Q4 2024 SandRidge Energy Inc Earnings Call
Good afternoon, My name is Audrey and I will be your conference operator today at.
At this time I would like to welcome everyone to the fourth quarter 2020 for Sandridge Energy Conference call.
Today's conference is being recorded.
All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.
I'd like to ask a question during this time simply press the star key Oliver the number one on your telephone keypad. If you would like to withdraw your question Press Star one again.
Speaker Change: At this time I would like to turn the conference over to Scott Preston Smith, Senior Vice President Finance and strategy. Please go ahead.
Speaker Change: Thank you and welcome everyone with me today are Grayson Brannan, our CEO, Jonathan freighters, our CFO, Brandon Brown, our CEO as well, it's been Parrish our CEO.
Speaker Change: We would like to remind you that today's content contained forward looking statements and assumptions, which are subject to risk and uncertainty and.
Speaker Change: And actual results may differ materially from those projected in these forward looking statements.
Speaker Change: These statements are not guarantees of future performance and our actual results may differ materially due to known and unknown risks and uncertainties as discussed in greater detail in our earnings release, and our SEC filings.
Speaker Change: We may also refer to adjusted EBITDA and adjusted G&A and other non-GAAP financial measures reconciliations of these measures can be found on our website.
Grayson: With that I'll turn the call over to Grayson.
Grayson: Thank you and good afternoon.
Grayson: I am pleased to report on a positive quarter and year for the company.
Grayson: In the fourth quarter total production averaged over 19.
Grayson: Per day made up of 48% liquids.
Grayson: And at the company's expanded activity continues to translate to meaningful free cash flow from our producing assets.
Before expanding on this Jonathan will touch on a few highlights.
Grayson: Thank you <unk>.
Grayson: Despite headwinds from natural gas prices last year, the company generated adjusted EBITDA of $24 million in the fourth quarter and $69 million for the year.
Grayson: As we have pointed out in the past adjusted EBITDA as a unique metrics for sandridge and that we have no debt and our substantial NOL position that shields, our cash flows from federal income taxes.
Grayson: During the year, we generated approximately $7 9 million of interest income from cash held in various high yield deposit accounts, which offset a significant portion of our corporate G&A cash, including restricted cash at the end of the year was just under 100 million, which represents more than $2 68.
Grayson: <unk> per share of our common stock outstanding.
Grayson: The company paid $72 million in dividends in 2024 made up of $16 million in regular and <unk> $56 million in special dividends.
Grayson: Combined with 2023, we paid shareholders, a total of $154 million in dividends for more than $4 per share.
Grayson: On March seven 2025, the board of directors declared an <unk> 11 per share cash dividend payable on March 31 to shareholders of record on March 20th.
Grayson: As noted the company has no term debt or revolving debt obligations and continue to live within cash flow funding all capital expenditures and capital returns with cash flow from operations and cash on the balance sheet.
Grayson: Commodity price realizations for the fourth quarter before considering the impact of hedges for $71 44 per barrel of oil $1 47 per Mcf gas and $18 19 per barrel of Ngls for the full year realizations were $74.
Grayson: 31 per barrel of oil $1 10 per Mcf of gas and $18 87 per barrel of Ngls.
Grayson: Following a run up in prices, we added hedges for natural gas and ethane during the quarter. The details of which can be found in our earnings release and 10-K.
Grayson: While we plan to continue to retain upside exposure to commodities. These hedges secured cash flows for percentage of our production over the year.
Grayson: We have maintained our large federal NOL position, which was roughly $1 $6 billion growth at quarter end, our NOL position has and will continue to allow us to shield our cash flows from federal income taxes.
Grayson: As always our commitment to cost discipline continues to yield results with adjusted G&A for the fourth quarter of approximately $2 4 million or $1 39 per Boe.
Grayson: And $9 $3 million or $1 54 per Boe for the year.
Grayson: Net income was approximately $18 million or <unk> 47 per basic share during the quarter and $63 million or $1 69 per basic share during the year.
Grayson: Net cash provided by operating activities was approximately $26 million for the fourth quarter and $74 million for the year. Finally, the company generated free cash flow before acquisitions of approximately $13 million during the quarter and $48 million for the full year before shifting to our outlook. We should note that our earnings.
Grayson: The release and 10-K will provide further details on our financial and operational performance during the quarter.
Speaker Change: Thank you Jonathan.
Speaker Change: That would be useful to give a brief update on operations as well as our acquisition last year before touching on other company highlights.
Speaker Change: Last quarter, we successfully completed and initiated production from the company's first operated wells in the Cherokee play.
Speaker Change: With three drilled but uncompleted wells or ducks.
Speaker Change: <unk> cost below historical industry average in the play.
Speaker Change: We hope to further leverage these cost efficiencies over our operated one rig development program. This year.
Speaker Change: We will touch more on this later.
Speaker Change: The company closed our second acquisition in the Cherokee shale play of the mid continent region that exchange and increased our ownership interest in a producing an undeveloped oil and natural gas properties for $5 7 million and terminated the previously announced joint development agreement.
Speaker Change: This allowed us to increase and optimize our undeveloped.
Speaker Change: Around the best result of the play.
Speaker Change: It also allows us to control our development and operations.
Speaker Change: See this is a real benefit as we implement our own comp focused program, which will include efficiencies gained from pad drilling zipper simulcast and other industry best practices.
Speaker Change: I'd like to pause for a moment to highlight the play.
Speaker Change: The Cherokee formation in mid continent region has become a highly productive hydrocarbon targets with increased horizontal activity over the last few years.
Speaker Change: It is comprised of mostly self sourcing shale with interbedded high processing stance.
Speaker Change: The play is currently being developed and the only needed across the northeast, Texas Panhandle, Western Oklahoma encompassing five county.
Speaker Change: At <unk>, we will be developing are focused in the southern area of the Cherokee core offsetting some of the more productive wells in the play.
Speaker Change: As the play has extended to the south productivity has meaningfully increased with depth.
Speaker Change: Two recent co developed non op wells that directly offset the units we will be developing this year had an average two stream IP 30 of approximately 400 Boe per day with 60% oil.
Speaker Change: And another offsetting well recently turned in line was incrementally better.
Speaker Change: Hope to share more details on this.
Speaker Change: Operated results next quarter.
Speaker Change: As I mentioned previously production for the fourth quarter was over 19 and BOE per day.
Speaker Change: This represents a 19% increase year over year on a Boe basis, and a 28% increase on an oil basis.
Speaker Change: As we look forward to developing our high return Cherokee assets. This year, we anticipate growing oil production volumes further.
Speaker Change: However, we will continue to be mindful of results commodity prices cost and other factors, which will shape, our capital allocation decisions this year and beyond.
Speaker Change: There are no significant explorations this year and we have the financial flexibility to adjust our development plan to respond to either tail or headwinds.
Speaker Change: Shifting over to natural gas prices.
Speaker Change: Last year saw Henry hub prices in the low twos, which is now up to the mid fours near doubling over a short period.
Speaker Change: The increase in natural gas prices will boost our revenue and as we realize better prices the fixed portion of our costs will be diluted at higher benchmark prices.
Speaker Change: The combination of our Cherokee and legacy assets as well as improvement in natural gas prices give us multi faceted options to include Cherokee development, and a constructive <unk> environment as well as further capitalizing on the potential of our incumbent properties.
Speaker Change: Through well reactivation incremental production optimization projects, and possibly development, yes, natural gas and liquid prices remained strong over a meaningful tenor.
Speaker Change: Or potentially both.
Speaker Change: <unk> and Henry hub are both constructive.
Speaker Change: Conversely <unk>.
Speaker Change: Given the relatively low breakeven of our producing properties and.
Speaker Change: And a cash balance of just under $100 million. We're also well positioned to take advantage of lower commodity environment by acquiring additional producing properties at attractive prices.
Speaker Change: Long and short.
Speaker Change: Have a more versatile kitbag, which better positions us to take advantage of not only the current and future commodity cycles.
Dean: Now pivoting back to the base business I will turn things over to Dean.
Dean: Thank you Jason.
Dean: Let's start on our capital program.
Dean: We completed three operated and one non operated and the Cherokee play last year.
Dean: <unk> had an average 30 day IP of approximately 1400 Boe per day with around 60% oil.
Dean: <unk> were located up dip towards the northern end of the play and as we move our capital program South this year deeper into the basin, we expect productivity to be further enhanced.
Dean: We did see some meaningful cost efficiencies with the most recent completions and are hopeful to leverage these savings going forward.
Dean: We spud our first operated Cherokee well in February and hope to share the results of this well on our next call.
Dean: We plan to drill eight operated Cherokee wells with one rig this year and complete six wells.
Dean: The remaining two completions are anticipated to carryover to next year.
Dean: Roughly 75% of our planned wells are proved undeveloped or puds with others projected to be converted to puds by year end.
Dean: This means that our planned drilling locations this year will offset producing wells, which translates to higher relative confidence in well performance.
Dean: Additionally, this could set up new pud additions or extensions at the end of the year.
Dean: Gross well costs vary by death, but are anticipated to be between nine and $11 million.
Dean: While we have taken proactive steps to help mitigate the effects of inflation further changes to tariffs or other factors could influence these costs in the future.
Dean: From a timing standpoint, most of the production from this year's capital program will occur in the second half of the year with the benefit extending into next year.
Dean: We intend to spend between 66% and $85 million and our 2025 capital program, which is made up of 47% to $63 million in drilling and completions activity in between 19 and $22 million in capital Workovers production optimization and selective leasing in the Cherokee.
Dean: Play.
Dean: Our high graded leasing as focus to further bolster our interest consolidate our position and extend development into future years.
Dean: We intend to fund capital expenditures and other commitments using cash flows from our operations and cash on hand.
Dean: The alere content and increased productivity from these Cherokee wells will help to boost relative rates of return, while decreasing breakeven pricing and high graded areas down to roughly $35 <unk>.
Dean: On optimizing production from our incumbent asset base, we are focused on high return and value, adding projects that provide benefits such as lowering forward looking costs enhancing production on existing wells and further moderating our base decline profile.
Artificial lift systems, we have and we will be installing in our conversion program are tailored for the wells current fluid production and we will reduce the electrical demand from the current artificial lift system, which is key to decreasing future utility costs.
Dean: The focused efforts over the past quarters, and optimizing our wells production profile and costs have continued to flattening the expected base asset level decline.
Dean: Are already producing assets to single digits.
Dean: In addition to artificial lift conversions and optimization programs to extend run times.
Dean: We will reactivate previously curtailed wells to cost effectively add production.
Dean: Our well re activations are currently very targeted but we could expand this program with further natural gas tail winds.
Dean: Our legacy assets remain approximately 99% held by production, which cost effectively maintains our development option over a reasonable tenure.
Dean: These non Cherokee assets have higher relative gas content.
Dean: Commodity price futures are not yet at preferred levels to resume further development or more well reactivation at this time.
Dean: Commodity prices firmly over $80 WTS.
Dean: $4, Henry hub, overconfident tenor and or reduction in well costs are needed before we would return to exercise the option value of further development or well re activations.
Dean: Natural gas is now over $4. The curve is backward dated after 2025 and <unk> has not yet reached targeted levels.
Dean: At current <unk> prices, we would need to see additional natural gas price increases before adding incremental capital to this year's development plan.
Dean: With that said, we will continue to monitor commodity prices and may adjust our plan accordingly.
Dean: Now shifting to lease operating expenses.
Dean: Despite continued inflationary pressures and increased well count from our recent acquisition and prior capital programs LOE and expense Workovers for the quarter were held to approximately $11 $3 million or $6 43 per Boe.
Dean: And $40 million or $6 61 per Boe for the full year.
Dean: And nearly 3% reduction from the prior year.
Dean: We will continue to actively press on operating costs through rigorous bidding processes, leveraging our significant infrastructure operation Center and other company advantages.
Grayson: With that I will turn things back over to Grayson.
Grayson: Thank you Dean.
Grayson: I will now revisit the key highlights of Sandridge.
Grayson: Our asset base is focused in the mid continent region with a primarily PDP well set which does not require any routine flaring of produced gas.
Grayson: These well understood assets are almost fully held by production with a long history shallow ing and diversified production profile and double digit reserve life.
Grayson: Our incumbent assets include more than 1000 miles each of owned and operated SWT in electrical infrastructure over our footprint.
Grayson: This substantial owned and integrated infrastructure helps de risk individual well profitability for a majority of our legacy producing wells down to roughly $40 <unk> and $2 Henry hub.
Grayson: Our assets continue to yield free cash flow and we have negative net leverage.
Grayson: This cash generation potential to provide several paths.
Grayson: Increase shareholder value realization and it's benefited by low G&A burden.
Grayson: Sandwiches value proposition has materially derisked from a financial perspective by our strengthened balance sheet.
Grayson: Financial flexibility.
Grayson: Advantaged tax position.
Grayson: Further the company is not subject to <unk> or other significant off balance sheet financial commitments.
We have bolstered our inventory to provide further organic growth optionality and incremental oil diversification with low breakeven and high graded areas.
Grayson: We maintain financial flexibility that allows us adjust our strategy to take advantage of commodity cycles.
Grayson: This flexibility provides advantages and strategic optionality to further grow our business and provides a buffer to commodity headwinds while protecting our capital return program.
Grayson: Finally, it's worth highlighting that we take our ESG commitment seriously.
Grayson: <unk> implemented disciplined processes around them.
Grayson: We remain committed to our strategy and growing the value of our business in a safe responsible and efficient manner, while prudently allocating capital to high return organic growth projects.
Grayson: We will also evaluate merger and acquisition opportunities in a disciplined manner with consideration of our balance sheet and commitment to our capital return program.
Grayson: This strategy has five points.
Grayson: One <unk>.
Grayson: Maximize the value of our incumbent Midcon PDP assets.
Grayson: Spending and flattening our production profile with high rate of return production optimization projects as well as continuously pressing on operating and administrative costs.
Grayson: Two.
Grayson: X sight capital stewardship, and invest in projects and opportunities that have high risk adjusted fully burdened rates of return.
Grayson: Being mindful and prudently targeting reasonable reinvestment rates that sustain our cash flow and prioritize our regular way of dividend.
Grayson: Three maintain optionality to execute on value accretive merger and acquisition opportunities that could bring synergies.
Grayson: Leverage the company's core competencies complement its portfolio of assets.
Grayson: Further utilize its approximately $1 $6 billion in federal net operating losses or otherwise yield attractive returns for its shareholders.
Grayson: Four as we generate cash we will continue to work with our board to assess path to maximize shareholder value to include investment in strategic opportunities.
Grayson: Advancement of our return of capital program and other uses.
Grayson: Final Stifel is to uphold our ESG responsibilities.
Grayson: As we look forward to the year and beyond we plan to further progress our Cherokee development and anticipate to extend our capital investment in these high return projects in order to help maintain our production levels, while providing further oil diversification.
Grayson: With continued success and supportive commodity prices.
Grayson: We're hopeful to expand to multiyear development plan. Please.
Grayson: Please keep in mind that our return of capital program, we will continue to be our top priority and given our financial flexibility.
Grayson: <unk> capital stewardship to respond to changes in commodity prices.
Grayson: <unk>.
Grayson: <unk> or other factors.
Grayson: Shifting to administrative expenses I'll turn things over to Brandon.
Brandon: Thank you Grayson to wrap up I would like to emphasize that our adjusted G&A of $2 4 million or $1 39 per BOE compares favorably to our peers.
Brandon: The efficiency of our organization stems from our core values to remain cost disciplined as well as our prior initiatives, which have tailored our organization to be fit for purpose.
Brandon: We will maintain our cost conscious and efficiency focus buying said moving forward and continue to balance the weighting of field versus corporate personnel to reflect where we create value.
Brandon: Outsource necessary, but perfunctory and less core functions such as operations accounting land administration.
Brandon: <unk> tax and HR.
Brandon: Our efficient structure has allowed us to operate with total personnel and just over 100 people, while retaining key technical skill sets that have both the experience and institutional knowledge of our business.
Brandon: In summary, the key.
Brandon: We had free cash flow of $48 million during the year.
Brandon: Just under $100 million in cash and cash equivalents at quarter end, which represents more than $2 68 per share of our common stock outstanding and.
Brandon: Inventory of high rate of return low breakeven projects.
Brandon: And overall may composition that is approximately 96% held by production, which preserves the option value of future development potential of our legacy acreage in a cost effective manner.
Brandon: Low overhead top tier adjusted G&A.
Brandon: No debt.
Brandon: Negative leverage.
Brandon: Flattening production profile double digit reserve life, and one $6 billion of <unk>.
Brandon: <unk> Nols.
Brandon: This concludes our prepared remarks. Thank you for your time, we will now open the call to questions.
Speaker Change: Thank you we will now begin the question and answer session. If you have dialed in I would like to ask a question. Please press star one on your telephone keypad to raise your hand and joined the queue. If you would like to withdraw your question simply press Star one again.
Brandon: Yes.
Brandon: Alright, we will go first to Christopher Dodd at third Avenue management.
Speaker Change: Hey, guys. Thanks for taking the question congrats on a nice Q4 results and finishing the year strong Scott.
Brandon: Scott One question and one follow up for you today.
Brandon: Your upper bound the $7 one mbo production levels are certainly exciting given where Henry hub prices are today and possible datacenter in LNG demand. So in addition to what you already mentioned on the forward curve.
Brandon: I also would you want to see to get closer to that high end of the range and then is there any further upside or further organic production growth available should pricing warrant and then I've got a follow up question.
Speaker Change: Sure appreciate that Chris.
Speaker Change: Thanks for being on the call are great question here I think on the upward bound.
Speaker Change: We'd like to see gas prices I think we stabilized the crop.
Speaker Change: 18 months five dollar.
Speaker Change: With WSI more constructive suddenly over 70.
Speaker Change: With that being said, we could have some some tailwind if results are better than expected or we're ahead of schedule.
Speaker Change: Really we have.
Speaker Change: Inventory of well reactivation that we can dig into very quickly without much lead time.
Speaker Change: And really I think our approach.
Speaker Change: Your task.
Speaker Change: Make sure that we have nat gas prices over a confident.
Speaker Change: Before we start deploying more capital that direction.
Speaker Change: You are right to point out that we do have.
Speaker Change: Other options. In addition to development that we can utilize to help grow production.
Speaker Change: Really constructive gas environment.
Speaker Change: Great that's really helpful.
Speaker Change: My only other question.
Speaker Change: Given that sandridge is in somewhat of a unique position we've got legacy transmission line infrastructure.
Speaker Change: There has been a lot of chatter about data center folks trying to get in front of the grids and maybe cut direct energy deals.
Speaker Change: Your infrastructure allow you to have maybe a unique negotiating position or is that not relevant.
Speaker Change: Yes, it's an interesting question and I appreciate that.
Speaker Change: We do have our infrastructure does give us strategic advantages.
Speaker Change: When it comes to selling directly to customers a lot of our gas has to be processed.
Speaker Change: Given them, where NGL prices are to say those being taken out so that we can sell those in other markets and take advantage of.
Speaker Change: Those are relative revenues so.
Speaker Change: So we sell all of our gas.
Speaker Change: Two large purchasers that have access to other markets.
Speaker Change: And so they have the ability to sell gas.
Speaker Change: In front of the grid and we can benefit secondarily some of that so it's really hard to pick up that gas at the tailgate of the plant.
Speaker Change: Plug that straight into engines.
Speaker Change: And electrify our owned operated and owned grid if that makes sense.
Speaker Change: Yes really helpful. Thanks, guys and again nice job on Q4.
Speaker Change: I appreciate it great.
Sergei: We'll move next to Sergei Hi, Gaurav at Freedom broker.
Gaurav: Hi, everyone and thank you for taking my question.
Speaker Change: Have a question on Capex.
Speaker Change: As we see from the guidance I mean like in the mid point.
Speaker Change: Okay.
Speaker Change: Next 2025.
Speaker Change: Three times higher than that.
Speaker Change: 1024 finger.
Speaker Change: <unk>.
Speaker Change: Should we consider this level.
Speaker Change: As necessary.
Speaker Change: So that was to maintain the current production and.
Speaker Change: Could we expect similar levels in 2022 and beyond.
Speaker Change: Okay.
Speaker Change: Yes, Thanks, Great question and I appreciate your time I think.
Speaker Change: This year, it's going to be different than last year in particular because of the acquisition that we had last year with that acquisition team interests and high graded undeveloped properties that we're going to be developing this year and as mentioned before these are really high rate of return projects and have very low breakeven down to <unk>.
Speaker Change: $35 <unk> and that was the catalyst between shifting too.
Speaker Change: Kind of a more defensive position last year, where we had really low nat gas prices and as you know.
Speaker Change: Our legacy assets.
Speaker Change: Our board gas weighted and gives them where it can rehab with last year it didn't make sense.
Speaker Change: Given the cheap option value of that acreage to go deploy capital there.
Speaker Change: And then we acquired the predominant PDT assets.
Speaker Change: With additional undeveloped.
Speaker Change: That we're going to be exporting this year in order to bring that value forward.
Speaker Change: I do think that we'll be mindful of our reinvestment rates.
Speaker Change: Target this year of reinvestment rates between 55% to 80%.
Speaker Change: And guiding to 50.
Speaker Change: 50% or better next year, assuming that we continue to be.
Speaker Change: Execute soundly and have constructive commodity prices.
Speaker Change: But we want to make sure that we're thoughtful about.
Speaker Change: Having a good free cash flow continued to be.
Speaker Change: Build that.
Speaker Change: We need to have a regular way dividend and all the things that we mentioned that we're going to prioritize on the call.
Speaker Change: Hopefully that answers your question, but.
Speaker Change: Untapped or anything else.
Speaker Change: Thank you. Thank you very much.
Speaker Change: With that.
Speaker Change: Thank you.
David Cordero: And we'll move next to David Cordero at Blue Pond capital.
David Cordero: Hi, can you talk a little bit about what you see.
David Cordero: For production growth next year, given your Capex this year.
David Cordero: Maybe just assuming that.
David Cordero: Commodity prices are kind of flat.
David Cordero: What do you expect for production and realize its kind of early but.
David Cordero: My ask anyway.
David Cordero: Yes, David Thank you great question.
David Cordero: For next year, we're going to look to.
David Cordero: Gross oil production from this year about 30% at.
David Cordero: At the midpoint of guidance.
David Cordero: BOE basis, just under 10%.
David Cordero: And if you look at the high end of guidance as Chris was asking earlier.
David Cordero: Multiples get better, but that's our baseline partners.
David Cordero: I'm sorry for the confusion I meant in 2006.
David Cordero: The thinking is that.
David Cordero: A lot of your wells that Youre drilling now coming on.
David Cordero: We ended the year and we will have more of an impact in 2006. So my question is really more on the production in 2006 and beyond like.
David Cordero: Is there a way to think about how fast you can grow production going forward.
David Cordero: Sure.
David Cordero: First I kind of wanted to set.
David Cordero: Playing field.
David Cordero: We're economic animals and so the return on the investment is Paramount relative to growing production, we do want to grow our base business because theres a lot of ancillary benefits, but we think about things from project to project.
David Cordero: These projects, we underwrite with high rates of return.
Speaker Change: Note that two but for the benefit of everybody on the call.
David Cordero: I want to reassure that we're not growing for growth's sake.
David Cordero: But that it's accretive to the business right and so as we look into 2026.
David Cordero: We will have the potential for additional growth as I mentioned on the call excluding.
David Cordero: 2026 drilling we're going to have.
David Cordero: Two of the eight completions carryover into 2026, so youre going to have.
David Cordero: Some new production hit in <unk>.
David Cordero: Even excluding the drilling in next year and we hopeful we are hopeful that commodity prices stay constructive and we can extend the runway here from this year into next year with this development program and with it furthering our oil weighted growth.
David Cordero: Got it thank you.
David Cordero: And then also.
David Cordero: The hedges are new.
David Cordero: I hear you guys you want to secure the cash flow based on much better natural gas prices.
Speaker Change: Could you just remind us Mike.
David Cordero: Maybe pushed out a little bit about what percentage of production that you're hedged.
David Cordero: How are you thinking about hedges in general going forward since it's a bit of a change.
David Cordero: Sure.
Speaker Change: I appreciate that David and I think most people on the call are aware of this but because.
Speaker Change: Because we have no debt, we have no bank led hedging mandate.
Speaker Change: The benefit to the company and so we've typically wanted to remain or has a lot of.
Speaker Change: Exposure to the upside.
Or.
Speaker Change: Given additional capital spent this year, we felt that it was prudent to secure hedges.
Speaker Change: At attractive prices and that's why you've seen us favor more natural gas some ethane here recently and less on oil just because there is I think some benefit to oil to the upside, but how we think about hedges are.
Speaker Change: Taking some risk off the table we're expanding.
Speaker Change: Our capital or return of capital programs. So it's really a risk management are opportunistically, taking advantage of attractive pricing.
Speaker Change: And so our most recent hedges that we layered on just this week.
Speaker Change: <unk> had colors with a $4 floor.
<unk> ceiling, which are pretty pretty attractive. So it's still allows us to participate in the market at current prices or better up to $8 20.
Speaker Change: So we feel pleased with that and so on the Nat gas side that takes us to just under 6% of PDP volume.
Speaker Change: Of course that is a lower number when we're looking at total production.
Speaker Change: Again, just being more cautious or prudent we've not hedged based off of.
Speaker Change: Anticipated production from our soon to be drilled well.
Speaker Change: So we think that's a reasonable place, but we'll continue to monitor the marketplace.
Speaker Change: The market's seen a lot of volatility and we want to balance like having some exposure to the upside versus mitigating downside risk.
Speaker Change: Okay. Thank you.
Speaker Change: You.
Speaker Change: And this concludes the Q&A session and today's conference call. Thank you for your participation you may now disconnect.
Speaker Change: Please wait the conference will begin shortly.
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