Josh Silverstein

Josh Silverstein of UBS asked about the success of Weatherford's $150 million cost cuts in 2025, the drivers behind the projected slight margin improvement despite revenue headwinds in 2026, and the longer-term margin potential.

Answer

Executive Vice President and CFO Anuj Dhruv attributed the 2025 cost cuts to a workforce reduction of over 2,000 people, generating a $150 million run rate, and proactive market diagnosis that allowed for swift action to protect margins, resulting in over 21% EBITDA for the full year. He noted ongoing evaluations of the global footprint and organizational structure (in-house vs. outsourcing, lower-cost jurisdictions). Mr. Dhruv highlighted the multi-year ERP journey as a structural change to enhance efficiency in supply chain, procurement, working capital, and inventory, positioning the company to leverage future market tailwinds.

Josh Silverstein from UBS inquired about Weatherford's significant cost cuts in 2025, totaling $150 million, the drivers behind the resulting margin improvement, and the company's longer-term margin potential.

Answer

Anuj Dhruv, Executive Vice President and CFO, stated that workforce reductions of over 2,000 people in 2025 resulted in $150 million in run-rate savings, enabling margin protection despite headwinds. He noted Weatherford's early diagnosis of the 2025 market environment allowed for swift action. Dhruv emphasized continuous improvement through organizational restructuring, outsourcing to lower-cost jurisdictions, and the multi-year ERP implementation to drive efficiencies in supply chain, procurement, and working capital, positioning the company for stronger margins with future tailwinds.

Josh Silverstein inquired about potential cost changes for the additional 2 GW deployment by 2029 compared to the first GW, given market tightness, and whether data center operators are still interested in 10-15 year agreements or seeking shorter 5-10 year windows.

Answer

CEO Ron Gusek stated that no meaningful change in economics or costs is expected, maintaining the $1 million/MW for generation and $1.5-$1.6 million/MW all-in estimates, due to strong supply chain partnerships. He also noted that the pendulum is swinging towards more openness for distributed, co-located power as a long-term solution, with increasing willingness for 15-year ESAs. CFO Michael Stock added that LPI offers grid parity now and expects to be significantly lower than grid prices in the future due to stable gas prices versus rising grid costs.

Josh Silverstein with UBS inquired about customer interest in 10-15 year agreements for distributed power, or if they seek shorter 5-10 year outs due to potential grid improvements.

Answer

CEO Ron Gusek indicated that the pendulum is swinging towards more openness for distributed, co-located, behind-the-meter power as the long-term solution due to reliability, economics, commercial optionality, and public concerns, increasing willingness for 15-year ESAs. CFO Michael Stock added that Liberty's solution offers power at grid parity now with a lower inflationary component, making it significantly cheaper than grid prices long-term.

Josh Silverstein asked about the cash flow breakeven for LNG, comparing tolling and offtake agreements, and how EQT's consolidation strategy in the basin aligns with tightening Appalachian pricing.

Answer

Jeremy Knop, CFO, clarified that tolling and offtake agreements have virtually the same economic breakeven spread, with the difference being EQT's physical delivery responsibility in tolling. He noted significant tightening of M2 basis futures in 2029-2030. Toby Rice, President and CEO, stated that EQT's current asset base offers significant organic runway, making it easy to stay disciplined on acquisitions, but acknowledged the benefits of scale.

Josh Silverstein sought clarification on EQT's LNG cash flow breakeven and whether the spread is achievable with tolling versus offtake agreements. He also asked about EQT's consolidation strategy in the Appalachian basin given anticipated tighter pricing and integration success.

Answer

Jeremy Knop (CFO, EQT) clarified that economically, tolling and offtake agreements have virtually the same breakeven spread, with EQT's preference influenced by regional gas supply risks. He noted that M2 basis futures for 2029-2030 have tightened significantly, reflecting demand projects. Toby Rice (President and CEO, EQT) stated that EQT has substantial organic runway, making it disciplined on acquisitions, but acknowledged the benefits of scale.

Josh Silverstein from UBS Group asked how EQT plans to deliver mid-single-digit growth, questioning the infrastructure needs and whether a DUC backlog would be built. He also requested an updated view on the company's LNG contracting strategy in light of the new power deals.

Answer

President and CEO Toby Rice stated that new midstream infrastructure will be built to connect demand projects to existing networks, leveraging EQT's commercial footprint for optimization. CFO Jeremy Knop addressed LNG, stating the long-term goal is to contract 5-10% of volume directly with end-users, similar to the power deals. He noted that discussions with LNG facilities have recently improved and sees it as a significant opportunity for 2030 and beyond.

Josh Silverstein from UBS Group asked about the company's free cash flow allocation strategy after retiring its 2026 notes, particularly regarding share buybacks, and questioned the reason for the CTV one project's first injection date moving to early 2026.

Answer

EVP & CFO Clio Crespy stated that CRC will remain opportunistic with its over $200M share repurchase program, balancing buybacks with debt redemption. President & CEO Francisco Leon clarified the CTV one timeline, explaining that construction remains on track for year-end 2025 completion, but the injection start is slated for early 2026 to account for the uncertain timing of final EPA approval for the first-of-its-kind project.

Josh Silverstein from UBS Group asked about the strong operational performance at TCO, which is producing 18% above nameplate. He questioned if this level is sustainable and if there are further debottlenecking opportunities.

Answer

Vice Chairman Mark Nelson confirmed the strong performance, attributing it to the integrated operation control center that optimizes the entire system. He noted the 18% above nameplate figure applies to the first and second-generation projects and that they are 'just scratching the surface' of the potential for the whole integrated system. A planned maintenance 'pit stop' in Q4 may allow for further improvements.

Josh Silverstein asked for an update on basis differential expectations for the Haynesville and Appalachia for the second half of 2025 and into 2026, as well as the company's view on total Lower 48 production trends.

Answer

EVP of Marketing & Commercial Dan Turco projected a 'grinding up' of basis in Appalachia over the medium-term. For the Haynesville, he expects a significant long-term demand pull from LNG to increase realizations, though the near-term impact of NG3 will be a wash due to capacity payments. He also noted that while recent production prints have been surprisingly high, growing LNG demand is expected to outpace supply.

Josh Silverstein of UBS Group asked for an update on basis differential expectations for the Haynesville and Appalachia for the rest of the year and into 2026. He also sought the company's view on the recent step-up in total Lower 48 natural gas production.

Answer

EVP of Marketing & Commercial Dan Turco projected a gradual improvement of basis in Appalachia and long-term basis improvement in the Haynesville driven by strong LNG demand. He acknowledged the surprising recent production increase but stated that growing LNG demand is expected to outpace that supply.

Josh Silverstein asked for an update on basis differential expectations for the second half of the year and into 2026, and also sought the company's view on the recent step-up in Lower 48 production.

Answer

EVP of Marketing & Commercial Dan Turco projected a gradual improvement in Appalachia basis long-term. For the Haynesville, he noted new pipeline capacity would be a 'wash' in the short term due to transport costs, but the long-term LNG demand pull should improve realizations. He acknowledged the surprising production increase but stated that expected demand growth from new LNG facilities should outpace supply.

Josh Silverstein asked for details on the Permian turn-in-line cadence for the year and inquired about opportunities for OpEx reduction in the Montney beyond the well-publicized D&C cost savings.

Answer

EVP & COO Greg Givens confirmed the full-year turn-in-line count is unchanged, with a more front-loaded first half due to faster-than-expected completions. President and CEO Brendan McCracken and Givens highlighted that OpEx is being reduced through higher run times, faster production restoration via automation, and optimized gas lift, contributing to the overall free cash flow increase.

Josh Silverstein from UBS Group asked if the digital business is still on track for its previously guided mid-to-high teens growth and requested details on growth contributions from the Delphi cloud and AI platforms. He also followed up on whether more granular disclosures for AI and SaaS products could be expected in the future.

Answer

CEO Olivier Le Peuch confirmed the ambition for the digital business to significantly outpace the market, noting double-digit growth in Q2 from platforms, applications, and digital operations. He highlighted strong momentum, citing a 50% year-over-year increase in cloud CPU hours consumed. He also mentioned strong early adoption of the new Lumi data and AI platform. Le Peuch confirmed that more detailed financial disclosures for the digital business as a separate segment will begin in Q3.

Josh Silverstein of UBS asked if ExxonMobil might shift its strategy of de-emphasizing dry gas production, given an improving demand outlook, or if associated gas growth is sufficient.

Answer

Chairman and CEO Darren Woods confirmed there is no change in strategy. He explained that the company's investment decisions are anchored to long-term fundamentals, not short-term market dynamics. While ExxonMobil has competitive dry gas assets, they are not a current priority compared to higher-value opportunities, including liquids-rich associated gas.

Josh Silverstein asked if Civitas would revert to its 50%+ free cash flow return policy after hitting its 2025 debt target or if it would accelerate deleveraging. He also questioned the status of the Wolfcamp D inventory and its inclusion in the 1,200 Permian location count.

Answer

CFO Marianella Foschi clarified that the company would prioritize accelerating its deleveraging goals rather than immediately reverting to a formulaic shareholder return model. CEO Chris Doyle confirmed that Wolfcamp D locations are included in the 1,200-location count and that the 2025 program will increase its focus on this formation to about 20% of Permian activity, up from 10% in 2024, due to strong well productivity.