaker Change: Yeah, and I'll just bolt on two quick things I think if you to further support Mark's comments. If you look at again Ive referenced it earlier, but just the increase in price power price and the recent PJM auction I think there is a indication that it's going to cost are going up and ultimately conversations will accelerate to quickly.

The tenor and pricing structures those types of agreements and how they manifest itself now it's going to be a mix of.

Speaker Change: Traditional just directly into the utilities to independent power producers, probably some behind the meter.

Speaker Change: Less conventional what youre seeing in the nuclear but if you pull back and look at what the what the potential displacement of incremental demand for natural gases for the nuclear deal. So far is something on the order of one Bcf a day potential that's assuming it gets regulatory approval and meets all the required.

Speaker Change: Figure out how you have an expansion of the I would imagine the grid, how do you add power how do you meet this feature growing demand in all balanced cost at the same time too whether it's the residents are end users and consumers of that power. Late lastly, we're encouraged to see that the state of Pennsylvania through the recent budget approval process.

Speaker Change: Clearances to re commission the nuclear power plant. So those are certainly encouraging in terms of the creativity and the recognition by data centers and industrial demand that they need reliable $24 seven clean power and Thats something that we the natural gas industry can do reliably.

Speaker Change: Earmarked $400 million through something Theyre, calling our sights program to basically look at site readiness in preparation for future demand and that's that's inclusive to many things, whether it's manufacturing or again data centers et cetera, but I think it's showing the wilderness willingness for the state of PAA to be on the front of their foot so to speak to support.

Speaker Change: Four seven.

Speaker Change: Yeah, and I'll just bolt on two quick things I think if you to further support <unk> comments. If you look at again I have referenced it earlier, but just the increase in price power price and the recent PJM auction I think there is a indication that it's going to cost are going up and ultimately conversations will accelerate to quickly.

Speaker Change: Industry jobs.

Speaker Change: And they understand I am assuming that we actually can supply a very long term low cost energy.

Speaker Change: Energy source that helps b the feedstock for these that kind of job generation, so anyway pretty encouraging from our view.

Speaker Change: Figure out how you have an expansion of the I would imagine that the grid, how do you add power how do you meet this future growing demand in all balanced cost at the same time too whether it's the residents are end users and consumers of that power. Late lastly, we're encouraged to see that the state of Pennsylvania through the recent budget approval process.

Speaker Change: That's great detail guys. Thanks, guys.

Speaker Change: Thank you.

Speaker Change: Ladies standby for our next question.

Speaker Change: Our next question comes from the line of Michael <unk> with Stephens. Your line is open.

Speaker Change: Yes, good morning, everybody I wanted to follow up on natural gas liquids.

Speaker Change: Earmarked $400 million through something they are calling our sights program to basically look at site readiness in preparation for future demand and that's that's inclusive to many things, whether it's manufacturing or again data centers et cetera, but I think it's showing the wilderness willingness for the state of PAA to be on the front of their foot so to speak to support.

Speaker Change: Markets.

Do all of your Ngls go out of Marcus Hook now and is there any capacity constraints there that you see coming up.

Speaker Change: Wondering if some of those Ngls.

Speaker Change: Could end up going to the Gulf.

Speaker Change: Do you see the suggestion there that you talked about.

Speaker Change: Industry jobs.

Speaker Change: Yes.

Speaker Change: And they understand im assuming that we actually can supply a very long term low cost <unk>.

Speaker Change: Good morning, Michael This is Alan Engberg, I manage our marketing business.

Speaker Change: Energy source that helps b the feedstock for these that kind of job generation, so anyway pretty encouraging from our view.

Speaker Change: Quick answer to that is.

Speaker Change: The majority of the.

Speaker Change: Our NGL center export it.

Speaker Change: Go to the Gulf and in fact on the LPG side, sorry go through Microsoft.

Speaker Change: That's great detail guys. Thank guys.

Speaker Change: Thank you.

Speaker Change: Please standby for our next question.

Speaker Change: In fact on the LPG side, we're able to export up to 80% of our production which is.

Speaker Change: Our next question comes from the line of Michael <unk> with Stephens. Your line is open.

Speaker Change: Is actually the highest level relative to production of any of our.

Speaker Change: Yes, good morning, everybody I wanted to follow up on the natural gas liquids.

Speaker Change: <unk>.

Speaker Change: Marcus Hook is typically running at call it 5% to 10% lower on capacity utilization than what the U S. Gulf is hence what Dennis referenced earlier, there is still an opportunity.

Markets.

Speaker Change: Do all of your Ngls go out of Marcus Hook now and is there any capacity constraints there that you see coming up.

Wondering if some of those Ngls.

Speaker Change: For range to actually ramp up exports.

Speaker Change: And then go into the Gulf.

Speaker Change: As we as we optimize the sales of our products. We do have some ethane that goes down to the Gulf.

Speaker Change: If you see the congestion there that you talked about being alleviated.

Speaker Change: Good morning, Michael This is Alan Engberg, I manage our marketing business.

Speaker Change: And that indirectly gets exported.

Speaker Change: Through Gulf Coast export facilities, but for the most part when we do set of Marcus Hook.

Speaker Change: Quick answer to that is the majority for.

Speaker Change: Our NGL center export it.

Speaker Change: Go to the Gulf and in fact on the LPG side are starting to go through a microscope.

Speaker Change: Well that's helpful. Appreciate that.

Speaker Change: I wanted to ask on the Capex Guide I know you moved the low end up for the year can you just talk about what.

Speaker Change: In fact on the LPG side, we're able to export up to 80% of our production, which.

Speaker Change: Was the driver there.

Speaker Change: Is actually the highest level relative to production of any of our.

Yeah, Mike I'll touch on that I mean quite honestly I'll say the starter kit is we're still within the guide that we had provided during the beginning of the year, but we did provide some ranges for areas like the land side, where it was adding up the white space Open parcel center.

Speaker Change: <unk>.

Speaker Change: Marcus Hook is typically running in call it 5% to 10% lower on capacity utilization than what the U S. Gulf is hence what Dennis referenced earlier, there is still an opportunity.

Speaker Change: For range to actually ramp up exports.

Speaker Change: As we've as we optimize the sales of our products. We do have some ethane that goes down to the Gulf.

Speaker Change: Basically driven by that land spend that we've had year to date, but that's it everything else on the drilling completion side is all well within well within the guide and on track, but we had communicated for the year.

Speaker Change: Is that indirectly gets exported.

Speaker Change: Through Gulf Coast export facilities, but for the most part when we do set of Marcus Hook.

Speaker Change: Thanks, guys I appreciate it.

Speaker Change: Well that's helpful. Appreciate that.

Speaker Change: Thank you Mike.

Speaker Change: I wanted to ask on the Capex Guide and then you move the low end up for the year can you just talk about what it was.

Speaker Change: Please standby for your next question.

Speaker Change: Yes.

Speaker Change: Our next question comes from the line of Leo Mariani with Ralph Your line is open.

Speaker Change: Was the driver there.

Speaker Change: Yes, Mike I'll touch on that I mean quite honestly I will say the starter kit is we're still within the guide that we had provided during the beginning of the year, but we did provide some ranges for areas like the land side, where it was adding up the white space Open parcel center.

Leo Mariani: Yeah, Hi, just wanted to.

Leo Mariani: Follow up a little bit in terms of the share buyback here. So it certainly looks as though free cash flow is going to start to increase here in the fourth quarter and throughout 25, certainly recognize that you guys have a bond payment.

Speaker Change: Our ability for us to pick up that allow us to extend laterals and I think that was up to essentially $30 million. We've now been able to based upon the drilling activity. This year capture some of that that those open parcels in it. So it's basically driven by that land spend that we've had year to date, but that's it everything else on the drilling completion side as well.

Leo Mariani: Redemption coming up as you already elaborated on but I'm just trying to get a sense is that free cash flow ramp should we expect a commensurate increase in that share buyback you folks. Obviously described the fact that you feel your stock is still undervalued at this point.

Speaker Change: All well within well within your guide and on track, but we had communicated for the year.

Speaker Change: Yes, good morning, I think.

<unk> principles that we've laid out over the last couple of years is to get the balance sheet within the target ZIP code and then we'd have a lot greater latitude on how and the cadence at which we're returning capital shareholders. So I think to answer your question is yes.

Speaker Change: Thanks, guys I appreciate it.

Thank you Mike.

Speaker Change: Please standby for our next question.

Speaker Change: Our next question comes from the line of Leo Mariani with Ralph Your line is open.

Speaker Change: Yes, the balance sheet is in the targets are good. So we have a lot greater latitude now to return capital to shareholders, whether it's share buybacks or.

Leo Mariani: Yeah, Hi, just wanted to.

Leo Mariani: A little bit in terms of the share buyback here. So it certainly looks as though free cash flow is going to start to increase here in the fourth quarter and throughout 'twenty five totally recognize that you guys have a bond payments.

Speaker Change: Slow ratable durable increases the dividend over time.

Speaker Change: Certainly given the significant disconnect we see in the value of the shares even to simply proved reserve value on a per share basis.

Share buybacks, we see is very very compelling. So we certainly have plenty of capacity in the existing approval and Thats certainly.

Redemption coming up as you already elaborated on but I'm just trying to get a sense is that free cash flow ramp should we expect a commensurate increase in that share buyback you folks. Obviously described the fact that you feel your stock is still undervalued at this point.

Speaker Change: A possible outcome.

Speaker Change: Yeah.

Speaker Change: I appreciate that.

Speaker Change: You folks obviously discussed.

Speaker Change: Capital efficiencies and continuing to move faster in the program and ensure a longer laterals.

Speaker Change: Yes, good morning, I think.

Speaker Change: Wanted to see if maybe you can quantify any of those efficiencies are you seeing like D&C costs per lateral foot comed.

Speaker Change: Our principles that we've laid out over the last couple of years is to get the balance sheet within the target ZIP code and then we'd have a lot greater latitude on how and the cadence at which we're returning capital to shareholders. So I think to answer your question.

Speaker Change: Come down.

Speaker Change: For the company.

Speaker Change: Yes, the balance sheet is in the target. So we have a lot greater latitude now to return capital to shareholders, whether it's share buybacks or.

Speaker Change: Is that mostly a function of efficiencies. If it is is coming down and any comments on what youre seeing on leading edge service costs, I know youre not using a ton of equipment, but do you expect there could be any improvement.

Slow ratable durable increases the dividend over time.

Speaker Change: Certainly given the significant disconnect we see in the value of the shares even to simply proved reserve value on a per share basis. The share buybacks. We see is very very compelling. So we certainly have plenty of capacity in the existing approval and Thats certainly.

Speaker Change: On a rig prices as oilfield activity has kind of softened here in 2014.

Speaker Change: Yes, I think from a service cost standpoint.

Speaker Change: It is early we just launched our RFP process for the fall.

Speaker Change: So we will have a lot better answer for you I think we would get when we get to the beginning of the year and we see what the results bear from that process. I mean, we have seen and we touched on it we have seen some relief in areas like some of the consumables may be frac sand.

Speaker Change: A possible outcome.

Speaker Change: I appreciate that.

Speaker Change: You folks obviously discussed.

Speaker Change: Capital efficiencies and continuing to move faster in the program and ensure a longer laterals.

Speaker Change: Wanted to see if maybe you can quantify any of those efficiencies are you seeing like D&C costs per lateral foot.

Speaker Change: Some of the tubular goods sides as well, but there are other areas that remained pretty resilient at current price levels and when you think about rig rates, we've all as an industry kind of coalesce to a similar super spec rig configuration and with drilling long laterals similar depths et cetera rates. It's provided some I'll just say some support.

Speaker Change: Come down.

Speaker Change: For the company.

Speaker Change: Is that mostly a function of efficiencies. If it is is coming down and any comments on what youre seeing on a leading edge service costs I know youre not using a ton of equipment, but do you expect there could be any.

Speaker Change: Some of those rig rates that that you see today. So it is going to be a balance and.

Speaker Change: Regardless of how this plays out from a service cost perspective.

Speaker Change: <unk>.

Speaker Change: On a rig prices as oilfield activity has kind of softened here in 2004.

Speaker Change: But we do anticipate is the ability to hold two two bcf equivalent per day with one frac crew and with the efficiencies. The team continues to harvest. We're we're seeing 9% to 10 frac stages, a day on a quarter in quarter out basis now.

Speaker Change: Yes, I think from a service cost standpoint.

It's early we just launched our RFP process for the fall.

Speaker Change: So we'll have a lot better answer for you I think would get when we get to the beginning of the year and we see what the results bear from that process. I mean, we have seen and we touched on it we have seen some relief in areas like some of the consumables may be frac sand.

Speaker Change: Water recycling and efficiencies there continue to look strong we drove some record days on the drilling side and the lateral this past quarter. So we just I guess in the spirit of a phrase one serves success begets success and so the team continues to build upon that momentum.

And I would expect for the next year again us to hold two two bcf flat with the one frac crew and it wherever we land from a service cost standpoint for us to continue to be on the front end of that low capital efficiency standpoint.

Speaker Change: <unk> rig configuration.

Speaker Change: And we're drilling long laterals similar depths et cetera.

Speaker Change: It's provided some I'll just say some support to some of those rig rates that that you see today, so it's going to be a balance.

Speaker Change: Thank you.

Speaker Change: Thanks Neil.

Speaker Change: Please standby for our next question.

Speaker Change: Regardless of how this plays out from a service cost perspective.

Speaker Change: But we do anticipate is the ability to hold two two bcf equivalent per day with one frac crew and with the efficiencies. The team continues to harvest. We're we're seeing nine to 10 frac stages, a day on a quarter in quarter out basis now.

Speaker Change: Ladies and gentlemen, we are nearing the end of today's conference. We will go to Paul Diamond of city for our final question. Your line is open.

Paul Diamond: Thank you good morning, all thanks for taking my call just wanted to get a quick one on the kind of the capital plan go forward to the opportunity set around inventory infrastructure and kind of the incremental land spend is that something we should think about.

Water recycling and efficiencies there continue to look strong we drove some record days on the drilling side and the lateral this past quarter. So we just I guess in the spirit of <unk>.

Paul Diamond: <unk>, a pretty flat run rate in coming quarters and years are there any I guess low hanging fruit for.

Speaker Change: Fraser von serves success begets success and so the team continues to build upon that momentum.

Paul Diamond: But any of those categories like she does bump up.

Speaker Change: And I would expect for the next year again us to hold two two bcf flat with the one frac crew and it wherever we land from a service cost standpoint for us to continue to be on the front end of that low capital efficiency standpoint.

Speaker Change: Yes, good morning, Paul I'll start here I think over.

Speaker Change: Over the course of time, we would expect that land incremental spend that you saw us breakout this year for some visibility we would expect that to be a lower exposure in the years ahead and mainly because it represents just a really small part of our overall program, but as you would imagine the more we're in excess of 90% of our acreage.

Thank you.

Thanks Neil.

Speaker Change: Please standby for our next question.

Speaker Change: Ladies and gentlemen, we are nearing the end of today's conference. We will go to falling Diamond of city for our final question. Your line is open.

<unk> is held by production or what we classify.

Speaker Change: Going to be captured in the next few years. So we would expect this to be a decrease in exposure in the years to come for sure. There are some land opportunities that exist in and around our producing footprint in <unk>.

Speaker Change: Thank you good morning, all and thanks for taking my call just wanted to get a quick one on the kind of the capital plan go forward to the opportunity set.

Speaker Change: Inventory of infrastructure and kind of the incremental land spend is that something we should think about.

Speaker Change: Some of them are the two state parts state parks excuse me that that are in our southwest area that could present, a future land opportunity, but for just the raw mechanics of how you are seeing us execute and operate today I would expect that exposure to look lower than lower over the course of time.

Speaker Change: It's pretty flat rates in coming quarters and years are there any I guess low hanging fruit.

Speaker Change: Looking at throughput any of those categories like she does bump up.

Speaker Change: Okay.

Speaker Change: Yes, good morning, Paul I'll start here.

Speaker Change: As far as capital in general going forward again. This year I think is a really good way to to visualize how our business could look from a capital and activity standpoint going forward I think it's also a good way of thinking about the productive capacity and production output that could come from the business.

Speaker Change: We essentially had a pretty flat activity program versus prior years, but yet here, we are with the ability to add some low percentage incremental production throughout the process and we've got to the Dutch that we've added over the past two years.

Speaker Change: Of our acreage is held by production or what we classify.

Speaker Change: It's going to be captured in the next few years. So we would expect this to be a decrease in exposure in the years to come for sure. There are some land opportunities that exist in and around our producing footprint in.

Speaker Change: As Mark said earlier, we don't think it's if it's when the fundamentals come together and the demand starts to materialize that results in low cost operators with high quality inventory like range to help participate to fill that growing demand and when that happens no doubt I'm sure. Our program will look a little bit different but we'll have that inventory to be able to be on the front of our foot.

Some of them are the two state parts state parks excuse me that that are in our southwest area that could present, a future land opportunities, but for just the raw mechanics, you're seeing us execute and operate today I would expect that exposure to look lower than lower over the course of time.

Speaker Change: So to speak and help participate in that growing demand and fundamentals.

Speaker Change: Capital in general going forward again this year I think is a really good way to to visualize how our business could look from a capital and activity standpoint going forward I think it's also a good way of thinking about the productive capacity and production output that could come from the business I mean, we essentially had a pretty flat active.

Speaker Change: Understood I appreciate the clarity I'll leave it there.

Speaker Change: Thank you Paul Thank you.

Speaker Change: Thank you.

This concludes today's question and answer session I would like to turn the call back over to Mr. Degner for his concluding remarks.

Dennis Degner: I'd just like to say, thank you for everyone for joining us on the call today. We appreciate all the thoughtful questions. If you have anything to follow up on please follow up with our Investor Relations team and we look forward to the next call and talking about 2025. Thank you.

Speaker Change: City program versus prior years, but yet here, we are with the ability to add some low percentage incremental production throughout the process and we've got to the Dutch that we've added over the past two years.

Speaker Change: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.

Speaker Change: As Mark said earlier, we don't think its if its when the fundamentals come together and the demand starts to materialize that results in low cost operators with high quality inventory like reach to help participate to fill that growing demand and when that happens no doubt I'm sure. Our program will look a little bit different but we'll have that inventory to be able to be on the front of our foot.

Speaker Change: So to speak and help participate in that growing demand and fundamentals.

Speaker Change: Understood I appreciate the clarity I'll leave it there.

Speaker Change: Thank you Paul Thank you.

Speaker Change: Thank you.

Speaker Change: This concludes today's question and answer session I would like to turn the call back over to Mr. Baker for his concluding remarks.

Speaker Change: It is like to say thank you for everyone for joining us on the call today. We appreciate all the thoughtful questions. If you have anything to follow up on please follow up with our Investor Relations team and we look forward to the next call and talking about 2025. Thank you.

Speaker Change: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.

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Speaker Change: Hello, and welcome to the range resources third quarter 2024 earnings Conference call.

Speaker Change: All lines have been placed on mute to prevent any background noise.

Speaker Change: Statements made during this conference call that are not historical facts are forward looking statements.

Speaker Change: Such statements are subject to risks and uncertainties, which could cause actual results to differ materially from those in the forward looking statements.

Speaker Change: After the Speakers' remarks, there will be a question and answer period.

Speaker Change: Vice President Investor Relations at <unk>.

Speaker Change: Range resources. Please go ahead Sir.

Speaker Change: Thank you operator, good morning, everyone and thank you for joining ranges third quarter 2024 earnings call.

Speaker Change: Speakers on today's call are Dennis Degner, Chief Executive Officer, and Mark <unk>, Chief Financial Officer.

Speaker Change: Hopefully you've had a chance to review the press release and updated Investor presentation that we've posted on our website.

Speaker Change: We may reference certain slides on the call. This morning.

Speaker Change: You will also find our 10-Q on ranges website under the investors tab.

Speaker Change: Or you can access it using the Sec's Edgar system.

Speaker Change: Please note, we'll be referencing certain non-GAAP measures on today's call. Our press release provides reconciliations of these to the most comparable GAAP figures.

Speaker Change: We've also posted supplemental tables on our website.

Speaker Change: That include realized pricing details byproduct, along with calculations of EBITDAX cash margins and other non-GAAP measures.

Speaker Change: With that let me turn the call over to Dennis.

Dennis Degner: Thanks, Lee and thanks to all of you for joining the call today.

Dennis Degner: Consistent performance has been a key part of the range story this year and.

In our third quarter results reflect our repeatable execution in areas such as operating safely.

Dennis Degner: Driving continued drilling completion and production improvements.

Dennis Degner: Generating free cash flow.

Dennis Degner: And the prudent allocation of that free cash flow balancing returns of capital to shareholders and the long term development of our world class asset base.

Q3 2024 Range Resources Corp Earnings Call

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