Brian Velie

Brian Velie asked about the total production guidance for the year, specifically the impact of three-stream to two-stream conversions, where these conversions are occurring, and how to model associated NGL and gas price realizations. He also inquired about the heavier 1Q CapEx spend, asking if it's due to starting with 14 rigs and shedding down to 11 by year-end.

Answer

President and CEO Beth McDonald explained the plan prioritizes value over volume, maximizing free cash flow. She detailed the three-stream to two-stream conversion impact by basin: 20% of DJ BOEs allocated to NGLs (use CIVI historical realizations) and 5% of Permian BOEs (use CIVI NGL, SM gas realizations). She highlighted the H2 2026 volumes (420-430 MBOE/day at 55% oil) as the go-forward run rate. Regarding CapEx, Beth McDonald confirmed starting with 15 rigs and lowering activity throughout the year to average 11, driven by program optimization. EVP and CFO Wade Pursell added that 45% of total capital will be in the second half, indicating capital efficiency.

Brian Velie asked about the turn-in-line cadence for 2025 and whether it implies significant pent-up dry gas production heading into 2026. He also inquired if there was any remaining low-hanging fruit for further capital efficiency improvements.

Answer

President and CEO John Reinhart explained that the 2025 production profile will increase throughout the year, positioning the company well for late 2025, but he refrained from commenting on 2026 specifics. Regarding efficiencies, he stated that while replicating past large-scale gains is challenging, he expects the operations team to continue delivering more moderate improvements.