Q4 2024 Veren Inc Earnings Call
This call is being recorded today and will be webcast along.
Slide deck, which can be found in barron's website homepage.
All amounts discussed today are in Canadian dollars.
Exception of West, Texas intermediate or double U T I pricing, which is quoted in U S dollars.
All lines have been placed on mute to prevent any background noise.
After the speakers remarks, there will be a question and answer session for the members of the investment community.
If you would like to ask a question over the phone lines. During this time simply press Star then the number one on your telephone keypad.
If you would like to withdraw your question press. The Star then the number two.
During the call management may make projections or other forward looking statements regarding the future events.
Our future financial performance.
Any such statements are made subject to the forward looking information and then GAAP measures sections.
The press release issued earlier today.
Craig breaks: I will now turn the call over to Craig breaks.
Craig breaks: President and Chief Executive Officer at battery.
Speaker Change: Please go ahead, Mr breaks are.
Speaker Change: Thank you operator, welcome everyone to our Q4 2024 and full year resorts results Conference call with me today are Ken Lamont, our Chief Financial Officer, adjusting for it our senior Vice President operations and marketing.
Speaker Change: Baron was successful in 2024 on many fronts, we safely integrated our Alberta montney assets into our corporate portfolio.
Speaker Change: We generated over $640 million of excess cash flow realizing nearly a third in Q4.
Speaker Change: We returned 60% of our excess cash flow to shareholders through the base dividend and share repurchases.
Speaker Change: We reduced our net debt by 35% or $1 $3 billion we.
Speaker Change: We delivered strong reserve additions across all categories.
Speaker Change: We successfully disposed of non core assets and entered into a strategic long term infrastructure partnership and we achieved an investment grade credit rating, which allowed us to diversify our capital structure and improve our overall cost of capital.
Speaker Change: In 2024, we generated annual average production of 191000 Boe per day, including fourth quarter production of 189000 Boe per day.
Speaker Change: Our montney and Duvernay assets in Alberta accounted for nearly 80% of our Q4 production equating to 10% growth compared to Q1.
Speaker Change: Our 2024 independent reserves report demonstrates why we continue to be excited about the quality of our asset base.
Speaker Change: We organically replaced 173% of our 2024 production on a <unk> basis and achieved positive technical revisions.
Speaker Change: The majority of our two key additions came from the Alberta, Montney with the remainder coming from the key Bob Duvernay.
Speaker Change: We replaced our production efficiently generating a strong recycle ratio of two one times based on our two P F&D costs, including change in FTC.
Speaker Change: We continue to believe in the long term sustainability in the future potential of our asset base with over 65% of our premium drilling locations in the Alberta, Montney and key Bob Duvernay remaining on booked.
Speaker Change: In the Alberta, Montney, we continue to test the single point of entry completions designs and car. We are pleased with the initial results from the two multi well pads. We brought on stream in late fourth quarter using this design. These.
Speaker Change: These pads generated average peak 30 day rate of 1270 Boe per day per well, which is 30% above the area type well. These wells also featured a high oil cut of 80%.
Speaker Change: We continue to invest in our gas egress infrastructure and in field optimization projects to increase our operational flexibility minimize future downtime and enhance our ability to grow we.
Speaker Change: We anticipate realizing future operational efficiencies through both this investment and our previously announced strategic long term partnership with permanent gas infrastructure.
Speaker Change: In the <unk> Duvernay, we are pleased by the consistent results. We are generating we brought on stream two multi well pads in the fourth quarter that generated an average peak 30 day rate of 1000 Boe per day per well, which is 25% above the area type well. These wells also featured a high condensate rate of 70%.
Speaker Change: We drilled several successful delineation wells in 2024 on both east and west boundaries of our Lance and Cape up Derisking future drilling inventory in the area. Our 2025 program includes additional delineation in the liquids rich and lean gas windows.
Speaker Change: We've built an asset portfolio that is a strategic combination of quick payout short cycle assets in Alberta, with our long cycle, Saskatchewan properties that provide dependable excess cash flow.
Speaker Change: Our annual production guidance for $2025 to 188 to 196000 Boe per day.
Speaker Change: A strong start to the year delivering January production of 191000 Boe per day.
Speaker Change: Our production growth is weighted to the second half of the year. This is driven by planned facility downtime in the early part of the year and the timing of bringing on a multi well pads.
Speaker Change: Our capital expenditures guidance of $1 4 billion to $1. Five 8 billion is weighted to the first half of the year and includes $240 million.
Speaker Change: We're 15% directed to facilities as discussed earlier.
Speaker Change: <unk> investment further solidifies our infrastructure needs to support our long term growth plans.
Speaker Change: We anticipate generating significant excess cash flow of $625 million to $825 million. This year based on 70% to $75 per barrel <unk> pricing and $2 25 per Mcf Eagle.
Speaker Change: We continue to return 60% of our excess cash flow through our base dividend and share repurchases with the goal of increasing our returns over time.
Speaker Change: We are confident about our 2025 outlook and remain focused on operational execution strengthening our balance sheet and returning capital back to our shareholders.
Speaker Change: To thank everyone for their ongoing support and I look forward to taking any questions I will.
Speaker Change: Now I'll turn the call back to the operator to begin the Q&A.
Speaker Change: Thank you.
Speaker Change: As a reminder, our day members of the investment community. If you would like to ask a question. Please press Star then the number one on your telephone keypad.
Speaker Change: If you would you like to withdraw your question. Please press star two.
Speaker Change: We will pause for a moment to compile the Q&A roster.
Speaker Change: And we will now take the first question and this comes from the line of Amir.
Amir: Amir <unk> from ATB capital.
Please go ahead. Your line is now open.
Speaker Change: Thanks. Good morning, guys. Just a quick question for you Craig.
Speaker Change: Just first of all just on the sliding sleeves test stick of the car sales results.
Speaker Change: Results again are encouraging is there any additional color you can share for us in terms of how those wells are holding up and if you feel that this has cracked the code in terms of how you wanted to completions going forward in the area.
Speaker Change: Hey, good morning, Amir and thanks for the question. So I cannot give you some color and I do have just in here as well too. So he can provide you some color, but obviously.
Speaker Change: Likely talked the rates.
Speaker Change: <unk> im a bit of a round or so lets say 300 ish Boe per day per rig for the average of the six wells were very excited about that.
Speaker Change: We'll continue to optimize completions as we go forward, both using single point of entry and plug and perf as we look across the field, but certainly with what we've seen from initial results on these very strong the other thing about our mirrors keep in mind the oil cuts on the subs have been.
Speaker Change: <unk> two when youre in that realm 80 ish percent.
Speaker Change: So really big oil wells and it's been positive on that front.
Speaker Change: When you when you look at the assets or sorry. These these.
Speaker Change: First couple of pads here.
Speaker Change: Over a.
Speaker Change: Call. It a $45 60 day, we're certainly happy with how they've been hanging in in how the declining performance has been on that.
Speaker Change: And as you have I have discussed in the past one of the other potentials about the single point of entry is is not only.
Speaker Change: Some of that initial results, but also what does it do for the shallow decline over the long term. So the date excited can be really happier about how the two pads have come online.
Speaker Change: And I appreciate that color and then just second question on the operating cost dropped nicely just quarter over quarter. Just curious how much of that is just due to the higher volumes and how much of that is due to some of the plant Debottleneck some facility upgrades you or James.
Speaker Change: I'm just curious if that's still coming in terms of further operating cost reductions from some of the facility optimization work.
Speaker Change: So a lot of that is.
Speaker Change: Obviously, you've got a big component of the <unk> costs that we have a fixed rate. So as those volumes are coming where you would expect them to be that does bring down the opex on a per BOE basis, So happy with that the other thing that you alluded to is the Debottlenecking work that we really started it really started last year in about August September and we've been working.
Speaker Change: Diligently at that and we are starting to see some of the benefits of that on that base level performance.
Speaker Change: As you bleed off the pressures across the field you can now flow more into not only into the facilities, but also into those pipelines that take it into the facility. So.
Speaker Change: That's starting to show through and then that starts to show through in that that Opex as it as it comes through in the $1 per Boe.
Speaker Change: So.
Speaker Change: We will continue to do that here, we've got big plans for.
Speaker Change: Q1, and then into Q2 on Debottlenecking.
Speaker Change: So ideally we start to see some consistent performance on that.
Speaker Change: Sounds good and then just a quick final question, Yes, and then just one final question. If I can on just the capacity expansion of Gulf quick list is that is that progressing on time for the six to seven pads to be tightened into March or is that 67 pad can it be into a new facility. Because I thought you were also building a new facility in.
Speaker Change: That area.
Speaker Change: So.
Speaker Change: No you've got you've got some of the color right there for sure I mean so.
Speaker Change: So the six to seven pad itself, so phase III, we're talking about here.
Speaker Change: We will be coming on call it mid March.
Speaker Change: Flows into our $3 26 facility Gulf request facility and that expansion work has been going on through Q4 and into Q1 and happy to tell you that things from that standpoint look good as far as timing. So it will be in good shape as far as processing capacity for that Pat.
Speaker Change: So I don't expect any any delays immuno what really helped us Samir I mean, let's be honest not very often you get a January where a cold days minus 20, right. So that certainly helped them as far as some of that work going but no everything looks good as far as on time and there is a little.
Speaker Change: A bit more facilities work that we're going to continue to do to go through the front half of the year.
Speaker Change: Extremely excited about that area.
Speaker Change: With.
Speaker Change: This has the potential of some of those wells. So we've got a bit more work to do but the facility itself is on time.
Speaker Change: Perfect fit.
Speaker Change: Congrats on a great quarter.
Speaker Change: Thanks, Thanks for the questions.
Speaker Change: Thank you and the next question comes from the line of Jeremy Mccrea from BMO Capital markets. Please go ahead. Your line is now open.
Speaker Change: Terry.
Speaker Change: As it relates to just some of the recent wells here coming on with the single point of entry.
Speaker Change: So these wells are coming on.
Speaker Change: 30% better on a BOE, 50% better on an oil basis.
Speaker Change: At what point do you look at the guidance and say.
Speaker Change: Well I'll start to perform like that do we need to potentially look at revising our numbers up how many wells would you like to see before you see that or what are some of the metrics youre looking for on that there.
Speaker Change: Yes. So thanks for the question Jeremy and good morning, So it's Craig here and again, Justin with Vinci wants to provide any color, but again, Jeremy we're really into February and the year extremely happy with how we entered the year and then how January looked on a production basis and really happy with the performance.
Speaker Change: Are these these first two pads.
Speaker Change: And we will see how things play out for the remainder of the year and what that means we're very comfortable with the market guidance that we have out now the 188 to 196.
Speaker Change: Things look certainly on track to be at those levels.
Speaker Change: So we'll see how things play out we've got a couple of pads coming up here and I know youre aware of over the next little bit in March we have the six to seven phase III pad, which we're excited about that we also have a 12 months to 36 pad.
Speaker Change: That is it's kind of north car area, Jeremy if youre familiar with that one on the maps so that one will be coming on.
Speaker Change: In April and that's a blend.
Speaker Change: Mainly single point of entry, but we do have a couple plug in person there too. So it's a good data set for us on a go forward basis and then.
Speaker Change: In the Duvernay.
Speaker Change: We've got a couple of pads here coming on just over the next month or so so let's see how things go but so far so good both on AR.
Speaker Change: Ah well results basis, as well as just overall production levels from the fields. So so far so good.
Speaker Change: And maybe just a just a bit of a catch all just in terms of different M&A going on throughout the Montney is this something you guys are still interested in or just very happy with your current montney duvernay position than maybe you're more likely yet finalizing some of this remaining dispositions.
Speaker Change: <unk>.
Speaker Change: Yes.
Speaker Change: Jeremy our stance really hasn't changed on that over the last 12 months. If you remember we've been letting everybody know that we're going to take a good solid pause as far as acquisitions and divestitures.
Speaker Change: We're extremely excited about the asset base that we were able to put together.
Speaker Change: Love the loved the Duvernay loved the Montney love, how it pairs with the long cycle assets in Saskatchewan lots of opportunity in front of us.
Speaker Change: We've got a good five year plan that we feel really good about so I think what we really need to do is to continue to demonstrate to the market.
Speaker Change: The quality of the assets and the quality of our execution.
Speaker Change: So that's my way of saying don't look for us to be doing anything on on that front in the near term very happy with how things have been moving here into the new year.
Speaker Change: Okay.
Speaker Change: Perfect and nice to see the stock moving here today this morning as well.
Speaker Change: Thanks, Jeremy.
Speaker Change: Thank you and the next question comes from the line of.
Speaker Change: Michael Speicher from HTM Research. Your line is now open. Please go ahead and ask your question.
Speaker Change: Thank you good morning, guys.
Speaker Change: Good quarter, and a little more pep in the step. This morning, it's good to see I've got I've got one question I guess I got a few so you can tell me if I'm getting too into the weeds, but looking at some of the gas oil ratios in the Gold Creek 717, and 15 to 16 pads.
Speaker Change: They've been they've been lower initially and during early time production. So is that a is that a function of shorter frac growth not penetrating the upper part.
Speaker Change: The gas your sequence and so you get less gas drive.
Speaker Change: How do you rationalize that kind of difference in early time gas oil ratios.
Speaker Change: And just generally.
Speaker Change: Is there anything kind of notable you guys have noticed over the past few months producing these pads that have further debt. The NCS leave single point of entry thesis because the declines are a lot shallower than than you would've expected. So I'm just kind of curious what the learnings have been over the last three months or so.
Speaker Change: Thanks for the question Michael.
Speaker Change: So.
Michael Speicher: You noted two of those pads from from Q4, where we did the plug and perf trials.
Michael Speicher: One thing I would tell you that we're really encouraged about is how those wells or how those paths have continued to increase in production that have recently been running fairly flat in that 500 to 600 ish Boe per day range and at a much higher oil cut so.
Michael Speicher: Excited to see how those things have performed and I think at some point in time.
Michael Speicher: When you think of acute time plot. These wells will end up probably cuming.
Michael Speicher: Where they should be against that relative or initial type well.
Michael Speicher: We're excited about how they played out as far as the <unk> you are right that <unk> is a little bit lower we do think where the wells were landed in that style completion may not aided in the high growth and really penetrated into a little bit of that gas.
Michael Speicher: But these are these are early time.
Michael Speicher: <unk> and we continue to analyze that but certainly have been encouraged with how they have performed all of that said our next batch in that area. We will we will try.
Michael Speicher: We will move back to the single point of entry system in there and see how those do on a relative basis, but certainly.
Michael Speicher: With 70 of those in the area feel pretty good about the results that we'll expect from that under a single point system.
Michael Speicher: And just I'll add a little color here as to.
Michael Speicher: Sorry, Michael just on just on your question on <unk> being a little bit lower one thing we have noticed with those 717 wells is actually are flowing bottom hole pressure or the percent drought the percent drawdown on those wells has been quite low. So those those wells. We are looking at optimizing and looking at different ways to be able to get that draw down much lower than that.
Michael Speicher: To help encourage that reservoir gas to come out. So again look forward here in the next few months next quarter or two for us to get those wells optimized.
Michael Speicher: And try to get that gas to come out.
Michael Speicher: And then the last thing I would say, Michael even though you do those plug and perf trials. We used we still use basically three tons of meter and similar fluid rates, so that that fluid and proppant went went into that reservoir.
Michael Speicher: Just maybe it didn't maximize the height growth, what we needed but that certainly has.
Michael Speicher: Obviously, you've got a good stimulation on those wells and they are performing better than we had hoped.
Michael Speicher: Our thought.
Michael Speicher: Okay.
Michael Speicher: That's super helpful. I guess, just a follow up on that.
Michael Speicher: I'm getting a little had.
Michael Speicher: Timelines here, but.
Michael Speicher: Would there be an opportunity in the future, possibly to replicate that NCS leave with extreme limited entry plug and perf I know you know shell did have some of those kind of a few years ago.
<unk>.
Michael Speicher: Get the cost savings and maybe kind of try to pump harder with with higher tier equipment at that time.
Michael Speicher: Has that been a discussion down the road or kind of just focus on getting Mcs back on track and proving those results first.
Michael Speicher: Yes, no absolutely youre thinking the same way we are we always want to continue to optimize our completions design and it's going to end up being different I'm sure for different areas. We also always want to continue to optimize our cost structure and pound that down.
Michael Speicher: And.
Michael Speicher: One of the learnings that we did have early on there Michael was in that quarter as we could see the completions on that particular 717 pad.
Michael Speicher: The performance wasn't what we had hoped we did make that change on the 12 to 36 pad, where we ended up going to three perf clusters per stage. So we're really starting to get a little bit more of a limited entry and getting that fluid rate per entry point.
Michael Speicher: Little bit higher now certainly you can go down to where you have one one per.
Michael Speicher: Per per sorry, one perf clusters per stage, but that's where you start to get a little bit.
Michael Speicher: Dilutive on your cost structure right. So at that point in time, it doesn't make sense to do that it makes a lot more sensitive as the single point system. So these are things that we need to continue to work through it is going to continue to evolve for us we're going to continue to get better.
Michael Speicher: From a production standpoint, and a cost structure standpoint. So that's why we're excited about how things have really started to play out here for us in January and how this is coming into the new year.
Speaker Change: Okay. That's awesome I appreciate that I got one more and it might be a little a little already but I just want to add.
Michael Speicher: <unk>.
Michael Speicher: Okay, I guess no pun intended on the Grittiness, but I've.
Michael Speicher: I've seen the evolution of profit mix 30, 50 heavy on the $5 23 and <unk>.
Michael Speicher: <unk> 30, 50, and 100 mesh or I guess $51 40.
Speaker Change: The <unk> is that a function of just sand sourcing or are you guys seeing different results with.
Michael Speicher: With different kind of proppant blends.
Michael Speicher: Yes, it's Justin here again, so we have we have transitioned and in some cases to using some smaller sand to see if we can more effectively placed that sand and more effectively get that prop type growth that we want that we think we need to get so still an evolution there on sand profit sizing.
Michael Speicher: As well Michael.
Michael Speicher: Okay guys.
Michael Speicher: Appreciate that so much very excited for the rest of the year.
Michael Speicher: Good job on the quarter that was well done turn it back to you guys now.
Michael Speicher: Thanks, Michael.
Speaker Change: Thank you and the next question comes from the line of Dennis Fong from CIBC World Markets. Your line is now open. Please go ahead.
Dennis Fong: Hi, good morning, everyone.
Speaker Change: Congrats on a great quarter, there they are creating team.
Speaker Change: My first question here is just related a little bit towards kind of a similar line of questioning so given the incremental liquids content that you're seeing coming from the single point of entry design and I think Justin maybe partially alluded to it.
How do you think that maybe plays into or maybe how do you think about adjusting the buildout or utilization of gas lift in your operations as well as how you think about the development of the field or optimization of the field as you progressed development, especially with the higher liquids content.
Speaker Change: Hey, Dennis is just again here, so yes, I mean through the through the acquisition process.
Speaker Change: Delta and Hammerhead, we acquired a couple of different theories on their gas lift and how they set up their pads.
Speaker Change: We're looking to push gas lift first of all out to the pad level.
Speaker Change: And then secondly, where are we where we can utilize it.
Speaker Change: Transition to high pressure gas lift to be able to draw. These these wells down quicker now when we do get even higher on the liquids content.
Speaker Change: We'll be looking at possibly using the asps.
Speaker Change: There are a couple in the field that are running in house have run effectively over the over the years.
Speaker Change: In the past and our predecessor companies that were operating in these fields. So again I think instead of a standard operation are standard fit for artificial lift it's definitely something that's going to evolve and the pad by pad evaluation for us going forward.
Speaker Change: Great.
Speaker Change: Really appreciate that incremental color there Justin on my second question, maybe shifting towards.
Speaker Change: Net debt, you've obviously made a lot of progress through 2024, and I guess this might be also addressed to Ken can you talk towards maybe your comfort level with your balance sheet today.
Speaker Change: And of the like obviously organic deleveraging is kind of the primary way of lowering outstanding.
Speaker Change: But are there any other options that you're looking at maybe accelerate that process and how should we be thinking about kind of your comfort level with where it stands today, obviously understanding you've made a lot of progress thus far.
Speaker Change: Yes, it's that it's Craig here Dennis so thanks for the question I'm going to pass it to Ken but the one thing I would note is we did make significant progress on our overall debt reduction last year, we did manage to get our balance sheet down to that call. It that $2 five ish billion of absolute debt, which is down 35% year over year.
Speaker Change: And as we've noted in the past our near term debt target on an absolute level was about $2 2 billion and we see ourselves getting there here over the next call. It 12 ish months. When you think of just the excess cash flow generation.
Speaker Change: From our organization and that retained amount that we keep.
Speaker Change: But ideally.
Dennis Fong: And then Dennis you know as well.
Dennis Fong: You talked to Ken and I, when you think of the business for the long term, we'd like to be somewhere in that neighborhood of about one five of $1 6 billion ish or absolute debt. So we'll continue to work towards that.
Dennis Fong: Ken is here and he'll give you some color just as how we are thinking too.
Dennis Fong: Yes.
Dennis Fong: Echo the same comments as Craig and then obviously, what we're really excited about here. When you look at 25, and then you look at the five year plan is just the amount of excess cash generation and then obviously is a function of that how much we're able to retain so.
Dennis Fong: I look forward into 2025 here I mean, we've got organic deleveraging of $250 million at a $70 USW Ti so.
Dennis Fong: Obviously these are these are good numbers.
Dennis Fong: We were able to bring that debt to cash flow or that leverage down I mean, our comfort or we are today and we're very comfortable at one basically a one times debt to cash flow to Craig's comments, obviously, we want to drive that lower.
Dennis Fong: And so yes, I think the real setup here as we look at this year and then look beyond.
Dennis Fong: Not only we are growing our production of 7% CAGR, but we're growing our excess cash by 15% and so year over year.
Dennis Fong: Even with the growth program that we've got we're building our excess cash generation and that's just going to accelerate the debt reduction and deleveraging. So.
Dennis Fong: Happy with the setup, obviously, we're going to remain committed to it.
Dennis Fong: We will have or will have our base dividends, there which is.
Dennis Fong: Sustainable here at lower oil prices.
Dennis Fong: Every dollar and a return of capital over and above that is going to go to share repurchases and then obviously I'll keep you in that 40% for the balance sheet and strengthening that so like the setup and that's how we're going to go forward.
Dennis Fong: Thanks Dennis.
Speaker Change: I appreciate the color I'll turn it back thanks, Greg Thanks, Ken.
Dennis Fong: Thanks.
Speaker Change: Thank you and the next question comes from the line of Luke Davis from Raymond James Your line is now open. Please go ahead.
Speaker Change: Yes. Thanks. Good morning, guys wondering if you could just expand a little bit on some of the prior questions first being.
Speaker Change: Related to your guidance looking a little bit conservative given how strong volumes have come on year to date and some of the improvements we're seeing across portfolio. So I'm. Just wondering if you can provide a little more detail around the parameters on the low end and the high end of the range and what's currently baked in there.
Speaker Change: Yes, so thanks, Luke and good morning.
Speaker Change: So again, our guidance is a 188 to $1 96.
Speaker Change: I think if you break it into apps on the year will be in the neighborhood of 187 on the front half of the year and around 197 in the back half of the year on average. So if you think of it from a quarter perspective, we're going to be somewhere in the neighborhood of we're saying 183 in Q1 and about 200 ish a little bit over 200 in the back half of the year keep in.
Speaker Change: And look we've got a couple of things going on here in the backdrop, one with the capital program being a little bit more heavily weighted to the front half of the year.
Speaker Change: And then with pad timing you're spending all this money upfront here in the front drilling these wells and getting these pads on but we don't see a lot of that production coming to the back half of the year. So that puts a little bit of a downward pressure on the front and then the other thing do know is as we alluded to a little bit earlier, we've got quite a bit of facilities work.
Speaker Change: Going on here in the backdrop.
Speaker Change: So even if you look into February for example, we did have some facilities that we had that shutdown to do some work on and all of that plays into your numbers. So.
Speaker Change: I guess, that's my way of saying we are comfortable with the range that we put out.
Speaker Change: Happy with the start we've had in January.
Speaker Change: And keep in mind, it's only February so let's see how.
Speaker Change: Things continue to progress, but the setup is.
Speaker Change: So far so good on that front.
Speaker Change: I appreciate that.
Speaker Change: Just yes, no super helpful.
Speaker Change: Just one follow up.
Speaker Change: Lot of focus obviously in the Montney and Duvernay, but I'm wondering if you could just speak a little bit to the Saskatchewan side of the portfolio.
Speaker Change: I'll speak to some of the changes youre, making down there.
Speaker Change: Things are alike and related to M&A no. Prior question was asked on the Montney, specifically, but anything you can do there to kind of bulk that up or generally just how youre thinking about that side of the business.
Speaker Change: Yes.
Speaker Change: Look again on that I mean super happy with how the portfolio has come together, especially when you think of where we were call. It five years ago.
Speaker Change: The portfolio, what it looks like today, the inventory of the short cycle assets in front of us between the Montney and Duvernay, which we love both of them.
Speaker Change: The other thing to keep in mind is the liquidity in our play.
Speaker Change: Our assets relative.
Speaker Change: Some of the other ones out there, where we're in that phase envelope and that 75% to 85% whether its condensate oil so.
Speaker Change: Loved the inventory setup in front of us between those two and then we really liked that pairing of the long cycle assets in Saskatchewan. So I wouldn't look for us to do anything on the M&A front, obviously look theres always little what I would call base business things that you do around swaps and small little tuck ins in that thing that you always look to be.
Speaker Change: Philadelphia.
Speaker Change: On the assets, but anything big I wouldn't say it is going to occur and then when you look at Saskatchewan.
Speaker Change: What we bought but both Saskatchewan is.
Speaker Change: It's it's a little bit longer stage of its lifecycle, it's now shifted really into that.
Speaker Change: Our phase and whether it's the waterflood or the polymer floods, we continue to advance that.
Speaker Change: And things on that front have look good it's just a nice low decline excess cash flow asset that pairs well with this short cycles that we have and so with that in mind, we do have a little bit of a drilling program going on out there now.
Speaker Change: And we Bob and weave between somewhere between one and call it three ish drilling rigs not.
Speaker Change: Not only throughout the year, but also throughout the five year plan and some of that is just the timing of breakup.
Speaker Change: You are familiar with those they're generally single well pads, it's not like you can get on a big patent run through breakup. So.
Speaker Change: Saskatchewan as a whole has been performing really well and I think.
Speaker Change: Aside from Palmer and the waterflood.
Speaker Change: Other thing that we've been doing is the.
Speaker Change: Open hole multi laterals in mainly in the <unk> field area and Thats been exciting for us so it's.
Speaker Change: It's been a good steady consistent production base and it's been just a good steady consistent execution on that program. So no real surprises there.
Speaker Change: Luke.
Luke: That's great I appreciate it for me.
Speaker Change: Thanks for the questions.
Speaker Change: Thank you and there are no further questions on the line. Thank you for joining today's earnings call.
Speaker Change: <unk> Investor Relations Department can be reached at 185776.
Speaker Change: <unk> 93.
Speaker Change: And have a good day.