Joshua Silverstein

Joshua Silverstein asked about the future capital allocation to long-cycle projects, specifically if the current ~25% of the budget will decline or be backfilled by new projects.

Answer

Chairman and CEO Ryan Lance confirmed that capital spending on major projects will ramp down as the current slate, including Willow and LNG projects, reaches completion. He clarified there is not another wave of similar-sized projects waiting for execution, which will drive the company's anticipated free cash flow inflection. He assured that investment in the base business across all regions will continue as planned.

Josh Silverstein from UBS asked for an update on the LNG contracting environment and whether there has been any shift in thinking about European LNG demand due to geopolitical factors or U.S. policy.

Answer

Andy O'Brien, SVP of Strategy, stated that the situation is a continuation of existing trends, with Europe remaining heavily dependent on LNG. He pointed to the end of a Russia-Ukraine pipeline deal and recent price action as evidence of ongoing need. He affirmed that ConocoPhillips' strategy is unchanged: building out 10-15 MTPA of offtake with regasification capacity in Europe and sales into Asia, and that events are playing out as they expected.

Josh Silverstein asked about the recent working interest acquisition in Alaska and inquired about the potential for similar bolt-on opportunities across the company's asset base.

Answer

Chairman and CEO Ryan Lance confirmed the company actively pursues such opportunities via rights of first refusal (ROFRs). Kirk Johnson, SVP of Global Operations, detailed the Alaska deal, where they exercised preemptive rights on a Chevron sale for ~$300 million. He noted the price implied a PDP-only valuation, making it a compelling opportunity to increase ownership in assets they know well with low-cost, high-margin development upside.

Joshua Silverstein questioned the efficiency of the lumpy turn-in-line schedule for the Eagle Ford program and asked about current availability and pricing trends for offshore rigs.

Answer

President and CEO Eric Hambly explained that while drilling activity in the Eagle Ford is now steady year-round, the timing of completions naturally leads to new wells coming online weighted to the first half of the year, a cadence that is difficult to smooth further at current capital levels. Regarding rigs, he noted a softening in rates for both jack-ups and drillships, with significant availability in Africa and a 'significantly lower' rate secured for the upcoming Vietnam appraisal well.

Joshua Silverstein from RBC Capital Markets inquired about California Resources Corporation's corporate breakeven price on an unhedged basis. He also asked if recent refinery shutdowns in California pose a risk to the company's ability to sell its crude or maintain its premium pricing relative to Brent.

Answer

President and CEO Francisco Leon stated the corporate breakeven is approximately $34 per barrel Brent, achieved through a multi-year strategy of M&A, hedging, maintaining a strong balance sheet, and cost discipline. He expressed no concern over refinery shutdowns, explaining that California refineries are optimized for CRC's low-sulfur crude, which ensures high price realizations.

Joshua Silverstein from UBS asked for an update on the Carbon TerraVault (CTV) joint venture with Brookfield, questioning if a payment delay signaled a shift in the JV's structure. He also inquired about the timing for pending Class 6 permits and the conversion of MOUs into formal agreements.

Answer

CEO Francisco Leon affirmed the Brookfield JV is working "extremely well" and the payment delay was a timing adjustment to better align capital deployment with project execution, not a change in strategy. He expects 4-5 additional Class 6 permits to be approved in 2025 or early 2026, which will facilitate the conversion of existing MOUs into definitive agreements, particularly as CRC expands its focus to Northern California.

Joshua Silverstein asked about the potential impact of California refinery shutdowns on CRC's oil price realizations. His follow-up question concerned the specific operational steps required to achieve the remaining $100 million in Aera-related synergies.

Answer

Francisco Leon (Executive) and Jay Bys (Executive) explained that strong in-state demand and the need for local crude as a blending stock support high realizations. Omar Hayat (Executive) then detailed the next phase of synergies, which will come from infrastructure consolidation, including optimizing power costs, connecting gas fields to leverage processing capacity, creating optimal oil blends, and consolidating water disposal.

Joshua Silverstein of UBS questioned the company's current thinking on its Marcellus gas asset and asked if the recent drop in oil prices has altered M&A valuations or activity in the Williston Basin.

Answer

CEO Daniel Brown reiterated that the Marcellus asset is considered non-core, and the company will seek to maximize its value over time, acknowledging the more constructive current gas price environment. On Williston M&A, he noted that rapid price swings can create a bid-ask spread that challenges deal-making, but he has not yet observed a significant impact on valuations.

Joshua Silverstein followed up on the buyback program, asking if Chord would consider using its balance sheet to repurchase shares in excess of 100% of free cash flow, given the stock's valuation. He also asked for more detail on the assumptions behind the company's ~10-year inventory duration.

Answer

CEO Daniel Brown reiterated that share repurchases are a capital allocation decision and noted the company has used its balance sheet for compelling opportunities in the past, calling the shares "pretty compelling" at current levels. On inventory, he described the current estimate as conservative, based almost entirely on a Middle Bakken-only, conservatively spaced program, with potential upside from longer laterals or tighter spacing.

Joshua Silverstein of UBS asked if pausing activity in the Permian would disrupt the company's operational efficiency flywheel and inquired about long-term solutions for potential gas bottlenecks in the Montney.

Answer

Executive Brendan McCracken clarified that maintaining activity is driven by the 'free cash flow flywheel,' as it doesn't make sense to preemptively shrink the business when it's generating strong returns. He characterized the current Montney gas situation as a unique, non-recurring event tied to the start-up of LNG Canada.

Joshua Silverstein of UBS questioned if there were any limits, such as pipeline capacity, to allocating more capital to the Marcellus. He also asked about the company's appetite for adding more exposure to power pricing for its natural gas.

Answer

Chairman, CEO and President Thomas Jorden indicated there is no significant limit and noted the company is seriously watching the Constitution Pipeline development as a potential growth opportunity. SVP of Operations Blake Sirgo added that while they are always looking for more power pricing deals, they are difficult to replicate, with a focus on greenfield projects.

Joshua Silverstein inquired if the Marcellus has sufficient takeaway capacity to handle a ramp-up in gas volumes, and asked if the share buyback program is on hold during the planned $1 billion debt reduction.

Answer

SVP of Operations Blake Sirgo confirmed the Marcellus is not capacity constrained and has room to grow. An executive, clarifying for the CFO, stated the buyback is not on hold, but debt repayment is the priority for 2025, suggesting repurchases would be more back-end loaded.

Joshua Silverstein requested details on activity levels Chevron is observing across its non-operated and royalty interest volumes in the Permian Basin.

Answer

CEO Mike Wirth stated that they do not see any pullback in activity from their partners, who are primarily large-cap companies. He expressed a high degree of confidence in the planned activity for the year, noting that for most non-op joint venture and royalty interest wells planned for the year, the wells have already been spud.

Joshua Silverstein asked about the weak refining and chemicals business, inquiring what actions beyond cost cuts Chevron could take to improve its leverage to a market recovery.

Answer

CEO Mike Wirth pointed to ongoing efforts in feedstock flexibility, reliability, and cost control. He highlighted the Pasadena refinery expansion as a key example of a capital-efficient investment that enhances integration with Permian production and the Pascagoula refinery, improving the ability to control margin outcomes.

Joshua Silverstein of UBS asked for a breakdown of the new $2-3 billion cost savings target, inquiring about the contribution from recent asset sales versus other structural changes and any upstream/downstream split.

Answer

CFO Eimear Bonner detailed the program, stating a large portion comes from portfolio actions like recent asset sales, which remove direct and overhead costs. The remainder comes from improvement initiatives, such as leveraging technology and centralizing work in global capability centers. She described the first $2 billion as firm plans, with the third billion being an additional target from initiatives not yet fully quantified.

Josh Silverstein of UBS asked if the strategy to de-emphasize dry gas production might shift given an improving demand outlook.

Answer

Darren Woods, Chairman and CEO, confirmed there is no shift in strategy. He stated that while the company has competitive dry gas assets, the strategic priority remains on higher-value, liquids-rich associated gas. Investment decisions are anchored to long-term fundamentals, not short-term market dynamics, so the company's emphasis will not change based on current conditions.

Josh Silverstein of UBS asked about the expected pace of share repurchases given the high year-end cash balance and inquired about the strategy guiding activity levels in the Dorado natural gas play.

Answer

CFO Ann Janssen stated that share buybacks will remain opportunistic, not programmatic, as part of the commitment to return a minimum of 70% of free cash flow to shareholders. COO Jeff Leitzell explained that the increased activity in the Dorado play is set at an optimal long-term pace to drive efficiency gains, rather than being a reaction to short-term gas prices.

Joshua Silverstein from UBS questioned the strategy behind targeting a half-turn of leverage, asking if it's for a stock rerating or if staying near one-turn for M&A and buybacks is better. He also asked about the company's large royalty position, including M&A appetite for more royalties and the amount of drilling on current royalty acreage.

Answer

Executive Hays Mabry stated the deleveraging is a natural result of strong cash flow, not a strategy for a stock rerating, and that a strong balance sheet provides opportunism. Co-CEO James Walter explained that while they look at royalty deals, they've had more success acquiring working interests that include royalties. He confirmed that capital is allocated to the highest-return projects, which often have the benefit of high net royalty interests.

Joshua Silverstein of UBS questioned the decision to allocate 2025 free cash flow to debt reduction instead of share buybacks, given the stock's valuation. He also asked if EQT would consider using its equity for acquisitions to apply its successful compression strategy.

Answer

CFO Jeremy Knop emphasized that a strong balance sheet with lower debt enables countercyclical buybacks, and the company will be patient and opportunistic rather than buying shares at 10-year highs. President and CEO Toby Rice responded that while EQT's operational edge creates M&A opportunities, the company will maintain a disciplined framework for evaluating potential deals.

Joshua Silverstein asked if the 2025 capital spending outlook is now likely to fall at the lower end of the previously guided range, considering recent efficiency gains and asset sales. He also requested specifics on the market signals EQT monitors to decide when to bring curtailed production back online.

Answer

CFO Jeremy Knop confirmed that after factoring in the non-op sale ($75M reduction) and efficiency gains ($50M reduction), the 2025 capital budget is indeed trending toward the lower end of the prior range. He specified that the key trigger for curtailment decisions is the local Appalachia price, with a threshold of approximately $1.50/Mcf at the M2 hub being their cash cost breakeven.

Joshua Silverstein asked about the strategic value of the midstream assets acquired with Grayson Mill and whether they could be a divestiture candidate to accelerate debt reduction. He also inquired about the 2025 capital allocation plans for the company's other assets, including the Eagle Ford, Anadarko, and Powder River Basins.

Answer

Chief Operating Officer Clay Gaspar stated that the Grayson Mill midstream assets are highly strategic, enabling lower operating costs and higher margins, and are therefore more likely to be retained and even expanded. Regarding 2025 capital allocation, Gaspar indicated it would be "directionally similar" to 2024, with the main shift being a larger allocation to the Williston Basin and a corresponding decrease for the Delaware Basin from ~60% to ~50% of the total budget.

Joshua Silverstein inquired about the company's plans to lock in an e-fleet for 2025 following the current trial period. He also asked about the hedging strategy for 2026, given that prices are above $3.50.

Answer

CFO Michael Kennedy stated that Antero is on its second of a two-pad e-fleet trial and will evaluate locking it in for 2025 after the trial's completion. Chairman and CEO Paul Rady added that while the company is monitoring the 2026 price curve for opportunities, no decisions on hedging have been made.