Q3 2024 APA Corp Earnings Call

At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to participate you would need to press star one one on your telephone you will then hear message advising your hand is raised.

To withdraw your question simply press Star one again, please be advised that today's conference is being recorded now.

Speaker Change: Now I will pass the call over to the Vice President of Investor Relations Gary Clark. Please go ahead.

Gary Clark: Good morning, and thank you for joining us on API corporations third quarter, 2024 financial and operational results conference call.

Thank you for watching!

Gary Clark: We will begin the call with an overview by CEO John Christmann.

Gary Clark: Steve Riney, President and CFO will then provide further color on our results and outlook.

Also on the call and available to answer your questions are Tracy Henderson Executive Vice President of exploration and Clay, Brad Shuster Executive Vice President of operations, our prepared remarks will be less than 20 minutes in length with the remainder of the hour allotted for Q&A.

In conjunction with yesterday's press release I Hope you have had the opportunity to review, our financial and operational supplement which can be found on our investor Relations website at Investor Dot Corp Dot com.

Gary Clark: Please note that we may discuss certain non-GAAP financial measures a reconciliation of the differences between these measures and the most directly comparable GAAP financial measures can be found in the supplemental information provided on our website.

Speaker Change: Good day everyone and thank you for standing by. Welcome to APA Corporation's third quarter 2024 financial and operational results.

Speaker Change: At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To participate, you will need to press star-one-one on your telephone. You will then hear a message advising your hand is raised.

Gary Clark: Consistent with previous reporting practices adjusted production numbers cited in today's call are adjusted to exclude Noncontrolling interest in Egypt, and Egypt tax barrels.

Gary Clark: I'd like to remind everyone that today's discussion will contain forward looking estimates and assumptions based on our current views and reasonable expectations.

However, a number of factors could cause actual results to differ materially from what we discuss on today's call.

Gary Clark: A full disclaimer is located with the supplemental information on our website and please note that our full year 2024 guidance reflects first quarter <unk> results on a standalone basis, plus three quarters of API and Colin combined.

Speaker Change: Good morning, and thank you for joining us on APA Corporation's 3rd Quarter 2024 Financial and Operational Results Conference Call.

We will begin the call with an overview by CEO John Christmann.

Speaker Change: President and CFO will then provide further color on our results and outlook.

And with that I will turn the call over to John.

John Christmann: Good morning, and thank you for joining us on our call today I will discuss our key strategic accomplishments in the core areas of the portfolio review third quarter highlights and results.

Speaker Change: Also on the call and available to answer your questions are Tracy Henderson, Executive Vice President of Exploration and Clay Bratchis, Executive Vice President of Operations.

Speaker Change: Our prepared remarks will be less than 20 minutes in length, with the remainder of the hour allotted for Q&A.

John Christmann: Outline our preliminary capital production and cost outlook for 2025.

Speaker Change: in conjunction with yesterday's press release. I hope you have had the opportunity to review our financial and operational supplement, which can be found on our Investor Relations website at investor.apacorp.com.

John Christmann: Over the past several years IPA has delivered a number of strategic initiatives designed to enhance the portfolio and create shareholder value.

John Christmann: In the U S. Since 2020, we have executed more than $5 billion of acquisitions and over $2 $5 billion of divestitures.

Speaker Change: Please note that we may discuss certain non-GAAP financial measures. A reconciliation of the differences between these measures and the most directly comparable GAAP financial measures can be found in the supplemental information provided on our website.

John Christmann: <unk> transforming our asset base into an unconventional pure play Permian operation.

Speaker Change: Consistent with previous reporting practices, adjusted production numbers cited in today's call are adjusted to exclude non-controlling interest in Egypt and Egypt tax barrels.

John Christmann: This activity has three primary benefits.

John Christmann: First it has added scale to our unconventional Permian position.

Gary Clark: Increasing unconventional acreage by more than 40%.

Speaker Change: I'd like to remind everyone that today's discussion will contain forward-looking estimates and assumptions based on our current views and reasonable expectations.

Enabling us to roughly double our unconventional production.

Gary Clark: Second it has increased drilling inventory and extended inventory duration as the rig count today is lower that IPA and count on a standalone basis.

Speaker Change: However, a number of factors could cause actual results to differ materially from what we discussed on today's call.

Speaker Change: A full disclaimer is located with the supplemental information on our website. And please note that our full year 2024 guidance reflects first quarter APA results on a stand-alone basis, plus three quarters of APA and CALIN combined.

Gary Clark: And third it rationalize our portfolio by eliminating assets that did not compete for capital and significantly reduces per unit LOE.

Gary Clark: Our primary strategic accomplishments in Egypt are twofold.

Speaker Change: And with that, I will turn the call over to John.

Gary Clark: Both of which drive.

John Christmann: Good morning, and thank you for joining us. On the call today, I will discuss our key strategic accomplishments in the core areas of the portfolio.

Gary Clark: Shareholder value and benefit the Egyptian people over the life of the PSC.

Gary Clark: In late 2021, we modernized and extended our PSC terms paving the way for more efficient capital allocation more operational flexibility and greater free cash flow generation and we recently reached an agreement to increase the contractual price for incremental.

John Christmann: Over the past several years, APA has delivered a number of strategic initiatives designed to enhance the portfolio and create shareholder value.

Gary Clark: Natural gas production in country, making gas exploration and development more economically competitive with oil development.

John Christmann: In the U.S., since 2020, we have executed more than $5 billion of acquisitions and over $2.5 billion of divestitures.

Gary Clark: Shifting to Charlotte, we are now seeing the culmination of our strategic efforts that began more than 10 years ago. When we made a counter cyclical investment in long cycle offshore exploration.

John Christmann: effectively transforming our asset base into an unconventional pure play Permian operation.

This activity has three primary benefits.

Gary Clark: The recently announced Grand <unk> project.

First, it is added scale to our unconventional Permian position.

Gary Clark: It gives us visibility into strong future oil production growth at the most attractive economics and our entire portfolio.

John Christmann: increasing unconventional acreage by more than 40 percent and enabling us to roughly double our unconventional production.

Gary Clark: Importantly, we believe this project can easily be funded over the next few years through operating cash flow, allowing us to maintain our current capital return framework.

Speaker Change: Second, it has increased drilling inventory and extended inventory duration as the rig count today is lower than APA and Calum on a stand-alone basis.

Gary Clark: Turning now to the third quarter results and highlights.

Speaker Change: And third, it rationalized our portfolio by eliminating assets that did not compete for capital and significantly reduces per unit LOE.

Gary Clark: <unk> achieved several important milestones during and subsequent to the end of the third quarter.

Gary Clark: We announced the sale of a package of non core Permian properties for $950 million, which is expected to close in December.

Our primary strategic accomplishments in Egypt are two-fold.

Speaker Change: both of which drive APA shareholder value and benefit the Egyptian people over the life of the PSC.

Gary Clark: We reached.

Gary Clark: On our first development project offshore Suriname, and block 58, with our partner and operator total energies.

Speaker Change: In late 2021, we modernized and extended our PSC terms, paving the way for more efficient capital allocation, more operational flexibility, and greater free cash flow generation.

Gary Clark: We signed an agreement in Egypt, the increases are contractual natural gas price on incremental volumes.

Gary Clark: And we received a credit rating upgrade from standard <unk> Poor's.

Speaker Change: And we recently reached an agreement to increase the contractual price for incremental natural gas production in-country, making gas exploration and development more economically competitive with oil development.

Gary Clark: Thus achieving investment grade status at all three major rating agencies.

Gary Clark: Third quarter results were strong across the board as we exceeded our production guidance, while capital and costs were below guidance.

Speaker Change: Shifting to Suriname, we are now seeing the culmination of our strategic efforts that began more than 10 years ago when we made a counter-cyclical investment in long-cycle offshore exploration.

Gary Clark: Cash flow from operations and free cash flow increased compared to the second quarter, despite weaker wty oil prices and significantly lower warthog gas prices.

Speaker Change: The recently announced Grand Morgue Project FID gives us visibility into strong future oil production growth at the most attractive economics in our entire portfolio.

Gary Clark: This resilience results from some unique attributes of the portfolio as well as some recent specific initiatives. These include.

Gary Clark: The successful integration of Cowen and associated cost synergy capture cash.

Speaker Change: Importantly, we believe this project can easily be funded over the next few years through operating cash flow, allowing us to maintain our current capital returns framework.

Gary Clark: Cash flow resilience to lower prices in Egypt under the PSC structure.

Gary Clark: Near term organic oil production growth.

Turning now to the third quarter results and highlights.

Gary Clark: Strong cash flow from our LNG contract and having the optionality to curtail U S volumes would have a haul pricing is negative while still generating cash flow from gas trading the real value of which lies in the preservation of resource for a better price environment.

Speaker Change: APA achieved several important milestones during and subsequent to the end of the third quarter.

Speaker Change: We announce the sale of a package of non-core Permian properties for $950 million, which is expected to close in December.

Gary Clark: We expect all of these will continue to generate positive financial impacts in the fourth quarter.

Speaker Change: We reached FID on our first development project offshore Suriname in Block 58 with our partner and operator Total Energies.

Gary Clark: Turning now to our key operational areas U.

Gary Clark: U S oil volumes have now met or exceeded guidance for the seventh straight quarter.

Speaker Change: We signed an agreement in Egypt that increases our contractual natural gas price on incremental volumes.

Gary Clark: Since closing the <unk> acquisition on April one we have reduced our Permian rig count from 11 down to eight which we believe is an appropriate pace given the prevailing commodity price environment.

Speaker Change: and we received a credit rating upgrade from Standard & Poor's, thus achieving investment grade status at all three major rating agencies.

Gary Clark: We have successfully integrated Cowen and turned our focus to developing the acreage our initial wells on acquired Cowen acreage are flowing back in the Midland Basin and the early results are encouraging the first wells in the Delaware Basin on Cowen acreage will follow later this quarter.

Speaker Change: Third quarter results were strong across the board, as we exceeded our production guidance, while capital and costs were below guidance.

Speaker Change: Cash flow from operations and free cash flow increased compared to the second quarter despite weaker WTI oil prices and significantly lower WAHA gas prices.

Gary Clark: In Egypt operations are running to plan and gross oil production is tracking accordingly.

Speaker Change: This resilience results from some unique attributes of the APA portfolio, as well as some recent specific initiatives. These include the successful integration of CALIN and associated cost synergy capture.

Gary Clark: The reduction in our drilling program is enabled to Workover rig fleet to reduce backlog oil volumes associated with delayed re completions and workovers to more normalized levels.

Gary Clark: Similar to the terms of the new gas price agreement, we recently added one drilling rig, bringing our total rig count to 12.

Speaker Change: Cash Flow Resilience to Lower Prices in Egypt under the PSC Structure

Gary Clark: Moving on to Suriname, We recently achieved an important milestone with the announcement of the final investment decision on our first offshore development and block 58.

Near-term organic oil production growth.

strong cash flow from our LNG contract

Speaker Change: and having the optionality to curtail U.S. volumes when OHA pricing is negative while still generating cash flow from gas trading, the real value of which lies in the preservation of resource for a better price environment.

Speaker Change: The operator total summarize the project is having a $10 5 billion gross cost 220000 barrels per day of production capacity.

Speaker Change: We expect all of these will continue to generate positive financial impacts in the fourth quarter.

Gary Clark: Per Boe capital, plus opex cost of $19 and a 15% IRR at $60 per barrel.

Turning now to our key operational areas.

Speaker Change: U.S. oil volumes have now met or exceeded guidance for the seventh straight quarter.

Speaker Change: These are very good returns and Apa's economics will be further enhanced by the capital carry provision we negotiated in 2019, when we brought total in as a partner.

Speaker Change: Since closing the Cowan acquisition on April 1st, we have reduced our Permian rig count from 11 down to 8, which we believe is an appropriate pace given the prevailing commodity price environment.

Gary Clark: We plan to fund Suriname development capital out of operating cash flow for the next few years until production commences in 2028.

Speaker Change: We have successfully integrated Callen and turned our focus to developing the acreage.

Speaker Change: Our initial wells on acquired Cowan Acreage are flowing back in the Midland Basin, and the early results are encouraging. The first wells in the Delaware Basin on Cowan Acreage will follow later this quarter.

Gary Clark: As previously noted we see significant opportunity for additional exploration in block 58 that could extend the production plateau and enhance the economics of our first Fps, so or potentially support additional development projects in the future.

Speaker Change: In Egypt, operations are running to plan and gross oil production is tracking accordingly.

Gary Clark: Switching now to the North sea during the third quarter production volumes were in line with guidance as we completed our platform maintenance turnaround at barrel as planned.

Speaker Change: The reduction in our drilling program has enabled the workover rig fleet to reduce backlogged oil volumes associated with delayed recompletions of workovers to more normalized levels.

Gary Clark: Earlier this year, the UK issued regulations, which will require substantial new emissions control investments on facilities that will operate beyond 2029.

Speaker Change: Pursuant to the terms of the new gas price agreement, we recently added one drilling rig, bringing our total rig count to 12.

Speaker Change: Moving on to Suriname, we recently achieved an important milestone with the announcement of the final investment decision on our first offshore development in Block 58.

Gary Clark: After six months of evaluation, we have concluded that the investment required to comply with these regulations at forties and Beryl coupled.

Speaker Change: The operator, Total, summarized the project as having a $10.5 billion gross cost.

Gary Clark: Coupled with the onerous financial impact of the energy profits Levy makes production of hydrocarbons beyond the year 2029 uneconomic.

220,000 barrels per day of production capacity.

Gary Clark: As a result, we have made the decision to cease all production in the North Sea by December 31, 2029, well ahead of what would have been otherwise reasonable timeframe.

Speaker Change: A per BOE capital plus OPEX cost of $19 And a 15% IRR at $60 per barrel

Speaker Change: These are very good returns, and APA's economics will be further enhanced by the capital carry provision we negotiated in 2019 when we brought Total in as a partner.

Gary Clark: Steve will provide further details on the revised schedule and financial statement impacts of this change in a few minutes.

Gary Clark: And to wrap up operations, we have finalized plans to resume exploration drilling on our extensive state lease position in Alaska, where we will test the Sakai prospect during the first half of 2025.

Speaker Change: We plan to fund Suriname Development Capital out of operating cash flow for the next few years until production commences in 2028.

Speaker Change: As previously noted, we see significant opportunity for additional exploration in Block 58 that could extend the production plateau and enhance the economics of our first FPSO, or potentially support additional development projects in the future.

Gary Clark: Turning now to our preliminary activity plan and outlook for 2025.

Gary Clark: We currently expect to run an eight rig program in the Permian Basin, and a 12 rig program in Egypt, and the North Sea. We will have a very limited capital program focused primarily on maintaining asset safety and integrity and a small amount of initial P&A work in preparation for long term asset abandonment.

Speaker Change: Switching now to the North Sea. During the third quarter, production volumes were in line with guidance as we completed our platform maintenance turnaround at Barrel as planned.

Speaker Change: Earlier this year, the UK issued regulations which will require substantial new emissions control investments on facilities that will operate beyond 2029.

Gary Clark: Our 2025 capital budget for the U S, Egypt, and North Sea will likely be in the range of $2 two to $2 3 billion.

Gary Clark: With an additional $200 million allocated to Suriname development activity and 100 million for exploration primarily Alaska.

Speaker Change: After six months of evaluation, we have concluded that the investment required to comply with these regulations at 40s and Barrel

Gary Clark: This capital program should broadly sustained production volumes in the Permian and Egypt on an adjusted basis, while North sea production will be down approximately 20% year over year I would also like to highlight the significant cost reductions we are targeting in 2025 and.

Speaker Change: coupled with the onerous financial impact of the energy profits levy makes production of hydrocarbons beyond the year 2029 uneconomic.

Speaker Change: As a result, we have made the decision to cease all production in the North Sea by December 31, 2029, well ahead of what would have been an otherwise reasonable time frame.

Gary Clark: In aggregate, we expect per unit LOE, G&A, GPT and interest costs to fall by 10% to 15% year over year.

Speaker Change: Steve will provide further details on the revised schedule and financial statement impacts of this change in a few minutes.

Gary Clark: At closing we have made very good progress on our strategic portfolio initiatives in the U S. Egypt in Suriname, we have.

Speaker Change: In the wrap-up operations, we have finalized plans to resume exploration drilling on our extensive state lease position in Alaska, where we will test the Sockeye prospect during the first half of 2025.

Gary Clark: Had an excellent quarter operationally and achieved all key guidance targets. The Cowen integration is complete most of the cost synergies have been captured and we look forward to demonstrating the potential of the acquired Calin acreage <unk>.

Speaker Change: Turning now to our Preliminary Activity Plan and Outlook for 2025.

Gary Clark: <unk> is running at a much more efficient operational cadence, we have the opportunity to unlock incremental value and assist the country with its natural gas needs. Following the negotiation of a new price framework.

Speaker Change: We currently expect to run an 8-rig program in the Permian Basin and a 12-rig program in Egypt.

Speaker Change: In the North Sea, we will have a very limited capital program focused primarily on maintaining asset safety and integrity, and a small amount of initial P&A work in preparation for long-term asset abandonment.

Gary Clark: Under our current price outlook, we will seek to generally sustained volumes in the Permian and Egypt for the foreseeable future, while rigorously managing costs and increasing the free cash flow that these regions generate.

Speaker Change: Our 2025 capital budget for the U.S., Egypt, and North Sea.

Speaker Change: will likely be in the range of $2.2 to $2.3 billion, with an additional $200 million allocated to Suriname development activity and $100 million for exploration, primarily Alaska.

Gary Clark: Longer term, our successful exploration program can add tremendous value and fuel future growth as evidenced by Suriname block 58.

Steve Riney: And with that I will turn the call over to Steve.

Speaker Change: This capital program should broadly sustain production volumes in the Permian and Egypt on an adjusted BOE basis, while North Sea production will be down approximately 20% year over year.

Steve Riney: Thank you John.

Steve Riney: For the third quarter under generally accepted accounting principles.

Steve Riney: <unk> reported a consolidated net loss of $223 million or <unk> 60 per diluted common share.

Speaker Change: I would also like to highlight the significant cost reductions we are targeting in 2025.

Gary Clark: As usual. These results include items that are outside of core earnings the.

Speaker Change: In aggregate, we expect per unit LOE, GNA, GPT and interest costs to fall by 10-15% year-over-year.

Gary Clark: The most significant of which was a $571 million after tax impairment of.

Gary Clark: North sea assets and non core Permian assets held for sale.

Speaker Change: In closing, we have made very good progress on our strategic portfolio initiatives in the U.S., Egypt, and Suriname.

Gary Clark: Excluding these and other smaller items adjusted net income for the third quarter was $370 million or $1 per share.

Speaker Change: We had an excellent quarter operationally and achieved all key guidance targets. The Callan integration is complete. Most of the cost synergies have been captured and we look forward to demonstrating the potential of the acquired Callan acreage.

Speaker Change: John noted in his remarks that we have revised the expected timetable for cessation of production and abandonment of our assets in the North Sea.

Speaker Change: This decision had three primary impacts this quarter.

Speaker Change: Egypt is running at a much more efficient operational cadence and we have the opportunity to unlock incremental value and assist the country with its natural gas needs following the negotiation of a new price framework.

Speaker Change: The previously mentioned after tax asset impairment of which $325 million was related to the north sea.

Gary Clark: 17 million barrel of oil equivalent write down of reserves that we no longer expect to produce.

Speaker Change: Under our current price outlook, we will seek to generally sustain volumes in the Permian and Egypt for the foreseeable future, while rigorously managing costs and increasing the free cash flow that these regions generate.

Gary Clark: And a $116 million increase in the net after tax present value of abandonment obligations on our balance sheet.

Gary Clark: We now carry an after tax present value liability of $1 2 billion for all of our North Sea Arif.

Speaker Change: Longer term, a successful exploration program can add tremendous value and fuel future growth, as evidenced by Suriname Block 58.

Gary Clark: We are planning to incur this liability between now and 2038.

Steve: And with that, I will turn the call over to Steve.

Gary Clark: Approximately half of this liability will be incurred between now and the end of 2030.

Steve: Thank you, John. For the third quarter, under generally accepted accounting principles, APA reported a consolidated net loss of 223 million dollars or 60 cents per diluted common share.

Gary Clark: While there will be some overlap. The next five years will consist of mostly wellbore abandonment, while the remaining eight years will focus mostly on facility abandonment.

Gary Clark: We expect Beryl Bravo, we'll be the first facility to cease production likely in late 2027 or early 2028.

Speaker Change: As usual, these results include items that are outside of core earnings.

Speaker Change: The most significant of which was a $571 million after-tax impairment of North Sea assets and non-core Permian assets held for sale.

Gary Clark: Moving over to Egypt, we continue to make good progress on past due receivables and during the quarter, both total and past due receivables decreased.

Speaker Change: excluding these and other smaller items, adjusted net income for the third quarter was $370 million or $1 per share.

Gary Clark: When payments on past due receivables are made.

Gary Clark: There is a counterintuitive impact on our stated free cash flow for the quarter because of the way we define free cash flow for the purposes of our 60% cash returns framework.

Speaker Change: John noted in his remarks that we have revised the expected timetable for cessation of production and abandonment of our assets in the North Sea.

Gary Clark: If you have questions about how to model. These cash flows please work with Gary and his team.

This decision had three primary impacts this quarter.

Speaker Change: The previously mentioned after-tax asset impairment, of which $325 million was related to the North Sea.

Gary Clark: Debt reduction is a continuing area of focus at API, while total debt increased with the <unk> acquisition, one of our goals is to liquidate the counting that as soon as possible.

Speaker Change: A 17 million barrel of oil equivalent write-down of reserves that we no longer expect to produce.

Gary Clark: We made progress on this front in the third quarter and we will continue to do so in the coming quarters.

Speaker Change: and a $116 million increase in the net after-tax present value of abandonment obligations on our balance sheet.

Gary Clark: Calin deal brought increased scale in the Permian, which coupled with our commitment to return to pre acquisition debt levels was a significant factor in our recent credit rating upgrade by S&P.

Speaker Change: We now carry an after-tax present value liability of 1.2 billion dollars for all of our North Sea ARO.

Gary Clark: To close I would like to provide a bit of color on some of our changes in our fourth quarter and 2020 for full year guidance.

Speaker Change: We are planning to incur this liability between now and 2038.

Speaker Change: Approximately half of this liability will be incurred between now and the end of 2030.

Gary Clark: Our full year capital budget has increased to $2 75 billion, which primarily reflects increases to fourth quarter spend on development capital in Suriname. Following the October project.

Speaker Change: While there will be some overlap, the next five years will consist of mostly wellbore abandonment while the remaining eight years will focus mostly on facility abandonment.

Speaker Change: We expect Barrel Bravo will be the first facility to cease production, likely in late 2027 or early 2028.

Gary Clark: Our recent decision to drill another exploration well in Alaska. This winter.

Gary Clark: And the addition of a <unk> rig in Egypt.

Gary Clark: These items, which were previously not contemplated in our guidance were partially offset by the reduction of one rig in the Permian basin.

Speaker Change: Moving over to Egypt, we continue to make good progress on past due receivables and during the quarter both total and past due receivables decreased.

Gary Clark: Turning to our U S production guidance, you'll note that we have adjusted our fourth quarter outlook to reflect the estimated impact of frac activity deferrals and planned production curtailments.

Speaker Change: When payments on past due receivables are made, there is a counterintuitive impact on our stated free cash flow for the quarter because of the way we define free cash flow for the purposes of our 60% cash returns framework.

Gary Clark: With much weaker than expected wahhab pricing this quarter, we decided to curtail gas from our alpine high area as we typically do.

Speaker Change: If you have questions about how to model these cash flows, please work with Gary and his team.

Gary Clark: We also decided to curtail some high volume high <unk> oil wells, which will generate higher revenue under a more constructive future gas price.

Speaker Change: Debt reduction is a continuing area of focus at APA. While total debt increased with the Callen acquisition, one of our goals is to liquidate the Callen debt as soon as possible.

Gary Clark: We currently project this will have a 20% to 25000 Boe impact on U S. Production. However, this estimate is subject to considerable volatility depending on how regional gas prices progressed through the fourth quarter.

Speaker Change: We made progress on this front in third quarter and will continue to do so in the coming quarters.

Speaker Change: The Callan deal brought increased scale in the Permian, which coupled with our commitment to return to pre-acquisition debt levels, was a significant factor in our recent credit rating upgrade by S&P.

Gary Clark: As most of you are aware our income from third party oil and gas purchased and sold is generally correlated to wahhab price differentials accordingly, with the persistence of weak pricing into the fourth quarter, we are raising our full year estimate to $500 million.

Speaker Change: To close, I would like to provide a bit of color on some of our changes in our fourth quarter and 2024 full year guidance.

Speaker Change: Our full-year capital budget has increased to $2.75 billion, which primarily reflects increases to fourth-quarter spend on development capital in Suriname following the October Project FID, our recent decision to drill another exploration well in Alaska this winter.

Gary Clark: Approximately two thirds of which is attributable to our gas trading activities and one third is attributable to the cheniere gas supply contract.

Gary Clark: And to close most of our $250 million counting synergy target should be realized by the end of this year.

and the addition of a 12th rig in Egypt.

Gary Clark: We anticipate reaching full synergy realization through 2025, and we did not plan to continue to reporting on these efforts from this point forward.

Speaker Change: These items, which were previously not contemplated in our guidance, were partially offset by the reduction of one rig in the Permian Basin.

Gary Clark: And with that I will turn the call over to the operator for Q&A.

Speaker Change: Turning to our U.S. production guidance, you'll note that we have adjusted our fourth quarter outlook to reflect the estimated impact of frack activity deferrals and planned production curtailments.

Speaker Change: Thank you so much and as a reminder to ask a question simply press star one on your telephone and wait for your name to be announced.

Speaker Change: To remove yourself press star one again.

Speaker Change: With much weaker than expected WAHA pricing this quarter, we decided to curtail gas from our alpine high area, as we typically do.

Speaker Change: We do ask you to.

Gary Clark: To keep your questions to one and one follow up one more.

Gary Clark: For our first question.

Speaker Change: We also decided to curtail some high-volume, high-GOR oil wells, which will generate higher revenue under a more constructive future gas price.

Speaker Change: And he comes from the line of Doug Leggate with Wolfe Research. Please proceed.

Speaker Change: Thanks, guys good morning.

Speaker Change: We currently project this will have a 20,000 to 25,000 BOE impact on U.S. production. However, this estimate is subject to considerable volatility, depending on how regional gas prices progress through the fourth quarter.

Speaker Change: Most of these are a lot this quarter, so I'm going to hit two one is Egypt and one is the oil guidance.

Gary Clark: So first of all in Egypt, you've obviously.

Speaker Change: You haven't given any color whatsoever.

Speaker Change: The gas price all of them and the fact that you got better pricing so to what extent can you help us frame the impact of this I guess it costs you about almost 25 net 25 million net additional rig.

Speaker Change: As most of you are aware, our income from third-party oil and gas purchased and sold is generally correlated to WAHA price differentials. Accordingly, with the persistence of weak pricing into the fourth quarter, we are raising our full-year estimate to $500 million.

Gary Clark: How do we think about the incremental free cash flow based on.

Gary Clark: Your current visibility on that gas price. That's my first one my second one is.

Speaker Change: approximately two-thirds of which is attributable to our gas trading activities and one-third is attributable to the Chenier gas supply contract.

Gary Clark: Clearly the oil guide has got a lot of moving parts not least the sale of the Central Basin platform. So can you just walk through the moving parts.

Speaker Change: And to close, most of our $250 million calendar synergy target should be realized by the end of this year.

Speaker Change: On the apples to apples.

Gary Clark: Acquisition versus.

Speaker Change: We anticipate reaching full synergy realization through 2025, and we do not plan continued reporting on these efforts from this point forward.

Gary Clark: Disposals to get us to kind of net number just to make sure. The street is looking at it on an apples to apples basis and I'll leave it that thanks.

Gary Clark: Yes.

Speaker Change: Really good question Doug.

Speaker Change: And with that, I will turn the call over to the operator for Q&A.

Speaker Change: I'll step in first on Egypt, and let Steve follow up and then we can come back to the Permian.

Speaker Change: Thank you so much and as a reminder to ask a question simply press star 1 1 on your telephone and wait for your name to be announced. To remove yourself press star 1 1 again.

Steve Riney: On the oil guide, but if you step back and Egypt in the Western Desert.

Gary Clark: We've historically always explored for oil.

Speaker Change: We do ask you to keep your questions to one and one follow-up one moment for our first question

Gary Clark: Obviously, the country of Egypt is now in a position where they need gas.

Gary Clark: We've been working on a framework, which would bring.

Gary Clark: Gas exploration wells up to parity with oil wells.

Speaker Change: and he comes from the line of Dog Legged. With Wolf Research, please proceed.

Gary Clark: It is on incremental volumes.

Speaker Change: Thanks guys, good morning. I've watched the news a lot this quarter, so I'm going to hit two. One is Egypt and one is the Oil Guide.

Gary Clark: We're not in a position to get into a lot of detail.

Gary Clark: On how that is calculated but you will be able to see it.

Gary Clark: Showing up on our.

So first of all in Egypt, you've obviously...

Gary Clark: Our income statement on going forward, we've allocated one rig we've got a lot of low hanging fruit as you know if you step back and look at the Western Desert, while we've always brought oil exploration programs. We found cost all of which was a <unk> backend loaded in 2000, so there's tremendous potential for gas in Egypt.

Speaker Change: you haven't given any color whatsoever around the gas price other than the fact that you got better pricing so to what extent can you help us frame the impact of this I guess it costs you about I don't know

$25 million net for that additional rig.

Speaker Change: How do we think about the incremental free cash flow based on your current visibility on that gas price? That's my first one. My second one is, clearly the oil guide has got a lot of moving parts, not least the sale of the Central Basin Platform. So can you just walk through the moving parts?

Gary Clark: Got a lot of low hanging fruit this will be on incremental gas volumes.

Gary Clark: And it's going to put our exploration program all on par with it all program.

Gary Clark: Yes so.

Gary Clark: So what we mean by incremental gas volumes as part of the agreement we've agreed with the GPC, what our PDP decline looks like.

on The Apples for Apples.

Acquisition versus

Speaker Change: disposals to get us to a kind of net number just to make sure that the street is looking out on an apostrophous basis. And I'll leave it there. Thanks.

Gary Clark: For the full development for the full remaining life of the concession so gas PDP.

Yeah, two really good questions, Doug.

Speaker Change: I'll step in first on Egypt and let Steve follow up, and then we can come back to the Permian and the oil guide. But if you step back in Egypt in the Western Desert, you know, we've historically always explored for oil.

Speaker Change: Decline curves.

Gary Clark: <unk>.

Gary Clark: For every quarter, we'll look at how much gas was produced in any gas over that decline curve in that quarter. It gets the new price.

Gary Clark: It doesn't have to be from new wells it doesn't have to be from new fields. So.

Speaker Change: Obviously, the country of Egypt is not a position where they need gas.

Gary Clark: So yeah.

Speaker Change: And so we've been working on a framework which would bring, you know, gas exploration wells up to parity with oil wells.

Gary Clark: Gas compression can bring on more gas volumes.

Gary Clark: Enhanced recovery step.

Gary Clark: Step outs infield step outs in infill or things like that all qualify for incremental gas volume.

It is on incremental volumes.

Speaker Change: As John said, we're we've priced it to where we're indifferent economically drill.

Speaker Change: The oil well or drilling a gas well.

showing up on our income statement on going forward.

Speaker Change: And as part of that agreement, we agreed to add one rig.

Speaker Change: We've allocated one rig. We've got a lot of low-hanging fruit, as you know. If you step back and look at the Western Desert, well, we've always run oil exploration programs.

Gary Clark: As we as we've said we have already done that and I would just say.

Speaker Change: We've got just to build on what John was saying, we've got 5 million acres of hydrocarbon rich.

Speaker Change: You know, we found COSRV, which is a 3-TCF field back in the early 2000s. So there's tremendous potential for gas in Egypt. We've got a lot of low-hanging fruit. This will be on incremental gas volumes.

Gary Clark: Our resource here, there's been as John said no gas focused exploration. So we believe that there is quite a bit of prosper activity. We've actually got some previously discovered.

Speaker Change: and it's going to put our exploration program on par with an oil program.

Gary Clark: Gas focused resource.

Speaker Change: Yeah, so what we mean by incremental gas volumes is, as part of the agreement we've agreed with EGPC, what our PDP decline looks like

Gary Clark: Some of that May need some appraisal, but theres quite a bit that's still that's ready for appraisal and development investment infrastructure is in place because we do produce a lot of gas today. There is some allege in that infrastructure.

Speaker Change: till, you know, for the full development or the full remaining life of the concession.

Gary Clark: And to the extent that we might need it in the future any any further build out of infrastructure was contemplated in the price that we negotiated.

Speaker Change: So, gas, PDPs, a decline curve, and for every quarter we'll look at how much gas was produced and any gas over that decline curve in that quarter gets the new price.

Speaker Change: Tracy if you want to talk about maybe a little bit about productivity for gas in Egypt.

Speaker Change: Sure, Steve It's Jon and Steve said, we've really focused our exploration program on oil and gas is really under explored relative to oil, but we see significant potential.

Speaker Change: It doesn't have to be from new wells. It doesn't have to be from new fields.

Speaker Change: gas compression can bring on more gas volumes, enhanced recovery, step-outs, infield step-outs and infill, things like that, all qualify for incremental gas volume.

Speaker Change: We have a good understanding of the geology and the source rocks, having been there for two decades, and we know the areas that are more gas prone in the basins that are more gas prone. So we do have a known inventory of low risk resource potential with material volumes and in addition, we will be testing some exploration gas prosper.

Speaker Change: As John said, we've priced it to where we're in different economically, drilling an oil well or drilling a gas well.

Speaker Change: And as part of that agreement, we agreed to add one rig. As we've said, we have already done that. And I would just say, just to build on what John was saying, we've got

Speaker Change: Vaccine concepts.

Speaker Change: Continue to grow that inventory over time, so we see a lot of potential in those opportunities and we're excited to have a gas focused program and it's a great opportunity to grow the inventory and add value to our business in Egypt.

5 million acres of hydrocarbon rich

Speaker Change: And Doug just to.

resource here. There's been, as John said, no gas-focused exploration.

Speaker Change: Rep rap that point up that question.

Speaker Change: So we're not going to share specifics about gas price agreement.

Speaker Change: So we believe that there's quite a bit of prospectivity. We've actually got some previously discovered...

Speaker Change: With Egypt.

Speaker Change: We're not going to do that at this point in time.

gas-focused resource.

Speaker Change: Some of that may need some appraisal, but there's quite a bit that's ready for appraisal and development investment.

Speaker Change: At their request.

Speaker Change: <unk>.

Speaker Change: You will start to see this show up in results.

Speaker Change: We will see we'll think about I understand your point about wanting to get to how do we forecast free cash flow I don't know what price.

Speaker Change: infrastructure is in place because we do produce a lot of gas today. There is some ullage in in that infrastructure.

Speaker Change: and, to the extent that we might need it in the future, any further build-out of infrastructure was contemplated.

Speaker Change: We will start thinking about.

Speaker Change: Now between now and February when we give our final plan for 2025, and <unk> and possibly beyond.

in the price that we negotiated.

Speaker Change: And I don't know, Tracy, if you want to talk about, maybe a little bit about prospectivity for gas in Egypt.

Speaker Change: We will give some.

Speaker Change: Some help.

Speaker Change: Being able to figure out what this means for free cash flow, we understand the point.

Tracy Henderson: Sure, Steve. As John and Steve said, we've really focused our exploration program on oil. So gas is really underexplored relative to oil, but we see significant potential.

Speaker Change: And if I can.

Speaker Change: Take the second question Doug.

Speaker Change: Permian oil.

Speaker Change: We have a good understanding of the geology and the source rocks, having been there for two decades.

Speaker Change: We've been running nine rigs we've scaled back we were at eight rigs and Thats, what we plan to run for next year. If you take our Q3 numbers, which we just put out $1 43 on the oil side for Permian.

Speaker Change: and we know the areas that are more gas prone and the basins that are more gas prone. So we do have a known inventory of low-risk resource potential with material volumes and in addition, we will be testing some exploration gas prospects and concepts.

Speaker Change: And you subtract the upcoming asset sales of 13000 barrels a day, that's going to put you around 130000.

Speaker Change: And we believe we can maintain that or hold that flat.

Speaker Change: to continue to grow that inventory over time. So we see a lot of potential in those opportunities and we're excited to have a gas focused program and it's a great opportunity to grow the inventory and add value to our business in Egypt.

Speaker Change: With the rig count that's down about 20% turn in lines that are down, 20% and Capex, which is in line with that so we think it's actually pretty strong but for next year, you're looking at and this is obviously the preliminary view as you know we're looking at about 130000 barrels a day of oil.

Speaker Change: And Doug, just to wrap that point up, that question, so we're not going to share specifics about a gas price agreement with Egypt, we're not going to do that at this point in time at their request.

Speaker Change: In the U S that we can hold flat with eight rigs.

Speaker Change: Got it thanks, guys I appreciate the answers.

You will start to see this show up in results.

Speaker Change: Thank you.

Speaker Change: One moment for our next question.

Speaker Change: We'll see, we'll think about, I understand your point about wanting to get to, you know, how we forecast free cash flow. I don't know a price. We'll start thinking about how, between now and February, when we give a final plan for 2025 and possibly beyond.

Speaker Change: Is from John Freeman with Raymond James Please proceed.

John Freeman: Good morning, guys.

Speaker Change: Good morning, John.

Speaker Change: First topic, just a little bit more info on the north sea. So I just want to make sure that kind of understand the way that you laid it out Steve of the.

We'll give some...

Speaker Change: some help in being able to figure out what this means for free cash flow. We understand the point.

Speaker Change: Arrow.

Speaker Change: Half potentially.

Speaker Change: Potentially be spent between now and the end of 2030, and I guess I'm just trying to understand in terms of just outflow of capital as you all like Ratchet down Capex in the North Sea over the next several years and then factoring in the <unk> just sort of how I should think about just capital being spent total.

And if I can...

Speaker Change: I'll take the second question, Doug, on the Permian oil. We've been running nine rigs, we've scaled back. We're at eight rigs, and that's what we plan to run for next year.

Speaker Change: If you take our Q3 numbers, which we just put out, 143 on the oil side for Permian.

Speaker Change: In the North sea over these four years when I know the middle income minimal spend capex wise in the North Sea next year.

Speaker Change: and you subtract the upcoming asset sales of 13,000 barrels a day that's going to put you around 130,000 and you know we believe we can maintain that or hold that flat.

Speaker Change: Any color on that front would be helpful.

Speaker Change: Yes, so the.

Speaker Change: The spend on the Arrow show up as capital.

Speaker Change: with a rig count that's down about, you know, 20 percent, turning lines that are down 20 percent.

Speaker Change: I actually see a number in.

Speaker Change: The costs incurred.

Speaker Change: and CapEx, which is in line with that. So we think it's actually pretty strong, but for next year, you're looking at, and this is obviously the preliminary view, as you know.

Speaker Change: We provide some reconciliations.

Speaker Change: GAAP.

Speaker Change: non-GAAP reconciliations in our supplement.

Speaker Change: And you'll see a number in there for the North Sea for the addition to the arrow so from a GAAP accounting purposes.

Speaker Change: We're looking at about 130,000 barrels a day of oil in the U.S. that we can hold flat with eight rigs.

Speaker Change: The increase in the Arrow is considered costs incurred.

Thanks guys, I appreciate the answers.

Speaker Change: Which is a.

Speaker Change: Kind of equivalent or.

Thank you.

Speaker Change: Somewhat equivalent to capital spending so it shows up when you add to the AAR own it doesn't show up as capital spending and the Capex program as we spend that capital.

One moment for our next question.

It's from John Freeman with Raymond and James. Please proceed.

Good morning, guys.

Speaker Change: Those dollars in the years in which we incur the arrow.

Good morning, John.

Speaker Change: The first topic, just a little bit more info on the North Sea, so I just want to make sure that I'm understanding. So the way that...

Speaker Change: And John just to give us maybe a little bit more.

Speaker Change: Mueller on.

Speaker Change: On the spend patterns.

Speaker Change: So as I said the.

You laid it out, Steve, of the ARO...

Speaker Change: If you were to combine two numbers because there's a there's a gross.

Speaker Change: said about half would potentially be spent between now and the end of 2030. And I guess I'm just trying to understand in terms of just outflow of capital as y'all like ratchet down the CapEx in the North Sea over the next several years.

Speaker Change: There is a gross obligation on the liability side on our balance sheet and then there is a deferred tax asset because there's a 40% tax savings for every dollar that you spend on <unk>. So there's two numbers on our balance sheet.

Speaker Change: and then factoring the AROs, just sort of how I should think about just capital being spent total in the North Sea over these next handful of years. When I know it's a minimal spend CapEx-wise in the North Sea next year, but just any color on that front would be helpful.

Speaker Change: Those two numbers net to $1 2 billion.

Speaker Change: With a 40% tax rate you could probably figure out pretty quickly it's about $2 billion of liability, it's about I hate under $1 million.

Speaker Change: Tax asset on the balance sheet.

Speaker Change: And that $1 2 billion as I said, roughly 50% of that will be spent between now and the end of 2030.

Speaker Change: Yeah, so the spend on the ARO won't show up as capital. You'll actually see a number in the...

Speaker Change: A lot of that is being spent on.

The costs incurred, we provide some reconciliations to

Speaker Change: On Wellbore abandonment.

Speaker Change: And.

Speaker Change: So you figure out your figure, okay, well thats about $100 million a year for six years and what I would say is the pattern grows through the through the period of time, so it's going to be way less than 100 next year.

Speaker Change: gap versus non-gap reconciliations in our supplement. And you'll see a number in there for the NORC for the addition to the ARO. So from a gap accounting purposes, it's

The increase in the ARO is considered cost incurred.

Speaker Change: In 2025 starts kind of ramping up a little bit in 2006.

Speaker Change: which is a gap kind of equivalent or somewhat equivalent to capital spending. So it shows up when you add to the ARO and it doesn't show up as capital spending in the CAPEX program as we spend that capital or those dollars in the years in which we incur the ARO.

Speaker Change: The first three years are below $100 million a year the last three years or about 100 million here.

Speaker Change: That's perfect I appreciate all the color on that and then on the on the LOE.

Speaker Change: All are indicating a pretty pretty big decline next.

Speaker Change: And, John, just to give maybe a little bit more color on the spend patterns.

Speaker Change: Next year kind of a 13% decline you mentioned the driver there is obviously a lot of a lot of moving parts with the AD accounting feraheme the other noncore.

So, as I said, the

Speaker Change: If you were to combine two numbers, because there's a gross obligation on the liability side on our balance sheet, and then there's a deferred tax asset, because

Speaker Change: Permian divestitures the curtailed volumes.

Speaker Change: Is there any way to give me just sort of a rough kind of idea just ballpark like.

Speaker Change: The magnitude of each of us from like a driver of that decline.

Speaker Change: There's a 40% tax savings for every dollar that you spend on ARO, so there's two numbers on our balance sheet Those two numbers net to 1.2 billion dollars

Speaker Change: Year over year, just some way to think about.

Speaker Change: Yes.

Speaker Change: With a 40% tax rate, you could probably figure out pretty quickly, it's about $2 billion of liability. It's about an $800 million tax asset on the balance sheet.

Speaker Change: Yes, we really haven't thought about how to break that out I mean, what we've tried to do is just look at the Standalone business next year as youre going into that and roll everything up obviously.

Speaker Change: And that $1.2 billion, as I said, roughly 50% of that will be spent between now and the end of 2030. A lot of that is being spent on wellbore abandonment.

Speaker Change: A big chunk of that is on the column side.

Speaker Change: The synergies that we've been able to drive up but a lot of it comes to just the change in the portfolio changes that we've made in the U S.

Speaker Change: Selling the higher cost.

Speaker Change: Planning waterflood assets on the Central Basin platform.

Speaker Change: You know, so you figure out, you know, you figure, okay, well, that's about a hundred million a year for six years. And what I would say is the pattern grows through the period of time. So it's going to be, you know, it'll be way less than a hundred next year in 2025.

Speaker Change: Which are typically much much higher cost we had a lot of water.

Speaker Change: So it's really a re.

Speaker Change: Characterization.

Speaker Change: Of our unconventional Permian basin business is what youre going to see and I can also tell you. There is we're working hard on auto do more than what we've laid out at this point.

Speaker Change: kind of ramping up a little bit in 26. The first three years are below 100 million a year. The last three years are above 100 million a year.

Speaker Change: Yes.

Speaker Change: Just add John.

Speaker Change: <unk>.

Speaker Change: We will provide quite a bit more detail around that when we rollout the detailed plan in February.

Speaker Change: That's perfect. I appreciate all the color on that. And then on the LOE, which y'all are indicating a pretty big decline.

Speaker Change: What we're trying to what we always try to do at this point in time in the year, just kind of give a shape to the capital program and what that means to.

Speaker Change: next year 10 to 15 percent decline and you know you mentioned the drivers and there's obviously a lot of a lot of moving parts with the account synergies the other non-core

Speaker Change: To production volume more than anything else is kind of the meat of the direction of the.

Speaker Change: Of the firm.

Speaker Change: permanent investors or curtailed volumes. Is there any way to give maybe just sort of a rough kind of idea of just ballpark like the magnitude of each of those from like a driver of that decline year-over-year just some way to think about

Speaker Change: But there is that that one chart in the supplement.

Speaker Change: Yeah.

Speaker Change: I mean, it's got multiple elements in it.

Speaker Change: You might want to just give gary called Les.

Speaker Change: Later today or sometime and he might be able to take you through some of the details behind that.

Speaker Change: Understood. Thanks, guys.

Speaker Change: it I mean, John, we really haven't thought about how to break that out. I mean, what we've tried to do is just look at the...

Speaker Change: Thank you. Thank you John.

Speaker Change: Our next question comes from the line of Bob Brackett with Bernstein Research. Please proceed.

Speaker Change: the standalone business next year as you're going into that and roll everything up. Obviously,

Speaker Change: Good morning, I had a question around the cadence of the cash return strategy and kind of the timing there is a big moving part around your disposals and getting that cash in the door and <unk> percent of free cash flow return came down a bit should I think of that is timing versus anything else.

Speaker Change: A big chunk of that is on the Callum side, is the synergies we've been able to drive out. But a lot of it comes to just the change in the portfolio changes that we've made in the U.S.

selling the higher cost.

declining water flood assets on the Central Basin Platform.

Speaker Change: which are typically much, much higher cost. We handle a lot of water. So it's really, you know, a re-characterization of our unconventional Permian Basin business is what you're gonna see. And I can also tell you there's, you know, we're working hard on how to do more than what we've laid out at this point. Yeah, and I'd just add, John,

Speaker Change: Yes, I mean definitely it's just timing Bob.

Speaker Change: We came into the year, we're running a little bit ahead, and you look at Q3, we've had a lot of.

Speaker Change: Material things that were in the works that can sometimes prevent you from being able to get in the market at times, but.

Speaker Change: We'll provide quite a bit more detail around that when we roll out the detailed plan in February. What we're trying to, what we always try to do at this point in time in the year is just kind of give a shape to the capital program and what that means to.

Speaker Change: In general.

Speaker Change: Yes, its more just timing that was kind of out of our control.

Speaker Change: Very clear a quick follow up on gas curtailment and your latest thoughts are on the ground intelligence around Matterhorn Matterhorn fields.

Speaker Change: Slow, but it's coming is that your expectation that we will get some takeaway out of the Permian realizations will improve and thats when the curtailment ends and whats your latest that you're here happening in the basin.

Speaker Change: And it's got multiple elements in it. You might want to just give Gary a call later today or sometime and he might be able to take you through some of the details behind that.

Speaker Change: Yes, I believe.

Speaker Change: I believe most of the price extremes, if you want to call them that right now are not related to matterhorn, but are related to.

Understood. Thanks, guys.

Thank you. Thank you, John.

Speaker Change: Some downtime on other pipelines coming out of the Permian to the Gulf Coast.

Speaker Change: Our next question comes from the line of Bob Brackett with Bernstein Research. Please proceed.

Speaker Change: And I think thats impacting that.

Thank you.

Speaker Change: Good morning. I had a question around the cadence of the cash return strategy and kind of the timing. There's a big moving part around your disposals and getting that cash in the door and 3Q percent of free cash flow return came down a bit. Should I think of that as timing versus anything else?

Speaker Change: The pricing.

Speaker Change: Dreams, as we see them today.

Speaker Change: Those.

Speaker Change: That maintenance activity I believe is planned to be completed in the next week or so so I think this is a matter perhaps just days.

Speaker Change: First of month for December a couple of days ago was $1 40, so not a great price, but that at least better than negative 3% or $3 50.

Speaker Change: I mean definitely it's just timing Bob. You know we we came into the year we're running a little bit ahead and then you know you look at Q3 we've had a lot of material things that were in the works that can sometimes

Speaker Change: Very clear thank you.

Bob: Thank you Bob.

Speaker Change: Thank you. Our next question comes from the line of Roger read with Wells Fargo Securities. Please proceed.

Speaker Change: prevent you from being able to get in the market at times. But in general, yes, it's more just timing that was out of our control.

Speaker Change: Yes. Thank you good morning.

Speaker Change: I guess I'd like to come back on the lowering of the cost I mean it looks.

Speaker Change: Very clear. A quick follow-up on gas curtailment and your latest thoughts or on-the-ground intelligence around Matterhorn. Matterhorn feels...

Speaker Change: Obviously, a piece of it but a lot of G&A and what is that.

Speaker Change: Or is that an addition.

Speaker Change: Synergies you anticipated on the Cowen merger.

Speaker Change: slow, but it's coming. Is that your expectation that we'll get some takeaway out of the Permian, realizations will improve, and that's when the curtailment ends? And what's your latest that you hear happening in the basin?

Speaker Change: So given the way it's laid out here, but I just wanted to understand what was <unk>.

Speaker Change: Some of these opportunities.

Roger: I think Roger it's clearly.

Speaker Change: Synergies on the <unk> side.

Speaker Change: But it's also some of the simplification on our on our business with the asset sales.

Speaker Change: Yes.

Speaker Change: And the other thing I would just add in our synergies around the Cowen transaction, we we said that.

Speaker Change: some downtime on other pipelines coming out of the Permian and to the Gulf Coast. And I think that's impacting the pricing extremes as we see them today. Those

Speaker Change: Around $90 million of that would be related to G&A and Cowen had a G&A cost structure of around $110 million a year.

Speaker Change: Our G&A right now is running basically flat with where we were prior to the Cowen acquisitions. So I think some of the G&A.

Speaker Change: that maintenance activity I believe is planned to be completed in the next week or so. So I think this is this is a matter of perhaps just days.

Speaker Change: The synergies are going to be around.

Speaker Change: First of month for December a couple days ago was $1.40, so not a great price, but at least better than negative $3 or $3.50.

Speaker Change: Just growing the increasingly are exceeding the amount of synergies that we thought we basically it's not all cowen people, because we actually have a number of Cowen people here in.

Very clear. Thank you.

Speaker Change: In the company, but we've equivalently eliminated the full <unk> there were some some one off costs and G&A in 2024 around the transaction as well.

Thank you, Bob.

Speaker Change: Thank you. Our next question comes from the line of Roger Reed with Wells Fargo Securities. Please proceed.

Speaker Change: Yeah, thank you. Good morning. I guess I'd like to come back on the lowering of the cost. I mean, it looks, you know, obviously a piece of it LOE, but a lot of it G&A.

Speaker Change: Yes.

Speaker Change: This unit.

Speaker Change: And then John My question for you.

John: You got the Alaska exploration, well and obviously all of those decisions that are being made pre election.

Speaker Change: And what is that, or is that in addition to the synergies you anticipated from the Calum merger? I mean, I would think so given the way it's laid out here, but I just wanted to understand what was driving some of these opportunities.

Speaker Change: In terms of regulatory outlook, certainly looks easier to do business in Alaska with the federal government at this point just wondering if.

Speaker Change: How you are looking at that.

Speaker Change: I mean, I think, Roger, it's clearly synergies on the Cowan side, but it's also some of the simplification on our business with the asset sales.

Speaker Change: No.

Speaker Change: Good or bad with this particular, well, but as you think about the overall Alaska opportunity.

Speaker Change: Yes, I think the main thing I'll.

Speaker Change: Ill remind you Roger is we've got about 300000 acres and our position but at state lands.

Speaker Change: Yeah, and the other thing I would just add, you know, in our synergies around the Callum transaction, we said that

Speaker Change: And so.

Speaker Change: We're in a position where you're fairly close to pipeline and were state land. So you don't really have to bring the federal side in.

Speaker Change: You know, around 90 million of that would be related to G&A and Callen had a G&A cost structure of around 110 million a year.

Speaker Change: But just on a few things so we feel good about that we're excited about Alaska.

Speaker Change: <unk>.

Speaker Change: prior to the Callen acquisition, so I think some of the GNA synergies are going to be around

Speaker Change: <unk> had a discovery earlier this year on the well that we did get down and we're going back to one of the two that we attempted last winter, but we're very excited about it.

Speaker Change: you know just growing the increasing or exceeding the amount of synergies that we thought

Speaker Change: So.

Speaker Change: Yes, it'll be early early next year, when we spud and we have.

Speaker Change: <unk> added some capital will start building ice roads and suffer this winter.

Speaker Change: Okay I appreciate that that one federal roadblock, and sometimes more than enough. So I just wanted to check on that.

Speaker Change: Yep.

Speaker Change: Thank you one moment for our next question.

Speaker Change: Yeah, no, I appreciate that. And then, John, my question for you, since you've got the Alaska Exploration well, and obviously all those decisions had to be made pre-election, but

Speaker Change: Comes from the line of Paul Cheng with Scotiabank. Please proceed.

Speaker Change: Hi, good morning team.

Speaker Change: Sure.

Speaker Change: John.

John Christmann: In terms of regulatory outlook, certainly it looks easier to do business in Alaska with the federal government. At this point, just wondering how you're looking at that.

Speaker Change: <unk> done the.

Speaker Change: Collyn deal.

Speaker Change: Even though I think Apache property you do both I think collyn, but when you go put that have you found does anything that you've learned from them, saying that they actually doing better than us and with that the property you have from the west.

John Christmann: I don't want to assume good or bad with this particular well, but as you think about the overall Alaska opportunity.

Speaker Change: Yes.

Speaker Change: Obviously, Paul when you when you integrate two companies you take good.

Speaker Change: Yeah, I think the main thing there, and I'll remind you, Roger, is, you know, we've got about 300,000 acres in our position, but it's state lands.

Speaker Change: From from both and try to replicate I think Cowen had some good people that we have integrated into the organization.

Speaker Change: And so, you know, we're in a position where you're fairly close to pipeline and, you know, we're state lands. So you don't really have to bring the federal side in, but, you know, just on a few things. So we feel good about that. We're excited about Alaska.

Speaker Change: Obviously, they've got some good acreage we're excited to get after as well.

Speaker Change: And then we've been digging into a lot of there.

Speaker Change: Technical assumptions as well, but yes.

Speaker Change: I think in general you've seen us be able to cut cost just from our supply chain and some of our processes.

Speaker Change: You know, we had a discovery earlier this year on the well that we did get down.

Speaker Change: We've cut almost $1 million per well.

Speaker Change: And, you know, we're going back to, you know, one of the two that we attempted last winter, but we're very excited about it. So it, you know, it'll be early, early next year when we spud and we have added some capital to start building ice roads and stuff for this winter.

Speaker Change: With the well cost side.

Speaker Change: We're anxious on the spacing and we've got two wells flowing back or actually for now, but two we've got pretty good results on in the Midland Basin.

Speaker Change: We're seeing some pretty good uplift on those two so we're pretty excited about Cowen in general.

Speaker Change: Yes.

Speaker Change: Okay, I appreciate that, but one federal roadblock is sometimes more than enough, so I just wanted to check on that.

Speaker Change: Good.

Speaker Change: Go ahead Paul.

Paul: No I was just asking that is there anything that from a technology or a process that Colin you actually find that they are.

Yep.

Speaker Change: Thank you. One moment for our next question that comes from the line of Paul Chang with Scotiabank. Please proceed.

Speaker Change: Doing well and then you will be able to.

Speaker Change: At opt out process or Pat knowledge and enhance operation.

Hi, good morning Tim.

Speaker Change: John, you guys have done the Cowen deal, even though I think Apache probably do better than Cowen. But when you go through that, have you found there's anything that you learned from them saying that, oh, they're actually doing better than us, and where that they probably have done the worst?

Speaker Change: Yes, I would say on the spacing side I mean, we're looking hard into the data in.

Speaker Change: How they were approaching the development scenarios and how we take how we how we designed it versus how they were and how do you modify that to what we think is a better answer.

Speaker Change: Yes.

Speaker Change: I could just add to that that's where I.

Speaker Change: Yeah, I mean, obviously, Paul, when you integrate two companies, you take good from both and try to replicate.

Speaker Change: I was going to say earlier was that.

Speaker Change: It would be really simple just to bring all of that acreage into into the Apache process and just assume we're right. We've got everything figured out and we're going to do it exactly the way we do everything else. Instead, I think it's always a good idea to just step back and think okay, well do they have any aspects.

Speaker Change: I think Callen had some good people that we've integrated into the organization.

Speaker Change: Obviously, they've got some good acres that we're excited to get after as well, and then we've been digging into a lot of their technical assumptions as well. But I think in general, you've seen us be able to cut costs just from our supply chain and some of our processes.

Speaker Change: Spacing and Frac ing and landing zones, and we would say communication, what's not in communication. So it's good news.

Speaker Change: Take the opportunity to step back from your question, what we believe in.

Speaker Change: You know, we've cut almost a million dollars per well. In terms of the well cost side, you know, we're anxious on the spacing and we've got two wells flown back, or actually four now, but two we've got pretty good results on in the Midland Basin.

Speaker Change: Our fundamental beliefs, there as well and we're doing that I think it's worth doing.

Speaker Change: We'll come to some conclusions in due course, but.

Speaker Change: It's worth asking ourselves those questions.

Speaker Change: and we're seeing some pretty good uplift on those two, so we're pretty excited about Cowan in general.

Speaker Change: So one moment for our next question please.

Yeah, just the...

Speaker Change: No, I was just asking that, is there anything that from a technology or process that you actually found that they are doing well and then you will be able to adopt their process or technology and enhance your operation?

Speaker Change: And it comes from the line of Neal Dingmann with <unk>. Please proceed.

Speaker Change: Good morning, guys. Thanks for the time, John My question, maybe just around <unk>.

Speaker Change: In Egypt production, specifically you all target you talked about for next year to eight Permian and <unk>.

Speaker Change: Jipson rigs I'm, just wondering does that.

Speaker Change: Yeah I would say on the spacing side I mean we're looking hard into the data and you know how they were approaching the development scenarios and you know how we take how we how we designed it versus how they were and how do you modify that to what we think is a better answer.

Speaker Change: Then kind of the plan to maintain you think thats about appropriate to maintain stable production in both those areas and I'm just wondering when it comes to base production has that has that changed much in either area. So I'm trying to get a sense of how we should think about sort of maintaining the flat production.

Speaker Change: Yeah, and if I could just add to that, that's what I was going to say earlier.

Speaker Change: Yes.

Speaker Change: Design that.

Speaker Change: The early look designs a program to sustained Permian oil.

Speaker Change: You know it'd be really simple just to bring all that acreage into into the Apache process and just assume well We're we're right. We're we've got everything figured out and we're going to do it exactly the way we do everything else

Speaker Change: Neil around the 130 that I mentioned earlier.

Speaker Change: Doug's first question and then in Egypt.

Speaker Change: It's really our.

Doug Leggate: Our reported production.

Speaker Change: instead, I think it's always a good idea to just step back and think, okay, well...

Doug Leggate: But the growth has been coming down slightly.

Doug Leggate: You look at on the oil side it was 11.

Speaker Change: Do they have any aspects of spacing and fracking and landing zones and what's in communication, what's not in communication?

Speaker Change: Right now you've got 12 rigs 11 to the oil program, one where the gas is what we've got in there.

Doug Leggate: At 11 were slightly under investing in Egypt.

Speaker Change: So it's good just to take the opportunity to step back and question what we believe and our fundamental beliefs there as well, and we're doing that, and I think it's worth doing. We'll come to some conclusions in due course, but it's worth asking ourselves those questions.

Doug Leggate: But it's close.

Speaker Change: Yes, if I can just add to that briefly I mean, we started the year with as people know we started the year with 18 drilling rigs. We ended the year with 12, we went down to 11 at one point in time.

Speaker Change: Steve, can you quantify what's the benefit? Because I assume those is not in your regional synergy target.

Doug Leggate: Just look back at what.

Speaker Change: What we said.

Speaker Change: That gross gross oil volume would slightly decline as we go through the year well first quarter was 138000 barrels a day second quarter was $1 39 in the third quarter was 137 so.

and John Clark. Thank you.

Speaker Change: No, at this point I'd say I can't quantify the benefits of that, but, you know, we'll do that in due course. I think we'll, you know, I think we've got to get more wells

Speaker Change: We are on a slight decline.

Speaker Change: Emphasize the slight aspect of that.

Speaker Change: drilled, completed, and online, and get some history to those. And, you know, we've talked about it in the past. At some point in time, in 2025, you know, we have the $250 million of annual cash operating, operational, and overhead type costs.

Speaker Change: I think that Thats, probably going to just continue into fourth quarter and on into 2022 absent a change in the drilling activity.

Speaker Change: But thats.

Speaker Change: If people go back to 2023, we were in the mid 100, <unk> with 18 rigs running for quite some time and we were kind of struggling to maintain production volume or to grow it from there. So.

Speaker Change: synergies, but we do believe that there are some meaningful synergies.

Speaker Change: around the capital productivity or capital efficiency, whichever you wanna call it.

Speaker Change: And we've said in the past, we will come back sometime in 2025 with a recap of where we think we are there, and that will include, just like the synergies have included, that will include things that we've learned

Speaker Change: We've commented a few times, we've actually with 11 rigs we've achieved.

Speaker Change: Have a nice very smooth operational cadence, that's working really well.

Speaker Change: We have increased that to 12.

Speaker Change: The.

Speaker Change: from the combination with Cowan and how that helps even the Apache approach to the rest of our acreage as well.

Speaker Change: The thing I would say about 2025 is that the.

Speaker Change: The 12th rig is drilling gas focused wells and some of those will be appraised some of them would be development wells. So it will be low risk appraisal type of step outs. Some of them will be exploration looking for bigger better prospects, which we believe there are there are they are out there.

John Christmann: The second question is on Alaska. John, you guys are going back. Can you tell us that you guys are essentially going back to the...

Speaker Change: seem too well that you suspend your last year program, and you're just going to redo that, or that you are targeting a totally new prospect.

Speaker Change: And so the potential for gas I would say is unknown at this point in time.

Speaker Change: Certainly optimistic we believe theres good prospectively, but the potential is there is still a bit unknown.

John Christmann: Now, Paul, it's actually going back to the, you know, the sockeye prospect is what

Speaker Change: The other thing I would say is that we in the last.

Speaker Change: I would say last year and a half we've learned a lot about what we can be doing around.

Speaker Change: Please stand by. We have some technical audio difficulties. Please stand by, ladies and gentlemen.

Speaker Change: Proving our focus on waterflood management.

Speaker Change: We've got a lot of plans in 2025, working that and I think the potential for that.

Speaker Change: We have yet to really see what that can do on that.

Speaker Change: On a decline mitigation basis, the best way to maintain production volumes at a country like Egypt is to mitigate decline not.

Please continue to stand by, ladies and gentlemen. Thank you.

Speaker Change: Not to be trying to drill too many wells so.

Speaker Change: We're working on both fronts and we'll see what 2025 brings but.

Speaker Change: If everything is kind of equal with 2024.

Speaker Change: We just continue on this pattern of gist.

Speaker Change: Decline.

Speaker Change: Got it and then just second you've talked a bit about this already today, but just.

Speaker Change: With shareholder return I mean, you guys and other periods, where the stock is getting hit.

Speaker Change: Very opportunistic coming in pretty aggressively I'm, just wondering given recent pricing is that potentially in the cards.

And you may continue. Thank you for standing by.

Speaker Change: Clearly, we've got our time periods fastest we're running ahead.

Speaker Change: Neil but we do think the share price is obviously attractive we've got the proceeds coming in from.

Speaker Change: The asset sales.

Speaker Change: Yes, you are live. We're back off. I apologize. We had an internet disconnect, but we're back, so.

Speaker Change: The majority of that's going to go to debt reduction as we are also working to get that paid out as well.

John: Thanks, John.

Speaker Change: One moment for our next question.

So one moment for our next question please.

Speaker Change: And it comes from the line of Jairam with JP Morgan. Please proceed.

Speaker Change: And he comes from the line of Neil Dingman with Truist. Please proceed.

Speaker Change: I wanted to go back to Egypt, and gas, Steve you mentioned that over time that you can make up call. It the PDP wedge with incremental volumes, where you'd get the higher gas price I was wondering if you could help us think about what the PDP decline rate looks like for gas in Egypt.

Speaker Change: Morning, guys. Thanks for the time, John. My question, maybe just around Permian and Egypt production, specifically, you all, you know, the target you talked about for next year, the 8 Permian and 12 Egyptian rigs, I'm just wondering, is that, again, kind of the plan to maintain, you think that's about appropriate to maintain stable production in both those areas? And I'm just wondering when it comes to base production, has that, you know, has that changed much in either area? So I'm trying to get a sense of how we should think about sort of maintaining the flat production.

Speaker Change: And obviously it.

Speaker Change: And the costs are field in <unk>.

Speaker Change: Specifically.

Speaker Change: Yeah Arun.

Speaker Change: Ill.

Speaker Change: I'll take that one at cost or has been on decline we've gone through some stages of compression. It is the big portion of our gas is costs are but we also produce a lot of casing head gas with a lot of the other all well so cost or has been in.

Speaker Change: Yeah, we've designed that, you know, the Early Look designs a program to sustain Permian oil.

Speaker Change: around the 1.30 that I mentioned earlier with Doug's first question.

Speaker Change: And then in Egypt, you know, it's really our reported production.

Speaker Change: In the double digits there.

Speaker Change: And.

Speaker Change: Obviously, we'll have to see with the new program can we can we feel the overall gas decline, but I think we've got an opportunity to.

Speaker Change: But the gross has been coming down slightly, if you look at on the oil side with 11, right now you've got 12 rigs, 11 to the oil program, 1 to the gas is what we've got in there. At 11, we're slightly under-investing in Egypt.

Speaker Change: To add some incremental volumes that it could be pretty material.

Speaker Change: Understood understood.

Speaker Change: And then just maybe a follow up.

but it's close.

Speaker Change: John with the with the North Sea now and kind of a late cycle stage in terms of the lifecycle of that.

Speaker Change: Yeah, if I can just add to that briefly. I mean, we started the year with, as people know, we started the year with 18 drilling rigs. We ended the year with 12. We went down to 11 at one point in time.

Speaker Change: Of that.

Speaker Change: Development of the field.

Speaker Change: And then obviously Suriname starting up in 2028, how are you thinking about.

If you just look back at the, when we said...

Speaker Change: The gross oil volume would slightly decline as we go through the year. Well, first quarter was 138,000 barrels a day. Second quarter was 139.

Speaker Change: Thinking about another leg to the stool in terms of the portfolio, obviously sold some assets recently, but how are you thinking about just the broader portfolio and obviously given.

and third quarter was 137.

Speaker Change: Given the north sea, where it's at adding another leg to the stool.

Speaker Change: So, you know, we're on a slight decline. I would emphasize the slight aspect of that. And I think that that's probably going to just continue into fourth quarter and on into 2022, absent a change in the drilling activity.

Speaker Change: Yeah, I mean, I think if you step back we've got what we believe are to really.

Speaker Change: The strong long term legs to the stool with both Permian.

Speaker Change: Our reshaped and rework Permian unconventional business, we think we can hold that flat.

Speaker Change: That's if people go back to 2023, you know, we were in the mid-140s with 18 rigs running for quite some time and we were kind of struggling to maintain production volume or to grow it from there.

Speaker Change: Efficient rig count for the foreseeable future.

Speaker Change: Egypt is a large asset we've been there now for over three decades, we see a lot of running room in Egypt as well.

Speaker Change: So, as we've commented a few times, with 11 rigs, we've achieved a nice, very smooth operational cadence that's working really well. We have increased that to 12.

Speaker Change: <unk> will start to come on in 28 and will be very material.

Speaker Change: And so if you step back and look at that.

Speaker Change: And we just maintain.

Speaker Change: The two large onshore positions 28 start off is going to put in some pretty nice growth relative to those two assets.

The thing I would say about 2025 is that

Speaker Change: The twelfth rig is drilling gas-focused wells, and some of those will be appraisal... some will be development wells, some will be low-risk appraisal type of step-outs.

Speaker Change: So I mean, I think portfolio is in pretty good shape, we're always looking to how we improve it.

Speaker Change: But I think we've got.

Speaker Change: Some of them will be exploration, looking for bigger, better prospects.

Speaker Change: Let's turn off stepping in and coming on in 2028, it's going to be a nice add to one or two really nice core positions both in the Permian and the U S.

which we believe they are out there.

Speaker Change: And so, you know, the potential for gas, I would say, is is unknown at this point in time. We're certainly optimistic. We believe there's good prospectivity, but the potential is still a bit unknown. The other thing I would say is that we, in the last

Speaker Change: In Egypt.

Speaker Change: Understood plus the exploration in Alaska near ago, absolutely, Yes, and I think the key there Arun as we've stayed committed we've been spending a small portion of our budget in exploration.

Speaker Change: I would say last year and a half, we've learned a lot about what we can be doing around improving our focus on water flood management, and we've got a lot of plans in 2025 for working that, and I think the potential for that.

Speaker Change: I think we've got a wonderful staff in.

Speaker Change: As I said in the prepared remarks.

Speaker Change: Successful exploration you can add real shareholder value.

Speaker Change: And sort of on block 58 is a perfect example of that so.

Speaker Change: We've got a nice portfolio.

Speaker Change: We have yet to really see what that can do on a decline mitigation basis. The best way to maintain production volumes in a country like Egypt is to mitigate decline, not to be trying to drill too many wells.

Speaker Change: Cited about it we'll continue to fund a little bit, but we also know when we make a real money is at our core assets and.

Speaker Change: Driving our free cash flow from Permian and Egypt.

Speaker Change: Great. Thanks, a lot Jeff.

Speaker Change: We're working on both fronts, and we'll see what 2025 brings, but if everything is kind of equal with 2024, we'll probably just continue on this pattern of just slight decline.

Speaker Change: Thank you so much one moment for our next question that comes from the line of Charles Meade with Johnson Rice. Please proceed.

Speaker Change: Good morning, John to you and your whole team there.

Speaker Change: I wanted to ask good morning Ross.

Speaker Change: Got it, and then just a second, you've talked a bit about this already today, but just with sharehold return, I mean you guys in other periods where you know the stock has gotten hit, have been very opportunistic coming in pretty aggressively. I'm just wondering given recent you know pricing, is that potentially in the cards?

Speaker Change: I wanted to thank you I wanted to ask a question about about Suriname and you you put this.

Speaker Change: Slide in your supplement on on Slide 11.

Speaker Change: I always liked these kind of mockup cartoons that give us give a sense of the the development layout, but but what when you guys decided to include this what are you. Besides the numbers on the far right side of the slide what do you really hope people take away from this.

Speaker Change: And I think, you know, clearly we've got our time periods fastest, we're running ahead.

Speaker Change: Neil, but we do think the share price is obviously attractive. You know, we've got the proceeds coming in from the asset sales. The majority of that's going to go to debt reduction, as we're also working to get debt paid down as well.

Speaker Change: When they see this I mean, what's the.

Speaker Change: So what you want people to get about.

Speaker Change: About the Grandma group.

Speaker Change: Well I mean, I think it's just given.

Speaker Change: It's a real project today right. So I mean, we've got visibility now.

Thanks John. Thank you. One moment for our next question.

Speaker Change: Volumes in 2028, and so I think it's time that you.

Speaker Change: You put some slides out there that bring it to life and that's why we put the picture out there you can see this is kind of looking from deepwater and you'll see where the <unk> will be place. This is a total slide.

Speaker Change: and it comes from the line of Arun Jairam with a JP Morgan. Please proceed.

Speaker Change: Yeah, I wanted to go back to Egypt and gas. Steve, you mentioned that over time that you can make up, call it the PDP wedge, with incremental volumes where you'd get the higher gas price. I was wondering if you could help us think about what the PDP decline rate looks like for gas in Egypt. And obviously...

Speaker Change: You'll see with krabbe value, it's a fairway as we've talked about.

Speaker Change: In terms of the development opportunities that we've appraised, they're looking over at <unk>, it's more of a field.

Speaker Change: The thing I would also say along that fairway as there will be.

and the COSR field specifically.

Speaker Change: More exploration prospects and potential tie backs as well so.

Speaker Change: That's something we're excited about it's material it's large.

Speaker Change: Yeah, Arun, you know, I'll take that one. COSR has been on decline. You know, we've gone through some stages of compression. It is the big portion of our gas, is COSR. But we also, you know, produce a lot of casing head gas with a lot of the other oil wells. So, you know, COSR has been in the double digits there.

Speaker Change: But I think it's just bringing this project to life because it's real today.

Speaker Change: We're looking forward to 2028.

Speaker Change: That's great. That's it for me Thank you John.

Speaker Change: You bet Charles Thank you.

Speaker Change: Thank you so much.

Speaker Change: For our next question that comes from the line of Neil Mariani with Roth. Please proceed.

Speaker Change: And, you know, obviously we'll have to see with the new program, can we fill the overall gas decline, but I think we've got an opportunity to add some incremental volumes that could be pretty material.

Speaker Change: Yes.

Neil Mariani: Alright, Thanks, just wanted to inquire a little about the kind of activity planned in the U S.

Speaker Change: It sounds like you guys are basically kind of pulling back there.

Speaker Change: It's roughly at 70, you guys just kind of sitting at a softer oil outlook just kind of curious are you expecting kind of oil prices to be lower.

Speaker Change: Next year I mean, obviously you just bought Cowen asked that you saw some pretty nice organic growth. The last couple of quarters on a combined basis and now you're kind of choosing to pull back can you just provide a little bit more color on sort of the thinking.

Speaker Change: of that development of the field. And then obviously Suriname, you know, starting up in 2028, how are you thinking about?

Speaker Change: Thinking about another leg to the stool in terms of the portfolio, obviously you sold some assets recently, but how are you thinking about the broader portfolio and obviously, given the North Sea where it's at, adding another leg to the stool?

Speaker Change: There as we roll into next year.

Speaker Change: Yeah, Leo I, just think we're in a softer price environment.

Speaker Change: We've got an asset base that we can sustain volumes with eight rigs.

Speaker Change: We're going to we're going to work on efficiencies.

Speaker Change: Yeah, I mean, I think if you step back, we've got what we believe are two really, you know,

Speaker Change: It's always easy to pick up those rigs up but I think with where we're moving into 2025, it feels like a good place to be.

strong long-term legs of the stool

Speaker Change: with both Permian, you know, kind of our reshaped and reworked Permian unconventional business. We think we can hold that flat at a very efficient rig count for the foreseeable future. Egypt is a large asset. We've been there now for over three decades. We see a lot of run-in room in Egypt as well.

Speaker Change: Initially and the nice thing is is like I said, if we can sustain Permian and roughly sustain Egypt.

Speaker Change: You've got thrown off coming in the next couple of 2028 from an overall corporate level.

Speaker Change: Surname will start to come on in 28 and will be very material. And so if you step back and look at that, and we just maintain, you know, the two large onshore positions.

Speaker Change: Okay, and then maybe just jumping over to Egypt here. So I think you guys made.

Speaker Change: Comment there on the call that you expect that we could see some very modest declines on Egypt.

Speaker Change: Gross oil I know you expect any kind of keep it.

Speaker Change: 28, Sardom's going to put in some pretty nice growth relative to, you know, those two assets.

Speaker Change: Adjusted or sort of net production on oil relatively flat, so maybe you're expecting to get a slightly higher share of that oil I don't know if thats just related to expectations for lower prices and the PSC.

Speaker Change: So, I mean, I think portfolio's in pretty good shape. We're always looking to how we improve it, but, you know, I think we've got, with Surinam stepping in and coming on in 2028, it's going to be a nice add to what are two really nice core positions.

Speaker Change: For next year I was hoping you could kind of address that quickly and then also just on Egypt gas you've got the gas rate going and what's your expectation there on gas production in Egypt for next year can that start to flatten out maybe in the second half do you see any growth in Egypt gas as we get towards the end of the year or next year.

both in the Permian and the U.S. and Egypt.

Understood. Plus the exploration in Alaska and Uruguay.

Speaker Change: And I think the key there, Arun, is we've stayed committed, you know, we've been spending a small portion of our budget in exploration. I think we've got a wonderful staff and, you know, as I said in the prepared remarks,

Speaker Change: Yes, I would just say if you look in Egypt at 11 rigs.

Speaker Change: Yes.

Speaker Change: As Steve mentioned, we've been declining slightly at the topline it's been very very slight.

Speaker Change: With successful exploration, you can add real shareholder value. And so on Block 58 is a perfect example of that.

Speaker Change: Over the last four quarters.

Speaker Change: So at 11, Thats about where we probably are on the gross oil side.

Speaker Change: We've got a nice portfolio, we're excited about it, we'll continue to fund a little bit but we also know where we make our real money is in our core assets and driving our free cash flow from Permian and Egypt.

Speaker Change: We're actually getting after some of the waterflood projects as well, which the benefit those habits.

Speaker Change: If they flatten or decline so that's.

Speaker Change: With a strong waterflood program and then you can improve that.

Great. Thanks a lot, John.

Speaker Change: And then on the gas side, our overall gross gas is declining.

Speaker Change: Thank you so much. One moment for our next question that comes from the line of Charles Mead with Johnson Rice. Please proceed.

Speaker Change: But with this program and we've got a one rig program laid out in some some nice quick prospects to get after that we can get the infrastructure will bring new volumes on and then we will we've got some bigger prospects to drill and then we will see.

Charles Mead: Good morning, John, to you and your whole team there. Good morning, Charles. Thank you. I wanted to ask a question about Suriname.

Speaker Change: You put this slide in your supplement on slide 11 and

Speaker Change: So I think the key there as we were getting started with that.

Speaker Change: I like these kind of mock-up cartoons that give a sense of the development layout.

Speaker Change: And after we get some prospects that we will have a better clue of scale on the gas side in the future.

But what...

Speaker Change: Alright. Thanks.

Speaker Change: you know when you guys decided to include this what what are you

Speaker Change: Thank you again.

Speaker Change: Besides the numbers on the far right side of the slide, what do you really hope people take away from this when they...

Speaker Change: Our next question comes from the line of Betty Jang with Barclays. Please proceed.

Speaker Change: when they see this and what's the so what you want people to get about

Betty Jang: Good morning, Thank you for taking my question.

about the Grand Moor Group.

Betty Jang: I want to go back to the North Sea Arrow conversation. So I think the one 2 billion is on the present value basis. So wondering if you could give the total liability on the absolute basis.

Speaker Change: Well, I mean, I think it's just given, you know, it's a real project today, right? So, I mean, we've got visibility now to volumes in 2028, and so I think it's time that you, you know, you put some slides out there that bring it to life, and that's why we put the picture out there. You can see this is kind of looking from...

Speaker Change: And.

Speaker Change:

Speaker Change: I think the.

Speaker Change: As we think about the cash outflow related to does does your free cash flow calculation.

Speaker Change: Deepwater Inn. You'll see where the FPSO will be placed. This is a total slide.

Speaker Change: You see with Crabbed Ague, it's a fair way as we've talked about.

Speaker Change: Include this outflow.

Speaker Change: As you think about the capacity.

Speaker Change: in terms of the development opportunities that we've appraised there. And looking over at Sopocora, it's more of a field.

Speaker Change: For cash returned in any given year.

Speaker Change: The thing I would also say along that fairway is there will be more exploration prospects and potential tiebacks as well. So it's something we're excited about. It's material. It's large.

Speaker Change: Yes so.

Speaker Change: I'll give you.

Speaker Change: Given the two numbers I will give you a third number as well.

Speaker Change: <unk>.

Speaker Change: So.

Speaker Change: Again, the two numbers of given are that we've got about a 2 billion dollar liability on our balance sheet U S. GAAP requires that we take what we think the current cost is.

Speaker Change: But I think it's just bringing this project to life because it's real today, and we're looking forward to 2028.

That's great. That's it for me. Thank you, John.

Speaker Change:

You bet, Charles. Thank you.

Speaker Change: Of abandoning all of those assets as if we had to abandon them today.

Speaker Change: Thank you so much. One moment for our next question. That comes from the line of Alio Mariani with Roth. Please proceed.

Speaker Change: Inflate that into the future.

Speaker Change: We discount that back at.

Speaker Change: Prescribed inflation in discount rates.

Thank you. Bye.

Speaker Change: I just wanted to inquire a little about the activity plan in the U.S.

Speaker Change: <unk>.

Speaker Change: So we've got that when you take the cost today inflate them and then discount them back you get $2 billion.

Speaker Change: You know, it sounds like you guys are basically kind of, you know, pulling back there. You know, oil's roughly at 70. You guys are kind of citing a...

Speaker Change: Today cost estimate is $2 $5 billion. So obviously the inflation rate is lower than the discount rate that we have to use for that which is our borrowing rate.

Speaker Change: a Softer Oil Outlook. Just kind of curious, are you expecting kind of oil prices to be lower, you know, next year? I mean, obviously, you just bought Callan Asset. You saw some pretty nice organic growth the last couple quarters on a combined basis. And now you're kind of

Speaker Change: Net debt.

Speaker Change: 10 to 15 year time frame.

Speaker Change: And then there's the tax benefit of all of that the present value of that tax benefit is eight.

Speaker Change: choosing to pull back. Can you provide a little bit more color on sort of the thinking, you know, there as we roll into next year?

Speaker Change: $800 million, so thats offsetting the $2 billion present value.

Speaker Change: Yeah, Leo, I just think we're in a softer price environment.

Speaker Change: Getting to the $1 2 billion net which is a net after tax present value liability on our balance sheet today two different numbers on the balance sheet 2 billion dollar liability $800 million deferred tax asset.

Speaker Change: You know, we've got an asset base that we can sustain volumes with eight rigs.

You know, we're going to work on efficiencies.

Speaker Change: It's always easy to pick up those rigs up, but I think with where we're moving into 2025, it feels like a good place to be.

Speaker Change: And what was the second part of the question.

Speaker Change: Just on the free cash flow calculation.

Speaker Change: initially, and the nice thing is, like I said, if we can sustain

Speaker Change: And when you think about the organic free cash flow as it related to cash return.

Speaker Change: Permian and roughly sustained Egypt, you know, you've got Suriname coming in the next couple, you know, 2028 from an overall corporate level.

Speaker Change: This cash outflow gets netted out of that.

Speaker Change: Yes that will.

Speaker Change: And then just I think.

Speaker Change: Okay, and then maybe just jumping over to Egypt here. So I think you guys made a

Speaker Change: Just let's just remember.

Speaker Change: We've talked a lot and I understand why we've talked a lot in kind of focused on the abandonment activity. That's ahead of us and the costs associated with that let's let's let's just not forget that we still have operating assets in the north sea those continue to generate free cash flow, even after a 78% tax rate.

Speaker Change: a comment there on the call that you expect that we could see some

Speaker Change: Very modest declines on Egyptian gross oil, but I know you're expecting to kind of keep

Speaker Change: So, you know, maybe you're expecting to get a slightly higher share of that oil, I don't know if that's just related to expectations for lower prices and the PSCs, you know, for next year.

Speaker Change: And those that free cash flow will help us pay for a lot of those costs here in the next several years.

Just hoping you could kind of...

Speaker Change: Understood. Thank you for that.

address that quickly, and then also just on Egypt's gas.

Speaker Change: My follow up is just on the gas marketing piece.

Speaker Change: You got the gas rig going. What's your expectation there on gas production in Egypt for next year? Can that start to flatten out maybe in the second half? Do you see any growth in Egypt gas as we get towards the end of the year or next year?

Speaker Change: You really surprised with how powerful that benefit on the gas marketing side.

Speaker Change: In a weak Oaxaca environment.

Speaker Change: Can you give us a flavor of like under the current.

Bye!

Speaker Change: I'd just say if you look in Egypt at 11 rigs, as Steve mentioned, we've been declining slightly at the top line. It's been very, very slight.

Speaker Change: The current price on Oahu spread.

Speaker Change: Would you be able to continue to capture above normal marketing benefit next year as well.

Speaker Change: You know, over the last four quarters, so at 11, that's it's about where we probably are on the gross oil side. We're actually getting after some of the water flood projects as well, which.

Speaker Change: Yes, that's just going to depend a lot on what happens with <unk> as we go through next year.

Speaker Change: It's really it's not absolute prices, it's the differential between <unk> and Gulf coast versus the cost to transport.

Speaker Change: You know, the benefit those have is they flatten your decline so that it's...

Speaker Change: with a strong water flood program, and then you can improve that.

Speaker Change: Fairly simple if there is a.

Speaker Change: If there is a.

And then on the gas side, our overall gross gas...

Speaker Change: $2.

Speaker Change: Quick numbers, if theres a $2 50.

is declining.

Speaker Change: Spread and Theres, a dollar cost to transport than Youre, making a $1 50 on.

Speaker Change: but with this program and we've got, you know, a one-rig program laid out and some...

Speaker Change: some nice, quick prospects to get after that we can get to infrastructure. We'll bring new volumes on and then we'll, we've got some bigger prospects to drill and then we'll see.

Speaker Change: Nearly 750 million cubic feet, a day that we buy and transport to the to the Gulf Coast.

Speaker Change: And if.

Speaker Change: So, you know, I think the key there is we're getting started with that.

Speaker Change: It will all depend on what are those spreads for 2025 and as we've experienced here in 2024.

Speaker Change: And, you know, after we get some prospects down, we'll have a better clue of scale on the gas side in the future.

Speaker Change: They can be extremely volatile even even over short periods of time like for a weekend. We can fine for a weekend prices can go negative for three or four days.

All right, thanks.

Thank you.

Speaker Change: Our next question comes from the line of Betty Jang with Barclays. Please proceed.

Speaker Change: As mentioned negative is like negative $5, which means.

Speaker Change: Hello, good morning. Thank you for taking my question. I want to go back to the North Sea ARO conversation. So I think the $1.2 billion is on the present value basis, so wondering if you could give the total liability on the absolute basis?

Speaker Change: When we're purchasing gas over the weekend people are paying us $5 to take.

Speaker Change: To take gas and then we transported for our transport costs, which we can't disclose but you could probably figure out what it is and we sell that on the Gulf coast for.

Speaker Change: What would normally be a positive price a little less a little less volatile pricing on Gulf Coast and you get on.

Um...

Speaker Change: I think as we think about the cash outflow related to this, does your free cash flow calculation include this outflow as you think about the capacity for cash returns in any given year? Thanks.

Speaker Change: Uh huh.

Speaker Change: It's.

Speaker Change: Certainly nice to have that pipeline right now just to clarify the Gulf Coast benchmark, you're looking at Q4, it's a combination of different hubs.

Speaker Change: Yes.

Speaker Change: It would be looking at mainly ship channel or.

Speaker Change: Depending on where the pipe takes you back to.

Speaker Change: Okay got it thank you.

Speaker Change: You bet. Thank you Betty.

Speaker Change: Thank you.

Speaker Change: Our last question comes from Jeffrey <unk> with BPH and company. Please proceed.

Speaker Change: Good morning, guys and thanks for squeezing me in here just a quick follow up to your commentary on the North Sea a couple of questions just around the free cash flow generation that you mentioned can you also help us understand what your outlook is for Opex from that asset as production declines in the next year in August that kind of help us dominated along with the Aro dynamic and trying to walk through.

Speaker Change: Yes.

Speaker Change: We'll probably go into more detail on that in the February call. We're just.

Speaker Change: Not really.

Speaker Change: At this point in time, we are like we say we normally at this time of year give a view to the capital program and production volumes and the general overall direction of the company.

Speaker Change: 10 to 15 year time frame.

Speaker Change: Then there's the tax benefit of all of that the present value of that tax benefit is.

Speaker Change: And in that.

Speaker Change: As we've highlighted with this conversation is generally dominated by.

Speaker Change: $800 million, so that's offsetting the $2 billion present value.

Speaker Change: The longer term oil price outlook.

Speaker Change: So thats all we really typically look to accomplish on the November call, we will give more details around the.

Speaker Change: Getting to the $1 2 billion net which is a net after tax present value liability on our balance sheet today two different numbers on the balance sheet 2 billion dollar liability $800 million deferred tax asset.

Speaker Change: Country by country specifics and the line items between revenues and low.

Speaker Change: And the breakdown of capital and things like that in February.

Speaker Change: I can tell you, though that the north sea is a.

Speaker Change: And what was the second part of the question.

Speaker Change: Because of the situation, we're in and the North Sea and we will talk about it.

Speaker Change: Just on the free cash flow calculation.

Speaker Change: And when you think about the organic free cash flow as it related to cash return.

Speaker Change: Openly that we are.

Speaker Change: We're in the business now and managing operations day to day operations for free cash flow now.

Speaker Change: This cash outflow gets netted out of that.

Speaker Change: Yes that will.

Speaker Change: Sure.

Speaker Change: Practically any type of capital investment is non economic under the current situation and so we manage that for free cash flow and we will look look hard at operating costs and we are looking hard at operating costs.

Speaker Change: And then just I think.

Speaker Change: Just let's just remember.

Speaker Change: We've talked a lot and I understand <unk>, we've talked a lot in kind of focused on the abandonment activity. That's ahead of us and the costs associated with that.

Speaker Change: We never do so in a way that sacrifices or puts at risk either human safety or the environment, but there's a lot of stuff that we spend money on that could be could be looked at and examined just to make sure that we're spending properly.

Speaker Change: Let's let's just not forget that we still have operating assets in the north sea those continue to generate free cash flow, even after a 78% tax rate.

Speaker Change: And those that free cash flow will help us pay for a lot of those costs here in the next several years.

Speaker Change: In an environment, where were just focused on free cash flow for the remaining life of the asset. So we will get will get into more detail of that in the February comp.

Speaker Change: Understood. Thank you for that.

Speaker Change: My follow up is on the gas marketing piece.

Speaker Change: Alright, thank you.

Speaker Change: Youre really surprised with how powerful that benefit on the gas marketing side.

Speaker Change: Thank you and with that I will close the Q&A session for today and turn it back to John Chris Our CEO for closing remarks.

Speaker Change: In a weak Oaxaca environment.

Speaker Change: Can you give us a flavor.

Speaker Change: Yes, Thank you and first of all.

Speaker Change: Karen.

Speaker Change: <unk>, probably double wall Hot bread.

John Chris: I apologize for the Internet.

John Chris: Disconnect that we had.

Speaker Change: Would you be able to continue to capture above normal marketing benefit next year as well.

John Chris: Paul's question, but.

John Chris: In closing as we've outlined we've made great progress on the portfolio and the assets are performing at a very very high level.

Speaker Change: Yes, that's just going to depend a lot on what happens with Oaxaca as we go through next year and it's really it's not absolute wahhab prices, it's the differential between Wahaha and Gulf coast versus the cost to transport fairly.

Speaker Change: We have significantly scaled and streamlined our Permian unconventional position, we're adding a potentially very valuable gas program in Egypt, and now have a clear timeline to significant production and cash flow in Suriname.

Speaker Change: Really simple if there's a.

Speaker Change: Going into 2025, we are looking at a potentially softer oil price environment and are focused on sustaining our core business, reducing costs and generating free cash flow. We provided an early look at a plan of eight rigs in the Permian and 12 rigs in Egypt, which ship broadly sustained oil volumes at reduced capital levels. We are.

Speaker Change: If there's a.

Speaker Change: $2 is fake numbers, if theres a $2 50.

Speaker Change: Spread.

Speaker Change: And Theres, a dollar cost to transport than Youre, making a $1 50 on.

Speaker Change: Nearly 750 million cubic feet, a day that we buy and transport to the Gulf Coast.

Speaker Change: Continue to work this plan and look forward to coming back to you in February with a lot more details. Thank.

Speaker Change: And if.

Speaker Change: It will all depend on what are those spreads for 2025 and as we've experienced here in 2024.

Speaker Change: Thank you for joining us.

Speaker Change: And with that ladies and gentlemen, we thank you for participating in today's conference you may now disconnect.

Speaker Change: They can be extremely volatile even even over short periods of time like for a weekend. We can find that for a weekend prices can go negative for three or four days.

Speaker Change: As much negative is like negative $5, which means.

Speaker Change: When we're purchasing gas over the weekend people are paying us $5 to take.

Speaker Change: To take gas and then we transported for our transport costs, which we can't disclose but you could probably figure out what it is and we sell that on the Gulf coast for for what would normally be a positive price a little less a little less volatile pricing on Gulf Coast and you get on.

Speaker Change: Uh huh.

Speaker Change: Okay.

Speaker Change: Certainly nice to have that pipeline right now just to clarify the Gulf Coast benchmark, you're looking at Q4, it's a combination of.

Speaker Change: Different hubs.

Speaker Change: Yes.

Speaker Change: It would be looking at mainly ship channel or.

Speaker Change: Depending on where the pipe takes you back to.

Speaker Change: Okay got it thank you.

Speaker Change: You bet. Thank you Betty.

Speaker Change: Thank you.

Speaker Change: Our last question comes from Jeffrey Lumberyard with BPH and company. Please proceed.

Jeffrey Lumberyard: Good morning, guys and thanks for squeezing me in here really just a quick follow up to your commentary on the North Sea a couple of questions just around the free cash flow generation that you mentioned can you also help us understand a trial looking at your Opex from that asset has production declines into next year and I'll just kind of help us dominated along with the Aro dynamic Charlie walked through.

Speaker Change: Yes.

Speaker Change: We'll probably go into more detail on that in the February call. We're just.

Speaker Change: Not really.

Speaker Change: At this point in time, where like we say we normally at this time of year give a view to the capital program and production volumes and the general overall direction of the company.

Speaker Change: And as we've highlighted with this conversation is generally dominated by.

Speaker Change: The longer term oil price outlook.

Speaker Change: That's all we really typically look to accomplish on the November call, we will give more details around.

Speaker Change: Country by country specifics and the line items between revenues and low.

Speaker Change: And the breakdown of capital and things like that in February I can tell you, though that the north sea is a <unk>.

Speaker Change: As of the situation, we're in and the North Sea and we will talk about it.

Speaker Change: Openly that we are.

Speaker Change: We're in the business now and managing operations day to day operations for free cash flow now.

Speaker Change: Yes.

Speaker Change: Practically any type of capital investment is non economic under the current situation and so we manage that for free cash flow and we will look look hard at operating costs and we are looking hard at operating costs.

Speaker Change: We never do so in a way that sacrifices or puts at risk either human safety or the environment, but there's a lot of stuff that we spend money on that could be could be looked at and examined just to make sure that we're spending properly.

Speaker Change: We are in an environment, where were just focused on free cash flow for the remaining life of the assets. So we will get will get into more detail of that.

Speaker Change: In the February comp.

Speaker Change: Alright, thank you.

Speaker Change: Thank you and with that I will close the Q&A session for today and turn it back to John Christian <unk>, our CEO for closing remarks.

John Christmann: Yes, Thank you and first of all.

Speaker Change: Apologize for the Internet a disconnect.

John Christmann: Disconnect that we had.

John Christmann: Paul's question, but.

John Christmann: In closing as we've outlined we've made great progress on the portfolio and the assets are performing at a very very high level.

John Christmann: We have significantly scaled and streamline our Permian unconventional position, we're adding a potentially very valuable gas program in Egypt, and now have a clear timeline to significant production and cash flow in Suriname.

John Christmann: Going into 2025, we are looking at a potentially softer oil price environment and are focused on sustaining our core business, reducing costs and generating free cash flow.

Speaker Change: We provided an early look at a plan of eight rigs in the Permian on 12 rigs in Egypt, which ship broadly sustained oil volumes at reduced capital levels. We will continue to work. This plan and look forward to coming back to you in February with a lot more details.

Speaker Change: Thank you for joining us.

Speaker Change: And with that ladies and gentlemen, we thank you for participating in today's conference you may now disconnect.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yeah.

Speaker Change: [music].

Speaker Change: [music].

Speaker Change: [music].

Speaker Change: [music].

Speaker Change: Good day, everyone and thank you for standing by welcome to E. P. A corporation's third quarter 2024 financial and operational results. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to participate you wouldn't need to press.

Speaker Change: Star one one on your telephone you will then hear and message advising your hand. This race to withdraw your question simply press Star. One again, please be advised that today's conference is being recorded.

Speaker Change: Now I will pass the call over to the Vice President of Investor Relations Gary Clark. Please go ahead.

Gary Clark: Good morning, and thank you for joining us on a P. A corporation's third quarter 2024 financial and operational results conference call.

Gary Clark: We will begin the call with an overview by CEO John Christmann.

Speaker Change: Steve Riney, President and CFO will then provide further color on our results and outlook.

Speaker Change: Also on the call and available to answer your questions are Tracy Henderson Executive Vice President of exploration and Clay brought chess executive Vice President of operations, our prepared remarks will be less than 20 minutes in length with the remainder of the hour allotted for Q&A.

Speaker Change: In conjunction with yesterday's press release, I hope you've had the opportunity to review, our financial and operational supplement which can be found on our investor Relations website at Investor Dot Corp Dot com.

Speaker Change: Please note that we may discuss certain non-GAAP financial measures a reconciliation of the differences between these measures and the most directly comparable GAAP financial measures can be found in the supplemental information provided on our website.

Speaker Change: System with previous reporting practices adjusted production numbers cited in today's call are adjusted to exclude Noncontrolling interest in Egypt, and Egypt tax barrels.

Speaker Change: Like to remind everyone that today's discussion will contain forward looking estimates and assumptions based on our current views unreasonable expectations.

Speaker Change: However, a number of factors could cause actual results to differ materially from what we discuss on today's call.

Speaker Change: Disclaimer is located with the supplemental information on our website and please note that our full year 2024 guidance reflects first quarter results on a standalone basis, plus three quarters of API and calling combined.

Speaker Change: And with that I will turn the call over to John.

John: Good morning, and thank you for joining us on our call today I will discuss our key strategic accomplishments in the core areas of the portfolio review third quarter highlights and results.

John Christmann: Outline our preliminary capital production and cost outlook for 2025.

Speaker Change: Over the past several years <unk> has delivered a number of strategic initiatives designed to enhance the portfolio and create shareholder value.

Speaker Change: In the U S. Since 2020, we have executed more than $5 billion of acquisitions and over $2 $5 billion of divestitures.